UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

FormFORM 10-K
(Mark One)
x☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20172020
OrOR
o☐TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________.
Commission file number 001-37427

HORIZON GLOBAL CORPORATION
(Exact Namename of Registrantregistrant as Specifiedspecified in Its Charter)
its charter)
Delaware
(State or Other Jurisdiction of Incorporation or
Organization)
47-3574483
(IRS Employer Identification No.)
2600 W. Big Beaver Road,47912 Halyard Drive, Suite 555100
Troy,Plymouth, Michigan 4808448170
(Address of Principal Executive Offices, Including Zip Code)principal executive offices, including zip code)
(248) 593-8820(734) 656-3000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class:Trading Symbol(s)Name of Each Exchange on Which Registered:
Common stock, $0.01 par valueHZNNew York Stock Exchange
         Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o☐    No x☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o☐    No x☒
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x☒    No o☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x☒   No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o☐
Accelerated filer o☐
Non-accelerated filero
(Do not check if a smaller reporting company) ☒
Smaller reporting company ocompany ☒
Emerging growth companyx ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes x☐    No o☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yeso ☐    No x☒
The aggregate market value of the common stock held by non-affiliates of the Registrant as of June 30, 20172020 was approximately $352.3$46.3 million, based upon the closing sales price of the Registrant’s common stock, $0.01 par value, reported for such date on the New York Stock Exchange. For purposes of this calculation only, directors and executive officers are deemed to be affiliates of the Registrant.
As of February 26, 2018,March 8, 2021, the number of outstanding shares of the Registrant’s common stock, $0.01 par value, was 24,950,90626,921,182 shares.
Portions of the Registrant’s Proxy Statement for the 20182021 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein.




Horizon Global Corporation
Index
3
Part I.
4
11
22
23
23
23
23
Part II.
3
Part I.
Item 1.
Business
4
Item 1A.
Risk Factors
11
Item 1B.
Unresolved Staff Comments
21
Item 2.
Properties
21
Item 3.
Legal Proceedings
21
Item 4.
Mine Safety Disclosures
21
Supplementary Item.
Executive Officers of the Company
22
Part II.
Item 5.
2325
2526
26
4045
4146
7889
7889
7889
Part III.
7990
7990
7990
7990
Principal AccountantAccountant Fees and Services
7990
8091
II-II-11
II-II-45
II-II-56



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Forward-Looking Statements
This Annual Report on Form 10-K may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date they are made and give our current expectations or forecasts of future events. These forward-looking statements can be identified by the use of forward-looking words, such as “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan” or other comparable words, or by discussions of strategy that may involve risks and uncertainties.
These forward-looking statements are subject to numerous assumptions, risks and uncertainties which could materially affect our business, financial condition or future results including, but not limited to, risks and uncertainties with respect to: the Company’s integrationimpact of the Westfalia Group (defined herein);novel coronavirus (“COVID-19”) pandemic on the Company’s business, results of operations, financial condition and liquidity; the Company’s ability to successfully completemaintain compliance with the acquisition ofNew York Stock Exchange’s continued listing standards; the Brink Group (defined herein); leverage;Company’s debt, including the Company’s ability to comply with the applicable financial covenants related thereto; liabilities and restrictions imposed by the Company’s debt instruments; market demand; competitive factors; supply constraints; material and energy costs; technology factors; litigation; government and regulatory actions;actions including the impact of any tariffs, quotas, or surcharges; the Company’s accounting policies; future trends; general economic and currency conditions; various conditions specific to the Company’s business and industry; the success of the Company’s action plan, including the actual amount of savings and timing thereof; the success of the Company’s business improvement initiatives in Europe-Africa, including the amount of savings and timing thereof; the Company’s exposure to product liability claims from customers and end users, and the costs associated therewith; the Company’s ability to meet its covenants in the agreements governing its debt; factors affecting the Company’s business that are outside of its control, including natural disasters, pandemics, including the current COVID-19 pandemic, accidents and governmental actions; and other risks that are discussed in Part I, Item 1A, “Risk Factors.” The risks described in this Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deemed to be immaterial also may materially adversely affect our business, financial position and results of operations or cash flows.
The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We caution readers not to place undoundue reliance on theforward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect the Company. We do not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statement to reflect events or circumstances after the date of this Annual Report on Form 10-K or to reflect the occurrence of unanticipated events, except as otherwise required by law.
We disclose important factors that could cause our actual results to differ materially from our expectations implied by our forward-looking statements under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Annual Report on Form 10-K. These cautionary statements qualify all forward-looking statements attributed to us or persons acting on our behalf. When we indicate that an event, condition or circumstance could or would have an adverse effect on us, we mean to include effects upon our business, financial and other conditions, results of operations, prospects and ability to service our debt.



