AURORA, Ontario, August 6 /PRNewswire/ -- Magna International Inc. (TSX: MG.A; NYSE: MGA) today reported financial results for the second quarter and six months ended June 30, 2008.

------------------------------------------------------------------------ THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ---------------------- -------------------- 2008 2007 2008 2007 ---- ---- ---- ---- Sales US$ 6,713 US$ 6,731 US$ 13,335 US$ 13,154 Operating income US$ 319 US$ 377 US$ 605 US$ 682 Net income US$ 227 US$ 262 US$ 434 US$ 480 Diluted earnings per share US$ 1.98 US$ 2.35 US$ 3.75 US$ 4.32 ------------------------------------------------------------------------ All results are reported in millions of U.S. dollars, except per share figures, which are in U.S. dollars. ------------------------------------------------------------------------

THREE MONTHS ENDED JUNE 30, 2008

--------------------------------

We posted sales of US$6.7 billion for the second quarter ended June 30, 2008, substantially unchanged over the second quarter of 2007. Increases in our European and Rest of World production sales were offset by reductions in North American production sales, complete vehicle assembly sales and tooling, engineering and other sales.

During the second quarter of 2008, our North American and European average dollar content per vehicle increased 2% and 23% respectively, over the second quarter of 2007. Also, during the second quarter of 2008, North American vehicle production declined 14% while European vehicle production was essentially unchanged, each compared to the second quarter of 2007.

Complete vehicle assembly sales decreased 1% to US$1.054 billion for the second quarter of 2008 compared to US$1.064 billion for the second quarter of 2007, while complete vehicle assembly volumes declined 28% to 39,726 units compared to the second quarter of 2007.

During the second quarter of 2008, operating income was US$319 million, net income was US$227 million and diluted earnings per share were US$1.98. Operating income decreased US$58 million, net income decreased US$35 million, and diluted earnings per share decreased US$0.37, each compared to the second quarter of 2007.

During the three months ended June 30, 2008, we generated cash from operations before changes in non cash operating assets and liabilities of US$483 million, and invested US$279 million in non cash operating assets and liabilities. Total investment activities for the second quarter of 2008 were US$366 million, including US$187 million in fixed asset additions, US$97 million to purchase subsidiaries and an US$82 million increase in investments and other assets.

During the second quarter ended June 30, 2008, we purchased for cancellation 1.9 million Class A Subordinate Voting Shares for cash consideration of US$134 million, pursuant to the terms of our normal course issuer bid program.

SIX MONTHS ENDED JUNE 30, 2008

------------------------------

We posted sales of US$13.3 billion for the six months ended June 30, 2008, an increase of 1% over the six months ended June 30, 2007. Increases in our European and Rest of World production sales were partially offset by reductions in North American production sales, complete vehicle assembly sales, and tooling, engineering and other sales.

During the six months ended June 30, 2008, North American and European average dollar content per vehicle increased 4% and 22%, respectively, each over the comparable six-month period in 2007. During the six months ended June 30, 2008, North American and European vehicle production declined 12% and 1%, respectively, each from the comparable six-month period in 2007.

Complete vehicle assembly sales decreased 1% to US$2.140 billion for the six months ended June 30, 2008 compared to US$2.168 billion for the six months ended June 30, 2007, while complete vehicle assembly volumes declined 28% to 83,272 units compared to the first six months of 2007.

During the six months ended June 30, 2008, operating income was US$605 million, net income was US$434 million and diluted earnings per share were US$3.75. Operating income decreased US$77 million, net income decreased US$46 million, and diluted earnings per share decreased US$0.57, each compared to the first six months of 2007.

During the six months ended June 30, 2008, we generated cash from operations before changes in non cash operating assets and liabilities of US$925 million, and invested US$497 million in non cash operating assets and liabilities. Total investment activities for the first six months of 2008 were US$534 million, including US$315 million in fixed asset additions, US$105 million to purchase subsidiaries, and a US$114 million increase in investments and other assets.

During the first six months of 2008, we purchased for cancellation 3.5 million Class A Subordinate Voting Shares for cash consideration of US$247 million, pursuant to the terms of our normal course issuer bid program.

A more detailed discussion of our consolidated financial results for the second quarter and six months ended June 30, 2008 is contained in the Management's Discussion and Analysis of Results of Operations and Financial Position, and the unaudited interim consolidated financial statements and notes thereto, which are attached to this Press Release.

DIVIDENDS

---------

Today, our Board of Directors declared a quarterly dividend with respect to our outstanding Class A Subordinate Voting Shares and Class B Shares for the quarter ended June 30, 2008. The dividend of U.S. US$0.36 per share is payable on September 15, 2008 to shareholders of record on August 29, 2008.

2008 OUTLOOK

------------

We have significantly reduced our expectations for 2008 light vehicle production volumes in North America. For the full year 2008, we now expect light vehicle production volumes of approximately 13.2 million units in North America and approximately 15.6 million units in Europe. Consequently, we expect consolidated sales to be between US$24.3 billion and US$25.6 billion for full year 2008. Full year 2008 average dollar content per vehicle is expected to be between US$850 and US$880 in North America and between US$485 and US$510 in Europe. We expect full year 2008 complete vehicle assembly sales to be between US$3.5 billion and US$3.8 billion.

