What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-03-01 compared with 2021-02-25 · 196 added, 199 removed, 1026 unchanged (28% of the section changed)

5 unchanged sentences

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 01, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Asbestos— Refer to Notes 3 and 17 to the financial statements

Critical Audit Matter Description

During the second quarter of 2020, the Company elected to change its method of accounting for asbestos-related defense costs from accruing for probable and reasonably estimable defense costs associated with known claims expected to settle to accrue for all future defense costs for both known and unknown claims.

The Company believes this change is preferable, and this accounting change has been reflected as a change in accounting estimate effected by a change in accounting principle.

Following the change in accounting estimate, the Company’s liability for asbestos-related claims will be based on a study from the Company’s third-party actuary, the Company's review of the study, as well as the Company’s own review of asbestos claims and claim resolution activity.

The study from the Company’s actuary, based on data as of December 31, 2019, provided for a range of possible future liability from $31.5 million to $43.3 million.

During the second quarter 2020, the Company recorded a $23.4 million charge to increase the liability estimate to the $31.5 million noted as the low end of the range.

As of December 31, 2020, the Company’s total asbestos-related liability is $28.7 million and is included in accrued liabilities and other long-term liabilities, respectively, in the accompanying consolidated balance sheet.

We identified the initial gross asbestos liability recorded as a result of the change in accounting estimate as a critical audit matter because estimating projected indemnity and defense costs of pending and future asbestos-related claims involves significant estimation by management due to variables that are difficult to predict and the range of possible outcomes.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists, when performing audit procedures to evaluate whether the asbestos related reserves were appropriately recorded as of December 31, 2020.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the asbestos-related reserves included the following, among others:

• We tested the effectiveness of controls over the valuation of the liability, including controls over the inputs to the model (claims data sets, indemnity settlement payments and legal payments), and over the accounting and disclosures related to the change in accounting policy resulting in a change in estimate.

This included inquires with management and inspection of documentation related to the change in accounting policy for asbestos and whether it is preferable and properly accounted for prospectively as a change in accounting estimate.

• With the assistance of our actuarial specialists that have experience in the area of asbestos-related reserves, we assessed the reasonableness of the valuation methodology, significant assumptions, and the range of probable outcomes estimated by management.

Additionally, the specialists developed a range of independent estimates and compared those to management’s estimate.

• We assessed the qualifications, experience, and objectivity of management’s third-party actuary.

• We tested the underlying data that served as the basis for the actuarial analysis, including claims data sets, indemnity settlement payments, and legal payments, to test the inputs to the actuarial estimate for completeness and accuracy.

Goodwill - Aerospace Reporting Units - Refer to Notes 3 and 9 to the financial statements.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) related to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill - Aerospace Fasteners Reporting Unit - Refer to Notes 3 and 9 to the financial statements.

Critical Audit Matter Description

The Company assesses goodwill for impairment on an annual basis as of October 1, and more frequently if there are changes in the business climate or as a result of a triggering event taking place.

The Company’s evaluation of goodwill for impairment involved the comparison of the fair value of each reporting unit to its carrying value.

If the Company concludes that conducting a quantitative assessment is required, it determines the fair value of its reporting units utilizing a discounted cash flow (income approach) and a market comparable method (market approach).

The determination of the fair value using the income approach requires management to make significant estimates and assumptions, which include forward-looking projections and discount rates.

The determination of the fair value using the market approach requires management to make significant estimates and assumptions, which include multiples of potentially comparable companies that are applied to management’s financial projections.

During the third quarter of 2020, as a result of a decline in its aerospace-related business' financial results, a significant reduction in its financial projections for the remainder of 2020 compared with prior projections, and uncertainty around the duration and magnitude of the impact of the COVID-19 pandemic on future financial results given their dependence on future levels of air travel and new aircraft builds, the Company determined there was a triggering event requiring an interim goodwill impairment assessment for its Aerospace Fasteners and Aerospace Engineered Products reporting units.

The Company determined that the carrying values of the Aerospace Fasteners and Aerospace Engineered Products reporting units exceeded their fair values, resulting in goodwill impairment charges of $70.8 million and $56.0 million, respectively.

The total Company goodwill balance was $304.0 million as of December 31, 2020, of which the Aerospace Fasteners reporting unit has $62.9 million, while the Aerospace Engineered Products reporting unit had no remaining goodwill.

Given the nature of the Aerospace Fasteners and Aerospace Engineered Products operations, sensitivity of the reporting unit’s business to changes in the economy, the reporting unit’s historical performance as compared to financial projections, and the difference between its fair value and the carrying value, auditing management’s judgments regarding financial projections, as well as selection of the discount rate and selection of multiples applied to management’s financial projections for the Aerospace Fasteners and Aerospace Engineered Products reporting units, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

The Company’s evaluation of goodwill impairment involves a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

The qualitative assessment involves significant use of management’s judgment and assumptions related to macroeconomic conditions, industry and market considerations, overall financial performance, entity and reporting unit specific events, and capital markets pricing.

The Company also considered recent valuations of its reporting units, including the difference between the most recent fair value estimate and the carrying amount.

Changes in these assumptions could have a significant effect on management’s conclusion about whether a quantitative goodwill impairment test is necessary to estimate the fair value of its reporting units.

The Company’s goodwill balance was $315 million as of December 31, 2021, of which $70 million was allocated to the Aerospace Fasteners Reporting Unit (“Aerospace Fasteners”).

The Company concluded there were no indications that the fair value of any reporting unit was less than the carrying amount, therefore a quantitative assessment was not performed, and no impairment was recognized.

Given the nature of the Aerospace Fasteners operations, the assumptions used in the qualitative assessment, and the difference between the most recent fair value estimate and the carrying amount of Aerospace Fasteners, auditing management’s judgments related to the impact of macroeconomic conditions, overall financial performance for Aerospace Fasteners, and capital markets pricing involved especially subjective judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the financial projections, the selection of the discount rate, and the selection of multiples applied to management’s historical financial results and financial projections (“market multiples”) for the Aerospace Fasteners and Aerospace Engineered Products reporting units included the following, among others:

• We tested the effectiveness of controls over management’s goodwill impairment evaluation including the determination of fair value, such as controls related to management’s financial projections and the selection of the discount rate and market multiples used.

• We evaluated management’s ability to accurately project by comparing actual financial results to management’s historical financial projections.

• We evaluated the reasonableness of management’s financial projections by comparing the financial projections to historical financial results and projected information included in industry reports for the various industries the reporting units operate within.

• With the assistance of our fair value specialists, we evaluated the discount rate, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rate selected by management.

• With the assistance of our fair value specialists, we evaluated the market multiples by evaluating the selected potentially comparable publicly traded companies and the adjustments made for differences in growth prospects and risk profiles between the reporting units and the potentially comparable publicly traded companies.

We tested the underlying source information and mathematical accuracy of the calculations.

Our audit procedures related to management’s qualitative evaluation of goodwill impairment for Aerospace Fasteners included the following, among others:

• We tested the effectiveness of controls over goodwill, including those over management's judgments and assumptions related to macroeconomic conditions, industry and market considerations, overall financial performance, entity and reporting unit specific events, capital markets pricing, recent fair value estimates and carrying amounts.

• We evaluated management's ability to accurately forecast future revenues and EBITDA margins by comparing actual results to management's historical forecasts.

