Linamar Corporation

Linamar Corporation

March 08, 2005 16:31 ET

Linamar Announces Fourth Quarter Results


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: LINAMAR CORPORATION

TSX SYMBOL: LNR

MARCH 8, 2005 - 16:31 ET

Linamar Announces Fourth Quarter Results

GUELPH, ONTARIO--(CCNMatthews - March 8, 2005) -

Linamar's Growth Driving Record Sales and Earnings

Linamar Corporation (TSX:LNR) ("Linamar" or "the company"), a global
supplier who designs, develops and manufactures precision machined
components, modules and systems for engine, transmission, chassis and
industrial applications primarily for the North American and European
automotive marketplace, today announced its financial results for the
fourth quarter ended December 31, 2004.

(CDN dollars in thousands except per share figures)



Three Months Ended Year Ended
December 31 December 31
2004 2003 2004 2003
---------------------------------------------------------------------
$ $ $ $

Sales 474,224 402,822 1,844,187 1,509,840
Gross Margin 60,841 53,556 236,205 195,903
Operating Earnings(1) 36,081 34,533 145,324 111,309
Earnings from Continuing
Operations 24,245 988 90,404 48,122
---------------------------------------------------------------------
Diluted Earnings per Share
from Continuing Operations 0.34 0.01 1.28 0.68
Diluted Earnings per Share 0.34 (0.02) 1.31 0.57
---------------------------------------------------------------------


Fourth Quarter Operating Highlights

Fourth quarter sales increased by 17.7% to $474.2 million compared to
$402.8 million in the same quarter last year. The full year sales growth
increased by 22.1% or $334.4 million to a level of $1,844.2 million
compared to $1,509.8 million last year. The fourth quarter increase was
lead by strong growth in North American Automotive sales related to both
light vehicles and medium/heavy trucks. This growth was the result of
the ramp up of new programs launched in recent periods (net of programs
ending), volume increases on new and established programs, and the
integration of acquisitions previously made. Total automotive sales
(North America, Europe & Tooling) increased 17.0% to $1,498.8 million
representing 81.3% of the company's total sales in 2004. In addition,
substantial growth occurred in the company's non-automotive businesses
which recorded sales of $345.4 million in 2004, an increase of 51.2%
over 2003.



(1) Operating earnings, as used by the company throughout this press
release, is a non-GAAP measure. Management of Linamar Corporation use
operating earnings in the monitoring of the performance of the
business specifically at the segmented level. Operating earnings is
calculated by the company as gross margin less selling, general and
administrative expenses.

Three Months Ended Year Ended
December 31 December 31
2004 2003 2004 2003
---------------------------------------------------------------------
$ $ $ $

Gross margin 60,841 53,556 236,205 195,903
Selling, general and
Administrative 24,760 19,023 90,881 84,594
---------------------------------------------------------------------
Operating earnings 36,081 34,533 145,324 111,309
---------------------------------------------------------------------


The non-GAAP financial measure does not have standard meaning and may
not be comparable to similar measures used by other issuers.


The effect of the stronger Canadian dollar compared with the U.S. dollar
in the fourth quarter of 2004 versus the fourth quarter of 2003 reduced
automotive sales by an estimated $27.0 million and for the full year at
$49.5 million. Sales would therefore have increased by 21.1% and 25.4%
for the quarter and year, respectively.

The operating earnings for the fourth quarter improved to $36.1 million
from $34.5 million, an improvement of 4.5% over the same quarter of
2003. Operating earnings for the year are $145.3 million, representing
an increase of 30.5% over the prior year's level of $111.3 million.
Geographic earnings remained relatively flat during the quarter whereas
for the year notable improvements have been made in Canada, Mexico, and
Europe. Segmented operating earnings are flat for the quarter. The
company's new Industrial segment is now shown separately because it
achieved a level requiring such disclosure.

Earnings from continuing operations for the fourth quarter of 2004 were
$24.2 million or 5.1% of sales compared to $16.8 million or 4.1% of
sales, net of the sales termination charge, for the comparable quarter
in the prior year. Excluding the fourth quarter 2003 sales termination
charge the earnings from continuing operations increased by $26.5
million or 41.4% for the year. Diluted earnings per share from
continuing operations for the quarter increased to $0.34 compared to
$0.01 last year or, excluding the sales termination charge, $0.23. For
the year, diluted earnings per share from continuing operations is $1.28
as compared to $0.68 in 2003.

North American content per vehicle for the quarter grew by 21.5% to
$89.34 per vehicle compared to $73.53 for the same quarter in the prior
year. For the year, compared to 2003, content grew 18.4% to $81.52 from
$68.83. European content per vehicle for the quarter declined by 5.0% to
$7.57 per vehicle. Compared to 2003 for the year, content remained flat
at $7.73 compared to $7.71.

The company's $120.0 million U.S. dollar private placement closed on
October 14, 2004 with the proceeds being used to reduce short-term bank
borrowings.

A more detailed discussion of the consolidated results for the quarter
and the year ended December 31, 2004, is contained in the Management
Discussion and Analysis ("MD&A") following the separately released
annual consolidated financial statements.

Dividends

The Board of Directors today declared a dividend of CDN$0.06 per share
on the common shares of the company, payable on or after March 31, 2005
to shareholders of record on March 22, 2005.

Outlook

During the next few years, the company anticipates continued growth in
both sales and earnings. Linamar is expecting to launch new programs as
well as see existing programs achieve their anticipated levels of
production such that growth in content per vehicle for 2005 is
forecasted at 10-15% in North America and 5-10% in Europe.

Sales growth projections are based on program launches which include
transmission business (such as differential cases for DaimlerChrysler
and Eaton, WK transmission carriers and differential cases, Ford Motor
Company 6R and 6F transmission components, other transmission carriers,
as well as output and coupler shafts) engines business (such as 3.7L
crankshafts, 4.0L, 3.5L, 3.9L and Gen IV and NG6 camshafts, 6.1L engine
block) and continued strength in the industrial products category.
Linamar also supplies the medium and heavy truck markets. In 2004, those
markets recovered significantly. Expectations are for continued strength
in 2005 and beyond, softening in 2007.

Earnings growth expectations are based on the launch and sales ramp-ups
of the programs noted and the maturity of other programs where
efficiencies of production are achieved and maintained. The earnings
expectation also assumes that the progress made in the past several
years in Mexico will be maintained and on-going performance will also
show improvement. Earnings growth anticipates that LAT will launch and
ramp up its camshaft and cylinder head & block programs turning that
business from losses in 2004 and 2005 to profitable performance
beginning in 2006. The remaining European businesses based in Hungary
will also steadily grow in both sales and earnings as programs with
Denso and Delphi (common rails and hydraulic manifolds), Bosch (pump
housing) and Honeywell (turbo housings) take effect in the automotive
sectors and industrial and agricultural business show some growth. The
uncertainty in Linamar Hungary caused by the CVT program ended in 2004
when General Motors ("GM") cancelled the program. Other Linamar Hungary
product areas remain difficult to forecast and predict because markets
can be effected by the presence or lack of government subsidies
available to purchasers (i.e. agriculture), the success of customers
products that are in very competitive markets (i.e. construction
equipment products) or the market acceptance of new customers'
technologies (i.e. ATI vehicle track systems).

In Linamar's Industrial Products business, which is dominated by
Linamar's Skyjack operations, the market remains highly competitive. The
construction equipment market rebounded in 2004 and the expectation is
that the market will remain strong through 2005 and beyond, provided
economic conditions permit. In 2004, strong sales growth for Skyjack
occurred not only in North America but also in the UK and Europe.
Performance by market is very difficult to predict. The significant
increase in Skyjack sales in 2004 over 2003 is expected to moderate
somewhat in 2005 because the market will remain relatively strong
although growth will increase at a slower rate.

Overall, these expectations assume consistent levels of North American
and European automobile production, no unforeseen changes in the
existing business base, and are subject to overall economic conditions
and world political events and factors. As well, in 2005, Linamar will
continue to realize the benefits provided by the Linamar Production
System. The system is based on lean principles developed by Taiichi
Ohno, a Toyota executive.

Linamar believes that its strategy to focus on the engine, transmission
and chassis components of the automobile represent a significant
opportunity for growth as products in these applications are expected to
be the next major area of outsourcing by the OEMs over the next 10 to 20
years. Other aspects of the vehicles such as interiors, seating, and
structural components have already experienced greater levels of
outsourcing. In addition to outsourcing, management believes other
related trends include more involvement by suppliers in component and
module design, a move towards global vehicle platforms and supply base
consolidation.

Linamar believes that it is uniquely positioned with its core
competencies in precision machining and manufacturing processes in its
range of precision machined and assembled automotive and non-automotive
products. To build on this strong business base, Linamar intends to
continue to develop the organization and its capabilities by enhancing
its existing expertise to produce every machined component in the
vehicle. Linamar's strategy is to establish and develop a market
leadership position in key components and assemblies, enhancing its
design, development and testing expertise, and researching opportunities
in product and process innovation.

A key factor in Linamar's future growth strategy is the effect of
economic fluctuations in the automotive industry and specifically
vehicles produced for the markets in which Linamar participates.
Variations in these factors can have a significant impact on the
industry and Linamar.

In 2004, the company's results were negatively impacted by the
strengthening Canadian dollar relative to the U.S. dollar. The company
continues to employ a hedging strategy as well as a strategy to balance
its U.S. and Canadian dollar cash flows to mitigate these risks.

As a result of current levels of consumer spending on automobiles, the
OEMs are constantly facing volume challenges which are reflected in the
results of Linamar through reduced volumes on some existing programs.
The OEMs do, however, continue to outsource, although at a measured
pace, which allows Linamar to expand and diversify its product base.

Other principal challenges and risks that the company faces moving
forward are the slow pace of outsourcing by the OEMs in the powertrain
segment, the market share shift to the Japanese automakers, the shortage
of qualified technical people in the labour pool, low cost country
outsourcing (such as China) and technologies that eliminate the need for
machining.

In addition, the automotive industry continues to decrease the supply
base mainly due to the actions of the OEMs. The OEMs are actively trying
to reduce their supply base to become more manageable. Through this
reduction, there have been considerable consolidations or acquisitions
of smaller suppliers. These consolidations provide Linamar with
additional opportunities to expand the sales base.

Strategies employed to address market challenges include focusing,
through Linamar's sales and marketing organization and technical
resources, on strategic sales products and processes to meet customer
and product sales levels. Linamar is making significant capital
expenditures (as illustrated in 2004) on various new programs that
target key products and expand into assemblies and modules. Expansion
into China and Korea is also an important aspect of Linamar's growth
strategy.

Through acquisitions, Linamar has gained technologies such as the
hydroforming of camshafts, as well as the increased capacity to design,
test and validate engine powertrains and their components.



Frank Hasenfratz Linda Hasenfratz
Chairman of the Board Chief Executive Officer

Guelph, Ontario
March 8, 2005


Risk and Uncertainties (forward looking statements)

Certain information provided by Linamar in these unaudited interim
financial statements, MD&A and other documents published throughout the
year that are not recitation of historical facts may constitute forward
looking statements. The words "estimate", "believe", "expect" and
similar expressions are intended to identify forward-looking statements.
Persons reading this report are cautioned that such statements are only
predictions and the actual events or results may differ materially. In
evaluating such forward-looking statements, readers should specifically
consider the various factors that could cause actual events or results
to differ materially from those indicated by such forward-looking
statements.

Such forward-looking information may involve important risks and
uncertainties that could materially alter results in the future from
those expressed or implied in any forward-looking statements made by, or
on behalf of, Linamar.

Some risks and uncertainties may cause results to differ from current
expectations. The factors which are expected to have the greatest impact
on Linamar include but are not limited to (in the various economies in
which Linamar operates): the extent of OEM outsourcing, industry
cyclicality, trade and labour disruptions, pricing concessions and cost
absorptions, delays in program launches, the company's dependence on
certain engine and transmission programs and major OEM customers,
currency exposure, and technological developments by Linamar's
competitors.

A large proportion of the company's sales are denominated in U.S.
dollars and the company also purchases a significant amount of raw
materials, supplies and equipment in U.S. dollars. The strengthening of
the Canadian dollar has the potential to have a negative impact on
financial results. The company has employed a hedging strategy to
attempt to mitigate the impact but cannot be completely assured that the
entire exchange effect has been offset.

As a result of current levels of consumer spending on automobiles, the
OEMs are constantly facing volume challenges which are reflected in the
results of Linamar through reduced volumes on some existing programs.
The OEMs do, however, continue to outsource, although not at expected
levels, which allows Linamar to expand and diversify its product base.

Other factors and risks and uncertainties that cause results to differ
from current expectations discussed in this MD&A include, but are not
limited to: fluctuations in interest rates, environmental emission and
safety regulations, governmental, environmental and regulatory policies,
and changes in the competitive environment in which Linamar operates.
Linamar assumes no obligation to update the forward-looking statements,
or to update the reasons why actual results could differ from those
reflected in the forward-looking statements.

Alternatively, forward e-mail requests to Linzie Brown, at
linzie.brown@linamar.com, or visit Linamar's website at www.linamar.com.



LINAMAR CORPORATION
CONSOLIDATED BALANCE SHEETS
As at December 31, 2004 with comparatives as at December 31, 2003
(Unaudited)
(in thousands of dollars)

December 31 December 31
2004 2003
--------------------------------------------------------------------
$ $

ASSETS
Current Assets
Cash 25,508 34,050
Accounts receivable 359,356 306,513
Inventories 193,839 165,172
Prepaid expenses 6,889 6,499
Current portion of other
long-term assets 3,722 1,202
Current portion of long-term
receivables 3,772 2,969
Future income taxes 3,141 10,764
Current assets -
discontinued operations 2,962 3,036
--------------------------------------------------------------------
599,189 530,205

Other Long-Term Assets 6,690 4,168
Long-term Receivables 10,490 9,283
Goodwill and Other
Intangible Assets 33,719 34,643
Property, Plant and
Equipment 796,410 716,187
Property, Plant and
Equipment - Discontinued
Operations 1,833 1,851
Future Income Taxes -
Discontinued Operations 605 397
--------------------------------------------------------------------
1,448,936 1,296,734
--------------------------------------------------------------------
--------------------------------------------------------------------

LIABILITIES
Current Liabilities
Unpresented cheques 12,997 4,720
Short-term bank borrowings 50,919 151,998
Accounts payable and accrued
liabilities 305,161 257,872
Income taxes payable 3,360 9,445
Current portion of long-term
debt (note 6) 7,038 23,284
Current portion of deferred
gain (note 3) 9,206 15,213
Current liabilities -
discontinued operations 2,090 2,366
--------------------------------------------------------------------
390,771 464,898

Long-Term Debt (note 6) 308,151 152,158
Deferred Gain (note 3) - 9,206
Future Income Taxes 27,094 22,038
Non-Controlling Interests 30,316 21,323
--------------------------------------------------------------------
756,332 669,623
--------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Capital Stock 103,173 102,913
Retained Earnings 625,764 544,589
Contributed Surplus (note 2) 78 -
Cumulative Translation
Adjustment (36,411) (20,391)
--------------------------------------------------------------------
692,604 627,111
--------------------------------------------------------------------
1,448,936 1,296,734
--------------------------------------------------------------------
--------------------------------------------------------------------


On behalf of the Board of Directors:


Frank Hasenfratz Linda Hasenfratz
Chairman of the Board Director



LINAMAR CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
For the three months and year ended December 31, 2004 and
December 31, 2003 (Unaudited)
(in thousands of dollars, except per share figures)

Three Months Ended Year Ended
December 31 December 31
2004 2003 2004 2003
---------------------------------------------------------------------
$ $ $ $
(Restated (Restated
- Note 5) - Note 5)

