Magna International, Inc. (MGA) 2009年年度報告「TSX」.pdf

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1、2 0 0 9 A N N UA L R E P O R TFinancial Highlights2009Company OverviewMagna,the most diversified global automotive supplier,designs,develops and manufactures technologically advanced automotive systems,assemblies,modules and components,and engineers and assembles complete vehicles,primarily for sale

2、 to original equipment manufacturers of cars and light trucks.Our capabilities include:completevehicleengineering&assembly body&chassissystems interiorsystems seatingsystems exteriorsystems roofsystems powertrainsystems visionsystems electronicsystems closuresystems hybrid&electricvehicles/systemsMa

3、gnahasapproximately72,500employeesin238manufacturingoperationsand79productdevelopment,engineeringandsalescentresin25countries.A protoype of the Ford Focus BEV jointly developed by Ford and Magna.8007006005004003002001000(100)(200)(300)(400)(500)Net Income(Loss)(U.S.$Millions)070809Diluted Earnings(L

4、oss)Per Share(U.S.$)6.005.004.003.001.0002.00(1.00)(2.00)(3.00)(4.00)(5.00)0708091,2008006001,0004002000(200)(400)(600)Operating Income(Loss)(U.S.$Millions)070809Sales(U.S.$Billions)25201510505060708 09040302010030Operating PrinciplesMagnas entrepreneurial corporate culture,highlighted in the princi

5、ples shown here,is the reason for Magnas success andour greatest competitive advantage.Decentralized Operating StructureMagnasmanufacturingdivisionsoperateasindependentprofitcentresalignedbygeographicregionineachofourproductareas.ThisdecentralizedstructurepreventsbureaucracyandmakesMagnamoreresponsi

6、vetocustomerneedsandchangeswithintheglobalautomotiveindustry,aswellaswithinspecificregions.Employee InvolvementBykeepingoperatingunitsrelativelysmallandflexible,Magnafostersgreateremployeeinvolvementandinitiative.ThisenvironmentalsoallowsMagnatorecognizeandrewardindividualscontributionsandmaintainop

7、encommunication.Entrepreneurial ManagersEntrepreneurial,hands-onmanagerswithstrongtooling,engineeringandmanufacturingbackgroundsrunMagnasdivisions.Divisionmanagersareresponsibleforensuringprofitability,achievingcustomersatisfactionandupholdingtheprinciplesoftheMagnaEmployeesCharter.Employee Profit S

8、haring and OwnershipThroughtheEquityParticipationandProfitSharingProgram,eligibleemployeesreceivetenpercentofMagnasqualifyingannualprofitsbeforetax.Aspart-ownersworkinginanenvironmentwhereproductivityisrewarded,Magnaemployeesaremotivatedtoproducequalityproductsatcompetitiveprices.Global Operations(A

9、s of December 2009)Total Numberof Employees(As of December 2009)North America:CanadaUnitedStatesMexico43104716302South America:Brazil21Asia Pacific:ChinaIndiaJapanKoreaThailand165243241Manufacturing Operations:238Product Development,Engineering and Sales Centres:79Africa:SouthAfrica3Europe:AustriaBe

10、lgiumCzechRepublicEnglandFranceGermanyHungaryIrelandItalyPolandRussiaSlovakRepublicSpainSwedenTurkey315142818215923135151331111Europe 27,925South Africa 100South America 825Asia Pacific 4,825North America 38,85027,900Magnas capabilities include:Exteriors&InteriorsE-Car SystemsElectronicsVehicles&Pow

11、ertrainBody&Chassis SystemsComplete VehicleEngineering&AssemblyMagna SteyrnEngineeringServicesnCompleteVehicleProductionnSystems&ModulesPowertrain SystemsMagna PowertrainnDriveline&ChassisControlSystemsnFluidPressure&ControlsnStampingsnDieCastingsnEngineeringServices&SystemIntegrationRoof SystemsMag

12、na SteyrnSoftTopsnRetractableHardTopsnPanoramicRoofModulesnRemovableRoofSystemsnIntegratedCargoCarriersHybrid&ElectricVehicles/SystemsMagna E-Car SystemsnBatteryCells&PacksnHybrid&ElectricVehicleDevelopment&ProductionnSystemDevelopmentandDeliveryforHybrid&ElectricVehiclesElectronic SystemsMagna Elec

13、tronicsnDriverAssistance&SafetynIntelligentPowerSystemsnEngineElectronics&LiquidSensorsnIndustrialProductsnBodyElectronicsnLightingSystemsExterior SystemsMagna Exteriors and InteriorsnFront&RearEndFasciaSystemsnSealingSystemsnExteriorTrimnClassACompositePanelsnEngineeredGlassnStructuralComponentsnUn

14、derHood&UnderbodyComponentsnSheetMoldingCompound(SMC)MaterialInterior SystemsMagna Exteriors and InteriorsnSidewall&TrimSystemsnCockpitSystemsn CargoManagementSystemsnOverheadSystemsn Carpet&LoadspaceSystemsVision SystemsMagna Mirrorsn ElectronicVisionSystemsn ExteriorMirrorsn InteriorMirrorsn Elect

15、rochromatic(Self-Dimming)MirrorGlassn ActuatorsClosure SystemsMagna ClosuresnDoorModulesnWindowSystemsnPowerClosureSystemsnLatchingSystemsnHandleAssembliesnDriverControlsSeating SystemsMagna SeatingnCompleteSeatingSolutionsReconfigurableSystemsFoamandTrimSolutionsSafetyandComfortSystems Integrationn

16、PowerandManualSeatMechanismSystemsnCoreSeatStructuresBody&Chassis SystemsCosma InternationalnBodySystemsnChassisSystemsnTechnology,Engineering&ToolingSystems BMW AGMagna International Inc.Financial Review and Other Information2009The Chairmans Message1The Magna Corporate Constitution2The Magna Emplo

17、yees Charter3Managements Message to Shareholders4Financial Review and Other InformationManagements Discussion and Analysis of Results of Operationsand Financial Position6Managements Responsibility for Financial Reporting38Independent Auditors Report on Financial Statements39Independent Auditors Repo

18、rt on Internal Controls Under Standardsof the Public Company Accounting Oversight Board(United States)40Consolidated Statements of Comprehensive(Loss)Income41Consolidated Statements of Retained Earnings42Consolidated Statements of Cash Flows42Consolidated Balance Sheets43Notes to the Consolidated Fi

19、nancial Statements44Supplementary Financial and Share Information79Corporate DirectoryInside BackCoverMagna International Inc.2009 Annual Report1Frank StronachChairman of the BoardThe Chairmans MessageThe past year was another difficult year for the automotive industry,although there have beena numb

20、er of positive signs that we may finally be emerging from one of the sharpest downturnsin history.I believe that the worst is now behind us,particularly in North America,whereNorth American-based OEMs are much leaner and more cost-effective than they were priorto the downturn.However,I also believe

21、that the North American automotive industry stillneeds to do more in order to remain globally competitive over the long term,especially giventhe fact that global competition will only intensify in the years ahead.In 2008,we were working together with General Motors on a plan to expand the Opel brand

22、into the Russian market.When General Motors announced early last year that it was sellingits Adam Opel GmbH automotive division,we made an offer to acquire an interest in Opel togetherwith our Russian financial partner,Sberbank.General Motors would have retained a strategicownership stake in Opel.It

23、 was our view that a partnership among GM,Magna and a Russiancompany would strategically position all parties to capitalize on major growth opportunities inthe Russian market.GMs employees representatives liked the way Magna operated andwere supportive of working with us.In exchange for the signific

24、ant concessions the unionswere prepared to make,we proposed that they have a minority equity stake,which was in linewith the Magna philosophy of making employees part-owners.The German governmentbacked our bid and believed our proposal was a viable solution concerning Opel.At the end of the day,we b

25、elieved that we could be of service to GM,our largest customer,as well as to the German government,which was eager to save tens of thousands of jobs inthat country.We understood our role as being the co-ordinator or facilitator between GM,the German government and our Russian partners in order to me

26、et the common objectives ofall of the parties involved.Naturally,we had some reservations within Magna.We were concerned that it could beperceived that we would have ended up indirectly competing with some of our customers.We were also concerned that the proposed Opel deal would have required a sign

27、ificantinvestment on our part.When General Motors finally decided not to pursue the proposedarrangement with regard to Opel,we did not view their announcement as a significant setback,nor did we consider it a roadblock in terms of our long-term strategic direction.We remaincommitted to doing whateve

28、r we can to support General Motors as it continues to restructureits European operations,as well as supporting all of our customers throughout the world.As for Russia,we still view it as an important market for Magna with significant potential forlong-term growth and we will continue to expand our p

29、resence there.Going forward,we intend to focus on significantly strengthening and deepening our expertisein electric vehicle development and electric vehicle systems.Our goal is to become theworlds leading supplier of hybrid and electric vehicle components and systems to all of theworlds major autom

30、akers.We see a potentially large and very promising market in this rapidlygrowing segment of our industry and a great future for our company in this area.We will alsocontinue to explore ways to leverage our technological and manufacturing capabilities todiversify into promising new industries such a

31、s alternative energy.In closing,I wish to thank our employees and managers for all of their efforts and sacrificesover the past year.I also wish to thank our customers for their support and understandingduring what was a turbulent time for everyone in the industry.Although some difficulties still li

32、e ahead,I believe the future of the automotive industry remainsbright.Globally,the industry continues to grow,and the desire of individuals everywherearound the world to have their own personal transportation be it gas-powered or electric remains as powerful as ever.I am confident that more and more

33、 of the parts and systems onthose vehicles of the future will be engineered and manufactured by Magna./s/Frank StronachFrank StronachChairman of the BoardMagna International Inc.2009 Annual Report2The Magna Corporate ConstitutionEmployee Equity and Profit ParticipationTen percent of Magnas qualifyin

34、g profit before tax will be allocated to eligible employees.These funds will be used for the purchase of Magna shares in trust for eligible employeesand for cash distributions to eligible employees,recognizing length of service.Shareholder Profit ParticipationMagna will distribute,on average over a

35、three-year period,not less than 20 percent of its annual net profit after tax to shareholders.Management Profit ParticipationTo obtain long-term contractual commitment,Magna provides a compensation arrangementto corporate management which allows for base salaries comparable to industry standards,plu

36、s incentive bonuses,in total,of up to six percent of its profit before tax.Research and DevelopmentMagna will allocate a minimum of seven percent of its profit before tax for research and developmentto ensure its long-term viability.Social ResponsibilityMagna will allocate a maximum of two percent o

37、f its profit before tax for charitable,cultural,educational and political purposes to support the basic fabric of society.Minimum Profit PerformanceManagement has an obligation to produce a profit.If Magna does not generate a minimum after-taxreturn of four percent on share capital for two consecuti