• We evaluated the reasonableness of management’s qualitative assessment of factors affecting revenue and EBITDA margin forecasts by comparing the forecasts to:

◦ Historical revenues and EBITDA.

◦ Internal communications to management and the Board of Directors.

◦ Forecasted information included in industry reports for the Company and certain of its peer companies.

• We evaluated the impact of changes in management’s forecasts from the October 1, 2021, annual measurement date to December 31, 2021.

• With the assistance of our fair value specialists, we evaluated the reasonableness of management’s qualitative assessment by performing the following:

(1) Researching GDP growth, inflation and/or other macroeconomic variables, as well as industry growth rates;

(2) Estimate industry discount rates;

(3) Research and analyze valuation multiple of guideline public companies to understand valuation trends, and research trends in growth and margins in guideline public companies;

and (4) Obtain information to analyze the trend of market capitalization of the entity and public peer companies.

/s/ Deloitte & Touche LLP

Detroit, Michigan

February 25, 2021

March 1, 2022

We have served as the Company's auditor since 2013.

53 unchanged sentences

Interest expense ( 14,510 ) ( 14,660 ) ( 13,950 )

Debt financing and related expenses ( 10,520 ) — —

Other income (expense), net ( 950 ) 240 990

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Non-cash compensation expense 9,500 8,170 6,450

Non-cash change in legacy liability estimate 23,400 — —

Debt financing and related expenses 10,520 — —

Change in legacy liability estimate 1,450 23,400 —

(Increase) decrease in receivables ( 11,180 ) 9,580 3,280

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Cash Flows from Financing Activities:

Retirement of senior notes ( 300,000 ) — —

Proceeds from issuance of senior notes 400,000 — —

Proceeds from borrowings on revolving credit facilities — 367,280 189,060

Repayments of borrowings on revolving credit facilities ( 48,620 ) ( 319,120 ) ( 189,340 )

Debt financing fees and senior notes redemption premium ( 13,570 ) — —

Payments to purchase common stock ( 19,090 ) ( 39,420 ) ( 36,740 )

Shares surrendered upon exercise and vesting of equity awards to cover taxes ( 5,230 ) ( 2,600 ) ( 3,340 )

Other financing activities — — —

Dividends paid ( 1,740 ) — —

Net cash provided by (used for) financing activities of continuing operations 11,750 6,140 ( 40,360 )

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Non-cash compensation expense — 6,450 — — 6,450

Impact of accounting standards adoption — — 1,190 ( 1,270 ) ( 80 )

Balances at December 31, 2019 $ 450 $ 782,880 $ ( 79,850 ) $ ( 6,000 ) $ 697,480

Net income — — 98,620 — 98,620

Net loss — — ( 79,760 ) — ( 79,760 )

Other comprehensive income — — — 380 380

2 unchanged sentences

Non-cash compensation expense 10 8,160 — — 8,170

Impact of accounting standards adoption — — 1,190 ( 1,270 ) ( 80 )

Balances at December 31, 2020 $ 430 $ 749,050 $ ( 159,610 ) $ ( 5,620 ) $ 584,250

Net loss — — ( 79,760 ) — ( 79,760 )

Net income — — 57,310 — 57,310

Other comprehensive income — — — 5,850 5,850

2 unchanged sentences

Non-cash compensation expense — 9,500 — — 9,500

Dividends declared — ( 1,740 ) — — ( 1,740 )

Balances at December 31, 2021 $ 430 $ 732,490 $ ( 102,300 ) $ 230 $ 630,850

4 unchanged sentences

TriMas Corporation ("TriMas" or the "Company"), and its consolidated subsidiaries, designs, engineers and manufactures innovative products under leading brand names for customers primarily in the consumer products, aerospace & defense, and industrial markets.

In the second quarter of 2020, the Company elected to change its method of accounting for asbestos-related defense costs from accruing for probable and reasonably estimable defense costs associated with known claims expected to settle to accrue for all future defense costs for both known and unknown claims, which the Company now believes are reasonably estimable.

The Company believes this change is preferable, as asbestos-related defense costs represent expenditures related to legacy activities that do not contribute to current or future revenue generating activities, and recording an estimate of the full liability for asbestos-related costs, where estimable with reasonable precision, provides a more complete assessment of the liability associated with resolving asbestos-related claims.

This accounting change has been reflected as a change in accounting estimate effected by a change in accounting principle.

See Note 17, "Commitments and Contingencies," for further information on this change.

In the first quarter of 2020, TriMas began reporting its machined components operations, located in Stanton, California and Tolleson, Arizona, as part of its Aerospace segment.

The operations were previously reported in the Specialty Products segment.

The move of these operations into TriMas Aerospace facilitates achieving anticipated synergies from the February 2020 RSA Engineered Products ("RSA") acquisition, allowing the Company to better leverage the machining competencies and resources across its aerospace businesses.

See Note 22, " Segment Information ," for further information on each of the Company's reportable segments.

In the fourth quarter of 2019, the Company completed the sale of its Lamons division (“Lamons”), a transaction entered into with an investment fund sponsored by First Reserve.

Lamons was sold for approximately $ 136.8 million in cash, of which approximately $ 135.0 million was received in 2019 and the remaining $ 1.8 million was received in the first quarter of 2020.

The financial results of Lamons were previously reported within the Company's Specialty Products segment, and are presented as discontinued operations for all periods presented in the financial statements attached hereto.

See Note 5, "Discontinued Operations," for further information on the sale of Lamons and its historical financial results.

The preparation of financial statements also requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities.

Actual results may differ from such estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the ongoing outbreak of a new strain of the coronavirus (“COVID-19”).

While the full impact of COVID-19 on the Company's operations is unknown and cannot be reasonably estimated at this time, the Company has made appropriate accounting estimates based on the facts and circumstances available as of the reporting date.

The preparation of financial statements requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities.

While the full impact of the COVID-19 pandemic is unknown and cannot be reasonably estimated at this time, the Company has made appropriate accounting estimates based on the facts and circumstances available as of the reporting date.

To the extent there are differences between these estimates and actual results, the Company's consolidated financial statements may be materially affected.

Certain prior year amounts have been reclassified to conform with current year presentation.

New Accounting Pronouncements

Recently Issued Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, "Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes" ("ASU 2019-12"), which removes specific exceptions to the general principles in Topic 740, simplifies the accounting for income taxes and provides clarification of certain aspects of current guidance.

ASU 2019-12 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted.

In November 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-10, "Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance" ("ASU 2021-10"), which requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy.

ASU 2021-10 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted.

The Company is in the process of assessing the impact of adoption on its consolidated financial statements.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20)" ("ASU 2018-14"), which modifies the disclosure requirements for employers who sponsor defined benefit pension or other postretirement plans.

The Company adopted ASU 2018-14 in the fourth quarter of 2020.

The standard relates to financial statement disclosure only and did not have an impact on the Company’s consolidated balance sheet, statement of operations or cash flows.

See Note 18, "Employee Benefit Plans," for disclosure of the Company's defined benefit plans.

In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"), which simplifies the test for goodwill impairment by eliminating the requirement to perform a hypothetical purchase price allocation to measure the amount of goodwill impairment.

Instead, under ASU 2017-04, the goodwill impairment is the amount by which a reporting unit's carrying value exceeds its fair value;

however, the loss recognized should not exceed the total amount of goodwill allocated to the reporting unit.

The Company adopted ASU 2017-04 in the first quarter of 2020.