Sales 474,224 402,822 1,844,187 1,509,840

Cost of Sales 380,720 322,349 1,487,990 1,216,578
Amortization 32,663 26,917 119,992 97,359
---------------------------------------------------------------------

Gross Margin 60,841 53,556 236,205 195,903
---------------------------------------------------------------------

Selling, general and
administrative 24,760 19,023 90,881 84,594
---------------------------------------------------------------------

Earnings Before the
Following: 36,081 34,533 145,324 111,309
---------------------------------------------------------------------

Interest on long-term
debt (3,912) (1,713) (9,153) (7,033)
Other interest expense (843) (1,515) (4,719) (3,437)
Interest earned 745 266 1,290 1,002
Sales agent termination - (23,596) - (23,596)
Dilution loss - - (248) -
Other income 143 903 702 333
---------------------------------------------------------------------
32,214 8,878 133,196 78,578
---------------------------------------------------------------------
Provision for (Recovery
of) Income Taxes
Current 2,760 6,123 28,014 29,851
Future 3,761 2,523 11,783 (134)
---------------------------------------------------------------------
6,521 8,646 39,797 29,717
---------------------------------------------------------------------
25,693 232 93,399 48,861
Non-Controlling
Interests 1,448 (756) 2,995 739
---------------------------------------------------------------------
Earnings from
Continuing Operations 24,245 988 90,404 48,122

Results of Discontinued
Operations (note 5) - (2,298) 2,109 (7,581)
---------------------------------------------------------------------
Net Earnings (Loss) for
the Period 24,245 (1,310) 92,513 40,541
---------------------------------------------------------------------
---------------------------------------------------------------------

Basic Earnings per Share
from Continuing Operations 0.34 0.01 1.28 0.68
---------------------------------------------------------------------

Diluted Earnings per Share
from Continuing Operations 0.34 0.01 1.28 0.68
---------------------------------------------------------------------

Basic Earnings (Loss)
per Share 0.34 (0.02) 1.31 0.57
---------------------------------------------------------------------

Diluted Earnings (Loss)
per Share 0.34 (0.02) 1.31 0.57
---------------------------------------------------------------------



CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
For the three months and year ended December 31, 2004 (Unaudited)
(in thousands of dollars)


Three Months Ended Year Ended
December 31 December 31
2004 2003 2004 2003
---------------------------------------------------------------------
$ $ $ $
Balance - Beginning of
Period 604,344 548,724 544,589 515,345
---------------------------------------------------------------------
Stock based
compensation (note 2) - - (41) -
---------------------------------------------------------------------

Balance - As restated
(note 2) 604,344 548,724 544,548 515,345

Net Earnings (Loss) for
the Period 24,245 (1,310) 92,513 40,541
Dividends (2,825) (2,825) (11,297) (11,297)
---------------------------------------------------------------------
Balance - End of Period 625,764 544,589 625,764 544,589
---------------------------------------------------------------------
---------------------------------------------------------------------


LINAMAR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months and year ended December 31, 2004 and
December 31, 2003 (Unaudited)
(in thousands of dollars)


Three Months Ended Year Ended
December 31 December 31
2004 2003 2004 2003
---------------------------------------------------------------------
Cash Provided By (Used In) $ $ $ $
(Restated (Restated
- Note 5) - Note 5)

Operating Activities
Earnings from continuing
operations 24,245 988 90,404 48,122
Non-cash charges (credits)
to earnings:
Amortization of property,
plant and equipment 32,663 26,917 119,992 97,359
Future income taxes net of
unrealized exchange loss 3,761 1,562 11,783 665
Non-controlling interests 1,448 (756) 2,995 739
Unrealized exchange loss
(gain) on debt (179) 1,170 (1,628) 2,154
Amortization of deferred
exchange gain (6,440) (3,068) (20,070) (6,033)
Loss (gain) on disposal of
property, plant and
equipment 1,517 (424) 1,999 (906)
Other 375 33 985 132
---------------------------------------------------------------------
57,390 26,422 206,460 142,232

Changes in non-cash working
capital:
(Increase) decrease in
accounts receivable 28,541 2,035 (58,468) (85,986)
Increase in inventories (20,570) (2,213) (34,024) (34,250)
(Increase) decrease in
prepaid expenses 1,927 3,378 (567) 1,907
Increase (decrease) in
income taxes payable (10,947) 4,994 (6,177) 2,947
Increase (decrease) in
accounts payable and
accrued liabilities 16,246 (5,745) 53,826 56,263
---------------------------------------------------------------------
72,587 28,871 161,050 83,113
Deferred gain 2,072 - 4,857 30,452
---------------------------------------------------------------------
Cash flow - continuing
operations 74,659 28,871 165,907 113,565
Cash flow - discontinued
operations 11 (1,626) (2,037) (4,691)
---------------------------------------------------------------------
74,670 27,245 163,870 108,874
---------------------------------------------------------------------

Financing Activities
Proceeds from short-term
bank borrowings (149,768) 32,807 (101,913) 97,813
Proceeds from long-term
debt (note 6) 157,940 38,704 165,710 47,396
Repayment of long-term debt (13,267) (2,222) (24,852) (8,445)
Proceeds from common share
issuance 260 - 260 -
Dividends to shareholders (2,825) (2,825) (11,297) (11,297)
---------------------------------------------------------------------
(7,660) 66,464 27,908 125,467
---------------------------------------------------------------------

Investing Activities
Payments for purchase of
property, plant and
equipment (67,057) (58,412) (259,151) (159,000)
Proceeds on disposal of
property, plant and
equipment 1,274 967 2,799 6,672
Business acquisitions - - - (64,509)
Investment by minority
shareholders - - 3,738 -
Investment in other
long-term assets (1,079) (4,889) (5,458) (4,734)
Investment in long-term
receivables 23,044 (7,119) (2,010) (10,048)
Other (9) - - 210
Discontinued operations (146) 614 (146) 192
Proceeds on disposal of
discontinued operation (note 5) - - 51,726 -
---------------------------------------------------------------------
(43,973) (68,839) (208,502) (231,217)
---------------------------------------------------------------------
23,037 24,870 (16,724) 3,124

Effect of Translation
Adjustment (28) (1,155) (95) (1,720)
---------------------------------------------------------------------
Increase (decrease) in Cash
Position 23,009 23,715 (16,819) 1,404
Cash Position - Beginning
of Period (10,498) 5,615 29,330 27,926
---------------------------------------------------------------------
Cash Position - End of
Period 12,511 29,330 12,511 29,330
---------------------------------------------------------------------
---------------------------------------------------------------------

Comprised of:
Cash 25,508 34,050 25,508 34,050
Unpresented cheques (12,997) (4,720) (12,997) (4,720)
---------------------------------------------------------------------
12,511 29,330 12,511 29,330
---------------------------------------------------------------------
---------------------------------------------------------------------


LINAMAR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months and year ended December 31, 2004 (Unaudited)

1. Management prepared these interim consolidated financial statements
in accordance with Canadian Generally Accepted Accounting Principles
using the historical cost basis of accounting and approximation and
estimates based on professional judgments. These interim consolidated
financial statements contain all adjustments that management believes
are necessary for a fair presentation of the company's financial
position, results of operations and changes in cash flows. These interim
consolidated financial statements should be used in conjunction with the
company's most recent annual consolidated financial statements. These
interim consolidated financial statements and the notes thereto have not
been reviewed by the company's external auditors, pursuant to a review
engagement applying review standards set out in the Canadian Institute
of Chartered Accountants ("CICA") Handbook. The accounting policies used
in preparing these interim consolidated financial statements are
consistent with those used in preparing the annual consolidated
financial statements with one addition. During the first quarter of
2004, the company began to amortize, to earnings, the estimated fair
value of the options granted after January 1, 2002 over their remaining
vesting period.

Stock Based Compensation: Effective January 1, 2004, the company adopted
the revised CICA Handbook Section 3870 "Stock-based compensation and
other stock-based payments" ("CICA 3870"). The company has adopted the
fair value method of accounting for stock-based compensation and
recognizes a compensation expense for all stock options granted to
employees and directors. The company only issues stock options to
employees, including directors. The fair value of the options issued in
the year is determined using the Black-Scholes option pricing model. The
estimated fair value of the options is amortized to income over the
vesting period.

Prior to January 1, 2004, the company disclosed the pro-forma net income
and earnings per share, as if the fair value based accounting method had
been used to account for stock-based compensation.

2. Stock Based Compensation (in thousands of dollars, except per share
figures)

Beginning January 1, 2004 the company has adopted revised CICA 3870
retroactively and has chosen not to restate prior periods as permitted
under the revised section. The effect of the restatement was the setup
of contributed surplus in the amount of $78 for the fair value of
options granted after January 1, 2002 and a reduction in the balance of
opening retained earnings by $41 as the cumulative effect of the change
on prior periods for the amount that would have been expensed. For the
three months and year ended December 31, 2004, $4 for the quarter and
$16 year-to-date was recorded as the compensation cost.

3. Financial Instruments

At December 31, 2004, the company was committed to a series of monthly
forward and zero cost option contracts to sell U.S. dollars. As these
forward and zero cost option contracts qualify for accounting as cash
flow hedges, the unrealized gains and losses are deferred and recognized
in the same period as the sales which generate the cash flows.

The company was also committed to a series of monthly forward exchange
contracts to sell British pounds and two long-dated forwards to buy U.S.
dollars. As these forward exchange contracts qualify for accounting as
fair value hedges, they are marked to current exchange rates to offset
the exchange gains and losses on the underlying hedged items.

During the prior year, the company placed forward contracts to buy U.S.
dollars, effectively locking in gains on forward contracts in place at
December 31, 2002. This transaction resulted in cash proceeds of $30.5
million. During 2004, the company locked in additional gains of $4.9
million. The gains have been deferred and have been amortized to revenue
based on the terms of the original underlying contracts.

All forward and zero cost option contracts mature in the future as noted
below. The company has continued to place forward contracts after the
quarter end.



Average Average
Year Amount Hedged - Sell (Buy) Exchange Rate Trigger Rate
---------------------------------------------------------------------

2005 USD$ 9,000,000 for 1.2451
Canadian dollars
2005 USD$ 45,000,000 for 1.3102 1.4311
Canadian dollars
2006 USD$ 10,000,000 for 1.3240 1.4441
Canadian dollars
2009 USD$ (80,000,000) with 1.3029
Canadian dollars (note 6)
2014 USD$ (40,000,000) with 1.3535
Canadian dollars (note 6)

2005 GBP Pounds Sterling 6,175,000 2.2445
for Canadian dollars


4. Segmented Sales and Earnings Information (Continuing Operations in
thousands of dollars)

Three of the company's five operating groups, Transmission, Engine and
Chassis are aggregated into the North American Automotive Systems
segment. Substantially all automotive revenue is derived from sales to
major North American manufacturers. Europe stands alone as a segment and
is in the automotive business.

During 2004, the Industrial group, which is primarily comprised of the
self-propelled scissor lift platform business, became a quantified
reportable segment. The corporate headquarters and other small operating
entities are now reported in the North American Automotive Systems
segment. The company has restated segmented information for prior
periods.



Geographic For the three months ended For the year ended
December 31, 2004 December 31, 2004
--------------------------- ---------------------------
Sales to Inter- Operating Sales to Inter- Operating
external segment earnings external segment earnings
customers sales (loss) customers sales (loss)
$ $ $ $ $ $

Canada 373,452 1,762 32,903 1,413,478 4,904 129,597

United States 31,391 2,430 1,342 139,859 7,409 9,275

Mexico 32,116 - (579) 125,844 - 2,230

Europe 37,265 1,411 2,415 165,006 6,688 4,222
-------------------------------------------------------
Total 474,224 36,081 1,844,187 145,324
-------------------------------------------------------


For the three months ended For the year ended
December 31, 2003 December 31, 2003
--------------------------- ---------------------------
Sales to Inter- Operating Sales to Inter- Operating
external segment earnings external segment earnings
customers sales (loss) customers sales (loss)
$ $ $ $ $ $

Canada 306,575 542 38,158 1,130,225 3,671 112,061

United States 29,035 4,489 2,241 116,018 7,869 7,584

Mexico 28,006 - (2,921) 111,003 - (7,187)

Europe 39,206 1,403 (2,945) 152,594 9,969 (1,149)
-------------------------------------------------------
Total 402,822 34,533 1,509,840 111,309
-------------------------------------------------------


Operational For the three months ended For the year ended
December 31, 2004 December 31, 2004
--------------------------- ---------------------------
Sales to Inter- Operating Sales to Inter- Operating
external segment earnings external segment earnings
customers sales (loss) customers sales (loss)
$ $ $ $ $ $

N.A. Automotive
Systems 398,879 3,091 30,246 1,504,576 10,308 124,328

Europe 30,744 1,411 2,358 131,906 6,688 1,185

Industrial 44,601 187 3,477 207,705 638 19,811
-------------------------------------------------------
Total 474,224 36,081 1,844,187 145,324
-------------------------------------------------------


For the three months ended For the year ended
December 31, 2003 December 31, 2003
--------------------------- ---------------------------
Sales to Inter- Operating Sales to Inter- Operating
external segment earnings external segment earnings
customers sales (loss) customers sales (loss)
$ $ $ $ $ $
N.A. Automotive
Systems 342,128 1,489 35,948 1,269,782 6,085 113,561

Europe 28,568 1,816 (4,653) 123,429 11,503 (2,630)

Industrial 32,126 47 3,238 116,629 143 378
-------------------------------------------------------
Total 402,822 34,533 1,509,840 111,309
-------------------------------------------------------


5. Discontinued operations (in thousands of dollars)

In August 2004, the company completed the sale of its 50% joint venture
in Weslin Industries Inc. ("Weslin"), a casting and machining facility
located in Oroszlany, Hungary to Wescast Industries Inc. in exchange for
cash consideration of $53.8 million.

As per the CICA Handbook Section 3475, the company has restated its
consolidated statement of earnings results and consolidated statements
of cash flows for the current and prior periods moving the operations of
the Weslin joint venture from continuing operations to discontinued
operations. The company was part of the Europe segment for both the
geographic and operational groups.



Three Months Ended Year Ended
December 31 December 31
2004 2003 2004 2003
---------------------------------------------------------------------
$ $ $ $

Revenue from Weslin discontinued
operation - 5,657 16,134 20,385
---------------------------------------------------------------------

Loss from operations of Weslin (net
of income taxes of $Nil, 2003 -
$Nil) - (2,145) (4,102) (8,587)
Gain on disposal of Weslin (net of
income tax provision of $255) - - 6,731 -
Results of other discontinued
operations (net of income tax
recovery of $280, 2003 - provision
of $518) - (153) (520) 1,006
---------------------------------------------------------------------

Results of discontinued operations - (2,298) 2,109 (7,581)
---------------------------------------------------------------------

---------------------------------------------------------------------
$

Cash consideration 53,750
Cash included in disposed assets (1,484)
Costs of disposal (540)
---------------------------------------------------------------------
Proceeds on disposal of discontinued operation 51,726

Current assets 10,483
Property, plant and equipment 42,871
Less: current liabilities (8,614)
---------------------------------------------------------------------
Net assets disposed 44,740

Gain on disposal of Weslin 6,986
Provision for income taxes (255)
---------------------------------------------------------------------
Net gain on disposal of Weslin 6,731
---------------------------------------------------------------------


6. Long-term debt (in thousands of dollars except where otherwise noted)

During the fourth quarter the company completed the placement of U.S.
$120 million of senior unsecured notes. The notes are comprised of U.S.
$80 million due October 2009 at 4.44% and U.S. $40 million due October
2014 at 5.33%. The company completed the placement of U.S. $120 million
of senior unsecured notes. The company entered into long-dated forward
exchange contracts to lock in the exchange rate on the principle
repayment component upon maturity of the notes and to hedge the
effective changes in exchange rates on the U.S. denominated notes (note
3). As at December 31, 2004, included in the principle above is the
unrealized exchange loss on the long-dated forward exchange contracts of
$6,150 and the accrual of forward points of $249. The forward points,
with a value of $7,980 net of accrual of $249, on the long-dated forward
exchange contracts are being accrued over the terms of the forward
contracts and are being treated as an additional cost of the notes
recorded through interest. This facility is unsecured but is guaranteed
by the company, three domestic subsidiaries, and one foreign subsidiary.