38、ve years,Magnas Class A shareholders,voting as a class,will have the right to elect additional directors.Unrelated InvestmentsMagna Class A and Class B shareholders,with each class voting separately,will have the right to approve any investment in an unrelated business in the event such investmentto

39、gether with all other investments in unrelated businesses exceeds 20 percent of Magnas equity.Board of DirectorsMagna believes that outside directors provide independent counsel and discipline.A majority of the members of Magnas Board of Directors will be outsiders.Constitutional AmendmentsA change

40、to Magnas Corporate Constitution will require the approvalof its Class A and Class B shareholders,with each class voting separately.Magnas Corporate Constitution publicly declares and defines the rights of employees and investors to participate in our profitsand growth while also imposing certain di

41、sciplines on management.These features strike a balance between employees,investors and management while allowing us to maintain an entrepreneurial environment that encourages productivity.Magna is a public company with two classes of shares:a Class B share which carries a multiple vote,held by mana

42、gementand its associates,and a Class A Subordinate Voting share for investors and employees which carries a single vote.This sharestructure has been in place since 1978 and enables management to have operating control of Magna on a day-to-day basis,provided it adheres to the Corporate Constitution.T

43、he simplified summary of Magnas Corporate Constitution(above)is qualified by the actual text of the Corporate Constitutionas contained in Magnas Articles of Incorporation.Magna International Inc.2009 Annual Report3The Magna Employees CharterMagnaiscommittedtoanoperatingphilosophywhichisbasedonfairne

44、ssandconcernforpeople.Thisphilosophyispartof MagnasFairEnterprisecultureinwhichemployeesandmanagementshareintheresponsibilitytoensurethesuccessof thecompany.Itincludestheseprinciples:Job SecurityBeing competitive by making a better product for a better price is the best way to enhance job security.M

45、agna is committed to working together with you to help protect your job security.To assist you,Magna will provide:Job Counselling Training Employee Assistance ProgramsA Safe and Healthful WorkplaceMagna strives to provide you with a working environment which is safe and healthful.Fair TreatmentMagna

46、 offers equal opportunities based on an individuals qualifications and performance,free from discrimination or favouritism.Competitive Wages and BenefitsMagna will provide you with information which will enable you to compare your total compensation,including total wages and total benefits,with thos

47、e earned by employees of your competitors,as well as with other plants in your community.If your total compensation is found not to be competitive,then your wages will be adjusted.Employee Equity and Profit ParticipationMagna believes that every employee should share in the financial success of the

48、company.Communication and InformationThrough regular monthly meetings between management and employees and through publications,Magna will provide you with information so that you will know what is going on in your companyand within the industry.The HotlineShould you have a problem,or feel the above

49、 principles are not being met,we encourage you to callthe Hotline or use the self-addressed Hotline Envelopes to register your complaints.You do not haveto give your name,but if you do,it will be held in strict confidence.Hotline Investigators will answeryour call.The Hotline is committed to investi

50、gate and resolve all concerns or complaintsand must report the outcome to Magnas Global Human Resources Department.Employee Relations Advisory BoardThe Employee Relations Advisory Board is a group of people who have proven recognition and credibilityrelating to humanitarian and social issues.This Bo

51、ard will monitor,advise and ensure that Magna operateswithin the spirit of the Magna Employees Charter and the principles of Magnas Corporate Constitution.Magna International Inc.2009 Annual Report4Managements Message to ShareholdersOperations OverviewMagna emerged from an extremely challenging year

52、 in the automotive industry well positionedto expand our global footprint,strengthen our capabilities and diversify our customer base.Year-over-year sales declined 27%to$17.4 billion.This was largely due to decreases in ourNorth American and European production sales,which were directly related to s

53、ignificantdeclines in North American and European vehicle production volumes,as well as a decreasein complete vehicle assembly sales.However,we posted a 31%increase in Rest of Worldproduction sales,our eighth straight year of increase.The restructuring and downsizing actions we have undertaken over

54、the past few years,coupledwith a number of cost saving measures implemented in 2009,all helped to mitigate the impactof the severe downturn in vehicle production volumes,particularly in North America andWestern Europe.These actions were not enough to allow us to avoid reporting our first operatinglo

55、ss since 1990.Nevertheless,we were able to generate$527 million in cash from operationsin 2009.Our strong financial position relative to many of our competitors also allowed us tosecure a significant amount of takeover business during the year.During the past year,we continued to make major strides

56、in pursuing our strategic objective ofbecoming one of the industrys leading hybrid and electric vehicle systems suppliers,including:The creation of Magna E-Car Systems as a new global operating unit to merge ourtechnological competence and market position in the field of hybrid and electric vehiclet

57、echnologies.Magna E-Car Systems will work together with our existing product groupsand will help manage complete vehicle electrification projects with our customers.Our formation of a joint venture with SEMIKRON,a global technology leader inpower semiconductor components and systems,to develop and p

58、roduce powerelectronics for future hybrid and electric vehicle applications.Supplying lithium-ion battery systems to a European-based OEM for use in theircommercial hybrid vehicles.And continuing to work with Ford on the development of a fully electric,zero-emissionFord vehicle,expected to go on sal

59、e in 2011.In addition,we continued to invest to grow our electronics capabilities and have been rewardedby our customers with a significant amount of new business in this area.Operating HighlightsThe following are some of the major operating highlights in 2009,including strategic acquisitionsthat ex

60、panded Magnas technical capabilities and product lines:We acquired seven manufacturing facilities from Michigan-based Meridian AutomotiveSystems Inc.that manufacture composite plastic modules and components.We believecomposite plastics are a strategic new product area and will play an increasinglyim

61、portant role going forward in the effort to improve vehicle fuel efficiency throughthe introduction of lightweight materials and components.We acquired the European subsidiary operations of Cadence Innovation LLC,a supplierof automotive interior and exterior plastic components and systems,including

62、bumpers,instrument panels,radiator grills and door panels.We formed an alliance with the National Research Council of Canada(NRC)to createthe Magna-NRC Composite Centre of Excellence.The Centre will focus on researchand development in the area of thermoplastic composites,which are stronger andlighte

63、r than traditional plastic components.The Magna-NRC Composite Centre ofExcellence,scheduled to open this summer,will help support the auto industry indeveloping next-generation vehicles with lighter,more durable parts that are safer,affordable,environmentally friendly and fuel-efficient.The Centre w

64、ill also help reinforceMagnas position as a supplier of lightweight,cost-effective composite solutions tothe global automotive market.Siegfried WolfCo-Chief Executive OfficerDonald J.WalkerCo-Chief Executive OfficerVincent J.GalifiExecutive Vice-Presidentand Chief Financial OfficerMagna Internationa

65、l Inc.2009 Annual Report5We were awarded a contract to supply the frame assembly for General Motors next generation of full-size light-dutypickups and SUVs.This is the third generation of frames on this platform that Magna has been awarded by GM.We successfully launched the assembly of the Peugeot 3

66、08 RC Z coupe at our Magna Steyr assembly facility inGraz,Austria our first complete vehicle assembly program for PSA Peugeot Citron.And this year we will alsobegin assembling the Aston Martin Rapide,a new four-door luxury sport sedan.This is our first assembly programfor Aston Martin and it is the

67、first time that an Aston Martin vehicle will be manufactured outside Great Britain.We announced the opening of a number of new facilities,including the formation of a 50/50 joint venture with KrishnaGroup of India,one of that countrys largest complete seat suppliers,to produce complete seating syste

68、ms andseat mechanisms;and a 50-50 joint venture with World Industries Ace Corporation to establish a new manufacturingplant in Korea that will produce and supply all-wheel-drive couplings,along with other powertrain components,to Hyundai Kia Motors Group.Our operating units and manufacturing divisio

69、ns won a number of major customer awards,including General MotorsSupplier of the Year awards,a Ford Gold World Excellence Award,Toyota Technology,Quality and Launch SupplierAwards,and Honda Delivery and Performance Awards.Our innovative BlindZoneMirror,which eliminates blindspots,won the 2009 Automo

70、tive News PACE Award,given to suppliers in recognition of products demonstratingsuperior innovation and technological advancement.Going ForwardAlthough we anticipate that 2010 will be another difficult year,global vehicle sales,and in particular,North American vehiclesales should begin to recover.We

71、 have weathered the automotive downturn well and stand to win more business as automakers consolidate their supplybase and award production contracts to suppliers that are financially healthy.We also stand to pick up more business fromweakened automotive suppliers that are struggling financially,pri

72、marily in North America.We remain focused on running a world-class automotive parts business and will continue to invest in new technologies aswell as developing promising new areas of growth,including hybrid and electric vehicles and electronics.We are also lookingat leveraging our manufacturing co

73、mpetencies to diversify into new,rapidly growing non-automotive industries such asrenewable energy.During 2009,our Cosma International operating unit was awarded contracts related to the engineering,development and manufacturing of metal-stamped components for the renewable energy industry.We expect

74、 thiscomplementary business to continue to grow in the years ahead beyond the business already awarded.Our priorities for the year ahead include continuing to grow our geographic footprint and investing in innovation to drive futurebusiness opportunities.Our strong financial position,with net cash o

75、f$1.2 billion,allows us to pursue these priorities.The past year was a difficult one for our employees as well as our customers.Our decentralized,entrepreneurial cultureplayed an important part in allowing us to manage through the difficulties.We wish to thank our stakeholders for their continuedsup

76、port during another trying year.We firmly believe that Magna has taken the right steps to ensure that we will be astrong and highly competitive supplier going forward.We are better prepared today than ever before to seize opportunitiesthat arise from changing market dynamics,geographic production sh

77、ifts,our customers focus on developing larger,globalplatforms and new emerging technologies.As one of the worlds largest and most diversified suppliers,we are solidlypositioned to play an increasingly important role in how the automotive industry evolves.Siegfried WolfDonald J.WalkerVincent J.Galifi

78、Co-Chief Executive OfficerCo-Chief Executive OfficerExecutive Vice-Presidentand Chief Financial Officer/s/Siegfried Wolf/s/Donald J.Walker/s/Vincent J.GalifiMagna International Inc.2009 Annual Report MD&A6MAGNA INTERNATIONAL INC.Managements Discussion and Analysis of Results of Operationsand Financi

79、al PositionAll amounts in this Managements Discussion and Analysis of Results of Operations and Financial Position(MD&A)are in U.S.dollars and all tabular amounts are in millions of U.S.dollars,except per share figures and average dollar content per vehicle,whichare in U.S.dollars,unless otherwise n

80、oted.When we use the terms we,us,our or Magna,we are referring to MagnaInternational Inc.and its subsidiaries and jointly controlled entities,unless the context otherwise requires.This MD&A should be read in conjunction with the accompanying audited consolidated financial statements for the year end

81、edDecember 31,2009 which are prepared in accordance with Canadian generally accepted accounting principles(GAAP)as well asthe Forward-Looking Statements on page 37.This MD&A has been prepared as at March 10,2010.OVERVIEWWe are the most diversified global automotive supplier.We design,develop and man

82、ufacture technologically advanced automotivesystems,assemblies,modules and components,and engineer and assemble complete vehicles,primarily for sale to originalequipment manufacturers(OEMs)of cars and light trucks.Our capabilities include the design,engineering,testing and manufactureof automotive i

83、nterior systems;seating systems;closure systems;body and chassis systems;vision systems;electronic systems;exterior systems;powertrain systems;roof systems;hybrid and electric vehicles/systems;as well as complete vehicle engineeringand assembly.We follow a corporate policy of functional and operatio

84、nal decentralization,pursuant to which we conduct ouroperations through divisions,each of which is an autonomous business unit operating within pre-determined guidelines.As atDecember 31,2009,we had 238 manufacturing divisions and 79 product development,engineering and sales centres in 25 countries.

