MAGNA INTERNATIONAL INC Form 40-F Filed 2017-03-30

SECURITIES AND EXCHANGE COMMISSION

FORM 40-F Annual reports filed by certain Canadian issuers pursuant to Section 15(d) and Rule 15d-4

Filing Date: 2017-03-30 | Period of Report: 2016-12-31 SEC Accession No. 0001193125-17-102145

(HTML Version on secdatabase.com)

FILER MAGNA INTERNATIONAL INC Mailing Address Business Address 337 MAGNA DRIVE 337 MAGNA DRIVE CIK:749098| IRS No.: 000000000 | Fiscal Year End: 1231 N/A N/A Type: 40-F | Act: 34 | File No.: 001-11444 | Film No.: 17723393 AURORA, ONTARIO, CAN A6 AURORA, ONTARIO, CAN A6 SIC: 3714 Motor vehicle parts & accessories L4G 7K1 L4G 7K1 9057262462

FORM 40-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

☒ ANNUAL REPORT PURSUANT TO SECTION 13(a) or 15(d) of THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2016 Commission File Number 001-11444

Magna International Inc. (Exact name of Registrant as specified in its charter)

Not Applicable (Translation of Registrants name into English (if applicable)

Province of Ontario, Canada (Province of other jurisdiction of incorporation or organization)

3714 (Primary Standard Industrial Classification Code number (if applicable)

Not Applicable (I.R.S. Employer Identification Number (if applicable)

337 Magna Drive, Aurora, Ontario, Canada L4G 7K1 (905) 726-2462 (Address and telephone number of Registrants principal executive offices)

Corporation Service Company, 1180 Avenue of the Americas, Suite 210 New York, New York 10036-8401 Telephone 212-299-5600 (Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class Name of each exchange on which registered Common Shares New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act. None

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. None

For annual reports, indicate by check mark the information filed with this Form:

☒ Annual Information Form ☒ Audited Annual Financial Statements

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report 382,552,522 Common Shares.

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes ☒ No ☐

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 1. ANNUAL INFORMATION FORM The Registrants Annual Information Form for the year ended December 31, 2016 is attached hereto as Exhibit 1 (the Annual Information Form).

2. AUDITED ANNUAL FINANCIAL STATEMENTS AND MANAGEMENTS DISCUSSION AND ANALYSIS The Registrants Annual Report to Shareholders for the year ended December 31, 2016 (the Annual Shareholders Report) was previously filed with the U.S. Securities and Exchange Commission (the Commission) as Exhibit 99.1 to the Registrants Report on Form 6-K dated March 28, 2017. For the Registrants consolidated audited annual financial statements, including the report of Independent Registered Public Accounting Firm Deloitte LLP, for the fiscal years ended December 31, 2016 and December 31, 2015 relating to such financial statements, see pages 27 to 61 and pages 25 and 26, respectively, of the Annual Shareholders Report. For the Registrants Managements Discussion and Analysis of Results of Operations and Financial Position, see pages 1 to 24 of the Annual Shareholders Report.

3. WEBSITE INFORMATION Notwithstanding any reference to the Registrants website on the World Wide Web in the Annual Information Form or in the documents attached or incorporated as exhibits hereto, the information contained in the Registrants website, or any other site on the World Wide Web referred to in the Registrants website, is not a part of this annual report on Form 40-F and, therefore, is not filed with the Commission.

4. FORWARD-LOOKING STATEMENTS The Registrant has made in the documents filed as part of this annual report on Form 40-F, and from time to time may otherwise make forward-looking statements, within the meaning of Section 21E of the Exchange Act and Section 27A of the U.S. Securities Act of 1933, and related assumptions concerning its operations, economic performance and financial matters. Actual results or events could differ materially from those set forth in, or implied by, the forward-looking statements and the related assumptions due to a variety of factors. Reference is made to the section entitled Forward-Looking Statements on page 2 of the Annual Information Form for a discussion of such factors.

5. CONTROLS AND PROCEDURES The Registrants Chief Executive Officer and its Executive Vice-President and Chief Financial Officer are responsible for establishing and maintaining the Registrants disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) and internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act).

Disclosure Controls and Procedures The Registrant maintains disclosure controls and procedures designed to ensure that material information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported on a timely basis, and that such information is accumulated and communicated to senior management, including the Registrants Chief Executive Officer and Chief Financial Officer, as appropriate, to enable them to make timely decisions regarding required disclosure of such information. The Registrant has conducted an evaluation of its disclosure controls and procedures as of December 31, 2016 under the supervision, and with the participation of, its Chief Executive Officer and its Chief Financial Officer. Based on this evaluation, the Registrants Chief Executive Officer and Chief Financial Officer have concluded that the Registrants disclosure controls and procedures (as this term is defined in the rules adopted by Canadian securities regulatory authorities and the United States Securities and Exchange Commission) are effective as of December 31, 2016.

Internal Control Over Financial Reporting Management of the Registrant is responsible for establishing and maintaining adequate internal control over financial reporting for the Registrant. Internal control over financial reporting is a process designed to provide reasonable, but not absolute, assurance regarding the reliability of financial reporting and preparation of financial

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document statements for external purposes in accordance with accounting principles generally accepted in the United States. Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Additionally, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. The Registrants management used the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control-Integrated Framework (2013) to evaluate the effectiveness of internal control over financial reporting. On January 4, 2016, the Registrant completed the acquisition of the Getrag Group of Companies (Getrag). As permitted by securities rules and regulations, the Registrant excluded Getrag from its evaluation of internal control over financial reporting as of December 31, 2016. The excluded Getrag assets constituted 7% of the Registrants total assets as of December 31, 2016. Overall, Getrag constituted 6% of sales and 2% of net income of the Registrant for the year ended December 31, 2016. Based on this evaluation, the Registrants Chief Executive Officer and Chief Financial Officer have assessed the effectiveness of the internal control over financial reporting and concluded that, as at December 31, 2016, such internal control over financial reporting is effective. The Companys internal control over financial reporting as of December 31, 2016 has been audited by Deloitte LLP, the Independent Registered Public Accounting Firm who also audited the Companys consolidated financial statements for the year ended December 31, 2016. Deloitte LLP expressed an unqualified opinion on the effectiveness of the Companys internal control over financial reporting. This report precedes the Registrants audited consolidated financial statements for the year ended December 31, 2016, and is located on page 26 of the Annual Shareholders Report.

Changes in Internal Controls Over Financial Reporting Other than the addition of Getrags operations to the Registrants internal control over financial reporting, there have been no changes in the Registrants internal controls over financial reporting that occurred during the year ended December 31, 2016 that have materially affected, or are reasonably likely to materially affect, the Registrants internal control over financial reporting. The Registrant is currently integrating Getrag into its operations, compliance programs and internal control process. As permitted by the securities rules and regulations, the Registrant has excluded Getrag from managements evaluation of internal control over financial reporting as of December 31, 2016.

6. AUDIT COMMITTEE MEMBERS AND AUDIT COMMITTEE FINANCIAL EXPERT The Registrant has a separately designated standing audit committee of its Board of Directors (the Audit Committee), which is currently comprised of the following members of the Registrants Board of Directors: Lawrence D. Worrall (Chair), Scott B. Bonham, Peter G. Bowie and Dr. Kurt J. Lauk.

The Registrants Board of Directors has determined that each of Mr. Worrall, the Chair of the Audit Committee, and Messrs. Bonham, Bowie and Lauk, is an audit committee financial expert and that each member of the Audit Committee is independent and financially literate, as such terms are defined in the listing standards of the New York Stock Exchange and Exchange Act Rule 10A-3.

7. CODE OF ETHICS The Registrant has adopted a code of ethics that applies to all of its employees, including its Chief Executive Officer, its Executive Vice- President and Chief Financial Officer, its Controller and other persons performing similar functions. The text of such code of ethics is contained in the Registrants Code of Conduct and Ethics, which is posted on the Corporate Governance section of the Registrants website at www.magna.com.

8. CORPORATE GOVERNANCE As a foreign private issuer listed on the New York Stock Exchange (NYSE), the Registrant is required to disclose the significant ways in which its corporate governance practices differ from those to be followed by U.S. domestic issuers under the NYSE listing standards. The Registrant has disclosed on its website (www.magna.com) a Statement of Significant Corporate Governance Differences (NYSE), which discloses such differences.

9. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The tables below show the fees for each of the last two fiscal years for professional services rendered by our principal accountant, Deloitte LLP for the fiscal years ended December 31, 2016 and December 31, 2015.

Fiscal 2016 Fiscal 2015 Type of Services Fees % of Total Fees % of Total Audit Fees 11,659,000 91 % 10,016,000 78 % Audit-Related Fees 85,000 1 % 1,726,000 13 % Tax Fees 769,000 6 % 1,044,000 8 % All Other Fees 283,000 2 % 49,000 <1 % Total 12,796,000 100.00 % 12,835,000 100.00 %

Services provided by an external auditor fall into one of the following categories:

The services comprising the Audit Fees category for each of the last two fiscal years were performed by the Auditor to comply with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), including integrated audit of the consolidated financial statements, quarterly reviews and statutory audits of foreign subsidiaries. In some cases, fees in this category may include an appropriate allocation of fees for tax services or accounting consultations, to the extent such services were necessary to comply with the standards of the PCAOB. This category includes fees incurred in connection with the audit of our internal controls and the Auditors opinion on Managements assessment of our internal control over financial reporting for purposes of Section 404 of the Sarbanes-Oxley Act of 2002.

The services comprising the Audit-Related Fees category for these two fiscal years consisted of fees paid in respect of assurance and related services, including such things as due diligence relating to mergers and acquisitions, accounting consultations and audits in connection with acquisitions, attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards. Audit-related services actually provided by the Auditor in (a) fiscal 2016 consisted of: assurance service and procedures related to attest engagements not required by statute or regulation, advice on accounting treatments and other assurance services, and (b) in fiscal 2015 consisted of: assurance services and procedures related to the audit of carve out financial statements for Magnas interiors business, issuance of comfort letters for prospectus supplements, assessments in connection with COSOs Internal Controls - Integrated Framework (2013), and specific procedures related to government subsidies.

The services comprising the Tax Fees category for these two fiscal years consisted of all fees paid in respect of tax compliance, planning and advisory services performed by the Auditors tax professionals, except those services required in order to comply with the standards of the PCAOB which are included under Audit Services. The tax services actually provided by the Auditor in each of fiscal 2016 and fiscal 2015 consisted of: domestic and international tax advisory, compliance and research services, as well as transfer pricing advisory services.

The category All Other Fees captures fees in respect of all permitted services not falling under any of the previous categories.

The Audit Committee has a process for pre-approving all services provided by, and related fees to be paid to, the Auditor. This process includes reviewing, on a quarterly basis, the details and associated costs of the services expected to be provided. Audit Committee approval is required for any services that have not been previously approved by the Audit Committee. The Audit Committee considers whether such services are consistent with the Commissions rules on auditor independence. The Audit Committee also considers whether the Auditor is best positioned to provide the most effective and efficient service, for reasons such as its familiarity with the Registrants business, people, culture, accounting systems, risk profile, and whether the services enhance the Registrants ability to manage or control risks and improve audit quality. None of the services provided by the Auditor in 2016 were treated as exempt from pre-approval pursuant to the de minimis provision of paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 10. OFF-BALANCE SHEET ARRANGEMENTS AND TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS For disclosure of the Registrants off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Registrants financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors, see page 18 of the Annual Shareholders Report, under the section entitled Contractual Obligations and Off Balance Sheet Financing.

For the tabular disclosure regarding the Registrants known contractual obligations, with amounts aggregated by the type of contractual obligation, see page 18 of the Annual Shareholders Report, under the section entitled Contractual Obligations and Off Balance Sheet Financing.

11. INTERACTIVE DATA FILE Concurrent with this filing, the Registrant has submitted to the Commission and posted on its corporate website, www.magna.com, an Interactive Data File.

UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

A. Undertaking Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

B. Consent to Service of Process A Form F-X signed by the Registrant and its agent for service of process was previously filed with the Commission.

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant: MAGNA INTERNATIONAL INC.

By (Signature and Title): /s/ Bassem Shakeel Bassem A. Shakeel Vice-President and Corporate Secretary

Date: March 28, 2017.

Exhibit 1 Annual Information Form of the Registrant dated March 28, 2017. Exhibit 2 Registrants Annual Report to Shareholders for the Year Ended December 31, 2016, which contains the Registrants audited financial statements as at and for the two-year period ended December 31, 2016 and Managements Discussion and Analysis of Results of Operations and Financial Position (incorporated by reference to Exhibit 99.1 to Registrants Report on Form 6-K dated March 28, 2017). Exhibit 3 Consent of Deloitte LLP. Exhibit 99.1 Certificate of Principal Executive Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (D. Walker). Exhibit 99.2 Certificate of Principal Financial Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (V. Galifi). Exhibit 99.3 Certificate of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (D. Walker). Exhibit 99.4 Certificate of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (V. Galifi). Exhibit 101 Interactive Data File.

Annual Information Form March 28, 2017 MAGNA

Section Page Forward-looking Statements 2 1. Corporate Structure 3 2. General Development of the Business 4 Overview 4 Recent Trends in the Automotive Industry 9 Our Business Strategy 11 Recent Developments in Our Business 15 3. Description of the Business 18 Products & Services 18 Research & Development 27 Manufacturing & Engineering 30 Human Resources 31 Competition 35 Sales & Marketing 36 Environmental Matters 37 Corporate Social Responsibility 40 Ethics & Legal Compliance 44 Intellectual Property 45 Risk Factors 46 4. Dividends 57 5. Description of our Capital Structure 58 6. Market for Securities 60 7. Directors & Executive Officers 61 8. Legal Proceedings 64 9. Interests of Management & Others in Material Transactions 66 10. Transfer Agent & Registrar 66 11. Interests of Experts 66 12. Audit Committee 66 13. Additional Information 67

In this Annual Information Form, we use the terms you and your to refer to the shareholder, while we, us, our, Company and Magna refer to Magna International Inc. and, where applicable, its subsidiaries. We also use the term Executive Management to refer, collectively, to our Chief Executive Officer; Chief Financial Officer; Chief Legal Officer; Chief Marketing Officer; Chief Operating Officer - Exteriors, Seating, Mirrors, Closures and Cosma; Chief Human Resources Officer; Chief Technology Officer; and EVP, Corporate Projects and Strategy Development. All amounts referred to in this Annual Information Form are presented in U.S. dollars unless we have stated otherwise. In this Annual Information Form, a reference to fiscal year is a reference to the fiscal or financial year from January 1 to December 31 of the year stated. Sales figures disclosed in this Annual Information Form have been prepared in accordance with United States Generally Accepted Accounting Principles (U.S. GAAP). Where we have referred to specific customers, the reference includes the customers operating divisions and subsidiaries, unless we have stated otherwise. Information (including 2015 comparative information) in this Annual Information Form does not include our former interiors operations, which we sold during 2015,

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document unless otherwise stated. Manufacturing operations, product development, engineering and sales centres and employee figures include certain equity-accounted operations. References to our Circular refer to our Management Information Circular/Proxy Statement dated March 28, 2017 for our 2017 Annual Meeting of Shareholders to be held on May 11, 2017 (the Meeting). The information in this Annual Information Form is current as of March 24, 2017, unless otherwise stated.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Forward-looking Statements This Annual Information Form contains statements that constitute forward-looking information or forward-looking statements (collectively, forward-looking statements) within the meaning of applicable securities legislation, including but not limited to statements relating to: implementation of our business and capital strategy; future returns of capital to our shareholders through dividends and share repurchases; growth prospects of our business, including through organic growth, acquisitions or joint ventures; and estimates of future environmental clean-up and remediation costs. The forward-looking statements in this Annual Information Form are presented for the purpose of providing information about managements current expectations and plans and such information may not be appropriate for other purposes. 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 and other statements that are not recitations of historical fact. We use words such as may, would, could, should, will, likely, expect, anticipate, believe, intend, plan, forecast, outlook, project, estimate and similar expressions suggesting future outcomes or events to identify forward-looking statements. Any such forward-looking statements are based on information currently available to us and 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 to our expectations and predictions is subject to a number of risks, assumptions and uncertainties, many of which are beyond our control, and the effects of which can be difficult to predict, including, without limitation:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the potential for a deterioration of economic conditions or an scheduled shutdowns of our customers production extended period of economic uncertainty; facilities (typically in the third and fourth quarters of each calendar year); a decline in consumer confidence, which would typically result in lower production volume levels; the termination or non-renewal by our customers of any material production purchase order; the growth of protectionism and the implementation of measures that impede the free movement of goods, services, exposure to, and ability to offset, commodities price people and capital; increases; planning risks created by rapidly changing economic or restructuring actions by OEMs, including plant closures; political conditions; work stoppages and labour relations disputes; fluctuations in relative currency values; risk of production disruptions due to natural disasters or legal claims and/or regulatory actions against us, including catastrophic event; without limitation any proceedings that may arise out of our global review focused on anti-trust risk; the security and reliability of our information technology systems; our ability to successfully launch material new or takeover business; pension liabilities; underperformance of one or more of our operating Divisions; changes in our mix of earnings between jurisdictions with lower tax rates and those with higher tax rates, as well as ongoing pricing pressures, including our ability to offset price our ability to fully benefit tax losses; concessions demanded by our customers; shifts in market share away from our top customers; warranty and recall costs; shifts in market shares among vehicles or vehicle our ability to successfully identify, complete and integrate segments, or shifts away from vehicles on which we have acquisitions or achieve anticipated synergies; significant content; our ability to conduct appropriate due diligence on acquisition inability to sustain or grow our business; targets; impairment charges related to goodwill, long-lived assets an increase in our risk profile as a result of and deferred tax assets; completed acquisitions; other potential tax exposures; risks of conducting business in foreign markets, including China, India, Eastern Europe, Brazil and other markets outside changes in credit ratings assigned to us; of North America and Western Europe; changes in laws and governmental regulations, including our ability to successfully compete with other automotive tax and transfer pricing laws; suppliers, including disruptive technology innovators which costs associated with compliance with environmental laws are entering or expanding in the automotive industry; and regulations; our ability to consistently develop innovative products or liquidity risks; processes; inability to achieve future investment returns that equal or our changing risk profile due to the increasing importance to exceed past returns; us of product areas such as powertrain and electronics; a reduction or suspension of our dividend; and restructuring, downsizing and/or other significant non- recurring costs; the unpredictability of, and fluctuation in, the trading price of our Common Shares. a reduction in outsourcing by our customers or the loss of a material production or assembly program; a prolonged disruption in the supply of components to us from our suppliers; shutdown of our or our customers or sub-suppliers production facilities due to a labour disruption;

In evaluating any forward-looking statements in this Annual Information Form, we caution readers not to place undue reliance on any particular statement. Readers should specifically consider the various factors, including those contained under Section 3. Description of

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the Business Risk Factors, which could cause actual events or results to differ materially from those indicated by our 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 contained in this Annual Information Form to reflect subsequent information, events, results or circumstances or otherwise.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 1. Corporate Structure Issuer Magna was originally incorporated under the laws of the Province of Ontario, Canada on November 16, 1961. Our charter documents currently consist of amended and restated articles of incorporation dated May 11, 2016, which were issued pursuant to the Business Corporations Act (Ontario). Our registered and head office is located at 337 Magna Drive, Aurora, Ontario, Canada L4G 7K1. Our common shares trade on the Toronto Stock Exchange (MG) and the New York Stock Exchange (MGA).

Subsidiaries A list of our principal subsidiaries and each of their jurisdictions of incorporation as of December 31, 2016 is set out below. Our legal structure (including that of our subsidiaries) is not necessarily indicative of our operational structure. Jurisdiction of Subsidiary(1)(2) Voting Securities Incorporation 175 Holdings ULC 100 % Alberta Magna US Holding, Inc. 100 % Delaware Cosma International of America, Inc. 100 % Michigan 1305290 Ontario Inc. 100 % Ontario Magna International Investments S.A. 100 % Luxembourg Magna International Automotive Holding GmbH 100 % Austria Magna Automotive Europe GmbH 100 % Austria Magna Automotive Holding AG 100 % Austria Magna Metalforming AG 100 % Austria Magna Steyr AG & Co. KG 100 % Austria Magna Steyr Fahrzeugtechnik AG & Co. KG 100 % Austria Magna Powertrain GmbH 100 % Austria Getrag PT GmbH 100 % Germany New Magna Investments N.V. 100 % Belgium Magna Automotive Holding (Germany) GmbH 100 % Germany Magna Exteriors Inc. 100 % Ontario Magna International (Hong Kong) Limited 100 % Hong Kong Magna Powertrain Inc. 100 % Ontario Magna Seating Inc. 100 % Ontario Magna Structural Systems Inc. 100 % Ontario

Notes: (1) The table shows the percentages of the votes attached to all voting securities and of each class of non-voting securities, owned by us or over which control or direction is exercised by us. Parent/subsidiary relationships are identified by indentations. Percentages represent the total equity interest in a subsidiary, which is not necessarily indicative of percentage voting control. (2) Subsidiaries not shown each represent less than 10% of our total consolidated revenues and total consolidated assets (although not all subsidiaries shown necessarily each represent more than 10% of our total consolidated assets and total consolidated sales) and, if considered in aggregate as a single subsidiary, represent less than 20% of our total consolidated revenues and total consolidated assets.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 2. General Development of the Business Overview We are a leading global automotive supplier with 317 manufacturing operations and 102 product development, engineering and sales centres in 29 countries, as at December 31, 2016. We have over 155,000 employees that are focused on delivering superior value to our customers through innovative products and processes, and World Class Manufacturing. Our product and service capabilities include:

Seating Systems Vision Systems Roof Systems Closure Systems Exterior Systems Active Driver Assistance Systems (ADAS) Body and Chassis Systems Powertrain Systems Complete Vehicle Engineering & Contract Manufacturing

We also have electronic and software capabilities across many of these product capabilities.

Our Corporate Culture The foundation of our operating structure is a decentralized, entrepreneurial corporate culture, the key elements of which are as follows:

Decentralization We follow a corporate policy of functional and operational decentralization, which we believe increases flexibility, customer responsiveness and productivity. Our manufacturing and assembly operations are conducted through Divisions, each of which is an autonomous business unit operating within pre-determined guidelines. Each Division is a separate profit center under the authority of a general manager who has the discretion to determine rates of pay, hours of work and sources of supply, within the framework of our Employees Charter, our Operational Principles and our corporate policies. Our Executive Management team allocates capital, coordinates our mergers and acquisitions and strategic alliances strategy, ensures customer and employee satisfaction and manages succession planning. Executive Management also interfaces with the investment community and is responsible for our long-term strategic planning and future growth, as well as monitoring the performance of the management of our product areas.

Employees Charter & Employee Equity and Profit Participation We are committed to operating our business in a way that is based on fairness and concern for our employees. Our Employees Charter and our Operational Principles set out key principles outlining this commitment.

One bedrock principle in our Employees Charter is participation by our employees in our financial success, as reflected in our long- standing practice of sharing 10% of our pre-tax profits with eligible employees. See Section 3. Description of the Business Human Resources for a description of our human resource principles (including our Employees Charter) and our employee equity and profit sharing program.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Incentive-Based Management Compensation We maintain an incentive-based compensation system for Management which directly links executive compensation and corporate performance, as measured by profitability. Our approach to executive compensation, including a new executive compensation framework approved by our Board, is described in further detail in the sections of our Circular titled Compensation and Performance Report and Compensation Discussion & Analysis.

Responsible Corporate Citizenship We are committed to being a responsible corporate citizen that conducts business in a legal and ethical manner. We have demonstrated this commitment in a number of ways, including our support of social and charitable causes, our actions to reduce the environmental impact of our operations, our activities to promote a safe and healthful work environment for our employees and our comprehensive ethics and legal compliance program. See Section 3. Description of the Business Environmental Matters, Corporate Social Responsibility and Ethics & Legal Compliance.

Reporting Segments Our success is directly dependent upon the levels of North American and European (and currently, to a lesser extent, Asian and Rest of World) car and light truck production by our customers. Given the differences between the regions in which we operate, our operations are segmented on a geographic basis. Our segments consist of North America, Europe, Asia and Rest of World. Consistent with the above, our internal financial reporting separately segments key internal operating performance measures between North America, Europe, Asia and Rest of World for our Chief Executive Officer to assist in the assessment of operating performance, the allocation of resources and our long-term strategic direction and future global growth.

Our external sales by reporting segment for 2016 and 2015 are set out in our Managements Discussion and Analysis of Results of Operations and Financial Position in our Annual Report to Shareholders for the year ended December 31, 2016 (MD&A). The MD&A has been filed on SEDAR (www.sedar.com).

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Geographic Markets and Customers North America Our North American production sales accounted for approximately 53% and 55% of our consolidated sales in 2016 and 2015, respectively. Our primary customers in North America in 2016 included BMW, Daimler, Fiat Chrysler, Ford, General Motors, Honda, Hyundai-Kia, Mazda, PACCAR, Renault-Nissan, Tesla, Toyota and Volkswagen.

Our top ten North American programs/platforms based on 2016 production sales were:

Capabilities Represented Body & Chassis Seating Exterior Powertrain Vision Electronic Closure Customer(s) Vehicle(s) Systems Systems Systems Systems Systems Systems Systems General Motors Full-Size SUVs & Pick-up Trucks ☐ ☐ ☐ ☐ ☐ ☐ Fiat Chrysler Jeep Grand Cherokee ☐ ☐ ☐ ☐ ☐ ☐ ☐ Chrysler Pacifica, Fiat Chrysler ☐ ☐ ☐ ☐ ☐ ☐ ☐ Dodge Grand Caravan General Motors Chevrolet Equinox, GMC Terrain, ☐ ☐ ☐ ☐ ☐ ☐ ☐ Chevrolet Captiva General Motors Buick Enclave, Chevrolet Traverse ☐ ☐ ☐ ☐ ☐ ☐ ☐ Traverse, GMC Acadia Ford Ford Escape, Lincoln MKC ☐ ☐ ☐ ☐ ☐ ☐ ☐ Fiat Chrysler Ram Pick-up Trucks ☐ ☐ ☐ ☐ ☐ Daimler Mercedes-Benz GLS/GL-Class, ☐ ☐ ☐ ☐ ☐ ☐ ☐ GLE/M-Class, GLE Coupe, R-Class Fiat Chrysler Jeep Wrangler ☐ ☐ ☐ ☐ ☐ ☐ Fiat Chrysler Jeep Cherokee ☐ ☐ ☐ ☐ ☐ ☐ ☐

Note: Capabilities represented may not be on each vehicle or each trim level of each vehicle. Additionally, our capabilities in each product area range from components to full systems, only some of which may be represented on any particular program.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Europe Our European production and vehicle assembly sales accounted for approximately 31% and 30% of our consolidated sales in 2016 and 2015, respectively. Our primary customers in Europe in 2016 included BMW, Daimler, Fiat Chrysler, Ford, Geely, General Motors, Hyundai-Kia, PSA Peugeot Citroën, Renault-Nissan, Tata Motors, Toyota and Volkswagen.

Our top ten European programs/platforms based on 2016 production and vehicle assembly sales were:

Capabilities Represented Engineering & Body & Chassis Seating Exterior Powertrain Vision Electronic Closure Customer(s) Vehicle(s) Assembly Systems Systems Systems Systems Systems Systems Systems Daimler Mercedes-Benz G-Class ☐ ☐ ☐ ☐ BMW MINI Countryman, MINI Paceman ☐ ☐ ☐ ☐ ☐ ☐ Ford Transit/Transit Custom ☐ ☐ ☐ ☐ ☐ Volkswagen Audi Q5 ☐ ☐ ☐ ☐ ☐ ☐ Volkswagen VW Transporter / Multivan ☐ ☐ ☐ ☐ ☐ ☐ Volkswagen VW Caddy / Caddy Maxi ☐ ☐ ☐ ☐ ☐ Volkswagen Audi A4, A4 Cabrio ☐ ☐ ☐ ☐ ☐ General Motors Opel Astra ☐ ☐ ☐ ☐ ☐ ☐ Daimler E-Class, E-Class Convertible/Coupe ☐ ☐ ☐ ☐ ☐ Volkswagen Skoda Octavia ☐ ☐ ☐ ☐ ☐

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Asia Our Asian production sales accounted for approximately 6% and 5% of our consolidated sales in 2016 and 2015, respectively. Our primary customers in Asia in 2016 included BMW, Chery Automobile, Daimler, Fiat Chrysler, First Automobile Works, Ford, General Motors, Great Wall Automobile, Honda, Hyundai-Kia, PSA Peugeot Citroën, Renault-Nissan, Toyota and Volkswagen.

Rest of World Our Rest of World production sales accounted for approximately 1% of our consolidated sales in each of 2016 and 2015. Our primary customers in Rest of World in 2016 included BMW, Daimler, Fiat Chrysler, Ford, General Motors, Renault-Nissan and Volkswagen.

Customer Concentration Worldwide sales to our six largest customers represented the following proportions of our consolidated sales in 2016 and 2015:

Customer 2016 2015 General Motors 20 % 20 % Ford 16 % 15 % Fiat Chrysler 15 % 16 % Daimler 12 % 12 % Volkswagen 10 % 10 % BMW 10 % 10 % Other 17 % 17 % TOTAL 100% 100%

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Recent Trends in the Automotive Industry A number of general trends have been impacting the automotive industry and our business in recent years, and are expected to continue, including the following:

Evolving Concepts of Mobility Fueled largely by intensifying urbanization and consumer demand for a variety of transportation solutions, expectations regarding global transportation and mobility are rapidly evolving. Increasing vehicle connectivity and the continued development of technology-enabled shared mobility services (such as ride-sharing, car-sharing, ride-hailing etc.) are giving consumers access to vehicles for a short-term and on an as-needed basis and reducing dependence on personally owned and driven vehicles. Automobile manufacturers and automotive suppliers that are able to develop or acquire in-house mobility service capabilities, including through collaboration or partnerships with mobility/technology providers, are expected to benefit from the growing consumer demand for new mobility services.

Growth of Electronics in Vehicles The importance of electronics in the automotive value chain has been increasing in recent years. Automobile manufacturers are increasingly seeking to replace vehicle functions traditionally performed using mechanical hardware with electric and electronically controlled alternatives, as well as seeking to increase on-demand functionality of systems and modules, and develop more efficient vehicle powertrains and thermal management modules through integrated electronics. In addition, automobile manufacturers are incorporating a growing number of electronic hardware and software systems into their vehicles, including those aimed at driver assistance systems, such as enhanced navigation or traffic avoidance and active safety systems. Automotive suppliers that possess sophisticated electronic hardware and software systems integration capabilities are expected to benefit from this accelerating trend. However, the growth of electronic hardware and software systems in vehicles may increase: warranty/recall risks, including if the complexity and/or interconnectedness of such systems makes repair or replacement more costly; risks related to vehicle cyber-attacks; and other risks.

Prevalence of Vehicles Built From High-Volume Global Vehicle Platforms Automobile manufacturers continue to increase the range of vehicles built from high-volume global platforms, allowing automobile manufacturers to: realize economies of scale; remain competitive; differentiate their vehicles for different markets; expand the number of market segments in which they compete; respond to lifestyle trends; and meet the tastes of consumers. The prevalence of global vehicle platforms provides Tier 1 automotive suppliers increased opportunities to supply larger volumes of products which may be common across multiple vehicles built from the same platform. However, the consolidation of platforms to fewer global platforms may increase warranty/recall risks and amplify the impact on suppliers of failing to win programs built from global platforms.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Growth of the Automotive Industry Outside of Our Traditional Markets The local demand for vehicles in China, India and other markets outside of North America and Western Europe continues to increase. This increasing local demand has helped boost the local automotive industry in these countries and has attracted investments in manufacturing from North American, European and Asian-based automobile manufacturers, through stand-alone investments and/or joint ventures with local partners. More recently, there has been increasing migration of component and vehicle design, development and engineering to certain of these markets. Automotive suppliers have followed and will likely continue to follow the expansion of automobile manufacturers into these regions. While this expansion may provide new opportunities for automotive suppliers, it may also result in exposure to a number of risks of conducting business in such markets.

Growth of B to D and SUV/CUV Vehicle Segments The local demand for vehicles in growing markets consists primarily of demand for B segment (sub-compact), C segment (compact), D segment (mid-size) cars and SUVs/CUVs. Automobile manufacturers that have established product offerings in these vehicle segments, and their preferred suppliers, will likely have an advantage in realizing the opportunities available in these higher growth vehicle segments.

Governmental Regulation and Enforcement The automotive industry is subject to greater governmental regulation seeking to promote higher corporate average fuel economy, reduce carbon dioxide (CO2)/greenhouse gas emissions, improve vehicle safety and increase vehicle recyclability. While increased regulation generally presents new challenges for the automotive industry, it may also provide new revenue opportunities for automotive suppliers that produce and market new products and technologies.

In addition to greater regulation, the automotive industry has in recent years been the subject of increased government enforcement of antitrust and competition laws, particularly by the United States Department of Justice and the European Commission.

Growth of Cooperative Arrangements In order to achieve economies of scale and defray development costs, competing automobile manufacturers continue to enter into cooperative alliances and arrangements relating to: shared purchasing of components; joint engine, powertrain and/or platform development and sharing; and other forms of cooperation. Cooperation among competing automobile manufacturers is expected to continue.

Increasing Consumer Demand For, and Industry Focus On, Fuel-Efficient and Environmentally-Friendly Vehicles Periodically elevated fuel prices, growing consumer awareness of environmental issues and other factors have increased consumer demand for vehicles that are more fuel-efficient and environmentally-friendly. As a result, automobile manufacturers are becoming increasingly focused on the development and manufacture of hybrid, electric and other alternative-energy vehicles. This trend is also manifesting itself in the increased use of materials such as aluminum, plastic, advanced high-strength steels and other materials which are designed to reduce vehicle weight and increase fuel efficiency. Automotive suppliers which emphasize technological innovation and broad product capabilities are expected to benefit from the growing demand for these features.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Pricing Pressures Automobile manufacturers continue to seek ways to reduce their costs of producing vehicles as competition for market share intensifies. In addition to seeking cost efficiencies in their own production, marketing and administrative structures, automobile manufacturers have placed significant pressure on automotive suppliers to reduce the price of their components, assemblies, modules and systems. This pricing pressure has historically come in different forms, including: long-term agreements containing pre-determined price reductions for each year of a vehicle production program; retroactive incremental price reductions and annual price reduction demands above and beyond those contained in any long- term agreement; pressure to absorb more design and engineering costs previously paid for by the automobile manufacturer and to recover these costs through amortization in the piece price of the particular components designed or engineered by the supplier; pressure to assume or offset commodities cost increases, including for steel and resins; refusal to increase the price paid for suppliers products to fully offset inflationary cost increases in the manufacturing process; and pressure to own and/or capitalize tooling and recover these costs through amortization in the piece price of the components produced by this tooling.

In many cases, automotive suppliers bear the risk of not being able to fully recover the design, engineering and tooling costs in circumstances where vehicle production volumes are lower than anticipated or programs are terminated early. In addition, automobile manufacturers continue to request that their automotive suppliers bear the cost of the repair and replacement of defective products that are either covered under the automobile manufacturers warranty and/or are the subject of a recall, including in situations where the automobile manufacturer has directed the purchase of sub-components from their preferred suppliers.

Some of these trends may present risks to our operations, profitability and/or financial condition. These risks are described in detail under Section 3. Description of the Business Risk Factors, which all readers are strongly encouraged to read and consider carefully.

Our Business Strategy Our Board of Directors (Board) is responsible for overseeing our long-term strategy and allocating capital through a capital expenditures budget which supports the strategic priorities approved by the Board, as well as our product and program commitments to our customers. At the centre of our long-term strategic plan is our understanding of what the Car of the Future will look like, and we continue to prioritize the high-growth and high-value products and service capabilities that we expect will be most relevant in future vehicles. Through the elements of our strategy discussed below, we seek to strengthen our position as a leading global automotive supplier and generate sustainable growth in order to create long-term shareholder value.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Operational Priorities Accelerated Focus on Innovation and Technology We seek to be recognized by our customers as an industry leader in innovative products, services, processes and the use of materials. In order to help achieve this strategic goal, we intend to continue to direct significant resources to commercialize new products and services and developing new processes, which will provide additional value to our customers in such areas as: weight reduction or light-weighting; fuel efficiency and reduced emissions; active and passive safety; and comfort, convenience and vehicle connectivity.

For a description of our research and development process and recent innovations, see Section 3. Description of the Business Research & Development.

World Class Manufacturing Our goal is to be recognized as a leader in World Class Manufacturing. Our global operating units have embraced this goal and we are committed to achieving best in class performance in all areas of manufacturing at each of our operating Divisions globally. In order to drive continuous improvement, we monitor our progress in achieving our goal of World Class Manufacturing using an assessment process similar to that used by our customers in evaluating their suppliers, supplemented with elements we view as critical to achieving world class manufacturing in accordance with our Operational Principles. Best practices, lessons learned and key initiatives are shared among our global operating units, including through regular internal World Class Manufacturing conferences that bring together our senior corporate and operating group leadership.

Leadership Development A key element to the success of our business remains our ability to attract, retain and develop skilled personnel to match the pace of our global growth. We have implemented and continue to enhance our Leadership Development and Succession program to help identify, train and develop future leaders with the skills and expertise needed to manage a complex, global business.

Growth Priorities Organic Growth and M&A We expect to grow organically and through acquisitions. We continue to consider acquisition opportunities that allow us to: expand our customer base; strengthen our position in priority product areas; expand in strategically important geographic markets; or acquire innovative technologies. Additionally, we regularly evaluate our existing product capabilities and, in some cases, we may exit product areas where our competitive position is not sufficiently strong or our level of investment return does not justify continued investment. We may also exit

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document product areas to the extent we believe that our capital resources could be better utilized elsewhere. In this regard, we completed a number of transactions in recent years designed to strategically reposition our product portfolio as part of our focus on the Car of the Future, including our acquisition of the Getrag Group of Companies (Getrag) which reflects the growing importance of the powertrain product area. The Getrag acquisition and several other transactions are described under Recent Developments in Our Business Acquisitions and Divestitures.

Pursuing Business on Global Vehicle Platforms The proliferation of global vehicle platforms and increased platform and component sharing among automobile manufacturers requires global suppliers with financial strength and capability to support automobile manufacturers regional product development activities and produce common products simultaneously in multiple regions around the world. We believe that our strong financial position, operational scale, manufacturing footprint, technological know-how, focus on innovation, continuing world class manufacturing efforts and global customer relationships support us in realizing the opportunities presented by the growth in global platforms and component sharing.

Focus on Significant Markets Outside of North America and Western Europe In recognition of the fact that much of the future growth potential in the automotive industry lies in growing markets outside of North America and Western Europe, we will continue to focus on markets that have or are expected to become key regions for vehicle production, including China, India, Eastern Europe and other markets outside of these markets. This strategy allows us to support the global needs of our traditional North American and European customers and to make inroads with other customers. In emphasizing growing markets, we seek to win business supplying products that can be manufactured in multiple locations globally, to take advantage of our customers continuing trend towards assembling higher volumes of vehicles built on global platforms in multiple locations around the world.

Diversifying our Automotive Sales Base Although we sell to all of the worlds largest automobile manufacturers and are present in all significant automobile producing regions in the world, a substantial proportion of our business has traditionally been with the Detroit 3 automobile manufacturers in North America (General Motors, Ford and Fiat Chrysler) and the German-based automobile manufacturers in Western Europe (Daimler, Volkswagen and BMW). Although we aim to maintain and grow our business with our traditional customers, we seek to further diversify our sales, as profitable opportunities arise, as follows:

Region: by increasing the proportion of our business in other significant markets outside of North America and Western Europe, Customer: by increasing the proportion of our business with customers outside of our top six, including with Asian-based automobile manufacturers and Vehicle Segment: by increasing the proportion of our business in growing vehicle segments.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We aim to further diversify our sales base in coming years by: continuing to demonstrate our technical capabilities; pursuing new programs from our customers, with particular emphasis on global platforms; and pursuing takeover business. At the same time, we seek to protect our position in our traditional markets through innovation in technology, processes and products.