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PART I


Item 1.    Business
Overview
Horizon Global Corporation, which we refer to herein as “Horizon,” “Horizon Global,” “we” or the “Company,” became an independent, publicly traded company as the result of a tax-free spin-off which we refer to herein as the “spin-off,”(the “Spin-off”) from TriMas Corporation or “TriMas,”(“TriMas”) on June 30, 2015. The Company’s common stock began trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “HZN” on July 1, 2015.
We are a leading designer, manufacturer and distributor of a wide variety of high-quality, custom-engineered towing, trailering, cargo management products and other related accessory productsaccessories on a global basis, serving the automotive original equipment manufacturers (“automotive OEMs”) and automotive original equipment servicers (“automotive OESs”) (collectively “OEs”), industrial, aftermarket, retail and original equipment, or “OE,”e-commerce channels.
The Company is organizedgroups its business into three reportable segments:operating segments generally by the region in which sales and manufacturing efforts are focused. The Company has two operating segments, Horizon Americas Horizon Asia-Pacific, and Horizon Europe-Africa.Europe‑Africa. Horizon Americas has operations in North and South America, primarily operating in the United States, Mexico, Canada and we believe has beenBrazil, and is generally a leader in towing and trailering-related products sold through the OE, industrial, aftermarket, retail aftermarket, OE,and e-commerce and industrial channels. Horizon Asia‑Pacific andchannels, especially in North America. Horizon Europe‑Africa focusfocuses their sales and manufacturing efforts outside of North and South America. Horizon Asia‑Pacific operates primarily in Australia, Thailand, and New Zealand, while Horizon Europe‑Africa operates primarily in Germany, France, the United Kingdom, Romania and South Africa. We believe Horizon Asia‑Pacific and Horizon Europe‑Africa havehas been leadersa leader in towing related products sold primarily through the OE and aftermarket channels in their regions.the regions where it operates. The Company previously had a third operating segment, Horizon Asia-Pacific (“APAC”); however, the APAC segment was sold on September 19, 2019. For additional information regarding the sale of the APAC segment, refer to Note 4, Discontinued Operations, included in Item 8, “Financial Statements and Supplementary Data,” within this Annual Report on Form 10-K.
Our products are used in two primary categories across the world: commercial applications, or “Work,” and recreational activities, or “Play.” Some of the markets in our Work category include agricultural, automotive, construction, fleet, industrial, marine, military mining and municipalities. Some of the markets in our Play category include equestrian, power sports, recreational vehicle, specialty automotive, truck accessory and other specialty towing applications. We believe that the primary brands we offer are among the most recognized in the markets we serve and are known for quality, safety and performance. Our products reach end consumers through many avenues, including independent installers, warehouse distributors, dealers, OE, retail stores and online retailers.
We believe no individual competitor serving the sales channels we participate in can match our broad product portfolio,portfolio. Our products reach end consumers through multiple sales channels which we categorize as follows:
▪Automotive OEM and automotive OES: The automotive OEM sales channel represents sales to automotive vehicle manufacturers while automotive OES primarily represents sales to automotive vehicle dealerships. We primarily sell our towing products to the OEs. This product category includes devices and accessories installed on a tow-vehicle for the purpose of attaching a trailer, camper, etc., such as hitches/tow bars, fifth wheels, gooseneck hitches, weight distribution systems, brake controls, wiring harnesses, draw bars, ball mounts, crossbars, security and other towing accessories.
▪Industrial: This sales channel represents sales to non-automotive manufacturers and dealers of agricultural equipment, trailers and other custom assemblies. We primarily sell our trailering products to the industrial sales channel. This product category includes control devices and components of the trailer itself, such as brake controls, jacks, winches, couplers, interior and exterior vehicle lighting and brake replacement parts.
▪Aftermarket: This sales channel represents sales to automotive installers and warehouse distributors. In addition to selling our towing and trailering products to the aftermarket sales channel, we also sell our cargo management and “other” products to this sales channel. The cargo management product category includes a wide variety of products used to facilitate the transportation of various forms of cargo. Examples of these products are bike racks, roof cross bar systems, cargo carriers, luggage boxes, car interior protective products, loading ramps and interior travel organizers. The “other” product category includes a diverse range of items in our portfolio that do not fit into towing, trailering or cargo management categories. Examples of these products include tubular push bars, side steps, sports bars, skid plates and oil pans.
4



▪Retail: This sales channel represents sales to direct-to-consumer retailers, such as traditional brick and mortar merchants. While we offer a majority of our products to the following four groups:retail sales channel, we primarily focus on towing and cargo management products in this sales channel.
▪
Towing: This product category includes devices and accessories installed on a tow-vehicle for the purpose of attaching a trailer, camper, etc. such as hitches, fifth wheels, gooseneck hitches, weight distribution systems, wiring harnesses, draw bars, ball mounts, crossbars, towbars, security and other towing accessories;
▪E-commerce: This sales channel represents sales to direct-to-consumer retailers who utilize the Internet to purchase the Company’s products. Similar to the retail sales channel, we offer a majority of our products to the e-commerce sales channel, with a focus on towing and cargo management products.
▪
Trailering: This product category includes control devices and components of the trailer itself such as brake controls, jacks, winches, couplers, interior and exterior vehicle lighting and brake replacement parts;
▪
Cargo Management: This product category includes a wide variety of products used to facilitate the transportation of various forms of cargo, to secure that cargo or to organize items. Examples of these products are bike racks, roof cross bar systems, cargo carriers, luggage boxes, car interior protective products, rope, tie-downs, tarps, tarp straps, bungee cords, loading ramps and interior travel organizers; and
▪
Other: This product category includes a diverse range of items in our portfolio that do not fit into any of the previous three main categories. Items in this category include tubular push bars, side steps, sports bars, skid plates, and oil pans.
We have positioned our product portfolio to create a variety of options based on price-point, ranging from entry-level to premium-level products across most of our markets. We believe the brands we offer in our aftermarket channel have significant customer recognition, with the fourthree most significant being Reese®, Hayman-Reese™, Draw-Tite® and Westfalia®. We believe all fourthree have substantial market share and have been leading brands in the towing market for over 50 years. These brands provide the foundation of our market position based on worldwide commercial and consumer acceptance. We also maintain a collection of regionally recognized brands that include Aqua Clear™, Bulldog®, BTM, DHF, Engetran, Fulton®, Kovil, Parkside®, Reese Secure™, Reese Explorer™, Reese Power Sports, Reese Towpower™, ROLA®, Tekonsha®, Trojan®, WesBarg® and Witter Towbar Systems. In addition to these product brands, we historically marketed our products to our OE customers in the Asia-Pacific segment, and more recently in the Americas, under the name TriMotive.
For information pertaining to net sales and operating profit attributed to our reportable segments, refer to Note 15, “Segment Information,” included in Item 8, “Financial Statements and Supplementary Data,” within this Annual Report on Form 10-K.