85、Our operations are segmented on a geographic basis between North America,Europe and Rest of World(primarily Asia,SouthAmerica and Africa).A Co-Chief Executive Officer heads management in each of our two primary markets,North America and Europe.The role of the North American and European management t

86、eams is to manage our interests to ensure a coordinated effort acrossour different capabilities.In addition to maintaining key customer,supplier and government contacts in their respective markets,ourregional management teams centrally manage key aspects of our operations while permitting our divisi

87、ons enough flexibility throughour decentralized structure to foster an entrepreneurial environment.HIGHLIGHTSThe automotive industry had a challenging year in 2009.The year began with weak global vehicle sales and production,most notablyin the North American and Western European markets.In the first

88、 half of 2009,North American and Western European vehicleproduction declined 50%and 33%,respectively,as compared to the first half of 2008.The worsening economic and industryconditions which became apparent in the second half of 2008 accelerated the deterioration in the financial condition of a numb

89、er ofOEMs and suppliers,culminating in the bankruptcy filings of Chrysler and General Motors in April and June,respectively.During theirrespective periods under bankruptcy protection,vehicle production for Chrysler and General Motors was negligible.More generally,annualized vehicle sales in North Am

90、erica for the first half of 2009 remained at levels not experienced for more than 25 years.European vehicle sales and production,while down significantly from the previous year,were buoyed by a number of scrappageprograms implemented by various European governments,which generally provided financial

91、 incentives for consumers to replaceolder,less fuel-efficient and typically higher polluting vehicles,with new vehicles,thereby stimulating vehicle sales.We began to see signs of improvement in the second half of 2009,particularly in North America.New vehicle selling ratesstrengthened,as consumer co

92、nfidence levels increased and economic stimuli began to work their way through various economies.In North America,vehicle inventory days declined to levels which were below long term trend levels,due in part to production shut-downsand the positive effect of a vehicle scrappage program implemented i

93、n the United States.Nevertheless,by historical standards,full year vehicle sales and production in North America and Western Europe remained at lowlevels.North American vehicle production ended 2009 down 32%,as compared to 2008,marking the seventh straight year ofdeclining production.Western Europea

94、n production declined 19%compared to 2008,despite the impact of the various scrappageprograms.In 2009,we continued with restructuring and downsizing actions in order to mitigate the impact of continued production volumedeclines.We also undertook a number of other cost-saving measures,including reduc

95、ed discretionary spending across theorganization,employee reductions,short work week schedules,reduced bonuses,voluntary wage reductions and benefit planchanges.Despite these actions,the weak production environment adversely impacted our 2009 operating results.Total sales declined 27%in 2009,compare

96、d to 2008,primarily as a result of the declines in vehicle production in North America and Western Europe,alongwith a 47%decline in complete vehicle assembly sales and a 16%decline in tooling,engineering and other sales.Operating incomefor 2009 decreased$839 million,to a loss of$511 million,from inc

97、ome of$328 million in 2008.Magna International Inc.2009 Annual Report MD&A7On the positive side,the severe industry conditions provided opportunities for us to strengthen our business relative to some of ourcompetitors.We were successful in securing significant takeover business in 2009.We also comp

98、leted selective acquisitions,including Cadence Innovation s.r.o,located primarily in the Czech Republic(Cadence),and several facilities in Mexico and the U.S.from Meridian Automotive Systems Inc.(Meridian).An additional bright spot was the continued growth of our business and manufacturing footprint

99、 outside our traditional markets ofNorth America and Western Europe,which contributed to a 31%increase in Rest of World production sales,our eighth straight yearof increasing production sales in this segment.During a period when several of our automotive supplier competitors ceased operations,were c

100、onsolidated or experienced significantfinancial difficulties,our strong balance sheet and overall financial flexibility leading into the economic downturn,coupled with ourfinancial discipline,cash flow generation and significant cash preservation and cost cutting efforts allowed us to preserve share

101、holdervalue and position us well to enhance such value in the future.Our strong financial position allows us to continue to invest in innovation.Notably,in the past few years,we have been investing toexpand our capabilities and footprint in electronics.We see electronics as an area of future growth

102、for the automotive industry andfor Magna.More recently,we have been investing to develop our component,system and integration capabilities in the growinghybrid/electric vehicle market.However,we will need to further invest in both electronics and hybrid/electric vehicle systems beforewe generate app

103、ropriate returns from these investments.Our investments in these areas negatively impacted our earnings in 2009,and our planned investments in 2010 are expected to be higher.After a very turbulent year in many automotive markets,we expect global vehicle production to grow this year,led by growth inN

104、orth America,provided that overall economic conditions continue to improve.Forecast growth in North American vehicle productionwould reverse the seven year slide experienced in this critical vehicle market.We are less optimistic about the near-term growthpotential of the Western European market,whic

105、h we believe will lag in 2010 due to the impact in 2009 of scrappage incentiveswhich mitigated what would likely have been much weaker vehicle demand last year by pulling forward sales.FINANCIAL RESULTS SUMMARYDuring 2009,we posted sales of$17.4 billion,a decrease of 27%from 2008.This lower sales le

106、vel was a result of decreases in ourNorth American and European production sales,complete vehicle assembly sales and tooling,engineering and other sales offset inpart by an increase in our Rest of World production sales.Comparing 2009 to 2008:North American average dollar content per vehicle increas

107、ed 1%,while vehicle production declined 32%;European average dollar content per vehicle increased 2%,while vehicle production declined 19%;andCompletevehicleassemblysalesdecreased47%to$1.8billionfrom$3.3billion,ascompletevehicleassemblyvolumesdeclined55%.During 2009,we generated an operating loss of

108、$511 million compared to operating income of$328 million for 2008.Excluding theunusual items recorded in 2009 and 2008,as discussed in the Unusual Items section,operating income declined$899 million.Included in operating income for 2009 and 2008 are several Significant Items that impact operating in

109、come representingapproximately$220 million and$85 million,respectively.Significant Items consist primarily of:downsizing and other restructuring activities that have not been included in the Unusual Items section;accounts receivable valuation allowances recorded in 2009;in 2009,a$9 million favourabl

110、e adjustment(2008-$41 million impairment)of our investment in ABCP as discussed in the CashResources section;a favourable settlement on research and development incentives during 2008;due diligence costs associated with our planned investment in Opel,which terminated during 2009;accelerated amortiza

111、tion of deferred wage buydown assets at a powertrain systems facility in the United States during 2008;the write-off of uncollectable pre-production costs incurred related to the cancelation of an assembly program in the fourthquarter of 2009;costs related to the delay in the start of production of

112、a program;andother losses on disposal of assets.In addition,operating income was negatively impacted by:decreased margin earned on reduced sales as a result of significantly lower vehicle production volumes;costs incurred in preparation for upcoming launches or for programs that have not fully rampe

113、d up production primarily in Europe;operational inefficiencies and other costs at certain facilities;costs incurred at new facilities in Russia as we continue to pursue opportunities in this market;electric vehicle development costs;costs incurred to develop and grow our electronics capabilities;hig

114、her commodity costs;andnet customer price concessions.These factors were partially offset by:the benefit of restructuring and downsizing activities and cost savings initiatives(including reduced discretionary spending,employee reductions,short work week schedules,reduced bonuses,voluntary wage reduc

115、tions and benefit plan changes),undertaken during or subsequent to 2008;productivity and efficiency improvements at certain facilities;andincremental margin earned from acquisitions completed during or subsequent to 2008.During 2009,net loss was$493 million compared to net income of$71 million for 2

116、008.Excluding the unusual items recorded in 2009and 2008,as discussed in the Unusual Items section,net income for 2009 decreased$682 million.The decrease in net income wasa result of the decrease in operating income partially offset by lower income taxes.During 2009,our diluted loss per share was$4.

117、41 compared to diluted earnings per share of$0.62 for 2008.Excluding the unusualitems recorded in 2009 and 2008,as discussed in the Unusual Items section,diluted earnings per share for 2009 decreased$6.04.The decrease in diluted earnings per share is as a result of the decrease in net income,excludi

118、ng unusual items,and a decrease inthe weighted average number of diluted shares outstanding during 2009.The decrease in the weighted average number of dilutedshares outstanding was primarily due to the effect of the repurchase and cancelation of Class A Subordinate Voting Shares in 2008under the ter

119、ms of our Normal Course Issuer Bid and a decrease in the number of diluted shares associated with restricted stockand stock options since such shares were anti-dilutive in 2009.UNUSUAL ITEMSDuring the three months and years ended December 31,2009 and 2008,we recorded certain unusual items as follows

120、:20092008DilutedDilutedOperatingNetEarningsOperatingNetEarningsIncomeIncomeper ShareIncomeIncomeper ShareFourth QuarterImpairment charges(1)$(108)$(106)$(0.95)$(16)$(16)$(0.15)Restructuring charges(1)(20)(20)(0.18)(80)(56)(0.50)Sale of facility(2)(8)(8)(0.07)Total fourth quarter unusual items(136)(1

121、34)(1.20)(96)(72)(0.65)Third QuarterImpairment charges(1)(258)(223)(2.00)Restructuring charges(1)(4)(4)(0.04)Foreign currency gain(3)1161161.04Valuation allowance on future tax assets(4)(123)(1.10)Total third quarter unusual items(146)(234)(2.10)Second QuarterImpairment charges(1)(75)(75)(0.67)(9)(7

122、)(0.06)Restructuring charges(1)(6)(6)(0.05)Curtailment gain(5)26200.18Total second quarter unusual items(55)(61)(0.54)(9)(7)(0.06)Total full year unusual items$(191)$(195)$(1.74)$(251)$(313)$(2.75)Magna International Inc.2009 Annual Report MD&A8(1)Restructuring and Impairment ChargesDuring 2009 and

123、2008,we recorded goodwill and long-lived asset impairment charges as follows:20092008OperatingNetOperatingNetIncomeIncomeIncomeIncomeFourth QuarterNorth America$38$36$12$12Europe707044Total fourth quarter impairment charges1081061616Third QuarterNorth America258223Second QuarterNorth America757553Eu