See Note 3, "Summary of Significant Accounting Policies," for further information on the Company's policies regarding assessing potential goodwill impairments.

In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" ("ASU 2021-08"), which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, "Revenue from Contracts with Customers." ASU 2021-08 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2022, with early adoption permitted.

The Company is in the process of assessing the impact of adoption on its consolidated financial statements.

Summary of Significant Accounting Policies

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See Note 8, " Cash and Cash Equivalents ," for further details regarding the Company's cash and cash equivalents.

Receivables are presented net of allowances for doubtful accounts of approximately $ 2.1 million at each of December 31, 2020 and 2019.

Receivables are presented net of allowances for doubtful accounts of approximately $ 1.6 million and $ 2.1 million at December 31, 2021 and 2020, respectively.

The Company monitors its exposure for credit losses and maintains allowances for doubtful accounts based upon the Company's best estimate of probable losses inherent in the accounts receivable balances.

The Company does not believe that significant credit risk exists due to its diverse customer base.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Inventories are stated at the lower of cost or net realizable value, with cost determined using the first-in, first-out method.

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Customer relationship intangibles are amortized over periods ranging from five to 25 years, while technology and other intangibles are amortized over periods ranging from one to 30 years.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Impairment of Long-Lived Assets and Definite-Lived Intangible Assets.

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The Company determines its reporting units at the individual operating segment level, or one level below, when there is discrete financial information available that is regularly reviewed by segment management to evaluate operating results.

For purposes of the Company's 2020 goodwill impairment test, the Company had six reporting units, three of which had goodwill, within its three reportable segments.

For purposes of the Company's 2021 goodwill impairment test, the Company had five reporting units, three of which had goodwill, within its three reportable segments.

The Company begins its goodwill reviews by conducting a qualitative assessment, considering relevant events and circumstances that affect the fair value or carrying amount of a reporting unit.

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Each of these factors is considered by management in reaching its conclusion about whether a quantitative goodwill impairment test is necessary to estimate the fair value of its reporting units.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

If the Company concludes that conducting a quantitative assessment is required, it performs a quantitative goodwill impairment test.

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An impairment loss is recognized when the carrying value of the asset exceeds its fair value.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In conducting a qualitative assessment, the Company considers relevant events and circumstances to determine whether it is more likely than not that the fair values of the indefinite-lived intangible assets are less than the carrying values.

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See Note 9, " Goodwill and Other Intangible Assets ," for further details regarding the Company's indefinite-lived intangible asset impairment testing.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

High Deductible Insurance.

The Company generally has high deductible insurance programs for losses and liabilities related to workers' compensation, health and welfare claims and comprehensive general, product and vehicle liability.

The Company is generally responsible for up to $ 0.8 million per occurrence under its retention program for workers' compensation, between $ 0.3 million and $ 1.5 million per occurrence under its retention programs for comprehensive general, product and vehicle liability, and has a $ 0.4 million per occurrence stop-loss limit with respect to its group medical plan.

The Company is generally responsible for up to $ 0.8 million per occurrence under its retention program for workers' compensation, up to $ 1.5 million per occurrence under its retention programs for comprehensive general, product and vehicle liability, and has a $ 0.4 million per occurrence stop-loss limit with respect to its group medical plan.

Total insurance limits under these retention programs vary by year for comprehensive general, product and vehicle liability and extend to the applicable statutory limits for workers' compensation.

13 unchanged sentences

Accruals for asbestos-related matters are included in the consolidated balance sheet in “Accrued liabilities” and “Other long-term liabilities.” See Note 17, “ Commitments and Contingencies ,” for further information.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Revenue Recognition.

15 unchanged sentences

costs related to the advertising, sale, marketing and distribution of the Company's products, amortization of customer intangible assets, costs of finance, human resources, legal functions, executive management costs and other administrative expenses.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Income Taxes.

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dollars are deferred as a component of accumulated other comprehensive income (loss) ("AOCI") in the consolidated statement of shareholders' equity.

Net foreign currency transaction gains were approximately $ 0.6 million, $ 0.3 million and $ 1.0 million for the years ended December 31, 2020, 2019 and 2018, respectively, and are included in other expense, net in the accompanying consolidated statement of operations.

The impact of net foreign currency transactions was an approximate loss of $ 0.9 million for the year ended December 31, 2021, and approximate gains of $ 0.6 million and $ 0.3 million for the years ended December 31, 2020 and 2019, respectively, and are included in other expense, net in the accompanying consolidated statement of operations.

Derivative Financial Instruments.

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See Note 14, " Derivative Instruments ," for further information.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fair Value of Financial Instruments.

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The carrying value of financial instruments reported in the balance sheet for current assets and current liabilities approximates fair value due to the short maturity of these instruments.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Business Combinations.

24 unchanged sentences

2021 Acquisitions

On December 15, 2020, the Company acquired Affaba & Ferrari Srl ("Affaba & Ferrari"), which specializes in the design, development and manufacture of precision caps and closures for food & beverage and industrial product applications, for an aggregate amount of approximately $ 98.4 million, net of cash acquired, subject to normal course adjustments, which are expected to be completed by mid-2021.

On December 17, 2021, the Company acquired Omega Plastics ("Omega"), which specializes in manufacturing custom components and devices for drug delivery, diagnostic and orthopedic medical applications, as well as components for industrial applications, for an aggregate amount of approximately $ 22.5 million, net of cash acquired.

Omega, which is reported in the Company's Packaging segment, is located in Clinton Township, Michigan and historically generated approximately $ 18 million in annual revenue.

On December 5, 2021, the Company acquired TFI Aerospace ("TFI"), a manufacturer and supplier of specialty fasteners used in a variety of applications, predominately for the aerospace end market, for an aggregate amount of approximately $ 11.8 million, with additional contingent consideration ranging from zero to approximately $ 12.0 million to be paid based on 2023 and 2024 earnings per the purchase agreement.

The Company recorded $ 3.7 million as its best estimate of the additional contingent consideration, with such estimate based on Level 3 inputs under the fair value hierarchy, as defined.

TFI, which is reported in the Company's Aerospace segment, is located near Toronto, Canada and historically generated approximately $ 6 million in annual revenue.

2020 Acquisitions

The fair value of assets acquired and liabilities assumed included approximately $ 49.1 million of goodwill, $ 35.1 million of intangible assets, $ 9.4 million of net working capital, $ 17.4 million of property and equipment, and $ 12.6 million of net deferred tax liabilities.

14 unchanged sentences

Discontinued Operations

On December 20, 2019, the Company completed the sale of Lamons to two wholly-owned subsidiaries of an investment fund sponsored by First Reserve, pursuant to an Asset and Stock Purchase Agreement dated as of November 1, 2019 (the “Purchase Agreement”), for a purchase price of $ 136.8 million.

On December 20, 2019, the Company completed the sale of its Lamons division ("Lamons") to two wholly-owned subsidiaries of an investment fund sponsored by First Reserve, pursuant to an Asset and Stock Purchase Agreement dated as of November 1, 2019 (the “Purchase Agreement”), for a purchase price of $ 136.8 million.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company recognized net cash proceeds of approximately $ 112.7 million, which represented the purchase price, less estimated tax payments of approximately $ 20.9 million, transaction costs of approximately $ 3.2 million.