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Our Industry
Our products are sold into a diverse set of end-markets; the primary applications relate to automotive accessories for light and recreational vehicles. Purchases of automotive accessory parts are discretionary, and we believe demand is driven by macro-economic factors including (i) employment trends, (ii) consumer sentiment and (iii) fuel prices, among others.
We believe alleach of these metrics impact both our Work- and Play-related sales. In addition, we believe the Play-related sales are more sensitive to changes in these indices, given the Play-related sales tend to be more directly related to disposable income levels. In general, recent decreases in unemployment
OE and fuel prices, coupled with increases in consumer sentiment, are positive trends for our businesses.
Aftermarket and RetailIndustrial Channels
We sell our products in the aftermarketWhile OE and retail channels to a wide range of customers, including national and regional distributors, installers, and both traditional brick and mortar and e-commerce merchants, including automotive, home hardware, farm and fleet, and mass merchants. More recent trends in the aftermarket and retail channels include:
▪
Channel Consolidation: In the more mature market of the United States, there has been increasing consolidation in distribution networks with larger, more sophisticated aftermarket distributors and retailers gaining market share. In kind, these distributors generally require larger, more sophisticated suppliers with product expertise, category management and supply chain services and capabilities, as well as a global manufacturing and services footprint. We provide customers in this category the opportunity to rationalize their supply base of vendors in our product lines by virtue of our broad offering and product expertise; and
▪
Growth of Online Capabilities: Reaching consumers directly through online capabilities, including e-commerce, is having an increasing impact on the global automotive aftermarket and retail channels. Establishment of a robust online presence is critical for suppliers regardless of whether or not they participate directly in e-commerce. We believe we are positioned well to take advantage of this continuing trend, given our established online presence. We support consumers by offering a wide range of information on our products and services, including installation videos, custom-fit guides and links to authorized dealers and both brick and mortar and e-commerce merchants.
OE Channels
The OEindustrial channel is comprised of automobile manufacturers and their dealer networks, referred to collectively as automotive OE, as well as non-automotive manufacturers of agricultural equipment, trailers, and other custom assemblies, collectively referred to as industrial OE. The two main components of this channel are original equipment manufacturers (“OEM”) and original equipment suppliers (“OES”). While OE demand is typically driven by planned production, suppliers also grow by increasing their product content on each unit produced through sales of existing product lines or expansion into new product line offerings. Given the consolidation and globalization throughout the automotive industry, suppliers combining a global presence with strong engineering, technology, manufacturing, supply chain and customer support will be best positioned to take advantage of automotive OE and industrial business opportunities.
More recent trends in the global OE and industrial supplier market include:
▪
▪Global Platform/Supplier Consolidation: OEs may begin adopting global vehicle platforms to decrease product development costs and increase manufacturing efficiency and profitability. As a result, OEs may select suppliers that have the capacity to manufacture and deliver products on a worldwide basis as well as the flexibility to adapt products to local variations. Suppliers with a global supply chain and efficient manufacturing capabilities are best positioned to benefit from this trend. We believe we are uniquely positioned to take advantage of this trend as a result of our global manufacturing footprint, highly developed supply chain relationships and track record of success in solving application challenges in our product lines;
▪Outsourcing of Design and Manufacturing of Vehicle Parts and Systems: OEs continually strive to simplify their assembly processes, lower costs and reduce development times. As a result, they have increasingly relied on suppliers to perform many of the design, engineering, research and development and assembly functions traditionally performed by OEs. Suppliers with extensive design and engineering capabilities are in the best position to benefit from this trend as they are able to offer value-added solutions with superior features and convenience. We believe certain OEs have sought us out to assist with their engineering challenges to increase towing capacity and for the many solutions provided by our existing products; and
▪Shorter Product Development Cycles: Due to frequent shifts in government regulations and customer preferences, OEs are requiring suppliers to continue to provide new designs and product innovations. These trends are prevalent in mature markets as well as, emerging markets, which are advancing rapidly towards the regulatory standards and consumer preferences of the more mature markets. Suppliers with strong technologies, robust engineering and development capabilities are best positioned to meet OE demands for rapid innovation. Our broad product offerings, product expertise, and global engineering footprint enables us to rapidly deploy solutions meeting the changing customer needs.
Global Platform/Supplier Consolidation: Automotive OEs are adopting global vehicle platforms to decrease product development costs and increase manufacturing efficiency and profitability. As a result, automotive OEs are selecting suppliers that have the capacity to manufacture and deliver products on a worldwide basis as well as the flexibility to adapt products to local variations. Suppliers with a global supply chain and efficient manufacturing capabilities are best positioned to benefit from this trend. We believe we are uniquely positioned to take advantage of this trend as a result of our global manufacturing footprint, highly developed supply chain relationships and track record of success in solving application challenges in our product lines;