124、rope44Total second quarter impairment charges757597Total full year impairment charges$183$181$283$246a For the year ended December 31,2009(i)GoodwillIn conjunction with the Companys annual business planning cycle,during the fourth quarter of 2009 we determinedthat our Car Top Systems(CTS)North Ameri

125、ca reporting unit could potentially be impaired,primarily as a result of:(i)a dramatic reduction in the market for soft tops,hard tops and modular retractable hard tops;and(ii)historical lossesthat are projected to continue throughout our business planning period.Based on the reporting units discoun

126、ted forecastcashflows,we recorded a$25 million goodwill impairment charge.In addition,during the second quarter of 2009,after failing to reach a favourable labour agreement at a powertrainsystems facility in Syracuse,New York,we decided to wind down these operations.Given the significance of thefaci

127、litys cashflows in relation to the reporting unit,management determined that it was more likely than not thatgoodwill at the Powertrain North America reporting unit could potentially be impaired.Therefore,we recorded a$75 milliongoodwill impairment charge.The goodwill impairment charges were calcula

128、ted by determining the implied fair value of goodwill in the same manneras if we had acquired the Powertrain and CTS reporting units as at June 30,2009 and December 31,2009,respectively.(ii)Long-lived AssetsAlso in conjunction with our annual business planning cycle,during the fourth quarter of 2009

129、 we recorded long-livedasset impairment charges of$83 million.In North America,we recorded charges of$13 million related to fixed assets at a die casting facility in Canada and ananticipated under recovery of capitalized tooling costs at a stamping facility in the United States due to significantly

130、lowervolumes on certain SUV programs.In Europe,we recorded long-lived asset impairment charges of$70 million related to our CTS and exterior systemsoperations in Germany.At our CTS operations,long-lived asset impairment charges of$59 million were recorded related to fixed and intangibleassets.The im

131、pairment charge was calculated based on CTS discounted forecast cashflows and was necessaryprimarily as a result of:(i)a dramatic reduction in the market for soft tops,hard tops and modular retractable hard tops;and(ii)historical losses that are projected to continue throughout our business planning

132、 period.Atourinteriorsandexteriorsoperations,werecordedan$11millionassetimpairmentchargerelatedtospecificunder-utilizedassets in Germany.Magna International Inc.2009 Annual Report MD&A9(iii)Restructuring CostsDuring 2009,we recorded restructuring and rationalization costs of$23 million in cost of go

133、ods sold and$3 million inselling,general and administrative expense.During the second quarter,we recorded restructuring costs of$6 millionrelated to the planned closure of a powertrain systems facility in Syracuse,New York and during the fourth quarter werecorded severance and other termination bene

134、fits related to the closure of powertrain and interior systems facilitiesin Germany.Substantially all of the$26 million will be paid subsequent to 2009.In addition,during 2009 and 2008,we incurred costs related to downsizing various operations in our traditional markets.b For the year ended December

135、 31,2008(i)Long-lived AssetsAs a result of the significant and accelerated declines in vehicle production volumes,primarily in North America,wereviewed goodwill and long-lived assets for impairment during the third quarter of 2008.Based on this analysis,during2008 we recorded long-lived asset impair

136、ment charges of$283 million related primarily to our powertrain,and interiorand exterior systems operations in the United States and Canada.At our powertrain operations,particularly at a facility in Syracuse,New York,asset impairment charges of$189 millionwere recorded primarily as a result of:(i)a

137、dramatic market shift away from truck programs,in particular four wheel drivepick-up trucks and SUVs;(ii)excess die-casting,machining and assembly capacity;and(iii)historical losses that wereprojected to continue throughout our business planning period.At our interiors and exteriors operations,we re

138、corded$74 million of asset impairment charges primarily as a result of:(i)significantly lower volumes on certain pick-up truck and SUV programs;(ii)the loss of certain replacement business;(iii)capacity utilization that is not sufficient to support the current overhead structure;and(iv)historical lo

139、sses that wereprojected to continue throughout our business planning period.Additionally,in North America we recorded asset impairment charges of$12 million related to dedicated assets at achassis systems facility in Canada and a seating systems facility in the United States.In Europe,we recorded an

140、$8 millionasset impairment related to specific assets at an interior systems facility in the United Kingdom and specific assets ata powertrain systems facility in Austria.(ii)Restructuring ChargesDuring 2008,we recorded restructuring and rationalization costs in North America of$79 million in cost o

141、f goods soldand$5 million in selling,general and administrative expense.These restructuring and rationalization costs were primarilyrecorded during the fourth quarter of 2008 and relate to:(i)the consolidation of interiors and exteriors operations inCanada and the United States;(ii)the closure of a

142、seating systems facility in St.Louis,Missouri;(iii)the consolidationof closure systems operations in Canada;and(iv)the consolidation of our powertrain die casting operations in Canadaand the United States.During 2008,we also incurred costs related to downsizing various operations.(2)Sale of Facility

143、During 2009,we entered into an agreement to sell an engineering centre in Europe and,as a result,incurred a loss on dispositionof the facility of$8 million.(3)Foreign Currency GainsIn the normal course of business,we review our cash investment and tax planning strategies,including where such funds a

144、reinvested.As a result of these reviews,during the third quarter of 2008 we repatriated funds from Europe and as a result recordedforeign currency gains of$116 million.(4)Income TaxesDuring the third quarter of 2008,we recorded a$123 million charge to establish valuation allowances against all of ou

145、r future taxassets in the United States.The valuation allowances were required in the United States based on historical consolidated losses at our U.S.operations,thatwere expected to continue in the near-term,the accelerated deterioration of near-term automotive market conditions in theUnited States

146、 and the significant and inherent uncertainty as to the timing of when we would be able to generate the necessarylevel of earnings to recover these future tax assets.Magna International Inc.2009 Annual Report MD&A10(5)Curtailment gainDuring the second quarter of 2009,we amended our Retiree Premium R

147、eimbursement Plan in Canada and the United States,such that most employees retiring on or after August 1,2009 will no longer participate in the plan.The amendment will reduceservice costs and retirement medical benefit expense in 2009 and future years.As a result of amending the plan,a curtailmentga

148、in of$26 million was recorded in cost of goods sold in the second quarter of 2009.INDUSTRY TRENDS AND RISKSWith the apparent stabilization and improvement in the global automotive industry in the second half of 2009,a number of the trendswhich impacted the industry and our business beginning in the

149、second half of 2008 appear to be diminishing.For example,vehicleproduction levels,particularly in North America,appear to be improving as compared to the low levels experienced in the second halfof 2008 and first half of 2009.However,forecast vehicle production levels in both North America and Europ

150、e for 2010 remainsignificantly below historic averages and remain sensitive to continued improvement in overall economic conditions.Similarly,whilethe short-term viability of several of our customers has improved due to significant government intervention and restructuring actions,the long-term viab

151、ility of certain of our customers remains uncertain.Continued improvement in the global automotive industry isheavily dependent on factors such as consumer confidence,employment levels,household debt,real estate values,the continuedavailability of consumer credit,interest rates,energy prices and oth

152、er factors.At this time,it is too early to determine whether theapparent stabilization and improvement in the economy and automotive industry in the second half of 2009 will continue.The impact of other recent trends also remains uncertain.For example,as a result of the restructuring of the global a

153、utomotiveindustry in 2008/2009,the financial condition of the automotive supply base deteriorated significantly,with a number of suppliersrestructuring while under bankruptcy protection or ceasing operations altogether.In the short-term,we have secured a significantamount of takeover business as our

154、 customers transferred business from weak suppliers to stronger suppliers.However,the midto long-term impact of the restructuring of the automotive supply base cannot be determined at this time.Some of our competitorshave successfully emerged from bankruptcy restructurings,leaving them with strong b

155、alance sheets,reduced cost structures andimproved overall competitiveness.One recent and growing trend in the automotive industry,born out of the need to carefully manage costs,is the growth of cooperativealliances and arrangements among competing automotive OEMs.New and increasing relationships inc

156、lude features such as:sharedpurchasing of components;joint engine,powertrain and/or platform development;and engine,powertrain and platform sharing.Cooperation among competing OEMs is expected to increase,particularly with respect to vehicle hybridization and electrification,in orderto lower the ent

157、ry cost for OEMs to compete in these vehicle segments.A number of general trends which have been impacting the automotive industry in recent years are expected to continue,including:the exertion of pricing pressure by OEMs;government incentives and consumer demand for,and industry focus on,more fuel

158、-efficient and environmentally-friendly vehicleswith alternative-energy fuel systems and additional safety features;governmental regulation of fuel economy and emissions;the long-term growth of the automotive industry in China,India,Brazil,Russia and other developing markets,including acceleratedmig

159、ration of component and vehicle design,development,engineering and manufacturing to certain of these markets;the growth of the A to D vehicle segments(micro to mid-size cars),particularly in developing markets;andthe consolidation of vehicle platforms.The following are some of the more significant r

160、isks that could affect our ability to achieve our desired results:The global automotive industry is cyclical and is sensitive to changes in economic and political conditions,including interestrates,energy prices and international conflicts.Commencing in the second half of 2008,the automotive industr

161、y experienced amore severe cyclical downturn than in prior cycles due to the disruption of global credit markets beginning in September 2008,the corresponding reduction in access to credit(particularly for purposes of vehicle financing),the deterioration of housing andequity markets and the resultin

162、g erosion in personal net worth,all of which led to extremely low consumer confidence,particularlyin the U.S and which in turn,severely impacted automotive sales.While the global economy is currently showing signs ofimprovement,uncertainty remains.As a result of restructuring actions taken by OEMs a

163、nd suppliers during the most recentcyclical downturn,automotive production levels are more closely aligned with actual automotive sales levels and,accordingly,are sensitive to overall economic conditions.The continuation of current or lower production volumes and sales levels for anextended period o

164、f time could have a material adverse effect on our profitability.Magna International Inc.2009 Annual Report MD&A11While the global economy is currently experiencing a gradual recovery and the condition of the global automotive industry appearsto have stabilized and improved beginning in the latter h

165、alf of 2009,considerable uncertainty remains as to the breadth anddepth of a global economic and industry recovery,including the timing of a return to more normal market conditions.As a resultof this continued uncertainty,we remain subject to considerable planning risk with respect to our business.A

166、 slower thananticipated recovery or a deterioration of economic conditions could have a material adverse effect on our profitability and financialcondition.The short-term viability of several of our OEM customers appears to have improved as a result of restructuring actions in the pastfew years,as w

167、ell as extraordinary levels of government financial intervention in the automotive industry,particularly in 2009.However,there can be no assurance that these restructuring actions will be successful in ensuring their long-term viability,norcan there be any assurance that government financial assista