7. Related Party Transactions (in thousands of dollars)

Included in the purchase of property, plant and equipment are the
construction of buildings, building additions and building improvements
in the aggregate amount of $5,264 by a company owned by the spouse of a
director. Included in cost of sales, are maintenance costs of $656 by
the same company. Included in cost of sales, are lease costs of $262
related to property leased from a company owned by two directors.
Included in selling, general and administrative expenses, is a recovery
of $48 related to equipment and services sold to a company owned by the
spouse of a director.

These transactions have been recorded at the exchange amount.

8. Pension Costs (in thousands of dollars)

The company has various contributory and non-contributory defined
contribution pension plans which cover most employees. Current service
pension costs are charged to earnings as they accrue. The following was
expensed during the quarter:



Three Months Ended Year Ended
December 31 December 31
2004 2003 2004 2003
---------------------------------------------------------------------
$ $ $ $

Government sponsored 2,773 2,484 14,542 12,979
Company sponsored 1,869 1,811 7,691 7,170
---------------------------------------------------------------------


9. Foreign Exchange (in thousands of dollars)

Included as part of selling, general and administrative expenses is
a gain (loss) resulting from foreign exchange as follows:


Three Months Ended Year Ended
December 31 December 31
2004 2003 2004 2003
---------------------------------------------------------------------
$ $ $ $

Foreign Exchange Gain (Loss) (507) 911 2,009 (328)
---------------------------------------------------------------------


10. Transfer of Receivables (in thousands of dollars)

Under a portfolio purchase agreement signed in during the fourth quarter
of 2004, the company sells certain long-term receivables. Although title
is transferred and no entitlement or obligated repurchase agreement is
in place before maturity, the company remains exposed to certain risks
of default on the amount of proceeds from receivables under
securitization less recourse in the form of property, plant and
equipment. Under the agreement receivables are sold on a fully serviced
basis, so that the company continues to administer the collection of
such receivables. The company receives no fee for administration of the
collection of such receivables.

11. Guarantees (in thousands of dollars)

The company has guaranteed the lease payments of Eagle Manufacturing
LLC, a joint venture, for the full term of the lease which ends in 2010.
The company is receiving a guarantee fee during the lease term. As at
the quarter end the maximum potential amount of future payments is
$14,491 over the remaining lease term.

The company has various other guarantees for a maximum potential future
payment of $1,642 over various terms of 4 to 5 years. The company has
estimated recourse, in the form of property, plant and equipment, to
recover a portion of the guarantee payable from customers if balances
remain unpaid in the amount of $765.

12. Contingent Liabilities and Commitments (in thousands of dollars)

The company is involved in certain lawsuits and claims. Management
believes that adequate provisions have been recorded in the accounts.
Although it is not possible to estimate the potential costs and losses,
if any, management is of the opinion that there will not be any
significant additional liability other than amounts already provided for
in these financial statements.

As at December 31, 2004, outstanding commitments for capital
expenditures under purchase orders and contracts amounted to
approximately $93,742.

13. Comparative Figures

Certain comparative figures have been reclassified in accordance with
the current quarter's presentation (see notes 4 and 5).



MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Year Ended December 31, 2004

This Management's Discussion and Analysis of Financial Condition and
Results of Operations ("MD&A") of Linamar Corporation ("Linamar" or the
"company") should be read in conjunction with its consolidated financial
statements for the year ended December 31, 2004 and related notes
thereto.

This MD&A has been prepared as at March 8, 2005.

Additional information regarding Linamar, including copies of its
continuous disclosure materials such as its annual information form, is
available on its website at www.linamar.com or through the SEDAR website
at www.sedar.com.

In this MD&A, reference is made to operating earnings which is not a
measure of financial performance under Canadian generally accepted
accounting principles ("GAAP"). Operating earnings is calculated by the
company as gross margin less selling, general and administrative
expenses and equity (earnings) loss. The company has included
information concerning this measure because it is used by management as
a measure of performance and management believes it is used by certain
investors and analysts as a measure of the company's financial
performance. This measure is not necessarily comparable to similarly
titled measures used by other companies and should not be construed as
alternatives to net earnings or cash flows from operating activities as
determined in accordance with Canadian GAAP or as a measure of liquidity.

OVERALL CORPORATE PERFORMANCE

Overview of the Business

Linamar designs, develops and manufactures precision machined
components, modules and assemblies for Brakes, Engine, Steering and
suspension, and Transmission and driveline applications ("B.E.S.T.") for
sale primarily to original equipment manufacturers ("OEMs") and Tier 1
customers for the North American and European car and light to heavy
truck markets. Linamar's business includes industrial products that
utilize the company's core competencies of precision machining and
assembly. The company also produces agricultural implements in Hungary
for worldwide use.

The following table sets out certain highlights of the company's
performance in 2004:



(in millions of dollars,
except content per vehicle numbers) 2004 2003
---------------------------------------------------------------------
Sales $1,844.2 $1,509.8
Gross Margin 236.2 195.9
Earnings from Continuing Operations 90.4 48.1
Content per Vehicle - North America $81.52 $68.83
Content per Vehicle - Europe $7.73 $7.71


Sale of Weslin Industries Inc.

In August 2004, Linamar sold its 50% joint venture interest in Weslin
Industries Inc. ("Weslin"), to its partner, Wescast Industries Inc.
("Wescast"). Linamar received proceeds of $53.75 million as
consideration, yielding a gain of $6.7 million after tax and disposal
costs. The resultant gain has been presented in the results from
discontinued operations. All statement of earnings and statement of cash
flow data has been restated to reflect the impact of Weslin as a
discontinued operation for prior operating periods presented. In
accordance with Canadian GAAP, only statement of earnings elements and
related cash flow balances have been restated. The balance sheet remains
as previously reported.

Private Debt Placement

In October 2004, Linamar was successful in completing a private
placement of U.S. $120 million aggregate principal amount of senior
unsecured notes. Of the total, U.S. $80 million of the notes have a
five-year term bearing interest at a rate of 4.44% per annum. The
remaining U.S. $40 million principal amount has a ten-year term and an
interest rate of 5.33% per annum. Long dated forward exchange contracts
have been placed to lock in the exchange rate on the principal
repayment(2). The net proceeds from the private placement were initially
used to reduce short-term borrowings while the overall intent is that
such proceeds will be used for general corporate purposes.

(2) These forward contracts are fair value hedges and, as such, are
marked to current exchange rates to offset the exchange gains and losses
on the underlying hedged items.

Overall Corporate Results

In 2004, Linamar achieved a record sales level of $1,844.2 million
representing a 22.1% increase over the prior year. Total automotive
sales including tooling was $1,498.8 million, an increase of 17.0%
compared to 2003 and represented 81.3% of Linamar's total 2004 sales.
This performance was achieved in automotive production markets which
recorded no growth in North America and 2.0% in Europe. In Linamar's
non-automotive businesses (including agricultural products, industrial
products, small engine, marine, power generation and transportation),
sales were $345.4 million, an increase of 51.2% over 2003. The
industrial products business accounted for the most significant portion
of the sales increase.

Linamar's success was also reflected in new business awarded. The
following programs are a partial listing of new programs won in 2004.
Late in the year, Linamar was awarded six different camshaft programs
reflecting volumes in excess of 3 million additional units; these
programs start in 2006 and 2007. In addition, the company took over a
program in Mexico to machine cylinder heads commencing in 2006 at
volumes of 650 thousand units. Linamar was also awarded seven
transmission components and modules for a transmission program in Korea
with projected sales in excess of $60 million annually, representing
Linamar's first facility in Asia. The company will begin setting up
operations in Korea in 2005.

Furthermore, Linamar added to new business with six speed transmission
components, additional iron cylinder head volumes and an additional
differential case program with significant volumes of more than 600
thousand units per year.

Finally, the acquisition of McLaren Performance Technologies Inc.
("McLaren") in 2003 has been beneficial in that Linamar was awarded the
design work for the head and block components of a high performance
engine for an OEM customer.

Linamar's earnings grew significantly during 2004 as well, outpacing the
growth in sales. Operating earnings(3) achieved $145.3 million, an
increase of 30.5% over the 2003 level of $111.3 million. Geographically,
operating earnings were higher in each area (Canada, U.S., Mexico,
Europe) and the North American Automotive Systems, Europe and Industrial
operating segments each showed improved performance.

(3) See discussion of non-GAAP measures.

Interest costs in 2004 were $12.6 million (net) compared to $9.5 million
in 2003 due to slightly higher borrowing costs and higher debt levels
incurred to support the significant capital expenditure program incurred
in 2004.

Linamar's 2004 growth is reflected in capital expenditures incurred
during the year to support programs launching or to be launched. The
major capital expenditure programs were related to two large
differential programs, two cylinder block programs, a cylinder head
program and a cylinder liner program at two of our Mexican plants, a
differential case program at our third Mexican plant, as well as a brake
drum program, 6R transmission programs in Guelph plants and finally the
hydroformed camshaft program at our plant in Germany.

Linamar's sales growth is also attributed to programs launched in prior
years which achieved higher or full volume in 2004. Those programs
include the Ford Motor Company ("Ford") 5.4L aluminum cylinder head, the
Caterpillar Inc. ("CAT") iron cylinder head, the General Motors ("GM")
Gen IV connecting rod and several take over programs along with
additional volume on existing programs where Linamar became sole source.
Additional sales growth was achieved by programs which were both
launched and achieved production in 2004 such as the DaimlerChrysler
("DCX") ATX differential case.

On August 31, 2004 Linamar sold its 50% interest in Weslin to its
partner, Wescast for $53.75 million. Linamar believed that it was
important for the business to have one controlling shareholder to guide
and direct the future of that business.

Earlier in the year, GM announced the cancellation of its continuous
variable transmission ("CVT") program which resulted in a loss of
business for Linamar Hungary RT ("Linamar Hungary") and one facility in
Guelph.

Selected Annual Information

The following table sets out selected financial data relating to the
company's years ended December 31, 2004, 2003 and 2002. This financial
data should be read in conjunction with the company's audited
consolidated financial statements for these years:



(millions of dollars, except
per share amounts) 2004 2003 2002
-------------------------------------------------------------------
Sales $1,844.2 $1,509.8 $1,348.1
Earnings from Continuing Operations 90.4 48.1 64.1
Net Earnings for the year 92.5 40.5 57.0
Total Assets 1,448.9 1,296.7 1,058.9
Total Long-term Liabilities 365.6 204.7 164.1
Cash Dividends declared per share $0.16 $0.16 $0.16
Earnings Per Share From
Continuing Operations
Basic $1.28 $0.68 $0.91
Diluted 1.28 0.68 0.91
Earnings Per Share From Net Earnings
Basic $1.31 $0.57 $0.81
Diluted 1.31 0.57 0.81


Sales

(millions of dollars) 2004 2003
-------------------------------------------------------------------
Canada $1,418.4 $1,133.9
U.S. 147.3 123.9
Mexico 125.8 111.0
Europe 171.7 162.6
Intersegment (19.0) (21.6)
-------------------------------------------------------------------
Total external sales $1,844.2 $1,509.8


Total sales were $1,844.2 million in 2004, an increase of $334.4 million
or 22.1%, compared to sales of $1,509.8 million generated in 2003. The
increase in sales is due to a combination of net new business awarded
and net volume increases on existing automotive programs offset by the
impact of the stronger Canadian dollar. The stronger Canadian dollar had
the effect of lowering sales by approximately $49.5 million for the
year. Excluding the estimated effect of the stronger Canadian dollar on
exchange rates, revenues would have increased by 25.4% in the year.

The company experienced strong growth in the sale of industrial products
during 2004, driven by its aerial lift platform business as well as
growth in marine and power generation precision machined components.

Vehicle Production Volumes

North American vehicle production units used by Linamar for the
determination of the company's content per vehicle (see table below)
include medium and heavy truck volumes. European vehicle production
units exclude medium and heavy trucks.

North American vehicle production volumes for 2004 were approximately
16.3 million units, the same level as 2003.

European vehicle production increased slightly by 2.0% with
approximately 16.3 million units produced in the year compared with
approximately 16.0 million units produced in 2003.

Automotive Sales

Automotive sales in the following discussion are based on content per
vehicle determined by the final vehicle production location and, as
such, there are differences in the figures as reported under the North
American Automotive Systems segment which is based primarily on the
company's location of manufacturing. These differences are the result of
products being sold directly to one continent but the final vehicle
being assembled on another continent. It is necessary to show the sales
based on the vehicle build location to provide accurate comparisons to
the production vehicle units for each continent.

Total automotive sales for North America and Europe were $1.451 billion
for the year, compared to $1.242 billion in 2003, an increase of 16.8%.
The impact of the stronger Canadian dollar accounted for approximately
$49.8 million in total automotive revenue reductions for 2004. If the
estimated impact of the stronger dollar is removed, total automotive
revenues for the year would have increased $258.8 million or 20.8%.

The increases in Linamar automotive revenues are the result of new
programs beginning to ramp up to full production levels and new programs
launched net of anticipated volume reductions and programs ending.



Content Per Vehicle (i)

North America 2004 2003 % Change
---------------------------------------------------------------------
Vehicle Production Units (ii) 16.26 16.26 -
Automotive Sales (iii) $1,325.5 $1,118.9 18.5%
Content Per Vehicle $81.52 $68.83 18.4%
---------------------------------------------------------------------
Europe 2004 2003 % Change
---------------------------------------------------------------------
Vehicle Production Units (ii) 16.29 15.97 2.0%
Automotive Sales (iii) $125.8 $123.2 2.1%
Content Per Vehicle $7.73 $7.71 0.3%


(i) measured as the amount of Linamar automotive sales dollars per
vehicle, not including tooling sales

(ii) Vehicle Production Units are shown in millions of units

(iii) Automotive Sales are shown in millions of dollars

In 2004 North American automotive sales increased by 18.5% over 2003 to
$1,325.5 million. North American vehicle production units were
essentially constant. Content per vehicle was $81.52, compared to $68.83
for 2003, an increase of 18.4%.

North American automotive sales benefited from the ramping up of a
number of new and expanding programs. Four significant programs that
contributed in 2004 were the CAT iron cylinder head program, the DCX ATX
differential cases, the GM Gen IV connecting rod, and the Detroit Diesel
Corporation ("DDC") overhead assembly. The CAT and DDC programs are used
on medium and heavy truck applications. The DCX components are a light
vehicle application. In addition to these programs, the DCX 9.25 carrier
and Ford V10 cylinder heads were launched.

Programs launched in 2003 contributing to the 2004 growth include the GM
Gen IV connecting rods, the GM 3.8L connecting rods and the Toyota Motor
Corporation ("Toyota") engine brackets.

In 2004, European automotive sales were $125.8 million compared to
$123.2 million in 2003, an increase of 2.1%, consistent with the
production increase of 2.0%. Content per vehicle grew to $7.73, a modest
increase of 0.3% over 2003 of $7.71.

