Magna International Inc. - OMEGA

One of Intier’s customers is requesting reimbursement for warranty costs as well as additional expenses which it expects to
incur as a result of a voluntary customer satisfaction-based recall of a product which forms part of a module supplied by Intier
to the customer. The product in question is supplied to Intier by another large supplier that Intier was directed to use by its
customer. The customer has claimed that the warranty and future recall costs could aggregate up to $42 million. Based on Intier's
investigations to date, Intier does not believe that it has any liability for this claim and that any liability that it may become subject
to, if it is established that the product is defective, will be recoverable from the supplier of the product, although Intier cannot
provide assurance that this will be the case.
We were previously named as defendants, along with one of our subsidiaries, in a number of class actions brought by
plaintiffs claiming compensatory and punitive damages in relation to unpaid work (forced/slave labour) performed by the plaintiffs
during World War II. All of these actions involved multiple named defendants. In November 2000, orders for Voluntary Dismissal
with Prejudice were entered in the District Court, District of New Jersey dismissing most of the class actions, including nine of
ten cases specifically naming us and/or our subsidiary. We have filed a motion to dismiss the final case in which we and our
subsidiary have been named and the U.S. Government has filed a Statement of Interest based on the slave labour and property
settlements with the Austrian Government. As a result, we have assessed the current status of the legal proceedings and believe
the ultimate resolution will not have a material adverse effect on our consolidated financial position.
In the ordinary course of business activities, we may be contingently liable for litigation and claims with customers, suppliers
and former employees. Our management believes that adequate provisions are recorded in the accounts where required and when
estimable. However, there can be no assurance that we will not incur additional expense.
INTELLECTUAL PROPERTY
We own and use numerous patents and patent applications in connection with our automotive operations. We are also
licensed to use patents or technology owned by others. From time to time claims of patent infringement are made by or against
us. None of the claims against us has had, and we believe that none of the current claims will have, a material adverse effect upon
us. While in the aggregate our patents and licenses are considered important in the operation of our business, we do not consider
them of such importance that their expiry would materially affect our business.
RISK FACTORS
The industry in which we compete and the business we conduct are subject to a number of risk and uncertainties. These risks
and uncertainties, together with certain assumptions, also underlie the forward-looking statements made in this Annual
Information Form. In order to fully understand these risks, uncertainties and assumptions, you should carefully consider the
following risk factors in addition to other information included in this Annual Information Form.
Risks Relating to the Automotive Industry
An economic downturn could reduce our profitability
Our automotive operations are directly related to levels of global automotive production. The global automotive industry is
cyclical and is sensitive to changes in certain economic conditions such as interest rates and consumer demand. The rate of
overall economic growth in North America and Europe slowed significantly in 2001, partially due to the events of September 11.
A series of interest rate cuts by the Federal Reserve Bank in the United States, the Bank of Canada and central banks in other
countries have led to historically low interest rate levels in many of these countries. Low interest rates, together with a variety
of incentives offered by automobile manufacturers have recently led to strong levels of consumer demand for such items as
automobiles and resulted in increases in production volumes for certain vehicle platforms, thus indicating that the economic
slowdown which commenced in 2001 may be over and an economic recovery underway. Nevertheless, significant economic
uncertainty remains in North America, Europe and the rest of the world. A decline in consumer demand for automobiles as a result
of a loss of confidence in the economy, reduction in vehicle incentive programs by automobile manufacturers, interest rate
increases or other factors could prompt automobile manufacturers to cut production volumes. Any material decline in production
volumes in either of our North American or European markets could significantly lower our profit margins.
We face increasing price reduction pressures from our customers that could reduce our profit margins
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