168、nce will be made available at levels necessary to prevent OEMfailures in the future.The bankruptcy of any of our major customers could have a material adverse effect on our profitability andfinancial condition.Additionally,since OEMs rely on a highly interdependent network of suppliers,an OEM bankru

169、ptcy couldmaterially disrupt the supply chain,which could have a material adverse effect on our profitability and financial condition.We rely on a number of suppliers to supply us with a wide range of components required in connection with our business.While theautomotive supply base appears to be s

170、tabilizing following the severe cyclical downturn which commenced in the second halfof 2008,the financial health of automotive suppliers is impacted by economic conditions,production volume cuts,intense pricingpressures and other factors.The insolvency or bankruptcy of a supplier could disrupt the s

171、upply of components to us or ourcustomers,potentially causing the temporary shut-down of our or our customers production lines.Any prolonged disruption inthe supply of critical components to us or our customers,the inability to re-source or in-source production of a critical componentfrom a financia

172、lly distressed automotive components sub-supplier,or any temporary shut-down of one of our production linesor the production lines of one of our customers,could have a material adverse effect on our profitability.Additionally,theinsolvency,bankruptcy or financial restructuring of any of our critical

173、 suppliers could result in us incurring unrecoverable costsrelated to the financial work-out of such suppliers and/or increased exposure for product liability,warranty or recall costs relatingto the components supplied by such suppliers to the extent such supplier is not able to assume responsibilit

174、y for such amounts,which could have an adverse effect on our profitability.The automotive parts supply industry is highly competitive.As a result of our diversified automotive business,we face a numberof competitors possessing varying degrees of financial and operational strength in each our of prod

175、uct and service capabilities.Some of our competitors have a substantially greater market share than we have and are dominant in some of the markets inwhich we do business.In addition,recent restructuring actions taken by some of our competitors have provided them withimproved financial and operation

176、al flexibility and could increase their competitive threat to our business.Failure to competesuccessfully with our existing competitors or with any new competitors could have an adverse effect on our operations andprofitability.We are dependent on the outsourcing of components,modules and assemblies

177、,as well as complete vehicles,by OEMs.The extentof OEM outsourcing is influenced by a number of factors,including relative cost,quality and timeliness of production by suppliersas compared to OEMs,capacity utilization,labour relations among OEMs,their employees and unions and other considerations.As

178、 a result of lower cost structures due to recent restructuring actions,some OEMs may insource production which hadpreviously been outsourced.Outsourcing of complete vehicle assembly is particularly dependent on the degree of unutilizedcapacity at the OEMs own assembly facilities,in addition to the f

179、oregoing factors.A reduction in outsourcing by OEMs,or theloss of any material production or assembly programs coupled with the failure to secure alternative programs with sufficientvolumes and margins,could have a material adverse effect on our profitability.We continue to invest in technology and

180、innovation,including certain alternative-energy technologies which we believe will becritical to our long-term growth.Our ability to anticipate changes in technology and to successfully develop and introduce newand enhanced products on a timely basis will be a significant factor in our ability to re

181、main competitive.If there is a shift awayfrom the use of technologies in which we are investing,our costs may not be fully recovered.We may be placed at a competitivedisadvantage if other technologies in which our investment is not as great,or our expertise is not as developed,emerge as theindustry-

182、leading technologies.This could have a material adverse effect on our profitability and financial condition.As part of our strategy of continuously seeking to optimize our global manufacturing footprint,we may further rationalize someof our production facilities.In the course of such rationalization

183、,we may incur further restructuring and/or downsizing costsrelated to plant closings,relocations and employee severance costs.Such costs could have an adverse effect on our short-termprofitability.In addition,we are working to turn around financially underperforming divisions;however,there is no gua

184、rantee thatwe will be successful in doing so with respect to some or all such divisions.We recorded significant impairment charges related to goodwill,long-lived assets and future tax assets in recent years and maycontinue to do so in the future.The bankruptcy of a significant customer or the early

185、termination,loss,renegotiation of the termsof,or delay in the implementation of,any significant production contract could be indicators of impairment.In addition,to theextent that forward-looking assumptions regarding:the impact of improvement plans on current operations;insourcing and othernew busi

186、ness opportunities;program price and cost assumptions on current and future business;the timing of new programlaunches;and forecast production volumes;are not met,any resulting impairment loss could have a material adverse effect onour profitability.Magna International Inc.2009 Annual Report MD&A12A

187、lthough we supply parts to all of the leading OEMs,a significant majority of our sales are to six such customers.While we havediversified our customer base somewhat in recent years and continue to attempt to further diversify,particularly to increase ourbusiness with Asian-based OEMs,there is no ass

188、urance we will be successful.Our inability to successfully grow our sales tonon-traditional customers could have a material adverse effect on our profitability.While we supply parts for a wide variety of vehicles produced in North America and Europe,we do not supply parts for allvehicles produced,no

189、r is the number or value of parts evenly distributed among the vehicles for which we do supply parts.Shifts in market share among vehicles(including shifts away from vehicles we assemble or shifts away from specific parts weproduce)or the early termination,loss,renegotiation of the terms of,or delay

190、 in the implementation of any significant productionor assembly contract could have a material adverse effect on our profitability.Many of our customers have sought,and will likely continue to seek to take advantage of lower operating costs in China,India,Brazil,Russia and other developing markets.W

191、hile we continue to expand our manufacturing footprint with a view to takingadvantage of manufacturing opportunities in these markets,we cannot guarantee that we will be able to fully realize suchopportunities.Additionally,the establishment of manufacturing operations in developing markets carries i

192、ts own risks,includingthose relating to:political and economic instability;trade,customs and tax risks;currency exchange rates;currency controls;insufficient infrastructure;and other risks associated with conducting business internationally.The inability to quickly adjust ourmanufacturing footprint

193、to take advantage of manufacturing opportunities in these markets could harm our ability to competewith other suppliers operating in or from such markets,which could have an adverse effect on our profitability.Since September 2008,several major financial institutions failed or required massive gover

194、nment intervention in order to preventcollapse.The turmoil in the financial sector significantly affected the global economy,and contributed to a global recession.While financial markets appear to have stabilized,the failure of any major financial institutions in the future could lead to significant

195、disruptions in capital and credit markets and could adversely affect our and our customers ability to access needed liquidity forworking capital.In addition,in the event of a failure of a financial institution:in which we invest our cash reserves;that is acounterparty in a derivative transaction wit

196、h us;or that is a lender to us:we face the risk that our cash reserves and amountsowing to us pursuant to derivative transactions may not be fully recoverable,or the amount of credit available to us may besignificantly reduced.All of these risks could have an impact on our financial condition.Althou

197、gh our financial results are reported in U.S.dollars,a significant portion of our sales and operating costs are realized inCanadian dollars,euros,British pounds and other currencies.Our profitability is affected by movements of the U.S.dollar againstthe Canadian dollar,the euro,the British pound and

198、 other currencies in which we generate revenues and incur expenses.However,as a result of hedging programs employed by us,foreign currency transactions are not fully impacted by movementsin exchange rates.We record foreign currency transactions at the hedged rate where applicable.Despite these measu

199、res,significant long-term fluctuations in relative currency values,in particular a significant change in the relative values of the U.S.dollar,Canadian dollar,euro or British pound,could have an adverse effect on our profitability and financial condition and anysustained change in such related curre

200、ncy values could adversely impact our competitiveness in certain geographic regions.We have completed a number of significant acquisitions in recent years and may continue to do so in the future.In those productareas in which we have identified acquisitions as critical to our business strategy,we ma

201、y not be able to identify suitableacquisition targets or successfully acquire any suitable targets which we identify.Additionally,we may not be able to successfullyintegrate or achieve anticipated synergies from those acquisitions which we do complete and such failure could have a materialadverse ef

202、fect on our profitability.We face significant pricing pressure,as well as pressure to absorb costs related to product design,engineering and tooling,aswell as other items previously paid for directly by OEMs.These pressures are expected to continue,even as the industry beginsto recover from the glob

203、al recession.The continuation or intensification of these pricing pressures and pressure to absorb costscould have an adverse effect on our profitability.Our customers continue to demand that we bear the cost of the repair and replacement of defective products which are eithercovered under their war

204、ranty or are the subject of a recall by them.Warranty provisions are established based on our bestestimate of the amounts necessary to settle existing or probable claims on product defect issues.Recall costs are costs incurredwhen government regulators and/or our customers decide to recall a product

205、 due to a known or suspected performance issueand we are required to participate either voluntarily or involuntarily.Currently,under most customer agreements,we only accountfor existing or probable warranty claims.Under certain complete vehicle engineering and assembly contracts,we record anestimate

206、 of future warranty-related costs based on the terms of the specific customer agreements and the specific customerswarranty experience.The obligation to repair or replace such products could have a material adverse effect on our profitabilityand financial condition if the actual costs are materially

207、 different from our estimates.From time to time,we may 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,we attempt to assess the likelihood of any adversejudgments or outcomes

208、 to these claims,although it is difficult to predict final outcomes with any degree of certainty.At this time,we do not believe that any of the claims to which we are party will have a material adverse effect on our financial position;however,we cannot provide any assurance to this effect.Magna Inte

209、rnational Inc.2009 Annual Report MD&A13RESULTS OF OPERATIONSAverage Foreign ExchangeFor the three monthsFor the yearended December 31,ended December 31,20092008Change20092008Change1 Canadian dollar equals U.S.dollars0.9480.828+14%0.8820.944-7%1 euro equals U.S.dollars1.4771.320+12%1.3951.470-5%1 Bri

210、tish pound equals U.S.dollars1.6351.569+4%1.5651.852-16%The preceding table reflects the average foreign exchange rates between the most common currencies in which we conduct businessand our U.S.dollar reporting currency.The significant changes in these foreign exchange rates for the three months an

211、d year endedDecember 31,2009 impacted the reported U.S.dollar amounts of our sales,expenses and income.The results of operations whose functional currency is not the U.S.dollar are translated into U.S.dollars using the average exchangerates in the table above for the relevant period.Throughout this

212、MD&A,reference is made to the impact of translation of foreignoperations on reported U.S.dollar amounts where relevant.Our results can also be affected by the impact of movements in exchange rates on foreign currency transactions(such as raw materialpurchases or sales denominated in foreign currenci

213、es).However,as a result of hedging programs employed by us,foreign currencytransactions in the current period have not been fully impacted by movements in exchange rates.We record foreign currencytransactions at the hedged rate where applicable.Finally,holding gains and losses on foreign currency de

214、nominated monetary items,which are recorded in selling,general andadministrative expense,impacts reported results.RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31,2009Sales20092008ChangeVehicle Production Volumes(millions of units)North America8.62112.622-32%Europe11.83514.596-19%Average Dollar