2 unchanged sentences

As a result, the historical results for Lamons are reported in the accompanying consolidated statement of operations as a discontinued operation.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Results of discontinued operations are summarized as follows (dollars in thousands):

4 unchanged sentences

Selling, general and administrative expenses ( 32,920 )

Net gain (loss) on dispositions of assets 38,900 ( 160 )

Net gain on dispositions of assets 38,900

Operating profit 50,470

Other income (expense), net ( 30 )

Other income (expense), net ( 30 ) 360

Other expense, net ( 30 )

Income from discontinued operations, before income taxes 50,440

2 unchanged sentences

Realignment Actions

2021 Realignment Actions

During 2021, the Company executed certain realignment actions in response to reductions in current and expected future end market demand.

First, the Company closed its Packaging segment's Union City, California manufacturing facility, consolidating the operation into its Indianapolis, Indiana and Woodridge, Illinois facilities.

The Company also realigned its Aerospace segment footprint, consolidating certain activities previously in its Stanton, California facilities into its Tolleson, Arizona facility.

In addition, the Company also reorganized its corporate office legal and finance groups.

The Company recorded pre-tax realignment charges of approximately $ 9.7 million, of which approximately $ 3.5 million related to facility consolidations and approximately $ 6.2 million were for employee separation costs.

As of December 31, 2021, approximately $ 2.4 million of the employee separation costs had been paid.

During 2021, approximately $ 4.1 million of these charges were included in cost of sales and approximately $ 5.6 million were included in selling, general and administrative expenses, respectively, in the accompanying consolidated statement of operations.

2020 Realignment Actions

During 2020, the Company executed certain realignment actions, primarily in its Aerospace and Specialty Products segments, in response to reductions in current and expected future end-market demand.

3 unchanged sentences

During 2020, approximately $ 17.1 million of these charges were included in cost of sales and approximately $ 2.8 million were included in selling, general and administrative expenses in the accompanying consolidated statement of operations.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents the Company’s disaggregated net sales by primary market served (dollars in thousands):

8 unchanged sentences

The Specialty Products segment earns revenues from a variety of submarkets within the industrial market.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Cash and Cash Equivalents

2 unchanged sentences

Cash and cash equivalents - unrestricted $ 129,790 $ 62,790

Cash - restricted 11,160 —

Cash - restricted (a)

10,950 11,160

Total cash and cash equivalents $ 140,740 $ 73,950

During 2020, the Company placed cash on deposit with a financial institution to be held as cash collateral for the Company's outstanding letters of credit.

In prior years, the Company used a portion of its credit agreement as collateral for letters of credit, which decreased availability under its revolving credit facility.

See Note 13, "Long-term Debt," for further information on the Company's credit agreement.

__________________________

(a) Includes cash placed on deposit with a financial institution to be held as cash collateral for the Company's outstanding letters of credit.

Goodwill and Other Intangible Assets

4 unchanged sentences

Aerospace Fasteners and Aerospace Engineered Products.

In preparing the quantitative analysis, the Company utilized both income and market-based approaches.

The income-based approach was conducted using the discounted cash flow method, for which management updated its internal five-year forecast, and reflected its current best estimates of when, and at what level, a recovery of air travel, new aircraft builds, and resulting customer orders would occur and the related impact on each reporting unit's future sales, earnings and cash flows.

Assumptions in estimating the future cash flows were based on Level 3 inputs under the fair value hierarchy.

The Company also selected appropriate terminal growth rates as well as discount rates, which considered various factors including the level of inherent risk in achieving the forecast based on prior history and current market conditions.

The market-based approach considered potentially comparable publicly traded companies and transactions within the aerospace industry and applied their trading multiples to management's forecast estimates.

Upon completion of the quantitative goodwill impairment tests, the Company determined that the carrying values of the Aerospace Fasteners and Aerospace Engineered Products reporting units exceeded their fair values, resulting in goodwill impairment charges of approximately $ 70.8 million in its Aerospace Fasteners reporting unit and approximately $ 56.0 million in its Aerospace Engineered Products reporting unit.

Following the impairment charges, the Aerospace Fasteners reporting unit has $ 62.9 million of remaining goodwill, while the Aerospace Engineered Products reporting unit has no remaining goodwill.

The Company notes that a 1 % change in the discount rate would have impacted the total goodwill impairment charge by approximately $ 20 million, while a 0.5 % change in the terminal growth rate would have impacted the total goodwill impairment charge by approximately $ 5 million.

If the future financial results of the aerospace-related businesses significantly differ from the assumptions inherent in this analysis, the Company may be subject to further impairment charges.

In the first quarter of 2020, the Company began reporting its machined components operations within the Aerospace segment.

8 unchanged sentences

Goodwill reassigned in segment realignment — 12,740 ( 12,740 ) —

Impairment charge — ( 126,840 ) — ( 126,840 )

Foreign currency translation and other 3,780 — — 3,780

1 unchanged sentence

Goodwill from acquisitions 10,550 7,220 — 17,770

Impairment charge — ( 126,840 ) — ( 126,840 )

Goodwill reassigned in segment realignment — 12,740 ( 12,740 ) —

Foreign currency translation and other ( 6,370 ) 120 — ( 6,250 )

73 unchanged sentences

2021 December 31,

4.125% Senior Notes due April 2029 $ 400,000 $ —

4.875% Senior Notes due October 2025 — 300,000

2 unchanged sentences

Long-term debt, net $ 393,820 $ 346,290

The Company has $ 300.0 million aggregate principal amount of 4.875 % senior notes outstanding due October 15, 2025 ("Senior Notes").

The Senior Notes accrue interest at a rate of 4.875 % per annum, payable semi-annually in arrears on April 15 and October 15.

The payment of principal and interest is jointly and severally guaranteed, on a senior unsecured basis, by certain subsidiaries of the Company (each a "Guarantor" and collectively the "Guarantors").

The Senior Notes are pari passu in right of payment with all existing and future senior indebtedness and subordinated to all existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness.

The Company may redeem all or part of the Senior Notes at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if redeemed during the twelve-month period beginning on October 15 of the years indicated below:

Senior Notes due 2029

In March 2021, the Company issued $ 400.0 million aggregate principal amount of 4.125 % senior notes outstanding due April 15, 2029 ("2029 Senior Notes") at par value in a private placement under Rule 144A of the Securities Act of 1933, as amended ("Securities Act").

The Company used the proceeds from the 2029 Senior Notes offering to pay fees and expenses of approximately $ 5.1 million related to the offering and pay fees and expenses of $ 1.1 million related to amending its existing credit agreement.

In connection with the issuance, the Company completed the redemption of its outstanding 4.875 % senior notes due October 15, 2025 ("2025 Senior Notes"), paying $ 300.0 million to retire the outstanding principal amount plus $ 7.3 million as a redemption premium.

The remaining cash proceeds from the 2029 Senior Notes were used for general corporate purposes, including repaying all outstanding revolving credit facility borrowings.

The $ 5.1 million of fees and expenses related to the 2029 Senior Notes were capitalized as debt issuance costs, while the $ 7.3 million redemption premium, as well as approximately $ 3.0 million of unamortized debt issuance costs associated with the 2025 Senior Notes, were included in debt financing and related expenses in the accompanying consolidated statement of operations.

The 2029 Senior Notes accrue interest at a rate of 4.125 % per annum, payable semi-annually in arrears on April 15 and October 15, commencing on October 15, 2021.

The payment of principal and interest is jointly and severally guaranteed, on a senior unsecured basis, by certain subsidiaries of the Company.