European automotive sales were severely impacted by GM's decision to
cancel the CVT program in 2004. Offsetting this decline were increases
with other existing customers and a full year of sales for Linamar
Antriebstechnik GmbH & Co. K.G. ("LAT") which was acquired in June of
2003.

Automotive tooling sales for the year increased over 2003 by $6.6
million or 18.3%, to $42.7 million. This increase is primarily due to
the new Ford V10 finish machining program launched at an Ontario
facility. These 6.8L heads are used in the popular Ford F-Series trucks.

Other Sales

The largest area of sales growth for the year, as compared to 2003, was
the sale of industrial products, which grew by $111.4 million to $249.8
million, primarily from the sale of Skyjack Inc. ("Skyjack") aerial lift
platforms. The majority of Skyjack's sales are in the North American
market with the European market representing 15% of its sales in 2004.
Skyjack has developed a reconditioning division. Machines of various
makes from all manufacturers are reconditioned and returned to the
rental market for fleet use. Not only has this division become a
contributor to the growth in Skyjack, it has allowed the engineers of
Skyjack to become more knowledgeable concerning the competitors'
products.

As in 2003, small engine sales continued to decline by 12.3%, or $3.1
million, for 2004 as the related product lines continue to be
strategically de-emphasized. These sales are included in the North
American Automotive Systems operational segment but are not included in
content per vehicle calculations.



Gross Margin

(millions of dollars) 2004 2003
-------------------------------------------------------------------
Sales $1,844.2 $1,509.8
Cost of sales 1,488.0 1,216.6
Amortization 120.0 97.3
-------------------------------------------------------------------
Gross margin $236.2 $195.9
-------------------------------------------------------------------
Gross margin percentage 12.8% 13.0%
-------------------------------------------------------------------


Gross margin after amortization was 12.8% for the year, comparable to
13.0% for last year. The change in margin is largely due to the
continuation of the change in automotive programs from consigned to
purchased material, the continued addition of high material content
machining and assembly programs, price reductions to customers, and the
impact of metal surcharges not recovered from the end customer. The
largest impact was the conversion by CAT to purchased materials in 2004.
Assembly programs generally carry a higher material content than a
typical machining program. Skyjack experiences higher material content
compared to the core machining business.

Other factors which affected margins include tooling programs which
experienced lower margins than in past years. Consumable tooling and
repairs on equipment have also contributed to the slight margin erosion
in 2004. Facilities launching large programs, such as the DCX ATX
differential case, tend to experience higher consumable tooling and
manufacturing costs during the initial stages of production until the
optimal use of materials and application is achieved. Repair costs have
increased as facilities transition to new programs. As part of the
transition, existing machines are serviced and put back in use on new
programs where possible.

Labour as a percent of sales has improved as the CAT programs launched
in 2003 reached full volumes in 2004 and further programs launched in
the same facility during the year were better able to utilize existing
labour resources. Labour was also positively impacted by Canadian
Scientific Research and Experimental Development tax credits.
Furthermore, the growth in the industrial sales area has resulted in
improved labour utilization.

Amortization charges as a percentage of sales remained consistent at
6.5%. As a percentage of assets employed, amortization costs increased
from 15.5% to 16.8%. The dollar value of assets in production has
increased over 2003 by $88.8 million as more programs come online for
production. New lines such as the DCX ATX differential case are designed
for larger volumes than experienced in the initial year of production.
Many of the machining facilities are also preparing for production of
various components for the Ford 6R transmission and the Eaton 8.6
differential case which will launch in 2005.



Operating Earnings

(millions of dollars) 2004 2003
-------------------------------------------------------------------
Gross margin $236.2 $195.9
Selling, general and administrative 90.9 84.6
-------------------------------------------------------------------
Operating Earnings $145.3 $111.3
-------------------------------------------------------------------


Selling, general and administrative ("SG&A") costs, excluding currency
exchange impacts, increased from $84.3 million in 2003 to $92.9 million
in 2004. However, as a percentage of sales, SG&A costs were lower at
4.9% as compared to 5.6% in 2003.

Core Linamar facilities (excluding Skyjack) recorded SG&A costs of $78.2
million or 4.8% of sales in 2004, compared to $69.6 million or 5.0% of
sales for 2003, consistent as a percent of sales at 4.8%. The main
factor behind the SG&A dollar amount increase is the company's continued
growth in the industrial market with Skyjack's operations. The nature of
this operation requires a higher level of marketing and sales efforts
because Skyjack directly markets and distributes its products to the end
users. In 2004, Skyjack had SG&A expenses totaling $17.5 million,
excluding exchange. This expenditure level has increased over 2003,
which is consistent with an increased sales level for the year.

The company experienced exchange losses during 2003 of $0.3 million as
compared to a gain of $2.0 million in 2004. Linamar Hungary holds Euro
denominated debt which affords a much lower interest rate than funds
borrowed in Hungarian Forints. New and growing business at Linamar
Hungary is also Euro-based. As the Hungarian Forint has strengthened
against the Euro, the company has experienced exchange gains in 2004 on
a net Euro debt position as compared to losses in 2003. The Mexican
subsidiaries have receivables denominated in U.S. dollars in excess of
U.S. dollar liabilities. With the weakening Peso, the Mexican operations
had experienced gains related to these accounts in 2003. In 2004, the
Mexican facilities were exchange neutral.

During 2003, the company placed forward contracts to buy U.S. dollars,
effectively locking in gains on forward contracts in place at December
31, 2002. This transaction resulted in cash proceeds of $30.5 million.
The gain has been deferred and is being amortized to revenue based on
the terms of the original underlying contracts. During 2004, $15.2
million of these gains were recognized, leaving $9.2 million to be
amortized in 2005.

INCOME BY SEGMENT

The following should be read in conjunction with Note 21 to Linamar's
consolidated financial statements for the financial year ended December
31, 2004.

Operational

During 2004, the Industrial group, which is primarily comprised of the
aerial lift platform business, became a quantified reportable segment.
The corporate headquarters and other small operating entities are now
reported in the North American Automotive Systems segment.

For 2004, sales for the North American Automotive Systems segment
recorded an increase of $234.8 million from $1,269.8 million in 2003 to
$1,504.6 million for 2004. The impact of the declining U.S. dollar
against the Canadian dollar and the Mexican Peso is estimated to
represent a sales reduction of $46.3 million for the year, such that
revenues would have otherwise increased by $281.1 million or 22.1% on a
consistent exchange rate basis. The programs with the largest impact for
the year have been the launch of the DCX differential case, the addition
of the DCX 9.25 carrier, the continued growth with CAT programs, and the
DDC overhead assembly launched near the end of 2003. The company's
transportation division has also experienced growth in external sales.
Furthermore, a full year of McLaren contributed to the 2004 sales.
McLaren was purchased in the third quarter of 2003.

For the year, operating earnings increased by 9.4% in the North American
Automotive Systems segment to $124.3 million from $113.6 million for
2003. Large gains have been made as a result of programs launched in
2003 such as the CAT liners and the DDC overhead assembly, reaching full
production volumes and achieving efficient operating results. Linamar de
Mexico S.A. de C.V. ("LdM") continues to improve results through the
application of the lean manufacturing system and cost control programs.
For 2005, improved operational efficiencies are also expected as the new
DCX 9.25 carrier reaches optimal levels of production and the new Ford
6R programs launch and begin to ramp up in various Ontario facilities.
The transportation operations are now contributing to the earnings in
this segment as well with the increase in sales to external customers. A
reduction in earnings was caused by losses in 2004 at McLaren. While
McLaren was acquired to support Linamar's requirement for additional
design and engineering capabilities for new and existing business, the
external market for dynamometer testing and one-off prototypes was lower
in 2004. OEM's have taken back in-house activities this year as compared
to prior years. Despite this situation, Linamar has expanded the
engineering capabilities within McLaren to enable us to provide
innovative designs to our customers and work with existing Linamar
facilities to improve the design of parts and processes for better
manufacturability.

European sales in 2004 increased $8.5 million to $131.9 million from
$123.4 million in 2003. GM cancelled the CVT program in 2004, having a
significant negative impact on the sales in the segment. Offsetting
gains were made in other automotive programs as well as sales of
products used in industrial applications such as generators and
elevators. The agriculture sales at Linamar Hungary were consistent with
prior year levels. The additional sales from the company's latest
European acquisition, LAT, were $2.6 million over 2003.

Europe achieved operating earnings for the year of $1.2 million as
compared to a loss of $2.6 million for 2003. Despite the loss of the CVT
program at Linamar Hungary, the European operations were able to utilize
equipment and other resources in other applications, maintaining and
improving the utilization of assets. Early in 2004, the company
anticipated the cancellation of the CVT program and planned for the use
of excess equipment and labour on new and growing programs. The
settlement agreed to with GM for the cancellation of the CVT program
partially offset the losses which occurred during the year.

Sales for the Industrial segment increased $91.1 million to $207.7
million for 2004. This relates to increased sales of Skyjack aerial lift
platforms.

Operating earnings in the Industrial segment improved in the year as
compared to 2003 by $19.4 million. The results in this segment improved
due to increased sales volumes and the continued efforts of the Skyjack
operations to reduce operating costs and alter the manufacturing
strategy from one of complete component manufacturer to one of design,
assembly of key component manufacturing and marketing/distribution
strategy.

Geographical

Canadian sales for 2004 were up $283.3 million to $1,413.5 million.
Programs launched for CAT and DDC reached full production volumes during
2004 as well as additional CAT programs which came on line. Other new
programs continuing to grow in 2004 were the launches of the DCX ATX
differential case, the DCX 9.25 carrier, and the Ford V10 cylinder head.
Skyjack continued to experience growth in both new unit and parts sales.

The operating earnings for the Canadian segment increased $17.5 million
to $129.6 million in 2004 as compared to 2003. The growth can be
attributed to the production efficiencies gained in 2004 on a number of
programs, including the CAT programs and the DDC overhead assembly
launched in 2003. The company's transportation services are also
contributing to growth with expanding external customer services. The
increased sales experienced by the Skyjack operation have also
contributed to better operating earnings through a higher absorption of
fixed costs inherent with the industrial business. Offsetting some of
the gains was the expected under utilization of resources occurring
during the launch of the ATX differential case and 9.25 carrier programs
for DCX. These programs began reaching more efficient operational levels
near the end of 2004. Many Ontario facilities are also preparing for the
2005 launch of components for the Ford 6R transmission.

The sales in the U.S. segment increased $23.9 million to $139.9 million
in 2004. The increase relates to the increased demand for Skyjack
equipment, parts and service. Eagle Manufacturing LLC ("Eagle")
experienced lower sales in 2004 as a result of the cylinder head program
which came to its anticipated conclusion. The decreased cylinder head
sales were not completely offset by the sales on new programs such as
the International Truck and Engine Corporation ("International")
bedplate program launched in 2003 at Eagle, a joint venture in which the
company has a 60% interest. McLaren's operations have also been fully
consolidated since the third quarter of 2003 and contributed somewhat to
the sales growth.

Operating earnings in the U.S. segment have improved slightly by $1.7
million for the year to $9.3 million as a result of cost improvements
and increased sales volumes at Skyjack. McLaren has experienced external
market declines, impacting their earnings. Eagle has experienced
slightly lower earnings in their transition to the bedplate production
replacing the cylinder head program which ended in early 2004.

Sales for Mexico have improved in 2004 by $14.8 million to $125.8
million for the year. Industrias de Linamar S.A de C.V ("ILSA")
experienced higher demand from Renault for equivalent engines than in
2003. New programs launched near the end of 2003 for GM and CAT
contributed to the sales growth. LdM began the launch of the Eaton 8.6
differential case program in the second half of 2004.

Operating earnings for the Mexican segment in 2004 have improved by $9.4
million to earnings of $2.2 million as compared to a loss of $7.2
million in 2003. In 2004, the new programs for CAT and GM have reached
more efficient operational levels. LdM has also improved operating
earnings despite a slight decline in sales levels through the
continuation of lean manufacturing processes and cost reduction
initiatives. Improvements have been seen in quality, manufacturing
costs, and better labour utilization. ILSA incurred a settlement charge
in 2003 for a quality issue.

Sales in Europe were $165.0 million, an increase of $12.4 million over
2003. Sales have improved, despite the significant impact of the GM CVT
cancellation. Skyjack's European operations and the growing volumes on
programs such as the Denso Corporation ("Denso") common rail and various
industrial products manufactured at Linamar Hungary are the more
significant contributors to the sales growth. The company's newest
European facility, LAT, which was purchased in June 2003, has also
contributed to the sales growth during the year.

Operating earnings in the European segment have improved. Earnings
increased $5.3 million to $4.2 million as compared to a loss of $1.1
million in 2003. Improvements in the earnings of Skyjack through the
continued efforts to gain operational efficiencies and expanded sales in
the European marketplace have contributed to this segment growth.
Despite the loss of the GM CVT program, Linamar Hungary improved
operating earnings through the increase in volumes on other programs.

NET EARNINGS AND BALANCE SHEET DATA

The following financial data has been derived from, and should be read
in conjunction with, Linamar's audited consolidated financial statements
for the financial years ended December 31, 2004 and 2003.



(millions of dollars,
except per share amounts) 2004 2003
-------------------------------------------------------------------
Sales $1,844.2 $1,509.8
Gross Margin 236.2 195.9
Operating Earnings 145.3 111.3
Net interest expense (12.6) (9.5)
Sales agent termination - (23.6)
Dilution loss (0.2) -
Other income 0.7 0.3
Provision for Income Taxes (39.8) (29.7)
Non-Controlling Interest (3.0) (0.7)
-------------------------------------------------------------------

Earnings from Continuing Operations $90.4 $48.1
Results from Discontinued Operations 2.1 (7.6)
-------------------------------------------------------------------

Net Earnings for the Year $92.5 $40.5
-------------------------------------------------------------------

Earnings Per Share From
Continuing Operations
Basic $1.28 $0.68
Diluted 1.28 0.68
Net Earnings Per Share
Basic $1.31 $0.57
Diluted 1.31 0.57

-------------------------------------------------------------------
Total Long-Term Liabilities $365.6 $204.7
-------------------------------------------------------------------
Cash Dividends declared per share 0.16 0.16
-------------------------------------------------------------------
Total Assets $1,448.9 $1,296.7
-------------------------------------------------------------------


Net Earnings and Earnings per Share

The effective tax rate for 2004 was 29.9%, a decrease from the effective
rate of 37.8% in 2003. During 2004, an additional $3.6 million was
recognized as an asset in relation to the Mexican operations. The asset
is comprised of losses and asset tax benefits carried forward. The
operations of the Mexican facilities have become more stable and
management feels the asset recognized will likely be utilized by the
entities. Removing the recognition of the Mexican assets, the effective
rate would be 32.6%. This rate is still lower than the Canadian
effective rate of 34.1%.

The effective tax rate was also impacted by the results generated by
operations in Mexico and Hungary. The Hungarian operations enjoy the
benefit of a tax holiday through a tax credit system which management
expects will continue until 2011. The company has also recognized the
benefit of Canadian Scientific Research and Experimental Development tax
credits which are not subject to provincial taxes in Ontario. The higher
rate in 2003 reflects the impact of tax rate increases enacted by the
new Government of Ontario in the fourth quarter.

Net earnings from continuing operations for the year improved
significantly to $90.4 million from $48.1 million in 2003. Removing the
impact of the Mexican tax asset recognized, earnings would have been
$86.8 million. The earnings in 2003 were impacted significantly by the
sales agent termination of $23.6 million ($15.8 million net of tax) and
the additional future taxes of $3.5 million associated with the new
Ontario Government's change to corporate income tax rates. Removing the
unusual impacts from 2003, the earnings from continuing operations would
have been $67.4 million or $0.95 per share.