215、Content Per VehicleNorth America$872$867+1%Europe$495$486+2%SalesExternal ProductionNorth America$7,515$10,938-31%Europe5,8577,089-17%Rest of World676515+31%Complete Vehicle Assembly1,7643,306-47%Tooling,Engineering and Other1,5551,856-16%Total Sales$17,367$23,704-27%External Production Sales-North

216、AmericaExternal production sales in North America decreased 31%or$3.4 billion to$7.5 billion for the year ended December 31,2009compared to$10.9 billion for the year ended December 31,2008.This decrease in production sales reflects a 32%decrease in NorthAmerican vehicle production volumes partially

217、offset by a 1%increase in our North American average dollar content per vehicle.More importantly,during 2009 our largest customers in North America continued to reduce vehicle production volumes comparedto 2008.While North American vehicle production volumes declined 32%in 2009 compared to 2008,Chry

218、sler and GM vehicleproduction declined 48%and 44%,respectively.On a positive note,Fords vehicle production decline was only 16%.Magna International Inc.2009 Annual Report MD&A14Our average dollar content per vehicle grew by 1%or$5 to$872 for the year ended December 31,2009 compared to$867 for theyea

219、r ended December 31,2008,primarily as a result of:the launch of new programs during or subsequent to 2008,including the:Ford F-Series and Lincoln Mark LT;Chevrolet Traverse;Chevrolet Equinox and GMC Terrain;andChevrolet Camaro;favourable production(relative to industry volumes)and/or increased conte

220、nt on certain programs,including the:Ford Escape,Mercury Mariner and Mazda Tribute;andFord Fusion,Mercury Milan and Lincoln MKZ;acquisitions completed during or subsequent to 2008,including:a substantial portion of Plastech Engineered Products Inc.s exteriors business(Plastech);Meridian;anda stampin

221、g and sub-assembly facility in Alabama from Ogihara America Corporation(Ogihara);andtakeover business that launched during or subsequent to 2008.These factors were partially offset by:unfavourable production(relative to industry volumes)and/or lower content on certain programs,including the:Chevrole

222、t Cobalt;Dodge Grand Caravan,Chrysler Town&Country and Volkswagen Routan;Chrysler 300 and 300C and Dodge Charger;andBuick Enclave and GMC Acadia;programs that ended production during or subsequent to 2008,including the:Saturn Vue,Aura and Outlook;Chevrolet Trailblazer and GMC Envoy;andPontiac G5,G6,

223、Solstice,Sky and GT;a decrease in reported U.S.dollar sales due to the weakening of the Canadian dollar against the U.S.dollar;andcustomer price concessions during or subsequent to 2008.External Production Sales-EuropeExternal production sales in Europe decreased 17%or$1.2 billion to$5.9 billion for

224、 the year ended December 31,2009 comparedto$7.1 billion for the year ended December 31,2008.This decrease in production sales reflects a 19%decrease in European vehicleproduction volumes partially offset by a 2%increase in our European average dollar content per vehicle.Our average dollar content pe

225、r vehicle increased by 2%or$9 to$495 for the year ended December 31,2009 compared to$486 forthe year ended December 31,2008,primarily as a result of:the launch of new programs during or subsequent to 2008,including the:Audi Q5;Volkswagen Golf;Porsche Panamera;Opel/Vauxhall Insignia;BMW One/Cooper Co

226、nvertible;andVolkswagen A5 Cabrio and Sportback;andacquisitions completed during or subsequent to 2008,including Cadence.These factors were partially offset by:unfavourable production(relative to industry volumes)and/or lower content on certain programs,including the:Mercedes-Benz C-Class;Porsche Ca

227、yenne and Volkswagen Touareg;Volkswagen Transporter;BMW X3;Ford Transit;Opel/Vauxhall Vivaro,Nissan Primastar and Renault Trafic;Opel Astra;Audi Q7;andHonda Civic;a decrease in reported U.S.dollar sales due to the weakening of the euro and British pound,each against the U.S.dollar;the sale of certai

228、n facilities during or subsequent to 2008;andcustomer price concessions during or subsequent to 2008.Magna International Inc.2009 Annual Report MD&A15External Production Sales Rest of WorldExternal production sales in Rest of World increased 31%or$161 million to$676 million for the year ended Decemb

229、er 31,2009compared to$515 million for the year ended December 31,2008,primarily as a result of:increased production and/or content on certain programs in China and Brazil;the launch of new programs during or subsequent to 2008 in China and Japan;andan increase in reported U.S.dollar sales as a resul

230、t of the strengthening of the Chinese Renminbi against the U.S.dollar.These factors were partially offset by:a decrease in reported U.S.dollar sales as a result of the weakening of the Brazilian real,Korean Won and South African Rand,each against the U.S.dollar;anddecreased production and/or content

231、 on certain programs,particularly in South Africa.Complete Vehicle Assembly SalesThe terms of our various vehicle assembly contracts differ with respect to the ownership of components and supplies related to theassembly process and the method of determining the selling price to the OEM customer.Unde

232、r certain contracts we are acting asprincipal and purchased components and systems in assembled vehicles are included in our inventory and cost of sales.These costsare reflected on a full-cost basis in the selling price of the final assembled vehicle to the OEM customer.Other contracts provide thatt

233、hird-party components and systems are held on consignment by us,and the selling price to the OEM customer reflects a value-addedassembly fee only.Production levels of the various vehicles assembled by us have an impact on the level of our sales and profitability.In addition,therelative proportion of

234、 programs accounted for on a full-cost basis and programs accounted for on a value-added basis also impactsour level of sales and operating margin percentage,but may not necessarily affect our overall level of profitability.Assuming nochange in total vehicles assembled,a relative increase in the ass

235、embly of vehicles accounted for on a full-cost basis has the effectof increasing the level of total sales,however,because purchased components are included in cost of sales,profitability as apercentage of total sales is reduced.Conversely,a relative increase in the assembly of vehicles accounted for

236、 on a value-added basishas the effect of reducing the level of total sales and increasing profitability as a percentage of total sales.20092008ChangeComplete Vehicle Assembly Sales$1,764$3,306-47%Complete Vehicle Assembly Volumes(Units)Full-Costed:BMW X3,Mercedes-Benz G-Class,Peugeot RCZ andSaab 93C

237、onvertible51,24497,229-47%Value-Added:Jeep Grand Cherokee,Chrysler 300,and Jeep Commander5,37628,207-81%56,620125,436-55%Complete vehicle assembly sales decreased 47%or$1.5 billion to$1.8 billion for the year ended December 31,2009 compared to$3.3 billion for the year ended December 31,2008 while as

238、sembly volumes decreased 55%or 68,816 units.The decrease in completevehicle assembly volumes is due to a combination of general economic conditions as discussed previously;the natural decline involumes as certain models that we currently assemble approach their scheduled end of production;and a decr

239、ease in reported U.S.dollar sales due to the weakening of the euro against the U.S.dollar.However,the Peugeot RCZ launched in the fourth quarter of2009 and several new complete vehicle assembly programs have been awarded and are scheduled to launch throughout 2010 to2013.Magna International Inc.2009

240、 Annual Report MD&A16Tooling,Engineering and OtherTooling,engineering and other sales decreased 16%or$0.3 billion to$1.6 billion for the year ended December 31,2009 comparedto$1.9 billion for the year ended December 31,2008.In the year ended December 31,2009,the major programs for which we recorded

241、tooling,engineering and other sales were the:MINI Cooper,Clubman and Crossman;Chevrolet Silverado and GMC Sierra;Porsche Panamera;Opel/Vauxhall Astra;Audi Q5;BMW X3;Porsche Boxster and Cayman;Porsche Cayenne;Mercedes-Benz M-Class;Peugeot RCZ;Cadillac SRX and Saab 9-4X;Ford F-Series;andMercedes-Benz

242、C-Class.In the year ended December 31,2008,the major programs for which we recorded tooling,engineering and other sales were the:MINI Cooper,Clubman and Crossman;BMW Z4,X3 and 1-Series;GMs full-size pickups;Cadillac SRX and Saab 9-4X;Mazda 6;Porsche 911/Boxster;Mercedes-Benz M-Class;Chevrolet Equino

243、x,Pontiac Torrent and Suzuki XL7;Ford F-Series;Lincoln MKS;andAudi A5.In addition,tooling,engineering and other sales decreased as a result of the weakening of the euro and Canadian dollar,each againstthe U.S.dollar.Gross MarginGross margin decreased$1.0 billion to$1.7 billion for 2009 compared to$2

244、.7 billion for 2008 while gross margin as a percentage oftotal sales decreased to 9.6%for 2009 compared to 11.5%for 2008.The unusual items discussed in the Unusual Items sectionnegatively impacted gross margin as a percentage of total sales in 2008 by 0.3%.Excluding unusual items,gross margin as ape

245、rcentage of total sales decreased by 2.2%.Significant Items also negatively impacted gross margin by approximately$125 millionand$70 million in 2009 and 2008,respectively.In addition,gross margin as a percentage of total sales was negatively impacted by:lower gross margin earned due to the significa

246、nt decline in vehicle production volumes;costs incurred in preparation for upcoming launches primarily in Europe;electric vehicle development costs;operational inefficiencies and other costs at certain facilities;a favourable revaluation of warranty accruals during 2008;costs incurred to develop and

247、 grow our electronics capabilities;additional supplier insolvency costs;increased commodity costs;andnet customer price concessions subsequent to 2008.These factors were partially offset by:the benefit of restructuring and downsizing activities and cost saving initiatives(including employee reductio

248、ns,short work weekschedules and benefit plan changes)undertaken during or subsequent to 2008;productivity and efficiency improvements at certain facilities;a decrease in complete vehicle assembly sales which have a lower gross margin than our consolidated average;no employee profit sharing for 2009;

249、andthe decrease in tooling and other sales that earn low or no margins.Magna International Inc.2009 Annual Report MD&A17Depreciation and AmortizationDepreciationandamortizationcostsdecreased16%or$136millionto$737millionfor2009comparedto$873millionfor2008.Thedecreasein depreciation and amortization w

250、as primarily as a result of:the impairment of certain assets during 2008,in particular at a powertrain systems facility in the United States and certaininteriors and exteriors systems facilities in North America;the sale or disposition of certain facilities during or subsequent to 2008;anda decrease

251、 in reported U.S.dollar depreciation and amortization due to the weakening of the Canadian dollar and euro,eachagainst the U.S.dollar.These factors were partially offset by acquisitions and capital spending during or subsequent to 2008.Selling,General and Administrative(SG&A)SG&A expense as a percen

252、tage of sales was 7.3%for 2009,compared to 5.6%for 2008.The unusual items discussed in the UnusualItems section negatively impacted SG&A as a percentage of total sales in 2009 by 0.1%and positively impacted SG&A as apercentage of total sales in 2008 by 0.4%.Excluding these unusual items,SG&A as a pe

253、rcentage of total sales increased 1.2%.SG&A expense decreased 4%or$58 million to$1.26 billion for 2009 compared to$1.32 billion for 2008.Excluding the unusual itemsrecorded in 2009 and 2008(as discussed in the Unusual Items section),SG&A expenses decreased by$180 million.SignificantItems also negati

254、vely impacted SG&A by approximately$95 million and$15 million in 2009 and 2008,respectively.In addition,SG&Awas positively impacted by:cost saving initiatives,including reduced discretionary spending,employee reductions,reduced bonuses,voluntary wagereductions and benefit plan changes;reduced spendi

255、ng at certain facilities as a result of restructuring and downsizing activities that were initiated during or subsequentto 2008;a decrease in reported U.S.dollar SG&A expense due to the weakening of the Canadian dollar and euro,each against the U.S.dollar;andthe sale or disposition of certain facili

256、ties during or subsequent to 2008.These factors were partially offset by acquisitions completed during or subsequent to 2008,including Cadence.Impairment ChargesImpairment charges decreased$100 million to$183 million for 2009 compared to$283 million for 2008 as discussed in the UnusualItems section.