The 2029 Senior Notes are pari passu in right of payment with all existing and future senior indebtedness and effectively subordinated to all existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness.

Prior to April 15, 2024, the Company may redeem up to 40 % of the principal amount of the 2029 Senior Notes at a redemption price of 104.125 % of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, with the net cash proceeds of one or more equity offerings provided that each such redemption occurs within 90 days of the date of closing of each such equity offering.

In addition, prior to April 15, 2024, the Company may redeem all or part of the 2029 Senior Notes at a redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, plus a "make whole" premium.

On or after April 15, 2024, the Company may redeem all or part of the 2029 Senior Notes at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, if any, to the redemption date, if redeemed during the twelve-month period beginning on April 15 of the years indicated below:

Year Percentage

2 unchanged sentences

2026 and thereafter 100.000 %

Senior Notes due 2025

In September 2017, the Company issued $ 300.0 million aggregate principal amount of its 2025 Senior Notes at par value in a private placement under Rule 144A of the Securities Act.

During the second quarter of 2021, and in connection with the issuance of the 2029 Senior Notes, the Company redeemed all of the outstanding 2025 Senior Notes, as permitted under the indenture, at a price of 102.438 % of the principal amount.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Credit Agreement

The Company is party to a credit agreement ("Credit Agreement") consisting of a $ 300.0 million senior secured revolving credit facility, which permits borrowings denominated in specific foreign currencies, subject to a $ 125.0 million sub limit, maturing on September 20, 2022 and is subject to interest at London Interbank Offered Rate ("LIBOR") plus 1.50 %.

The interest rate spread is based upon the leverage ratio, as defined, as of the most recent determination date.

In March 2021, the Company amended its existing credit agreement ("Credit Agreement") in connection with the issuance of the 2029 Senior Notes to extend the maturity date.

The Company incurred fees and expenses of approximately $ 1.1 million related to the amendment, all of which was capitalized as debt issuance costs.

The Company also recorded approximately $ 0.2 million of non-cash expense related to the write-off of previously capitalized deferred financing fees.

Below is a summary of key terms under the Credit Agreement as of December 31, 2021, compared to the key terms prior to the amendment (showing gross availability):

Instrument Amount

($ in millions) Maturity

Date Interest Rate

Credit Agreement (as amended)

Senior secured revolving credit facility $ 300.0 3/29/2026 LIBOR (a) plus 1.500 % (b)

Credit Agreement (prior to amending)

Senior secured revolving credit facility $ 300.0 9/20/2022 LIBOR (a) plus 1.500 % (b)

__________________________

(a) London Interbank Offered Rate ("LIBOR")

(b) The interest rate spread is based upon the leverage ratio, as defined, as of the most recent determination date.

The Credit Agreement also provides incremental revolving credit facility commitments in an amount not to exceed the greater of $ 200.0 million and an amount such that, after giving effect to such incremental commitments and the incurrence of any other indebtedness substantially simultaneously with the making of such commitments, the senior secured net leverage ratio, as defined, is no greater than 3.00 to 1.00.

1 unchanged sentence

The Company's revolving credit facility allows for the issuance of letters of credit, not to exceed $ 40.0 million in aggregate.

During 2020, the Company placed cash on deposit with a financial institution to be held as cash collateral for the Company's outstanding letters of credit;

therefore, as of December 31, 2020, the Company had no letters of credit issued against its revolving credit facility.

The Company places cash on deposit with a financial institution to be held as cash collateral for the Company's outstanding letters of credit;

therefore, as of December 31, 2021 and December 31, 2020, the Company had no letters of credit issued against its revolving credit facility.

See Note 8, " Cash and Cash Equivalents ," for further information on its cash deposits.

At December 31, 2020, the Company had $ 50.5 million outstanding under its revolving credit facility and had $ 249.5 million potentially available.

At December 31, 2019, the Company had no amounts outstanding under its revolving credit facility and had $ 283.9 million potentially available after giving effect to approximately $ 16.1 million of letters of credit issued and outstanding.

At December 31, 2021, the Company had no amounts outstanding under its revolving credit facility and had $ 300.0 million potentially available.

At December 31, 2020, the Company had $ 50.5 million amounts outstanding under its revolving credit facility and had $ 249.5 million potentially available.

The Company's borrowing capacity was not reduced by leverage restrictions contained in the Credit Agreement as of December 31, 2021 and December 31, 2020.

7 unchanged sentences

At December 31, 2021, the Company was in compliance with the financial covenants contained in the Credit Agreement.

In November 2021, the Company amended the Credit Agreement to replace LIBOR with a benchmark interest rate determined based on the currency denomination of borrowings, effective January 1, 2022.

Other Revolving Loan Facility

In May 2021, the Company, through one of its non-U.S.

subsidiaries, entered into a revolving loan facility with a borrowing capacity of $ 4 million.

The facility is guaranteed by TriMas Corporation.

There are no borrowings outstanding on this loan facility as of December 31, 2021.

Long-term Debt Maturities

2 unchanged sentences

Future Maturities

Thereafter 400,000

Total $ 400,000

4 unchanged sentences

Carrying Amount Fair Value Carrying Amount Fair Value

Senior Notes $ 300,000 $ 305,630 $ 300,000 $ 309,000

4.125% Senior Notes due April 2029 $ 400,000 $ 399,000 $ — $ —

4.875% Senior Notes due October 2025 — — 300,000 305,630

Revolving credit facility — — 50,450 50,450

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Debt Issuance Costs

2 unchanged sentences

Amortization expense for these items was approximately $ 1.0 million, $ 1.2 million and $ 1.1 million in 2021, 2020 and 2019, respectively, and is included in interest expense in the accompanying consolidated statement of operations.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Derivative Instruments

4 unchanged sentences

dollar-based long-term debt into Euro-denominated long-term debt.

At inception, the cross-currency swaps were designated as net investment hedges.

In November 2020, the Company entered into additional cross-currency swap agreements at notional amounts declining from $ 50.0 million to $ 25.0 million over the contract period ending April 15, 2025.

Under the terms of the swap agreements, the Company is to receive net interest payments at a fixed rate of approximately 0.8 % of the notional amount.

As of December 31, 2020, the notional amount of these cross-currency swaps was $ 50.0 million.

In October 2018, the Company entered into cross-currency swap agreements at notional amounts declining from $ 125.0 million to $ 75.0 million over the contract period ending October 15, 2023.

Under the terms of the swap agreements, the Company is to receive net interest payments at a fixed rate of approximately 2.9 % of the notional amount.

As of December 31, 2020, the notional amount of these cross-currency swaps was $ 100.0 million.

In October 2018, immediately prior to entering into the new cross-currency swap agreements, the Company terminated its existing cross-currency swap agreements, de-designating the swaps as net investment hedges and receiving approximately $ 1.1 million of cash.

At inception, the Company designates its cross-currency swaps as net investment hedges.

As of December 31, 2021, the Company had cross-currency swap agreements at notional amounts totaling $ 250.0 million, which declines to $ 25.0 million over various contract periods ending between April 15, 2022 and April 15, 2027.

Under the terms of the agreements, the Company is to receive net interest payments at a fixed rate ranging from approximately 0.8 % to 2.9 % of the notional amounts.