For the year, earnings per share from continuing operations were $1.28.
Removing the impact of the Mexican tax asset, earnings per share from
continuing operations would have been $1.23 as compared to $0.95 in 2003
after removing the sales termination and tax rate change. The
improvement is due to significant programs that were launched in 2003,
reaching full productive volumes in 2004, and achieving anticipated
utilization of program resources.

Interest

During the year, interest on long-term debt increased by $2.2 million
over last year to $9.2 million from $7.0 million. The increase is
primarily due to the private placement in October of 2004 and the
increased short-term borrowing position prior to the placement. The
effective interest rate, including the new placement, is lower in 2004
at 4.8% from 5.1% in 2003. This is the result of Linamar Hungary moving
portions of its Forint debt to Euros as it comes due for renewal. The
Euro debt affords a lower rate of interest and assists Linamar Hungary
in reducing exchange exposure as the company's Euro based sales grow.

Other interest expense is higher by $1.3 million for the year due to the
increased level of utilization of short-term debt before the receipt of
the private placement funds in October. The short-term borrowings were
used to support significant capital spending required for the launch of
many new long-term differential case and cylinder head programs.
Interest earned has increased slightly over 2003.

SUMMARY OF QUARTERLY RESULTS OF OPERATIONS

The following table sets forth unaudited information for each of the
eight quarters ended March 31, 2003 through December 31, 2004. This
information has been derived from our unaudited consolidated financial
statements which, in the opinion of management, have been prepared on a
basis consistent with the audited consolidated financial statements and
include all adjustments, consisting only of normal recurring
adjustments, necessary for fair presentation of our financial position
and results of operations for those periods.



(millions of dollars,
except per share amounts) Mar 31, June 30, Sept 30, Dec 31,
2003 2003 2003 2003
---------------------------------------------------------------------
Sales 372.2 368.0 366.8 402.8
Earnings from Continuing
Operations 14.4 18.2 14.5 1.0
Earnings Per Share from
Continuing Operations
Basic 0.20 0.26 0.21 0.01
Diluted 0.20 0.26 0.21 0.01
Net Earnings (Loss) Per Share
Basic 0.17 0.24 0.18 (0.02)
Diluted 0.17 0.24 0.18 (0.02)



(millions of dollars,
except per share amounts) Mar 31, June 30, Sept 30, Dec 31,
2004 2004 2004 2004
---------------------------------------------------------------------
Sales 430.6 460.6 478.7 474.2
Earnings from Continuing
Operations 21.7 24.6 19.8 24.2
Earnings Per Share from
Continuing Operations
Basic 0.31 0.35 0.28 0.34
Diluted 0.31 0.34 0.28 0.34
Net Earnings (Loss) Per Share
Basic 0.29 0.32 0.36 0.34
Diluted 0.29 0.32 0.35 0.34


The quarterly results of the company are impacted by the seasonality of
certain operational units. Earnings in the second quarter are positively
impacted by the high selling season for both the aerial lift platform
and agricultural businesses. The third quarter is generally negatively
impacted by the scheduled summer shutdowns at the company's automotive
customers. The company takes advantage of summer shutdowns for
maintenance activities that would otherwise disrupt normal production
schedules.

The results above have been restated to reflect the sale of the
company's 50% interest in Weslin in the third quarter of 2004. The
operational results of Weslin and the gain realized on the sale have
been reclassified to discontinued operations for all periods reported.

The fourth quarter of 2003 was negatively impacted by the termination of
all outside sales agents which cleared the way for the company to build
its own internal sales force.



FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

(millions of dollars) 2004 2003
---------------------------------------------------------------------
Cash provided from (used for):
Operating activities $163.9 $108.8
Financing activities 27.9 125.5
Investing activities (208.5) (231.2)
Effect of translation adjustment (0.1) (1.7)
---------------------------------------------------------------------
Net increase (decrease) in cash (16.8) 1.4
---------------------------------------------------------------------
Cash Position - Beginning of Year 29.3 27.9
---------------------------------------------------------------------
Cash Position - End of Year 12.5 29.3
---------------------------------------------------------------------
Comprised of:
Cash 25.5 34.0
Unpresented Cheques (13.0) (4.7)
---------------------------------------------------------------------
$12.5 $29.3
---------------------------------------------------------------------


Linamar's cash position (net of unpresented cheques) at December 31,
2004 was $12.5 million, a decrease of $16.8 million. The timing of cash
receipts in 2004 allowed application to the short-term bank borrowings
to reduce levels at the end of the year. The increase in unpresented
cheques is indicative of capital expenditure levels during 2004.

Cash generated during the year from operations, the private placement
and the sale of Weslin were offset by the reduction in short-term
borrowings and extensive capital spending to support future sales
growth. Capital intensive, long-term programs were launched during 2004
or are scheduled for early 2005.



Operating Activities

(millions of dollars) 2004 2003
---------------------------------------------------------------------
Earnings from continuing operations $90.4 $48.1
Items not involving current cash flows 116.1 94.1
---------------------------------------------------------------------
Cash provided from operations $206.5 $142.2
Net change in non-cash working capital (45.4) (59.1)
Deferred gain 4.8 30.5
---------------------------------------------------------------------
Cash flow - continuing operations $165.9 $113.6
Cash flow - discontinuing operations (2.0) (4.8)
---------------------------------------------------------------------
Cash provided from operating activities $163.9 $108.8
---------------------------------------------------------------------


Cash provided by continuing operations, before the effect of changes in
non-cash working capital, increased to $206.5 million in 2004 from
$142.2 million in 2003, driven primarily by improved operating results
achieved in 2004 and higher amortization. The 2003 results include the
receipt of cash proceeds of $30.5 million on U.S. forward contracts
crystallized in the second quarter of 2003 as compared to $4.8 million
in 2004.

Incremental investments in non-cash working capital for the year were
$45.4 million, compared to $59.1 million last year. This increased
investment compared to last year resulted primarily from increases in
accounts receivable and inventory levels which is a reflection of the
change from consigned to purchased materials for the CAT programs,
programs for cylinder heads and connecting rods. ILSA has also been
requested by Renault to carry twenty production days of equivalent
engines.



Financing Activities

(millions of dollars) 2004 2003
---------------------------------------------------------------------
Proceeds from (repayment of)
short-term bank borrowings $(101.9) $97.8
Proceeds from long-term debt 165.7 47.4
Repayment of long-term debt (24.9) (8.4)
Proceeds from common share issuance 0.3 -
Dividends to shareholders (11.3) (11.3)
---------------------------------------------------------------------
Cash provided from financing activities $27.9 $125.5
---------------------------------------------------------------------


Cash provided by financing activities for 2004 was $27.9 million. In
2003, the cash provided by financing activities was $125.5 million.

During 2004, short-term borrowings continued to increase as a result of
the high levels of investment in capital equipment related to launching
programs. The private placement provided funds of U.S. $120.0 million in
October 2004 and was applied to reduce the level of short-term
borrowings. Linamar Hungary continues to replace short-term Forint
borrowings with long-term Euro debt, reducing financing costs as a
result.

The increase in short-term bank borrowings during 2003 was primarily the
result of acquisitions. The McLaren acquisition required cash of $26.1
million. During the second quarter, the LAT acquisition required cash of
$22.9 million and the share buyout of Torreon Holding Inc.("Torreon")
required cash of $15.5 million.

During the fourth quarter of 2003, the company renewed and increased the
non-revolving term facility under its Canadian syndicated credit
agreement. The agreement requires the facility to be fully drawn at all
times. The credit facility was increased by $45.0 million, increasing
the total credit available in Canada to $302.0 million. This agreement
was renewed in December 2004 at the same debt levels.

In 2003 and 2004, additional long-term debt was acquired through further
capital leases for the new programs coming online at Eagle.

Repayments related to scheduled terms for the Skyjack Industrial Revenue
Bonds, Linamar Hungary Euro loans and the capital leases at Eagle.

In 2004, stock options were exercised for proceeds of $0.3 million. No
options were exercised during 2003.

The company continued its dividend policy with payments made quarterly
on 70,627,476 common shares at a rate of $0.04 per share. The dividend
declared March 8, 2005 and payable on March 31, 2005 to shareholders on
record on March 22, 2005 is $0.06 per share.



Investing Activities

(millions of dollars) 2004 2003
---------------------------------------------------------------------
Payments for purchases of
capital assets $(259.1) $(159.0)
Proceeds from disposal of
capital assets 2.8 6.7
Proceeds from disposal of Weslin
Industries Inc. 51.7 -
Investment in other long-term assets (5.5) (4.7)
Investment in long-term receivables (2.0) (10.0)
Business acquisitions - (64.5)
Investment by Minority Shareholders 3.7 -
Other - 0.2
Discontinued operations (0.1) 0.1
---------------------------------------------------------------------
Cash used for investing activities $(208.5) $(231.2)
---------------------------------------------------------------------


As at December 31, 2004, outstanding commitments for capital
expenditures under purchase orders and contracts amounted to
approximately $93.7 million (2003 - $66.8 million).

For 2004, cash spent on investing activities totaled $208.5 million
while, for 2003, the total spent was $231.2 million. The purchases of
capital assets in 2004 exceed 2003 levels by over $100.0 million. During
2004 the company invested in capital equipment for the DCX ATX
differential case, the DCX 9.25 carrier, the CAT block and liner
programs, the Eaton 8.6 differential case, the Ford V10 cylinder head
and the Ford 6R program. Expenditures were also made for the 2005 launch
of a hydro-formed camshaft to be produced by LAT for a German auto
maker. These programs account for almost 70% of the 2004 investment in
capital equipment.

The company received net proceeds from the sale of Weslin in the amount
of $51.7 million during 2004 in contrast to the outlay of $64.5 million
in 2003 for the acquisitions of McLaren, LAT and the remaining 45% of
Torreon, which holds 100% ownership interest in ILSA.

Financing Resources

At December 31, 2004, cash on hand was $25.5 million, with unpresented
cheques and short-term bank borrowings of $63.9 million. As at December
31, 2004, the company's syndicated revolving facility had available
credit of $138.1 million. The company completed a successful private
placement yielding U.S. $120.0 million. In December 2003, the syndicated
non-revolving term facility was renewed and increased to $120.0 million,
due in December 2006. This facility is fully drawn, as required under
the credit agreement. Of the company's consolidated long-term debt, only
2.2% of the $315.2 million is due and payable in the next 12 months.

Contractual Obligations

The following table summarizes contractual obligations by category and
the associated payment for the next five years.



Contractual Payment Due by Period (millions of dollars)
Obligations Total 2005 2006 2007 2008 2009 Thereafter
---------------------------------------------------------------------
Long-Term
Debt Principal,
Excluding
Capital Leases $297.2 $4.3 $129.9 $11.6 $0.8 $100.4 $50.2
Capital Lease
Obligations(4) 21.7 3.9 3.9 3.9 3.9 6.0 0.1
Operating Leases 13.9 3.8 3.0 2.6 2.0 1.5 1.0
Purchase
Obligations(5) 93.7 93.7 - - - - -
---------------------------------------------------------------------
Total Contractual
Obligations $426.5 $105.7 $136.8 $18.1 $6.7 $107.9 $51.3
---------------------------------------------------------------------

(4) "Capital Lease Obligations" include the interest component in
accordance with the definition of minimum lease payments under GAAP.

(5) "Purchase Obligations" means an agreement to purchase goods or
services that is enforceable and legally binding that specifies all
significant terms, including: fixed or minimum quantities to be
purchased; fixed, minimum or variable price provisions; and the
approximate timing of the transaction.


Shareholders' Equity

Book value per share(6) grew to $9.81 per share at December 31, 2004, as
compared to $8.88 per share at December 31, 2003. Earnings net of
dividends contributed $81.2 million for the year to retained earnings.
During the year 24,000 options were exercised for total proceeds of $0.3
million. The number of options outstanding as at December 31, 2004
stands at 3,009,000.

(6) See discussion of non-GAAP measures

The decrease in the cumulative translation adjustment of $16.0 million
since December 31, 2003 represents the unrealized foreign exchange loss
on Linamar's net investment in its self-sustaining foreign subsidiaries.
This change is a result of the strengthening Canadian dollar relative to
the U.S. dollar and Mexican Peso. Also, the cumulative realized gain on
disposal of Weslin amounted to $6.5 million of the $16.0 million change
during the year.

Foreign Currency Activities

Linamar pursues a strategy of attempting to balance its foreign currency
cash flows to the largest extent possible in each region in which it
operates but subsequent to negotiations with its customers on those
matters. Linamar's foreign currency cash flows for the purchases of
materials and certain capital equipment denominated in foreign
currencies are naturally hedged when contracts to sell products are
denominated in those same foreign currencies. In an effort to manage the
remaining exposure, Linamar employs hedging programs primarily through
the use of forward exchange contracts. The contracts are purchased based
on the projected foreign cash flows from operations. The company does
not hold or issue derivative financial instruments for trading or
speculative purposes, and controls are in place to detect and prevent
these activities.

The amount and timing of forward contracts is dependent upon a number of
factors, including anticipated production delivery schedules,
anticipated customer payment dates, anticipated foreign currency costs,
and expectations with respect to future foreign exchange rates. Linamar
is exposed to credit risk from the potential default by counterparties
on its foreign exchange contracts and attempts to mitigate this risk by
dealing only with Canadian chartered banks. Despite these measures,
significant long-term movements in relative currency values could affect
Linamar's results of operations. Linamar does not hedge the business
activities of its self-sustaining foreign subsidiaries and, accordingly,
Linamar's results of operations could be further affected by a
significant change in the relative values of the Canadian dollar, U.S.
dollar, Euro, Hungarian Forint and Mexican Peso.

At December 31, 2004, the company was committed to a series of monthly
forward and zero cost option contracts to sell U.S. dollars. As these
forward and zero cost option contracts qualify for accounting as cash
flow hedges, the unrealized gains and losses are deferred and recognized
in the same period as the sales which generate the cash flows.

The company was also committed to a series of monthly forward exchange
contracts to sell British pounds and two long-dated forwards to buy U.S.
dollars. As these forward exchange contracts qualify for accounting as
fair value hedges, they are marked to current exchange rates to offset
the exchange gains and losses on the underlying hedged items.

At December 31, 2004, the net unrecognized gain on the U.S. contracts
was approximately $0.7 million (2003 - $12.3 million gain). The
unrecognized net gain on the British pound contracts was approximately
$0.1 million (2003 - $0.1 million loss). The unrecognized gain on the
Euro contracts was approximately $Nil (2003 - $0.2 million).

During the prior year, the company placed forward contracts to buy U.S.
dollars, effectively locking in gains on forward contracts in place at
December 31, 2002. This transaction resulted in cash proceeds of $30.5
million. During 2004, the company locked in additional gains of $4.8
million. The gains were deferred and amortized to revenue based on the
terms of the original underlying contracts. As at December 31, 2004, the
balance remaining to be amortized is $9.2 million.

Off Balance Sheet Arrangements

The company leases transport trucks and trailers through its
subsidiaries Linamar Transportation Inc. and Linamar Transportation USA,
Inc. These subsidiaries are ISO 9001-2000 registered companies,
providing the best possible delivery service to their customers. The
company currently leases approximately 105 trucks and 152 trailers from
Penske Truck Leasing and Ryder Truck Rental Canada, Ltd. The amount due
under these operating leases are reflected under the heading "Operating
Leases" in the table set out in the "Contractual Obligations" section of
this document. The company is allowed to return up to 20% of the fleet
at any time without incurring any charges. Should the entire arrangement
be terminated, the company would be responsible for the balance of the
amount owing under the leases.