257、Earnings(Loss)before Interest and Taxes(EBIT)(1)Refer to note 25 of the accompanying 2009 audited consolidated financial statements,which describes our operating segments andbasis of segmentation.SalesEBIT20092008Change20092008ChangeNorth America$8,146$11,826$(3,680)$(113)$(106)$(7)Europe8,46711,301

258、(2,834)(415)241(656)Rest of World734560174433211Corporate and Other20173(19)99(118)Total$17,367$23,704$(6,337)$(504)$266$(770)Magna International Inc.2009 Annual Report MD&A18(1)EBIT is defined as income(loss)from operations before income taxes as presented on our unaudited interim consolidatedfinan

259、cial statements before net interest expense(income).Included in EBIT for years ended December 31,2009 and 2008 were the following unusual items,which have been discussed in theUnusual Items section above.20092008North AmericaImpairment charges$(113)$(275)Restructuring charges(6)(84)Curtailment gain2

260、6(93)(359)EuropeImpairment charges(70)(8)Restructuring charges(20)Sale of facility(8)(98)(8)Corporate and OtherForeign currency gain116$(191)$(251)North AmericaEBIT in North America decreased$7 million to a loss of$113 million for the year ended December 31,2009 compared to a loss of$106 million for

261、 the year ended December 31,2008.Excluding the North American unusual items discussed in the Unusual Itemssection,the$273 million decrease in EBIT was substantially due to decreased margins earned on reduced sales as a result ofsignificantly lower vehicle production volumes.Significant Items includi

262、ng,downsizing and other restructuring activities;acceleratedamortization of deferred wage buydown assets;and settlement on research and development incentives also negatively impactedEBIT in North America by approximately$85 million and$40 million in 2009 and 2008,respectively.In addition,EBIT was n

263、egativelyimpacted by:electric vehicle development costs;additional supplier insolvency costs;increased commodity costs;costs incurred to develop and grow our electronics capabilities;higher warranty costs;andnet customer price concessions subsequent to 2008.These factors were partially offset by:the

264、 benefit of restructuring and downsizing activities and cost saving initiatives(including reduced discretionary spending,employee reductions,reduced bonuses,and benefit plan changes)undertaken during or subsequent to 2008;lower affiliation fees paid to corporate;no employee profit sharing for 2009;p

265、roductivity and efficiency improvements at certain facilities;andincremental margin earned related to the acquisition from Plastech.EuropeEBITinEuropedecreased$656milliontoalossof$415millionfortheyearendedDecember31,2009comparedtoearningsof$241millionfor the year ended December 31,2008.Excluding the

266、 European unusual items discussed in the Unusual Items section,the$566 milliondecrease in EBIT was substantially due to decreased margins earned on reduced sales as a result of significantly lower vehicleproduction volumes.Significant Items including,downsizing and other restructuring activities;acc

267、ounts receivable valuationallowances;write-off of uncollectable pre-production costs incurred related to the cancelation of an assembly program;and costsrelated to the delay in the start of production in a program also negatively impacted EBIT in Europe by approximately$110 millionand$5 million in 2

268、009 and 2008,respectively.In addition,EBIT was negatively impacted by:costs incurred in preparation for upcoming launches or for programs that have not fully ramped up production;costs incurred at new facilities in Russia as we continue to pursue opportunities in this market;operational inefficienci

269、es and other costs at certain facilities;a favourable revaluation of warranty accruals during 2008;costs incurred to develop and grow our electronics capabilities;andnet customer price concessions subsequent to 2008.Magna International Inc.2009 Annual Report MD&A19These factors were partially offset

270、 by:productivity and efficiency improvements at certain facilities;incremental margin earned related to the acquisition of Cadence;lower affiliation fees paid to corporate;the benefit of cost saving initiatives,including reduced discretionary spending,employee reductions,short work week schedules,re

271、duced bonuses and voluntary wage reductions;lower commodity costs;andthe sale of certain underperforming divisions during or subsequent to 2008.Rest of WorldEBIT in Rest of World increased$11 million to$43 million for the year ended December 31,2009 compared to$32 million for theyear ended December

272、31,2008 primarily as a result of incremental margin earned on new programs that launched during orsubsequent to 2008 in China partially offset by costs incurred at new facilities,substantially in India and Japan.Corporate and OtherCorporate and Other EBIT decreased$118 million to a loss of$19 millio

273、n for the year ended December 31,2009 compared to earningsof$99 million for the year ended December 31,2008.Excluding the Corporate and Other unusual items discussed in the UnusualItems section,EBIT decreased by$2 million.Significant Items including,due diligence costs associated with our planned in

274、vestmentin Opel,which terminated during the fourth quarter of 2009;adjustments of our investment in ABCP;and other losses on disposalof assets also negatively impacted EBIT in Corporate and Other by approximately$25 million and$40 million in 2009 and 2008,respectively.In addition,EBIT was negatively

275、 impacted by:a decrease in affiliation fees earned from our divisions;anda decrease in equity income earned.These factors were partially offset by:the benefit of cost saving initiatives,including reduced discretionary spending,employee reductions,short work week schedules,reduced bonuses,voluntary w

276、age reductions and benefit plan changes;decreased executive compensation;costs incurred in the fourth quarter of 2008 related to electric vehicle development;andlower charitable and social contributions.Interest Expense(Income),netDuring 2009,we recorded net interest expense of$7 million,compared to

277、$62 million of net interest income for 2008.The$69 milliondecrease in net interest income is as a result of:a decrease in interest income earned on lower cash and cash equivalent balances;a decrease in interest income earned due to lower interest rates;andan increase in interest expense paid on high

278、er short-term borrowings.These factors were partially offset by a reduction in interest expense on long-term debt due to the repayment of our senior unsecurednotes and 7.08%Subordinated Debentures.Operating Income(Loss)Operating income decreased$839 million to a loss of$511 million for 2009 compared

279、 to income of$328 million for 2008.Excludingthe unusual items discussed in the Unusual Items section,operating income for 2009 decreased$899 million.The decrease inoperating income is the result of the decreases in EBIT(including the approximately$130 million of additional Significant Items in2009)a

280、nd net interest income earned,both as discussed above.Income TaxesOur effective income tax rate on operating income(excluding equity income)for 2009 and 2008 was significantly impacted by theunusual items discussed in the Unusual Items section.Excluding unusual items,our effective income tax rate ch

281、anged to a recoveryof 6.7%for 2009 compared to an expense of 34.8%for 2008.The change in the effective income tax rate is primarily the result ofan increase in losses not benefited primarily in Germany and Austria.Magna International Inc.2009 Annual Report MD&A20Net Income(Loss)Net income decreased$

282、564 million to a net loss of$493 million for 2009 compared to net income of$71 million for 2008.Excluding theunusual items discussed in the Unusual Items section,net income decreased$682 million.This decrease in net income is the resultof the decrease in operating income partially offset by lower in

283、come taxes,both as discussed above.Earnings(Loss)per Share20092008ChangeEarnings(loss)per Class A Subordinate Voting or Class B ShareBasic$(4.41)$0.63$(5.04)Diluted$(4.41)$0.62$(5.03)Average number of Class A Subordinate Votingand Class B Shares outstanding(millions)Basic111.8112.8-1%Diluted111.8113

284、.9-2%Diluted earnings per share decreased$5.03 to a loss of$4.41 for 2009 compared to earnings of$0.62 for 2008.Excluding the unusualitems,discussed in the Unusual Items section,diluted earnings per share decreased$6.04 from 2008 as a result of a decrease innet income(excluding unusual items)describ

285、ed above and a decrease in the weighted average number of diluted shares outstandingduring 2009.The decrease in the weighted average number of diluted shares outstanding was primarily due to the effect of the repurchase andcancelation of our Class A Subordinate Voting Shares in 2008 under the terms

286、of our Normal Course Issuer Bid and a decrease in thenumber of diluted shares associated with restricted stock and stock options since such shares were anti-dilutive in 2009.FINANCIAL CONDITION,LIQUIDITY AND CAPITAL RESOURCESCash Flow from Operations20092008ChangeNet income(loss)$(493)$71Items not i

287、nvolving current cash flows1,1141,2586211,329$(708)Changes in non-cash operating assets and liabilities(94)(275)Cash provided from operating activities$527$1,054$(527)Cash flow from operations before changes in non-cash operating assets and liabilities decreased$708 million to$621 million for2009 co

288、mpared to$1.3 billion for 2008.The decrease in cash flow from operations was primarily due to the$564 million decreasein net income,as discussed above,and a$223 million decrease in non-cash unusual items,$136 million reduction in depreciation andamortization offset in part by a$187 million increase

289、in future taxes.Cashinvestedinnon-cashoperatingassets andliabilitiesamountedto$94 millionfor 2009 compared to$275 millionfor 2008.Thechangein non-cash operating assets and liabilities is comprised of the following sources(and uses)of cash:20092008Accounts receivable$(40)$826Inventories17(124)Income

290、taxes receivable(104)(232)Prepaid expenses and other6(70)Accounts payable241(493)Accrued salaries and wages(92)(98)Other accrued liabilities(108)(58)Deferred revenue(14)(26)Changes in non-cash operating assets and liabilities$(94)$(275)Magna International Inc.2009 Annual Report MD&A21The increase in

291、 accounts receivable and accounts payable in 2009 was primarily due to higher sales in the fourth quarter of 2009compared to the fourth quarter of 2008.The decrease in inventories relates to several tooling programs in North America and Europeand depletion of production inventory builds due to incre

292、ased production volumes.The increase in income taxes receivable wasprimarily due to losses that are being carried back to prior years and higher refunds in North America.The decrease in other accruedliabilities is primarily a result of the payments during 2009 of restructuring costs that were accrue