Maintaining Target Capital Structure We have returned significant amounts of capital to our shareholders in recent years in the form of dividends and share repurchases and made significant levels of investment in our business, including the acquisition of Getrag. As a result, we achieved an Adjusted Debt ratio of 1.30 times EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) by the end of 2016 and aim to maintain such ratio in the range of 1.0 1.5 times EBITDA. Going forward, we look to maintain the efficiency of our capital structure, and continue to create shareholder value by increasing our free cash flow generation and ensuring the amount of cash on our balance sheet remains at a level reasonably required to run our business, including through an industry downturn, while maintaining an investment grade credit rating.

Creating Long-Term Shareholder Value We believe that success in executing the elements of our strategy discussed above, together with the following actions will help us continue to create long-term shareholder value: reinforcing our unique, decentralized, entrepreneurial corporate culture; maintaining our employee equity participation and profit sharing plans; allocating capital resources efficiently to support high-growth and high-value product and services relevant to the Car of the Future; continuing to focus on growing our earnings, maximizing free cash flow and returning excess cash to shareholders in the form of share repurchases and steadily growing dividends; enhancing our executive compensation system to reinforce Managements focus on efficient capital allocation and reward value creation over the long-term; and maintaining and reinforcing our commitment to conducting business in a legal and ethical manner, including through our comprehensive global employee training and education initiatives designed to reinforce the principles embodied in our Employees Charter, our Operational Principles and our Code of Conduct and Ethics (the Code of Conduct).

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Recent Developments in Our Business Acquisitions and Divestitures We have completed a number of acquisitions, divestitures, financings and securities/corporate transactions in the last three fiscal years, including those listed below. None of these acquisitions constitute significant acquisitions within the meaning of such term in National Instrument 51-102 Continuous Disclosure Obligations of the Canadian Securities Administrators.

2016 In November 2016, we acquired BÖCO Boddecker & Co. GmbH & Co. KG, an automotive supplier of latches, hinges and strikers that strengthens our position in the global closure systems market.

In May 2016, we acquired Telemotive AG (Telemotive), a leading engineering service provider in the field of automotive electronics. The acquisition of Telemotive expands our engineering service product portfolio in vehicle connectivity, Human Machine Interface (HMI) and infotainment.

In January 2016, we acquired Getrag, one of the worlds largest suppliers of transmissions for a purchase price of $1.9 billion (net of $136 million cash acquired). Getrag has an 80-year history in transmissions and is a global supplier of automotive transmission systems, including manual, automated-manual, dual-clutch, hybrid and other advanced systems.

2015 In December 2015 we entered into a partnership agreement in China with Chongqing Xingqiaorui (Xingqiaorui), a Tier 1 supplier of automotive body-in-white components to Changan Ford. Under the terms of the arrangement, Xingqiaorui transferred a 53% controlling interest in its three China manufacturing facilities and cash consideration of $36 million. In exchange, we transferred a 47% non-controlling equity interest in our Chongqing manufacturing facility and cash consideration of $130 million to Xingqiaorui.

In November 2015, we acquired Stadco, a United Kingdom-based supplier of steel and aluminum stampings, as well as vehicle assemblies primarily to Jaguar and Land Rover, for total cash consideration of $115 million.

In August 2015, we: sold substantially all of our interiors operations (excluding our seating operations) to Grupo Antolin, a leading global supplier of automotive interior systems. As part of the transaction, the sale of two of our joint ventures in China to Grupo Antolin was completed in October 2015 following receipt of required regulatory approvals. The proceeds of the sale, net of transaction costs were $520 million; and entered into a joint venture arrangement for the manufacture and sale of roof and other accessories for the Jeep market to automobile manufacturers, as well as aftermarket customers. We contributed our aftermarket Jeep brand roof tops business and received a 49% interest in the newly formed joint venture and cash proceeds of $118 million.

In May 2015, we sold our battery pack business to Samsung SDI Co., Ltd. for proceeds of approximately $120 million.

In February 2015, we acquired the head-up display and electronic components business units of Philips & Lite-On Digital Solutions (PLDS) in Germany, as well as PLDS ultrasonic sensor business in Taiwan.

2014 In October 2014, we acquired the Techform Group of Companies, an automotive supplier of hinges, door locking rods and other closure products, which has operations in Canada, the United States and China, for cash consideration of $23 million.

In August 2014, we completed the sale of five composites manufacturing operations in the U.S. and Mexico to Continental Structural Plastics Inc.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Financings and Securities/Corporate Transactions Issuance of Senior Unsecured Notes On April 9, 2014, we filed a short form base shelf prospectus (Shelf Prospectus) with the Ontario Securities Commission (OSC) and a corresponding shelf registration statement with the United States Securities and Exchange Commission (SEC) on Form F-10 (Registration Statement) to provide for the offering in Ontario and the United States of up to an aggregate of $2 billion of senior unsecured notes from time to time over a 25 month period.

We issued the following senior unsecured notes pursuant to the Shelf Prospectus and Registration Statement:

Issuance Date Amount Issued Interest Rate Maturity Date June 16, 2014 $750,000,000 3.625 % June 15, 2024 September 23, 2015 $650,000,000 4.150 % October 1, 2025 November 24, 2015 550,000,000 1.900 % November 24, 2023

We also issued, on December 7, 2015, CAD425,000,000 principal amount of senior unsecured notes (the Canadian Notes, and together with the senior unsecured notes in the table above, the Senior Notes), by way of private placement to accredited investors in each of the provinces of Canada. The privately placed notes bear interest at an annual rate of 3.10% and will mature on December 15, 2022.

The sections entitled DESCRIPTION OF THE NOTES in the Prospectus Supplements dated June 11, 2014, September 16, 2015 and November 17, 2015 (each to the Shelf Prospectus) from pages S-22 to S-30, S-22 to S-30 and S-26 to S-40, respectively, are hereby incorporated by reference into this Annual Information Form. The Prospectus Supplements have been filed on SEDAR (www.sedar.com).

Global Credit Facility We maintain a $2.75 billion syndicated revolving credit facility that expires on June 22, 2021. The facility includes a $200 million Asian tranche, a $100 million Mexican tranche and a tranche for Canada, U.S. and Europe, which is fully transferable between jurisdictions and can be drawn in U.S. dollars, Canadian dollars or euros.

Commercial Paper Programs We have established a euro-commercial paper program (the ECP Program) and a U.S. commercial paper program (the USP Program), each backstopped by our Global Credit Facility. Under the ECP Program, one of our indirect wholly-owned subsidiaries may, from time to time, issue euro-commercial paper notes (the ECP Notes), subject to an aggregate maximum of 500 million or its equivalent in alternative currencies. Under the USP Program, we may, from time to time, issue commercial paper notes (the US Notes), subject to an aggregate maximum of USD$500 million or its equivalent in alternative currencies.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Normal Course Issuer Bid On November 10, 2016, the Toronto Stock Exchange (TSX) accepted our Notice of Intention (the Notice) to Make a Normal Course Issuer Bid relating to the purchase of up to 38,000,000 Magna Common Shares (the 2017 Bid), representing approximately 10% of our public float of Common Shares. The Notice was amended on March 17, 2017 to permit purchases under specified share repurchase programs. The primary purposes of the 2017 Bid are purchases for cancellation, as well as purchases to fund our stock-based compensation awards or programs and/or our obligations to our deferred profit sharing plans. The 2017 Bid commenced on November 15, 2016 and will terminate no later than November 14, 2017. Purchases of Common Shares under the 2017 Bid are made on the TSX or the NYSE at the market price at the time of purchase in accordance with the rules and policies of the TSX or in compliance with Rule 10b-18 under the U.S. Securities Exchange Act of 1934, respectively. Purchases may also be made through other published markets, or by such other means permitted by the TSX, including by private agreement or under a specified share repurchase program, pursuant to an issuer bid exemption order issued by a securities regulatory authority. Purchases made by way of such private agreements or under a specified share repurchase program pursuant to an issuer bid exemption order are at a discount to the prevailing market price and are included in computing the number of Common Shares purchased under the 2017 Bid.

We have purchased the following Common Shares pursuant to the 2017 Bid as at March 24, 2017, and under our previous normal course issuer bid which commenced on November 13, 2015 and terminated on November 12, 2016 (2016 Bid):

2017 Bid 2016 Bid Shares purchased and cancelled 3,410,255 22,774,839 Shares purchased and retained for stock-based compensation awards or programs and/or deferred profit sharing plans 136,609 124,325 TOTAL 3,546,864 22,899,164

Notes: (1) 540,000 Common Shares were purchased by way of private agreement with an arms length, third-party seller at a discount to prevailing market prices pursuant to an issuer bid exemption order issued to us by the OSC on November 27, 2015. (2) 279,800 Common Shares were purchased pursuant to a specified share repurchase program with an arms length, third-party seller at a discount to prevailing market prices pursuant to an issuer bid exemption order issued to us by the OSC on March 17, 2017.

Stock Split On March 25, 2015 we completed a two-for-one stock split (the Stock Split), implemented by way of a stock dividend, as a result of which shareholders of record at the close of business on March 11, 2015 received one additional Common Share for each Common Share held. All equity-based compensation plans and arrangements and our normal course issuer bid were adjusted to reflect the issuance of additional Common Shares due to the Stock Split.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3. Description of the Business We are a leading global automotive supplier with 317 manufacturing operations and 102 product development, engineering and sales centres in 29 countries, as at December 31, 2016.

Our success is primarily dependent upon the levels of North American and European (and currently, to a lesser extent Asian and Rest of World) car and light truck production by our customers and the relative amount of content we have on various programs. Vehicle production is affected by consumer demand, which in turn is significantly impacted by consumer confidence. A worsening of economic and political conditions, including through rising interest rates or inflation, rising unemployment, increasing energy prices, declining real estate values, increased volatility in global capital markets, sovereign debt concerns, an increase in protectionist measures, collapse of multilateral trade or currency unions, international conflicts and/or other factors may result in lower consumer confidence. A number of other factors, discussed under Risk Factors, also affect our success, including such things as relative currency values, commodities prices, price reduction pressures from our customers, the financial condition of the automotive supply base and competition from manufacturers with operations in low-cost countries.

Products & Services Despite operating our business on a geographic basis, we possess product and service capabilities which span across such geographic regions. Details regarding our product and service capabilities follow: Seating Systems We develop and manufacture complete seating solutions and seat hardware systems for the global automotive industry.

Complete Seating Systems Seat Structures, Mechanisms & Hardware Foam & Trim Products Solutions Reconfigurable Seat Solutions Conventional Foam (Auto, Light & Heavy Truck, Seat Structures (including High Bus) Strength Steel, Aluminum and Recycled Foam Magnesium) In-Vehicle Stowable Seats Renewable Foam Formulations Manual and Power Recliners Ingress/Egress Solutions Black Foam Manual and Power Adjusters Dual Firmness Foam Comfort Systems (Fore/Aft and Lift) Trim Covers (Cloth & Leather) Lightweight Seat Solutions Seat Attach Latches Thin Seating Specialty Mechanisms Safety Systems Integration (Stow-in-Floor, Stand Up, Reversible, Push Button Entry (EZ-Entry), Seat Memory)

The technologies and processes used in the manufacture of seating and seat hardware systems include: traditional cut and sew technology; manual and automated assembly; as well as our patented Multi-Material Mold-In-Place technology.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Closure Systems We engineer and manufacture closure systems and modules for the global automotive industry.

Door Modules Power Closure Systems Engineered Glass Structural Door Modules Power Sliding Doors Power and Manual Truck & Van Sliding Windows Sealed Modules Power Liftgates Front and Rear Quarter Windows Hardware Trim Modules Power Doors Liftglass Assembly Integrated Trim Modules Power Decklids Windshields and Backlights Integrated Inner Panel Module Anti-Pinch Strips Fixed Roof Glass Modules Liftgate and Tailgate Modules Bus Windows Mid-Door Modules

Window Systems Latching Systems Running Boards & Roof Racks Dual Rail Cable and Drum Side Door and Sliding Door Automated, Platform and Tube- Systems Latches Style Running Boards Single Rail Cable and Drum Hood and Liftgate Latches Functional and Cosmetic Roof Systems Racks Tailgate and Decklid Latches Convertible Quarter Glass Cargo Door Latches Arm and Sector Systems Rear Access Door Latches Seat Latches

Sealing Systems Electronic Features Handle Assemblies Window Surround Modules Electronic Control Unit Design Inside and Outside Handles Backlight, Belt, Windshield, Obstacle Detection and Anti-Pinch Door Surround and Roof Drip Moldings Non-Contact Sensing Door, Inner and Outer Belt Seals Complete Convertible Sealing Systems

Hinges & Rods Composite Components Decklid, Hood and Convertible Applied Door Headers Hinges Structural Metal and Plastic Torsion, Hood Prop and Door Components Latch Rods Strikers Hangers

The primary processes involved in the manufacture of closure systems and modules include: light stamping; injection molding; extrusion processes, such as co-extrusion, thermoset and thermoplastic extrusion; as well as manual and automated assembly.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Body and Chassis Systems We provide metal body systems, components, assemblies and modules, including complete vehicle frames, chassis systems and body-in-white systems, as well as related engineering services, for the global automotive industry.

Body Systems Chassis Systems Engineering & Tooling Complete Body-In-White Crossmember Assemblies Program Management Floor Pans Engine Cradles Program Engineering Underbody Assemblies Front and Rear Sub-Frame Computer-Aided Engineering Assemblies (CAE) Design Verification A, B, C and D Pillars Front and Rear Suspension Prototype Build Shock Towers Modules Testing and Validation Radiator Supports Control Arms Tooling and Automated Systems Bumper Beams Frame Rails Research and Development Door, Hood and Deck Full Frame Assemblies Assemblies Roof Panels Fender and Quarter Panels Tailgate and Liftgate Assemblies Door Intrusion Systems Heat Shields

We employ a number of different forming technologies such as: hydroforming; stamping; hot stamping; roll forming; aluminum casting; draw bending; advanced welding technologies; as well as finishing technologies such as: e-coating; heat treating; and high temperature wax coating.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Vision Systems We design, engineer and manufacture vision systems for the global automotive industry.

Interior Mirrors Exterior Mirrors Actuators Auto-dimming Glass Auto-dimming Glass Mirror Adjustment Framed and Frameless Glass Framed and Frameless Glass Bend Lighting Telematics, Compass and Integrated Cameras and Sensors Active Grille Shutter Temperature Displays Rear Vision Video Blind Spot Detection Heating, Ventilating and Air Conditioning (HVAC) Garage Door Openers Power Folding and Power Electronic Toll Collection Extending Technologies Reverse and Forward Spotlight Lighting Ground Illumination & Projection Lighting

Door Handle Illumination Headlamps & Tail Lamps Small Lighting and Tail Lamps Pocket and Ground Illumination LED Lighting Fog Lamps Projection Logo Lights Halogen & High Intensity Centre High Mount Stop Lamps Discharge (HID) Reflectors Exterior & Interior Illumination LED Lighting Halogen & HID Projectors and Electronic Handles Bi-Function Projectors

Electronic Controllers Body/Mirror Controls Lighting Controls

The primary processes involved in the manufacture of our vision products include: electronics integration; injection molding; painting; as well as manual and automated assembly.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Advanced Driver Assistance Systems (ADAS) We design, engineer and manufacture ADAS, as well as secure connectivity products and electronic components for the global automotive industry.

Automated Systems Secure Connectivity Electronic Controllers Automated Reverse and Parking Cyber Threat Detection & Chassis Controls Assistance (camera-based and Prevention ultrasonic) Glow Plug Controls Secure Communications Semi-Autonomous Driving Motor Controls Over-the-Air Updates Automated Emergency Braking Emergency Services (e-Call) Surround View Object / Lane Detection (including cross traffic recognition) Trailer Angle Detection Object and Lane Detection Traffic Sign Recognition Lighting Automation

The primary processes involved in the manufacture of ADAS and electronics products include: surface mount placements of electronic components on printed circuit boards; as well as manual and automated assembly of electronic modules.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exterior Systems We design, engineer and manufacture various exterior components and systems for the global automotive industry, including commercial truck product markets.

Fascia & Trim Front End Modules Liftgate & Exterior Modules Front and Rear Bumper Fascias Front End Carriers / Grille Liftgate Modules Opening Reinforcements Energy Management Systems Polycarbonate Roof Modules Full or Partial Front End Modular Spoilers & Grilles Assemblies (Fascia, Cooling Rocker Panels and Claddings Components, Headlamps, Sensors, Wiring and Latches) Decklid and Pillar Appliques Wheel Opening Moldings

Active Aerodynamics Lightweight Composites Hidden & Class A Active Grille Hoods, Roofs & Decklids Systems Fenders Structural Beams & Reinforcements Underbody Shields

We utilize a number of different technologies and processes in connection with these products, including: molding technologies, such as injection molding, structural reaction injection, reaction injection, compression and thermoset molding; finishing processes, including painting, hardcoating, chrome plating, vacuum anodizing; and manual and automated assembly and sequencing.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Powertrain Systems We design, engineer and manufacture powertrain systems and components for the global automotive industry.

Transmissions Driveline Systems Fluid Pressure & Controls Manual Transmissions Transfer Cases Engine Oil, Mechanical Vacuum and Water Pumps Dual-Clutch Automatic Coupling Systems Transmissions Tandem Pumps AWD/4x4 Disconnect Systems Hybrid Transmissions Transmission Oil Pumps Rear Drive Modules (RDM) Electric Vehicle Transmissions ePumps (Coolant, Oil, Purge & Front and Rear Axle Drives Vacuum) Power Take-Off Units Electronic Cooling Fans Thermal Management Modules High Pressure Hydraulic Pumps Electric Cam Phasers Powertrain Actuators Actuators & System Control

Metal Forming Solutions Engineering Services Electronic Controllers Transmission Clutch Modules System Engineering and Pump Controls Architecture Clutch Hubs & Housings Transfer Case Controls Vehicle, Engine & Drivetrain Die Casting Products Engineering Transmission Controls Accessory Drives Electrics / Electronics / Powertrain Controls Oil Pan Modules Mechatronics Flexplates / Driveplates Simulation & Testing Services Planetary Carriers Technical Application Software & Support Geared Products Prototyping & Low-Volume Transmission Oil Pan Modules Production Electrification of Vehicles

We employ a variety of different manufacturing capabilities and processing technologies in our powertrain operations, including: metal die-forming; flow-forming; stamping and spinning; synchronous roll-forming; die-spline rolling; precision-heavy stamping; fineblanking; aluminum die casting and precision machining; magnesium machining; plastic injection molding; welding; soft and hard processing of gears and shafts; rotary swaging; hardening; laser welding; manual and automated assembly; and end-of-line testing. We also possess extensive powertrain integration capabilities.

We conduct some of our powertrain operations through joint ventures, including a non-controlling, 50% voting (76.7% equity) partnership interest in the Litens Automotive Partnership (Litens), a partnership with certain members of its current and retired senior management. Litens is a leading supplier of highly-engineered drive subsystems and components. Its product offerings include accessory drive systems and products, such as auto tensioners and idlers, OAD overrunning alternator decoupler assemblies, Torqfiltr crankshaft vibration control technology, isolating crank pulley assemblies and clutched waterpump pulleys and assemblies; timing drive systems and products, such as belt and chain tensioners and idlers, SmartSprocket tuned sprockets and clutched waterpump pulleys and assemblies; and other specialty products for vehicle start / stop subsystems. Litens has manufacturing operations in North America (Canada), Europe (Germany), Asia (China and India) and Rest of World (Brazil).

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Roof Systems We design, engineer and manufacture vehicle roof systems for the global automotive industry.

Sliding Folding & Modular Roofs Retractable Hard Tops Soft Tops Roof Openings with Fixed C Multi-Piece Modules Classic Soft Tops pillars Integration Services Manual and Fully Automatic Soft Various Fabric Solutions Tops Design Services Flash to the Roof Panels Rail-to-Rail Concepts Roof Openings Spanning the Entire Vehicle Width Roof Openings with Intermediate Positions

Processes employed in our roof systems operations include: cut and sew of complete fabric covers; backlight gluing; as well as manual and automated complete roof assembly.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Complete Vehicle Engineering & Contract Manufacturing We provide components, systems, vehicle engineering and contract vehicle manufacturing services for the automotive industry. We are a leading brand-independent assembler of complete vehicles, and an experienced engineering and manufacturing partner.

Engineering Services Contract Manufacturing Fuel Systems Design & Vehicle Concepts Vehicle Contract Manufacturing Fuel Tanks (Steel, Plastic & Aluminum) Complete Vehicle Door Modules Development & Integration Tank Filler Pipes (Steel & Plastic) Structural Components Systems & Modules Diesel Misfueling Protection Development Industrial Services Fuel, Oil and Cooling Caps Safety Engineering Selective Catalytic Reduction Prototype and Low-Volume (SCR) Tank Caps Production Compressed Natural Gas (CNG) Test Bed Services and Hydrogen Gas (H2) Fuel Systems Hybrid & Electric Vehicles

Processes employed in our vehicle engineering and contract assembly operations include: manual and automated welding; bonding and riveting; manual and automated painting/coating (dipped and sprayed) and sealing; cycler testing; as well as manual and automated assembly.

Tooling / Engineering / Other We design, engineer and manufacture tooling for our own use, as well as for sale to our customers. Additionally, we provide engineering support services, independent of particular production programs on which we may have production sales.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Research & Development We have historically emphasized technology development and product and process innovation as a key element of our business strategy. See Section 2. Our Business Strategy Operational Priorities. We expect that our involvement in the development of innovative product and process technologies in cooperation with automobile manufacturers will increase as automobile manufacturers further involve automotive suppliers in the vehicle development process.

Our research and development activities are conducted through our innovation development process or IDP. These activities involve close collaboration between our Corporate R&D group, under the global direction of our Executive Vice-President and Chief Technology Officer and each of our operating groups.

The IDP is a multi-stage process aimed at turning ideas into innovations that can ultimately be commercialized. The initial stage of the process is designed to foster generation of ideas and includes, among other things: identification, understanding and analysis of societal, digital, demographic, regulatory, industry and other trends which may create demand for and thus drive development of new automotive technologies; review of academic research; and automotive customer input.

Concepts that progress past this initial stage are further evaluated, including with respect to: fit with our innovation pillars (discussed below); commercialization potential; as well as risks and challenges to further development. Selected innovations then progress through subsequent stages towards product or process realization, validation and, eventually, product launch.

To augment our own innovation efforts and gain access to innovative thinking outside of our company, we engage with potential inventors, entrepreneurs, universities, technical institutions, the venture capital community and start-ups to help bring innovative ideas to market. As part of our continuing efforts to develop innovative solutions to unmet needs in the automotive industry, we have in recent years investigated over 86 new potential innovations, which have led to 22 active projects, and have invested $69 million in equity investment in 13 new technology partnerships. More specifically, as part of our open innovation efforts, we have undertaken a number of initiatives and investments recently, including: our partnership with Innoviz Technologies Ltd. to deliver LiDAR remote sensing solutions for the implementation of autonomous driving features and full autonomy in future vehicles; our partnership with NextAI and other founding partners to bring global Artificial Intelligence (AI) talent and entrepreneurs to Toronto, where they will work with corporate, academic and technology partners to develop commercially-viable AI ventures; establishment of an advanced technology advisory board which includes leaders from their respective fields with more than 180 years of collective experience in product innovation and the implementation of new technologies and/or disruptive business models; and sponsorship and promotion of a Magna employee innovation challenge, which seeks ideas from within the company, serves as an incubator of future developments, and has resulted in over 2,000 submitted ideas in the two years since its inception.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Innovations Innovation is a foundation of Magnas past success, an important factor in our competitiveness, a key operational priority and a critical element of our business strategy. Our current strategic focus on innovation is aimed at responding to key industry trends, including the growth of: new mobility services, secure connectivity and automated driver assistance, vehicle electrification and autonomous driving. Further, we are developing products and processes that fit within one of the four innovation pillars discussed below. Some examples of recent innovations within such pillars follow:

PITCH SLIDE AND TIP SLIDE EZ ENTRY SEATS Our Pitch Slide and Tip Slide 2nd Row EZ Entry vehicle seats represent our latest seating innovations. The Pitch Slide seat is specifically engineered for the second row passenger side of the vehicle, while the Tip Slide is made for the second row drivers side. This new design allows easier accessibility and greater space flexibility. Our i-DiSC 4 recliners and META tracks allow the seats to release and move forward to maximize the opening for passengers to enter and exit a vehicles third row of seats and also functions without having to remove an installed child or infant seat. The seats have been introduced on 2017 model-year vehicles, with the Pitch Slide recently making its market debut with GMC. ULTRA ALL-WHEEL DRIVE (AWD) SYSTEM We have partnered with Audi® on the new Quattro® Ultra All-Wheel Drive system, which is based on our Flex4 all-wheel drive technology. This technology now makes it possible to have an all-wheel-drive disconnect system that automatically activates all four wheels only when necessary, which is approximately 20% of all driving conditions. The disconnect system goes beyond systems currently available on the market to reduce friction and transmission losses, which improves fuel efficiency and emissions and improves driving performance and stability. The AWD system was launched on the Audi® A4 allroad in 2016. ULTRALIGHT DOOR MODULE We have partnered with the U.S. Department of Energy, Fiat Chrysler and Grupo Antolin to develop an ultralight door architecture. This new architecture reflects a combination of Magnas SmartLatchTM electronic latch system and aluminum for door-in-white assembly that achieves a 42.5% mass reduction compared to an average current production door. This innovation will help global automakers meet emissions standards and reduce fuel consumption through lightweighting. The next steps include manufacturing full-scale prototype door assemblies, performance tests and safety tests to validate the design, with the goal of eventual availability for use in production vehicles. Smarter Comfort, Convenience and Connectivity. DESIGNING AND DELIVERING AN INSPIRED, BEST-IN-CLASS CABIN EXPERIENCE Cleaner Efficiency Sustainability and. OPTIMIZING THE USE OF ENERGY TO MEET THE NEEDS OF OUR CUSTOMERS AND OUR PLANET Safer Passive Active Safety and . ENGINEERING PROTECTION AND PEACE OF MIND FOR ALL WHO SHARE THE ROAD Lighter Lightweight and Science Material . DRIVING PERFORMANCE AND QUALITY THROUGH INNOVATIVE MASS REDUCTION EYERIS® IN-CABIN CHILD MONITORING FEATURE We have developed a video-based child-monitoring system, which is an industry-first feature based on Magnas EYERIS® camera technologies. The child-monitoring system features a digital camera located over the rear seat which provides the front passengers with a top-down view of children in the rear seats on a display screen. In low-light or dark conditions, passengers are illuminated by an infrared LED light and can be seen on the screen. The system recently debuted on a new minivan at the 2017 North American International Auto Show. D-OPTIC LIGHTING We are improving forward visibility for drivers and providing customized styling options for automakers through the introduction of our D-Optic LED headlamps. D-Optic lighting combines multiple high-power LEDs with precise, injection-molded lenses to achieve high performance with efficient energy use. The LED lights in D-Optic provide a 60% energy-consumption improvement compared to halogen and a 40% improvement compared to High Intensity Discharge (HID) lights. CARBON FIBER SUBFRAME We have collaborated with Ford to develop a prototype carbon-fiber composite subframe. Our engineering team focused on the design, materials and processing to address the challenge of weight reduction using composite materials and manufacturing processes. The carbon-fiber subframe reduces vehicle mass by 34% compared to making the same part out of stamped steel. In addition, the prototype subframe achieves an 87% part reduction by replacing 45 steel parts with two molded parts and four metallic parts. We are currently producing prototype subframes for vehicle-level testing at Ford. CLEARVIEW OUTSIDE MIRROR We have developed the ClearView outside mirror that combines a camera into a traditional mirror and displays a live feed within the vehicle to provide a larger field of view and enhanced depth perception for blind zone detection. ClearView offers unique features such as a self-cleaning camera and customizable graphical overlays, while still incorporating traditional outside mirror features such as turn signals, power fold, ground illumination and surround view cameras.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document In addition to the innovations described above, a number of our innovations have received accolades and awards in 2016, including the following: Our SmartLatch electronic side-door latch, an industry first innovation that requires no cables, rods or moving handles in the door, was selected as the winner for the 2016 Automotive News Pace Awards, the companys fourth PACE Award in the last six years. Our carbon fiber hoods for Cadillac, which are more than 27 percent lighter than aluminum hoods and 72 percent lighter than steel hoods, were selected as a 2016 JEC Group Americas Innovation Award winner in the automotive category for the molding process used in making the hoods. The award given by JEC, a composites industry association, is based on technical excellence, working with supply-chain partners, market potential and originality. Our rear view camera and innovative image processing technologies featured in the 2016 Ford Super Duty Trailer Reverse Guidance system, has received the 2016 Ford World Excellence Award in the smart category for its innovative technology. We received several awards recognizing our innovative use of plastics from the Society of Plastics Engineers (SPE). Magnas lightweight skid plate made for a European automaker won SPEs Grand Prize Award, representing top honors across all product categories. The skid plate also placed first in the Exteriors category. Magnas active grille shutter and Cadillac ATS-V and CTS-V carbon fiber hood placed second and fourth, respectively in the same category. The company also received the SPEs Innovation Award in the Exteriors category for its use of laser cutting and welding of front and rear fascias on the 2017 Chevrolet Camaro 2L1.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Manufacturing & Engineering Facilities As at December 31, 2016, we had the following manufacturing and product development, engineering and sales facilities:

Product Development, Geographic Region Manufacturing Engineering and Sales North America 135 25 Europe 114 50 Asia 54 25 Rest of World 14 2 TOTAL 317 102

Our manufacturing facilities occupied approximately 69 million square feet, of which approximately 60% was leased from third parties (including 29% leased from Granite Real Estate Investment Trust (Granite REIT), a Canadian-based, publicly-traded real estate investment trust). The remaining 40% of manufacturing facilities were owned by us. Most of our manufacturing facilities maintain an in-house tooling capability with a staff of experienced tool and die makers. We are operating many of our manufacturing facilities on a multi-shift basis.

Our product development and engineering facilities occupied approximately 3.7 million square feet, of which approximately 89% was leased from third parties (including 29% leased from Granite REIT) and the remaining 11% was owned by us.

Leases typically have terms of at least five years with one or more options to renew. Among other terms, our leases typically require us to return the facilities to the condition in which we received them at start of the lease (reasonable wear and tear excepted). From time to time, the cost of doing so may be significant due to such factors as the length of the lease period, the nature of the manufacturing operations, the extent of modifications made to the lease premises over the term of the lease and other factors.

Key Commodities We purchase the majority of our commodities from regional suppliers where we do business. Factors such as price, quality, transportation costs, warehousing costs, availability of supply and timeliness of delivery have an impact on the decision to source from certain suppliers. We also purchase some key commodities offshore when shortages occur or when we choose to source one supplier for a global program. Prices for certain key commodities used in our parts production, particularly steel and resin, continue to be volatile. Approximately two-thirds of our steel is acquired through resale programs operated by automobile manufacturers and the balance is generally acquired through annual or six month contracts. Under customer steel resale programs we are not exposed to steel price volatility, thus helping to manage our production costs. Most of our resin purchases fluctuate directly with market indexes, although we do participate in some customer resale programs on a small portion of our resin purchases. To date, we have not experienced any significant difficulty in obtaining supplies of parts, components or key commodities for our manufacturing operations. Consistent with lean manufacturing principles, we do not carry inventories of key commodities or finished products significantly in excess of those reasonably required to meet production and shipping schedules.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Human Resources As at December 31, 2016, we employed over 155,000 people as follows:

Geographic Region Number of Employees North America 74,150 Europe 55,575 Asia 22,125 Rest of World 3,600 TOTAL 155,450

Human Resource Principles Employee Equity Participation and Profit Sharing Program To ensure employees participate in profits and share ownership (a key principle expressed in our Employees Charter) we have a long- standing practice of allocating 10% of our annual pre-tax profits before profit sharing to eligible employees under our employee equity and profit participation program.

Management Incentive Compensation We believe that the managers who run their business units as if they owned them are best able to generate strong operating and financial performance. In order to create such an entrepreneurial culture within the framework of a large, global, public company, we maintain a decentralized operating structure which gives significant operational autonomy to our managers at each of the three primary levels of management Divisional, Group and Executive. Additionally, we have historically employed the following basic compensation principles for management: minimal fixed compensation in the form of salaries; annual profit-based incentive bonuses, portions of which are deferred for almost three years and delivered in the form of equity; long-term equity incentives; and the absence of pensions or retirement benefits.

Our compensation system also incorporates a number of other important elements, including significant equity maintenance requirements for senior management, as well as various compensation risk management tools to promote responsible decision-making. For a detailed discussion of our executive compensation, see Compensation and Performance Report and Compensation Discussion & Analysis in our Circular.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Employees Charter We are committed to an operating philosophy based on fairness and concern for people. This philosophy is part of our Fair Enterprise culture in which employees and management share in the responsibility to help ensure our success. Our Employees Charter embodies this philosophy through the following principles: Job Security Being competitive by making a better product for a better price is the best way to enhance job security. We are committed to working together with our employees to help protect their job security. To assist in this regard, we provide job counselling, training and employee assistance programs to our employees. A Safe and Healthful Workplace We strive to provide our employees with a working environment that is safe and healthful. Fair Treatment We offer equal opportunities based on an individuals qualifications and performance, free from discrimination or favouritism. Competitive Wages and Benefits We provide our employees with information which enables them to compare their total compensation, including wages and benefits, with those earned by employees of direct competitors and local companies with which an employees Division competes for labour. If total compensation is not competitive, it will be adjusted. Employee Equity and Profit Participation We believe that our employees should share in our financial success. Communication and Information Through regular monthly meetings between management and employees and through various publications and videos, we provide our employees with information so that they know what is going on in the company and in the industry. Employee Hotline Should any of our employees have a problem, or feel the foregoing principles are not being met, we encourage them to contact the Hotline to register their complaints. Employees do not have to give their names, but if they do, it is held in strict confidence. Hotline investigators will respond to employees. The Hotline is committed to investigating and resolving all concerns or complaints and must report the outcome to our Global Human Resources Department.

Human Resource Policies We value diversity and view it as a competitive advantage. Our Employees Charter has fostered diversity through the principles of fair treatment and equal opportunity based on an individuals qualifications and performance, free of discrimination or favouritism, and we regularly reinforce these principles through employee meetings, training and communications. Any employee who believes that we are not living up to any of the principles in the Employees Charter, including the principle of fair treatment, can seek redress through our Employee Hotline, a confidential and anonymous process through which employee complaints are reported and investigated.

In furtherance of our commitment to fairness, as demonstrated in our Employees Charter, we have established Fairness Committees in most of our North American and in many European manufacturing facilities which enable employees at such facilities to have many of their concerns resolved by a committee comprised of both management and employees. Most of our North American manufacturing facilities also have an Employee Advocate who works with our employees and management to ensure that any concerns that arise in the

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document workplace are addressed quickly and in accordance with our Employees Charter and Operational Principles. An Employee Advocate can only be removed if more than 65% of the shop floor employees at the applicable Division vote to remove him or her through a secret ballot vote.

We have established many employee communication programs, such as monthly divisional employee meetings, continuous improvement team meetings, an Employee Hotline and employee opinion surveys to help ensure employee involvement and feedback.

In addition to the employee equity participation and profit sharing programs discussed under Human Resource Principles, we maintain a group registered retirement savings plan in Canada and a 401(k) plan in the United States, whereby we partially match employees contributions made through payroll deductions. These plans complement the employee equity participation and profit sharing programs and are designed to assist employees in providing replacement income for retirement.

Labour Relations We believe in the importance of maintaining positive relations with our employees and, where applicable, with the unions and/or work councils representing the employees at certain of our operating Divisions.

On October 15, 2007, we announced that we had entered into the Framework of Fairness Agreement (FFA) with the Canadian Auto Workers union (CAW) (now Unifor). The FFA is a set of principles which balance the needs of employees and the needs of business to be competitive. If a majority of workers in a facility vote in favour, then that plant will be covered by a new Magna-Unifor national collective agreement.

The key terms and conditions of the FFA include: preservation of our Fair Enterprise culture and operating principles, including the sharing of our financial success through equity ownership, as set out in our Employees Charter; comprehensive no strike, no lock-out provisions with unresolved collective bargaining issues being settled through final offer selection arbitration; progressive concern resolution and plant representation mechanisms that preserve our Open Door Process, Fairness Committees, Employee Advocates and the Employee Hotline; competitive wage and benefit principles consistent with our Employees Charter; tying of annual wage adjustments to a manufacturing inflationary index, plant specific performance measures and competitive considerations; secret ballot voting on workplace issues; and generally, depoliticization of the workplace and labour-management relations.

Employees at three of our Canadian Divisions are covered by the Magna-Unifor national collective agreement under the FFA. These agreements are scheduled for renegotiation in late 2017.

Employees at one of our facilities in Canada are covered by a collective agreement with Unifor which does not fall under the FFA. This collective agreement was extended for an additional three years in November 2016. Employees at six of our Divisions in the United States are represented by the International Union, United

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Automobile, Aerospace and Agricultural Implement Workers of America (UAW). The forms of collective agreements negotiated with Unifor and the UAW recognize our unique operating philosophy, including our Employees Charter and fundamental Fair Enterprise principles. Most of these agreements recognize the need for wages and benefits to be competitive with companies we compete with for business, rather than those paid by our customers vehicle assembly operations. Moreover, in accordance with applicable labour relations legislation, strikes and lock-outs are prohibited during the life of such agreements.

Employees at a number of our Divisions in Mexico and the United Kingdom are currently covered by collective bargaining agreements with various unions in these jurisdictions. Employees at a number of our Divisions in continental Europe are covered by national industry- wide agreements relating to compensation and employment conditions and are members of in-house employees associations, works councils and/or trade unions. From time to time, various unions seek to represent groups of our employees and, as a result, we may become party to additional collective agreements in the future.

Awards Magna has been named one of the best places to work in Canada and has received the 2016 Glassdoor Employees Choice Award. The Employees Choice Awards program relies solely on the input of employees, who elect to provide feedback on their jobs, work environments and companies via Glassdoor, a global employer review website.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Competition We face numerous sources of competition in the markets in which we operate, primarily from automobile manufacturers and from other automotive suppliers, including ones in which one or more automobile manufacturers may have direct or indirect investments. There are a number of automotive suppliers that can produce the same types of components, assemblies, modules and systems that we currently produce. Some of our competitors may have greater technical or marketing resources than we do and some of them may be dominant in markets in which we operate. With the growing importance of electronics in the automotive value chain, a number of electronics and semiconductor companies have entered or expanded their presence in the automotive industry. Additionally, disruptive technology innovators are changing the competitive landscape of the automotive industry through the development of high-value product and service offerings. However, we believe that we possess a breadth of systems and vehicle integration capabilities and full vehicle competence which is unmatched by our competitors. In particular, our ability to take a holistic view of the vehicle, our electronics integration capabilities, and our extensive vehicle assembly and systems expertise, combined with our strong balance sheet, corporate culture, and other factors, provide us with an important competitive advantage.

The basis on which automobile manufacturers select automotive suppliers is determined by a number of factors, including: price; quality; service; historical performance; timeliness of delivery; proprietary technologies; scope of in-house capabilities; existing agreements; responsiveness to the customer; the suppliers overall relationship with the automobile manufacturer; the degree of available and unutilized capacity or resources in the manufacturing facilities of the automobile manufacturer; collective bargaining agreement provisions; labour relations issues; financial strength; and other factors. The number of competitors that are asked by automobile manufacturers to bid on any individual product has been reduced in many cases and we expect further reductions as a result of economic conditions in recent years and as automobile manufacturers follow through on their stated intentions of dealing with fewer suppliers and rewarding those suppliers with earlier and deeper involvement.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Sales & Marketing Customer Management Offices We have a globally-structured sales, engineering and marketing team spread across multiple global locations where our customers maintain engineering, commercial and/or manufacturing facilities. The various internal operating divisions and subsidiaries of the automobile manufacturers normally initiate many of their own purchasing decisions. As a result, an automobile manufacturer may effectively constitute multiple customers. We maintain customer management offices in the following locations:

North America Europe Asia Rest of World Canada Austria Japan Brazil Mexico Germany China United States United Kingdom South France Korea Italy India Sweden Thailand Poland Czech Republic Hungary Turkey Russia

Purchase Orders Our sales are generated through customer requests to quote on particular products and the tools and dies to produce parts. Purchase orders for our products are typically for one or more models, and typically extend over the life of each model, which is generally four to seven years. However, purchase orders issued by our automobile manufacturer customers typically do not require them to purchase any minimum number of our products. Releases under such purchase orders, which authorize us to supply specific quantities of products, are issued for planning, raw material and production purposes typically over a one to four month period in advance of anticipated delivery dates. The actual number of products that we supply under purchase orders in any given year is dependent upon the number of vehicles produced by the automobile manufacturers of the specific models in which those products are incorporated.