5
Table


Aftermarket, Retail and E-Commerce Channels
We sell our products in these sales channels to a wide range of Contentscustomers, including national and regional distributors, installers, and both traditional brick and mortar and e-commerce merchants, including automotive, home hardware, farm and fleet, and mass merchants. More recent trends in these sales channels include:

▪Channel Consolidation: In the more mature market of the United States, there has been increasing consolidation in distribution networks with larger, more sophisticated aftermarket distributors and retailers gaining market share. In kind, these distributors generally require larger, more sophisticated suppliers with product expertise, category management and supply chain services and capabilities, as well as a global manufacturing and services footprint. We provide customers in this category the opportunity to rationalize their supply base of vendors in our product lines by virtue of our broad offering and product expertise; and

▪Growth of Online Capabilities: The ability to reach consumers directly through online capabilities, including e-commerce, is having an increasing impact on the global automotive aftermarket and retail channels. Establishment of a robust online presence is critical for suppliers regardless of whether or not they participate directly in e-commerce. We believe we are positioned well to take advantage of this continuing trend, given our established online presence. We support consumers by offering a wide range of information on our products and services, including installation videos, custom-fit guides and links to authorized dealers and both brick and mortar and e-commerce merchants.

▪
Outsourcing of Design and Manufacturing of Vehicle Parts and Systems: Automotive OEs continually strive to simplify their assembly processes, lower costs and reduce development times. As a result, they have increasingly relied on suppliers to perform many of the design, engineering, research and development and assembly functions traditionally performed by automotive OEs. Suppliers with extensive design and engineering capabilities are in the best position to benefit from this trend as they are able to offer value-added solutions with superior features and convenience. We believe certain automotive OEs have sought us out to assist with their engineering challenges to increase towing capacity and for the many solutions provided by our existing products; and
▪
Shorter Product Development Cycles: Due to frequent shifts in government regulations and customer preferences, OEs are requiring suppliers to continue to provide new designs and product innovations. These trends are prevalent in mature markets as well as, emerging markets, which are advancing rapidly towards the regulatory standards and consumer preferences of the more mature markets. Suppliers with strong technologies, robust engineering and development capabilities are best positioned to meet OE demands for rapid innovation. Our broad product offerings, product expertise, and global engineering footprint enables us to rapidly deploy solutions meeting the changing customer needs.
Competitive Strengths
We believe our reportableoperating segments share and benefit from the following competitive strengths:
▪
▪Diverse Product Portfolio of Market Leading Brands. We believe we benefit from a diverse portfolio of high-quality and highly-engineered products sold under globally recognized and market leading brand names. By offering a wide range of products, we are able to provide a complete solution to satisfy our customers’ towing, trailering and cargo management needs, as well as serve diverse channels through effective brand management. Our brands are well-known in their respective product areas and channels. We believe that we are among the leading suppliers of towing and trailering products globally.
▪Global Scale with Flexible Manufacturing Footprint and Supply Chain. We were built through internal growth and a series of acquisitions to become a global automotive accessories company with a broad range of products. Our sourcing arrangements with third-party suppliers provides us with the ability to manufacture or source high-volume products as end-market demand fluctuates, while also providing us the flexibility to produce low-volume and customized products throughout our global manufacturing facilities. Our flexible manufacturing capability, low-cost manufacturing facilities and established supply chain allow us to quickly and efficiently respond to changes in end-market demand.
▪Long-Term Relationships with a Diverse Customer Base. Our customers encompass a broad range of OEs, mass merchants, e-commerce websites, distributors, dealers, and independent installers, representing multiple channels reaching the end consumer. Blue chip customers include Ford Motor Company, Stellantis, Volkswagen, BMW, Mercedes-Benz, Toyota, Tractor Supply Company, AutoZone, O’Reilly Auto Parts, Canadian Tire, Amazon, Etrailer, LKQ, U-Haul and Redneck Trailer Supplies, among others. Our customer relationships are well established, with many exceeding 20 years. These strong partnerships can provide stability to our revenue base through economic cycles. We believe our diverse product portfolio, global scale and flexible manufacturing capabilities enable us to provide a unique value proposition to customers.
▪Globally Competitive Cost Structure. We are consistently focused on margin improvement activities, identifying and acting on projects to reduce our cost structure. We believe our focused, identifiable projects that are under way or complete, our strong brand names, leading market position, and flexible manufacturing and sourcing operations will yield improved operating margins and cash flow that can then be deployed to high-value creation activities.
Diverse Product Portfolio of Market Leading Brands. We believe we benefit from a diverse portfolio of high-quality and highly-engineered products sold under globally recognized and market leading brand names. By offering a wide range of products, we are able to provide a complete solution to satisfy our customers’ towing, trailering and cargo management needs, as well as serve diverse channels through effective brand management. Our brands are well-known in their respective product areas and channels. We believe that we are the leading supplier of towing products and among the leading suppliers of trailering products globally.
▪
Global Scale with Flexible Manufacturing Footprint and Supply Chain. We were built through internal growth and a series of acquisitions to become the only truly global automotive accessories company with the products we offer. We have the ability to produce low-volume, customized, quick-turn products in our global manufacturing facilities, while our sourcing arrangements with third-party suppliers provides us with the flexibility to manufacture or source high-volume products as end-market demand fluctuates. Our flexible manufacturing capability, low-cost manufacturing facilities and established supply chain allow us to quickly and efficiently respond to changes in end-market demand.
▪
Long-Term Relationships with a Diverse Customer Base.  Our customers encompass a broad range of OEs, mass merchants, e-commerce websites, distributors, dealers, and independent installers, representing multiple channels to reaching the end consumer. Blue chip customers include Walmart, Ford Motor Company, FCA, Volkswagen, BMW, Mercedes-Benz, AutoZone, Amazon, Toyota, Canadian Tire, LKQ, U-Haul, Home Depot and Etrailer, among others. Our customer relationships are well established, with many exceeding 20 years. These strong partnerships can provide stability to our revenue base through economic cycles. We believe Horizon’s diverse product portfolio, global scale and flexible manufacturing capabilities enable us to provide a unique value proposition to customers.
▪
Globally Competitive Cost Structure.  Since becoming an independent public company, we have focused on margin improvement activities, identifying and acting on projects to reduce our cost structure. With focused, identifiable projects under way or complete, we believe we will benefit from improved operating margins and cash flow that can then be deployed to high-value creation activities. The combination of our strong brand names, leading market position, flexible manufacturing and sourcing operations have historically resulted in significant cash flow generation.
▪
Experienced Management Team. Our management team is led by our Chief Executive Officer, Mark Zeffiro, who was a senior executive at TriMas for over seven years and has more than 25 years of financial, operational and business leadership experience with companies such as Black & Decker and General Electric Company. David Rice, our Chief Financial Officer, joined TriMas in 2005 and brings more than 30 years of financial, audit and leadership experience to the role. David was previously division finance officer of Cequent Performance Products. Carl Bizon, President of Horizon Americas, has over 23 years of experience, including nearly eight years as the President of Horizon’s international business, including both Europe-Africa and Asia-Pacific. The leadership team of Horizon Asia‑Pacific includes Jason Kieseker, who joined the Horizon business in 2001 and has held various leadership roles within our Horizon Asia‑Pacific business. The leadership team of Horizon Europe‑Africa includes Paul Caruso, who has over 30 years of experience in a variety of roles within the industrial and automotive markets.