293、d as at December 31,2008.Capital and Investment Spending20092008ChangeFixed asset additions$(629)$(739)Investments and other assets(227)(231)Fixed assets,investments and other assets additions(856)(970)Purchase of subsidiaries(50)(158)Proceeds from disposition3065Cash used for investing activities$(

294、876)$(1,063)$187Fixed and other assets additionsIn 2009,we invested$629 million in fixed assets.While investments were made to refurbish or replace assets consumed in thenormal course of business and for productivity improvements,a large portion of the investment in 2009 was for manufacturingequipme

295、nt for programs that will be launching subsequent to 2009.In 2009,we invested$227 million in other assets related substantially to fully reimbursable planning and engineering and tooling costsat our complete vehicle engineering and assembly operations and our roof systems operations for programs tha

296、t will be launchingsubsequent to 2009.Purchase of subsidiariesDuring 2009,we invested$50 million to purchase subsidiaries,including the acquisition of:Cadence,a manufacturer of exterior and interior systems.The acquired business is primarily located in the Czech Republic withsales to various custome

297、rs,including Skoda;andseveral facilities from Meridian.The facilities are located in the United States and Mexico and manufacture composites forvarious customers.During 2008,we invested$158 million to purchase subsidiaries,including the acquisition of:a facility from Ogihara America Corporation;a su

298、bstantial portion of the exteriors business and related assets from Plastech;BluWav Systems LLC;andTechnoplast.Proceeds from dispositionProceeds from disposition in 2009 and 2008 were$30 million and$65 million,respectively,which represent normal course fixed andother asset disposals.Financing2009200

299、8ChangeIncrease(decrease)in bank indebtedness$(853)$827Repayments of debt(296)(354)Issues of debt53Issues of Class A Subordinate Voting Shares2Settlement of stock appreciation rights(1)Repurchase of Class A Subordinate Voting Shares(247)Cash dividends paid(21)(140)Cash provided from(used for)financi

300、ng activities$(1,164)$89$(1,253)Magna International Inc.2009 Annual Report MD&A22In December 2008,in response to the uncertainty related to the financial viability of some of our key customers in North America,we drew down on our term and operating lines of credit.In February and March 2009,as the s

301、ituation facing some of our keycustomers became clearer,we repaid$767 million of the outstanding lines of credit.The repayments of debt in 2009 consists primarily of the repayment of our 7.08%Subordinated Debentures in September 2009 andour 6.5%Convertible Subordinated Debentures in December 2009.Du

302、ring 2009,cash dividends of$21 million were paid on the Class A Subordinate Voting or Class B Shares in the first quarter of 2009.This compares to cash dividends of$140 million in 2008.During the second quarter of 2009,our Board of Directors suspendedpayment of dividends and,as a result,no cash divi

303、dends were paid on our Class A Subordinate Voting or Class B Shares for theremainder of 2009.Financing ResourcesAs atAs atDecember 31,December 31,20092008ChangeLiabilitiesBank indebtedness$48$909Long-term debt due within one year16157Long-term debt1151431791,209Shareholders equity7,3607,363Total cap

304、italization$7,539$8,572$(1,033)Total capitalization decreased by$1.03 billion to$7.54 billion at December 31,2009 compared to$8.57 billion at December 31,2008.The decrease in capitalization was a result of a$1.03 billion decrease in liabilities.The decrease in liabilities is primarily as a result of

305、 a$767 million repayment on our outstanding lines of credit in the first quarter of 2009,the repayment of our 7.08%Subordinated Debentures during the third quarter of 2009 and the repayment of our 6.5%ConvertibleSubordinated Debentures during the fourth quarter of 2009.These decreases were partially

306、 offset by debt assumed on the acquisitionof Cadence.The decrease in shareholders equity was primarily as a result of:the net loss incurred during 2009;anddividends paid during the first quarter of 2009.These factors were partially offset by:a$407 million increase in accumulated net unrealized gains

307、 on translation of our net investment in foreign operations,primarilyasaresultofthestrengtheningoftheCanadiandollar,euroandBritishpound,eachagainsttheU.S.dollarbetweenDecember31,2008and December 31,2009;andnet unrealized gains on cash flow hedges and the reclassification of net losses on cash flow h

308、edges from accumulated othercomprehensive income to net loss.Cash ResourcesDuring 2009,our cash resources decreased by$1.4 billion to$1.3 billion primarily as a result of the net repayment of$0.9 billion onour outstanding lines of credit,cash used in investing activities,the repayment of our 7.08%Su

309、bordinated Debentures and therepayment of our 6.5%Convertible Subordinate Debentures,all as discussed previously.In addition to our cash resources,we hadterm and operating lines of credit totalling$2.1 billion.The unused and available portion of our lines of credit increased$0.9 billion to$1.9 billi

310、on during 2009 due to the net repayment on our operating lines.In addition,at December 31,2009,we held Canadian third party ABCP with a face value of Cdn$134 million and a carrying value ofCdn$88 million,which was based on a valuation technique that estimates the fair value based on relevant current

311、 market indices forinstruments of comparable credit quality,term and structure(current market indices).During 2009,we recorded a$9 million increase in the carrying value of our investment in ABCP due to a tightening of the spreadbetween the anticipated return on the restructured notes and the curren

312、t market indices.Magna International Inc.2009 Annual Report MD&A23Maximum Number of Shares IssuableThe following table presents the maximum number of shares that would be outstanding if all of the outstanding options issued andoutstanding at March 9,2010 were exercised or converted:Class A Subordina

313、te Voting and Class B Shares112,646,332Stock options(i)3,468,300116,114,632(i)Options to purchase Class A Subordinate Voting Shares are exercisable by the holder in accordance with the vesting provisionsand upon payment of the exercise price as may be determined from time to time pursuant to our sto

314、ck option plans.On February 26,2010,we conditionally granted options to acquire 2,525,000 Class A Subordinate Voting Shares each with anexercise price of either Cdn$60.00(being the closing price of the Class A Subordinate Voting Shares on the Toronto StockExchange on such date)or$56.99(being the clo

315、sing price of the Class A Subordinate Voting Shares on The New York StockExchange on such date).These options were granted pursuant to our 2009 Stock Option Plan,which remains subject toratification by our shareholders at our Annual and Special Meeting of Shareholders to be held on May 6,2010.This c

316、onditionaloption grant is not included in the maximum number of shares issuable at March 9,2010.Contractual Obligations and Off-Balance Sheet FinancingAt December 31,2009,we had contractual obligations requiring annual payments as follows:20102011-20122013-2014ThereafterTotalOperating leases with:MI

317、 Developments Inc.(MID)$150$296$284$422$1,152Third parties12819112999547Long-term debt1684922131Total contractual obligations$294$571$422$543$1,830We had no unconditional purchase obligations other than those related to inventory,services,tooling and fixed assets in the ordinarycourse of business.Ou

318、r unfunded obligations with respect to employee future benefit plans,which have been actuarially determined,were$295 millionat December 31,2009.These obligations are as follows:Termination andPensionRetirementLong ServiceLiabilityLiabilityArrangementsTotalProjected benefit obligation$310$43$210$563L

319、ess plan assets(218)(218)Unfunded amount9243210345Unrecognized past service costs and actuarial gains(losses)(57)23(16)(50)Amount recognized in other long-term liabilities$35$66$194$295Our off-balance sheet financing arrangements are limited to operating lease contracts.The majority of our facilitie

320、s are subject to operating leases with MID or with third parties.Operating lease payments in 2009 forfacilities leased from MID and third parties were$149 million and$131 million,respectively.Operating lease commitments in 2010for facilities leased from MID and third parties are expected to be$150 m

321、illion and$128 million,respectively.Our existing leases withMID generally provide for periodic rent escalations based either on fixed-rate step increases,or on the basis of a consumer price indexadjustment(subject to certain caps).We also have operating lease commitments for equipment.These leases a

322、re generally of shorter duration.Operating lease paymentsfor equipment were$42 million for 2009,and are expected to be$41 million in 2010.Although our consolidated contractual annual lease commitments decline year by year,we expect that existing leases will either berenewed or replaced,or alternativ

323、ely,we will incur capital expenditures to acquire equivalent capacity.Magna International Inc.2009 Annual Report MD&A24Foreign Currency ActivitiesOur North American operations negotiate sales contracts with OEMs for payment in both U.S.and Canadian dollars.Materials andequipment are purchased in var

324、ious currencies depending upon competitive factors,including relative currency values.The NorthAmerican operations use labour and materials which are paid for in both U.S.and Canadian dollars.Our Mexican operations generallyuse the U.S.dollar as the functional currency.Our European operations negoti

325、ate sales contracts with OEMs for payment principally in euros and British pounds.The Europeanoperations material,equipment and labour are paid for principally in euros and British pounds.We employ hedging programs,primarily through the use of foreign exchange forward contracts,in an effort to manag

326、e our foreignexchange exposure,which arises when manufacturing facilities have committed to the delivery of products for which the sellingprice has been quoted in foreign currencies.These commitments represent our contractual obligations to deliver products over theduration of the product programs,w

327、hich can last a number of years.The amount and timing of the forward contracts will be dependentupon a number of factors,including anticipated production delivery schedules and anticipated production costs,which may be paidin the foreign currency.In addition,we enter into foreign exchange contracts

328、to manage foreign exchange exposure with respect tointernal funding arrangements.Despite these measures,significant long-term fluctuations in relative currency values,in particular asignificant change in the relative values of the U.S.dollar,Canadian dollar,euro or British pound,could have an advers

329、e effect on ourprofitability and financial condition(as discussed throughout this MD&A).RELATED PARTIESMr.Frank Stronach and Ms.Belinda Stronach,Magnas Chairman and Executive Vice-Chairman,respectively,together with two othermembers of the Stronach family,are trustees and members of the class of pot

330、ential beneficiaries of the Stronach Trust.The StronachTrust indirectly holds shares which represent a 100%voting interest in 447 Holdings Inc.,a holding company,which controls Magnathrough the right to direct the votes attaching to 100%of Magnas Class B Shares.The Stronach Trust controls MID and th

331、ereforeMagna Entertainment Corp.(MEC)until March 5,2009(the date MEC filed for creditor protection in the United States),through theright to direct the votes attaching to 66%of MIDs Class B Shares.In the normal course of business,Magna leases various land andbuildings from MID under operating lease

332、agreements,which are effected on normal commercial terms.The leases are measuredat the exchange amount,which is the amount of consideration established and agreed to by the related parties.Lease expenseincluded in the consolidated statements of(loss)income and comprehensive(loss)income with respect

333、to MID for the year endedDecember 31,2009 and 2008 was$149 million and$156 million,respectively.Included in accounts payable are trade amounts owingtoMIDanditssubsidiariesof$0.5million(2008-$0.4million).Includedinaccounts receivable areamounts owedfromMECof$1.1million(2008-$0.6 million).During the first quarter of 2010,we entered into an agreement to sell an office building located in Vienna,Austr