It has been our experience that once we receive purchase orders for products for a particular vehicle model or program, we will usually continue to supply those products until the end of that model or program. However, automobile manufacturers could cease sourcing their production requirements from us for a number of reasons, including if we refuse to accept demands for price reductions or other concessions.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Environmental Matters Health, Safety and Environmental Policy We are subject to a wide range of environmental laws and regulations relating to air emissions, soil and ground water quality, wastewater discharge, waste management and storage of hazardous substances. We aim to be an industry leader in environmental compliance with the intention to prevent pollution by reducing the impact of our operations on the environment and through technological innovation and process efficiencies. In furtherance of this aim, our Health, Safety and Environmental Policy (HSE Policy) commits us to: complying with, and exceeding where reasonably possible, all applicable health, safety and environmental laws, regulations and standards in all of our operations and conforming to our internal standards based on generally accepted environmental practices and established industry codes of practice; regularly evaluating and monitoring past and present business activities impacting upon health, safety and environmental matters; improving upon the efficient use of natural resources, including energy and water, minimizing waste streams and emissions, and implementing effective recycling in manufacturing operations, in each case, through the use of locally set continuous improvement targets; utilizing innovative design and engineering to reduce the environmental impact of our products during vehicle operation and at end of life; ensuring that a systematic review program is implemented and monitored at all times for each of our operations, with the goal of continual improvement in health, safety and environmental matters; and ensuring that adequate reports on health, safety and environmental matters are presented to our Board on an annual basis, at a minimum.

The Enterprise Risk Oversight Committee (EROC) of our Board assists in overseeing our handling of health, safety and environmental issues and annually reviews our HSE Policy. This Committee operates pursuant to a written charter, the text of which is located on our website (www.magna.com) under Corporate Governance, along with the text of our HSE Policy.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Environmental Compliance Certifications As part of our commitment to environmental compliance, we are also compliant with ISO 14001 standards where appropriate. As of December 31, 2016, 257 (over 69%) of our manufacturing facilities were ISO 14001 certified. In addition, our complete vehicle assembly plant in Graz, Austria, our largest facility, and several Getrag European operations are certified under the European Commissions Eco-Management and Audit Scheme (EMAS).

We have also initiated energy management activity within many of our manufacturing facilities, including as part of our World Class Manufacturing efforts. To date, 38 of our facilities have obtained ISO 50001 certification, with additional facilities targeting certification over the next few years.

Industrial Emissions We operate a number of manufacturing facilities that use environmentally sensitive processes and hazardous materials. Our manufacturing facilities are subject to a program of regular third party and internal environmental compliance audits or inspections. We believe that all of these operations meet, in all material respects, applicable governmental standards for waste handling and emissions. Notwithstanding this compliance, we have in the past and may in the future experience complaints regarding some of our manufacturing facilities from neighbouring parties. In the past, such complaints have been addressed by open dialogue with relevant stakeholders and, where appropriate, manufacturing process adjustments. In addition, facilities have in the past and may in the future receive a notice of violation or similar communication from local regulators during routine reviews. We have in the past and will continue in the future to address any such notices promptly.

Further, in spite of generating and disposing of hazardous wastes in full compliance with the regulations, a waste generator (manufacturing facility) can be named as a Potentially Responsible Party (PRP) if a U.S.-based waste handling or disposal facility used by the manufacturing facility goes bankrupt, or is otherwise unable to clean up any contamination associated with its operation. Costs associated with being a PRP could be material depending upon the site conditions and the number of participating PRPs. In order to mitigate this risk, each of our facilities requires that any waste haulers or disposal facilities that they use carry pollution liability insurance in addition to being appropriately licensed.

We are also subject to environmental laws requiring investigation and clean-up of environmental contamination. From time to time, our operations and properties become the subject of inquiries or investigations of environmental regulators. We are in various stages of investigation or clean-up at our manufacturing facilities where contamination has been alleged or identified. These stages include performing periodic soil and groundwater sampling, determining the most appropriate corrective action approach for remediating the contamination and obtaining regulatory approval of such approach, performing the remediation and monitoring the status of our remediation. Estimating environmental clean-up liabilities is complex and heavily dependent on the nature and extent of historical information and physical data about the contaminated site, the complexity of the contamination, the uncertainty of which remedy to apply and the outcome of discussions with regulatory authorities relating to the contamination. To date, the aggregate costs incurred in complying with

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document environmental laws and regulations, including the costs of clean-up and remediation, have not had a material adverse effect on us. However, changes in these government laws and regulations are ongoing and may make environmental compliance, such as emissions control and waste disposal, increasingly expensive. In 2016, we spent approximately $1.8 million on environmental clean-up and remediation costs and currently estimate similar or slightly higher expenditures for 2017. We are subject to environmental laws and regulations both as tenant and owner of our properties. Our leases with third party landlords generally provide that we must maintain the leased properties in accordance with all applicable laws, including environmental laws. We are also responsible for removing all hazardous and toxic substances as required by applicable laws and, in any event, prior to the termination of our occupation of the leased properties. Magna routinely conducts a Phase 1 Environmental Assessment, and if necessary a Phase 2 site investigation, at non-office locations prior to occupancy to identify any pre-existing contamination at leased or owned sites. Magna would typically be responsible to address new impacts or exacerbation of existing impacts as defined by lease terms or regulatory requirements. Our leases with third party landlords generally also contain indemnities in favour of the landlord with respect to environmental matters and those indemnities expire after a specified period of time following the termination of the leases.

Greenhouse Gas Emissions Regulations for greenhouse gas emissions from manufacturing operations are in place or proposed for a number of jurisdictions. They include phased-in mandatory reporting and, in some jurisdictions, reduction targets. Although our operations in various jurisdictions have to meet any applicable regulatory targets for greenhouse gas (GHG) reduction, our operations are not major emitters and generally do not exceed local reporting thresholds. Accordingly, we do not currently anticipate that current or future regulatory targets for such GHG reduction or future greenhouse gas emission caps would have a material adverse effect on our overall operations. Magna participates in the Carbon Disclosure Project, a not-for-profit project designed to provide investors with information relating to corporate greenhouse gas emissions, water use and perceived corporate risk due to climate change.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Corporate Social Responsibility We are committed to being a good corporate citizen and have backed-up our commitment with concrete actions in five core areas:

Contributing to Society & Community Development Corporate Giving We have a long history of supporting social and charitable causes, primarily in the communities around the world in which our employees live and work.

Our donations and sponsorships are focused primarily on: Employee and Community Health and Wellness; Technical and Vocational Training/Education; Disaster Relief and Refugee Aid; Culture; and Youth Sports.

Employee Volunteerism We also encourage the efforts of those employees who devote their time, energy and passion to making a positive contribution to their workplace and communities through direct giving, special events, focused fundraising, volunteer work and other activities.

CONTRIBUTING TO SOCIETY & COMMUNITY DEVELOPMENT OCCUPATIONAL HEALTH & SAFETY ENVIRONMENTAL RESPONSIBILITY & STEWARDSHIP RESPECTING EMPLOYEE RIGHTS & GLOBAL WORKING CONDITIONS SUPPLY CHAIN RESPONSIBILITY

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Occupational Health & Safety Safe and Healthful Working Environment Our employees are a key factor in our success and protection of their health and well-being is important to us. We have long demonstrated a strong commitment to providing a safe and healthful work environment for our employees and visitors to our facilities, as reinforced through our Employees Charter. To the extent an employee believes we have not fulfilled our promise to provide a safe and healthful working environment, he or she has numerous avenues to elevate the concern, including our Employee Hotline. Additionally, our HSE Policy articulates our goal of being an industry leader in providing a safe and healthful working environment. This commitment is fulfilled through a regular program of health and safety audits and inspections of our global facilities, covering health, safety, industrial-hygiene, industrial ergonomics and emergency preparedness policies and action plans. The results of our health and safety audits and inspections are reported bi-annually to and overseen by the EROC. Our health and safety department holds regular conferences with representatives of our manufacturing facilities to reinforce our commitment to providing a safe and healthful work environment and share best practices with respect to occupational health and safety.

Ergonomics Program Utilizing international and regional standards, including best practices, our Divisions incorporate a management system approach to control risk, achieve legislative compliance and reduce accidents. Each Division incorporates different committees including joint health and safety, ergonomic and focus groups to prioritize and implement practices to address and control location specific hazards. A key program for supporting employee well-being is our ergonomics program which aims to reduce the risk of musculoskeletal injuries. Managed by the Divisions ergonomic committee and with the support and guidance of corporate ergonomists, the program regularly evaluates each Divisions performance against a set of established criteria.

Environmental Responsibility & Stewardship We are committed to being an industry leader in environmental practices, including efficient use of natural resources, minimization of waste streams and emissions and innovation to reduce the environmental impact of our products. We seek to comply with or, where reasonably possible, exceed environmental regulatory requirements and minimize the impact of our operations on the environment. Although our manufacturing facilities are generally not significant greenhouse gas emitters or water users, we participate in the Carbon Disclosure Project, a not-for-profit project which provides investors with information relating to corporate greenhouse gas emissions, water use and perceived corporate risk due to climate change.

We maintain an environmental compliance program consisting of regular third party and internal audits or inspections of our facilities for compliance with local regulations, our internal corporate standards and industry best practices. The results of our environmental program are reported bi-annually to and are overseen by the EROC. A more detailed discussion of our environmental compliance program and the requirements of our HSE Policy can be found above under Section 3. Description of the Business Environmental Matters. Our environmental department holds regular conferences with representatives from our manufacturing facilities to reinforce our commitment to environmental responsibility, keep our local and regional teams informed of changing regulations and to share best practices with respect to environmental compliance and sustainability initiatives.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Sustainability Through Innovation One of the most important ways we contribute to environmental sustainability is through development of automotive technologies that support our customers goals of producing vehicles with reduced emissions and lower fuel consumption. Some recent examples of innovative products we have developed in connection with these goals can be found above under Section 3. Description of the Business Research & Development.

Waste Elimination & Recycling Our Operational Principles, which are posted in each of our facilities globally, include waste and scrap elimination as a key principle. Waste reduction and scrap elimination will continue to be important considerations in our manufacturing activities, including as part of our efforts to implement World Class Manufacturing in our facilities globally. One example of our waste reduction efforts is our packaging and packing initiative which aims to replace disposable packaging with reusable packaging for our parts, as well as, redesigning product packaging to more efficiently use space when transporting products to our customers; reducing the number of trips needed.

Energy & Water Reduction Many of our facilities around the globe have developed structured energy teams tasked with achieving energy reductions through efficiency improvements. A number of our Divisions have made important incremental changes that have reduced our energy consumption, including energy efficient lighting retrofits, compressed air leak detection and repair, door upgrades to reduce heat loss, use of ceiling fans to blend air temperatures and prevent heat over-delivery and monitoring of electrical panel efficiency. In addition, a number of our Divisions have undertaken initiatives to reduce water usage, including through use of recycled water in the manufacturing process. These initiatives are supported at the corporate level, including through: training courses designed to promote strategies for reduced energy use; an internal energy savings collaboration site which allows Divisions to view implemented projects, associated costs and savings and implementation recommendations; and our two energy Champions (North America and Europe) who identify and promote energy reduction initiatives.

In 2016, we received a Continuous Energy Improvement Award from Enbridge Gas Distribution for our natural gas savings, environmental practices and energy-efficiency initiatives. Sixteen of our energy-efficiency projects that have been implemented across Canada achieved an annual natural gas saving of 2.75 million cubic metres, the carbon emission equivalent of planting more than 1,600 trees.

Respecting Employee Rights & Global Working Conditions We are committed to providing working conditions and standards that promote dignified and respectful treatment of all of our employees globally, as well as those within our supply chain. Our Global Working Conditions, together with our Code of Conduct prohibit use of child, underage, slave or forced labour. Among other things, the Global Working Conditions also articulate our belief that workers have the right to associate freely and join labour unions or workers councils in accordance with applicable laws. Our Global Working Conditions are an integral part of our supplier package and a failure by any of our suppliers to comply with its terms can result in the termination by Magna of the supply relationship.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Supply Chain Responsibility Our Expectations of our Suppliers Our contractual arrangements with suppliers require, among other things, compliance with our Code of Conduct, including compliance with laws, respect for employee rights and environmental responsibility. Our Global Working Conditions (discussed above) are communicated to our suppliers and a failure by any of our suppliers to comply with its terms can result in the termination by Magna of the supply relationship. We also support and are actively participating in automotive industry efforts to develop common industry standards relating to business ethics, environmental standards, working conditions and employee rights. We will continue to engage with our suppliers to raise awareness of the importance of social responsibility in our supply chain.

Supplier Diversity We participate in a number of supplier diversity initiatives and support it through our purchasing activities. To further support our supplier diversity efforts, we participate as a corporate member of a number of industry-recognized supplier diversity organizations.

Conflict Minerals Consistent with the approach taken by our customers, suppliers and other fellow members of the Automotive Industry Action Group, we are engaged in an annual process of determining whether any products which we make or buy contain such conflict minerals. Our latest conflict minerals report is available on our website www.magna.com and on the SECs EDGAR website (www.sec.gov/edgar). We continue to work with our suppliers to increase awareness, and accuracy, of conflict minerals reporting requirements and, through our membership in the Conflict Free Sourcing Initiative (CFSI), support continuing cross-industry efforts to identify and validate conflict- free smelters and refiners.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Ethics & Legal Compliance We strive to be an ethical and responsible corporate citizen and are committed to conducting business in a legal and ethical manner globally. Our Chief Executive Officer, and our Executive and Group Management, have communicated and consistently reinforced our clear and unequivocal compliance expectations through all levels of our organization. Our Code of Conduct, which applies equally to all of our Directors, officers and employees, articulates our compliance-oriented values and our expectations generally. It also establishes our standards of conduct in a number of specific areas, including: employment practices and employee rights; respect for human rights; compliance with law, generally; conducting business with integrity, fairness and respect; fair dealing, including prohibition on giving or receiving bribes; accurate financial reporting; standards of conduct for senior financial officers; prohibition on insider trading and derivative monetization transactions; timely public disclosure of material information; compliance with antitrust and competition laws; environmental responsibility; occupational health and safety; management of conflicts of interest; protection of employees confidential information; and compliance with our corporate policies.

The Code of Conduct, which is disclosed on the corporate governance section of our website (www.magna.com) and posted on our employee intranet in 24 different languages, is administered and overseen by the EROC. The Code of Conduct is reviewed every two years and proposed amendments must be approved by our Board. We have also supplemented and reinforced the requirements of the Code of Conduct through the adoption of policies covering: bribery and improper payments; tooling practices; gifts and entertainment; anti-retaliation; careful communication; conflicts of interest and anti-trust and competition laws.

In order to help our employees understand the values, standards and principles underlying the Code of Conduct, we have implemented an ethics and legal compliance program (ELC Program) which includes both live and online training. Online training was rolled-out in 2012, and continues to be a key element of our training program. We have also developed specialized compliance training modules which target specific functional audiences and high-risk regions. In addition to providing training on legal compliance and ethics topics generally, these specialized programs are designed to be interactive and incorporate real-life scenarios and exercises, which we believe amplifies our compliance expectations and resonates more powerfully with participants.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The EROC oversees our ELC Program, which aims to assist employees in understanding the values, standards and principles underlying the Code of Conduct, as well as the application of such values, standards and principles to real-life situations encountered by employees in different roles. The global implementation of the program is supervised by the Magna Compliance Council, a body that includes key corporate officers representing our finance, legal, human resources, operations, internal audit, sales and marketing and ethics & compliance function. The Compliance Council is tasked with, among other things, providing overall direction for our compliance program, approving key initiatives and ensuring that the required elements of our compliance program are being carried out globally by our cross-functional product group Compliance Committees. These product group Compliance Committees are supported by cross- functional regional Compliance Committees.

We formed the North American Automotive Compliance Roundtable (ACR) to benchmark and share compliance best practices with our customers and Tier 1 competitors. The North American ACR currently has 12 members including Ford, GM and Chrysler who meet in-person three times per year in Detroit. Due to the success of the North American ACR, we also formed the European Automotive Compliance Roundtable, which currently has 13 members including Daimler, Ford and General Motors/Opel.

We also maintain a confidential and anonymous whistle-blowing line known as the Good Business Line (GBL), which is overseen by our Audit Committee. The GBL is available for employees and other stakeholders such as customers and suppliers to make submissions 24 hours per day, seven days a week, in over 20 languages, by phone, mail or online (www.magnagbl.com). Submissions are received and tracked by an independent third-party service provider. Reports to the GBL are reviewed by our Internal Audit and Corporate Legal departments and, when appropriate, an investigation is conducted. The Vice-President, Internal Audit together with our Corporate Legal department supervises all GBL-related investigations. The Audit Committee receives quarterly presentations regarding GBL activity and details of submissions are discussed by the head of Internal Audit with the Audit Committee without members of Management present. We have also recently launched an internal site for employee self-disclosure of any conflict of interest. Our other ethics and legal compliance initiatives include risk assessments focused on identifying and mitigating areas of compliance risk, as well as due diligence on those suppliers and vendors who interact with government officials on our behalf to ensure that they do not have a past history of corruption and bribery.

In 2016, the EROC oversaw the retention of an external third party to provide an independent benchmarking assessment of the structure and effectiveness of our ELC Program. The assessment report confirmed that Magna maintains an ELC Program that reflected both a highly commendable tone from the top and a great deal of thoughtful and rigorous design and implementation of the various program measures.

Intellectual Property We own and use numerous patents and patent applications in connection with our operations. We are also licensed to use patents or technology owned by others. From time to time, claims of patent infringement are made by or against us. None of the claims against us has had, and we believe that none of the current claims will have, a material adverse effect upon us. While in the aggregate our patents and licenses are considered important in the operation of our business, we do not consider them of such importance that the expiry of any one patent or license would materially affect our business.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Risk Factors The industry in which we compete and the business we conduct are subject to a number of risks and uncertainties. These risks and uncertainties, together with a number of assumptions underlie the forward-looking statements made in this Annual Information Form. In order to fully understand these risks, uncertainties and assumptions, you should carefully consider the following risk factors in addition to other information included in this Annual Information Form.

A worsening of economic and political conditions may result in lower consumer confidence. Lower consumer confidence could result in a decline in production volumes as a result of lower consumer demand which could have a material adverse effect on our profitability.

The global automotive industry is cyclical, with the potential for regional differences in timing of expansion and contraction. A worsening of economic or political conditions in North America, Europe or Asia, including through rising interest rates or inflation, rising unemployment, increasing energy prices, declining real estate values, increased volatility in global capital markets, international conflicts, sovereign debt concerns, an increase in protectionist trade measures, collapse of multilateral trade or currency unions and/or other factors, may result in lower consumer confidence. Lower consumer confidence typically results in lower vehicle sales levels, which in turn would typically result in lower vehicle production levels. A significant decline in vehicle production volumes from current levels could have a material adverse effect on our profitability.

The growth of protectionist sentiments and implementation of measures which impede the free movement of goods, services, people and capital could have a material adverse effect on our operations and profitability.

The election of protectionist governments could lead to the withdrawal of some countries from, or renegotiation of, multilateral trade, economic or currency regimes such as the European Union, North American Free Trade Agreement and Trans-Pacific Partnership. The automobile industry is a highly globalized industry which is currently dependent on open borders and the free movement of goods, services, people and capital, particularly in Europe and North America. The continued growth of protectionist sentiments and implementation of measures which impede the free movement of goods, services, people and capital could have a material adverse effect on our operations, profitability or results of operations.

The uncertainty created by rapidly changing economic or political conditions could have a material adverse effect on our profitability or financial condition.

The uncertainty created by rapidly changing economic or political conditions may impact our ability to plan effectively for our business over the short- and medium-terms. For example, we may establish production capacity at different facilities, including our complete vehicle assembly operations in Austria, based on production volumes which fail to materialize. A material variation between our planning assumptions and actual outcomes could have a material adverse effect on our profitability or financial condition.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Significant long-term fluctuations in relative currency values could have an adverse effect on our profitability and financial condition, and could adversely impact our competitiveness in certain regions.

Although our financial results are reported in U.S. dollars, a significant portion of our sales and operating costs are realized in Canadian dollars, euros, British pounds and other currencies. Our profitability is affected by movements of the U.S. dollar against the Canadian dollar, the euro, the British pound and other currencies in which we generate revenues and incur expenses. Significant long-term fluctuations in relative currency values, in particular a significant change in the relative values of the U.S. dollar, Canadian dollar or euro, could have an adverse effect on our profitability and financial condition and any sustained change in such relative currency values could adversely impact our competitiveness in certain geographic regions.

Our profitability could be materially adversely affected by fines or penalties imposed by antitrust and competition regulatory authorities, including Brazilian antitrust authorities.

The automotive industry has in recent years been the subject of increased government enforcement of antitrust and competition laws, particularly by the United States Department of Justice and the European Commission. Antitrust enforcement proceedings can often continue for several years. Where wrongful conduct is found, the relevant antitrust authority can, depending on the jurisdiction, initiate administrative or criminal legal proceedings and impose administrative or criminal fines or penalties.

In September 2014, the Conselho Administrativo de Defesa Economica, Brazils Federal competition authority, attended at one of the Companys operating Divisions in Brazil to obtain information in connection with an ongoing antitrust investigation relating to suppliers of automotive door latches and related products.

At this time, management is unable to predict the duration or outcome of the Brazilian investigation, including whether any of our operating Divisions will be found liable for any violation of law or the extent or magnitude of any liability, if found to be liable.

The Companys policy is to comply with all applicable laws, including antitrust and competition laws. The Company has initiated a global review focused on antitrust risk led by a team of external counsel. If any antitrust violation is found as a result of such review, a regulatory investigation or otherwise, Magna could be subject to fines, penalties, restitution settlements and civil, administrative or criminal legal proceedings that could have a material adverse effect on Magnas profitability in the year in which any such fine or penalty is imposed or the outcome of any such proceeding is determined. Additionally, Magna could be subject to other consequences, including reputational damage, which could have a material adverse effect on our operations.

Our profitability may be adversely affected by program launch difficulties.

The launch of new business is a complex process, the success of which depends on a wide range of factors, including the production readiness of our and our suppliers manufacturing facilities, as well as factors related to manufacturing processes, tooling, equipment, employees, initial product quality and other factors. Our failure to successfully launch material new or takeover business could have a material adverse effect on our profitability.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Our inability to turn around underperforming operations could have a material adverse effect on our profitability and operations.

Although we are working to turn around underperforming operating Divisions, there is no guarantee that we will be successful in doing so in the short to medium term or that the expected improvements will be fully realized or realized at all. We may also experience underperformance at operating Divisions not currently experiencing any issues. Significant underperformance of one or more operating Divisions could have a material adverse effect on our profitability and operations.

Our inability to offset price concessions or additional costs from our customers could have a material adverse effect on our profitability.

We face ongoing pricing pressure from automobile manufacturers, including through: long-term supply agreements with mutually agreed price reductions over the life of the agreement; incremental annual price concession demands; pressure to absorb costs related to product design, engineering and tooling and other items previously paid for directly by automobile manufacturers; pressure to assume or offset commodities cost increases; and refusal to fully offset inflationary price increases. Automobile manufacturers possess significant leverage over their suppliers due to their purchasing power and the highly competitive nature of the automotive supply industry. As a result of the broad portfolio of parts we supply to our six largest customers, such customers may be able to exert greater leverage over us as compared to our competitors. We attempt to offset price concessions and costs in a number of ways, including through negotiations with our customers, improved operating efficiencies and cost reduction efforts. Our inability to fully offset price concessions or costs previously paid for by automobile manufacturers could have a material adverse effect on our profitability.

Warranty and recall costs could have a material adverse effect on our profitability and financial condition.

Our customers continue to demand that we bear the cost of the repair and replacement of defective products which are either covered under their warranty or are the subject of a recall by them. Warranty provisions are established based on our best estimate of the amounts necessary to settle existing or probable claims on product defect issues. Recall costs are costs incurred when government regulators and/ or our customers decide to recall a product due to a known or suspected performance issue and we are required to participate either voluntarily or involuntarily. Currently, under most customer agreements, we only account for existing or probable warranty claims. Under certain powertrain systems programs and certain complete vehicle engineering and assembly contracts, we record an estimate of future warranty-related costs based on the terms of the specific customer agreements and the specific customers, or our own, warranty experience. While we possess considerable historical warranty and recall data and experience with respect to the products we currently produce, we have little or no warranty and recall data which allows us to establish accurate estimates of, or provisions for, future warranty or recall costs relating to new products, assembly programs or technologies being brought into production or acquired by us. The obligation to repair or replace such products could have a material adverse effect on our profitability and financial condition.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Our failure to successfully identify, complete and integrate acquisitions could have a material adverse effect on our profitability.

We intend to continue to pursue acquisitions in those product areas which we have identified as key to our business strategy. However, we may not be able to identify suitable acquisition targets or successfully acquire any suitable targets which we identify. Additionally, we may not be able to successfully integrate or achieve anticipated synergies from those acquisitions which we do complete and/or such acquisitions may be dilutive in the short to medium term, which could have a material adverse effect on our profitability.

The completion of acquisitions may increase our risk profile which could have a material adverse effect on our profitability.

The successful completion of one or more significant acquisitions could increase our risk profile, including through the assumption of incremental regulatory/compliance, pricing, supply chain, commodities, labour relations, litigation, environmental, pensions, warranty, recall, IT, tax or other risks. Although we seek to conduct appropriate levels of due diligence on our acquisition targets, these efforts may not always prove to be sufficient in identifying all risks and liabilities related to the acquisition, including as a result of: limited access to information; time constraints for conducting due diligence; inability to access target company facilities and/or personnel; or other limitations in the due diligence process. Additionally, we may identify risks and liabilities through our acquisition due diligence efforts that we are not able to sufficiently mitigate through appropriate contractual protections. The realization of any such risks could have a material adverse effect on our profitability.

Shifts in market share away from our top customers could have a material adverse effect on our profitability.

Although we supply parts to all of the leading automobile manufacturers, a significant majority of our sales are to six customers: General Motors, Ford, Fiat Chrysler, Daimler, BMW and Volkswagen. While we have diversified our customer base somewhat in recent years and continue to attempt to further diversify, there is no assurance we will be successful. Shifts in market share away from our top customers could have a material adverse effect on our profitability.

Shifts in market shares among vehicles or vehicle segments or shifts away from vehicles on which we have significant content could have a material adverse effect on our profitability.

While we supply parts for a wide variety of vehicles produced globally, we do not supply parts for all vehicles produced, nor is the number or value of parts evenly distributed among the vehicles for which we do supply parts. Shifts in market shares among vehicles or vehicle segments, particularly shifts away from vehicles on which we have significant content and shifts away from vehicle segments in which our sales may be more heavily concentrated, could have a material adverse effect on our profitability.

We may not be able to grow our business with Japanese, Korean and Chinese-based automotive customers, or grow our business enough with such customers to offset potentially slower growth with our largest customers, which could materially adversely affect our profitability.

In light of the amount of business we currently have with our largest customers in North America and Europe, our opportunities for incremental growth with these customers may be limited. The amount of business we have with Japanese, Korean and Chinese-based automobile manufacturers generally lags that with our largest

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document customers, due in part to the existing relationships between such automobile manufacturers and their preferred suppliers. There is no certainty that we can achieve growth with Asian-based automobile manufacturers, nor that any such growth will offset slower growth we may experience with our largest customers in North America and Europe. As a result, our inability to grow our business with Asian-based automobile manufacturers could have a material adverse effect on our profitability.

We are exposed to a number of risks related to conducting business in foreign countries. The occurrence of any such risks could have an adverse effect on our operations, financial condition and profitability.

While we continue to expand our manufacturing footprint with a view to taking advantage of opportunities in markets such as China, India, Eastern Europe and other non-traditional markets for us, we cannot guarantee that we will be able to fully realize such opportunities. Additionally, the establishment of manufacturing operations in new markets carries its own risks, including those relating to: political, civil and economic instability and uncertainty; corruption risks; high inflation and our ability to recover inflation-related cost increases; trade, customs and tax risks; expropriation risks; currency exchange rates; currency controls; limitations on the repatriation of funds; insufficient infrastructure; competition to attract and retain qualified employees; and other risks associated with conducting business internationally. Expansion of our business in non-traditional markets is an important element of our strategy and, as a result, our exposure to the risks described above may be greater in the future. The likelihood of such occurrences and their potential effect on us vary from country to country and are unpredictable, however, the occurrence of any such risks could have an adverse effect on our operations, financial condition and profitability.

Failure to successfully compete with existing or new competitors could have an adverse effect on our operations and profitability.

The automotive supply industry is highly competitive and becoming more so. As a result of our diversified automotive business, some of our competitors have greater market share than we do in product areas such as electronics or geographic regions such as Asia, or increasing market share in such product areas or geographic regions which are experiencing higher growth rates. With the growing importance of electronics in the automotive value chain, a number of electronics and semiconductor companies have entered or expanded their presence in the automotive industry. Additionally, disruptive technology innovators are developing high-value product and service offerings which traditional automotive suppliers may not be able to match. Failure to successfully compete with existing or new competitors, including failure to grow sales of our electronics products or services at or above the rate of growth of electronics content, could have an adverse effect on our operations and profitability.

Our profitability and financial condition could be materially adversely affected if we are unsuccessful in consistently developing innovative products and processes.

While we continue to invest in technology and innovation which we believe will be critical to our long-term growth, the automotive industry is experiencing rapid technological change and significant disruption. Our ability to anticipate changes in technology and to successfully develop and introduce new and enhanced products and/or manufacturing processes on a timely basis will be a significant factor in our ability to remain competitive. If we are unsuccessful or are less successful than our competitors in consistently developing innovative products and/or processes, we may be placed at a competitive disadvantage, which could have a material adverse effect on our profitability and financial condition.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Realization of one or more risks related to our powertrain or electronics area could have a material adverse effect on our profitability, financial condition or operations.

The risk profile of our business is changing with the growing importance to us of product areas such as powertrain and electronics. As our business evolves, we may face new or heightened risks, including: challenges in quoting for profitable returns on products with leading-edge technologies for which we may not have significant quoting experience; increased warranty and recall risks on new products and leading-edge technologies; increased product liability risks on safety-related products or systems; heightened risk of technological obsolescence of some of our products, processes and/or assets; and difficulties in attracting or retaining employees with critical skills in high-demand areas. Realization of one or more such risks could have a material adverse effect on our profitability, financial condition or operations.

Our short-term profitability could be materially adversely affected by costs associated with selling some of our product lines, downsizing, closing or selling some of our operations or other significant, non-recurring costs.

We may sell some product lines and/or downsize, close or sell some of our operating Divisions. By taking such actions, we may incur restructuring, downsizing and/or other significant non-recurring costs. These costs may be higher in some countries than others and could have a material adverse effect on our profitability.

A reduction in outsourcing by our customers, or the loss of any material production or assembly programs, combined with a failure to secure sufficient alternative programs, could have a material adverse effect on our profitability.

We depend on the outsourcing of components, modules and assemblies, as well as complete vehicles, by automobile manufacturers. The extent of automobile manufacturer outsourcing is influenced by a number of factors, including: relative cost, quality and timeliness of production by suppliers as compared to automobile manufacturers; capacity utilization; automobile manufacturers perceptions regarding the strategic importance of certain components/modules to them; labour relations among automobile manufacturers, their employees and unions; and other considerations. A reduction in outsourcing by automobile manufacturers, or the loss of any material production or assembly programs combined with the failure to secure alternative programs with sufficient volumes and margins, could have a material adverse effect on our operations and profitability.

Work stoppages and other labour relations disputes could have a material adverse effect on our operations and profitability.

Some of our manufacturing facilities are unionized, as are many manufacturing facilities of our customers and suppliers. Unionized facilities are subject to the risk of labour disruptions from time to time, including as a result of restructuring actions taken by us, our customers and other suppliers. We cannot predict whether or when any labour disruption may arise, or how long such a disruption could last. A significant labour disruption could lead to a lengthy shutdown of our or our customers and/or our suppliers production lines, which could have a material adverse effect on our operations and profitability.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Prolonged supply disruptions could have a material adverse effect on our profitability.

A disruption in the supply of components to us from our suppliers could cause the temporary shut-down of our or our customers production lines. Any prolonged supply disruption, including due to the inability to re-source or in-source production, could have a material adverse effect on our profitability.

Scheduled production shutdowns of our customers production facilities could cause our sales and profitability to fluctuate within a fiscal year.

Our business is generally not seasonal. However, our sales and profits are closely related to our automotive customers vehicle production schedules. Our largest North American customers typically halt production for approximately two weeks in July and one week in December. In addition, many of our customers in Europe typically shut down vehicle production during portions of August and one week in December. These scheduled shutdowns of our customers production facilities could cause our sales and profitability to fluctuate when comparing fiscal quarters in any given year.

Termination or non-renewal of a production purchase order by a customer could have an adverse effect on our profitability.

Contracts from our customers consist of blanket purchase orders which generally provide for the supply of components for a customers annual requirements for a particular vehicle, instead of a specific quantity of products. These blanket purchase orders can be terminated by a customer at any time and, if terminated, could result in our incurring various pre-production, engineering and other costs which we may not recover from our customer and which could have an adverse effect on our profitability.

Our inability to offset commodities price increases could have a material adverse effect on our profitability.

Prices for certain key raw materials and commodities used in our parts, including steel and resin, can be volatile. To the extent we are unable to offset commodity price increases by passing such increases to our customers, by engineering products with reduced commodity content, through hedging strategies, or otherwise, such additional commodity costs could have an adverse effect on our profitability. Some of our manufacturing facilities generate a significant amount of scrap steel and recover some of the value through scrap steel sales. Scrap steel prices can also be volatile. Declines in scrap steel prices from time to time could have an adverse effect on our profitability.

Natural disasters or other catastrophic events could disrupt our supply of products to our customers which could have a material adverse effect on our operations and profitability.

Our manufacturing facilities are subject to risks associated with natural disasters or other catastrophic event, including fires, floods, hurricanes and earthquakes. The occurrence of any of these disasters or catastrophic event could cause the total or partial destruction of our or our sub-suppliers manufacturing facility, thus preventing us from supplying products to our customers and disrupting production at their facilities for an indeterminate period of time. The inability to promptly resume the supply of products following a natural disaster or catastrophic event at a manufacturing facility could have a material adverse effect on our operations and profitability.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document A significant breach of our information technology systems could disrupt our business and damage our reputation with customers which could have a material adverse effect on our company.

The reliability and security of our information technology (IT) systems is important to our business and operations. Although we have established and continue to enhance security controls intended to protect our IT systems and infrastructure, there is no guarantee that such security measures will be effective in preventing unauthorized physical access or cyber-attacks. A significant breach of our IT systems could: cause disruptions in our manufacturing operations; lead to the loss, destruction or inappropriate use of sensitive data; or result in theft of our, our customers or our suppliers intellectual property or confidential information. If any of the foregoing events occurs, we may be subject to a number of consequences, including reputational damage, which could have a material adverse effect on our operations.

An increase in our pension funding obligations could have a material adverse effect on our profitability and financial condition.

Some of our current and former employees in Canada, the United States and Germany participate in defined benefit pension plans. Although these plans in North America, and one of our German plans, have been closed to new participants, existing participants in Canada and under such German plan continue to accrue benefits. Our defined benefit pension plans in Germany are not funded and plans in Canada and the United States may not be fully funded. Our pension funding obligations in North America could increase significantly due to a reduction in plan funding status caused by a variety of factors, including: weak performance of capital markets; declining interest rates; failure to achieve sufficient investment returns; investment risks inherent in the investment portfolios of the plans; and other factors. A significant increase in our pension funding obligations could have an adverse effect on our profitability and financial condition.

Legal claims and/or regulatory actions against us could have a material adverse effect on our financial position.

From time to time, we may become involved in regulatory proceedings, or become liable for legal, contractual and other claims by various parties, including customers, suppliers, former employees, class action plaintiffs and others. Depending on the nature or duration of any potential proceedings or claims, we may incur substantial costs and expenses and may be required to devote significant management time and resources to the matters. On an ongoing basis, we attempt to assess the likelihood of any adverse judgments or outcomes to these proceedings or claims, although it is difficult to predict final outcomes with any degree of certainty. Except as disclosed from time to time in our consolidated financial statements and/or our Managements Discussion & Analysis, we do not believe that any of the proceedings or claims to which we are party will have a material adverse effect on our profitability; however, we cannot provide any assurance to this effect.

Our profitability may be materially adversely affected by our inability to utilize tax losses or because of tax exposures we face.

We have incurred losses in some countries which we may not be able to fully or partially offset against income we have earned in those countries. In some cases, we may not be able to utilize these losses at all if we cannot generate profits in those countries and/or if we have ceased conducting business in those countries altogether. Our inability to utilize tax losses could materially adversely affect our profitability. At any given time, we may face other tax exposures arising out of changes in tax or transfer pricing laws, tax reassessments or otherwise. To the extent we cannot implement measures to offset these exposures, they may have a material adverse effect on our profitability.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We recorded significant impairment charges in recent years and could record additional impairment charges in the future which could have a material adverse effect on our profitability.

We have in the past recorded significant impairment charges related to goodwill and long-lived assets and may do so again in the future. The early termination, loss, renegotiation of the terms of, or delay in the implementation of, any significant production contract could be indicators of impairment, as may the technological obsolescence of any of our products or production assets. In addition, to the extent that forward-looking assumptions regarding: the impact of turnaround plans on underperforming operations; new business opportunities; program price and cost assumptions on current and future business; the timing and success of new program launches; and forecast production volumes; are not met, any resulting impairment loss could have a material adverse effect on our profitability.

An unanticipated deterioration of economic conditions could result in depletion of our cash resources, which could have a material adverse effect on our operations and financial condition.

We believe we will have sufficient financial resources available to successfully execute our business plan, even in the event of another global recession similar to that of 2008-2009. However, as a result of the reduction of our excess cash in connection with our balance sheet strategy, we may have less financial flexibility than we have had in the last few years. The occurrence of an economic shock not contemplated in our business plan, a rapid deterioration of economic conditions or a more prolonged recession than that experienced in 2008-2009 could result in the depletion of our cash resources, which could have a material adverse effect on our operations and financial condition.

We may not achieve returns on investments which equal or exceed past returns which could materially adversely affect our profitability.

In recent years, we have invested significant amounts of money in our business through capital expenditures to support new facilities, expansion of existing facilities, purchases of production equipment and acquisitions. Returns achieved on such investments in the past are not necessarily indicative of the returns we may achieve on future investments and our inability to achieve returns on future investments which equal or exceed returns on past investments could have a material adverse effect on our level of profitability.

Trading prices of our Common Shares are not predictable and may fluctuate significantly due to a variety of factors, many of which are outside of our control.

Trading prices of our Common Shares cannot be predicted and may fluctuate significantly due to a variety of factors, many of which are outside our control, including: general economic and stock market conditions; variations in our operating results and financial condition; differences between our actual operating and financial results and those expected by investors and stock analysts; changes in recommendations made by stock analysts, whether due to factors relating to us, our customers, the automotive industry or otherwise; significant news or events relating to our primary customers, including the release of vehicle production and sales data; investor and stock analyst perceptions about the prospects for our or our primary customers respective businesses or the automotive industry; and other factors.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Changes in our mix of earnings between jurisdictions with lower tax rates and those with higher tax rates could have a material adverse effect on our profitability.

Our effective tax rate varies in each country in which we conduct business. Changes in our mix of earnings between jurisdictions with lower tax rates and those with higher tax rates could have a material adverse effect on our profitability.

A downgrade in credit ratings assigned to us could impact our cost of borrowing, which could have an adverse effect on our profitability and financial condition.

The credit ratings currently assigned to us by DBRS, Moodys and Standard & Poors, or that may in the future be assigned to us by other ratings agencies, are subject to change in accordance with the criteria established by such ratings agencies. There is no assurance that any rating assigned to us will remain in effect for any given period of time or that any rating will not be revised or withdrawn entirely by a rating agency in the future. A downgrade in the credit ratings assigned to us by one or more rating agencies could increase our cost of borrowing or impact our ability to renegotiate loans made to us, which could have an adverse effect on our profitability and financial condition.