In addition, we expect that full year 2008 spending for fixed assets will be in the range of US$850 million to US$900 million.

In our 2008 outlook we have assumed no significant acquisitions or divestitures, and no significant labour disruptions in our principal markets. In addition, we have assumed that foreign exchange rates for the most common currencies in which we conduct business relative to our U.S. dollar reporting currency will approximate current rates.

We are the most diversified global automotive supplier. We design, develop and manufacture technologically advanced automotive systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers ("OEMs") of cars and light trucks. Our capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; body and chassis systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; as well as complete vehicle engineering and assembly.

We have approximately 82,000 employees in 241 manufacturing operations and 62 product development and engineering centres in 23 countries.

------------------------------------------------------------------------ We will hold a conference call for interested analysts and shareholders to discuss our second quarter results on Wednesday, August 6, 2008 at 5:00 p.m. EDT. The conference call will be chaired by Vincent J. Galifi, Executive Vice-President and Chief Financial Officer. The number to use for this call is +1-800-734-8592. The number for overseas callers is +1-212-231-2900. Please call in 10 minutes prior to the call. We will also webcast the conference call at www.magna.com. The slide presentation accompanying the conference call will be available on our website Wednesday afternoon prior to the call. For further information, please contact Louis Tonelli, Vice-President, Investor Relations at +1-905-726-7035. For teleconferencing questions, please contact Karin Kaminski at +1-905-726-7103. ------------------------------------------------------------------------

FORWARD-LOOKING STATEMENTS

--------------------------

The previous discussion may contain statements that, to the extent that they are not recitations of historical fact, constitute "forward-looking statements" within the meaning of applicable securities legislation. Forward-looking statements may include financial and other projections, as well as statements regarding our future plans, objectives or economic performance, or the assumptions underlying any of the foregoing. We use words such as "may", "would", "could", "will", "likely", "expect", "anticipate", "believe", "intend", "plan", "forecast", "project", "estimate" and similar expressions to identify forward-looking statements. Any such forward-looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks, assumptions and uncertainties. These risks, assumptions and uncertainties include, without limitation: shifting OEM market shares, declining production volumes and changes in consumer demand for vehicles; a reduction in the production volumes of certain vehicles, such as certain light trucks; our ability to compete with suppliers with operations in low cost countries; our ability to offset price concessions demanded by our customers; our dependence on outsourcing by our customers; our ability to offset increases in the cost of commodities, such as steel and resins, as well as energy prices; fluctuations in relative currency values; changes in our mix of earnings between jurisdictions with lower tax rates and those with higher tax rates, as well as our ability to fully benefit tax losses; other potential tax exposures; the financial distress of some of our suppliers and customers; the inability of our customers to meet their financial obligations to us; the termination or non-renewal by our customers of any material contracts; our ability to fully recover pre-production expenses; warranty and recall costs; product liability claims in excess of our insurance coverage; expenses related to the restructuring and rationalization of some of our operations; impairment charges; our ability to successfully identify, complete and integrate acquisitions; risks associated with program launches; legal claims against us; risks of conducting business in foreign countries, including Russia; work stoppages and labour relations disputes; changes in laws and governmental regulations; costs associated with compliance with environmental laws and regulations; the fact that we may be considered to be effectively controlled, indirectly, by the Stronach Trust and OJSC Russian Machines ("Russian Machines") for so long as the governance arrangements remain in place between them; potential conflicts of interest involving the Stronach Trust and Russian Machines; the risk that the benefits, growth prospects and strategic objectives expected to be realized from the investment by, and strategic alliance with, Russian Machines may not be fully realized, may take longer to realize than expected or may not be realized at all; the possibility that the governance arrangements between the Stronach Trust and Russian Machines may terminate in certain circumstances; and other factors set out in our Annual Information Form filed with securities commissions in Canada and our annual report on Form 40-F filed with the United States Securities and Exchange Commission, and subsequent filings. In evaluating forward-looking statements, readers should specifically consider the various factors which could cause actual events or results to differ materially from those indicated by such forward-looking statements. Unless otherwise required by applicable securities laws, we do not intend, nor do we undertake any obligation, to update or revise any forward-looking statements to reflect subsequent information, events, results or circumstances or otherwise.

------------------------------------------------------------------------ For further information about Magna, please see our website at www.magna.com. Copies of financial data and other publicly filed documents are available through the internet on the Canadian Securities Administrators' System for Electronic Document Analysis and Retrieval (SEDAR) which can be accessed at www.sedar.com and on the United States Securities and Exchange Commission's Electronic Data Gathering, Analysis and Retrieval System (EDGAR) which can be accessed at www.sec.gov. ------------------------------------------------------------------------

Web site: http://www.magna.com

For further information: Louis Tonelli, Vice-President, Investor Relations at +1-905-726-7035; For teleconferencing questions, please contact Karin Kaminski at +1-905-726-7103