The company has various operating leases for office equipment,
computers, fork trucks, and other such items. Please see Note 15 of the
consolidated financial statements incorporated herein.

Under a portfolio purchase agreement signed in 2004, the company sells
certain long-term receivables. Although title is transferred and no
entitlement or obligated repurchase agreement is in place before
maturity, the company remains exposed to certain risks of default on the
amount of proceeds from receivables under securitization less recourse
in the form of property, plant and equipment. Under the agreement,
receivables are sold on a fully serviced basis so that the company
continues to administer the collection of such receivables. The company
receives no fee for administration of the collection of such receivables.

Guarantees

The company is also a party to certain financial guarantees and
contingent liabilities on government assistance as discussed in Notes
13, 22, and 23 of the consolidated financial statements that are
incorporated herein.

Transactions with Related Parties

Included in the purchase of property, plant and equipment are the
construction of buildings, building additions and building improvements
in the aggregate amount of $5.3 million (2003 - $11.3 million) to
Kiwi-Newton Construction Ltd., a company owned by the spouse of an
officer and a director. Included in cost of sales, are maintenance costs
of $0.7 million (2003 - $0.2 million) by the same company. Included in
selling, general and administrative expenses, is a recovery of
approximately $0.1 million (2003 - $Nil) related to equipment and
services sold to the same company. On a periodic basis the company
entertains a closed-bid process to ensure that it receives the best
price for the work done by a related party.

Included in cost of sales, are lease costs of $0.3 million (2003 - $Nil)
related to property leased from a company owned by two directors.

During the prior year, certain officers and directors of the company
exercised their options in Linamar Hungary subject to government
regulatory approval from the Court of Registry in Hungary. During the
current year, registration was completed resulting in a dilution of the
company's ownership in the subsidiary from 62.8% to 58.6%. No further
options are outstanding subsequent to this transaction.

A component of the company's Human Resources and Corporate Governance
Committee mandate is to review related party transactions for their fair
market value.

FOURTH QUARTER

In the fourth quarter, sales increased by 17.8% to $474.2 million
compared to $402.8 million in the same quarter last year. The increase
was the result of the ramping up of automotive volumes on new programs
launched during 2004 and the end of 2003 (net of anticipated programs
ending) such as the expanded CAT programs, the Ford V10 cylinder head,
the DCX 9.25 carrier and DCX ATX differential case as well as higher
sales of aerial lift platforms at Skyjack.

With respect to fourth quarter sales, Linamar's North American
Automotive sales grew by 14.0% while North American automobile
production decreased by 1.8% over the fourth quarter of 2003. Had the
U.S. to Canadian dollar exchange rate remained unchanged, sales would
otherwise have increased by 21.1%.

In Europe, Linamar's fourth quarter automotive sales grew by 18.9% due
to higher sales at Linamar Hungary, despite the cancellation of the GM
CVT program. This result was achieved while European automobile
production increased by only 3.0%.

Content per vehicle for the quarter in North America grew by 21.5% to
$89.34, while European content per vehicle declined by 5.0% to $7.57
compared to fourth quarter 2003.

The segmented results for the fourth quarter show continued sales growth
in the North American Automotive Systems segment of $398.9 million as
compared to $342.1 million in 2003. This growth is related to increasing
volumes such as the expanded CAT programs. Operating earnings in this
segment were negatively impacted by metal surcharges not recovered from
the end customer. Lower margins were evident with respect to the launch
of new programs such as the DCX 9.25 carrier and Eaton differential
cases; as operating efficiencies take effect, margins will improve.

Sales in the European segment increased slightly to $30.7 million as
compared to $28.6 million in 2003 with volumes on programs for Denso and
Bosch, compensating for the lost GM CVT sales. Europe's operating
earnings of $2.3 million as compared to a loss of $4.6 million in 2003
were positively impacted in the quarter by sales volume increases, the
net CVT settlement, and exchange gains realized.

The Industrial segment experienced higher sales volumes than 2003,
resulting in fourth quarter sales of $44.6 million. This quarter is
consistent with a strong market this year for aerial lift platforms.
Operating earnings for the segment remained consistent with 2003 at $3.5
million as compared to $3.2 million.

On a geographic segmented basis, Canadian sales continued to grow,
achieving a level of $373.5, an increase of $66.9 million, over the
fourth quarter of 2003. Sales in the quarter were positively impacted by
the expanded CAT volumes, the ramp up during the year of the DDC
overhead assembly and the launch of the DCX ATX differential case.
Operating earnings eroded slightly to $32.9 million from $38.2 million
in the fourth quarter of 2003 as plants experienced lower margins on new
programs during program launches, R&D tax benefits recorded in 2003, and
larger effect of foreign exchange hedging in 2003.

The U.S. segmented sales for the fourth quarter increased slightly to
$31.4 million. Increases in the Skyjack new unit and parts business were
offset by expected declining cylinder head sales to International.
Segmented operating earnings declined slightly to $1.3 million as
compared to $2.3 million in 2003 as a result of the cylinder head volume
decline.

The Mexican segment experienced higher sales during the fourth quarter
at $32.1 million as compared to $29.0 million in 2003. Volumes on
equivalent engines for Renault exceeded 2003 levels. Newer programs such
as the Eaton 8.6 differential case were launched during 2004 and higher
volumes achieved on GM and CAT programs launched in 2003. This segment
experienced a loss in the fourth quarter of $0.6 million; however, this
is an improvement from the $2.9 million loss in the same quarter of
2003. The volumes on the GM and CAT programs have reached more efficient
levels, reducing costs. These gains have been offset slightly by lower
margins associated with the launch of the Eaton 8.6 differential case.

European sales in the fourth quarter were $37.3 million, a slight
decline from 2003 mainly due to the reduced Skyjack sales in the
European marketplace. Lower sales were also experienced due to the CVT
cancellation; however, these volumes were offset by new programs and
increased volumes on existing programs. Operating earnings improved at
$4.2 million as compared to a loss in 2003 of $1.2 million for the
quarter. This segment benefited from the net CVT settlement which
partially offset operating losses incurred in earlier quarters, an
exchange gain on Euro-based debt, and improved operating efficiencies.

In the quarter, gross margin remained consistent at 13.3% of sales or
$60.8 million compared to 13.3% or $53.6 million in the same quarter of
last year. During the quarter, margins were impacted, somewhat, during
program launches as expected. North American Automotive earnings were
down slightly as certain facilities work towards operational
efficiencies on newly launched lines and other facilitates prepare for
the launch of new programs such as those related to the Ford 6R program.
Amortization was 6.9% of sales as compared to 6.7% for the fourth
quarter of last year. This is indicative of the new programs starting
production but which are not yet at full capacity by the end of the year.

Fourth quarter operating earnings increased by 4.5% to $36.1 million as
compared to $34.5 million for the same quarter of 2003. This increase
was the result of higher sales and improvements in Europe and Mexico.
SG&A costs were slightly higher in the fourth quarter at 5.2% of sales
or $24.8 million as compared to 4.7% of sales or $19.0 million in the
same quarter of 2003.

During the fourth quarter of 2004, management reviewed the current and
expected results related to the Mexican entities. Based on this
assessment, $3.6 million of future tax assets was recognized thereby
reducing the tax rate to 20.2% for the quarter versus 31.4% otherwise.

In the fourth quarter of 2003, Linamar completed the termination of its
sales agent agreements and recorded a one-time charge of $23.6 million
in recognition of that transaction. Also during the fourth quarter of
2003, the Government of Ontario increased income tax rates, which
impacted the company's future tax liability by $3.5 million.

Proposed Transactions

The company has no transactions currently proposed as at March 8, 2005.

RISK MANAGEMENT

Operational Risk

Dependence on Certain Customers

The company provides precision machined products to multiple divisions
and suppliers of some of the largest businesses in the automotive and
non-automotive industry. As a result, the company typically has a few
customers that account for more than 10% of its consolidated revenues or
receivables at any given time. The sales cycle is extended longer than
one year for most transactions. Any disruption in the company's
relationships with these major customers or any decrease in revenue from
these major customers, given unforeseen events in the automotive
industry, could have a material adverse effect on the company's
business, financial condition, or results of operations. In addition,
while it may require such customers a considerable length of time to
find an alternate source and have them tool up, operating results could
be adversely affected if one or more of these major customers cancel,
delay or reduce significant orders in the future.

Sources and Availability of Raw Materials

The primary raw materials utilized by the precision machining operations
are iron and aluminum castings and forgings, which are obtained from a
variety of suppliers in North America for the Canadian, U.S. and Mexican
operations. The company is not dependent on any one supplier. There are
occasions where the material is consigned to the company by its
customers such that any disruption in supply is the responsibility of
that customer. The European segment sources its raw materials primarily
from Europe. The company continues to seek out capable, less costly
sources for its castings. By appointing a Director of Asian Business
Development, the company is continuing its efforts to locate and develop
strategic suppliers in Asia to deliver parts to the company's North
American facilities for further manufacturing and to create
opportunities to supply the rapidly growing Asian automotive sector.
During 2004, the company has been successful in sourcing some of its
requirements from Asia. This effort will continue as Linamar's presence
in Asia increases.

Raw materials supply factors such as allocations, pricing, quality,
timeliness of delivery, transportation and warehousing costs may,
however, affect the raw material sourcing decisions of Linamar and its
plants. When appropriate and available, the company may negotiate
long-term agreements with raw material suppliers to attempt to ensure
continued availability of certain raw materials on favourable terms. In
the event of significant unanticipated increase in demand for the
company's products and the supply of raw materials, the company may in
the future be unable to manufacture certain products in a quantity
sufficient to meet its customers demand in any particular period.

Technological Change and Product Launches

The automotive and non-automotive precision machining industry may
encounter technological change, new product introductions, and evolving
industry requirements and standards. Accordingly, the company believes
that its future success depends on its ability to launch new programs as
well as enhance or develop current and future products at competitive
prices and in a timely manner. The corporation's inability, given
technological or other reasons, to enhance, develop, or launch products
in a timely manner in response to changing market conditions or customer
requirements could also have a material adverse effect on the company's
results of operations. For the development and production of products,
the ability for the company to compete successfully will depend on its
ability to acquire and retain competent trades' people, management, and
product development staff that allow the company to quickly adapt to
technological change and advances in processes. In addition, there can
be no assurance that products or technologies developed by others will
not render the company's products uncompetitive or obsolete.

Financial And Capital Management Risk

Capital and Liquidity Risk

The amount of financial resources available to invest in a company's
growth is dependent upon its size and willingness to utilize debt and
issue equity. Since Linamar has a conservative financial policy and is
not as large as some competitors, the company has fewer financial
resources than some of its principle competitors. If the company exceeds
its growth expectations it may require additional debt or equity
financing. There is no assurance that the company will be able to obtain
additional financial resources that may be required to successfully
compete in its markets on favourable commercial terms. Failure to obtain
such financing could result in the delay or abandonment of certain
strategic plans for product manufacturing or development or for the
company to satisfy its obligations as they become due, which may have a
material adverse effect on the business and financial condition of the
company.

The company's current credit facility requires the company to comply
with certain financial covenants. There can be no assurance of the
company's ability to continue to comply with these financial covenants
or to appropriately service its debt given unforeseen events.

Acquisition and Expansion Risk

The company may intend to expand its operations, depending on certain
conditions, by acquiring additional businesses, products or
technologies. There can be no assurance that the company will be able to
identify, acquire or profitably manage additional businesses, or
successfully integrate any acquired businesses, products or technologies
into the company without substantial expenses, delays or other
operational or financial problems. Furthermore, acquisitions may involve
a number of special risks, including diversion of management's
attention, failure to retain key personnel, unanticipated events or
circumstances, and legal liabilities, some or all of which could have a
material adverse effect on the company's business, results of operations
and financial condition. In addition, there can be no assurance that
acquired businesses, products or technologies, if any, will achieve
anticipated revenues and income. The failure of the company to manage
its acquisition or expansion strategy successfully could have a material
adverse effect on the company's business, results of operations and
financial condition.

Foreign Currency Risk

Linamar typically negotiates sales contracts and purchases materials,
equipment and labour in the resident currency for the region in which
Linamar's specific operations are located. Linamar's foreign currency
cash flows for the purchases of materials and certain capital equipment
denominated in foreign currencies are naturally hedged when contracts to
sell products are denominated in those same foreign currencies. In an
effort to manage the remaining exposure to foreign currency risk,
Linamar employs hedging programs primarily through the use of forward
and zero cost option contracts. The contracts are purchased based on the
projected foreign cash flows from operations.

The company enters into forward exchange contracts to manage exposure to
currency rate fluctuations related primarily to its future cash inflows
of U.S. dollars, Euros, and British pounds from operations as well as
outflows of Euros from certain capital asset acquisitions and two
long-dated forwards to buy U.S. dollars. The company uses forecasted
future cash flows of foreign currencies to determine the level of hedges
required. The purpose of the company's foreign currency hedging
activities is to minimize the effect of exchange rate fluctuations on
business decisions and the resulting uncertainty on future financial
results. The company does not hold or issue derivative financial
instruments for trading or speculative purposes, and controls are in
place to detect and prevent these activities. The company's forward and
zero cost option contracts are referenced in Note 17 to the company's
consolidated financial statements for the year ended December 31, 2004
which are included in the Annual Report to shareholders.

Credit Risk

A substantial portion of the company's accounts receivable are with
large customers in the automotive, truck, and industrial sectors and are
subject to normal industry credit risks. At December 31, 2004, the
accounts receivable from the company's three largest customers amounted
to 15.0%, 13.4%, and 8.1% of accounts receivable (2003 - 18.1%, 6.9%,
and 5.5%).

Interest Rate Risk

Interest rate swap agreements are used as part of the company's program
to manage the fixed and floating interest rate mix of the company's
total debt portfolio and related overall cost of borrowing. The company
designates its interest rate hedge agreements as hedges of the
underlying debt and accordingly defers gains and losses. The interest
rate swap agreements involve the periodic exchange of payments without
the exchange of the notional principal amount upon which the payments
are based, and interest expense on the debt is adjusted to include the
payments made or received under the interest rate swaps. At December 31,
2004, the increase or decrease in net earnings for each 1% change in
interest rates on the long-term and short-term borrowings amounts to
approximately $0.9 million (2003 - $0.8 million) and $0.3 million (2003
- $1.0 million) respectively. Please see Note 17 of the company's
consolidated financial statements.

Seasonality, Industry Growth, and Competition

Historically, earnings in the second quarter are positively impacted by
the high selling season for both the general lift platform and
agricultural businesses. Vehicle production is typically at its lowest
level during the months of July and August due to model changeovers by
the OEMs. Since the company's working capital requirements are dependent
upon industry production volumes, they are typically at their lowest
level at this time. The company takes advantage of summer shutdowns for
maintenance activities that would otherwise disrupt normal production
schedules. Production volumes in the month of December are usually
negatively affected by the holiday season.

Through its precision machining businesses, Linamar principally engages
in machining and assembly for the automotive industry, which generally
involves long-run processes for long-term contracts. Outsourcing of
brake components and assemblies, engine components, and powertrain
segment by the OEM's has increased.

Management believes there is still more work performed in house by the
OEM's than is currently outsourced, and therefore there is still large
potential for growth. However, because of various factors affecting the
OEM's, such as the level of consumer spending on automobiles, labour
contracts, and other economic factors, the OEM's are constantly facing
volume changes and decisions on whether to outsource work or not; such
changes and decisions are reflected in Linamar's results through reduced
volume on some existing programs and the ability to bid on, and receive,
new business.