Significant changes in laws and governmental regulations could have an adverse effect on our profitability.

A significant change in the current regulatory environment in our principal markets could have an adverse effect on our profitability. Additionally, we could be adversely affected by changes in tax or other laws which impose additional costs on automobile manufacturers or consumers, or more stringent fuel economy and emissions requirements on manufacturers, of sport-utility vehicles, light trucks and other vehicles from which we derive some of our sales.

Compliance with environmental laws and regulations could have an adverse effect on our financial condition or profitability.

We are subject to a wide range of environmental laws and regulations relating to air emissions, wastewater discharge, waste management and storage of hazardous substances. We are also subject to environmental laws requiring investigation and clean-up of environmental contamination and are in various stages of investigation and clean-up at our manufacturing facilities where contamination has been alleged. Estimating environmental clean-up liabilities is complex and heavily dependent on the nature and extent of historical information and physical data relating to the contaminated sites, the complexity of the contamination, the uncertainty of which remedy to apply and the outcome of discussions with regulatory authorities relating to the contamination. In addition, these environmental laws and regulations are complex, change frequently and have tended to become more stringent and expensive over time. Therefore, we may not have been, and in the future may not be, in complete compliance with all such laws and regulations and we may incur material costs or liabilities as a result of such laws and regulations significantly in excess of amounts we have reserved. To the extent that we incur liabilities or costs in excess of the amounts we have reserved in order to comply with environmental laws and regulations, such liabilities or costs could have an adverse effect on our financial condition or profitability.

The declaration and payment of dividends, including the dividend rate, is subject to the Boards discretion taking into account our cash flow, capital requirements, our financial condition and other factors the Board considers relevant. These factors are, in turn, subject to various risks, including the risk factors set out above. While we aim to pay a consistent dividend and increase the dividend rate over time, our Board may in certain circumstances determine that it is in the best interests of the Corporation to reduce or suspend the dividend. In such event, the trading price of our Common Shares may be materially affected.

The following table sets forth the cash dividends we have paid or payable on our Common Shares for the last three years.

Amount per Common Period Payment Date Record Date Share Calendar 2017 (to date) March 24 March 10 $ 0.275 Calendar 2016 December 9 November 25 $ 0.25 September 9 August 26 $ 0.25 June 10 May 27 $ 0.25 March 24 March 11 $ 0.25

Calendar 2015 December 11 November 27 $ 0.220 September 11 August 28 $ 0.220 June 12 May 29 $ 0.220 March 27 March 13 $ 0.220

Calendar 2014 December 12 November 28 $ 0.190 September 12 August 29 $ 0.190 June 13 May 30 $ 0.190 March 28 March 14 $ 0.190

We intend to continue paying a quarterly dividend from our cash flow from operations, with the aim of regularly increasing the dividend consistent with our practice since 2010. The declaration and payment of dividends, including the dividend rate, is reviewed quarterly by our Board and is subject to the Boards discretion taking into account our cash flow, capital requirements, our financial condition and other factors they consider relevant. See Section 3. Description of the Business Risk Factors.

Dividend Reinvestment Plan (DRIP) Since 1994, we have maintained a dividend reinvestment plan in which registered shareholders have the option to purchase additional Common Shares by investing the cash dividends paid on their shares.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 5. Description of our Capital Structure Authorized Share Capital Our authorized share capital consists of an unlimited number of Common Shares and 99,760,000 Preference Shares, issuable in series, all with no par value. As of March 24, 2017, the Record Date for our Meeting, a total of 381,164,066 Common Shares were issued and outstanding. No Preference Shares have been issued or are outstanding.

The following is a brief description of the significant attributes of our authorized share capital and is qualified in its entirety by reference to the detailed provisions in our charter documents. The attributes of our Common Shares and our Preference Shares are set out in our charter documents.

Common Shares The holders of our Common Shares are entitled: to one vote for each Common Share held at all meetings of our shareholders, other than meetings of the holders of another class or series of shares; to receive any dividends that may be declared by our Board, subject to the preferential rights attaching to any shares ranking in priority to our Common Shares; and to receive, after the payment of our liabilities and subject to the rights of the holders of any shares ranking in priority to our Common Shares, all our property and assets available for distribution in the event of our liquidation, dissolution or winding-up, whether voluntary or involuntary, or any other distribution of assets among our shareholders for the purpose of winding-up our affairs.

Preference Shares Our Board may, without the approval of any of our shareholders, fix the number of shares in, and determine the attributes of, an individual series of Preference Shares and issue shares of such series from time to time. The shares of each such series will be entitled to a preference over our Common Shares, but will rank equally with the Preference Shares of every other series with respect to the payment of dividends and in the distribution of all our property and assets available for distribution in the event of our liquidation, dissolution or winding-up, whether voluntary or involuntary, or any other distribution of assets among our shareholders for the purpose of winding-up our affairs. No Preference Shares have been issued or are outstanding and we do not currently anticipate issuing any such shares. In the event we do issue Preference Shares in the future, we would expect to issue them solely for legitimate financing purposes and not to block a change of control transaction.

Amendments to Share Provisions and Other Matters The provisions attaching to our Preference Shares, to a series of our Preference Shares and to our Common Shares may not be deleted or varied without the approval of the holders of the class or series concerned. In addition, no shares of a class ranking prior to or on a parity with our Preference Shares, or our Common Shares may be created without the approval of the holders of the class or each series of the class concerned. Any approval required to be given must be given by two-thirds of the votes cast by those present or voting at a meeting of the holders of the class or series concerned duly called for that purpose in addition to any other consent or approval required by law.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Ratings As of the date of this Annual Information Form, we have been assigned the ratings in the table below:

Issuer Senior Debt Short-Term Outlook / Credit Rating Agency Rating Rating Debt Rating Trend Dominion Bond Rating Service (DBRS)1 A (low) A (low) R-1 (low) Stable Moodys Investor Services (Moodys)2 A3 A3 P-2 Stable Standard & Poors (S&P)3 A- A- A-2 Stable

Notes: (1) DBRSs issuer and senior debt ratings are based on its long-term rating scale that ranges from AAA to D which represents the range from an issuer with the highest credit quality to one that has filed under bankruptcy, insolvency or winding up legislation or failed to satisfy an obligation after exhausting grace periods. A rating in the A rating category is in the third highest category of the relevant scale of eight major categories and is considered by DBRS to be of good credit quality, with substantial capacity for payment of financial obligations. High and low grades are used to indicate the relative standing of credit within a particular rating category. The absence of one of these designations indicates a rating which is in the middle of the category, excluding the AAA and D categories for which the high, middle or low designations are not used. The DBRS rating trends provide guidance in respect of DBRS opinion regarding the outlook for the rating in question, with rating trends falling into one of three categories - Positive, Stable or Negative. The rating trend indicates the direction in which DBRS considers the rating is headed should present tendencies continue, or in some cases, unless challenges are addressed. A Positive or Negative does not necessarily indicate a ratings change is imminent, but rather the trend represents an indication that there is a greater likelihood that the rating could change in the future than would be the case if a Stable trend was assigned. DBRSs short-term debt rating is based on its commercial paper and short-term debt rating scale that ranges from R-1 (high) to D which represents the range from an issuer with the highest credit quality to one that has filed under bankruptcy, insolvency or winding up legislation or failed to satisfy an obligation after exhausting grace periods. A rating in the R-1 (low) category represents the third highest category of the relevant scale of ten major categories and is considered by DBRS to be of good credit quality, with substantial capacity for payment of financial obligations. (2) Moodys senior unsecured issuer rating is an opinion as to our future relative creditworthiness. The credit rating is based on a rating scale that, for global automotive suppliers, ranges from Aaa to C, which represents the range from those obligations with minimal credit risk to those obligations that are in default with little prospect of recovery. Issuers in the A rating category are in the third highest category of the relevant scale of nine major categories and are considered by Moodys to be subject to low credit risk. The determination of the overall rating assigned to a global automotive supplier is based on an assessment of an issuers performance in four broad weighted categories which are further broken down into 13 weighted sub-factors each of which maps to a specific letter rating in the range above. The indicated rating category for each sub-factor (i.e., Aaa, Aa, etc.) is then converted into a numeric value, which is then multiplied by the weight for that sub-factor with the results then totaled to produce a composite weighted-factor score, that is itself then mapped back to an alphanumeric rating based on the ratings range from Aaa to C. Moodys appends the numerical modifiers 1, 2, or 3 to each generic rating classification from Aa through Caa. The modifiers 1, 2 and 3 indicate that the obligation ranks in the higher end, mid-range or lower end of its generic rating category, respectively. The Moodys rating outlook is an opinion regarding the likely direction of an issuers rating over the medium term, and fall into one of four categories: Positive, Negative, Stable or Developing. (3) S&Ps issuer credit rating is a current opinion of our overall financial capacity (i.e. credit worthiness) to pay our financial obligations in full and on time. This credit rating is based on a rating scale that ranges from AAA to D, which represents the range from extremely strong capacity to meet financial obligations to a failure to pay one or more financial obligations when it came due. An issuer with a long-term issuer rating in the A rating category is in the third highest category of the relevant scale of ten major categories and is considered by Standard & Poors to have a strong capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than issuers in higher-rated categories. The ratings from AA to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. The lack of one of these designations indicates a rating that is in the middle of the category. The S&P rating outlook assesses the potential direction of a credit rating over the intermediate term (typically six months to two years), but is not necessarily a precursor to a rating change. A Stable outlook rating means the rating is not likely to change.

Credit ratings are intended to provide investors with an independent measure of the credit quality of debt and securities. The credit ratings assigned to us or our senior debt by the rating agencies are not recommendations to purchase, hold or sell our debt or securities, since such ratings do not address market price or suitability for a particular investor. There is no assurance that any rating will remain in effect for any given period of time or that any rating will not be revised or withdrawn entirely by a rating agency in the future, if in its judgement, circumstances warrant. We have made customary payments to each of DBRS, Moodys and S&P in respect of the ratings assigned to us during the last two years and expect to continue to do so. In addition, we made payments to Moodys and S&P in connection with

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the confirmation of our ratings in respect of the issuance of our Senior Notes and the establishment and continued issuance of our ECP Program and USP Program.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6. Market for Securities Our Common Shares are listed and posted for trading on the TSX under the trading symbol MG, and on the New York Stock Exchange under the trading symbol MGA.

The high and low sale prices and volume of shares traded for our Common Shares, as reported by the TSX and NYSE, respectively, for the months during the year ended December 31, 2016 were as follows:

TSX TSX TSX NYSE NYSE NYSE Month High (C$) Low (C$) Volume High ($) Low ($) Volume January 56.11 47.42 36,098,633 40.22 32.49 74,152,855 February 52.82 42.09 27,522,040 39.10 30.41 48,442,738 March 56.47 52.69 24,564,963 43.50 39.21 41,427,160 April 56.12 51.34 18,982,877 43.66 39.15 31,030,190 May 53.74 50.85 18,404,094 42.39 38.82 29,097,732 June 53.37 43.42 28,378,807 42.15 33.26 41,739,110 July 52.29 42.73 17,804,914 39.61 32.76 31,496,421 August 53.51 48.19 16,415,680 41.22 36.89 26,365,938 September 56.73 51.11 23,218,831 43.24 38.74 30,391,515 October 57.89 52.50 17,570,930 43.96 39.79 26,581,883 November 55.95 49.44 26,763,263 41.46 36.78 35,394,083 December 62.10 54.38 18,807,207 47.19 40.68 26,063,462

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 7. Directors & Executive Officers Directors Our Board currently consists of the following members:

Name & Municipality of Residence Director Since Principal Occupation Scott B. Bonham May 10, 2012 Corporate Director and Co-Founder, Intentional California, U.S.A. Capital Peter G. Bowie May 10, 2012 Corporate Director Ontario, Canada Hon. J. Trevor Eyton May 6, 2010 Corporate Director Ontario, Canada Lady Barbara Judge September 20, 2007 Corporate Director London, England Dr. Kurt J. Lauk(1) May 4, 2011 Co-Founder & President, Globe CP GmbH Baden-Württemburg, Germany Cynthia A. Niekamp May 8, 2014 Corporate Director Michigan, U.S.A. Dr. Indira V. Samarasekera May 8, 2014 Senior Advisor, Bennett Jones LLP and Corporate British Columbia, Canada Director Donald J. Walker November 7, 2005 Chief Executive Officer of Magna Ontario, Canada Lawrence D. Worrall November 7, 2005 Corporate Director Ontario, Canada William L. Young(2)(3) May 4, 2011 Co-Founder and Partner, Monitor Clipper Partners Ontario, Canada

Notes: (1) Dr. Lauk was a director of Papierfabrik Scheuffelen GmbH, a private company, when it filed for bankruptcy protection under German law on July 17, 2008. (2) Chairman of the Board. (3) Mr. Young was a director of American Fiber & Yarns and Recycled Paper Greetings, both of which were private companies, when they filed voluntary petitions for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code on September 23, 2008 and January 2, 2009, respectively.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document All of our directors were elected to their present terms of office by our shareholders at our Annual Meeting of Shareholders held on May 5, 2016. The term of office for each director expires at the conclusion of the next annual meeting of our shareholders. No executive committee of the Board has been constituted. One director, Hon. J. Trevor Eyton, will be retiring from the Board in 2017 and thus is not standing for re-election at the Meeting.

All of the directors have held the principal occupations identified above (or another position with the same employer) for not less than five years, except as follows: Mr. Bonham was a Venture Partner of GGV Capital from 2011 to June 2015, a venture capital firm he co-founded in 2000. Ms. Niekamp was Senior Vice-President, Automotive Coatings, PPG Industries, Inc. from July 2010 to March 2016. Ms. Samarasekera was President & Vice-Chancellor of the University of Alberta from July 2005 to July 2015.

All of our directors, with the exception of Mr. Walker, our CEO, have all been determined by our Board to be independent directors within the meaning of such term under applicable law.

Our Board currently has three standing Committees, each of which is comprised of the following independent directors as of March 24, 2017:

Corporate Governance, Compensation & Nominating Enterprise Risk Name Audit Committee Committee Oversight Committee Scott B. Bonham ☐ ☐ Peter G. Bowie ☐ Hon. J. Trevor Eyton ☐ Lady Barbara Judge ☐ Chair Dr. Kurt J. Lauk ☐ Cynthia A. Niekamp ☐ Dr. Indira V. Samarasekera ☐ Lawrence D. Worrall Chair ☐ William L. Young Chair

Additional information in respect of each person nominated for election at the Meeting, including one nominee, William A. Ruh, who does not presently serve on our Board, as well as the basis for the Boards independence determination, can be found in our Circular.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Executive Officers Our executive officers currently consist of the following persons:

Name & Municipality of Residence Principal Occupation Donald J. Walker Chief Executive Officer (since November 2010; previously Co-CEO since April 2005) Ontario, Canada Vincent J. Galifi Executive Vice-President (since September 1996) and Chief Financial Officer (since December 1997) Ontario, Canada Jeffrey O. Palmer Executive Vice-President (since January 2001) and Chief Legal Officer (since January 2008) Ontario, Canada Guenther Apfalter President, Magna Europe (since February 2011) and President, Magna Steyr (since January 2008) Upper Austria, Austria Seetarama Kotagiri Executive Vice-President and Chief Technology Officer (since January 2014) and President, Magna Michigan, U.S.A. Electronics (since February 2016) Marc J. Neeb Executive Vice-President (since January 2003) and Chief Human Resources Officer (since January Ontario, Canada 2014) Francis C. Seguin Executive Vice-President, Corporate Projects and Strategy Development (since February 2016) Ontario, Canada Tommy J. Skudutis Chief Operating Officer, Exteriors (since May 2007) Seating, Mirrors, Closures (since May 2010) and Ontario, Canada Cosma (since February 2013) James J. Tobin, Sr. Chief Marketing Officer (since May 2010) and President, Magna Asia (since February 2012) Michigan, U.S.A.

To the extent that our executive officers have not held the offices identified above for the last five years, they have held the following offices or positions with us and/or have had the following principal occupations, during the last five years: Prior to January 2014, Mr. Kotagiri was Executive Vice President, Corporate Engineering and R&D (since January 2013) and Executive Vice President of Global Engineering and R&D of Cosma International (since June 2008). Prior to January 2014, Mr. Neeb was Executive Vice-President, Global Human Resources (since January 2003). Prior to February 2016, Mr. Seguin was President of Magna Closures (from January 2010 to January 2016). Prior to January 2013, Mr. Skudutis was also President, Cosma International (from January to December 2012). Prior to February 2012, Mr. Tobin was President, Magna Japan and Korea since May 2010. He previously served as Executive Vice-President, Business Development (from December 2007 to May 2010), prior to which he served as Executive Vice- President, Business Development and Sales of Cosma International since January 2006.

Beneficial Ownership of Securities All our directors and executive officers as a group (18 persons) owned beneficially or exercised control or direction over 3,687,763 Common Shares representing approximately 1.0% of the class, as at March 24, 2017.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 8. Legal Proceedings KS Centoco In November 1997, Magna and two of its subsidiaries were sued in the Ontario Superior Court of Justice by KS Centoco Ltd., an Ontario- based steering wheel manufacturer in which we have a 23% equity interest, and by Centoco Holdings Limited, the owner of the remaining 77% equity interest in KS Centoco Ltd. In March 1999, the plaintiffs were granted leave to make substantial amendments to the original statement of claim in order to add several new defendants and claim additional remedies and, in February 2006, the plaintiffs further amended their statement of claim to add an additional remedy. In February 2016, a consent order was granted allowing the Plaintiffs to file a fresh statement of claim which includes an additional remedy and reduces certain aggravated and punitive damages claimed. The fresh statement of claim alleges, among other things: breach of fiduciary duty by us and two of our subsidiaries; breach by us of our binding letter of intent with KS Centoco, including our covenant not to have any interest, directly or indirectly, in any entity that carries on the airbag business in North America, other than through MST Automotive Inc., a company to be 77% owned by Magna and 23% owned by Centoco Holdings; the plaintiffs exclusive entitlement to certain airbag technologies in North America pursuant to an exclusive licence agreement (the Licence Agreement), together with an accounting of all revenues and profits resulting from the alleged use by us, TRW Inc. and other unrelated third party automotive supplier defendants of such technology in North America; inducement by the Company of a breach of the Licence Agreement by TRW; a conspiracy by us, TRW and others to deprive KS Centoco of the benefits of such airbag technology in North America and to cause Centoco Holdings to sell to TRW its interest in KS Centoco in conjunction with the sale by us to TRW of our interest in MST Automotive GmbH and TEMIC Bayern-Chemie Airbag GmbH; and oppression by the defendants.

The plaintiffs are seeking, among other things, damages of approximately C$2.56 billion. Document production, completion of undertakings and examinations for discovery are substantially complete, although limited additional examinations for discovery are expected to occur.

In April 2016, Magna filed a new claim against Centoco Holdings Limited and KS Centoco seeking an order under the Ontario Business Corporations Act to wind-up the business and affairs of KS Centoco and distribute its assets to the shareholders (the Wind-Up Action). In June 2016, Centoco Holdings Limited and KS Centoco filed a statement of defence and counterclaim in the Wind-Up Action alleging breach of fiduciary duty and bad

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document faith performance of contractual obligations by Magna and two of its officers who were our representatives on KS Centocos Board of Directors for a number of years (the Centoco Counterclaim). Pursuant to the Centoco Counterclaim, Centoco Holdings Limited and KS Centoco are claiming damages of approximately C$1.8 billion.

Both actions will be tried together at a trial scheduled to commence on October 30, 2017. The claims and damages in the Centoco Counterclaim substantially duplicate those described in the main action and, as a result, we believe that there is no incremental liability due to the Centoco Counterclaim. We also believe we have valid defences to the claims made by Centoco Holdings Limited and KS Centoco in both actions and therefore we intend to continue to vigorously defend these two cases. Due to the nature of the claims made and potential damages alleged by Centoco Holdings Limited and KS Centoco, Magna is unable to predict the final outcome of these claims.

Antitrust Investigation In September 2014, the Conselho Administrativo de Defesa Economica, Brazils Federal competition authority, attended at one of the Companys operating Divisions in Brazil to obtain information in connection with an ongoing antitrust investigation relating to suppliers of automotive door latches and related products.

Proceedings of this nature can often continue for several years. Where wrongful conduct is found, the relevant antitrust authority can, depending on the jurisdiction, initiate administrative or criminal legal proceedings and impose administrative or criminal fines or penalties taking into account several mitigating and aggravating factors. At this time, management is unable to predict the duration or outcome of the Brazilian investigation, including whether any operating Divisions of the Company will be found liable for any violation of law or the extent or magnitude of any liability, if found to be liable.

The Companys policy is to comply with all applicable laws, including antitrust and competition laws. The Company previously initiated a global review focused on antitrust risk led by a team of external counsel. If any antitrust violation is found as a result of such review, a regulatory investigation or otherwise, Magna could be subject to fines, penalties, restitution settlements, and civil, administrative or criminal legal proceedings and other consequences, including reputational damage.

Other In the ordinary course of business activities, we may become contingently liable for litigation and claims with customers, suppliers, former employees and other parties. In addition, we may be, or could become, liable to incur environmental remediation costs to bring environmental contamination levels back within acceptable legal limits. On an ongoing basis, we assess the likelihood of any adverse judgments or outcomes to these matters, as well as potential ranges of probable costs and losses.

A determination of the provision required, if any, for these contingencies is made after analysis of each individual issue. The required provision may change in the future due to new developments in each matter or changes in approach, such as a change in settlement strategy in dealing with these matters.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Warranty, Product Liability and Recall Costs In certain circumstances, we are at risk for warranty costs, including product liability and recall costs. Due to the nature of the costs, we make our best estimate of the expected future costs, however, the ultimate amount of such costs could be materially different. We continue to experience increased customer pressure to assume greater warranty responsibility. Currently, under most customer agreements, we only account for existing or probable claims. Under certain complete vehicle engineering and assembly contracts, and with respect to certain powertrain systems programs, we record an estimate of future warranty-related costs based on the terms of the specific customer agreements and the specific customers, or our own, warranty experience.

9. Interests of Management & Others in Material Transactions Reference is made to Interests of Management and Other Insiders in Certain Transactions in our Circular for our Meeting, which is incorporated by reference into this Annual Information Form.

10. Transfer Agent & Registrar The transfer agent and registrar for our Common Shares is Computershare Trust Company of Canada, at its principal offices in Toronto, Ontario. The co-transfer agent and co-registrar for our Common Shares in the United States is Computershare Trust Company, N.A., at its offices in Canton, Massachusetts.

11. Interests of Experts Our independent auditor for the 2016 fiscal year is Deloitte LLP. Deloitte LLP is independent within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of Ontario, and the applicable rules and regulations adopted by the SEC and the Public Company Accounting Oversight Board (United States) (PCAOB). Additional information regarding the fees paid to our independent auditors is contained under Meeting Information Business of the Meeting in our Circular, which is incorporated by reference into this Annual Information Form.

12. Audit Committee Our Audit Committee consists of Messrs. Lawrence D. Worrall (Chair), Scott B. Bonham, Peter G. Bowie and Dr. Kurt J. Lauk. A copy of our Audit Committee Charter is available on our website (www.magna.com) under Corporate Governance and has been filed on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov/edgar) and is incorporated by reference into this Annual Information Form. Additional information about our Audit Committee is contained under Corporate Governance Report of the Audit Committee in our Circular for our Meeting, which is incorporated by reference into this Annual Information Form.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 13. Additional Information Our Circular contains the following additional information: our directors and named executive officers remuneration and indebtedness; our voting securities and their principal holders; and securities authorized for issuance under our equity-based compensation plans.

Additional financial information about us is provided in our consolidated financial statements as at and for the two-year period ended December 31, 2016 and in our MD&A. These documents and additional information about us may be found on SEDAR, at www.sedar.com, on EDGAR at www.sec.gov/edgar and on our website, at www.magna.com.

Any person may obtain copies of the following documents upon request from our Corporate Secretary, c/o Magna International Inc., 337 Magna Drive, Aurora, Ontario, L4G 7K1: at any time when our securities are in the course of a distribution pursuant to a short form prospectus or a preliminary short form prospectus has been filed in respect of a distribution of our securities, one copy of this Annual Information Form; one copy of our Annual Report to Shareholders for the year ended December 31, 2016, which contains the following items: the Managements Discussion and Analysis of Results of Operations and Financial Position, which is the only item incorporated by reference into this Annual Information Form; and our consolidated financial statements as at and for the two-year period ended December 31, 2016; one copy of any of our interim financial statements subsequent to the financial statements for our most recently completed fiscal year; one copy of our Circular; and one copy of any other documents that are incorporated by reference into the preliminary short form prospectus or the short form prospectus and are not provided under any of the foregoing; or at any other time, one copy of any of the documents referred to immediately above, provided that we may require payment of a reasonable charge for such copy if the request is made by a person who is not one of our security holders.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document MAGNA INTERNATIONAL INC. 337 Magna Drive Aurora, Ontario, Canada L4G 7K1 Telephone: +1 905 726 2462 Magna.com CONNECT WITH MAGNA

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in Registration Statement Nos. 333-210449 and 333-128257 on Form S-8 and to the use of our reports dated March 9, 2017 relating to the consolidated financial statements of Magna International Inc. and its subsidiaries (the Company), and the effectiveness of the Companys internal control over financial reporting, incorporated by reference from the Companys Current Report on Form 6-K dated March 28, 2017 to this Annual Report on Form 40-F for the year ended December 31, 2016.

/s/ Deloitte LLP

Chartered Professional Accountants Licensed Public Accountants March 28, 2017 Toronto, Canada

CERTIFICATION

I, Donald J. Walker, Chief Executive Officer, certify that: 1. I have reviewed this annual report on Form 40-F of Magna International Inc. (the issuer); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report; 4. The issuers other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the issuers disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the issuers internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuers internal control over financial reporting. 5. The issuers other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuers auditors and the audit committee of the issuers board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the issuers ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuers internal control over financial reporting.

Dated as of the 28th day of March, 2017.

/s/ Donald Walker Donald J. Walker Chief Executive Officer

CERTIFICATION

I, Vincent J. Galifi, the Executive Vice-President and Chief Financial Officer, certify that: 1. I have reviewed this annual report on Form 40-F of Magna International Inc. (the issuer); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report; 4. The issuers other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the issuers disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the issuers internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuers internal control over financial reporting. 5. The issuers other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuers auditors and the audit committee of the issuers board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the issuers ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuers internal control over financial reporting.

Dated as of the 28th day of March, 2017.

/s/ Vincent Galifi Vincent J. Galifi Executive Vice-President and Chief Financial Officer

CERTIFICATE OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Donald J. Walker, Chief Executive Officer of Magna International Inc. (the Company), certify that: 1. the Annual Report on Form 40-F of the Company dated the 28th day of March, 2017 for the fiscal year ending December 31, 2016 (the Report) fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated as of the 28th day of March, 2017.

/s/ Donald Walker Donald J. Walker Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

CERTIFICATE OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Vincent J. Galifi, Executive Vice-President and Chief Financial Officer of Magna International Inc. (the Company), certify that: 1. the Annual Report on Form 40-F of the Company dated the day of 28th day of March, 2017 for the fiscal year ending December 31, 2016 (the Report) fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated as of the 28th day of March, 2017.

/s/ Vincent Galifi Vincent J. Galifi Executive Vice-President and Chief Financial Officer

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Document and Entity Dec. 31, 2016 Information shares Document And Entity Information [Abstract] Document Type 40-F Amendment Flag false Document Period End Date Dec. 31, 2016 Document Fiscal Year Focus 2016 Document Fiscal Period Focus FY Trading Symbol MGA Entity Registrant Name MAGNA INTERNATIONAL INC Entity Central Index Key 0000749098 Current Fiscal Year End Date --12-31 Entity Current Reporting Status Yes Entity Common Stock, Shares Outstanding 382,552,522

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Statements of 12 Months Ended Income - USD ($) Dec. 31, Dec. 31, shares in Millions, $ in 2016 2015 Millions Income Statement [Abstract] Sales $ 36,445 $ 32,134 Costs and expenses Cost of goods sold 31,123 27,559 Depreciation and amortization 1,056 802 Selling, general and administrative 1,601 1,448 Interest expense, net 88 44 Equity income (233) (204) Other expense (income), net 30 (166) Income from continuing operations before income taxes 2,780 2,651 Income taxes 706 711 Net income from continuing operations 2,074 1,940 Income from discontinued operations, net of tax 67 Net income 2,074 2,007 (Income) loss from continuing operations attributable to non-controlling interests (43) 6 Net income attributable to Magna International Inc. $ 2,031 $ 2,013 Basic Earnings per Common Share: Continuing operations $ 5.19 $ 4.78 Discontinued operations 0.16 Attributable to Magna International Inc. 5.19 4.94 Diluted Earnings per Common Share: Continuing operations 5.16 4.72 Discontinued operations 0.16 Attributable to Magna International Inc. $ 5.16 $ 4.88 Weighted average number of Common Shares outstanding during the year [in millions]: Basic 391.0 407.5 Diluted 393.2 412.7

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Statements of 12 Months Ended Comprehensive Income - USD ($) Dec. 31, 2016Dec. 31, 2015 $ in Millions Statement of Comprehensive Income [Abstract] Net income $ 2,074 $ 2,007 Other comprehensive loss, net of tax: Net unrealized loss on translation of net investment in foreign operations (134) (800) Net unrealized gain (loss) on cash flow hedges 1 (244) Reclassification of net loss on cash flow hedges to net income 126 95 Reclassification of net loss on investments to net income 1 3 Reclassification of net loss on pensions to net income 9 7 Pension and post-retirement benefits (29) 14 Other comprehensive loss (26) (925) Comprehensive income 2,048 1,082 Comprehensive (income) loss attributable to non-controlling interests (18) 8 Comprehensive income attributable to Magna International Inc. $ 2,030 $ 1,090

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Balance Sheets - USD ($) Dec. 31, 2016Dec. 31, 2015 $ in Millions Current assets Cash and cash equivalents $ 974 $ 2,863 Accounts receivable 6,165 5,439 Inventories 2,804 2,564 Prepaid expenses and other 220 278 Total current assets 10,163 11,144 Investments 1,850 399 Fixed assets, net 7,022 5,948 Intangible assets, net 621 169 Goodwill 1,923 1,344 Deferred tax assets 268 271 Other assets 719 412 Consolidated total assets 22,566 19,687 Current liabilities Short-term borrowings 623 25 Accounts payable 5,430 4,746 Accrued salaries and wages 768 660 Other accrued liabilities 1,639 1,512 Income taxes payable 96 122 Long-term debt due within one year 139 211 Total current liability 8,695 7,276 Long-term debt 2,394 2,327 Long-term employee benefit liabilities 667 504 Other long-term liabilities 298 331 Deferred tax liabilities 293 132 Total liability 12,347 10,570 Shareholders' equity Common Shares [issued: 382,252,522; 2015 - 402,264,201] 3,796 3,942 Contributed surplus 105 107 Retained earnings 7,318 6,387 Accumulated other comprehensive loss (1,451) (1,470) Stockholders equity attributable to Magna International Inc 9,768 8,966 Non-controlling interests 451 151 Total stockholder's equity 10,219 9,117 Total liability and stockholders' equity $ 22,566 $ 19,687

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Balance Sheets Dec. 31, 2016Dec. 31, 2015 (Parenthetical) - shares Statement of Financial Position [Abstract] Common stock, shares issued 382,252,522 402,264,201

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Statements of 12 Months Ended Cash Flows - USD ($) Dec. 31, 2016Dec. 31, 2015 $ in Millions OPERATING ACTIVITIES Net income from continuing operations $ 2,074 $ 1,940 Items not involving current cash flows 1,231 736 Profit loss after adjustment of non cash items 3,305 2,676 Changes in operating assets and liabilities 81 (344) Cash provided from operating activities 3,386 2,332 INVESTMENT ACTIVITIES Fixed asset additions (1,807) (1,591) Purchase of subsidiaries (1,930) (222) Increase in investments and other assets (478) (221) Increase in restricted cash deposits (194) Proceeds from disposition 138 61 Proceeds on disposal of facilities 221 Sale of Interiors 520 Cash used in discontinued operations (56) Cash used for investment activities (4,271) (1,288) FINANCING ACTIVITIES Issues of debt 282 1,608 Increase in short-term borrowings 386 25 Repayments of debt (417) (99) Issues of Common Shares on exercise of stock options 33 35 Repurchase of Common Shares (913) (515) Contributions to subsidiaries by non-controlling interests (1) 41 Dividends paid to non-controlling interests (5) Dividends paid (385) (354) Cash (used for) provided from financing activities (1,020) 741 Effect of exchange rate changes on cash and cash equivalents 16 (171) Net (decrease) increase in cash and cash equivalents during the year (1,889) 1,614 Cash and cash equivalents, beginning of year 2,863 1,249 Cash and cash equivalents, end of year $ 974 $ 2,863

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Statements of Common Contributed Retained Noncontrolling Changes in Equity - USD ($) AOCL Total Shares Surplus Earnings [1] Interest shares in Millions, $ in [Member] [Member] [Member] [Member] [Member] Millions Beginning Balance at Dec. 31, $ $ 3,979 $ 83 $ 5,155 $ (558) $ 14 2014 8,673 Beginning Balance, shares at 410.3 Dec. 31, 2014 Net income 2,007 2,013 (6) Other comprehensive loss (925) (923) (2) Shares issued on exercise of 35 $ 45 (10) stock options Shares issued on exercise of 2.4 stock options, shares Release of stock and stock $ 17 (17) units Release of stock and stock 0.5 units, shares Repurchase and cancellation under normal course issuer bids (515) $ (108) (418) 11 [note 20] Repurchase and cancellation under normal course issuer bid, (11.1) shares Contribution by non- 46 17 29 controlling interests [note 7] Purchase of non-controlling (2) (2) interests [note 7] Acquisitions [note 7] 116 116 Stock-based compensation 36 36 expense Dividends paid (354) $ 9 (363) Dividends paid, shares 0.2 Ending Balance at Dec. 31, 9,117 $ 3,942 107 6,387 (1,470) 151 2015 Ending Balance, shares at Dec. 402.3 31, 2015 Net income 2,074 2,031 43 Other comprehensive loss (26) (1) (25) Shares issued on exercise of 33 $ 47 (14) stock options Shares issued on exercise of 2.1 stock options, shares Release of stock and stock $ 25 (25) units

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Release of stock and stock 0.4 units, shares Repurchase and cancellation under normal course issuer bids (913) $ (222) (711) 20 [note 20] Repurchase and cancellation under normal course issuer bid, (22.6) shares Contribution by non- (1) (1) controlling interests [note 7] Acquisitions [note 7] 288 288 Stock-based compensation 37 37 expense Dividends paid to non- (5) (5) controlling interests Dividends paid (385) $ 4 (389) Dividends paid, shares 0.1 Ending Balance at Dec. 31, $ $ 3,796 $ 105 $ 7,318 $ (1,451) $ 451 2016 10,219 Ending Balance, shares at Dec. 382.3 31, 2016 [1]AOCL is Accumulated Other Comprehensive Loss.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Statements of 12 Months Ended Changes in Equity Dec. 31, 2016Dec. 31, 2015 (Parenthetical) - $ / shares Statement of Stockholders' Equity [Abstract] Dividends paid per share $ 1.00 $ 0.88

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Significant Accounting 12 Months Ended Policies Dec. 31, 2016 Accounting Policies [Abstract] Significant Accounting 1. SIGNIFICANT ACCOUNTING POLICIES Policies Magna International Inc. [collectively “Magna” or the “Company”] is a global automotive supplier whose product capabilities include producing body, chassis, exterior, seating, powertrain, electronic, active driver assistance, vision, closure and roof systems and modules, as well as complete vehicle engineering and contract manufacturing.

The consolidated financial statements have been prepared in U.S. dollars following accounting principles generally accepted in the United States [“GAAP”].

Principles of consolidation The Consolidated Financial Statements include the accounts of Magna and its subsidiaries in which Magna has a controlling financial interest or is the primary beneficiary. Magna accounts for investments in companies over which it has the ability to exercise significant influence but does not hold a controlling interest under the equity method, and records its proportionate share of income or losses in Equity income in the Consolidated Statements of Income. The Company presents non-controlling interests as a separate component within Shareholders’ equity in the Consolidated Balance Sheets.

Financial instruments The Company classifies all of its financial assets and financial liabilities as 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 and the Company’s investment in asset-backed commercial paper [“ABCP”] 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, which include long-term interest bearing government securities held to partially fund certain Austrian lump sum termination and long service payment arrangements, are recorded at amortized cost using the effective interest method. Loans and receivables, which include accounts receivable, long-term receivables and accounts payable, are recorded at amortized cost using the effective interest method. Available-for-sale financial assets are recorded at cost and are subsequently measured at fair value with all revaluation gains and losses included in other comprehensive income.

Foreign currency translation The Company operates globally, which gives rise to a risk that its earnings and cash flows may be adversely impacted by fluctuations in foreign exchange rates.

Assets and liabilities of the Company’s operations having a functional currency other than the U.S. dollar are translated into U.S. dollars using the exchange rate in effect at year end, and revenues and expenses are translated at the average rate during the year. Exchange gains or losses on translation of the Company’s net investment in these operations are included in comprehensive income and are deferred in accumulated other comprehensive income. Foreign exchange gains or losses on debt that was designated as a hedge of the Company’s net investment in these operations are also recorded in accumulated other comprehensive income.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document committed foreign currency based outflows and inflows. Most of the Company’s foreign exchange contracts are subject to master netting arrangements that provide for the net settlement of contracts, by counterparty, in the event of default or termination. All derivative instruments, including foreign exchange contracts, are recorded on the consolidated balance sheet at fair value. The fair values of derivatives are recorded on a gross basis in prepaid expenses and other, other assets, other accrued liabilities or other long-term liabilities. To the extent that cash flow hedges are effective, the change in their fair value is recorded in other comprehensive income; any ineffective portion is recorded in net income. Amounts accumulated in other comprehensive income are reclassified to net income in the period in which the hedged item affects net income. If the Company’s foreign exchange forward contracts cease to be effective as hedges, for example, if projected foreign cash inflows or outflows declined significantly, gains or losses pertaining to the portion of the hedging transactions in excess of projected foreign currency denominated cash flows would be recognized in income at the time this condition was identified.

Cash and cash equivalents Cash and cash equivalents include cash on account, demand deposits and short-term investments with remaining maturities of less than three months at acquisition.

Inventories Production inventories and tooling inventories manufactured in-house are valued at the lower of cost and market, with cost being determined substantially on a first-in, first-out basis. Cost includes the cost of materials plus direct labour applied to the product and the applicable share of manufacturing overhead.

Outsourced tooling inventories are valued at the lower of subcontracted costs and market.

Long-lived assets Fixed assets are recorded at historical cost. Depreciation is provided on a straight-line basis over the estimated useful lives of fixed assets at annual rates of 2 1⁄2% to 5% for buildings, 7% to 10% for general purpose equipment and 10% to 33% for special purpose equipment.

Definite-lived intangible assets, which have arisen principally through acquisitions and include customer relationship intangibles and patents and licences. These definite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives which range from 4 to 15 years.

Goodwill Goodwill represents the excess of the cost of an acquired enterprise over the fair value of the identifiable assets acquired and liabilities assumed less any subsequent write-downs for impairment. Goodwill is reviewed for impairment in the fourth quarter of each year, or more frequently if indicators of potential impairment exist. Goodwill impairment is assessed based on a comparison of the fair value of a reporting unit to the underlying carrying value of the reporting unit’s net assets, including goodwill. When the carrying amount of the reporting unit exceeds its fair value, the fair value of the reporting unit’s goodwill is compared with its carrying amount to measure the amount of impairment, if any. The fair value of a reporting unit is determined using the estimated discounted future cash flows of the reporting unit.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Other assets Other assets include the long-term portion of certain receivables, which represent the recognized sales value of tooling and design and engineering services provided to customers under certain long-term contracts. The receivables will be paid in full upon completion of the contracts or in instalments based on forecasted production volumes. In the event that actual production volumes are less than those forecasted, a reimbursement for any shortfall will be made.

Preproduction costs related to long-term supply agreements Pre-operating costs incurred in establishing new facilities that require substantial time to reach commercial production capability are expensed as incurred.

Costs incurred [net of customer subsidies] related to design and engineering, which are paid for as part of subsequent production piece price amounts, are expensed as incurred unless a contractual guarantee for reimbursement exists.