As of December 31, 2021 and 2020, the fair value carrying amount of the Company's derivatives designated as hedging instruments are recorded as follows (dollars in thousands):

4 unchanged sentences

Cross-currency swaps Other long-term liabilities — ( 5,000 )

The following table summarizes the income recognized in AOCI on derivative contracts designated as hedging instruments as of December 31, 2020 and 2019, and the amounts reclassified from AOCI into earnings for the years ended December 31, 2020, 2019 and 2018 (dollars in thousands):

The following table summarizes the income (loss) recognized in AOCI on derivative contracts designated as hedging instruments as of December 31, 2021 and 2020, and the amounts reclassified from AOCI into earnings for the years ended December 31, 2021, 2020 and 2019 (dollars in thousands):

Amount of Income (Loss) Recognized

12 unchanged sentences

The foreign exchange contracts primarily mitigate currency exposures between the U.S.

dollar and the Euro, British pound, Mexican peso and the Chinese yuan, and have various settlement dates through April 2021.

dollar and the Euro, Canadian dollar, Chinese yuan, and the Mexican peso, as well as between the Euro and British pound, and have various settlement dates through December 2022.

These contracts are not designated as hedging instruments;

3 unchanged sentences

The following table summarizes the effects of derivatives not designated as hedging instruments on the Company's consolidated statement of operations (dollars in thousands):

Amount of Loss Recognized in Earnings on Derivatives

Amount of Income (Loss) Recognized in Earnings on Derivatives

Year ended December 31,

Location of Loss

Location of Income (Loss)

Recognized in

19 unchanged sentences

The components of lease expense are as follows (dollars in thousands):

Year ended December 31, 2020 Year ended December 31, 2019

Year ended December 31,

2021 2020 2019

Operating lease cost $ 8,510 7,870 6,380

14 unchanged sentences

The weighted-average discount rate as of December 31, 2021 is approximately 3.8 %.

Cash paid for amounts included in the measurement of operating lease liabilities was approximately $ 7.9 million and $ 6.4 million during 2020 and 2019, respectively, and is included in cash flows provided by operating activities in the consolidated statement of cash flows.

Right-of-use assets obtained in exchange for lease liabilities were approximately $ 14.0 million and $ 1.4 million during 2020 and 2019, respectively, primarily due to acquisitions.

Rental expense for operating leases as classified under prior authoritative lease guidance for the Company was approximately $ 5.8 million in 2018.

Cash paid for amounts included in the measurement of operating lease liabilities was approximately $ 7.9 million, $ 7.9 million and $ 6.4 million during 2021, 2020 and 2019 respectively, and is included in cash flows provided by operating activities in the consolidated statement of cash flows.

Right-of-use assets obtained in exchange for lease liabilities were approximately $ 19.6 million and $ 14.0 million during 2021 and 2020, respectively.

Other Long-term Liabilities

4 unchanged sentences

Total other long-term liabilities $ 59,030 $ 69,690

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Commitments and Contingencies

7 unchanged sentences

Future events, including those relating to climate change or greenhouse gas regulation, could require the Company to incur expenses related to the modification or curtailment of operations, installation of pollution control equipment or investigation and cleanup of contaminated sites.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2021, the Company was a party to 389 pending cases involving an aggregate of 4,754 claimants primarily alleging personal injury from exposure to asbestos containing materials formerly used in gaskets (both encapsulated and otherwise) manufactured or distributed by Lamons and certain other related subsidiaries for use primarily in the petrochemical refining and exploration industries.

16 unchanged sentences

Of the 4,754 claims pending at December 31, 2021, 27 set forth specific amounts of damages (other than those stating the statutory minimum or maximum).

At December 31, 2020, of the 40 claims that set forth specific amounts, there were no claims seeking specific amounts for punitive damages.

At December 31, 2021, of the 27 claims that set forth specific amounts, there was one claim seeking more than $5 million for punitive damages.

Below is a breakdown of the compensatory damages sought for those claims seeking specific amounts:

1 unchanged sentence

Number of claims — 2 25

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Relatively few claims have reached the discovery stage and even fewer claims have gone past the discovery stage.

Relatively few of the claims have reached the discovery stage and even fewer claims have gone past the discovery stage.

Total settlement costs (exclusive of defense costs) for all such cases, some of which were filed over 25 years ago, have been approximately $ 10.6 million.

1 unchanged sentence

Based on the settlements made to date and the number of claims dismissed or withdrawn for lack of product identification, the Company believes that the relief sought (when specified) does not bear a reasonable relationship to its potential liability.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

There has been significant volatility in the historical number of claim filings and costs to defend, with previous claim counts and spend levels much higher than current levels.

Management believes this volatility was associated more with tort reform, plaintiff practices and state-specific legal dockets than the Company’s underlying asbestos-related exposures.

In the past three years, however, the number of new claim filings, and costs to defend, have become much more consistent, ranging between 143 to 173 new claims per year and total defense costs ranging between $ 2.2 million and $ 2.3 million.

From 2017 to 2019, however, the number of new claim filings, and costs to defend, had become much more consistent.

The higher degree of consistency in census data and spend levels, as well as lower claim activity levels and an evolving defense strategy, has allowed the Company to more effectively and efficiently manage claims, making process or local counsel arrangement improvements where possible.

Given the consistency of activity over a multi-year period, the Company believed a trend may have formed where it could be possible to reasonably estimate its future cash exposure for all asbestos-related activity with an adequate level of precision.

Given the consistency of activity over a multi-year period, the Company believes a trend may have formed where it could be possible to reasonably estimate its future cash exposure for all asbestos-related activity with an adequate level of precision.

As such, the Company commissioned an actuary to help evaluate the nature and predictability of its asbestos-related costs, and provide an actuarial range of estimates of future exposures.

2 unchanged sentences

This accounting change has been reflected as a change in accounting estimate effected by a change in accounting principle.

In connection with this second quarter 2020 change, the Company recorded a non-cash, pre-tax charge for asbestos-related costs of approximately $ 23.4 million which is included in selling, general and administrative expenses in the accompanying consolidated statement of operations.

This accounting change was reflected as a change in accounting estimate effected by a change in accounting principle.

The study from the Company’s actuary, based on data as of December 31, 2019, provided for a range of possible future liability from $ 31.5 million to $ 43.3 million.

The Company did not believe any amount within the range of potential outcomes represented a better estimate than another given the many factors and assumptions inherent in the projections, and therefore recorded the $ 23.4 million charge to increase the liability estimate to $ 31.5 million, at the low-end of the range.

After completing its study in the second quarter of 2020, the Company recorded a non-cash, pre-tax charge of $ 23.4 million, which is included in selling, general and administrative expenses in the accompanying consolidated statement of operations.

In 2021, the Company commissioned its actuary to update the asbestos study based on data as of September 30, 2021, which yielded a range of possible future liability of $ 28.2 million to $ 38.6 million.

The Company did not believe any amount within the range of potential outcomes represented a better estimate than another given the many factors and assumptions inherent in the projections, and therefore recorded a non-cash, pre-tax charge of $ 1.5 million to increase the liability estimate to $ 28.2 million, at the low-end of the range.

This charge is included in selling, general and administrative expenses in the accompanying consolidated statement of operations.

As of December 31, 2021, the Company’s total asbestos-related liability is $ 27.6 million, and is included in accrued liabilities and other long-term liabilities, respectively, in the accompanying consolidated balance sheet.

