TRIMAS CORP 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk In the normal course of business, we are exposed to market risk associated with fluctuations in commodity prices, insurable risks due to property damage, employee and liability claims, and other uncertainties in the financial and credit markets, which may impact demand for our products. We conduct business in various locations throughout the world and are subject to market risk due to changes in the value of foreign currencies. The functional currencies of our foreign subsidiaries are primarily the local currency in the country of domicile. We manage these operating activities at the local level and revenues and costs are generally denominated in local currencies; however, results of operations and assets and liabilities reported in U.S. dollars will fluctuate with changes in exchange rates between such local currencies and the U.S. dollar. We use derivative financial instruments to manage currency risks associated with our procurement activities denominated in currencies other than the functional currency of our subsidiaries and the impact of currency rate volatility on our earnings. We may also be subject to interest risk as it relates to long-term debt, for which we have historically and may prospectively employ derivative instruments such as interest rate swaps to mitigate the risk of variable interest rates. See Item 7 " Management's Discussion and Analysis of Financial Condition and Results of Operations " for details about our primary market risks, and the objectives and strategies used to manage these risks. Also see Note 11, " Long-term Debt, " and Note 12, " Derivative Instruments ," included in Item 8, " Financial Statements and Supplementary Data ," within this Form 10-K for additional information. 46 Table of Contents