Costs incurred [net of customer subsidies] related to design and development costs for moulds, dies and other tools that the Company does not own [and that will be used in, and paid for as part of the piece price amount for, subsequent production] are expensed as incurred unless the supply agreement provides a contractual guarantee for reimbursement or the non-cancellable right to use the moulds, dies and other tools during the supply agreement.

Warranty The Company records product warranty liabilities based on its individual customer agreements. Under most customer agreements, the Company only accounts for existing or probable claims on product default issues when amounts related to such issues are probable and reasonably estimable. Under certain powertrain and complete vehicle engineering and assembly contracts, the Company records an estimate of future warranty-related costs based on the terms of the specific customer agreements and the specific customer’s warranty experience.

Product liability provisions are established based on the Company’s best estimate of the amounts necessary to settle existing claims on product default issues. Recall costs are costs incurred when government regulators and/or the customer decides to recall a product due to a known or suspected performance issue, and the Company is required to participate, either voluntarily or involuntarily. Costs typically include the cost of the product being replaced, the customer’s cost of the recall and labour to remove and replace the defective part. When a decision to recall a product has been made or is probable, the Company’s portion of the estimated cost of the recall is recorded as a charge to income in that period. In making this estimate, judgment is required as to the number of units that may be returned as a result of the recall, the total cost of the recall campaign and the ultimate negotiated sharing of the cost between the Company, the customer and, in some cases, a supplier to the Company.

The Company monitors warranty activity on an ongoing basis and adjusts reserve estimates when it is probable that future warranty costs will be different than those estimates.

Employee future benefit plans The cost of providing benefits through defined benefit pensions, lump sum termination and long service payment arrangements, and post-retirement benefits other than pensions is actuarially determined and recognized in income using the projected benefit method pro-rated on service and management’s best estimate of expected plan investment performance, salary escalation,

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document retirement ages of employees and, with respect to medical benefits, expected health care costs. Differences arising from plan amendments, changes in assumptions and experience gains and losses that are greater than 10% of the greater of the accrued benefit obligation at the beginning of the year and the fair value, or market related value, of plan assets at the beginning of the year, are recognized in income over the expected average remaining service life of employees. Gains related to plan curtailments are recognized when the event giving rise to the curtailment has occurred. Plan assets are valued at fair value. The cost of providing benefits through defined contribution pension plans is charged to income in the period in respect of which contributions become payable.

The funded status of the plans is measured as the difference between the plan assets at fair value and the projected benefit obligation [“PBO”]. The aggregate of all overfunded plans is recorded in other assets, and the aggregate of all underfunded plans in long-term employee benefit liabilities. The portion of the amount by which the actuarial present value of benefits included in the PBO exceeds the fair value of plan assets, payable in the next twelve months, is reflected in other accrued liabilities. This is determined on a plan by plan basis.

Asset retirement obligation The Company recognizes its obligation to restore leased premises at the end of the lease by recording at lease inception the estimated fair value of this obligation as other long-term liabilities with a corresponding amount recognized as fixed assets. The fixed asset amount is amortized over the period from lease inception to the time the Company expects to vacate the premises, resulting in both depreciation and interest charges. The estimated fair value of the obligation is assessed for changes in the expected timing and extent of expenditures with changes related to the time value of money recorded as interest expense.

Revenue recognition Revenue from the sale of manufactured products is recognized when the price is fixed or determinable, collectability is reasonably assured and upon shipment to [or receipt by customers, depending on contractual terms], and acceptance by customers.

Revenue from tooling and engineering services are accounted for as a separate revenue element only in circumstances where the tooling and engineering has value to the customer on a standalone basis. Revenues from significant engineering services and tooling contracts that qualify as separate revenue elements are recognized on a percentage-of-completion basis. Percentage-of-completion is generally determined based on the proportion of accumulated expenditures to date as compared to total anticipated expenditures.

Revenue and cost of goods sold, including amounts from engineering and tooling contracts, are presented on a gross basis in the consolidated statements of income and comprehensive income when the Company is acting as principal and is subject to significant risks and rewards in connection with the process of bringing the product to its final state and in the post-sale dealings with its customers. Otherwise, components of revenues and related costs are presented on a net basis.

With respect to vehicle assembly sales, given that Magna is acting as principal with respect to purchased components and systems, the selling price to the customer includes the costs of such inputs.

Government assistance The Company makes periodic applications for financial assistance under available government assistance programs in the various jurisdictions that the Company operates. Grants relating to capital expenditures are reflected as a reduction of the cost of the related assets. Grants relating to current operating expenditures are generally recorded as a reduction of the related expense at the time the eligible expenses are incurred. The Company also receives tax credits and tax super allowances, the benefits of which are recorded as a reduction of income tax expense. In addition,

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the Company receives loans which are recorded as liabilities in amounts equal to the cash received. When a government loan is issued to the Company at a below-market rate of interest, the loan is initially recorded at its net present value, and accreted to its face value over the period of the loan. The benefit of the below-market rate of interest is accounted for like a government grant. It is measured as the difference between the initial carrying value of the loan and the cash proceeds received.

Income taxes The Company uses the liability method of tax allocation to account for income taxes. Under the liability method of tax allocation, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

No deferred tax liability is recorded for taxes on undistributed earnings and translation adjustments of foreign subsidiaries if these items are either considered to be reinvested for the foreseeable future or if they are available for repatriation and are not subject to further tax on remittance. Taxes are recorded on such foreign undistributed earnings and translation adjustments when it becomes apparent that such earnings will be distributed in the foreseeable future and the Company will incur further significant tax on remittance. Recognition of uncertain tax positions is dependent on whether it is more-likely-than-not that a tax position taken or expected to be taken in a tax return will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense.

Comprehensive income Other comprehensive income includes unrealized gains and losses on translation of the Company’s foreign operations that use the local currency as the functional currency, the change in fair value of available-for-sale investments, net of taxes, the change in unamortized actuarial amounts, net of taxes and to the extent that cash flow hedges are effective, the change in their fair value, net of income taxes.

Earnings per Common Share Basic earnings per Common Share are calculated on net income attributable to Magna International Inc. using the weighted average number of Common Shares outstanding during the year.

Diluted earnings per Common Share are calculated on the weighted average number of Common Shares outstanding, including an adjustment for stock options outstanding using the treasury stock method.

Discontinued operations

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Company reports financial results for discontinued operations separately from continuing operations to distinguish the financial impact of disposal transactions from ongoing operations. Discontinued operations reporting only occurs when the disposal of a component or a group of components of the Company represents a strategic shift that will have a major impact on the Company’s operations and financial results. In the third quarter of 2015, the Company sold substantially all of its interiors operations. Accordingly, for the year ended December 31, 2015 the operating results and operating cash flows for the disposed interiors operations are presented as discontinued operations separate from the Company’s continuing operations. Financial information related to the interiors operations has been excluded from both continuing operations and segment results in the consolidated financial statements. Refer to Note 3 Discontinued Operations for further information regarding the Company’s discontinued operations.

Use of estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Accounting Standards Dec. 31, 2016 New Accounting Pronouncements and Changes in Accounting Principles [Abstract] Accounting Standards 2. ACCOUNTING STANDARDS Accounting Changes Pension and other Post Retirement Benefit Plans At December 31, 2016, the Company changed the method used to estimate the service and interest components of net periodic benefit cost for pension and other postretirement benefits for plans that utilize a yield curve approach. This change compared to the previous method will result in different service and interest components of net periodic benefit cost (credit) in future periods. Historically, the Company estimated these service and interest cost components utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. The Company elected to utilize a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. The Company made this change to provide a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot yield curve rates. This change does not affect the measurement of the total benefit obligations or annual net periodic benefit cost (credit) as the change in the service and interest costs is completely offset in the net actuarial (gain) loss reported. The change in the service and interest costs was not significant. The Company has accounted for this change as a change in accounting estimate.

Simplifying the Presentation of Debt Issuance Costs In the first quarter of 2016, the Company adopted Accounting Standards Update No. 2015-03 “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. This guidance requires that debt issuance costs be presented as a direct reduction to the carrying amount of the related debt in the balance sheet rather than as an asset. Consequently, the Company has reclassified $19 million of deferred debt issuance costs from other assets to long- term debt in the consolidated balance sheet as at December 31, 2015.

Future Accounting Standards Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers: Topic 606 (ASU 2014-09)”, to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. In July 2015, the FASB deferred the effective date to annual reporting periods beginning after December 15, 2017 [including interim reporting periods within those periods]. ASU 2014-09 is effective for the Company in the first quarter of fiscal 2018 using either of two methods: [i] retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or [ii] retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. The Company has not yet selected a transition method and continues to evaluate the impact that ASU 2014-09 will have on its consolidated financial statements and related disclosures. In addition, new controls and processes designed to comply with ASU 2014-09 will be implemented and tested throughout 2017 to permit adoption by January 1, 2018.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Leases In February 2016, the FASB issued ASU No. 2016-02, “Leases: Topic 842 (ASU 2016-02)”, to supersede nearly all existing lease guidance under GAAP. The guidance would require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. ASU 2016-02 is effective for the Company in the first quarter of fiscal 2019 using a modified retrospective approach with the option to elect certain practical expedients. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-02 on its consolidated financial statements.

Statement of Cash Flows In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which provides amendments to current guidance to address the classification and presentation of changes in restricted cash in the statement of cash flows. ASU 2016-18 is effective for the Company in the first quarter of fiscal 2018 and earlier adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-18 on its consolidated financial statements.

Income Taxes In October 2016, the FASB issued ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. This guidance requires that the tax effects of all intra-entity sales of assets other than inventory be recognized in the period in which the transaction occurs. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption as of the beginning of an annual reporting period is permitted. The guidance is to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements.

Goodwill In January 2017, the FASB issued new guidance, ASU No. 2017-4, Intangibles-Goodwill and Other (Topic 350): Simplifying the test for Goodwill Impairment. This guidance simplifies subsequent goodwill measurement by eliminating Step 2 from the goodwill impairment test. Under this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The new standard is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 with early adoption permitted for annual goodwill impairment tests performed after January 1, 2017. The standard must be applied prospectively. Upon adoption, the standard will impact how the Company assesses goodwill for impairment. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Discontinued Operations Dec. 31, 2016 Discontinued Operations and Disposal Groups [Abstract] Discontinued Operations 3. DISCONTINUED OPERATIONS On August 31, 2015, the Company sold substantially all of its interiors operations [“the interiors operations”]. The Company recognized a gain on the divestiture within income from discontinued operations as follows:

Proceeds on disposal, net of transaction costs $549 Net assets disposed 438 Pre-tax gain on divestiture 111 Income taxes 66 Gain on divestiture, net of tax $45

There were no amounts related to the interiors operations classified as discontinued operations for the year ended December 31, 2016. The following table summarizes the results of the interiors operations classified as discontinued operations for the year ended December 31, 2015:

2015 Sales $1,737 Costs and expenses Cost of goods sold 1,635 Depreciation and amortization 13 Selling, general and administrative 58 Equity income (11 ) Income from discontinued operations before income taxes and gain on divestiture 42 Income taxes 20 Income from discontinued operations before gain on divestiture 22 Gain on divestiture of discontinued operations, net of tax 45 Income from discontinued operations, net of tax $67

The interiors operations were previously included within all of the Company’s reporting segments except for Rest of World.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Other Expense (Income), Net Dec. 31, 2016 Other Income and Expenses [Abstract] Other Expense (Income), Net 4. OTHER EXPENSE (INCOME), NET Other expense (income), net consists of significant items such as: restructuring charges generally related to significant plant closures or consolidations; impairment charges; gains or losses on disposal of facilities; re-measurement gains on acquisitions; and other items not reflective of on-going operating profit or loss. Other expense (income), net consists of:

2016 2015 North America [a] Gain on disposal of Bestop $— $(136) Pension settlement 13 — 13 (136) Europe [b] Restructuring charges 17 27 Gain on disposal of battery pack business — (57 ) 17 (30 ) $30 $(166)

[a] North America For the year ended December 31, 2016 During the fourth quarter of 2016, the Company offered a limited lump-sum payout to certain terminated vested plan participants of its U.S. defined benefit pension plans. As a result of the partial settlement, the Company recognized a $13 million [$9 million after tax] non-cash settlement charge.

For the year ended December 31, 2015 During 2015, the Company entered into a joint venture arrangement for the manufacture and sale of roof and other accessories for the Jeep market to original equipment manufacturers as well as aftermarket customers. The Company contributed two manufacturing facilities and received a 49% interest in the newly formed joint venture and cash proceeds of $118 million. Total consideration was valued at $160 million and as a result the Company recognized a gain of $136 million [$80 million after tax]. The Company accounts for its ownership as an equity investment since Magna has significant influence through its voting rights, but does not control the joint venture. [b] Europe For the year ended December 31, 2016 During 2016, the Company recorded net restructuring charges of $17 million [$17 million after tax] in Germany at a powertrain systems facility.

For the year ended December 31, 2015 During 2015, the Company recorded net restructuring charges of $27 million [$27 million after tax] primarily in Germany at its exterior systems and roof systems operations. During 2015, the Company sold its battery pack business to Samsung SDI for gross proceeds of approximately $120 million, resulting in a gain of $57 million [$42 million after tax].

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Earnings Per Share Dec. 31, 2016 Earnings Per Share [Abstract] Earnings Per Share 5. EARNINGS PER SHARE Earnings per share are computed as follows:

2016 2015 Income available to Common shareholders: Net income from continuing operations $2,074 $1,940 (Income) loss from continuing operations attributable to non-controlling interests (43 ) 6 Net income attributable to Magna International Inc. from continuing operations 2,031 1,946 Income from discontinued operations, net of tax — 67 Net income attributable to Magna International Inc. $2,031 $2,013

Weighted average shares outstanding: Basic 391.0 407.5 Adjustments Stock options and restricted stock [a] 2.2 5.2 Diluted 393.2 412.7

Earnings per Common Share:

2016 2015 Basic: Continuing operations $5.19 $4.78 Discontinued operations — 0.16 Attributable to Magna International Inc. $5.19 $4.94

Diluted: Continuing operations $5.16 $4.72 Discontinued operations — 0.16 Attributable to Magna International Inc. $5.16 $4.88

The dilutive effect of participating securities using the two-class method was excluded from the calculation of earnings per share because the effect would be immaterial.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Details of Cash From 12 Months Ended Operating Activities Dec. 31, 2016 Additional Cash Flow Elements, Operating Activities [Abstract] Details of Cash From Operating Activities 6. DETAILS OF CASH FROM OPERATING ACTIVITIES [a]Cash and cash equivalents consist of:

2016 2015 Bank term deposits, bankers’ acceptances and government paper $498 $2,572 Cash 476 291 $974 $2,863

[b]Items not involving current cash flows:

2016 2015 Depreciation and amortization $1,056 $802 Amortization of other assets included in cost of goods sold 135 110 Other non-cash charges 27 44 Deferred income taxes [note 12] 22 (7 ) Equity income in excess of dividends received (9 ) (20 ) Non-cash portion of Other (income) expense, net [note 4] — (193) $1,231 $736

[c]Changes in operating assets and liabilities:

2016 2015 Accounts receivable $(446) $(410) Inventories (159) (241) Prepaid expenses and other 189 13 Accounts payable 562 139 Accrued salaries and wages 94 43 Other accrued liabilities (145) 72 Income taxes payable (14 ) 40 $81 $(344)

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Acquisitions Dec. 31, 2016 Business Combinations [Abstract] Acquisitions 7. ACQUISITIONS Acquisitions in the year ended December 31, 2016 On January 4, 2016, the Company completed the acquisition of 100% of the common shares and voting interests of the Getrag Group of Companies [“Getrag”]. Getrag is a global supplier of automotive transmission systems, including manual, automated-manual, dual clutch, hybrid and other advanced systems. The purchase price was approximately $1.9 billion [net of $136 million cash acquired]. The acquired business has sales primarily to BMW, Audi, Jiangling Motors, Ford, Volvo and Dongfeng.

The acquisition of Getrag was accounted for as a business combination. The following table summarizes the amounts recognized for assets acquired and liabilities assumed:

Preliminary Measurement amounts recognized Period Final at March 31, 2016 adjustments allocation Cash $ 136 $ — $136 Non-cash working capital (466 ) 71 (395 ) Investments 1,719 (222 ) 1,497 Fixed assets 468 (23 ) 445 Goodwill 430 160 590 Other assets 60 (36 ) 24 Intangibles 218 154 372 Deferred tax assets 43 (9 ) 34 Long-term employee benefit liabilities (125 ) (12 ) (137 ) Long-term debt (116 ) (1 ) (117 ) Other long-term liabilities (9 ) (43 ) (52 ) Deferred tax liabilities (137 ) 18 (119 ) Non-controlling interest (303 ) 16 (287 ) Consideration paid 1,918 73 1,991 Less: Cash acquired (136 ) — (136 ) Net cash outflow $ 1,782 $ 73 $1,855

The measurement period adjustments primarily reflect: [i] changes in the estimated fair value of the acquired equity method investments; [ii] changes in the estimated fair value of the acquired patents and customer relationship intangibles; and [iii] a working capital adjustment due to an increase in the total fair value of consideration transferred. This resulted in a net adjustment to goodwill of $160 million.

The measurement period adjustments did not result from intervening events subsequent to the acquisition date and did not have a material impact on the Company’s earnings in any period. The final allocation of the consideration transferred to the assets acquired and liabilities assumed has been completed.

The investments amount includes the following equity investments that were acquired as part of the business combination:

Ownership Investment percentage balance Getrag Ford Transmission GmbH [“GFT”] 50.0 % $ 340

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Getrag (Jiangxi) Transmission Co., Ltd [“GJT”] [i] 50.0 % $ 1,077 Dongfeng Getrag Transmission Co. Ltd [“DGT”] 50.0 % $ 80

[i] GJT is 66.7% owned by one of the Company’s consolidated subsidiaries which has a 25% non-controlling interest.

As a result, the investment balance was derived using 66.7% of the fair value.

The Company accounts for the investments under the equity method since it has the ability to exercise significant influence but does not hold a controlling financial interest.

Recognized goodwill is attributable to the assembled workforce, expected synergies and other intangible assets that do not qualify for separate recognition. All of the goodwill recognized was assigned to the Company’s European segment.

Intangible assets consist primarily of amounts recognized for the fair value of customer relationship intangibles and patents. These amortizable intangible assets are being amortized on a straight-line basis over a 15 year estimated useful life.

Sales and net income for the acquired Getrag entities for the year ended December 31, 2016 were $2.0 billion and $45 million, respectively.

The following table provides consolidated supplemental pro forma information as if the acquisition of Getrag had occurred on January 1, 2015.

December 31, 2015 Sales $ 34,150 Net income attributable to Magna International Inc. $ 1,992

The unaudited pro forma financial results do not include any anticipated synergies or other expected benefits of the acquisition. This information is presented for informational purposes only and is not indicative of future operating results.

Other During the fourth quarter of 2016, the Company acquired 100% of the equity interest in the BÖCO Group of Companies [“BÖCO”]. BÖCO is an automotive supplier of latches, hinges and strikers, with sales primarily to the BMW Group, Daimler and Audi.

During the second quarter of 2016, the Company acquired 100% of the equity interest in Telemotive AG, an engineering service provider in the field of automotive electronics. The acquired business has sales primarily to BMW, Volkswagen and Daimler.

These entities have been included in our consolidated results of operations since their respective acquisition dates. Pro forma results of operations during the current period have not been presented because the effects of these acquisitions, individually and in aggregate, were not material to the Company’s consolidated results of operations.

Acquisitions in the year ended December 31, 2015 On December 10, 2015, the Company entered into a partnership agreement in China [the “Xingqiaorui Partnership”] with Chongqing Xingqiaorui. Under the terms of the arrangement, Xingqiaorui transferred a 53% controlling interest in its three China manufacturing facilities and cash consideration of $36 million. In exchange, the Company transferred a 47% non-controlling equity interest in its Chongqing manufacturing facility and cash consideration of $130 million to

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Xingqiaorui. The acquisition of the 53% controlling interest in the China manufacturing facilities was accounted for as a business combination.

On November 30, 2015, the Company acquired a 100% interest in Stadco Automotive Ltd. [“Stadco”] for total cash consideration of $115 million. Stadco, based in the United Kingdom, is a supplier of steel and aluminum stampings as well as vehicle assemblies primarily to Jaguar and Land Rover.

The final allocation of the consideration transferred to the assets acquired and liabilities assumed for both the Xingqiaorui Partnership and Stadco has been completed. As a result of additional information obtained, changes to the preliminary fair values of certain property, plant and equipment, definite-lived intangible assets and contingent tax liabilities, from the amounts disclosed as of December 31, 2015 were recorded during the three months ended December 31, 2016, resulting in a net adjustment to goodwill of $14 million. These adjustments did not have a material impact on the Company’s earnings in any period.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Inventories Dec. 31, 2016 Inventory Disclosure [Abstract] Inventories 8. INVENTORIES Inventories consist of:

2016 2015 Raw materials and supplies $1,007 $843 Work-in-process 264 246 Finished goods 327 311 Tooling and engineering 1,206 1,164 $2,804 $2,564

Tooling and engineering inventory represents costs incurred on tooling and engineering services contracts in excess of billed and unbilled amounts included in accounts receivable.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Investments in Affiliated 12 Months Ended Companies Dec. 31, 2016 Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] Investments in Affiliated 9. INVESTMENTS IN AFFILIATED COMPANIES Companies The Company uses the equity method of accounting for its investments in entities over which it does not have control, but is able to exercise significant influence over operating and financial policies.

The ownership percentages and carrying value of the Company’s principal equity method investments at December 31 were as follows [in million, except percentages]:

2016 2015 Litens Automotive Partnership [“Litens”] [i] 76.7% $173 $138 Getrag (Jiangxi) Transmission Co., Ltd 50.0% $1,015 — Getrag Ford Transmission GmbH 50.0% $325 — Dongfeng Getrag Transmission Co. Ltd [ii] 50.0% $79 —

[i] Litens - The Company accounts for its investment in Litens under the equity method of accounting as a result of significant participating rights that prevent control. [ii] DGT – DGT is a variable interest entity [“VIE”] and depends on the Company and the Dongfeng Motor Group Company for any additional cash needs. The Company cannot make key operating decisions considered to be most significant to the VIE, and is therefore not considered to be the primary beneficiary. Our known maximum exposure to loss approximated the carrying value of our investment balance as at December 31, 2016.

A summary of the total financial results, as reported by the Company’s equity method investees, in the aggregate, at December 31 was as follows:

Summarized Balance Sheets

2016 2015 Current assets $2,478 $905 Non-current assets $4,450 $756 Current liabilities $2,329 $806 Long-term liabilities $1,268 $335

Summarized Income Statements

2016 2015 Sales $5,009 $3,168 Cost of goods sold, expenses and income taxes 4,668 2,886 Net income $341 $282

No impairment charges were recorded for the years ended December 31, 2016 and 2015. Sales to equity method investees were approximately $214 million and $98 million in 2016 and 2015 respectively.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Variable Interest Entities The Company has determined that two of its investees acquired as part of the Getrag acquisition are variable interest entities, in which the Company is the primary beneficiary and has the power to direct the activities that are considered most significant to the entities. As a result, the assets, liabilities, and results of operations of these variable interest entity are included in the Company’s Consolidated Financial Statements. The Company’s maximum exposure to any potential losses associated with these affiliated companies is limited to its investment, and was $187 million at December 31, 2016.

The carrying amounts and classification of assets and liabilities included in the Company’s consolidated balance sheet related to the consolidated VIEs are as follows:

2016 Current assets $256 Noncurrent assets 221 Total assets $477

Current liabilities $288 Noncurrent liabilities 2 Total liabilities $290

Assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the consolidated VIEs.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Fixed Assets Dec. 31, 2016 Property, Plant and Equipment [Abstract] Fixed Assets 10. FIXED ASSETS Fixed assets consist of:

2016 2015 Cost Land $254 $259 Buildings 1,942 1,659 Machinery and equipment 12,349 11,016 14,545 12,934 Accumulated depreciation Buildings (652 ) (590 ) Machinery and equipment (6,871 ) (6,396 ) $7,022 $5,948

Included in the cost of fixed assets are construction in progress expenditures of $1.0 billion [2015 - $1.3 billion] that have not been depreciated.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Goodwill Dec. 31, 2016 Goodwill and Intangible Assets Disclosure [Abstract] Goodwill 11.GOODWILL The following is a continuity of the Company’s goodwill by segment:

North America Europe Asia Total Balance, December 31, 2014 $ 633 $577 $127 $1,337 Acquisitions [note 7] — 13 107 120 Foreign exchange and other (43 ) (65 ) (5 ) (113 ) Balance, December 31, 2015 590 525 229 1,344 Acquisitions [note 7] — 620 (5 ) 615 Foreign exchange and other 5 (29 ) (12 ) (36 ) Balance, December 31, 2016 $ 595 $1,116 $212 $1,923

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Income Taxes Dec. 31, 2016 Income Tax Disclosure [Abstract] Income Taxes 12. INCOME TAXES [a] The provision for income taxes differs from the expense that would be obtained by applying the Canadian statutory income tax rate as a result of the following:

2016 2015 Canadian statutory income tax rate 26.5% 26.5% Manufacturing and processing profits deduction (0.3 ) (0.4 ) Foreign rate differentials (0.2 ) 0.8 Losses not benefited 0.8 1.1 Utilization of losses previously not benefited (0.2 ) (0.1 ) Earnings of equity accounted investees (1.2 ) (0.8 ) Tax on repatriation of foreign earnings 0.7 2.1 Valuation allowance on deferred tax assets [i] (0.4 ) — Write off of investment [ii] — (1.4 ) Research and development tax credits (1.5 ) (1.3 ) Reserve for uncertain tax positions 0.2 (0.3 ) Non-deductible foreign exchange losses [iii] 1.3 1.0 Others (0.3 ) (0.4 ) Effective income tax rate 25.4% 26.8%

[i] GAAP requires that the Company assess whether valuation allowances should be established or maintained against its deferred tax assets, based on consideration of all available evidence, using a “more-likely-than-not” standard. The factors the Company uses to assess the likelihood of realization are its history of losses, forecasts of future pre-tax income and tax planning strategies that could be implemented to realize the deferred tax assets. [ii] During 2015, the Company recorded a benefit related to the write-off of historical tax basis in one of its South American subsidiaries. [iii]Non-deductible foreign exchange losses are related to the re-measurement of financial statement balances of foreign subsidiaries, primarily in Mexico, that are maintained in a currency other than their functional currency. [b] The details of income before income taxes by jurisdiction are as follows:

2016 2015 Canadian $617 $590 Foreign 2,163 2,061 $2,780 $2,651

[c] The details of the income tax provision are as follows:

2016 2015 Current Canadian $127 $140 Foreign 559 578 686 718 Deferred Canadian 16 14 Foreign 4 (21 ) 20 (7 )

[d] Deferred income taxes have been provided on temporary differences, which consist of the following:

2016 2015 Tax depreciation greater than book depreciation $58 $12 Book amortization (in excess of) less than tax amortization (41) 7 Liabilities currently not deductible for tax 48 — Net tax losses benefited (31) (13 ) Change in valuation allowance on deferred tax assets (12) (1 ) Tax on undistributed foreign earnings 8 3 Others (10) (15 ) $20 $(7 )

[e] Deferred tax assets and liabilities consist of the following temporary differences:

2016 2015 Assets Tax benefit of loss carryforwards $715 $614 Liabilities currently not deductible for tax 106 211 Tax credit carryforwards 22 24 Unrealized loss on cash flow hedges and retirement liabilities 134 154 Other assets tax value in excess of book values 36 11 Others 21 5 1,034 1,019 Valuation allowance against tax benefit of loss carryforwards (615 ) (562 ) Other valuation allowance (66 ) (50 ) 353 407 Liabilities Tax depreciation in excess of book depreciation 277 249 Tax on undistributed foreign earnings 98 10 Unrealized gain on cash flow hedges and retirement liabilities 3 9 378 268 Net deferred tax (liabilities) assets $(25 ) $139

The net deferred tax (liabilities) assets are presented on the consolidated balance sheet in the following categories:

2016 2015 Long-term deferred tax assets $268 $271 Long-term deferred tax liabilities (293) (132) $(25 ) $139

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document [f] The Company has provided for deferred income taxes for the estimated tax cost of distributable earnings of its subsidiaries. Deferred income taxes have not been provided on approximately $4.46 billion of undistributed earnings of certain foreign subsidiaries, as the Company has concluded that such earnings should not give rise to additional tax liabilities upon repatriation or are indefinitely reinvested. A determination of the amount of the unrecognized tax liability relating to the remittance of such undistributed earnings is not practicable. [g] Income taxes paid in cash [net of refunds] were $707 million for the year ended December 31, 2016 [2015 - $647 million]. [h] As of December 31, 2016, the Company had domestic and foreign operating loss carryforwards of $2.29 billion and tax credit carryforwards of $22 million. Approximately $1.65 billion of the operating losses can be carried forward indefinitely. The remaining operating losses and tax credit carryforwards expire between 2017 and 2036. [i] As at December 31, 2016 and 2015, the Company’s gross unrecognized tax benefits were $220 and $221 million, respectively [excluding interest and penalties], of which $201 and $158 million, respectively, if recognized, would affect the Company’s effective tax rate. The gross unrecognized tax benefits differ from the amount that would affect the Company’s effective tax rate due primarily to the impact of the valuation allowance on deferred tax assets. A summary of the changes in gross unrecognized tax benefits is as follows:

2016 2015 Balance, beginning of year $221 $202 Increase based on tax positions related to current year 21 17 (Decrease) increase based on tax positions of prior years (52 ) 53 Increase related to acquisitions 44 — Settlements (2 ) (15 ) Statute expirations (8 ) (20 ) Foreign currency translation (4 ) (16 ) $220 $221

The Company recognizes interest and penalties with respect to unrecognized tax benefits as income tax expense. As at December 31, 2016 and 2015, the Company had recorded interest and penalties on the unrecognized tax benefits of $35 and $21 million, respectively, which reflects expenses related to changes in its reserves for interest and penalties of $14 and $3 million, respectively. The Company operates in multiple jurisdictions throughout the world, and its tax returns are periodically audited or subject to review by both domestic and foreign tax authorities. During the next twelve months, it is reasonably possible that, as a result of audit settlements, the conclusion of current examinations and the expiration of the statute of limitations in several jurisdictions, the Company may decrease the amount of its gross unrecognized tax benefits [including interest and penalties] by approximately $62 million, of which $52 million, if recognized, would affect its effective tax rate. The Company considers its significant tax jurisdictions to include Canada, the United States, Austria, Germany and Mexico. With few exceptions, the Company remains subject to income tax examination in Germany for years after 2007, in Austria for years after 2008, Mexico for years after 2010, and in Canada and the U.S. federal jurisdiction for years after 2012.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Intangible Assets Dec. 31, 2016 Finite-Lived Intangible Assets, Net [Abstract] Intangible Assets 13. INTANGIBLE ASSETS Intangible assets were as follows:

Estimated weighted average useful life in years 2016 2015 Cost Customer relationship intangibles [note 7] 12 $392 $134 Computer software 4 316 278 Patent and licenses 15 278 39 986 451 Accumulated depreciation Customer relationship intangibles [note 7] (96 ) (53 ) Computer software (242) (221) Patent and licenses (27 ) (8 ) $621 $169

The Company recorded approximately $100 million and $48 million of amortization expense related to definite-lived intangible assets for the years ended December 31, 2016 and 2015, respectively. The Company currently estimates annual amortization expense to be $90 million for 2017, $82 million for 2018, $66 million for 2019, $47 million for 2020 and $44 million for 2021.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Other Assets Dec. 31, 2016 Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] Other Assets 14.OTHER ASSETS Other assets consist of:

2016 2015 Preproduction costs related to long-term supply agreements with contractual guarantee for reimbursement $420 $276 Long-term receivables [note 22[c]] 229 87 Pension overfunded status [note 18[a]] 21 17 Unrealized gain on cash flow hedges [note 22] 6 5 Other, net 43 27 $719 $412

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Employee Equity and Profit 12 Months Ended Participation Program Dec. 31, 2016 Other Liabilities Disclosure [Abstract] Employee Equity and Profit 15. EMPLOYEE EQUITY AND PROFIT PARTICIPATION PROGRAM Participation Program During the year ended December 31, 2016, a trust, which exists to make orderly purchases of the Company’s shares for employees for transfer to the Employee Equity and Profit Participation Program [“EEPPP”], borrowed up to $10 million [2015 - $55 million] from the Company to facilitate the purchase of Common Shares. At December 31, 2016, the trust’s indebtedness to Magna was $10 million [2015 - $5 million]. The Company nets the receivable from the trust with the Company’s accrued EEPPP payable in accrued wages and salaries.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Warranty Dec. 31, 2016 Product Warranties Disclosures [Abstract] Warranty 16. WARRANTY The following is a continuity of the Company’s warranty accruals:

2016 2015 Balance, beginning of year $59 $80 Expense, net 101 26 Settlements (59 ) (53 ) Acquisitions [i] 174 — Foreign exchange and other (5 ) 6 $270 $59

[i] $127 million of the acquisition balance relates to a pre-acquisition settlement agreement negotiated with a customer and a supplier for a specific performance issue [note 7].

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Debt Dec. 31, 2016 Debt Disclosure [Abstract] Debt 17. DEBT Short-term borrowings The Company’s short-term borrowings consist of the following:

2016 2015 Bank indebtedness [i] $8 $25 Commercial paper [ii] 615 — $623 $25

[i] In the third quarter of 2016, the Company entered into an agreement for a credit facility that is drawn in euros. The Company is required to secure any amounts drawn on the facility with a USD cash deposit of 105% of the outstanding euro balance. As of December 31, 2016, the gross amount outstanding under the credit facility was $185 million [€175 million]. The credit agreement includes a netting arrangement with the bank that provides for the legal right of setoff. Accordingly, as at December 31, 2016, this liability balance was offset against the related restricted cash deposit of $194 million. The remaining net cash deposit of $9 million was included in the prepaid expenses and other balance, and is restricted under the terms of the loan. [ii] During 2016, the Company established a U.S. commercial paper program [the “U.S. Program”] and a euro-commercial paper program [the “euro-Program”]. Under the U.S. Program, the Company may issue U.S. commercial paper notes [the “U.S. notes”] up to a maximum aggregate amount of U.S. $500 million. The U.S. Program is supported by the Company’s existing global credit facility. The proceeds from the issuance of the U.S. notes are being used for general corporate purposes. As at December 31, 2016, $295 million of U.S notes were outstanding, with a weighted-average interest rate of 1.04%, and maturities generally less than three months. Under the euro-Program, the Company may issue euro-commercial paper notes [the “euro notes”] up to a maximum aggregate amount of €500 million or its equivalent in alternative currencies. The euro notes issued are being guaranteed by the Company’s existing global credit facility. The proceeds from the issuance of the euro notes are being used for general corporate purposes. As of December 31, 2016, $320 million [€304 million] of euro notes were outstanding, with a negative weighted-average interest rate of 0.07%, and maturities generally less than three months.

Long-term borrowings [a] The Company’s long-term debt, which is substantially uncollateralized, consists of the following:

2016 2015 Senior Notes [note 17 [c]] $750 million Senior Notes due 2024 at 3.625% $746 $745 $650 million Senior Notes due 2025 at 4.150% 643 643 €550 million Senior Notes due 2023 at 1.900% 576 592 Cdn$425 million Senior Notes due 2022 at 3.100% 315 305 Bank term debt at a weighted average interest rate of approximately 7.3% [2015 – 8.1%], denominated primarily in Indian rupee, Chinese renminbi, euro and Brazilian real 117 202

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Government loans at a weighted average interest rate of approximately 2.53% [2015 – 3.7%], denominated primarily in euro, Canadian dollar and Brazilian real 92 9 Other 44 42 2,533 2,538 Less due within one year 139 211 $2,394 $2,327

[b] Future principal repayments on long-term debt are estimated to be as follows:

2017 $139 2018 39 2019 26 2020 22 2021 20 Thereafter 2,287 $2,533

[c] All of the Senior Notes pay a fixed rate of interest semi-annually except for the €550 million Senior Notes which pay a fixed rate of interest annually. The Senior Notes are unsecured obligations and do not include any financial covenants. The Company may redeem the Senior Notes in whole or in part at any time, at specified redemption prices determined in accordance with the terms of each of the respective indentures governing the Senior Notes. All of the Senior Notes were issued for general corporate purposes. [d] The Company’s $2.75 billion revolving credit facility matures on June 22, 2021. The facility includes a $200 million Asian tranche, a $100 million Mexican tranche and a tranche for Canada, U.S. and Europe, which is fully transferable between jurisdictions and can be drawn in U.S. dollars, Canadian dollars or euros. [e] Interest expense, net includes:

2016 2015 Interest expense Current $22 $20 Long-term 78 38 100 58 Interest income (12 ) (14) Interest expense, net $88 $44

[f] Interest paid in cash was $99 million for the year ended December 31, 2016 [2015 - $54 million]. [g] At December 31, 2016, the Company had commitments under operating leases requiring annual rental payments as follows:

Total 2017 $277 2018 237 2019 208 2020 183 2021 164 Thereafter 586 $1,655

For the year ended December 31, 2016, operating lease expense was $314 million [2015 - $285 million].

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Long-Term Employee 12 Months Ended Benefit Liabilities Dec. 31, 2016 Postemployment Benefits [Abstract] Long-Term Employee Benefit 18. LONG-TERM EMPLOYEE BENEFIT LIABILITIES Liabilities Long-term employee benefit liabilities consist of:

2016 2015 Defined benefit pension plans and other [a] $313 $181 Termination and long service arrangements [b] 319 287 Retirement medical benefits plans [c] 29 30 Other long-term employee benefits 6 6 Long-term employee benefit obligations $667 $504

[a] Defined benefit pension plans The Company sponsors a number of defined benefit pension plans and similar arrangements for its employees. All pension plans are funded to at least the minimum legal funding requirements, while European defined benefit pension plans are unfunded. The weighted average significant actuarial assumptions adopted in measuring the Company’s obligations and costs are as follows:

2016 2015 Projected benefit obligation Discount rate 3.1% 3.8% Rate of compensation increase 2.3% 2.5% Net periodic benefit cost Discount rate 3.2% 3.7% Rate of compensation increase 2.4% 2.7% Expected return on plan assets 5.8% 5.9%

Information about the Company’s defined benefit pension plans is as follows:

2016 2015 Projected benefit obligation Beginning of year $493 $536 Current service cost 14 12 Interest cost 21 18 Actuarial losses (gains) and changes in actuarial assumptions 28 (18 ) Benefits paid (22 ) (18 ) Benefits paid – settlements [i] (32 ) — Acquisition 129 1 Gain on settlement (5 ) — Foreign exchange (2 ) (38 ) End of year 624 493 Plan assets at fair value [ii] Beginning of year 326 347 Return on plan assets 22 7 Employer contributions 19 19 Benefits paid (17 ) (18 ) Benefits paid – settlements [i] (32 ) —

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Acquisition 8 — Foreign exchange 4 (29 ) End of year 330 326 Ending funded status $294 $167

Amounts recorded in the consolidated balance sheet Non-current asset [note 14] $(21 ) $(17 ) Current liability 2 3 Non-current liability 313 181 Net amount $294 $167 Amounts recorded in accumulated other comprehensive income Unrecognized actuarial losses $(144) $(138)

Net periodic benefit cost Current service cost $14 $12 Interest cost 21 18 Return on plan assets (20 ) (20 ) Benefits paid – settlements [i] 13 — Actuarial losses 3 4 Net periodic benefit cost $31 $14

[i] During the fourth quarter of 2016, the Company offered a limited lump-sum payout to certain terminated vested plan participants on its U.S. defined benefit pension plan. Under this offer, certain participants were able to voluntarily elect an early payout of their pension benefits, in the form of a lump-sum payment. The lump-sum payment was equal to the present value of the participant’s pension benefits. In connection with the partial settlement, payments of $32 million were distributed from existing defined benefit pension plan assets, and the Company recognized a $13 million non-cash settlement charge [note 4]. [ii] The asset allocation of the Company’s defined benefit pension plans at December 31, 2016 and the target allocation for 2017 is as follows:

2017 2016 Equity securities 55-75% 61 % Fixed income securities 25-45% 39 % Cash and cash equivalents 0-15 % 0 % 100 % 100%

Substantially all of the plan assets’ fair value has been determined using significant observable inputs [level 2] from indirect market prices on regulated financial exchanges. The expected rate of return on plan assets was determined by considering the Company’s current investment mix, the historic performance of these investment categories and expected future performance of these investment categories.