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Key Business Priorities
Horizon Global established threethe following strategic platforms for value creation focused on business improvement and transformation, supported by a company culture of continuous improvement.
▪
Margin Expansion. Our first priority is to drive the organization to a 10% operating margin level. We believe the investments made in our facilities and equipment over the past few years, along with our efforts to realign or operations, should provide the foundation for additional margin expansion. We are developing an organization in which all team members are focused on constantly improving the efficiency of all operations through the adoption of lean and continuous improvement practices.
•Margin Expansion. Our first priority is to drive the organization to an operating margin that is competitive with or above industry expectations. We believe the investments made in our facilities and equipment over the past few years, along with our efforts to realign and rebalance our operations, should provide the foundation for additional margin expansion. We are an organization in which our team members are focused on constantly improving the efficiency of all operations through the adoption of lean and continuous improvement practices.
•Liquidity Management. Our second priority is to continue to effectively manage the liquidity of the business. We believe the recently completed refinancing activities and resulting improved capital structure have positioned us to meet the liquidity needs of the business through a focus on working capital management and continued cash flow generation, while servicing our debt obligations.
•Organic Growth.     Our third priority is to grow the business organically. We have identified areas of focused growth activities, involving geographic markets, sales channel customer and product line expansion, which we believe are particularly aligned with our competitive strengths.
▪
Capital Structure. Our second priority is to improve our capital structure. Our net leverage ratio, as defined in certain of the agreements covering our indebtedness, at December 31, 2017 was approximately 3.2 times (expected to be 5.0 times subsequent to the acquisition of Brink International B.V. (“Brink Group”), which is discussed below). Our long-term net leverage ratio target is less than 2 times. We aim to accomplish this goal through both margin improvement as well as paying down our fixed obligations, and should we decide to do so, we have a structure in place that allows us to prepay debt in addition to the amortization required under our term debt.
▪
Organic Growth.     Our third priority is to grow the business 3% to 5% on an organic basis, annually. We have identified five broad areas of focused growth activities, involving geographic markets and sales channels, which we believe are particularly aligned with our competitive strengths.
Growth Strategies
Prior to becoming an independent public company, Horizon operated on a regional basis under separate management teams, with independent business decisions and resource allocations made by the Horizon Americas, Horizon Asia‑Pacific and Horizon Europe‑Africa leaders. As a public company, we are reorganizing our global operations to operate as a single combined entity. As a result, weWe believe that we have multiple opportunities to integrate, improve and grow our business, whether via organic initiatives, or via acquisitions of new products or in new geographies or new product development, through the following strategies:
▪
•Balanced Original Equipment and Aftermarket Growth. The global market for accessories and vehicle personalization is increasing across channels. The Company is positioned to balance and leverage the OE growth with growth in the aftermarket as we have significant brand recognition and strategic distributor and customer relationships. We believe that our significant brand recognition in the marketplace will allow us to support profitable organic growth to meet customer demand in the aftermarket channel. Further, automotive manufacturers are looking for suppliers to partner with to create genuine accessories to meet this need. Historically, this has been undertaken as a regional effort, but the growth of global OE programs may increase the need for global suppliers. Our geographic footprint, existing customer relationships and the potential for growth in global vehicle platforms align to present us with unique opportunities to grow with our OE customers.
•E-commerce. We will continue to leverage the breadth of our product portfolio and global manufacturing footprint by continuing to expand our presence in the high growth e-commerce channel. This strategy is applicable in our developed markets where a focus on content delivery and customer support drive growth. It is also a powerful tool as we look at developing new, less mature markets around the world, enabling a direct connection with the users of our product set.
•Low Cost Countries. We believe our manufacturing presence in Mexico and Eastern Europe, coupled with our global distribution network provides opportunities for growth, while supporting both new and existing global and regional customers in a cost-effective manner across our sales channels. When leveraged appropriately, it allows us to manufacture and distribute our products in a localized and regionalized manner efficiently and supports having the right product in the right place to best serve customer and end market needs.
•Product Innovation. Our presence in the OE channels and multiple geographic markets allows us to leverage development costs and product innovation tied to new vehicles across our entire global footprint. We aim to be first to market in the aftermarket with our historical success of leveraging our OE innovation into the aftermarket channel, which supports profitable organic growth.
Original Equipment. The global market for accessories and vehicle personalization is increasing and automotive manufacturers are looking for suppliers to partner with to create genuine accessories to meet this need. Historically, this has been a regional effort, but the growth of global automotive OE has increased the need for global suppliers. Our geographic footprint, existing customer relationships and the increase in global vehicle platforms align to present us with unique opportunities to grow with our automotive OE customers.
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E-commerce. We intend to leverage the breadth of our product portfolio and global manufacturing footprint to expand our presence in the high growth e-commerce channel. This strategy is applicable in our developed markets where a focus on content delivery and customer support drive growth. It is also a powerful tool as we look at developing new, less mature markets around the world, enabling a direct connection with the users of our product set.
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Latin American Markets.  Since entering the Latin American market, we have witnessed a desire to accessorize vehicles among new entrants to the middle class. We expanded our global footprint and product portfolio in Brazil by acquiring DHF Soluções Automotivas Ltda and Engetran Engenharia, Indústria, e Comércio de Peças e Acessórios Veiculares Ltda, respectively, which are included in Horizon Americas. We believe these expansions into new geographies, as well as our manufacturing presence in Mexico, provide opportunities for growth, while supporting both new and existing global customers.
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Chinese Market.  China is in the early stages of adoption for towing and trailering products. As this adoption rate increases, there is an opportunity for us to bring our experience in the safe use of these products into the market in a meaningful capacity. The rapidly growing middle class, in concert with a developing interest in an outdoor recreational lifestyle, is expected to result in incremental demand for our automotive aftermarket products and accessories. We intend to leverage our existing relationships with global automotive OEs and our global manufacturing and distribution network to expand our sales in this developing economy.
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Product Innovation. Our focus in multi-generational product planning is to formalize the process by which we integrate the feedback and needs of users into our product development engine. We look to move beyond simply responding to the feedback that we receive, to anticipating the functionality future products need to possess to enrich the lives of our users.