Through its Skyjack subsidiary, the company engages in the production
and sale of aerial lift platforms. There is a clear sales cycle in this
industry segment, as it is closely related to, and affected by, product
life cycle and the construction sector. Therefore, the risks and
fluctuations in the construction industry in the countries that Skyjack
operates in, also affect Skyjack's sales.

The precision machining industry in North America is characterized by a
large number of manufacturers. As a result, manufacturers such as
Linamar tend to have a relatively small share of the North American
market. Nonetheless, Linamar believes that it is currently the sole
supplier being used by its customers worldwide for products that
represent more than half of the company's consolidated sales.

The company faces numerous sources of competition, including its OEM
customers and their affiliated parts manufacturers, other direct
competitors and product alternatives. In many product areas, the primary
competition comes from in-house divisions of the OEMs. As Linamar's
North American customers have faced increased cost pressures, some have
decided to "outsource" some of their requirements. This outsourcing has
continued to represent an additional source of new business for Linamar.

Other competition in metal machining and assembly work comes from high
precision machining companies which typically have several manufacturing
locations and substantial capital resources to invest in equipment for
high volume, high precision, long-term contracts. Several of these
companies are heavily involved in the automotive industry and are
suppliers to GM, Ford and Chrysler, as well as major truck manufacturers
and OEMs ultimately controlled by persons resident outside North America.

Linamar believes that there are a large number of independent suppliers
which have the capability to produce some or all of the components,
modules and systems which Linamar currently produces. In addition, some
of these competitors are larger and may have access to greater resources
than Linamar, but the company believes that none of them are dominant in
the markets in which Linamar operates. The basis for supplier selection
by OEMs is not typically determined solely by price, but would also
typically include such elements as quality, service, historical
performance, timeliness of delivery, proprietary technologies, scope of
in-house capabilities, existing agreements, responsiveness and the
supplier's overall relationship with the OEM, as well as being
influenced by the degree of available and unutilized capacity of
resources in the OEM's manufacturing facilities, labour relations issues
and other factors. The number of competitors that OEMs solicit to bid on
any individual product has, in certain circumstances, been significantly
reduced and management expects that further reductions will occur as a
result of the OEMs' stated intention to deal with fewer suppliers and to
award those suppliers longer-term contracts.

Foreign Business Risk

The company's operations in Europe and Mexico, and the operations to be
commenced in China and South Korea, are subject to general business
risks that do not exist in Canada or the United States. The political
climate and government policies are less stable and less predictable in
these countries. As well, Hungary, Mexico, China and South Korea do not
have the same economic infrastructure as exists in Canada or the United
States.

Operations outside the United States and Canada subject Linamar to other
potential risks associated with international operations, including, but
not limited to: complications in both compliance with and unexpected
changes in foreign government laws and regulations, tariffs and other
trade barriers, potential adverse tax consequences, fluctuations in
currency exchange rates, difficulty in collecting accounts receivable,
difficulty in staffing and managing foreign operations, events of
international terrorism, economic effects of public health threats such
as Severe Acute Respiratory Syndrome, recessionary environments in
foreign economies, uncertainties in local commercial practices, and
uncertainties in local accepted business practices and standards which
may not be similar to accepted business practices and standards in
Canada and which may create unforeseen business or public relation
situations.

Insurance

The company's business subjects it to the risk that it may incur product
liability claims, warranty or recall claims, as well as business
interruption claims. No assurance can be given that the insurance
coverage or insurance coverage limits of the company would be adequate
to protect it against any claims for product liability claims, warranty
or recall claims, or business interruption claims that may arise. The
company may require additional insurance coverage in these areas as the
company gets more involved with product design and development. This
insurance is expensive and may not be available on acceptable terms, or
at all. Any uninsured or underinsured product liability claims, warranty
or recall claims, or business interruption claims could have a material
adverse effect on the company's financial condition, results of
operations and prospects.

Regulatory Risk

Securities Laws Compliance and Corporate Governance Standards

The securities laws in Canada and abroad have been changing since the
collapse of Enron Corporation in the United States and the subsequent
introduction of strengthened securities and governance laws such as the
Sarbanes-Oxley Act. Canada has been slowly implementing similar laws and
it is foreseen that this will continue indefinitely. The company is
currently implementing the Canadian Securities Administrators ("CSA")
Multilateral Instrument 52-109 and expects to be in full compliance with
the new proposed CSA date.

Tax Laws

The tax laws in Canada and abroad are continuously changing. Recently,
corporate tax rates in Canada have been on the decrease. There is no
assurance that rates will continue to decrease in Canada or remain
unchanged in other countries. The company's operations in Hungary are
subject to an effective tax holiday but there can be no assurance that
this effective holiday will continue beyond its anticipated end date.
The company's planned expansion into Asia via China and South Korea
subjects the company to new tax regimes that may change based on
political or social conditions. The company currently has tax losses and
credits in Mexico and the U.S. that, given unforeseen changes in tax
laws, may not continue indefinitely.

Emission Standards

Recent changes in emission standards in the U.S. in certain states, such
as California, may affect the future sale of products such as the
engines contained within certain automobiles. Even though the company
continues to implement changes to certain products via specifications
from customers, there can be no assurance that the company will be able
to keep pace with these changes. The introduction of the experimental
fuel cell automobile by all major automotive manufacturers may affect
the products and processes the company employs, the effect of which is
currently undetermined. Canada, and other countries where the company's
products are sold, has implemented the Kyoto Protocol, which sets limits
for emission standards. The effect of this standard has not been fully
analyzed by the automotive industry and its full effect on the financial
stability of the company and its customers is as yet undetermined.

Environmental Matters

Linamar's manufacturing operations are subject to a wide range of
environmental laws and regulations imposed by governmental authority in
the jurisdictions in which the company conducts business. Linamar has
established an Environment Committee of senior management to oversee
Linamar's environmental programs and to ensure that Linamar complies
with applicable environmental laws. As well, the company has regular
environmental compliance audits performed to check that wastes are
disposed of in accordance with such laws. Twenty-four of Linamar's
manufacturing facilities meet the ISO 14001 standard. All other
facilities are working towards qualifying under ISO 14001. To date,
environmental laws and regulations have not had a material affect on
Linamar's operations or financial condition. Linamar has made, and will
continue to make, significant expenditures in connection with
environmental matters. Changes in laws and regulations, however, and the
enforcement of such laws and regulations, are ongoing and may make
environmental compliance, such as emissions control, site clean-ups and
waste disposal, increasingly expensive. Senior management regularly
assesses the work and costs required to address environmental matters,
but is not able to predict the future costs (whether or not material)
that may be incurred to meet environmental obligations. Senior
management is not aware of any material environmental liability facing
the company at this time.

Dependence on Key Personnel

Loss of certain members of the executive team or key technical leaders
of the company could have a disruptive effect on the implementation of
the company's business strategy and the efficient running of day-to-day
operations until their replacement is found. Competition for personnel
throughout the industry is intense. The company may be unable to retain
its key employees or attract, assimilate, retain or train other
necessary qualified employees, which may restrict its growth potential.

CRITICAL ACCOUNTING ESTIMATES

The preparation of the consolidated financial statements requires
management to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and the related
disclosure of contingent assets and liabilities. The company bases its
estimates on historical experience and various other assumptions that
are believed to be reasonable in the circumstances, the results of which
form the basis for making judgments about the carrying value of assets
and liabilities. On an ongoing basis, the company evaluates its
estimates. However, actual results may differ from these estimates under
different assumptions or conditions.

Impairment of Goodwill and Other Intangibles

Management, on an annual basis, must assess for impairment of goodwill
and intangible assets not subject to amortization. For intangibles the
company must also assess for impairment when events and changes in
circumstances indicate that the carrying amounts may not be recoverable.
The company believes that the estimate of impairment for goodwill and
other intangibles is a "critical accounting estimate" because management
is required to make significant forward looking assumptions. Also,
different estimates that could have been used or changes in estimates
from period to period may have a material impact on the company's
consolidated balance sheets, statements of cash flows, and statements of
earnings. For goodwill, the company evaluates its interest in a
subsidiary's fair value using a valuation of their underlying net
identifiable assets. For other intangibles subject to amortization, the
company evaluates, when events or circumstances change, the fair value
of the intangible. The company uses a discounted cash flow method to
determine the fair value. Uncertain changes in the discount rate used,
and forward looking assumptions regarding improvement plans, costing
assumptions, timing of program launches, and production volumes may
affect the fair value of estimates used. No known trends, commitments,
events or other uncertainties are currently believed to affect the
assumptions used.

As at December 31, 2004, goodwill and other intangibles of $33.7 million
(2003 - $34.6 million) was recorded on the consolidated balance sheet of
the company. The amount acquired during the prior year was $31.9 million
with no acquisitions in the current year. The amount recorded as
impaired on the company's consolidated statements of earnings amounted
to $Nil (2003 - $Nil).

On a geographic segmented basis, the goodwill and other intangibles
balance was $3.3 million in the Canada segment, $11.7 million in the
U.S. segment (McLaren goodwill at $10.4 million and the McLaren trade
name at $1.3 million), and $18.7 million in the Europe segment (LAT
goodwill at $10.0 million and the LAT customer contract at $8.7
million). On an operation segmented basis, the balance was $11.7 million
in the North American Automotive Systems segment (McLaren goodwill at
$10.4 million and the McLaren trade name at $1.3 million), $18.7 million
in the Europe segment (LAT goodwill at $10.0 million and the LAT
customer contract at $8.7 million), and $3.3 million in the Industrial
segment.

There were no additions to goodwill or intangibles during 2004. The
company reviewed the carrying value of the intangible assets on the
annual anniversary of each acquisition. No impairment of goodwill and
other intangibles was recorded during the year.

Future Income Tax Assets and Liabilities

Future income tax assets and liabilities result from the difference
between the financial reporting and tax basis of assets and liabilities.
Loss carry forwards comprise a portion of the temporary differences,
outside of the principal item of amortization, and result in a future
income tax asset. To the extent that management does not consider it to
be more likely than not that a future income tax asset will be realized,
a valuation allowance is provided. The company considers this allowance
a "critical accounting estimate" as highly uncertain assumptions are
made at the time of estimation and differing estimates may result due to
changes in the assumptions from period to period and have a material
impact on the company's consolidated financial statements. The company
evaluates quarterly the realization of its future tax assets by
assessing its valuation allowance and by adjusting the amount of such
allowance, if necessary. The factors used to assess the likelihood of
realization are the company's forecast of future taxable income and
available tax planning strategies that could be implemented to realize
the future tax assets. The company has and continues to use tax planning
strategies to realize future tax assets in order to avoid the potential
loss of benefits. Unknown future events and circumstances, such as
changes in tax rates and laws, may materially affect the assumptions and
estimate made from one period to the next. Any significant change in
events, tax laws, and tax rates beyond the control of the company may
materially affect the consolidated financial statements.

As at December 31, 2004, the valuation allowance against the tax benefit
of tax credits and loss carry forwards as well as other assets with tax
value in excess of book value was $15.5 million (2003 - $24.9 million)
which is based on loss carry forwards and other assets, and is reflected
in the net future income tax liability from continuing operations
balance of $24.0 million (2003 - $11.3 million) on the consolidated
balance sheets of the company.

Given the uncertainty of changes in events, tax laws, and tax rates, a
valuation allowance of either Nil or the full balance of loss carry
forwards and other assets comprise the range of estimates from which the
estimate was selected.

On a geographical segmented basis, the valuation allowance of $15.5
million was in the Mexico segment. On an operational segmented basis the
valuation allowance was $15.5 million in the North American Automotive
Systems segment.

Impairment of Long-Lived Assets

Management assesses for impairment of long-lived assets when events and
changes in circumstances indicate that the carrying amounts may not be
recoverable. The company believes that the estimate of impairment for
long-lived assets is a "critical accounting estimate" because management
is required to make significant forward looking assumptions when events
or circumstances indicating impairment arise. Also, different estimates
that could have been used or changes in estimates from period to period
may have a material impact on the company's consolidated balance sheets,
statements of cash flows, and statements of earnings. Recoverability is
assessed by comparing the carrying amount first to the estimated
undiscounted future cash flows. An impairment loss is measured when the
carrying amount of the long lived asset exceeds its fair value which can
be determined using the discounted future cash flows the long-lived
assets are expected to generate. Uncertain changes in the discount rate
used, and forward looking assumptions regarding improvement plans,
costing assumptions, timing of program launches, and production volumes
may affect the fair value of estimates used. No known trends,
commitments, events or other uncertainties are currently believed to
affect the assumptions used.

Currently no significant long-lived assets, which primarily consists of
property, plant and equipment, has had significant changes in
circumstances to indicate that their carrying amount may not be
recoverable. Therefore, no quantification of change in financial
performance or consolidated financial statement line items has been
provided. Since the evaluation of impairment of long-lived assets is a
recent handbook addition no changes in estimates has occurred over the
past two years.

Stock-Based Compensation

Management estimates the fair value of stock-based compensation granted
after January 1, 2002. This fair value is amortized to earnings over the
remaining vesting period. The fair value of the options issued each
year, if applicable, is determined using the Black-Scholes option
pricing model. The company believes that the estimate of stock-based
compensation is a "critical accounting estimate" because management is
required to make significant forward looking assumptions. Given the
varying inputs on which the Black-Scholes option pricing model is based,
can result in significantly different results, there may be a material
impact on the company's consolidated balance sheets, statements of cash
flows, and statements of earnings. Uncertain changes in expected stock
volatility, the change in expected dividend yields, the expected option
term, and changes in assumptions used to form a risk free rate during
the expected option term may affect the value derived for stock-based
compensation. No known trends, commitments, events or other
uncertainties are currently believed to affect the assumptions used.

Currently the number of options outstanding that were issued after
January 1, 2002 is not significant. Therefore, no quantification of
change in assumptions used in the Black-Scholes option pricing model has
been provided as these changes in assumptions would not be material to
the company's consolidated financial statements. Since the fair value of
stock-based compensation is determined at the grant date no changes in
estimates has occurred over the past two years. Currently the
compensation expense is recorded in the North American Automotive
Systems segment and amounts to $16 thousand. Retroactive change without
restatement, to comply with transitional provisions, amounted to $41
thousand to retained earnings for 2002 and 2003.

CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTIONS

The following accounting policies and pronouncements were adopted during
the year ended December 31, 2004:

a) During the first quarter, the company introduced a policy to address
the adoption of the Canadian Institute of Chartered Accountants ("CICA")
revised Handbook Section 3870 "Stock-based compensation and other
stock-based payments". The company began to amortize to earnings the
estimated fair value of the options granted after January 1, 2002 over
their remaining vesting period:Effective January 1, 2004, the company
adopted the revised Handbook Section 3870. The company has adopted the
fair value method of accounting for stock-based compensation and
recognizes a compensation expense for all stock options granted to
employees and directors. The company only issues stock options to
employees, including directors. The fair value of the options issued in
the year is determined using the Black-Scholes option pricing model. The
estimated fair value of the options is amortized to income over the
vesting period.

Pro-forma net income and earnings per share, as if the fair value based
accounting method had been used to account for stock-based compensation
are provided for the prior year.