[b] Termination and long service arrangements Pursuant to labour laws and national labour agreements in certain European countries and Mexico, the Company is obligated to provide lump sum termination payments to employees on retirement or involuntary termination, and long service payments contingent upon persons reaching a predefined number of years of service. The weighted average significant actuarial assumptions adopted in measuring the Company’s projected termination and long service benefit obligations and net periodic benefit cost are as follows:

2016 2015

Information about the Company’s termination and long service arrangements is as follows:

2016 2015 Projected benefit obligation Beginning of year $295 $323 Current service cost 20 15 Interest cost 8 8 Actuarial losses and changes in actuarial assumptions 15 2 Benefits paid (11 ) (12 ) Acquisition 16 — Divestiture — (4 ) Foreign exchange (16 ) (37 ) Ending funded status $327 $295

Amounts recorded in the consolidated balance sheet Current liability $8 $8 Non-current liability 319 287 Net amount $327 $295

Amounts recorded in accumulated other comprehensive income Unrecognized actuarial losses $(84 ) $(69 )

Net periodic benefit cost Current service cost $20 $15 Interest cost 8 8 Actuarial losses 1 18 Net periodic benefit cost $29 $41

[c] Retirement medical benefits plans The Company sponsors a number of retirement medical plans which were assumed on certain acquisitions in prior years. These plans are frozen to new employees and incur no current service costs. In addition, the Company sponsors a retirement medical benefits plan that was amended during 2009 such that substantially all employees retiring on or after August 1, 2009 no longer participate in the plan. The weighted average discount rates used in measuring the Company’s projected retirement medical benefit obligations and net periodic benefit cost are as follows:

2016 2015 Retirement medical benefit obligations 3.8% 3.9% Net periodic benefit cost 3.9% 3.7% Health care cost inflation 7.0% 6.5%

Information about the Company’s retirement medical benefits plans are as follows:

2016 2015 Projected benefit obligation Beginning of year $32 $41 Interest cost 1 1 Actuarial gains and changes in actuarial assumptions (1 ) (7 )

Amounts recorded in the consolidated balance sheet Current liability $2 $2 Non-current liability 29 30 Net amount $31 $32

Amounts recorded in accumulated other comprehensive income Unrecognized past service costs $1 $1 Unrecognized actuarial gains 11 11 Total accumulated other comprehensive income $12 $12

Net periodic benefit cost Interest cost $1 $2 Past service cost amortization (1 ) (1 ) Net periodic benefit cost $— $1

The effect of a one-percentage point increase or decrease in health care trend rates would not have a significant impact on the Company’s income.

[d] Future benefit payments

Termination Defined and long Retirement benefit service medical pension plans arrangements benefits plans Total Expected employer contributions - 2017 $ 24 $ 8 $ 2 $34

Expected benefit payments: 2017 $ 21 $ 8 $ 2 $31 2018 21 9 2 32 2019 21 11 2 34 2020 23 13 2 38 2021 23 15 2 40 Thereafter 133 91 9 233 $ 242 $ 147 $ 19 $408

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Other Long-Term Liabilities Dec. 31, 2016 Other Liabilities Disclosure [Abstract] Other Long-Term Liabilities 19.OTHER LONG-TERM LIABILITIES Other long-term liabilities consist of:

2016 2015 Long-term portion of fair value of hedges [note 22] $61 $152 Long-term portion of income taxes payable 181 131 Asset retirement obligation 28 26 Long-term lease inducements 16 19 Deferred revenue 12 3 $298 $331

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Capital Stock Dec. 31, 2016 Equity [Abstract] Capital Stock 20. CAPITAL STOCK [a] At December 31, 2016, the Company’s authorized, issued and outstanding capital stock are as follows:

Preference shares - issuable in series - The Company’s authorized capital stock includes 99,760,000 preference shares, issuable in series. None of these shares are currently issued or outstanding.

Common Shares - Common Shares without par value [unlimited amount authorized] have the following attributes: [i] Each share is entitled to one vote per share at all meetings of shareholders. [ii] Each share shall participate equally as to dividends. [b] On November 10, 2016, the TSX accepted the Company’s Notice of Intention to Make a Normal Course Issuer Bid relating to the purchase for cancellation, as well as purchases to fund the Company’s stock-based compensation awards or programs and/or the Company’s obligations to its deferred profit sharing plans, of up to 38 million Magna Common Shares [the “2016 Bid”], representing approximately 10% of the Company’s public float of Common Shares. The Bid commenced on November 15, 2016 and will terminate no later than November 17, 2017. Previously, the Company had Normal Course Issuer Bids in place for the 12 month periods beginning in November 2015 and 2014. The following is a summary of the Normal Course Issuer Bids [number of shares in the table below are expressed in whole numbers]:

Certain purchases were made by way of private agreements entered into with arm’s length, third party sellers. Such private agreement purchases were made at a discount to the prevailing market price for the Company’s Common Shares and pursuant to issuer bid exemption orders issued by the Ontario Securities Commission. All other purchases of Common Shares are made at the market price at the time of purchase in accordance with the rules and policies of the TSX. Purchases may also be made on the NYSE in compliance with Rule 10b-18 under the U.S. Securities Exchange Act of 1934. [c] The following table presents the maximum number of shares that would be outstanding if all the dilutive instruments outstanding at March 9, 2017 were exercised or converted:

Common Shares 382,269,005 Stock options 9,258,413 391,527,418

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accumulated Other 12 Months Ended Comprehensive Loss Dec. 31, 2016 Equity [Abstract] Accumulated Other 21. ACCUMULATED OTHER COMPREHENSIVE LOSS Comprehensive Loss The following is a continuity schedule of accumulated other comprehensive loss:

2016 2015 Accumulated net unrealized loss on translation of net investment in foreign operations Balance, beginning of year $(1,042) $(255 ) Net unrealized loss (109 ) (798 ) Repurchase of shares under normal course issuer bids [note 20] 20 11 Balance, end of year (1,131) (1,042) Accumulated net unrealized loss on cash flow hedges [b] Balance, beginning of year (262 ) (113 ) Net unrealized gain (loss) 1 (244 ) Reclassification of net loss to net income [a] 126 95 Balance, end of year (135 ) (262 ) Accumulated net unrealized loss on other long- term liabilities [b] Balance, beginning of year (165 ) (186 ) Net unrealized (loss) gain (29 ) 14 Reclassification of net loss to net income [a] 9 7 Balance, end of year (185 ) (165 ) Accumulated net unrealized loss on available-for-sale investments Balance, beginning of year (1 ) (4 ) Net unrealized loss — 3 Reclassification of net loss to net income [a] 1 — Balance, end of year — (1 ) Total accumulated other comprehensive loss [c] $(1,451) $(1,470)

[a] The effects on net income of amounts reclassified from AOCL, with presentation location, were as follows:

2016 2015 Cash flow hedges Sales $(87 ) $(86 ) Cost of sales (87 ) (45 ) Interest — (3 ) Income tax 48 39 Net of tax (126) (95 ) Other long-term liabilities Cost of sales 1 (9 ) Income tax — 2 Net of tax 1 (7 ) Total loss reclassified to net income $(125) $(102)

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document [b] The amount of income tax benefit that has been allocated to each component of other comprehensive loss is as follows:

2016 2015 Accumulated net unrealized loss on cash flow hedges Balance, beginning of year $97 $44 Net unrealized loss 4 92 Reclassification of net loss to net income (48) (39 ) Balance, end of year 53 97 Accumulated net unrealized loss on other long-term liabilities Balance, beginning of year 31 36 Net unrealized loss (gain) 3 (3 ) Reclassification of net loss to net income (4 ) (2 ) Balance, end of year 30 31 Total income tax benefit $83 $128

[c] The amount of other comprehensive loss that is expected to be reclassified to net income during 2017 is $130 million.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Financial Instruments Dec. 31, 2016 Investments, All Other Investments [Abstract] Financial Instruments 22. FINANCIAL INSTRUMENTS [a] Foreign exchange contracts At December 31, 2016, the Company had outstanding foreign exchange forward contracts representing commitments to buy and sell various foreign currencies. Significant commitments are as follows:

For Canadian dollars For U.S. dollars U.S. Weighted Weighted Weighted dollar average Euro average Peso average Buy (Sell) amount rate amount rate amount rate 2017 122 1.32036 23 1.45496 3,500 0.05995 2017 (885 ) 0.79352 (15 ) 0.68983 — — 2018 1 1.30509 1 1.44050 1,819 0.05194 2018 (597 ) 0.78550 (2 ) 0.68689 — — 2019 — — — — 564 0.04335 2019 (338 ) 0.78407 — — — — 2020 (126 ) 0.76519 — — — — 2021 (8 ) 0.76001 — — — — (1,831) 7 5,883

For euros U.S. Weighted Weighted Czech Weighted dollar average GBP average koruna average Buy (Sell) amount rate amount rate amount rate 2017 115 0.90038 5 1.18435 4,084 0.03722 2017 (112 ) 1.19637 (28 ) 0.84126 — — 2018 43 0.87976 1 1.17412 2,389 0.03766 2018 (53 ) 1.16833 (17 ) 0.80446 — — 2019 24 0.86787 — — 1,167 0.03777 2019 (24 ) 1.15362 (9 ) 0.80790 — — 2020 5 0.86156 — — 165 0.03802 2020 (2 ) 1.17400 (5 ) 0.87553 — — (4 ) (53 ) 7,805

Based on forward foreign exchange rates as at December 31, 2016 for contracts with similar remaining terms to maturity, the gains and losses relating to the Company’s foreign exchange forward contracts recognized in other comprehensive income are approximately $18 million and $195 million, respectively [note 21]. The Company does not enter into foreign exchange forward contracts for speculative purposes. [b] Financial assets and liabilities The Company’s financial assets and liabilities consist of the following:

2016 2015 Trading Cash and cash equivalents $974 $2,863 Investment in ABCP 60 73 Equity investments — 4 $1,034 $2,940

Held-to-maturity investments

Loans and receivables Accounts receivable $6,165 $5,439 Long-term receivables included in other assets [note 14] 229 87 $6,394 $5,526

Other financial liabilities Bank indebtedness $8 $25 Commercial paper 615 — Long-term debt (including portion due within one year) 2,533 2,538 Accounts payable 5,430 4,746 $8,586 $7,309

Derivatives designated as effective hedges, measured at fair value Foreign currency contracts Prepaid expenses and other $12 $27 Other assets 6 4 Other accrued liabilities (134 ) (191 ) Other long-term liabilities (61 ) (152 ) $(177 ) $(312 )

[c] Derivatives designated as effective hedges, measured at fair value The Company presents derivatives that are designated as effective hedges at gross fair values in the consolidated balance sheets. However, master netting and other similar arrangements allow net settlements under certain conditions. The following table shows the Company’s derivative foreign currency contracts at gross fair value as reflected in the consolidated balance sheets and the unrecognized impacts of master netting arrangements:

Gross Gross amounts amounts presented not offset in consolidated in consolidated Net balance sheets balance sheets amounts December 31, 2016 Assets $ 18 $ 17 $1 Liabilities $ (195 ) $ (17 ) $(178 ) December 31, 2015 Assets $ 31 $ 30 $1 Liabilities $ (343 ) $ (30 ) $(313 )

[d] Fair value The Company determined the estimated fair values of its financial instruments based on valuation methodologies it believes are appropriate; however, considerable judgment is required to develop these estimates. Accordingly, these estimated fair values are not necessarily indicative of the amounts the Company could realize in a current market exchange. The estimated fair value amounts can be materially affected by the use of different assumptions or methodologies. The methods and assumptions used to estimate the fair value of financial instruments are described below:

Cash and cash equivalents, accounts receivable, bank indebtedness and accounts payable. Due to the short period to maturity of the instruments, the carrying values as presented in the consolidated balance sheets are reasonable estimates of fair values.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Investments At December 31, 2016, the Company held Canadian third party ABCP with a face value of Cdn$81 million [2015 – Cdn$107 million]. The investment had a carrying value of Cdn$81 million [December 31, 2015 - Cdn $101 million]. At December 31, 2016, the fair value of the ABCP was Cdn$81 million based on its maturity value in January 2017.

Commercial Paper Due to the short period to maturity of the commercial paper, the carrying value as presented in the consolidated balance sheet is a reasonable estimate of its fair value.

Term debt The Company’s term debt includes $139 million due within one year. Due to the short period to maturity of this debt, the carrying value as presented in the consolidated balance sheet is a reasonable estimate of its fair value.

Senior Notes The fair value of our Senior Notes are classified as Level 1 when we use quoted prices in active markets and Level 2 when the quoted prices are from less active markets or when other observable inputs are used to determine fair value. At December 31, 2016, the net book value of the Company’s Senior Notes was $2.30 billion and the estimated fair value was $2.36 billion, determined primarily using active market prices.

[e] Credit risk The Company’s financial assets that are exposed to credit risk consist primarily of cash and cash equivalents, accounts receivable, held-to-maturity investments and foreign exchange and commodity forward contracts with positive fair values. Cash and cash equivalents, which consist of short-term investments, are only invested in governments, bank term deposits and bank commercial paper with an investment grade credit rating. Credit risk is further reduced by limiting the amount which is invested in certain governments or any major financial institution. The Company is also exposed to credit risk from the potential default by any of its counterparties on its foreign exchange forward contracts. The Company mitigates this credit risk by dealing with counterparties who are major financial institutions that the Company anticipates will satisfy their obligations under the contracts. In the normal course of business, the Company is exposed to credit risk from its customers, substantially all of which are in the automotive industry and are subject to credit risks associated with the automotive industry. For the year ended December 31, 2016, sales to the Company’s six largest customers represented 82% [2015 - 83%] of the Company’s total sales; and substantially all of its sales are to customers in which the Company has ongoing contractual relationships.

[f] Currency risk The Company is exposed to fluctuations in foreign exchange rates when manufacturing facilities have committed to the delivery of products for which the selling price has been quoted in currencies other than the facilities’ functional currency, and when materials and equipment are purchased in currencies other than the facilities’ functional currency. In an effort to manage this net foreign exchange exposure, the Company employs hedging programs, primarily through the use of foreign exchange forward contracts [note 22[a]].

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document [g] Interest rate risk The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary current assets and current liabilities. In particular, the amount of interest income earned on cash and cash equivalents is impacted more by investment decisions made and the demands to have available cash on hand, than by movements in interest rates over a given period. In addition, the Company is not exposed to interest rate risk on its term debt and Senior Notes as the interest rates on these instruments are fixed.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Contingencies Dec. 31, 2016 Commitments and Contingencies Disclosure [Abstract] Contingencies 23. CONTINGENCIES From time to time, the Company may become involved in regulatory proceedings, or become liable for legal, contractual and other claims by various parties, including customers, suppliers, former employees, class action plaintiffs and others. On an ongoing basis, the Company attempts to assess the likelihood of any adverse judgments or outcomes to these proceedings or claims, together with potential ranges of probable costs and losses. A determination of the provision required, if any, for these contingencies is made after analysis of each individual issue. The required provision may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters. [a] In November 1997, the Company and two of its subsidiaries were sued by KS Centoco Ltd., an Ontario-based steering wheel manufacturer in which the Company has a 23% equity interest, and by Centoco Holdings Limited, the owner of the remaining 77% equity interest in KS Centoco Ltd. In March 1999, the plaintiffs were granted leave to make substantial amendments to the original statement of claim in order to add several new defendants and claim additional remedies and, in February 2006, the plaintiffs further amended their claim to add an additional remedy. In February 2016, a consent order was granted allowing the Plaintiffs to file a fresh statement of claim which includes an additional remedy and reduces certain aggravated and punitive damages claimed [the “Main Action”]. The fresh statement of claim alleges, among other things: • breach of fiduciary duty by the Company and two of its subsidiaries; • breach by the Company of its binding letter of intent with KS Centoco Ltd., including its covenant not to have any interest, directly or indirectly, in any entity that carries on the airbag business in North America, other than through MST Automotive Inc., a company to be 77% owned by Magna and 23% owned by Centoco Holdings Limited; • the plaintiff’s exclusive entitlement to certain airbag technologies in North America pursuant to an exclusive licence agreement [the “Licence Agreement”], together with an accounting of all revenues and profits resulting from the alleged use by the Company, TRW Inc. [“TRW”] and other unrelated third party automotive supplier defendants of such technology in North America; • inducement by the Company of a breach of the Licence Agreement by TRW; • a conspiracy by the Company, TRW and others to deprive KS Centoco Ltd. of the benefits of such airbag technology in North America and to cause Centoco Holdings Limited to sell to TRW its interest in KS Centoco Ltd. in conjunction with the Company’s sale to TRW of its interest in MST Automotive GmbH and TEMIC Bayern-Chemie Airbag GmbH; and • oppression by the defendants. The plaintiffs are seeking, among other things, damages of approximately Cdn$2.56 billion in the Main Action. Document production, completion of undertakings and examinations for discovery are substantially complete, although limited additional examinations for discovery are expected to occur. In April 2016, the Company filed a new claim against Centoco Holdings Limited and KS Centoco Ltd. seeking an order under the Ontario Business Corporations Act to wind-up the business and affairs of KS Centoco Ltd. and distribute its assets to the shareholders [the “Wind-Up Action”]. In June 2016, Centoco Holdings Limited and KS Centoco Ltd. filed a statement of defence and counterclaim in the Wind-Up Action alleging breach of fiduciary duty and bad faith performance of contractual obligations by the Company and two of its

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document officers who were the Company’s representatives on KS Centoco Ltd.’s Board of Directors for a number of years [the “Centoco Counterclaim”]. Pursuant to the Centoco Counterclaim, Centoco Holdings Limited and KS Centoco Ltd. are claiming damages of approximately Cdn$1.8 billion. Both actions will be tried together at a trial scheduled to commence on October 30, 2017. The claims and damages in the Centoco Counterclaim substantially duplicate those described in the Main Action and, as a result, the Company believes that there is no incremental liability due to the Centoco Counterclaim. The Company also believes it has valid defences to the claims made by Centoco Holdings Limited and KS Centoco Ltd. in both actions and therefore intends to continue to vigorously defend these two cases. Due to the nature of the claims made and potential damages alleged by Centoco Holdings Limited and KS Centoco Ltd., the Company is unable to predict the final outcome of these claims. [b] In September 2014, the Conselho Administrativo de Defesa Economica, Brazil’s Federal competition authority, attended at one of the Company’s operating divisions in Brazil to obtain information in connection with an ongoing antitrust investigation relating to suppliers of automotive door latches and related products. Proceedings of this nature can often continue for several years. Where wrongful conduct is found, the relevant antitrust authority can, depending on the jurisdiction, initiate administrative or criminal legal proceedings and impose administrative or criminal fines or penalties taking into account several mitigating and aggravating factors. At this time, management is unable to predict the duration or outcome of the Brazilian investigation, including whether any operating divisions of the Company will be found liable for any violation of law or the extent or magnitude of any liability, if found to be liable. The Company’s policy is to comply with all applicable laws, including antitrust and competition laws. The Company previously initiated a global review focused on antitrust risk led by a team of external counsel. If any antitrust violation is found as a result of such review, a regulatory investigation or otherwise, Magna could be subject to fines, penalties, restitution settlements and civil, administrative or criminal legal proceedings and other consequences, including reputational damage. [c] In certain circumstances, the Company is at risk for warranty costs including product liability and recall costs. Due to the nature of the costs, the Company makes its best estimate of the expected future costs [note 16]; however, the ultimate amount of such costs could be materially different. The Company continues to experience increased customer pressure to assume greater warranty responsibility. Currently, under most customer agreements, the Company only accounts for existing or probable claims. Under certain complete vehicle engineering and assembly contracts, and with respect to our powertrain systems programs, the Company records an estimate of future warranty-related costs based on the terms of the specific customer agreements, and the specific customer’s [or the Company’s] warranty experience.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Segmented Information Dec. 31, 2016 Segment Reporting [Abstract] Segmented Information 24. SEGMENTED INFORMATION [a] Magna is a global automotive supplier which has complete vehicle engineering and contract manufacturing expertise, as well as product capabilities which include body, chassis, exterior, seating, powertrain, active driver assistance, vision, closure and roof systems. Magna also has electronic and software capabilities across many of these areas. Magna’s success is directly dependent upon the levels of North American and European [and currently to a lesser extent on Asia and Rest of World] car and light truck production by its customers. OEM production volumes in each of North America and Europe may be impacted by a number of geographic factors, including general economic conditions, interest rates, consumer credit availability, fuel prices and availability, infrastructure, legislative changes, environmental emission and safety issues, and labour and/or trade relations. Given the differences between the regions in which the Company operates, Magna’s operations are segmented on a geographic basis. The Company’s segments consist of North America, Europe, Asia and Rest of World. The Company maintains management teams in each of the Company’s two primary markets, North America and Europe. The role of the North American and European management teams is to manage Magna’s interests to ensure a coordinated effort across the Company’s different product capabilities. In addition to maintaining key customer, supplier and government contacts in their respective markets, the regional management teams centrally manage key aspects of the Company’s operations while permitting the divisions enough flexibility through Magna’s decentralized structure to foster an entrepreneurial environment. Consistent with the above, the Company’s internal financial reporting separately segments key internal operating performance measures between North America, Europe, Asia and Rest of World for purposes of presentation to the chief operating decision maker to assist in the assessment of operating performance, the allocation of resources, and the long-term strategic direction and future global growth in the Company. The Company’s chief operating decision maker uses Adjusted EBIT as the measure of segment profit or loss, since management believes Adjusted EBIT is the most appropriate measure of operational profitability or loss for its reporting segments. Adjusted EBIT is calculated by taking net income from continuing operations and adding back income taxes, interest expense, net, and other expense (income), net. The accounting policies of each segment are the same as those set out under “Significant Accounting Policies” [note 1] and intersegment sales and transfers are accounted for at fair market value. The following tables show certain information with respect to segment disclosures:

2016 Depreciation Fixed Fixed Total External and Adjusted asset assets, sales sales amortization EBIT [ii] Goodwill additions net North America Canada $6,784 $6,214 $201 $721 United States 10,226 9,857 400 1,573 Mexico 5,121 4,586 309 999 Eliminations (1,387 ) — — — North America 20,744 20,657 $ 486 $2,061 $595 910 3,293 Europe

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Western Europe (excluding Great Britain) 10,537 10,159 578 1,912 Great Britain 658 656 24 127 Eastern Europe 2,285 2,000 136 545 Eliminations (400 ) — — — Europe 13,080 12,815 431 543 1,116 738 2,584 Asia 2,674 2,502 103 266 212 97 679 Rest of World 465 464 13 (17 ) — 11 62 Corporate and Other [i] (518 ) 7 23 45 — 51 404 Total reportable segments $36,445 $36,445 $ 1,056 $2,898 $1,923 $1,807 $7,022 Current assets 10,163 Investments, intangible assets, goodwill, deferred tax assets and other assets 5,381 Consolidated total assets $22,566

2015 Depreciation Fixed Fixed Total External and Adjusted asset assets, sales sales amortization EBIT [ii] Goodwill additions net North America Canada $6,329 $5,856 $242 $645 United States 9,603 9,183 421 1,422 Mexico 4,261 3,869 233 755 Eliminations (1,178 ) — — — North America 19,015 18,908 $ 411 $1,934 $590 896 2,822 Europe Western Europe (excluding Great Britain) 8,936 8,635 357 1,263 Great Britain 404 404 26 145 Eastern Europe 2,110 1,873 112 471 Eliminations (327 ) — — — Europe 11,123 10,912 276 451 525 495 1,879 Asia 1,981 1,846 77 149 229 121 811 Rest of World 461 461 17 (25 ) — 15 51 Corporate and Other [i] (446 ) 7 21 20 — 64 385 Total reportable segments $32,134 $32,134 $ 802 $2,529 $1,344 $1,591 $5,948 Current assets 11,144 Investments, intangible assets, goodwill, deferred tax assets, and other assets 2,595 Consolidated total assets $19,687

[i] Included in Corporate and Other Adjusted EBIT are intercompany fees charged to the automotive segments. [ii] The following table reconciles Net income from continuing operations to Adjusted EBIT:

2016 2015 Net Income from continuing operations $2,074 $1,940

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Add (deduct): Interest expense, net 88 44 Other expense (income), net 30 (166 ) Income taxes 706 711 Adjusted EBIT $2,898 $2,529

[b] The following table aggregates external revenues by customer as follows:

2016 2015 General Motors $7,207 $6,424 Ford Motor Company 5,667 4,923 Fiat / Chrysler Group 5,349 5,094 Daimler AG 4,294 3,779 BMW 3,786 3,300 Volkswagen 3,758 3,301 Other 6,384 5,313 $36,445 $32,134

[c] The following table summarizes external revenues generated by automotive products and services:

2016 2015 Body systems and chassis systems $9,157 $7,790 Powertrain systems 6,489 4,755 Exterior systems 5,272 5,155 Seating systems 5,079 4,497 Tooling, engineering and other 3,078 2,700 Vision and electronic systems 2,768 2,583 Closure systems 2,412 2,297 Complete vehicle assembly 2,190 2,357 $36,445 $32,134

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Significant Accounting 12 Months Ended Policies (Policies) Dec. 31, 2016 Accounting Policies [Abstract] Principles of consolidation Principles of consolidation The Consolidated Financial Statements include the accounts of Magna and its subsidiaries in which Magna has a controlling financial interest or is the primary beneficiary. Magna accounts for investments in companies over which it has the ability to exercise significant influence but does not hold a controlling interest under the equity method, and records its proportionate share of income or losses in Equity income in the Consolidated Statements of Income. The Company presents non-controlling interests as a separate component within Shareholders’ equity in the Consolidated Balance Sheets. Financial instruments Financial instruments The Company classifies all of its financial assets and financial liabilities as 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 and the Company’s investment in asset-backed commercial paper [“ABCP”] 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, which include long-term interest bearing government securities held to partially fund certain Austrian lump sum termination and long service payment arrangements, are recorded at amortized cost using the effective interest method. Loans and receivables, which include accounts receivable, long-term receivables and accounts payable, are recorded at amortized cost using the effective interest method. Available-for-sale financial assets are recorded at cost and are subsequently measured at fair value with all revaluation gains and losses included in other comprehensive income. Foreign currency translation Foreign currency translation The Company operates globally, which gives rise to a risk that its earnings and cash flows may be adversely impacted by fluctuations in foreign exchange rates.

Foreign exchange gains and losses on transactions occurring in a currency other than an operation’s functional currency are reflected in income, except for gains and losses on foreign exchange contracts used to hedge specific future commitments in foreign currencies and on intercompany balances which are designated as long-term investments. In particular, the Company uses foreign exchange forward contracts for the sole purpose of hedging certain of the Company’s future committed foreign currency based outflows and inflows. Most of the Company’s foreign exchange contracts are subject to master netting arrangements that provide for the net settlement of contracts, by counterparty, in the event of default or termination. All derivative instruments, including foreign exchange contracts, are recorded on the consolidated balance sheet at fair value. The fair values of derivatives are recorded on a gross basis in prepaid expenses and other, other assets, other accrued liabilities or other long-term liabilities. To the extent that cash flow hedges are effective, the change in their fair value is recorded in other comprehensive income; any ineffective portion is

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document recorded in net income. Amounts accumulated in other comprehensive income are reclassified to net income in the period in which the hedged item affects net income. If the Company’s foreign exchange forward contracts cease to be effective as hedges, for example, if projected foreign cash inflows or outflows declined significantly, gains or losses pertaining to the portion of the hedging transactions in excess of projected foreign currency denominated cash flows would be recognized in income at the time this condition was identified. Cash and cash equivalents Cash and cash equivalents Cash and cash equivalents include cash on account, demand deposits and short-term investments with remaining maturities of less than three months at acquisition. Inventories Inventories Production inventories and tooling inventories manufactured in-house are valued at the lower of cost and market, with cost being determined substantially on a first-in, first-out basis. Cost includes the cost of materials plus direct labour applied to the product and the applicable share of manufacturing overhead.

Outsourced tooling inventories are valued at the lower of subcontracted costs and market. Long-lived assets Long-lived assets Fixed assets are recorded at historical cost. Depreciation is provided on a straight-line basis over the estimated useful lives of fixed assets at annual rates of 2 1⁄2% to 5% for buildings, 7% to 10% for general purpose equipment and 10% to 33% for special purpose equipment.

The Company assesses fixed and definite-lived intangible assets for recoverability whenever indicators of impairment exist. If the carrying value of the asset exceeds the estimated undiscounted cash flows from the use of the asset, then an impairment loss is recognized to write the asset down to fair value. The fair value of fixed and definite-lived intangible assets is generally determined using estimated discounted future cash flows. Goodwill Goodwill Goodwill represents the excess of the cost of an acquired enterprise over the fair value of the identifiable assets acquired and liabilities assumed less any subsequent write-downs for impairment. Goodwill is reviewed for impairment in the fourth quarter of each year, or more frequently if indicators of potential impairment exist. Goodwill impairment is assessed based on a comparison of the fair value of a reporting unit to the underlying carrying value of the reporting unit’s net assets, including goodwill. When the carrying amount of the reporting unit exceeds its fair value, the fair value of the reporting unit’s goodwill is compared with its carrying amount to measure the amount of impairment, if any. The fair value of a reporting unit is determined using the estimated discounted future cash flows of the reporting unit. Other assets Other assets Other assets include the long-term portion of certain receivables, which represent the recognized sales value of tooling and design and engineering services provided to customers under certain long-term contracts. The receivables will be paid in full upon completion of the contracts or in instalments based on forecasted production volumes. In the event that actual production volumes are less than those forecasted, a reimbursement for any shortfall will be made.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Preproduction costs related to Preproduction costs related to long-term supply agreements long-term supply agreements Pre-operating costs incurred in establishing new facilities that require substantial time to reach commercial production capability are expensed as incurred.

Where these preproduction costs are deemed to be a single unit of account combined with a subsequent parts production, the costs deferred in the above circumstances are included in other assets and amortized on a units-of-production basis to cost of goods sold over the anticipated term of the supply agreement. Warranty Warranty The Company records product warranty liabilities based on its individual customer agreements. Under most customer agreements, the Company only accounts for existing or probable claims on product default issues when amounts related to such issues are probable and reasonably estimable. Under certain powertrain and complete vehicle engineering and assembly contracts, the Company records an estimate of future warranty-related costs based on the terms of the specific customer agreements and the specific customer’s warranty experience.

The Company monitors warranty activity on an ongoing basis and adjusts reserve estimates when it is probable that future warranty costs will be different than those estimates. Employee future benefit plans Employee future benefit plans The cost of providing benefits through defined benefit pensions, lump sum termination and long service payment arrangements, and post-retirement benefits other than pensions is actuarially determined and recognized in income using the projected benefit method pro-rated on service and management’s best estimate of expected plan investment performance, salary escalation, retirement ages of employees and, with respect to medical benefits, expected health care costs. Differences arising from plan amendments, changes in assumptions and experience gains and losses that are greater than 10% of the greater of the accrued benefit obligation at the beginning of the year and the fair value, or market related value, of plan assets at the beginning of the year, are recognized in income over the expected average remaining service life of employees. Gains related to plan curtailments are recognized when the event giving rise to the curtailment has occurred. Plan assets are valued at fair value. The cost of providing benefits through defined contribution pension plans is charged to income in the period in respect of which contributions become payable.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The funded status of the plans is measured as the difference between the plan assets at fair value and the projected benefit obligation [“PBO”]. The aggregate of all overfunded plans is recorded in other assets, and the aggregate of all underfunded plans in long-term employee benefit liabilities. The portion of the amount by which the actuarial present value of benefits included in the PBO exceeds the fair value of plan assets, payable in the next twelve months, is reflected in other accrued liabilities. This is determined on a plan by plan basis. Asset retirement obligation Asset retirement obligation The Company recognizes its obligation to restore leased premises at the end of the lease by recording at lease inception the estimated fair value of this obligation as other long-term liabilities with a corresponding amount recognized as fixed assets. The fixed asset amount is amortized over the period from lease inception to the time the Company expects to vacate the premises, resulting in both depreciation and interest charges. The estimated fair value of the obligation is assessed for changes in the expected timing and extent of expenditures with changes related to the time value of money recorded as interest expense. Revenue recognition Revenue recognition Revenue from the sale of manufactured products is recognized when the price is fixed or determinable, collectability is reasonably assured and upon shipment to [or receipt by customers, depending on contractual terms], and acceptance by customers.

With respect to vehicle assembly sales, given that Magna is acting as principal with respect to purchased components and systems, the selling price to the customer includes the costs of such inputs. Government assistance Government assistance The Company makes periodic applications for financial assistance under available government assistance programs in the various jurisdictions that the Company operates. Grants relating to capital expenditures are reflected as a reduction of the cost of the related assets. Grants relating to current operating expenditures are generally recorded as a reduction of the related expense at the time the eligible expenses are incurred. The Company also receives tax credits and tax super allowances, the benefits of which are recorded as a reduction of income tax expense. In addition, the Company receives loans which are recorded as liabilities in amounts equal to the cash received. When a government loan is issued to the Company at a below-market rate of interest, the loan is initially recorded at its net present value, and accreted to its face value over the period of the loan. The benefit of the below-market rate of interest is accounted for like a government grant. It is measured as the difference between the initial carrying value of the loan and the cash proceeds received. Income taxes Income taxes

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Company uses the liability method of tax allocation to account for income taxes. Under the liability method of tax allocation, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

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. Earnings per Common Share Earnings per Common Share Basic earnings per Common Share are calculated on net income attributable to Magna International Inc. using the weighted average number of Common Shares outstanding during the year.

Diluted earnings per Common Share are calculated on the weighted average number of Common Shares outstanding, including an adjustment for stock options outstanding using the treasury stock method.

Common Shares that have not been released under the Company’s restricted stock plan or are being held in trust for purposes of the Company’s restricted stock unit program have been excluded from the calculation of basic earnings per share but have been included in the calculation of diluted earnings per share. Discontinued operations Discontinued operations The Company reports financial results for discontinued operations separately from continuing operations to distinguish the financial impact of disposal transactions from ongoing operations. Discontinued operations reporting only occurs when the disposal of a component or a group of components of the Company represents a strategic shift that will have a major impact on the Company’s operations and financial results. In the third quarter of 2015, the Company sold substantially all of its interiors operations. Accordingly, for the year ended December 31, 2015 the operating results and operating cash flows for the disposed interiors operations are presented as discontinued operations separate from the Company’s continuing operations. Financial information related to the interiors operations has been excluded from both continuing operations

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document and segment results in the consolidated financial statements. Refer to Note 3 Discontinued Operations for further information regarding the Company’s discontinued operations. Use of estimates Use of estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Discontinued Operations 12 Months Ended (Tables) Dec. 31, 2016 Discontinued Operations and Disposal Groups [Abstract] Schedule of Gain on Divestiture within Income from The Company recognized a gain on the divestiture within Discontinued Operations income from discontinued operations as follows:

Proceeds on disposal, net of transaction costs $549 Net assets disposed 438 Pre-tax gain on divestiture 111 Income taxes 66 Gain on divestiture, net of tax $45 Reconciliation of Major Classes of Line Items Constituting Income (Loss) from Discontinued Operations, Net of Tax as The following table summarizes the results of the interiors operations classified as discontinued operations for the year Presented in Statements of Income ended December 31, 2015:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Other Expense (Income), Net 12 Months Ended (Tables) Dec. 31, 2016 Other Income and Expenses [Abstract] Other (Income) Expense, Net Other expense (income), net consists of:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Earnings Per Share (Tables) Dec. 31, 2016 Earnings Per Share [Abstract] Computation of Earnings Per Earnings per share are computed as follows: Share 2016 2015 Income available to Common shareholders: Net income from continuing operations $2,074 $1,940 (Income) loss from continuing operations attributable to non-controlling interests (43 ) 6 Net income attributable to Magna International Inc. from continuing operations 2,031 1,946 Income from discontinued operations, net of tax — 67 Net income attributable to Magna International Inc. $2,031 $2,013

Weighted average shares outstanding: Basic 391.0 407.5 Adjustments Stock options and restricted stock [a] 2.2 5.2 Diluted 393.2 412.7

[a] Diluted earnings per Common Share exclude 3.4 million [2015 – 0.9 million] Common Shares issuable under the Company’s Incentive Stock Option Plan because these options were not “in-the-money”. Schedule of Earnings Per Earnings per Common Share: Common Share 2016 2015 Basic: Continuing operations $5.19 $4.78 Discontinued operations — 0.16 Attributable to Magna International Inc. $5.19 $4.94

Diluted: Continuing operations $5.16 $4.72 Discontinued operations — 0.16 Attributable to Magna International Inc. $5.16 $4.88

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Details of Cash From 12 Months Ended Operating Activities (Tables) Dec. 31, 2016 Additional Cash Flow Elements, Operating Activities [Abstract] Components of Cash and Cash Equivalents [a]Cash and cash equivalents consist of:

2016 2015 Bank term deposits, bankers’ acceptances and government paper $498 $2,572 Cash 476 291 $974 $2,863 Details of Items Not Involving Current Cash Flows [b]Items not involving current cash flows:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Acquisitions (Tables) Dec. 31, 2016 Business Combinations [Abstract] Summary of Amounts Recognized for Assets and Liabilities Acquired The following table summarizes the amounts recognized for assets acquired and liabilities assumed:

Ownership Investment percentage balance Getrag Ford Transmission GmbH [“GFT”] 50.0 % $ 340 Getrag (Jiangxi) Transmission Co., Ltd [“GJT”] [i] 50.0 % $ 1,077 Dongfeng Getrag Transmission Co. Ltd [“DGT”] 50.0 % $ 80

[i] GJT is 66.7% owned by one of the Company’s consolidated subsidiaries which has a 25% non-controlling interest.

As a result, the investment balance was derived using 66.7% of the fair value. Consolidated Supplemental Pro Forma Information The following table provides consolidated supplemental pro forma information as if the acquisition of Getrag had occurred on January 1, 2015.