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Marketing, Customers and Distribution
Horizon employs a dedicated sales force in each of our primary channels. In serving our customers globally, we rely upon our strong historical customer relationships, custom engineering capability, brand recognition, broad product offerings, our established distribution network and varied merchandising strategies to bolster our towing, trailering, cargo management and accessory product sales. Significant Horizon customers include Ford Motor Company, FCA, Volkswagen, ToyotaBMW, Mercedes-Benz and General Motors/HoldenToyota in the OE channel; Walmart, Tractor Supply Company, AutoZone, O’Reilly Auto Parts and Super Retail GroupCanadian Tire in the retail channel; Amazon and Etrailer in the E-commerce channel; and LKQ, U-Haul and Redneck Trailer Supplies in the aftermarket channel. No customer represented greater than 10% of total revenue during the yearstwelve months ended December 31, 2017, 2016 or 2015.2020 and 2019.
Competition
The competitive environment for automotive accessory products is highly fragmented and is characterized by numerous smaller suppliers, even the largest of which tend to focus in narrow product categories. We believe there is no individual competitor that has the breadth of product portfolio on a global basis in the markets we serve. Significant towing competitors include Curt Manufacturing, B&W Trailer Hitches, Husky Towing Products, Winston Products, The Bosal Group, Brink Group, Buyers Products Company, Demco Products, PullRite, Westin Automotive Products and Camco. Significant trailering competitors include Pacific Rim, Dutton-Lainson, Shelby, Ultra-Fab, Sea-SenseSAF-Holland, Demco Products, Jost International and Atwood.Sea-Sense. In addition, competitioncompetitors in the cargo management product category primarily comes frominclude Thule, Yakima, Bell, Masterlock and Saris.
Acquisition Strategy
We believe that our businesses have significant opportunities to grow through disciplined strategic acquisitions. We typically seek bolt-on acquisitions, in which we acquire another industry participant or adjacent product lines that enhance the strengths of our core businesses. When evaluating acquisition targets, we look for opportunities to expand our existing product offerings, gain access to new customers and end markets, add new early life cycle technologies, as well as add additional distribution channels, expand our geographic footprint and/or capitalize on scale and cost efficiencies.
Westfalia Acquisition
On October 4, 2016, we completed our previously announced acquisition of Westfalia-Automotive Holding GmbH and TeIJs Holding B.V., which we refer to collectively as the “Westfalia Group” or “Westfalia”. Pursuant to the purchase agreement, we acquired all of the outstanding equity interests of the Westfalia Group for cash consideration of approximately $99.2 million and the issuance to certain of the sellers of 2,704,310 shares of our common stock in a transaction exempt from registration requirements of the Securities Act of 1933, or the “Securities Act.” We funded the cash payment, as well as the repayment of certain of the Westfalia Group’s debt, through a combination of cash on hand and $152.0 million of incremental borrowings under our Term B Loan.
The Westfalia Group is a leading European towing company. Headquartered in Rheda-Wiedenbrück, Germany, with operating facilities in 11 countries, it manufactures towing and trailering products, including more than 1,700 different types of towbars, wiring kits and carrier systems for cars and light utility vehicles. It holds in excess of 300 issued patents and published patent applications protecting its unique line of towing and trailering products. The brands under which it markets its products include Westfalia, Terwa and Siarr.
The acquisition of the Westfalia Group positions us as a leading manufacturer of towing and trailering equipment in Europe and further complements our broad portfolio. We believe the acquisition will expand our opportunities for revenue and margin growth, increase our market share and augment our global OE footprint with access to new markets and customers.
Brink Group
On December 13, 2017, we entered into a definitive agreement to acquire the Brink Group, subject to the satisfaction of customary closing conditions, including receipt of regulatory approvals. We plan to finance the acquisition through new long-term debt and cash on hand. The Company expects to close the acquisition in the second quarter of 2018.
The Brink Group is an industry-leading innovator and manufacture of towbars, wiring kits, and towing accessories. Headquartered in Staphorst, Netherlands, with operations in eight countries, it manufactures towing and trailering solutions serving the automotive OE and aftermarket channels. This acquisition will strengthen our global platform and enhance our product portfolio.