4 unchanged sentences

Based upon the Company’s review of the actuarial study, the Company does not believe it is probable that it will reach the threshold of qualified future settlements required to commence excess carrier insurance coverage under the coverage-in-place agreement.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

While the Company recorded a significant non-cash charge in the six months ended June 30, 2020 in connection with its change in accounting policy, based upon the Company's experience to date, including the trend in annual defense and settlement costs incurred to date, and other available information (including the availability of excess insurance), the Company does not believe these cases will have a material adverse effect on its financial position or cash flows.

Based upon the Company's experience to date, including the trend in annual defense and settlement costs incurred to date, and other available information (including the availability of excess insurance), the Company does not believe these cases will have a material adverse effect on its financial position, results of operations, or cash flows.

Claims and Litigation

The Company is subject to other claims and litigation in the ordinary course of business, but does not believe that any such claim or litigation will have a material adverse effect on its financial position and results of operations or cash flows.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Employee Benefit Plans

2 unchanged sentences

The plan contains both contributory and noncontributory profit sharing arrangements, as defined.

Aggregate charges included in the accompanying consolidated statement of operations under this plan for both continuing and discontinued operations were approximately $ 3.4 million, $ 4.6 million and $ 4.2 million in 2020, 2019 and 2018, respectively.

Certain of the Company's non-U.S.

7 unchanged sentences

Expected return on plan assets ( 1,530 ) ( 1,450 ) ( 1,400 )

Settlements and curtailments — — 2,620

Amortization of net loss 910 890 580

1 unchanged sentence

The service cost component of net periodic benefit expense is recorded in cost of goods sold and selling, general and administrative expenses, while non-service cost components are recorded in other expense, net in the accompanying consolidated statement of operations.

During 2018, the Company recognized one-time settlement and curtailment charges of approximately $ 2.6 million, of which approximately $ 2.5 million was due to the purchase of an annuity contract to transfer certain U.S.

retiree defined benefit obligations to an insurance company.

The annuity contract was funded by plan assets.

Actuarial valuations of the Company's defined benefit pension plans were prepared as of December 31, 2021, 2020 and 2019.

7 unchanged sentences

Expected long-term rate of return on plan assets 6.13 % 6.13 % 7.13 %

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company utilizes a high-quality (Aa or greater) corporate bond yield curve as the basis for its domestic discount rate for its pension benefit plans.

8 unchanged sentences

Expected long-term rate of return on plan assets 3.90 % 4.10 % 4.60 %

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following provides a reconciliation of the changes in the Company's defined benefit pension plans' projected benefit obligations and fair value of assets for each of the years ended December 31, 2021 and 2020 and the funded status as of December 31, 2021 and 2020 (dollars in thousands):

5 unchanged sentences

Participant contributions ( 50 ) ( 60 )

Actuarial loss (a)

Actuarial gain (loss) (a)

3,290 ( 2,420 )

12 unchanged sentences

__________________________

(a) The actuarial losses for the year ended December 31, 2020 and 2019 were primarily due to a decrease in the discount rate utilized in measuring the projected benefit obligations, partially offset by other assumptions and experience gains.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(a) The actuarial gain for the year ended December 31, 2021 was primarily due to an increase in the discount rate utilized in measuring the projected benefit obligations as well as other assumptions and experience gains.

The actuarial loss for the year ended December 31, 2020 was primarily due to a decrease in the discount rate utilized in measuring the projected benefit obligations, partially offset by other assumptions and experience gains.

Pension Benefit

3 unchanged sentences

Noncurrent liabilities ( 6,870 ) ( 8,900 )

Net liability recognized at December 31 $ ( 4,770 ) $ ( 6,320 )

Net asset (liability) recognized at December 31 $ 570 $ ( 4,770 )

Pension Benefit

3 unchanged sentences

Total accumulated other comprehensive loss recognized at December 31 $ 6,860 $ 11,640

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accumulated Benefit Obligations Projected Benefit Obligations

17 unchanged sentences

The Company expects to make contributions of approximately $ 1.6 million to fund its pension plans during 2022.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company's overall investment goal is to provide for capital growth with a moderate level of volatility by investing assets in targeted allocation ranges.

14 unchanged sentences

(a) Diversified growth funds invest in a broad range of asset classes including equities, investment grade and high yield bonds, commodities, property, private equity, infrastructure and currencies.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Actual allocations to each asset vary from target allocations due to periodic investment strategy changes, market value fluctuations and the timing of benefit payments and contributions.

3 unchanged sentences

Investment policies reflect the unique circumstances of the respective plans and include requirements designed to mitigate these risks by including quality and diversification standards.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes the level under the fair value hierarchy (see Note 3, " Summary of Significant Accounting Policies ") that the Company's pension plan assets are measured, on a recurring basis as of December 31, 2021 (dollars in thousands):

24 unchanged sentences

TriMas Corporation Director Retainer Share Election Program

The Company previously maintained the 2011 Omnibus Incentive Compensation Plan, which was replaced by the TriMas Corporation 2017 Equity and Incentive Compensation Plan in 2017, such that, while existing grants remain outstanding until exercised, vested or canceled, no new shares may be issued under the plan.

Stock Options

9 unchanged sentences

Outstanding at December 31, 2021 — $ — — $ —

As of December 31, 2020, the 150,000 stock options outstanding were exercisable under the Company's long-term equity incentive plans and there was no unrecognized compensation cost related to stock options.

No stock options vested during 2020 and 50,000 stock options vested during each of 2019 and 2018.

The Company recognized no stock-based compensation expense related to stock options during 2020 and approximately $ 0.1 million and $ 0.2 million of stock-based compensation expense related to stock options during 2019 and 2018, respectively.

As of December 31, 2021, there were no stock options outstanding under the Company's long-term equity incentive plans.

No stock options vested during each of 2021 and 2020, and 50,000 stock options vested during 2019.

The Company recognized no stock-based compensation expense related to stock options during each of 2021 and 2020, and approximately $ 0.1 million of stock-based compensation expense related to stock options during 2019.

The stock-based compensation expense is included in selling, general and administrative expenses in the accompanying consolidated statement of operations.

4 unchanged sentences

• issued 1,792 , 3,673 and 4,494 RSUs, respectively, related to director fee deferrals as certain of the Company's directors elected to defer all or a portion of their directors fees and to receive the amount in Company common stock at a future date.

The Company awarded the following RSUs during 2021:

• issued 49 RSUs to certain employees related to dividend equivalent rights on existing equity awards.

TRIMAS CORPORATION

12 unchanged sentences

For similar performance-based RSUs awarded in 2018, the Company attained 126.2 % of the target on a weighted average basis, resulting in an increase of 25,993 shares during 2021.

In addition, the Company awarded 87,034 performance-based RSUs to certain key divisional employees which vest three years from the grant date as long as the employee remains with the Company.

During 2020, the Company awarded 87,034 performance-based RSUs to certain key divisional employees which vest three years from the grant date as long as the employee remains with the Company.

These awards are earned based upon the Company's stock price performance over the period from January 1, 2020 and ending December 31, 2022.

32 unchanged sentences

As of December 31, 2021, the Company has approximately $ 142.6 million remaining under the repurchase authorization.

Holders of common stock are entitled to dividends at the discretion of the Company's Board of Directors.

In 2021, the Company's Board of Directors declared the first dividend since the Company's initial public offering in 2007.

The Company's dividends declared were $ 0.04 per share of common stock and total dividends paid in cash were $ 1.7 million for the year ended December 31, 2021.