December 31, 2015 Sales $ 34,150

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Inventories (Tables) Dec. 31, 2016 Inventory Disclosure [Abstract] Inventories Inventories consist of:

2016 2015 Raw materials and supplies $1,007 $843 Work-in-process 264 246 Finished goods 327 311 Tooling and engineering 1,206 1,164 $2,804 $2,564

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Investments in Affiliated 12 Months Ended Companies (Tables) Dec. 31, 2016 Summary of Total financial Results of Equity Method A summary of the total financial results, as reported by the Company’s equity method investees, in the aggregate, at December 31 was as follows: Investees

Summarized Balance Sheets

2016 2015 Current assets $2,478 $905 Non-current assets $4,450 $756 Current liabilities $2,329 $806 Long-term liabilities $1,268 $335

Summarized Income Statements

2016 2015 Sales $5,009 $3,168 Cost of goods sold, expenses and income taxes 4,668 2,886 Net income $341 $282 Carrying Amounts and Classification of Assets and The carrying amounts and classification of assets and liabilities included in the Company’s consolidated balance sheet related to the consolidated VIEs are as follows: Liabilities Included in

Consolidated Balance Sheet 2016 Related to Consolidated VIE Current assets $256 Noncurrent assets 221 Total assets $477

Current liabilities $288 Noncurrent liabilities 2 Total liabilities $290 Equity Method Investments [Member] Ownership Percentages and Carrying Value Principal The ownership percentages and carrying value of the Company’s principal equity method investments at December 31 were as follows [in million, except percentages]: Equity Method Investments

[i] Litens - The Company accounts for its investment in Litens under the equity method of accounting as a result of significant participating rights that prevent control.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document [ii] DGT – DGT is a variable interest entity [“VIE”] and depends on the Company and the Dongfeng Motor Group Company for any additional cash needs. The Company cannot make key operating decisions considered to be most significant to the VIE, and is therefore not considered to be the primary beneficiary. Our known maximum exposure to loss approximated the carrying value of our investment balance as at December 31, 2016.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Fixed Assets (Tables) Dec. 31, 2016 Property, Plant and Equipment [Abstract] Components of Fixed Assets Fixed assets consist of:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Goodwill (Tables) Dec. 31, 2016 Goodwill and Intangible Assets Disclosure [Abstract] Goodwill by Segment The following is a continuity of the Company’s goodwill by segment:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Income Taxes (Tables) Dec. 31, 2016 Income Tax Disclosure [Abstract] Summary of Income Tax Rate [a] The provision for income taxes differs from the expense that would be obtained by applying the Canadian statutory income tax rate as a result of the following:

[i] GAAP requires that the Company assess whether valuation allowances should be established or maintained against its deferred tax assets, based on consideration of all available evidence, using a “more-likely-than-not” standard. The factors the Company uses to assess the likelihood of realization are its history of losses, forecasts of future pre-tax income and tax planning strategies that could be implemented to realize the deferred tax assets. [ii] During 2015, the Company recorded a benefit related to the write-off of historical tax basis in one of its South American subsidiaries. [iii]Non-deductible foreign exchange losses are related to the re-measurement of financial statement balances of foreign subsidiaries, primarily in Mexico, that are maintained in a currency other than their functional currency. Details of Income before [b] The details of income before income taxes by jurisdiction are as follows: Income Taxes by Jurisdiction 2016 2015 Canadian $617 $590 Foreign 2,163 2,061 $2,780 $2,651 Details of Income Tax [c] The details of the income tax provision are as follows: Provision 2016 2015 Current Canadian $127 $140 Foreign 559 578 686 718 Deferred Canadian 16 14 Foreign 4 (21 ) 20 (7 ) $706 $711

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Summary of Deferred Income [d] Deferred income taxes have been provided on temporary differences, which consist of the Taxes Provided on Temporary following: Differences 2016 2015 Tax depreciation greater than book depreciation $58 $12 Book amortization (in excess of) less than tax amortization (41) 7 Liabilities currently not deductible for tax 48 — Net tax losses benefited (31) (13 ) Change in valuation allowance on deferred tax assets (12) (1 ) Tax on undistributed foreign earnings 8 3 Others (10) (15 ) $20 $(7 ) Summary of Deferred Tax [e] Deferred tax assets and liabilities consist of the following temporary differences: Assets and Liabilities 2016 2015 Assets Tax benefit of loss carryforwards $715 $614 Liabilities currently not deductible for tax 106 211 Tax credit carryforwards 22 24 Unrealized loss on cash flow hedges and retirement liabilities 134 154 Other assets tax value in excess of book values 36 11 Others 21 5 1,034 1,019 Valuation allowance against tax benefit of loss carryforwards (615 ) (562 ) Other valuation allowance (66 ) (50 ) 353 407 Liabilities Tax depreciation in excess of book depreciation 277 249 Tax on undistributed foreign earnings 98 10 Unrealized gain on cash flow hedges and retirement liabilities 3 9 378 268 Net deferred tax (liabilities) assets $(25 ) $139 Net Deferred Tax (Liabilities) Assets Presented on The net deferred tax (liabilities) assets are presented on the consolidated balance sheet in the following categories: Consolidated Balance Sheet

2016 2015 Long-term deferred tax assets $268 $271 Long-term deferred tax liabilities (293) (132) $(25 ) $139 Summary of Changes in Gross [i] As at December 31, 2016 and 2015, the Company’s gross unrecognized tax benefits were Unrecognized Tax Benefits $220 and $221 million, respectively [excluding interest and penalties], of which $201 and $158 million, respectively, if recognized, would affect the Company’s effective tax rate. The gross unrecognized tax benefits differ from the amount that would affect the Company’s effective tax rate due primarily to the impact of the valuation allowance on deferred tax assets. A summary of the changes in gross unrecognized tax benefits is as follows:

2016 2015

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Balance, beginning of year $221 $202 Increase based on tax positions related to current year 21 17 (Decrease) increase based on tax positions of prior years (52 ) 53 Increase related to acquisitions 44 — Settlements (2 ) (15 ) Statute expirations (8 ) (20 ) Foreign currency translation (4 ) (16 ) $220 $221

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Intangible Assets (Tables) Dec. 31, 2016 Finite-Lived Intangible Assets, Net [Abstract] Intangible Assets Intangible assets were as follows:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Other Assets (Tables) Dec. 31, 2016 Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] Summary of Other Assets Other assets consist of:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Warranty (Tables) Dec. 31, 2016 Product Warranties Disclosures [Abstract] Schedule of Company's The following is a continuity of the Company’s warranty accruals: Warranty Accruals 2016 2015 Balance, beginning of year $59 $80 Expense, net 101 26 Settlements (59 ) (53 ) Acquisitions [i] 174 — Foreign exchange and other (5 ) 6 $270 $59

[i] $127 million of the acquisition balance relates to a pre-acquisition settlement agreement negotiated with a customer and a supplier for a specific performance issue [note 7].

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Debt (Tables) Dec. 31, 2016 Debt Disclosure [Abstract] Short Term Borrowings The Company’s short-term borrowings consist of the following:

2016 2015 Bank indebtedness [i] $8 $25 Commercial paper [ii] 615 — $623 $25

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 2,533 2,538 Less due within one year 139 211 $2,394 $2,327 Schedule of Future Principal [b] Future principal repayments on long-term debt are estimated to be as follows: Repayments on Long-Term Debt 2017 $139 2018 39 2019 26 2020 22 2021 20 Thereafter 2,287 $2,533 Interest Expense, Net [e] Interest expense, net includes:

2016 2015 Interest expense Current $22 $20 Long-term 78 38 100 58 Interest income (12 ) (14) Interest expense, net $88 $44 Company's Commitments [g] At December 31, 2016, the Company had commitments under operating leases requiring under Operating Leases and annual rental payments as follows: Requiring Annual Rental Total Payments 2017 $277 2018 237 2019 208 2020 183 2021 164 Thereafter 586 $1,655

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Long-Term Employee 12 Months Ended Benefit Liabilities (Tables) Dec. 31, 2016 Long-Term Employee Benefit Long-term employee benefit liabilities consist of: Liabilities 2016 2015 Defined benefit pension plans and other [a] $313 $181 Termination and long service arrangements [b] 319 287 Retirement medical benefits plans [c] 29 30 Other long-term employee benefits 6 6 Long-term employee benefit obligations $667 $504 Schedule of Company's Information about the Company’s defined benefit pension plans is as follows: Defined Benefit Pension Plans 2016 2015 Projected benefit obligation Beginning of year $493 $536 Current service cost 14 12 Interest cost 21 18 Actuarial losses (gains) and changes in actuarial assumptions 28 (18 ) Benefits paid (22 ) (18 ) Benefits paid – settlements [i] (32 ) — Acquisition 129 1 Gain on settlement (5 ) — Foreign exchange (2 ) (38 ) End of year 624 493 Plan assets at fair value [ii] Beginning of year 326 347 Return on plan assets 22 7 Employer contributions 19 19 Benefits paid (17 ) (18 ) Benefits paid – settlements [i] (32 ) — Acquisition 8 — Foreign exchange 4 (29 ) End of year 330 326 Ending funded status $294 $167

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document [i] During the fourth quarter of 2016, the Company offered a limited lump-sum payout to certain terminated vested plan participants on its U.S. defined benefit pension plan. Under this offer, certain participants were able to voluntarily elect an early payout of their pension benefits, in the form of a lump-sum payment. The lump-sum payment was equal to the present value of the participant’s pension benefits. In connection with the partial settlement, payments of $32 million were distributed from existing defined benefit pension plan assets, and the Company recognized a $13 million non-cash settlement charge [note 4]. [ii] The asset allocation of the Company’s defined benefit pension plans at December 31, 2016 and the target allocation for 2017 is as follows:

2017 2016 Equity securities 55-75% 61 % Fixed income securities 25-45% 39 % Cash and cash equivalents 0-15 % 0 % 100 % 100% Future Benefit Payments [d] Future benefit payments

Termination Defined and long Retirement benefit service medical pension plans arrangements benefits plans Total Expected employer contributions - 2017 $ 24 $ 8 $ 2 $34

Expected benefit payments: 2017 $ 21 $ 8 $ 2 $31 2018 21 9 2 32 2019 21 11 2 34 2020 23 13 2 38 2021 23 15 2 40 Thereafter 133 91 9 233 $ 242 $ 147 $ 19 $408 Pension Plan, Defined Benefit [Member] Summary of Weighted The weighted average significant actuarial assumptions adopted in measuring the Company’s Average Significant Actuarial obligations and costs are as follows: Assumptions Adopted in Measuring Company's 2016 2015 Obligations and Cost Projected benefit obligation Discount rate 3.1% 3.8% Rate of compensation increase 2.3% 2.5% Net periodic benefit cost Discount rate 3.2% 3.7% Rate of compensation increase 2.4% 2.7% Expected return on plan assets 5.8% 5.9% Termination and Long Service Arrangements [Member] Summary of Weighted The weighted average significant actuarial assumptions adopted in measuring the Company’s Average Significant Actuarial projected termination and long service benefit obligations and net periodic benefit cost are as Assumptions Adopted in follows: Measuring Company's Obligations and Cost 2016 2015 Discount rate 2.9% 3.1%

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Rate of compensation increase 2.7% 2.8% Schedule of Company's Information about the Company’s termination and long service arrangements is as follows: Defined Benefit Pension Plans 2016 2015 Projected benefit obligation Beginning of year $295 $323 Current service cost 20 15 Interest cost 8 8 Actuarial losses and changes in actuarial assumptions 15 2 Benefits paid (11 ) (12 ) Acquisition 16 — Divestiture — (4 ) Foreign exchange (16 ) (37 ) Ending funded status $327 $295

Amounts recorded in the consolidated balance sheet Current liability $8 $8 Non-current liability 319 287 Net amount $327 $295

Amounts recorded in accumulated other comprehensive income Unrecognized actuarial losses $(84 ) $(69 )

Net periodic benefit cost Current service cost $20 $15 Interest cost 8 8 Actuarial losses 1 18 Net periodic benefit cost $29 $41 Retirement Medical Benefits Plans [Member] Summary of Weighted The weighted average discount rates used in measuring the Company’s projected retirement Average Significant Actuarial medical benefit obligations and net periodic benefit cost are as follows: Assumptions Adopted in Measuring Company's 2016 2015 Obligations and Cost Retirement medical benefit obligations 3.8% 3.9% Net periodic benefit cost 3.9% 3.7% Health care cost inflation 7.0% 6.5%

Schedule of Company's Information about the Company’s retirement medical benefits plans are as follows: Defined Benefit Pension Plans 2016 2015 Projected benefit obligation Beginning of year $32 $41 Interest cost 1 1 Actuarial gains and changes in actuarial assumptions (1 ) (7 ) Benefits paid (1 ) (2 ) Foreign exchange — (1 ) Ending funded status $31 $32

Amounts recorded in the consolidated balance sheet Current liability $2 $2 Non-current liability 29 30 Net amount $31 $32

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Amounts recorded in accumulated other comprehensive income Unrecognized past service costs $1 $1 Unrecognized actuarial gains 11 11 Total accumulated other comprehensive income $12 $12

Net periodic benefit cost Interest cost $1 $2 Past service cost amortization (1 ) (1 ) Net periodic benefit cost $— $1

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Other Long-Term Liabilities 12 Months Ended (Tables) Dec. 31, 2016 Other Liabilities Disclosure [Abstract] Particulars of Other Long-Term Liabilities Other long-term liabilities consist of:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Capital Stock (Tables) Dec. 31, 2016 Equity [Abstract] Summary of Normal Course The following is a summary of the Normal Course Issuer Bids [number of shares in the Issuer Bids table below are expressed in whole numbers]:

2016 2015 Maximum number Shares Cash Shares Cash of shares purchased amount purchased amount 2014 Bid 40,000,000 — $ — 8,166,514 $388 2015 Bid 40,000,000 20,313,194 818 2,585,970 113 2016 Bid 38,000,000 2,021,824 86 — — 22,335,018 $ 904 10,752,484 $501 Maximum Number of Shares [c] The following table presents the maximum number of shares that would be outstanding if Outstanding Exercised or all the dilutive instruments outstanding at March 9, 2017 were exercised or converted: Converted Common Shares 382,269,005 Stock options 9,258,413 391,527,418

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accumulated Other 12 Months Ended Comprehensive Loss Dec. 31, 2016 (Tables) Equity [Abstract] Schedule of Accumulated Other Comprehensive The following is a continuity schedule of accumulated other comprehensive Loss loss:

2016 2015 Accumulated net unrealized loss on translation of net investment in foreign operations Balance, beginning of year $(1,042) $(255 ) Net unrealized loss (109 ) (798 ) Repurchase of shares under normal course issuer bids [note 20] 20 11 Balance, end of year (1,131) (1,042) Accumulated net unrealized loss on cash flow hedges [b] Balance, beginning of year (262 ) (113 ) Net unrealized gain (loss) 1 (244 ) Reclassification of net loss to net income [a] 126 95 Balance, end of year (135 ) (262 ) Accumulated net unrealized loss on other long-term liabilities [b] Balance, beginning of year (165 ) (186 ) Net unrealized (loss) gain (29 ) 14 Reclassification of net loss to net income [a] 9 7 Balance, end of year (185 ) (165 ) Accumulated net unrealized loss on available-for-sale investments Balance, beginning of year (1 ) (4 ) Net unrealized loss — 3 Reclassification of net loss to net income [a] 1 — Balance, end of year — (1 ) Total accumulated other comprehensive loss [c] $(1,451) $(1,470) Schedule of Net Income Amounts Reclassified [a]The effects on net income of amounts reclassified from AOCL, with from AOCL presentation location, were as follows:

2016 2015 Cash flow hedges Sales $(87 ) $(86 ) Cost of sales (87 ) (45 ) Interest — (3 ) Income tax 48 39 Net of tax (126) (95 )

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Other long-term liabilities Cost of sales 1 (9 ) Income tax — 2 Net of tax 1 (7 ) Total loss reclassified to net income $(125) $(102) Summary of Income Tax Benefit to Component [b]The amount of income tax benefit that has been allocated to each of Other Comprehensive Loss component of other comprehensive loss is as follows:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Financial Instruments 12 Months Ended (Tables) Dec. 31, 2016 Investments, All Other Investments [Abstract] Foreign Exchange Forward Contracts At December 31, 2016, the Company had outstanding foreign exchange Representing Commitments to Buy and Sell forward contracts representing commitments to buy and sell various foreign Various Foreign Currencies currencies. Significant commitments are as follows:

Schedule of Company's Financial Assets and The Company’s financial assets and liabilities consist of the following: Liabilities 2016 2015 Trading Cash and cash equivalents $974 $2,863 Investment in ABCP 60 73 Equity investments — 4 $1,034 $2,940

Held-to-maturity investments Severance investments $3 $3

Loans and receivables Accounts receivable $6,165 $5,439 Long-term receivables included in other assets [note 14] 229 87 $6,394 $5,526

Other financial liabilities Bank indebtedness $8 $25

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Commercial paper 615 — Long-term debt (including portion due within one year) 2,533 2,538 Accounts payable 5,430 4,746 $8,586 $7,309

Derivative Foreign Currency Contracts at The following table shows the Company’s derivative foreign currency Gross Fair Value and Unrecognized Impacts contracts at gross fair value as reflected in the consolidated balance sheets and of Master Netting Arrangements the unrecognized impacts of master netting arrangements:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Segmented Information 12 Months Ended (Tables) Dec. 31, 2016 Segment Reporting [Abstract] Schedule of Information with The following tables show certain information with respect to segment disclosures: Respect to Segment 2016 Depreciation Fixed Fixed Total External and Adjusted asset assets, sales sales amortization EBIT [ii] Goodwill additions net North America Canada $6,784 $6,214 $201 $721 United States 10,226 9,857 400 1,573 Mexico 5,121 4,586 309 999 Eliminations (1,387 ) — — — North America 20,744 20,657 $ 486 $2,061 $595 910 3,293 Europe Western Europe (excluding Great Britain) 10,537 10,159 578 1,912 Great Britain 658 656 24 127 Eastern Europe 2,285 2,000 136 545 Eliminations (400 ) — — — Europe 13,080 12,815 431 543 1,116 738 2,584 Asia 2,674 2,502 103 266 212 97 679 Rest of World 465 464 13 (17 ) — 11 62 Corporate and Other [i] (518 ) 7 23 45 — 51 404 Total reportable segments $36,445 $36,445 $ 1,056 $2,898 $1,923 $1,807 $7,022 Current assets 10,163 Investments, intangible assets, goodwill, deferred tax assets and other assets 5,381 Consolidated total assets $22,566

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Great Britain 404 404 26 145 Eastern Europe 2,110 1,873 112 471 Eliminations (327 ) — — — Europe 11,123 10,912 276 451 525 495 1,879 Asia 1,981 1,846 77 149 229 121 811 Rest of World 461 461 17 (25 ) — 15 51 Corporate and Other [i] (446 ) 7 21 20 — 64 385 Total reportable segments $32,134 $32,134 $ 802 $2,529 $1,344 $1,591 $5,948 Current assets 11,144 Investments, intangible assets, goodwill, deferred tax assets, and other assets 2,595 Consolidated total assets $19,687

[i] Included in Corporate and Other Adjusted EBIT are intercompany fees charged to the automotive segments. [ii] The following table reconciles Net income from continuing operations to Adjusted EBIT:

2016 2015 Net Income from continuing operations $2,074 $1,940 Add (deduct): Interest expense, net 88 44 Other expense (income), net 30 (166 ) Income taxes 706 711 Adjusted EBIT $2,898 $2,529 Schedule of Aggregates External [b] The following table aggregates external revenues by customer as follows: Revenues by Customer 2016 2015 General Motors $7,207 $6,424 Ford Motor Company 5,667 4,923 Fiat / Chrysler Group 5,349 5,094 Daimler AG 4,294 3,779 BMW 3,786 3,300 Volkswagen 3,758 3,301 Other 6,384 5,313 $36,445 $32,134 Summary of External Revenues by [c] The following table summarizes external revenues generated by automotive products Automotive Products and Services and services:

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Significant Accounting 12 Months Ended Policies - Additional Dec. 31, 2016 Information (Detail) Significant Accounting Policies [Line Items] Changes in assumptions and experience gains and losses Greater than 10% Period of benefit obligation in current liabilities Next twelve months Minimum [Member] Significant Accounting Policies [Line Items] Amortizable intangible assets, estimated useful life 4 years Minimum [Member] | Building [Member] Significant Accounting Policies [Line Items] Annual rates of depreciation on fixed assets 2.50% Minimum [Member] | General Purpose Equipment [Member] Significant Accounting Policies [Line Items] Annual rates of depreciation on fixed assets 7.00% Minimum [Member] | Special Purpose Equipment [Member] Significant Accounting Policies [Line Items] Annual rates of depreciation on fixed assets 10.00% Maximum [Member] Significant Accounting Policies [Line Items] Amortizable intangible assets, estimated useful life 15 years Maximum [Member] | Building [Member] Significant Accounting Policies [Line Items] Annual rates of depreciation on fixed assets 5.00% Maximum [Member] | General Purpose Equipment [Member] Significant Accounting Policies [Line Items] Annual rates of depreciation on fixed assets 10.00% Maximum [Member] | Special Purpose Equipment [Member] Significant Accounting Policies [Line Items] Annual rates of depreciation on fixed assets 33.00%

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accounting Standards - Additional Information Dec. 31, Dec. 31, (Detail) - USD ($) 2016 2015 $ in Millions New Accounting Pronouncements or Change in Accounting Principle [Line Items] Other assets $ 719 $ 412 Long-term debt $ 2,394 2,327 Accounting Standards Update No. 2015-03 | Restatement Adjustment [Member] New Accounting Pronouncements or Change in Accounting Principle [Line Items] Other assets (19) Long-term debt $ (19)

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Discontinued Operations - 1 Months Ended12 Months Ended Schedule of Gain on Divestiture within Income from Discontinued Aug. 31, 2015 Dec. 31, 2015 Operations (Detail) - USD ($) $ in Millions Discontinued Operations and Disposal Groups [Abstract] Proceeds on disposal, net of transaction costs $ 549 Net assets disposed 438 Pre-tax gain on divestiture 111 Income taxes 66 Gain on divestiture, net of tax $ 45 $ 45

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Discontinued Operations - 1 Months 12 Months Reconciliation of Major Ended Ended Classes of Line Items Constituting Income (Loss) from Discontinued Operations, Net of Tax as Aug. 31, 2015 Dec. 31, 2015 Presented in Statements of Income (Detail) - USD ($) $ in Millions Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] Sales $ 1,737 Costs and expenses Cost of goods sold 1,635 Depreciation and amortization 13 Selling, general and administrative 58 Equity income (11) Income from discontinued operations before income taxes and gain on divestiture 42 Income taxes 20 Income from discontinued operations before gain on divestiture 22 Gain on divestiture of discontinued operations, net of tax $ 45 45 Income from discontinued operations, net of tax $ 67

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Other Expense (Income), Net 3 Months Ended 12 Months Ended - Other Expense (Income), Net (Detail) - USD ($) Dec. 31, 2016 Dec. 31, 2016Dec. 31, 2015 $ in Millions Components of Other Expense (Income), Net [Line Items] Other expense (income), net $ 30 $ (166) North America [Member] Components of Other Expense (Income), Net [Line Items] Gain on disposal (136) Pension settlement $ 13 13 Other expense (income), net 13 (136) Europe [Member] Components of Other Expense (Income), Net [Line Items] Gain on disposal (57) Other expense (income), net 17 (30) Restructuring charges $ 17 $ 27

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Other Expense (Income), Net 3 Months Ended 12 Months Ended - Other Expense (Income), Dec. 31, 2015 Dec. 31, 2016 Dec. 31, 2016 Net (Parenthetical) (Detail) USD ($) USD ($) USD ($) $ in Millions Facility North America [Member] Components of Other Expense (Income), Net [Line Items] Pension settlement $ 13 $ 13 Pension settlement, after tax $ 9 9 Number of facilities contributed to joint venture | Facility 2 Percentage interest in joint venture 49.00% Cash proceeds of joint venture $ 118 Consideration paid 160 Gain on disposal 136 Gain from joint venture arrangement, after tax 80 Europe [Member] Components of Other Expense (Income), Net [Line Items] Gain on disposal 57 Restructuring charges 17 27 Restructuring charges, after tax $ 17 27 Proceeds from sale of battery pack business 120 Gain on disposal of battery pack business, after tax $ 42

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Earnings Per Share - 12 Months Ended Computation of Earnings Per Share (Detail) - USD ($) Dec. 31, 2016Dec. 31, 2015 shares in Millions, $ in Millions Earnings Per Share [Abstract] Net income from continuing operations $ 2,074 $ 1,940 (Income) loss from continuing operations attributable to non-controlling interests (43) 6 Net income attributable to Magna International Inc. from continuing operations 2,031 1,946 Income from discontinued operations, net of tax 67 Net income attributable to Magna International Inc. $ 2,031 $ 2,013 Basic 391.0 407.5 Stock options and restricted stock 2.2 5.2 Diluted 393.2 412.7

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Earnings Per Share - 12 Months Ended Schedule of Earnings Per Common Share (Detail) - $ / Dec. 31, 2016Dec. 31, 2015 shares Earnings Per Share [Abstract] Continuing operations $ 5.19 $ 4.78 Discontinued operations 0.16 Attributable to Magna International Inc. 5.19 4.94 Continuing operations 5.16 4.72 Discontinued operations 0.16 Attributable to Magna International Inc. $ 5.16 $ 4.88

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Details of Cash From Operating Activities - Components of Cash and Dec. 31, 2016Dec. 31, 2015Dec. 31, 2014 Cash Equivalents (Detail) - USD ($) $ in Millions Cash and Cash Equivalents [Abstract] Bank term deposits, bankers' acceptances and government paper $ 498 $ 2,572 Cash 476 291 Cash and cash equivalents $ 974 $ 2,863 $ 1,249

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Details of Cash From 12 Months Ended Operating Activities - Details of Items Not Involving Current Cash Flows (Detail) Dec. 31, 2016Dec. 31, 2015 - USD ($) $ in Millions Statement of Cash Flows [Abstract] Depreciation and amortization $ 1,056 $ 802 Amortization of other assets included in cost of goods sold 135 110 Other non-cash charges 27 44 Deferred income taxes 22 (7) Equity income in excess of dividends received (9) (20) Non-cash portion of Other (income) expense, net (193) Items not involving current cash flows $ 1,231 $ 736

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Details of Cash From 12 Months Ended Operating Activities - Changes in Operating Assets and Liabilities (Detail) - USD Dec. 31, 2016Dec. 31, 2015 ($) $ in Millions Statement of Cash Flows [Abstract] Accounts receivable $ (446) $ (410) Inventories (159) (241) Prepaid expenses and other 189 13 Accounts payable 562 139 Accrued salaries and wages 94 43 Other accrued liabilities (145) 72 Income taxes payable (14) 40 Changes in operating assets and liabilities $ 81 $ (344)

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3 9 12 Months Months Months Ended Ended Ended Acquisitions - Additional Dec. Dec. Information (Detail) 10, Nov. 30, Dec. 31, Dec. 31, Dec. 31, 31, $ in Millions Jan. 04, 2015 Jun. 30, 2015 2016 2016 2016 2015 2016 USD 2016 USD ($) USD ($) USD ($) USD ($) USD ($) ($) Facility Business Acquisition [Line Items] Net cash outflow $ 1,930 $ 222 Net adjustment to goodwill 615 $ 120 Stadco Automotive Ltd. [Member] Business Acquisition [Line Items] Interest acquired 100.00% Cash paid $ 115 Getrag Group Of Companies [Member] Business Acquisition [Line Items] Business acquisition, percentage of 100.00% voting interests acquired Net cash outflow $ 1,855 Cash acquired in business acquisition 136 Goodwill $ 590 590 590 Amortizable intangible assets, estimated 15 years useful life Sales from acquired company 2,000 Net income from acquired company 45 Getrag Group Of Companies [Member] | Measurement Period adjustments [Member] Business Acquisition [Line Items] Net cash outflow 73 Goodwill $ 160 $ 160 $ 160 BOCO Group of Companies [Member] Business Acquisition [Line Items] Business acquisition, percentage of 100.00%100.00%100.00% voting interests acquired Telemotive AG [Member] Business Acquisition [Line Items] Business acquisition, percentage of 100.00% voting interests acquired Xingqiaorui Partnership and Stadco [Member] Business Acquisition [Line Items] Net adjustment to goodwill $ 14

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Xingqiaorui Partnership [Member] Business Acquisition [Line Items] Business acquisition, percentage of 53.00% voting interests acquired Number of manufacturing facilities in 3 China | Facility Cash paid $ 36 Percentage of noncontrolling equity 47.00% interest in Xingqiaorui Cash consideration paid $ 130

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Acquisitions - Summary of 9 Months 12 Months Ended Amounts Recognized for Ended Assets and Liabilities Mar. 31, Dec. 31, Dec. 31, Dec. 31, Acquired (Detail) - USD ($) 2016 2016 2016 2015 $ in Millions Business Acquisition [Line Items] Net cash outflow $ 1,930 $ 222 Getrag Group Of Companies [Member] Business Acquisition [Line Items] Cash $ 136 136 Non-cash working capital (395) (395) Investments 1,497 1,497 Fixed assets 445 445 Goodwill 590 590 Other assets 24 24 Intangibles 372 372 Deferred tax assets 34 34 Long-term employee benefit liabilities (137) (137) Long-term debt (117) (117) Other long-term liabilities (52) (52) Deferred tax liabilities (119) (119) Non-controlling interest (287) (287) Consideration paid 1,991 Less: Cash acquired (136) Net cash outflow 1,855 Getrag Group Of Companies [Member] | Preliminary amounts recognized [Member] Business Acquisition [Line Items] Cash $ 136 Non-cash working capital (466) Investments 1,719 Fixed assets 468 Goodwill 430 Other assets 60 Intangibles 218 Deferred tax assets 43 Long-term employee benefit liabilities (125) Long-term debt (116) Other long-term liabilities (9) Deferred tax liabilities (137) Non-controlling interest (303) Consideration paid 1,918 Less: Cash acquired (136) Net cash outflow $ 1,782

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Getrag Group Of Companies [Member] | Measurement Period adjustments [Member] Business Acquisition [Line Items] Non-cash working capital 71 71 Investments (222) (222) Fixed assets (23) (23) Goodwill 160 160 Other assets (36) (36) Intangibles 154 154 Deferred tax assets (9) (9) Long-term employee benefit liabilities (12) (12) Long-term debt (1) (1) Other long-term liabilities (43) (43) Deferred tax liabilities 18 18 Non-controlling interest 16 $ 16 Consideration paid 73 Net cash outflow $ 73

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Equity Investments Acquired as Part of Business Dec. 31, 2016 Combination (Detail) USD ($) $ in Millions Getrag Ford Transmission GmbH ["GFT"] [Member] Schedule of Equity Method Investments [Line Items] Ownership percentage 50.00% Investment balance $ 340 Getrag (Jiangxi) Transmission Co., Ltd [GJT] [Member] Schedule of Equity Method Investments [Line Items] Ownership percentage 50.00% Investment balance $ 1,077 Dongfeng Getrag Transmission Co. Ltd ["DGT"] [Member] Schedule of Equity Method Investments [Line Items] Ownership percentage 50.00% Investment balance $ 80

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Equity Investments Acquired as Part of Business Dec. 31, 2016 Combination (Parenthetical) (Detail) Getrag (Jiangxi) Transmission Co., Ltd [GJT] [Member] Schedule of Equity Method Investments [Line Items] Percentage of ownership interest 66.70% Consolidated subsidiary [Member] Schedule of Equity Method Investments [Line Items] Percentage of non-controlling interest 25.00%

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Supplemental 12 Months Ended Pro Forma Information (Detail) - Getrag Group Of Dec. 31, 2015 Companies [Member] USD ($) $ in Millions Business Acquisition [Line Items] Sales $ 34,150 Net income attributable to Magna International Inc. $ 1,992

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Inventories - Inventories (Detail) - USD ($) Dec. 31, 2016Dec. 31, 2015 $ in Millions Inventory Disclosure [Abstract] Raw materials and supplies $ 1,007 $ 843 Work-in-process 264 246 Finished goods 327 311 Tooling and engineering 1,206 1,164 Inventory, net, total $ 2,804 $ 2,564

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Ownership Percentages and Carrying Value Principal Equity Method Investments Dec. 31, 2016Dec. 31, 2015 (Detail) - USD ($) $ in Millions Litens Automotive Partnership [Member] Schedule of Equity Method Investments [Line Items] Ownership percentage 76.70% Carrying value of equity method investments $ 173 $ 138 Getrag (Jiangxi) Transmission Co., Ltd [GJT] [Member] Schedule of Equity Method Investments [Line Items] Ownership percentage 50.00% Carrying value of equity method investments $ 1,015 Getrag Ford Transmission GmbH ["GFT"] [Member] Schedule of Equity Method Investments [Line Items] Ownership percentage 50.00% Carrying value of equity method investments $ 325 Dongfeng Getrag Transmission Co. Ltd ["DGT"] [Member] Schedule of Equity Method Investments [Line Items] Ownership percentage 50.00% Carrying value of equity method investments $ 79

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Investments - Company's 12 Months Ended Combined Proportionate Share of Major Components of Financial Statements Dec. 31, 2016Dec. 31, 2015 (Detail) - USD ($) $ in Millions Equity Method Investments and Joint Ventures [Abstract] Current assets $ 2,478 $ 905 Non-current assets 4,450 756 Current liabilities 2,329 806 Long-term liabilities 1,268 335 Sales 5,009 3,168 Cost of goods sold, expenses and income taxes 4,668 2,886 Net income $ 341 $ 282

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Investments in Affiliated Dec. 31, 2016 Companies - Additional Dec. 31, USD ($) Information (Detail) 2015 Business- $ in Millions USD ($) Combination Schedule of Equity Method Investments [Line Items] Impairment charges for equity method investments $ 0 $ 0 Sales to equity method investees 214 $ 98 Variable interest entities, maximum exposure to any potential losses $ 187 Getrag Group Of Companies [Member] Schedule of Equity Method Investments [Line Items] Number of investees, determined as variable interest entities | Business- 2 Combination

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Carrying Amounts and Classification of Assets and Liabilities Included in Dec. 31, 2016 Consolidated Balance Sheet USD ($) Related to Consolidated VIE (Detail) $ in Millions Organization, Consolidation and Presentation of Financial Statements [Abstract] Current assets $ 256 Noncurrent assets 221 Total assets 477 Current liabilities 288 Noncurrent liabilities 2 Total liabilities $ 290

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Fixed Assets - Components of Fixed Assets (Detail) - Dec. 31, 2016Dec. 31, 2015 USD ($) $ in Millions Property, Plant and Equipment [Line Items] Property plant and equipment, gross $ 14,545 $ 12,934 Property plant and equipment, net 7,022 5,948 Land [Member] Property, Plant and Equipment [Line Items] Property plant and equipment, gross 254 259 Building [Member] Property, Plant and Equipment [Line Items] Property plant and equipment, gross 1,942 1,659 Accumulated depreciation (652) (590) Machinery and Equipment [Member] Property, Plant and Equipment [Line Items] Property plant and equipment, gross 12,349 11,016 Accumulated depreciation $ (6,871) $ (6,396)

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Fixed Assets - Additional Information (Detail) - USD Dec. 31, 2016Dec. 31, 2015 ($) $ in Billions Property, Plant and Equipment [Abstract] Construction in progress expenditures $ 1.0 $ 1.3

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Goodwill - Goodwill by 12 Months Ended Segment (Detail) - USD ($) Dec. 31, 2016Dec. 31, 2015 $ in Millions Goodwill [Line Items] Goodwill, Beginning balance $ 1,344 $ 1,337 Acquisitions 615 120 Foreign exchange and other (36) (113) Goodwill, Ending balance 1,923 1,344 North America [Member] Goodwill [Line Items] Goodwill, Beginning balance 590 633 Foreign exchange and other 5 (43) Goodwill, Ending balance 595 590 Europe [Member] Goodwill [Line Items] Goodwill, Beginning balance 525 577 Acquisitions 620 13 Foreign exchange and other (29) (65) Goodwill, Ending balance 1,116 525 Asia [Member] Goodwill [Line Items] Goodwill, Beginning balance 229 127 Acquisitions (5) 107 Foreign exchange and other (12) (5) Goodwill, Ending balance $ 212 $ 229

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Income Taxes - Summary of 12 Months Ended Income Tax Rate (Detail) Dec. 31, 2016Dec. 31, 2015 Income Tax Disclosure [Abstract] Canadian statutory income tax rate 26.50% 26.50% Manufacturing and processing profits deduction (0.30%) (0.40%) Foreign rate differentials (0.20%) 0.80% Losses not benefited 0.80% 1.10% Utilization of losses previously not benefited (0.20%) (0.10%) Earnings of equity accounted investees (1.20%) (0.80%) Tax on repatriation of foreign earnings 0.70% 2.10% Valuation allowance on deferred tax assets (0.40%) Write off of investment (1.40%) Research and development tax credits (1.50%) (1.30%) Reserve for uncertain tax positions 0.20% (0.30%) Non-deductible foreign exchange losses 1.30% 1.00% Others (0.30%) (0.40%) Effective income tax rate 25.40% 26.80%

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Income Taxes - Details of 12 Months Ended Income before Income Taxes by Jurisdiction (Detail) - Dec. 31, 2016Dec. 31, 2015 USD ($) $ in Millions Income Tax Disclosure [Abstract] Canadian $ 617 $ 590 Foreign 2,163 2,061 Income before income taxes, Total $ 2,780 $ 2,651

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Income Taxes - Details of 12 Months Ended Income Tax Provision (Detail) - USD ($) Dec. 31, 2016Dec. 31, 2015 $ in Millions Income Tax Disclosure [Abstract] Canadian $ 127 $ 140 Foreign 559 578 Current income tax, Total 686 718 Canadian 16 14 Foreign 4 (21) Deferred income tax, Total 20 (7) Income tax provision, Total $ 706 $ 711

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Income Taxes - Summary of 12 Months Ended Deferred Income Taxes Provided on Temporary Differences (Detail) - USD Dec. 31, 2016Dec. 31, 2015 ($) $ in Millions Income Tax Disclosure [Abstract] Tax depreciation greater than book depreciation $ 58 $ 12 Book amortization (in excess of) less than tax amortization (41) 7 Liabilities currently not deductible for tax 48 Net tax losses benefited (31) (13) Change in valuation allowance on deferred tax assets (12) (1) Tax on undistributed foreign earnings 8 3 Others (10) (15) Deferred income tax, Total $ 20 $ (7)

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Income Taxes - Summary of Deferred Tax Assets and Dec. 31, 2016Dec. 31, 2015 Liabilities (Detail) - USD ($) $ in Millions Income Tax Disclosure [Abstract] Tax benefit of loss carryforwards $ 715 $ 614 Liabilities currently not deductible for tax 106 211 Tax credit carryforwards 22 24 Unrealized loss on cash flow hedges and retirement liabilities 134 154 Other assets tax value in excess of book values 36 11 Others 21 5 Deferred tax assets, Gross, Total 1,034 1,019 Valuation allowance against tax benefit of loss carryforwards (615) (562) Other valuation allowance (66) (50) Deferred tax assets, Net, Total 353 407 Tax depreciation in excess of book depreciation 277 249 Tax on undistributed foreign earnings 98 10 Unrealized gain on cash flow hedges and retirement liabilities 3 9 Deferred tax liabilities, Total 378 268 Net deferred tax (liabilities) $ (25) Net deferred tax assets $ 139

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Income Taxes - Net Deferred Tax (Liabilities) Assets Presented on Consolidated Dec. 31, 2016Dec. 31, 2015 Balance Sheet (Detail) - USD ($) $ in Millions Income Tax Disclosure [Abstract] Long-term deferred tax assets $ 268 $ 271 Long-term deferred tax liabilities (293) (132) Net deferred tax (liabilities) $ (25) Net deferred tax assets $ 139

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Income Taxes - Additional 12 Months Ended Information (Detail) - USD Dec. 31, Dec. 31, Dec. 31, ($) 2016 2015 2014 $ in Millions Income Taxes [Line Items] Undistributed earnings of certain foreign subsidiaries $ 4,460 Income taxes paid, net 707 $ 647 Income tax loss carryforwards 2,290 Tax credit carryforwards 22 Total losses 1,650 Gross unrecognized tax benefits 220 221 $ 202 Recognized tax benefits 201 158 Interest and penalties on the unrecognized tax benefits 35 21 Recoveries/(expenses) related to changes in reserves for interest and 14 $ 3 penalties Decrease in gross unrecognized tax benefits 62 Decrease in recognized tax benefits $ 52 Minimum [Member] Income Taxes [Line Items] Expiry date of losses 2017 Maximum [Member] Income Taxes [Line Items] Expiry date of losses 2036

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Income Taxes - Summary of 12 Months Ended Changes in Gross Unrecognized Tax Benefits Dec. 31, 2016Dec. 31, 2015 (Detail) - USD ($) $ in Millions Income Tax Disclosure [Abstract] Balance, beginning of year $ 221 $ 202 Increase based on tax positions related to current year 21 17 (Decrease) increase based on tax positions of prior years (52) 53 Increase related to acquisitions 44 Settlements (2) (15) Statute expirations (8) (20) Foreign currency translation (4) (16) Balance, ending of year $ 220 $ 221

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Intangible Assets (Detail) - 12 Months Ended USD ($) Dec. 31, 2016 Dec. 31, 2015 $ in Millions Finite-Lived Intangible Assets [Line Items] Intangible Assets, cost $ 986 $ 451 Intangible assets, net $ 621 169 Customer Relationships [Member] Finite-Lived Intangible Assets [Line Items] Estimated weighted average useful life in years 12 years Intangible Assets, cost $ 392 134 Intangible Assets, accumulated depreciation $ (96) (53) Computer software [Member] Finite-Lived Intangible Assets [Line Items] Estimated weighted average useful life in years 4 years Intangible Assets, cost $ 316 278 Intangible Assets, accumulated depreciation $ (242) (221) Patent And License [Member] Finite-Lived Intangible Assets [Line Items] Estimated weighted average useful life in years 15 years Intangible Assets, cost $ 278 39 Intangible Assets, accumulated depreciation $ (27) $ (8)