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Materials and Supply Arrangements
We procure a variety of materials from a global supplier base from around the world. We are sensitive to price movements in our raw materials supply base. Our largest material purchases are for steel, copper, and aluminum. We also consume a significant amount of energy via utilities in our facilities. Historically, when we have experienced increasing costs of steel, we have successfully worked withpassed those through to our suppliers to manage cost pressures and disruptions in supply. Price increases used to offset inflation or a disruption of supply in core materials have generally been successful,customers, although sometimes delayed. Increases in price for these purposes representwith a risk in execution.delay due to competitive pressure.
Employees and Labor RelationsHuman Capital Resources
As of December 31, 2017,2020, we employed approximately 4,3004,000 people, of which approximately 13%12% were located in the United States. In the United States, we have no collective bargaining agreements. EmployeeIn June 2020, the Company successfully completed a three-year agreement with our largest union in Horizon Europe‑Africa. Globally, employee relations have generally been satisfactory. We cannot predict the impact of any future unionization of our workplace.
On July 21, 2015,Horizon Global focuses on a number of human capital resources objectives in managing its business, including our commitment to safety, employee engagement, diversity and inclusion, and talent development. These human capital resources objectives, taken together, may be material to understanding our business under certain circumstances. These objectives are reinforced by our code of conduct, The Spirit and the Letter, our global policies, and our commitment to sustainability as evidenced in our inaugural Sustainability Report, published in 2020.
Commitment to Safety
One of our primary objectives is the health and safety of our employees and anyone who conducts business on our behalf. The commitment to safety starts at the top levels of our organization. We believe a safe and secure workplace is fundamental and important to our success. Horizon Global is committed to providing a safe and healthy workplace, and complying with applicable safety and health laws, regulations and internal requirements. We are also committed to engaging our employees to continually improve health and safety by acting upon opportunities to reduce risk and improve our safety and health performance. Horizon Global maintains comprehensive safety programs focused on identifying hazards and eliminating risks that can lead to severe injuries.
Employee Engagement
The Company maintains a commitment to continuous improvement as one of our core values and is imperative to our long-term business strategies and initiatives. We embrace lean manufacturing principles, such as Kaizen, and work to foster a culture of employee engagement to drive performance improvements and operational excellence.
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Diversity and Inclusion
We believe we announcedare at our best when we bring together unique perspectives, experiences and ideas, and actively build diverse teams and inclusive work environments across our global locations. We believe that tapping into our employees’ diverse backgrounds and experiences ensures we make better decisions and supports stronger operating performance. Our goal is to foster working environments that are fair and safe, where rights are respected and everyone can achieve their full potential. Our policies and practices strive to assure equal employment and advancement opportunities for all qualified people. We also work to maintain appropriate standards of conduct in the decisionworkplace and to closebe sensitive to the concerns of our manufacturing facilitydiverse group of employees. We strive to maintain workplaces that are free from discrimination or harassment on the basis of race, religion, color, national origin, sex, age, genetic information, sexual orientation, gender identity, protected veteran status, disability or any other characteristic protected by applicable law.
Talent Development
We believe that a talented, engaged and dynamic workforce is vital to our success. We seek to hire, develop and retain individuals who embrace and thrive in Ciudad Juarez, Mexico alongour culture. Our culture is grounded in our values: Socially Responsible, Respectful & Open Team, Integrity & Accountability and Data & Results Driven. Our business strives to build a dynamic talent pipeline through robust recruitment initiatives across our operating footprint. Our programs are intended to ensure seamless onboarding for our new employees. We identify and nurture talent through a culture that is designed to enable employees to succeed and grow into leadership positions. We believe that our business and structure provide opportunities for employees to follow their own path and advance their careers.
We support a culture of continuous growth and development, and we provide employees with our distribution warehouse in El Paso, Texas, within our Horizon Americas segment, impacting approximately 214 hourlythe opportunity to receive frequent performance feedback. Our employees have goals and 47 salaried employees.objectives that align to both personal development and the Company’s strategic objectives. The performance management process includes performance and career development discussions between employees and their managers (via annual goal setting and year-end performance and talent reviews). During the second quarter of 2016, we vacated the El Paso, Texasthis process, employees receive candid feedback on their performance against established goals and Juarez, Mexico sites.objectives. These reviews evaluate each employee’s strengths, skills, areas for opportunity and growth, which are important for career development.
