Magna International Inc. - OMEGA

OUR NON-AUTOMOTIVE BUSINESS STRATEGY
With respect to our non-automotive operations, all of which are conducted through MEC, we intend to grow and develop our
racetrack and pari-mutuel wagering business further by:
• Selectively acquiring additional strategic racetracks and related assets. We intend to pursue strategically important,
geographically diverse racetracks in order to increase MEC’s ownership of live racing content, thereby increasing both
the number of days in the year and hours in the day that MEC offers wagering on live and simulcast races.
• Continuing to integrate MEC’s acquisitions by employing “best practices” at its racetracks. We intend to continue
integrating MEC’s acquisitions in order to grow revenues and achieve operational synergies through implementation
of “best practices”, cost reductions realized from economies of scale and increased efficiencies.
• Expanding the distribution of live racing. We intend to further develop MEC’s simulcasting operations and its
XpressBet TM internet and telephone account wagering business, as well as new forms of account wagering, including
interactive television.
• Further developing an integrated branding and marketing strategy. We intend to combine the racing content owned
by MEC, and possibly the racing content from racetracks owned by others, and market this content under MEC’s brand
name.
• Improving the quality of the entertainment experience at MEC’s racetracks and off-track betting facilities. In
conjunction with strategic partners, we intend to develop leisure and entertainment-based real estate projects on land
surrounding, or adjacent to, certain of MEC’s premier racetracks.
Decentralization
OPERATING STRUCTURE AND PRINCIPLES
We follow a corporate policy of functional and operational decentralization, which we believe increases flexibility, customer
responsiveness and productivity. Our operating structure contains three levels of management - divisional management,
automotive systems group management and our executive management. Our manufacturing and assembly operations are
conducted through divisions, each of which is an autonomous operating unit and profit centre under the authority of a general
manager. The general manager of each division has the discretion to determine rates of pay, hours of work, sources of supply and
contracts to be performed, within the framework of our Corporate Constitution and our Employee Charter. All of our divisions are
organized along global product lines under one of the five global automotive systems groups discussed above under “ITEM 2.
GENERAL DEVELOPMENT OF THE BUSINESS - OVERVIEW - Automotive Operations”. The management of each of our
automotive systems groups is responsible for coordinating product development, finance and marketing as well as maximizing
manufacturing efficiencies in the divisions comprising the group. Each group interfaces with customers and provides assistance
and advice to its respective divisions. Our executive management coordinates advanced systems development and manufacturing,
ensures customer satisfaction and interfaces with the investment community. Our executive management is also responsible for
our long-term strategic planning and future growth, as well as monitoring the performance of group management.
Spincos
In furtherance of our commitment to decentralization, in 1982 our shareholders approved our “spinco” policy of developing
our operating groups into self-sufficient public companies. The objective of this spinco policy was to establish one or more of
our operating groups as separate public corporations or “spincos” over a period of time, while we remained as a major shareholder.
Guidelines to implement our spinco policy were approved by our shareholders at our Annual and Special Meeting of Shareholders
held on December 10, 1987. Under these guidelines, each spinco must have a corporate constitution and share structure similar
to ours and be comprised of independent operating units which are supported by the spinco’s operations, marketing and financial
management resources and executive management. Our role is to provide operations, technical, marketing and financial
management and other services from time to time to each spinco for an agreed upon fee. Management and employees of each
spinco are to be provided an opportunity and encouraged to invest in the equity of such spinco through compensation and profit
incentive programs similar to ours. In addition, to the extent practicable, our shareholders and employees of each spinco will be
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