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Intangible Assets - 12 Months Ended Additional Information (Detail) - USD ($) Dec. 31, 2016Dec. 31, 2015 $ in Millions Finite-Lived Intangible Assets, Net [Abstract] Definite-lived intangible assets, amortization expense $ 100 $ 48 Estimates annual amortization expense, 2017 90 Estimates annual amortization expense, 2018 82 Estimates annual amortization expense, 2019 66 Estimates annual amortization expense, 2020 47 Estimates annual amortization expense, 2021 $ 44

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Other Assets - Summary of Other Assets (Detail) - USD Dec. 31, Dec. 31, ($) 2016 2015 $ in Millions Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] Preproduction costs related to long-term supply agreements with contractual guarantee $ 420 $ 276 for reimbursement Long-term receivables 229 87 Pension overfunded status 21 17 Unrealized gain on cash flow hedges 6 5 Other, net 43 27 Total other assets $ 719 $ 412

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Employee Equity and Profit Participation Program - Additional Information Dec. 31, Dec. 31, (Detail) - Trust for Benefit of 2016 2015 Employees [Member] - USD ($) Share-based Compensation Arrangement by Share-based Payment Award [Line Items] Amount borrowed from company to purchase common shares maximum $ $ 10,000,000 55,000,000 Amount included in accounts receivable $ $ 5,000,000 10,000,000

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Warranty - Schedule of 12 Months Ended Company's Warranty Accruals (Detail) - USD ($) Dec. 31, 2016Dec. 31, 2015 $ in Millions Movement in Standard Product Warranty Accrual [Roll Forward] Balance, beginning of year $ 59 $ 80 Expense, net 101 26 Settlements (59) (53) Acquisitions 174 Foreign exchange and other (5) 6 Balance, end of year $ 270 $ 59

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Warranty - Schedule of 12 Months Ended Company's Warranty Accruals (Parenthetical) Dec. 31, 2016 (Detail) USD ($) $ in Millions Product Warranty Liability [Line Items] Acquisition balance relates to a pre-acquisition settlement agreement $ 174 Pre-acquisition Settlement Agreement for Specific Performance [Member] Product Warranty Liability [Line Items] Acquisition balance relates to a pre-acquisition settlement agreement $ 127

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Debt - Short Term Borrowings (Detail) - USD Dec. 31, 2016Dec. 31, 2015 ($) $ in Millions Short-term Debt [Line Items] Short term borrowings $ 623 $ 25 Bank Indebtedness [Member] Short-term Debt [Line Items] Short term borrowings 8 $ 25 Commercial Paper [Member] Short-term Debt [Line Items] Short term borrowings $ 615

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Debt - Short Term Dec. 31, Dec. 31, Borrowings (Parenthetical) Dec. 31, 2016 2016 2015 (Detail) USD ($) EUR (€) USD ($) Short-term Debt [Line Items] Increase in restricted cash $ 194,000,000 deposits Maximum borrowing capacity 2,750,000,000 Short-term borrowings $ $ 623,000,000 25,000,000 Bank Indebtedness [Member] Short-term Debt [Line Items] Covenant percentage USD cash deposit to outstanding 105.00% euro balance Gross amount outstanding € $ 185,000,000 under the credit facility 175,000,000 Increase in restricted cash 194,000,000 deposits Short-term borrowings $ 8,000,000 25,000,000 U.S. Commercial Paper Notes [Member] Short-term Debt [Line Items] Maximum borrowing capacity 500,000,000 Short-term borrowings $ 295,000,000 Weighted-average interest rate 1.04% 1.04% on notes outstanding Debt maturity period Maturities generally less than three months. Euro-Commercial Paper Notes [Member] Short-term Debt [Line Items] Maximum borrowing capacity € | € 500,000,000 Short-term borrowings € $ 320,000,000 304,000,000 Weighted-average interest rate (0.07%) (0.07%) on notes outstanding Debt maturity period Maturities generally less than three months. Debt issuance description Under the euro-Program, the Company may issue euro- commercial paper notes [the "euro notes"] up to a

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document maximum aggregate amount of €500 million or its equivalent in alternative currencies. Prepaid Expenses and Other [Member] | Bank Indebtedness [Member] Short-term Debt [Line Items] Net cash deposit $ 9,000,000

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Debt - Schedule of Company's Long-Term Debt Dec. 31, 2016Dec. 31, 2015 (Detail) - USD ($) $ in Millions Debt Instrument [Line Items] Total long-term debt $ 2,533 $ 2,538 Less due within one year 139 211 Total long term non current debt 2,394 2,327 Three Point Six Two Five Senior Notes [Member] Debt Instrument [Line Items] Total long-term debt 746 745 Four Point One Five Zero Senior Notes [Member] Debt Instrument [Line Items] Total long-term debt 643 643 One Point Nine Zero Zero Senior Notes [Member] Debt Instrument [Line Items] Total long-term debt 576 592 Three Point One Zero Zero Senior Notes [Member] Debt Instrument [Line Items] Total long-term debt 315 305 Bank Term Debt [Member] Debt Instrument [Line Items] Total long-term debt 117 202 Government Loans [Member] Debt Instrument [Line Items] Total long-term debt 92 9 Other Long Term Debt [Member] Debt Instrument [Line Items] Total long-term debt $ 44 $ 42

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Debt - Schedule of Ended Company's Long-Term Debt Dec. 31, Dec. 31, 2016 Dec. 31, 2016 Dec. 31, (Parenthetical) (Detail) 2016 USD ($) CAD 2015 EUR (€) Three Point Six Two Five Senior Notes [Member] Debt Instrument [Line Items] Senior Notes, face amount $ 750,000,000 Senior Notes, due year 2024 Interest rate 3.625% 3.625% 3.625% Four Point One Five Zero Senior Notes [Member] Debt Instrument [Line Items] Senior Notes, face amount $ 650,000,000 Senior Notes, due year 2025 Interest rate 4.15% 4.15% 4.15% One Point Nine Zero Zero Senior Notes [Member] Debt Instrument [Line Items] Senior Notes, face amount | € € 550,000,000 Senior Notes, due year 2023 Interest rate 1.90% 1.90% 1.90% Three Point One Zero Zero Senior Notes [Member] Debt Instrument [Line Items] Senior Notes, face amount | CAD CAD 425,000,000 Senior Notes, due year 2022 Interest rate 3.10% 3.10% 3.10% Bank Term Debt [Member] Debt Instrument [Line Items] Weighted average interest rate of bank term debt 7.30% 7.30% 7.30% 8.10% Government Loans [Member] Debt Instrument [Line Items] Weighted average interest rate of bank term debt 2.53% 2.53% 2.53% 3.70%

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Debt - Schedule of Future Principal Repayments on Long-Term Debt (Detail) - Dec. 31, 2016Dec. 31, 2015 USD ($) $ in Millions Debt Disclosure [Abstract] 2017 $ 139 2018 39 2019 26 2020 22 2021 20 Thereafter 2,287 Total long-term debt $ 2,533 $ 2,538

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Debt - Additional Dec. 31, 2016 Dec. 31, 2015 Dec. 31, 2016 Information (Detail) USD ($) USD ($) EUR (€) Debt Instrument [Line Items] Borrowings under revolving credit facility $ 2,750,000,000 Revolving credit facility maturity date Jun. 22, 2021 Interest paid in cash $ 99,000,000 $ 54,000,000 Operating lease expense 314,000,000 $ 285,000,000 One Point Nine Zero Zero Senior Notes [Member] Debt Instrument [Line Items] Senior Notes, face amount | € € 550,000,000 Asian Tranche [Member] Debt Instrument [Line Items] Line of credit facility fully transferable amount 200,000,000 Mexican Tranche [Member] Debt Instrument [Line Items] Line of credit facility fully transferable amount $ 100,000,000

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Debt - Interest Expense, Net 12 Months Ended (Detail) - USD ($) Dec. 31, 2016Dec. 31, 2015 $ in Millions Interest expense Current $ 22 $ 20 Long-term 78 38 Interest Expense, Total 100 58 Interest income (12) (14) Interest expense, net $ 88 $ 44

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Debt - Company's Commitments under Operating Leases Requiring Dec. 31, 2016 Annual Rental Payments USD ($) (Detail) $ in Millions Leases [Abstract] 2017 $ 277 2018 237 2019 208 2020 183 2021 164 Thereafter 586 Operating Leases, Future Minimum Payments Due, Total$ 1,655

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Long-Term Employee Benefit Liabilities - Long- Term Employee Benefit Dec. 31, 2016Dec. 31, 2015 Liabilities (Detail) - USD ($) $ in Millions Compensation and Retirement Disclosure [Abstract] Defined benefit pension plans and other $ 313 $ 181 Termination and long service arrangements 319 287 Retirement medical benefits plans 29 30 Other long-term employee benefits 6 6 Long-term employee benefit obligations $ 667 $ 504

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Long-Term Employee 12 Months Ended Benefit Liabilities - Summary of Weighted Average Significant Actuarial Assumptions Dec. 31, 2016Dec. 31, 2015 Adopted in Measuring Company's Obligations and Cost (Detail) - Pension Plan, Defined Benefit [Member] Defined Benefit Plan Disclosure [Line Items] Discount rate 3.10% 3.80% Rate of compensation increase 2.30% 2.50% Net periodic benefit cost Discount rate 3.20% 3.70% Rate of compensation increase 2.40% 2.70% Expected return on plan assets 5.80% 5.90%

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Long-Term Employee 12 Months Ended Benefit Liabilities - Schedule of Company's Defined Benefit Pension Plans Dec. 31, 2016Dec. 31, 2015 (Detail) - USD ($) $ in Millions Defined Benefit Plan Disclosure [Line Items] Non-current asset $ (21) $ (17) Non-current liability 667 504 Pension Plan, Defined Benefit [Member] Defined Benefit Plan Disclosure [Line Items] Beginning of year 493 536 Current service cost 14 12 Interest cost 21 18 Actuarial losses (gains) and changes in actuarial assumptions 28 (18) Benefits paid (22) (18) Benefits paid - settlements (32) Acquisition 129 1 Gain on settlement (5) Foreign exchange (2) (38) End of year 624 493 Beginning of year 326 347 Return on plan assets 22 7 Employer contributions 19 19 Benefits paid (17) (18) Benefits paid - settlements (32) Acquisition 8 Foreign exchange 4 (29) End of year 330 326 Ending funded status 294 167 Non-current asset (21) (17) Current liability 2 3 Non-current liability 313 181 Net amount 294 167 Unrecognized actuarial losses (144) (138) Current service cost 14 12 Interest cost 21 18 Return on plan assets (20) (20) Benefits paid - settlements 13 Actuarial losses 3 4 Net periodic benefit cost $ 31 $ 14

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Long-Term Employee 12 Months Ended Benefit Liabilities - Schedule of Company's Defined Dec. 31, 2016 Benefit Pension Plans USD ($) (Parenthetical) (Detail) $ in Millions Defined Benefit Plan Disclosure [Line Items] Defined benefit pension, non cash settlement $ 13 Pension Plan, Defined Benefit [Member] Defined Benefit Plan Disclosure [Line Items] Defined benefit pension plan assets, settlement $ 32 Target allocation in 2017 100.00% Asset allocation of defined benefit pension plans 100.00% Equity Investments [Member] | Pension Plan, Defined Benefit [Member] Defined Benefit Plan Disclosure [Line Items] Target allocation in 2017, minimum 55.00% Target allocation in 2017, maximum 75.00% Asset allocation of defined benefit pension plans 61.00% Fixed Income Securities [Member] | Pension Plan, Defined Benefit [Member] Defined Benefit Plan Disclosure [Line Items] Target allocation in 2017, minimum 25.00% Target allocation in 2017, maximum 45.00% Asset allocation of defined benefit pension plans 39.00% Cash and Cash Equivalents [Member] | Pension Plan, Defined Benefit [Member] Defined Benefit Plan Disclosure [Line Items] Target allocation in 2017, minimum 0.00% Target allocation in 2017, maximum 15.00% Asset allocation of defined benefit pension plans 0.00%

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Long-Term Employee Benefit Liabilities - Summary of Weighted Average Significant Actuarial Assumptions Adopted in Measuring Company's Projected Dec. 31, 2016Dec. 31, 2015 Termination and Long Service Benefit Obligations and Net Periodic Benefit Cost (Detail) - Termination and Long Service Arrangements [Member] Defined Benefit Plan Disclosure [Line Items] Discount rate 2.90% 3.10% Rate of compensation increase 2.70% 2.80%

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Long-Term Employee 12 Months Ended Benefit Liabilities - Company's Termination and Long Service Arrangements Dec. 31, 2016Dec. 31, 2015 (Detail) - USD ($) $ in Millions Defined Benefit Plan Disclosure [Line Items] Non-current liability $ 667 $ 504 Termination and Long Service Arrangements [Member] Defined Benefit Plan Disclosure [Line Items] Beginning of year 295 323 Current service cost 20 15 Interest cost 8 8 Actuarial losses and changes in actuarial assumptions 15 2 Benefits paid (11) (12) Acquisition 16 Divestiture (4) Foreign exchange (16) (37) Ending funded status 327 295 Current liability 8 8 Non-current liability 319 287 Net amount 327 295 Unrecognized actuarial losses (84) (69) Current service cost 20 15 Interest cost 8 8 Actuarial losses 1 18 Net periodic benefit cost $ 29 $ 41

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Long-Term Employee 12 Months Ended Benefit Liabilities - Summary of Weighted Average Discount Rates Used in Measuring Company's Projected Dec. 31, 2015Dec. 31, 2014 Retirement Medical Benefit Obligations and Net Periodic Benefit Cost (Detail) - Retirement Medical Benefits Plans [Member] Defined Benefit Plan Disclosure [Line Items] Retirement medical benefit obligations 3.80% 3.90% Net periodic benefit cost 3.90% 3.70% Health care cost inflation 7.00% 6.50%

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Long-Term Employee 12 Months Ended Benefit Liabilities - Company's Retirement Dec. 31, Dec. 31, Medical Benefits Plans 2016 2015 (Detail) - USD ($) $ in Millions Defined Benefit Plan Disclosure [Line Items] Non-current liability $ 667 $ 504 Retirement Medical Benefits Plans [Member] Defined Benefit Plan Disclosure [Line Items] Beginning of year 32 41 Interest cost 1 1 Actuarial losses (gains) and changes in actuarial assumptions (1) (7) Benefits paid (1) (2) Foreign exchange (1) Ending funded status 31 32 Current liability 2 2 Non-current liability 29 30 Net amount 31 32 Unrecognized past service costs 1 1 Unrecognized actuarial gains 11 11 Total amounts included in accumulated other comprehensive loss 12 12 Past service cost amortization (1) (1) Net periodic benefit cost 1 Retirement Medical Benefits Plans [Member] | Net Periodic Benefit Costs [Member] Defined Benefit Plan Disclosure [Line Items] Interest cost $ 1 $ 2

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Long-Term Employee 12 Months Ended Benefit Liabilities - Future Dec. 31, 2016 Benefit Payments (Detail) USD ($) $ in Millions Defined Benefit Plan Disclosure [Line Items] Expected employer contributions - 2017 $ 34 2017 31 2018 32 2019 34 2020 38 2021 40 Thereafter 233 Total 408 Pension Plan, Defined Benefit [Member] Defined Benefit Plan Disclosure [Line Items] Expected employer contributions - 2017 24 2017 21 2018 21 2019 21 2020 23 2021 23 Thereafter 133 Total 242 Termination and Long Service Arrangements [Member] Defined Benefit Plan Disclosure [Line Items] Expected employer contributions - 2017 8 2017 8 2018 9 2019 11 2020 13 2021 15 Thereafter 91 Total 147 Retirement Medical Benefits Plans [Member] Defined Benefit Plan Disclosure [Line Items] Expected employer contributions - 2017 2 2017 2 2018 2 2019 2 2020 2 2021 2 Thereafter 9 Total $ 19

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Other Long-Term Liabilities - Particulars of Other Long- Term Liabilities (Detail) - Dec. 31, 2016Dec. 31, 2015 USD ($) $ in Millions Statement of Financial Position [Abstract] Long-term portion of fair value of hedges $ 61 $ 152 Long-term portion of income taxes payable 181 131 Asset retirement obligation 28 26 Long-term lease inducements 16 19 Deferred revenue 12 3 Total $ 298 $ 331

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months Ended Capital Stock - Additional Dec. 31, 2016 Nov. 10, 2016 Information (Detail) Vote shares shares Equity [Abstract] Preference shares included in authorized capital stock 99,760,000 Shares issued or outstanding 0 Number of votes per share | Vote 1 Number of common stock shares to be purchased under the Bid 38,000,000 Percentage of issued and outstanding common shares 10.00% Commencement date of Bid Nov. 15, 2016 Termination date of Bid Nov. 17, 2017

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Capital Stock - Summary of 12 Months Ended Normal Course Issuer Bids (Detail) - USD ($) Dec. 31, 2016Dec. 31, 2015 $ in Millions Schedule Of Share Repurchase Programs [Line Items] Shares purchased 22,335,018 10,752,484 Cash amount $ 904 $ 501 2014 Bid [Member] Schedule Of Share Repurchase Programs [Line Items] Maximum number of shares 40,000,000 Shares purchased 8,166,514 Cash amount $ 388 2015 Bid [Member] Schedule Of Share Repurchase Programs [Line Items] Maximum number of shares 40,000,000 Shares purchased 20,313,194 2,585,970 Cash amount $ 818 $ 113 2016 Bid [Member] Schedule Of Share Repurchase Programs [Line Items] Maximum number of shares 38,000,000 Shares purchased 2,021,824 Cash amount $ 86

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Capital Stock - Maximum Number of Shares Outstanding Exercised or Converted (Detail) - Mar. 09, 2017 Convertible Common Stock shares [Member] - Scenario, Forecast [Member] - Subsequent Event [Member] Class of Stock [Line Items] Common Shares 382,269,005 Stock options 9,258,413 Total number of shares outstanding 391,527,418

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accumulated Other 12 Months Ended Comprehensive Loss - Schedule of Accumulated Dec. 31, Dec. 31, Other Comprehensive Loss 2016 2015 (Detail) - USD ($) $ in Millions Accumulated Other Comprehensive Income (Loss) [Line Items] Beginning Balance $ 9,117 $ 8,673 Net unrealized gain (loss) 1 (244) Ending Balance 10,219 9,117 Accumulated Translation Adjustment [Member] Accumulated Other Comprehensive Income (Loss) [Line Items] Beginning Balance (1,042) (255) Net unrealized gain (loss) (109) (798) Repurchase of shares under normal course issuer bids [note 20] 20 11 Ending Balance (1,131) (1,042) Accumulated Net (Loss) Gain from Designated or Qualifying Cash Flow Hedges [Member] Accumulated Other Comprehensive Income (Loss) [Line Items] Beginning Balance (262) (113) Net unrealized gain (loss) 1 (244) Reclassification of net loss to net income 126 95 Ending Balance (135) (262) Accumulated Net Unrealized Loss On Other Long Term Liabilities [Member] Accumulated Other Comprehensive Income (Loss) [Line Items] Beginning Balance (165) (186) Net unrealized gain (loss) (29) 14 Reclassification of net loss to net income 9 7 Ending Balance (185) (165) Accumulated Net Unrealized Loss on Available-for-Sale investments [Member] Accumulated Other Comprehensive Income (Loss) [Line Items] Beginning Balance (1) (4) Net unrealized gain (loss) 3 Reclassification of net loss to net income 1 Ending Balance (1) AOCL [Member] Accumulated Other Comprehensive Income (Loss) [Line Items] Beginning Balance [1] (1,470) (558) Ending Balance [1] $ (1,451) $ (1,470) [1]AOCL is Accumulated Other Comprehensive Loss.

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accumulated Other 12 Months Comprehensive Loss - Ended Schedule of Net Income Amounts Reclassified from Dec. 31, Dec. 31, AOCL (Detail) - USD ($) 2016 2015 $ in Millions Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] Sales $ $ (36,445)(32,134) Cost of sales 31,123 27,559 Interest 88 44 Income tax 706 711 Net of tax (2,031) (2,013) Total loss reclassified to net income (125) (102) Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net (Loss) Gain from Designated or Qualifying Cash Flow Hedges [Member] Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] Sales (87) (86) Cost of sales (87) (45) Interest (3) Income tax 48 39 Net of tax (126) (95) Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Unrealized Loss On Other Long Term Liabilities [Member] Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] Cost of sales 1 (9) Income tax 2 Net of tax $ 1 $ (7)

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accumulated Other Comprehensive Loss - Dec. 31, 2017 Additional Information USD ($) (Detail) $ in Millions Scenario, Forecast [Member] Accumulated Other Comprehensive Income (Loss) [Line Items] Amount of comprehensive loss that is expected to be reclassified to net income $ 130

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Financial Instruments - Foreign Exchange Forward Contracts Representing Commitments to Buy and USD ($) EUR (€) MXN GBP (£) CZK Sell Various Foreign Currencies (Detail) - 12 months ended Dec. 31, 2016 Euro Member Countries, Euro Derivative [Line Items] Notional amount of foreign currency £ CZK $ (4,000,000) derivatives (53,000,000)7,805,000,000 Euro Member Countries, Euro | 2017 [Member] | US Dollar [Member] Derivative [Line Items] Foreign exchange forward contract, 0.90038 Purchases Exchange Rate Foreign exchange forward contract, 1.19637 Sales Exchange Rate Euro Member Countries, Euro | 2017 [Member] | British Pound [Member] Derivative [Line Items] Foreign exchange forward contract, 1.18435 Purchases Exchange Rate Foreign exchange forward contract, 0.84126 Sales Exchange Rate Euro Member Countries, Euro | 2017 [Member] | Czech Koruna [Member] Derivative [Line Items] Foreign exchange forward contract, 0.03722 Purchases Exchange Rate Euro Member Countries, Euro | 2017 [Member] | Long [Member] Derivative [Line Items] Notional amount of foreign currency $ 115,000,000 5,000,000 4,084,000,000 derivatives Euro Member Countries, Euro | 2017 [Member] | Short [Member] Derivative [Line Items] Notional amount of foreign currency $ (112,000,000) (28,000,000) derivatives Euro Member Countries, Euro | 2018 [Member] | US Dollar [Member] Derivative [Line Items] Foreign exchange forward contract, 0.87976 Purchases Exchange Rate

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Foreign exchange forward contract, 1.16833 Sales Exchange Rate Euro Member Countries, Euro | 2018 [Member] | British Pound [Member] Derivative [Line Items] Foreign exchange forward contract, 1.17412 Purchases Exchange Rate Foreign exchange forward contract, 0.80446 Sales Exchange Rate Euro Member Countries, Euro | 2018 [Member] | Czech Koruna [Member] Derivative [Line Items] Foreign exchange forward contract, 0.03766 Purchases Exchange Rate Euro Member Countries, Euro | 2018 [Member] | Long [Member] Derivative [Line Items] Notional amount of foreign currency $ 43,000,000 1,000,000 2,389,000,000 derivatives Euro Member Countries, Euro | 2018 [Member] | Short [Member] Derivative [Line Items] Notional amount of foreign currency $ (53,000,000) (17,000,000) derivatives Euro Member Countries, Euro | 2019 [Member] | US Dollar [Member] Derivative [Line Items] Foreign exchange forward contract, 0.86787 Purchases Exchange Rate Foreign exchange forward contract, 1.15362 Sales Exchange Rate Euro Member Countries, Euro | 2019 [Member] | British Pound [Member] Derivative [Line Items] Foreign exchange forward contract, 0.80790 Sales Exchange Rate Euro Member Countries, Euro | 2019 [Member] | Czech Koruna [Member] Derivative [Line Items] Foreign exchange forward contract, 0.03777 Purchases Exchange Rate Euro Member Countries, Euro | 2019 [Member] | Long [Member] Derivative [Line Items] Notional amount of foreign currency $ 24,000,000 1,167,000,000 derivatives

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Euro Member Countries, Euro | 2019 [Member] | Short [Member] Derivative [Line Items] Notional amount of foreign currency $ (24,000,000) (9,000,000) derivatives Euro Member Countries, Euro | 2020 [Member] | US Dollar [Member] Derivative [Line Items] Foreign exchange forward contract, 0.86156 Purchases Exchange Rate Foreign exchange forward contract, 1.17400 Sales Exchange Rate Euro Member Countries, Euro | 2020 [Member] | British Pound [Member] Derivative [Line Items] Foreign exchange forward contract, 0.87553 Sales Exchange Rate Euro Member Countries, Euro | 2020 [Member] | Czech Koruna [Member] Derivative [Line Items] Foreign exchange forward contract, 0.03802 Purchases Exchange Rate Euro Member Countries, Euro | 2020 [Member] | Long [Member] Derivative [Line Items] Notional amount of foreign currency CZK $ 5,000,000 derivatives 165,000,000 Euro Member Countries, Euro | 2020 [Member] | Short [Member] Derivative [Line Items] Notional amount of foreign currency £ (2,000,000) derivatives (5,000,000) Canada, Dollars Derivative [Line Items] Notional amount of foreign currency $ € 7,000,000 derivatives (1,831,000,000) Canada, Dollars | 2017 [Member] | US Dollar [Member] Derivative [Line Items] Foreign exchange forward contract, 1.32036 Purchases Exchange Rate Foreign exchange forward contract, 0.79352 Sales Exchange Rate Canada, Dollars | 2017 [Member] | Euro [Member] Derivative [Line Items]

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Foreign exchange forward contract, 1.45496 Purchases Exchange Rate Foreign exchange forward contract, 0.68983 Sales Exchange Rate Canada, Dollars | 2017 [Member] | Long [Member] Derivative [Line Items] Notional amount of foreign currency $ 122,000,000 23,000,000 derivatives Canada, Dollars | 2017 [Member] | Short [Member] Derivative [Line Items] Notional amount of foreign currency $ (885,000,000)(15,000,000) derivatives Canada, Dollars | 2018 [Member] | US Dollar [Member] Derivative [Line Items] Foreign exchange forward contract, 1.30509 Purchases Exchange Rate Foreign exchange forward contract, 0.78550 Sales Exchange Rate Canada, Dollars | 2018 [Member] | Euro [Member] Derivative [Line Items] Foreign exchange forward contract, 1.44050 Purchases Exchange Rate Foreign exchange forward contract, 0.68689 Sales Exchange Rate Canada, Dollars | 2018 [Member] | Long [Member] Derivative [Line Items] Notional amount of foreign currency $ 1,000,000 1,000,000 derivatives Canada, Dollars | 2018 [Member] | Short [Member] Derivative [Line Items] Notional amount of foreign currency € $ (597,000,000) derivatives (2,000,000) Canada, Dollars | 2019 [Member] | US Dollar [Member] Derivative [Line Items] Foreign exchange forward contract, 0.78407 Sales Exchange Rate Canada, Dollars | 2019 [Member] | Short [Member] Derivative [Line Items]

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Notional amount of foreign currency $ (338,000,000) derivatives | $ Canada, Dollars | 2020 [Member] | US Dollar [Member] Derivative [Line Items] Foreign exchange forward contract, 0.76519 Sales Exchange Rate Canada, Dollars | 2020 [Member] | Short [Member] Derivative [Line Items] Notional amount of foreign currency $ (126,000,000) derivatives | $ Canada, Dollars | 2021 [Member] | US Dollar [Member] Derivative [Line Items] Foreign exchange forward contract, 0.76001 Sales Exchange Rate Canada, Dollars | 2021 [Member] | Short [Member] Derivative [Line Items] Notional amount of foreign currency $ (8,000,000) derivatives | $ United States of America, Dollars Derivative [Line Items] Notional amount of foreign currency MXN derivatives 5,883,000,000 United States of America, Dollars | 2017 [Member] | Mexican Peso [Member] Derivative [Line Items] Foreign exchange forward contract, 0.05995 Purchases Exchange Rate United States of America, Dollars | 2017 [Member] | Long [Member] Derivative [Line Items] Notional amount of foreign currency 3,500,000,000 derivatives United States of America, Dollars | 2018 [Member] | Mexican Peso [Member] Derivative [Line Items] Foreign exchange forward contract, 0.05194 Purchases Exchange Rate United States of America, Dollars | 2018 [Member] | Long [Member] Derivative [Line Items] Notional amount of foreign currency 1,819,000,000 derivatives

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document United States of America, Dollars | 2019 [Member] | Mexican Peso [Member] Derivative [Line Items] Foreign exchange forward contract, 0.04335 Purchases Exchange Rate United States of America, Dollars | 2019 [Member] | Long [Member] Derivative [Line Items] Notional amount of foreign currency MXN derivatives 564,000,000

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Financial Instruments - 12 Months Ended Additional Information Dec. 31, Dec. 31, Dec. 31, Dec. 31, (Detail) 2016 2015 2016 2015 CAD in Millions, $ in USD ($) USD ($) CAD CAD Millions Customer Derivative Instruments, Gain (Loss) [Line Items] Trading securities $ 1,034 $ 2,940 Long-term debt due within one year $ 139 $ 211 Debt instrument maturity period 1 year Book value of senior notes $ 2,300 Sales Revenue, Net [Member] Derivative Instruments, Gain (Loss) [Line Items] Number of largest customers | Customer 6 Sales Revenue, Net [Member] | Customer Concentration Risk [Member] Derivative Instruments, Gain (Loss) [Line Items] Percentage of sales to six largest customers 82.00% 83.00% Fair Value, Inputs, Level 1 [Member] | Senior Notes [Member] Derivative Instruments, Gain (Loss) [Line Items] Estimated fair value of notes payable $ 2,360 Asset-backed Securities [Member] Derivative Instruments, Gain (Loss) [Line Items] Face value of investments | CAD CAD 81 CAD 107 Asset-backed Securities [Member] | Reported Value Measurement [Member] Derivative Instruments, Gain (Loss) [Line Items] Trading securities | CAD 81 CAD 101 Asset-backed Securities [Member] | Estimate of Fair Value Measurement [Member] Derivative Instruments, Gain (Loss) [Line Items] Trading securities | CAD CAD 81 Foreign Exchange Forward [Member] Derivative Instruments, Gain (Loss) [Line Items] Foreign exchange forward contracts, gain recognized in other 18 comprehensive loss Foreign exchange forward contracts, loss recognized in other $ 195 comprehensive loss

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Financial Instruments - 12 Months Ended Schedule of Company's Financial Assets and Dec. 31, Dec. 31, Dec. 31, Liabilities (Detail) - USD ($) 2016 2015 2014 $ in Millions Trading Cash and cash equivalents $ 974 $ 2,863 $ 1,249 Investment in ABCP 60 73 Equity investments 4 Trading Securities 1,034 2,940 Held-to-maturity investments Severance investments 3 3 Loans and receivables Accounts receivable 6,165 5,439 Long-term receivables included in other assets [note 14] 229 87 Total 6,394 5,526 Other financial liabilities Short term borrowings 623 25 Long-term debt (including portion due within one year) 2,533 2,538 Accounts payable 5,430 4,746 Total 8,586 7,309 Derivatives designated as effective hedges, measured at fair value, 18 31 Assets Derivatives designated as effective hedges, measured at fair value, (195) (343) Liabilities Liabilities, Net Amounts (178) (313) Foreign Exchange Contract [Member] Other financial liabilities Liabilities, Net Amounts (177) (312) Prepaid Expenses and Other [Member] | Foreign Exchange Contract [Member] Other financial liabilities Derivatives designated as effective hedges, measured at fair value, 12 27 Assets Other Assets [Member] | Foreign Exchange Contract [Member] Other financial liabilities Derivatives designated as effective hedges, measured at fair value, 6 4 Assets Other Accrued Liabilities [Member] | Foreign Exchange Contract [Member] Other financial liabilities Derivatives designated as effective hedges, measured at fair value, (134) (191) Liabilities

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Other Long-term Liabilities [Member] | Foreign Exchange Contract [Member] Other financial liabilities Derivatives designated as effective hedges, measured at fair value, (61) (152) Liabilities Bank Indebtedness [Member] Other financial liabilities Short term borrowings 8 $ 25 Commercial Paper [Member] Other financial liabilities Short term borrowings $ 615

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Financial Instruments - Derivative Foreign Currency Contracts at Gross Fair Value and Unrecognized Dec. 31, 2016Dec. 31, 2015 Impacts of Master Netting Arrangements (Detail) - USD ($) $ in Millions Offsetting [Abstract] Assets, Gross amounts presented in consolidated balance sheets $ 18 $ 31 Assets, Gross amounts not offset in consolidated balance sheets 17 30 Assets, Net amounts 1 1 Liabilities, Gross amounts presented in Consolidated Balance Sheets (195) (343) Liabilities, Gross amounts not offset in Consolidated Balance Sheets (17) (30) Liabilities, Net Amounts $ (178) $ (313)

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 1 Months Ended12 Months Ended Contingencies - Additional Jun. 30, 2016 Dec. 31, 2016 Information (Detail) CAD CAD CAD in Millions Officers Subsidiary Loss Contingencies [Line Items] Amount related to damages | CAD CAD 1,800 CAD 2,560 KS Centoco Ltd [Member] Loss Contingencies [Line Items] Number of subsidiaries sued by KS Centoco Ltd | Subsidiary 2 Percentage of equity interest owned by Company 23.00% Percentage of equity interest owned by third party 77.00% Number of officers sued | Officers 2 MST Automotive Inc [Member] Loss Contingencies [Line Items] Percentage of equity interest owned by Company 77.00% Percentage of equity interest owned by third party 23.00%

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Segmented Information - Dec. 31, 2016 Additional Information Market (Detail) Segment Reporting [Abstract] Number of primary markets 2

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Segmented Information - 12 Months Schedule of Information Ended with Respect to Segment Dec. 31, Dec. 31, Dec. 31, (Detail) - USD ($) 2016 2015 2014 $ in Millions Segment Reporting Information [Line Items] Total sales $ $ 36,445 32,134 Depreciation and amortization 1,056 802 Adjusted EBIT 2,898 2,529 Goodwill 1,923 1,344 $ 1,337 Fixed assets, net 7,022 5,948 Current assets 10,163 11,144 Investments, intangible assets, goodwill, deferred tax assets and other assets 5,381 2,595 Consolidated total assets 22,566 19,687 Operating Segments [Member] Segment Reporting Information [Line Items] Total sales 36,445 32,134 External sales 36,445 32,134 Depreciation and amortization 1,056 802 Adjusted EBIT 2,898 2,529 Goodwill 1,923 1,344 Fixed asset additions 1,807 1,591 Fixed assets, net 7,022 5,948 North America [Member] Segment Reporting Information [Line Items] Goodwill 595 590 633 North America [Member] | Operating Segments [Member] Segment Reporting Information [Line Items] Total sales 20,744 19,015 External sales 20,657 18,908 Depreciation and amortization 486 411 Adjusted EBIT 2,061 1,934 Goodwill 595 590 Fixed asset additions 910 896 Fixed assets, net 3,293 2,822 North America [Member] | Intersubsegment Eliminations [Member] | Operating Segments [Member] Segment Reporting Information [Line Items] Total sales (1,387) (1,178) North America [Member] | Canada [Member] | Reportable Subsegments [Member] | Operating Segments [Member] Segment Reporting Information [Line Items] Total sales 6,784 6,329

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document External sales 6,214 5,856 Fixed asset additions 201 242 Fixed assets, net 721 645 North America [Member] | United States [Member] | Reportable Subsegments [Member] | Operating Segments [Member] Segment Reporting Information [Line Items] Total sales 10,226 9,603 External sales 9,857 9,183 Fixed asset additions 400 421 Fixed assets, net 1,573 1,422 North America [Member] | Mexico [Member] | Reportable Subsegments [Member] | Operating Segments [Member] Segment Reporting Information [Line Items] Total sales 5,121 4,261 External sales 4,586 3,869 Fixed asset additions 309 233 Fixed assets, net 999 755 Europe [Member] Segment Reporting Information [Line Items] Goodwill 1,116 525 577 Europe [Member] | Operating Segments [Member] Segment Reporting Information [Line Items] Total sales 13,080 11,123 External sales 12,815 10,912 Depreciation and amortization 431 276 Adjusted EBIT 543 451 Goodwill 1,116 525 Fixed asset additions 738 495 Fixed assets, net 2,584 1,879 Europe [Member] | Intersubsegment Eliminations [Member] | Operating Segments [Member] Segment Reporting Information [Line Items] Total sales (400) (327) Europe [Member] | Western Europe Excluding Great Britain [Member] | Reportable Subsegments [Member] | Operating Segments [Member] Segment Reporting Information [Line Items] Total sales 10,537 8,936 External sales 10,159 8,635 Fixed asset additions 578 357 Fixed assets, net 1,912 1,263 Europe [Member] | Great Britain [Member] | Reportable Subsegments [Member] | Operating Segments [Member] Segment Reporting Information [Line Items] Total sales 658 404 External sales 656 404

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Fixed asset additions 24 26 Fixed assets, net 127 145 Europe [Member] | Eastern Europe [Member] | Reportable Subsegments [Member] | Operating Segments [Member] Segment Reporting Information [Line Items] Total sales 2,285 2,110 External sales 2,000 1,873 Fixed asset additions 136 112 Fixed assets, net 545 471 Asia [Member] Segment Reporting Information [Line Items] Goodwill 212 229 $ 127 Asia [Member] | Operating Segments [Member] Segment Reporting Information [Line Items] Total sales 2,674 1,981 External sales 2,502 1,846 Depreciation and amortization 103 77 Adjusted EBIT 266 149 Goodwill 212 229 Fixed asset additions 97 121 Fixed assets, net 679 811 Rest of World [Member] | Operating Segments [Member] Segment Reporting Information [Line Items] Total sales 465 461 External sales 464 461 Depreciation and amortization 13 17 Adjusted EBIT (17) (25) Fixed asset additions 11 15 Fixed assets, net 62 51 Corporate and Other [Member] | Operating Segments [Member] Segment Reporting Information [Line Items] Total sales (518) (446) External sales 7 7 Depreciation and amortization 23 21 Adjusted EBIT 45 20 Fixed asset additions 51 64 Fixed assets, net $ 404 $ 385

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Segmented Information - 12 Months Ended Schedule of Information with Respect to Segment (Parenthetical) (Detail) - Dec. 31, 2016Dec. 31, 2015 USD ($) $ in Millions Segment Reporting [Abstract] Net income from continuing operations $ 2,074 $ 1,940 Add (deduct): Interest expense, net 88 44 Other expense (income), net 30 (166) Income taxes 706 711 Adjusted EBIT $ 2,898 $ 2,529

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Segmented Information - 12 Months Ended Schedule of Aggregates External Revenues by Dec. 31, 2016Dec. 31, 2015 Customer (Detail) - USD ($) $ in Millions Revenue from External Customer [Line Items] Revenue from external customers $ 36,445 $ 32,134 General Motors [Member] Revenue from External Customer [Line Items] Revenue from external customers 7,207 6,424 Ford Motor Company [Member] Revenue from External Customer [Line Items] Revenue from external customers 5,667 4,923 Fiat or Chrysler Group [Member] Revenue from External Customer [Line Items] Revenue from external customers 5,349 5,094 Daimler AG [Member] Revenue from External Customer [Line Items] Revenue from external customers 4,294 3,779 BMW [Member] Revenue from External Customer [Line Items] Revenue from external customers 3,786 3,300 Volkswagen [Member] Revenue from External Customer [Line Items] Revenue from external customers 3,758 3,301 Other Customers [Member] Revenue from External Customer [Line Items] Revenue from external customers $ 6,384 $ 5,313

Copyright © 2017 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Segmented Information - 12 Months Ended Summary of External Revenues by Automotive Products and Services Dec. 31, 2016Dec. 31, 2015 (Detail) - USD ($) $ in Millions Segment Reporting Information [Line Items] Revenue from external customers $ 36,445 $ 32,134 Body Systems and Chassis Systems [Member] Segment Reporting Information [Line Items] Revenue from external customers 9,157 7,790 Powertrain Systems [Member] Segment Reporting Information [Line Items] Revenue from external customers 6,489 4,755 Exterior Systems [Member] Segment Reporting Information [Line Items] Revenue from external customers 5,272 5,155 Seating Systems [Member] Segment Reporting Information [Line Items] Revenue from external customers 5,079 4,497 Tooling, Engineering and Other [Member] Segment Reporting Information [Line Items] Revenue from external customers 3,078 2,700 Vision and Electronic Systems [Member] Segment Reporting Information [Line Items] Revenue from external customers 2,768 2,583 Closure Systems [Member] Segment Reporting Information [Line Items] Revenue from external customers 2,412 2,297 Complete Vehicle Assembly [Member] Segment Reporting Information [Line Items] Revenue from external customers $ 2,190 $ 2,357