The effect of the restatement was the setup of contributed surplus in
the amount of $78 thousand for the fair value of options granted after
January 1, 2002, and a reduction in the balance of opening retained
earnings by $41 thousand as the cumulative effect of the change on prior
periods for the amount that would have been expensed. For the year ended
December 31, 2004, $16 thousand was recorded as the compensation cost.

b) In 2003, the CICA issued Handbook Section 3063 "Impairment of
Long-lived Assets" ("CICA 3063"). CICA 3063 required that all companies
comply with changes effective for years beginning on or after April 1,
2003. Accordingly, the company has adopted Handbook Section effective
January 1, 2004 for the year-ended December 31, 2004. On a prospective
basis the company has begun, on an ongoing basis, to assess, measure and
disclose the impairment of long-lived assets.

c) In 2001, the CICA issued Accounting Guideline, AcG-12 "Transfers of
Receivables" ("AcG-12"). During the forth quarter, for the first time
under the new guideline, the company transferred receivables to a third
party. AcG-12 follows FASB standard No. 140 which is guided by the
effective control standard. The standard and guideline concludes that
when a transferor surrenders control over a receivable or set of
receivables, the transaction should be accounted for as a sale to the
extent that consideration other than beneficial interests in the
transferred assets is received in exchange. On a prospective basis the
company has begun to assess, measure, and disclose the transfer of
receivables:The transfer of receivables is recognized as a sale when the
company surrenders control over the asset to the extent that
consideration other than beneficial interests is received in exchange.
Any consideration in excess of the carrying value of the receivable
transferred is recorded as a gain in earnings.

d) In 2002, the CICA amended Handbook Section 3475, "Disposal of
Long-lived Assets and Discontinued Operations" ("CICA 3475"). CICA 3475
applies to disposal activities initiated on or after May 1, 2003. All
future initiation of disposal activities by the company will fall under
this amended Handbook Section. CICA 3475 provides guidance on
differentiating between assets held for sale and held for disposal other
than by sale and on the presentation of long-lived assets and
discontinued operations. The company's formal plan to divest of its
wholly owned in house casting operations was initiated by the company
before this date and as a result, there is no effect from this change on
the company's consolidated financial statements for this operation.

The company's disposal of it's 50% joint venture in Weslin did apply as
a disposal under this new handbook section and the company, in
accordance with CICA 3475, restated its consolidated statements of
earnings and consolidated statements of cash flows for the current and
prior periods moving the operations of the Weslin joint venture from
continuing operations to discontinued operations. This resulted in a
gain of $6.7 million being recorded along with a loss from operations of
$4.1 million (2003 - $8.6 million). The company was part of the Europe
segment for both the geographic and operational groups.

e) In March 2004, the CICA revised Handbook Section 3461, "Future
Employee Benefits" ("CICA 3461"). CICA 3461 requires that all companies
comply with changes effective for years ending on or after June 30,
2004. The purpose of CICA 3461 is to introduce new disclosure
requirements for pensions and other future employee benefits and allow
readers to better understand how an employer's obligations under these
plans affect the company's consolidated financial statements. Other than
disclosure, the adoption of revised CICA 3461 is not expected to have an
effect on the company's consolidated financial statements.

f) In 2003, the CICA finalized proposed amendments to Accounting
Guideline, AcG-13 "Hedging Relationships" ("AcG-13"). AcG-13 requires
that all companies comply with changes effective for years beginning on
or after July 1, 2003. The company adopted the new recommendations
effective January 1, 2004. The most significant change is the
establishment of certain conditions for when hedge accounting may be
applied. Hedge accounting modifies the normal basis for recognizing the
gains, losses, revenues and expenses associated with a hedged item or a
hedging item in a company's income statement. Accordingly, the company
applies hedge accounting only under conditions that justify its use. The
adoption and compliance with AcG-13 has not resulted in a significant
effect on the company's financial condition.

g) In 2003, the CICA issued Handbook Section 3110, "Asset Retirement
Obligations" ("CICA 3110"). CICA 3110 requires that all companies comply
with the new Guideline for years beginning on or after January 1, 2004.
CICA 3110 applies to legal obligations associated with the retirement of
a tangible long-lived asset that result from its acquisition,
construction, development or normal operation. It states that an entity
should recognize the fair value of a liability, and related capitalized
cost, for an asset retirement obligation in the period in which it is
incurred only when a reasonable estimate of fair value can be made.
Thereafter the obligation is periodically revalued, along with the
related asset, using an undiscounted cash flow approach. The adoption of
CICA 3110 has not had an effect on the company's financial condition.

The following accounting pronouncements were adopted by the company
after December 31, 2004:

In 2003, the CICA issued Accounting Guideline, AcG-15 "Consolidation of
Variable Interest Entities" ("AcG-15"). AcG-15 requires that all
companies comply with the new Guideline for years beginning on or after
November 1, 2004. AcG-15 sets out criteria for identifying variable
interest entities and further establishes criteria to determine which
entity, if any, should consolidate them. AcG-15 conforms Canadian GAAP
with U.S. GAAP as it applies to variable interest entities. The company
consolidates all of its subsidiaries. The adoption of AcG-15 will not
have an effect on the company's financial condition.

OUTSTANDING SHARE DATA

Linamar is authorized to issue an unlimited number of common shares, of
which 70,627,476 common shares were outstanding as of March 8, 2005. As
of March 8, 2005, options to purchase 3,009,000 common shares were
outstanding under Linamar's share option plan.

NON-GAAP MEASURES

The following measures do not have a standardized meaning under Canadian
generally accepted accounting principles and, therefore are unlikely to
be comparable to similar measures presented by other issuers.

Operating Earnings

Operating earnings, as used by the chief operating decision makers and
management, monitors the performance of the business specifically at the
segmented level. Operating earnings is calculated by the company as
gross margin less selling, general and administrative expenses and
equity loss.




December 31
(millions of dollars) 2004 2003 2002 2001 2000
---------------------------------------------------------------------
Gross Margin $236.2 $195.9 $176.8 $154.2 $188.7
Selling, general and
Administrative 90.9 84.6 72.0 57.9 65.5
Equity loss - - 0.8 6.9 -
---------------------------------------------------------------------
Operating Earnings $145.3 $111.3 $104.0 $89.4 $123.2
---------------------------------------------------------------------

Earnings from Continuing Operations net of Sales Termination Charge

This measure is used by the chief operating decision makers and
management to review the results of the company excluding this charge
as it is not expected to be a recurring item. Earnings from
Continuing Operations net of Sales Termination Charge is calculated
by the company as earnings from continuing operations less the after
tax sales agent termination charge.


December 31 (millions of dollars) 2004 2003
-------------------------------------------------------------------
Earnings from Continuing Operations $90.4 $48.1
Sales agent termination - 23.6
Tax on sales agent termination - (7.8)
-------------------------------------------------------------------
Earnings from Continuing Operations
net of Sales Termination Charge $90.4 $63.9
-------------------------------------------------------------------

Book Value Per Share

This measure as used by the chief operating decision makers and
management, indicates the value of the company based on the carrying
value of the company's net assets. Book value per share is
calculated by the company as Shareholders' Equity divided by shares
outstanding at year-end.


December 31 (millions of dollars,
except per share amounts) 2004 2003
-------------------------------------------------------------------
Shareholders' Equity $692.6 $627.1

Shares outstanding at year-end 70,627,476 70,603,476

Book value per share $9.81 $8.88
-------------------------------------------------------------------


Debt to Total Capitalization

This measure as used by the chief operating decision makers and
management, indicates the company's reliance on debt and its
financial flexibility. Debt to total capitalization is calculated by
the company as the addition of Short-term bank borrowings, Current
portion of long-term debt, and Long-Term Debt divided by the addition
of this total and Shareholders' Equity.


December 31 (millions of dollars) 2004 2003
-------------------------------------------------------------------
Short-term bank borrowings $50.9 $152.0
Current portion of long-term debt 7.0 23.3
Long-Term Debt 308.2 152.1
-------------------------------------------------------------------

Total Debt $366.1 $327.4

Shareholders' Equity 692.6 627.1
-------------------------------------------------------------------

Debt to Total Capitalization 34.6% 34.3%
-------------------------------------------------------------------


Return on Shareholders' Equity

This measure as used by the chief operating decision makers and
management, indicates the yearly return for shareholders. Return on
Shareholders' Equity is calculated by the company as the Earnings
from Continuing Operations divided by Shareholders' Equity.


December 31
(millions of dollars) 2004 2003 2002 2001 2000
--------------------------------------------------------------------
Earnings from Continuing
Operations $90.4 $48.1 $64.1 $58.4 $80.1

Shareholders' Equity 692.6 627.1 622.9 557.8 513.8
--------------------------------------------------------------------
Return on Shareholders'
Equity 13.1% 7.7% 10.3% 10.5% 15.6%
--------------------------------------------------------------------


OUTLOOK

During the next few years, the company anticipates continued growth in
both sales and earnings. Linamar is expecting to launch new programs as
well as see existing programs achieve their anticipated levels of
production such that growth in content per vehicle for 2005 is
forecasted at 10-15% in North America and 5-10% in Europe.

Sales growth projections are based on program launches which include
transmission business (such as differential cases for DaimlerChrysler
and Eaton, WK transmission carriers and differential cases, Ford Motor
Company 6R and 6F transmission components, other transmission carriers,
as well as output and coupler shafts) engines business (such as 3.7L
crankshafts, 4.0L, 3.5L, 3.9L and Gen IV and NG6 camshafts, 6.1L engine
block) and continued strength in the industrial products category.
Linamar also supplies the medium and heavy truck markets. In 2004, those
markets recovered significantly. Expectations are for continued strength
in 2005 and beyond, softening in 2007.

Earnings growth expectations are based on the launch and sales ramp-ups
of the programs noted and the maturity of other programs where
efficiencies of production are achieved and maintained. The earnings
expectation also assumes that the progress made in the past several
years in Mexico will be maintained and on-going performance will also
show improvement. Earnings growth anticipates that LAT will launch and
ramp up its camshaft and cylinder head & block programs turning that
business from losses in 2004 and 2005 to profitable performance
beginning in 2006. The remaining European businesses based in Hungary
will also steadily grow in both sales and earnings as programs with
Denso and Delphi (common rails and hydraulic manifolds), Bosch (pump
housing) and Honeywell (turbo housings) take effect in the automotive
sectors and industrial and agricultural business show some growth. The
uncertainty in Linamar Hungary caused by the CVT program ended in 2004
when GM cancelled the program. Other Linamar Hungary product areas
remain difficult to forecast and predict because markets can be effected
by the presence or lack of government subsidies available to purchasers
(i.e. agriculture), the success of customers products that are in very
competitive markets (i.e. construction equipment products) or the market
acceptance of new customers' technologies (i.e. ATI vehicle track
systems).

In Linamar's Industrial Products business, which is dominated by
Linamar's Skyjack operations, the market remains highly competitive. The
construction equipment market rebounded in 2004 and the expectation is
that the market will remain strong through 2005 and beyond, provided
economic conditions permit. In 2004, strong sales growth for Skyjack
occurred not only in North America but also in the UK and Europe.
Performance by market is very difficult to predict. The significant
increase in Skyjack sales in 2004 over 2003 is expected to moderate
somewhat in 2005 because the market will remain relatively strong
although growth will increase at a slower rate.

Overall, these expectations assume consistent levels of North American
and European automobile production, no unforeseen changes in the
existing business base, and are subject to overall economic conditions
and world political events and factors. As well, in 2005, Linamar will
continue to realize the benefits provided by the Linamar Production
System. The system is based on lean principles developed by Taiichi
Ohno, a Toyota executive.

Linamar believes that its strategy to focus on the engine, transmission
and chassis components of the automobile represent a significant
opportunity for growth as products in these applications are expected to
be the next major area of outsourcing by the OEMs over the next 10 to 20
years. Other aspects of the vehicles such as interiors, seating, and
structural components have already experienced greater levels of
outsourcing. In addition to outsourcing, management believes other
related trends include more involvement by suppliers in component and
module design, a move towards global vehicle platforms and supply base
consolidation.

Linamar believes that it is uniquely positioned with its core
competencies in precision machining and manufacturing processes in its
range of precision machined and assembled automotive and non-automotive
products. To build on this strong business base, Linamar intends to
continue to develop the organization and its capabilities by enhancing
its existing expertise to produce every machined component in the
vehicle. Linamar's strategy is to establish and develop a market
leadership position in key components and assemblies, enhancing its
design, development and testing expertise, and researching opportunities
in product and process innovation.

A key factor in Linamar's future growth strategy is the effect of
economic fluctuations in the automotive industry and specifically
vehicles produced for the markets in which Linamar participates.
Variations in these factors can have a significant impact on the
industry and Linamar.

In 2004, the company's results were negatively impacted by the
strengthening Canadian dollar relative to the U.S. dollar. The company
continues to employ a hedging strategy as well as a strategy to balance
its U.S. and Canadian dollar cash flows to mitigate these risks.

As a result of current levels of consumer spending on automobiles, the
OEMs are constantly facing volume challenges which are reflected in the
results of Linamar through reduced volumes on some existing programs.
The OEMs do, however, continue to outsource, although at a measured
pace, which allows Linamar to expand and diversify its product base.

Other principal challenges and risks that the company faces moving
forward are the slow pace of outsourcing by the OEMs in the powertrain
segment, the market share shift to the Japanese automakers, the shortage
of qualified technical people in the labour pool, low cost country
outsourcing (such as China) and technologies that eliminate the need for
machining.

In addition, the automotive industry continues to decrease the supply
base mainly due to the actions of the OEMs. The OEMs are actively trying
to reduce their supply base to become more manageable. Through this
reduction, there have been considerable consolidations or acquisitions
of smaller suppliers. These consolidations provide Linamar with
additional opportunities to expand the sales base.

Strategies employed to address market challenges include focusing,
through Linamar's sales and marketing organization and technical
resources, on strategic sales products and processes to meet customer
and product sales levels. Linamar is making significant capital
expenditures (as illustrated in 2004) on various new programs that
target key products and expand into assemblies and modules. Expansion
into China and Korea is also an important aspect of Linamar's growth
strategy.

Through acquisitions, Linamar has gained technologies such as the
hydroforming of camshafts, as well as the increased capacity to design,
test and validate engine powertrains and their components.

FORWARD LOOKING INFORMATION

Certain information provided by Linamar in this Management Discussion
and Analysis in the Annual Report and other documents published
throughout the year which are not recitation of historical facts may
constitute forward-looking statements. The words "may", "would",
"could", "will", "likely", "estimate", "believe", "expect", "plan",
"forecast" and similar expressions are intended to identify
forward-looking statements. Readers are cautioned that such statements
are only predictions and the actual events or results may differ
materially. In evaluating such forward-looking statements, readers
should specifically consider the various factors that could cause actual
events or results to differ materially from those indicated by such
forward-looking statements.

Such forward-looking information may involve important risks and
uncertainties that could materially alter results in the future from
those expressed or implied in any forward-looking statements made by, or
on behalf of, Linamar. Some of the factors and risks and uncertainties
that cause results to differ from current expectations discussed in this
Management Discussion and Analysis and elsewhere in the Annual Report
include, but are not limited to, changes in the various economies in
which Linamar operates, fluctuations in interest rates, environmental
emission and safety regulations, the extent of OEM outsourcing, industry
cyclicality, trade and labour disruptions, world political events,
pricing concessions and cost absorptions, delays in program launches,
the company's dependence on certain engine and transmission programs and
major OEM customers, currency exposure, technological developments by
Linamar's competitors, governmental, environmental and regulatory
policies and changes in the competitive environment in which Linamar
operates.

The foregoing is not an exhaustive list of the factors that may affect
Linamar's forwarding looking statements. These and other factors should
be considered carefully and readers should not place undue reliance on
Linamar's forward-looking statements. Linamar assumes no obligation to
update the forward-looking statements, or to update the reasons why
actual results could differ from those reflected in the forward-looking
statements.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Linamar Corporation
    Linda Hasenfratz
    CEO
    (519) 836-7550
    or
    Linamar Corporation
    Keith Wettlaufer
    Chief Financial Officer
    (519) 836-7550
    www.linamar.com