Other Comprehensive Income

25 unchanged sentences

Net current-period other comprehensive income (loss) 1,310 ( 7,810 ) 6,880 380

Reclassification of stranded tax effects ( 1,260 ) ( 10 ) — ( 1,270 )

Balance, December 31, 2020 $ ( 8,620 ) $ ( 3,580 ) $ 6,580 $ ( 5,620 )

11 unchanged sentences

The Company utilizes its proprietary TriMas Business Model as its platform which is based upon a standardized set of processes to manage and drive results and strategy across its multi-industry businesses.

Within the Company's reportable segments, there are no individual products or product families for which reported net sales accounted for more than 10% of the Company's consolidated net sales.

Within each of the Company's reportable segments, there are no individual products or product families for which reported net sales accounted for more than 10% of the Company's consolidated net sales.

See below for more information regarding the types of products and services provided within each reportable segment:

Packaging – The Packaging segment, which consists primarily of the Rieke ® , Taplast, Affaba & Ferrari, Stolz, and Rapak ® brands, develops and manufactures a broad array of dispensing products (such as foaming pumps, lotion and hand soap pumps, sanitizer pumps, beverage dispensers, perfume sprayers, nasal sprayers and trigger sprayers), polymeric and steel caps and closures (such as food lids, flip-top closures, child resistance caps, beverage closures, drum and pail closures, flexible spouts, and agricultural closures), polymeric jar products, and fully integrated dispensers for fill-ready bag-in-box applications, all for a variety of consumer products submarkets including, but not limited to, beauty and personal care, food and beverage, home care, and pharmaceutical and nutraceutical, as well as the industrial market.

Aerospace – The Aerospace segment, which includes the Monogram Aerospace Fasteners ™ , Allfast Fastening Systems ® , Mac Fasteners ™ , RSA Engineered Products and Martinic Engineering ™ brands, develops, qualifies and manufactures highly-engineered, precision fasteners, tubular products and assemblies for fluid conveyance, and machined products and assemblies to serve the aerospace and defense market.

Packaging – The Packaging segment, which consists primarily of the Rieke ® , Taplast, Affaba & Ferrari, Stolz, Rapak ® and Omega Plastics brands, develops and manufactures a broad array of dispensing products (such as foaming pumps, lotion and hand soap pumps, sanitizer pumps, beverage dispensers, perfume sprayers, nasal sprayers and trigger sprayers), polymeric and steel caps and closures (such as food lids, flip-top closures, child resistance caps, beverage closures, drum and pail closures, flexible spouts, and agricultural closures), polymeric jar products, and fully integrated dispensers for fill-ready bag-in-box applications, all for a variety of consumer products submarkets including, but not limited to, beauty and personal care, food and beverage, home care, and pharmaceutical and nutraceutical, as well as the industrial market.

Aerospace – The Aerospace segment, which includes the Monogram Aerospace Fasteners ™ , Allfast Fastening Systems ® , Mac Fasteners ™ , TFI Aerospace, RSA Engineered Products and Martinic Engineering brands, develops, qualifies and manufactures highly-engineered, precision fasteners, tubular products and assemblies for fluid conveyance, and machined products and assemblies to serve the aerospace and defense market.

Specialty Products – The Specialty Products segment, which includes the Norris Cylinder ™ and Arrow ® Engine brands, designs, manufactures and distributes highly-engineered steel cylinders, wellhead engines and compression systems for use within industrial markets.

18 unchanged sentences

Specialty Products 5,500 3,890 5,090

Corporate (a)

Corporate 90 90 70

Total $ 45,060 $ 40,480 $ 29,670

9 unchanged sentences

Corporate 136,660 58,730 175,240

Subtotal from continuing operations 1,193,880 1,192,700 1,005,150

Discontinued operations — — 95,370

Total $ 1,303,640 $ 1,193,880 $ 1,192,700

________________________________________

(a) Corporate capital expenditures for the year ended December 31, 2018 are primarily related to purchases of machinery and equipment formerly held under operating leases.

These purchased assets were subsequently transferred from Corporate to the segment utilizing the assets.

TRIMAS CORPORATION

64 unchanged sentences

Goodwill and other intangible assets impairment — 13,430 —

Nontaxable income — ( 570 ) ( 940 )

Research and manufacturing incentives ( 2,130 ) ( 1,160 ) ( 1,740 )

Tax credits and incentives ( 5,060 ) ( 2,130 ) ( 1,160 )

Net change in valuation allowance 2,100 ( 6,390 ) 3,580

Tax Reform Act — — ( 400 )

Nondeductible compensation 2,280 260 210

Other, net $ ( 790 ) $ ( 1,280 ) $ ( 1,930 )

2 unchanged sentences

These actions resulted in the recognition of an approximate $ 6.4 million deferred tax benefit related to an interest limitation carryforward.

The Company has recorded deferred tax assets on $ 43.4 million of various state operating loss carryforwards and $ 61.6 million of various foreign operating loss carryforwards.

The Company has recorded deferred tax assets on approximately $ 34.0 million of various state operating loss carryforwards and $ 57.6 million of various foreign operating loss carryforwards.

The majority of the state tax loss carryforwards expire between 2026 and 2032 and the majority of the foreign losses have indefinite carryforward periods.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company has not made a provision for U.S.

or additional foreign withholding taxes related to investments in foreign subsidiaries that are indefinitely reinvested since any excess of the amount for financial reporting over the tax basis in these investments is not significant as of December 31, 2021.

In December 2017, the Tax Cuts and Jobs Act ("Tax Reform Act") was signed into law, and, among the provisions, reduced the Federal statutory corporate income tax rate from 35 % to 21 % effective January 1, 2018, and implemented a territorial tax system, imposing a one-time tax on the deemed repatriation of undistributed earnings of non-U.S.

subsidiaries ("Transition Tax").

The Transition Tax is payable over eight years beginning in 2019.

The Company recorded provisional expenses in 2017 related to the Transition Tax and finalized the measurement of the provisional expenses in 2018.

In 2018, the Company recognized an approximate $ 1.1 million income tax benefit in connection with finalizing the revaluation of its net deferred tax assets following the filing of the Company's 2017 corporate income tax return, and recognized an approximate $ 0.7 million income tax expense related to finalizing the Transition Tax, resulting in a $ 0.4 million net reduction in 2018 to the $ 12.7 million provisional tax expense recorded in 2017.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unrecognized Tax Benefits

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In addition to the UTBs summarized above, the Company has recorded approximately $ 0.8 million and $ 0.8 million in potential interest and penalties associated with uncertain tax positions as of December 31, 2021 and 2020, respectively.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company is subject to U.S.

4 unchanged sentences

Management monitors changes in tax statutes and regulations and the issuance of judicial decisions to determine the potential impact to UTBs and is not aware of, nor does it anticipate, any subsequent events that could have a significant impact on the Company's financial position during the next twelve months.

Subsequent Events

On February 28, 2022 , the Company announced that it has acquired Intertech Plastics LLC and related companies (collectively, "Intertech") for a purchase price of approximately $ 65 million, subject to customary closing conditions.

Intertech is a manufacturer of custom injection molded products used in medical applications, as well as products and assemblies for consumer and industrial applications, and has annual net sales of approximately $ 32 million.

Intertech will become part of the Packaging reportable segment.

On February 18, 2022 , the Company announced that its Board of Directors had declared a cash dividend of $ 0.04 per share of TriMas Corporation common stock, which will be payable on March 11, 2022 to shareholders of record as of the close of business on March 4, 2022 .

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data