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Seasonality and Backlog
We experience some seasonality in our business. Sales of towing and trailering products in the northern hemisphere, where we generate the majority of our sales, are generally stronger in the second and third calendar quarters, as trailer OEs, distributors and retailers acquire product for the spring and summer selling seasons. Our growing businessesIn addition, within the OE channels, there is moderate seasonality due to production schedules and the launch of component production for new vehicle models, which generally occurs in the southern hemisphere are stronger inthird calendar quarter of the first and fourth calendar quarters.year. Accordingly, our results reflect any seasonality we may experience. We normally do not consider order backlog to be a material factor in our businesses.
Environmental MattersGovernment Regulation
We are subject to increasingly stringentU.S. federal, state and local, and non-U.S. international environmental, safety and health laws and regulations, including those relating to air emissions, wastewater discharges and chemical and hazardous waste management and disposal. Some of these environmental laws hold owners or operators of land or businesses liable for their own and for previous owners’ or operators’ releases of hazardous or toxic substances or wastes. Other environmental laws and regulations require the obtainment and compliance with environmental permits. To date, costs of complying with environmental, health and safety requirements have not been material. However, the nature of our operations and our long history of industrial activities at certain of our current or former facilities, as well as those acquired, could potentially result in material environmental liabilities.
While we must comply with existing and pending climate change legislation, regulation and international treaties or accords, current laws and regulations have not had a material impact on our business, capital expenditures or financial position. Future events, including those relating to climate change or greenhouse gas regulation could require us to incur expenses related to the modification or curtailment of operations, installation of pollution control equipment or investigation and cleanup of contaminated sites.
Intangible Assets
Our identified intangible assets, consistingIn addition to environmental laws and regulations, our operations are governed by variety of customer relationships, trademarkslaws and trade namesregulations, including those relating to workplace safety and technology, are recorded at approximately $90.2 million as of December 31, 2017, net of accumulated amortization. The valuation of each of our identified intangibles was performed using broadly accepted valuation methodologiesworker health, principally the Occupational Safety and techniques.
Customer Relationships. Health Act and regulations thereunder. We have developed and maintained stable, long-term selling relationships with customer groups for specific branded products and/or focused market product offerings within each of our businesses. Useful lives assigned to customer relationship intangibles range from five to 25 years and have been estimated using historic customer retention and turnover data. Other factors considered in evaluating estimated useful lives include the diverse nature of focused markets and products of which we have significant share, how customers in these markets make purchases and these customers’ position in the supply chain. We also monitor and evaluate the impact of other evolving risks including the threat of lower cost competitors and evolving technology.
Trademarks and Trade Names. Each of our operating groups designs and manufactures products for focused markets under various trade names and trademarks. Our trademark/trade name intangibles are well-established and considered long-lived assets that require maintenance through advertising and promotion expenditures. Because it is our practice and intent to maintain and to continue to support, develop and market these trademarks/trade names for the foreseeable future, we consider our rights in these trademarks/trade names to have an indefinite life, except as otherwise dictated by applicable law. During the second quarter of 2016, we made a decision to simplify our brand offering in the Horizon Americas segment. This resulted in the impairment of trade names with an aggregate carrying value of $2.4 million. During the fourth quarter of 2016, we performed our annual assessment of indefinite-lived intangible assets. Based on this assessment, we determined that certain trade names with an aggregate carrying value of $6.9 million were impaired. This resulted in impairment charges of $6.2 million. No impairments were recorded in 2017.

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For additional information, refer to Note 6, “Goodwill and Other Intangible Assets,” included in Item 8, “Financial Statements and Supplementary Data,” within this Annual Report on Form 10-K.
Technology. We hold a number of U.S. and foreign patents, patent applications, and proprietary product and process-oriented technologies. We have, and will continue to dedicate, technical resources toward the further development of our products and processes in order to maintain our competitive position in the industrial, commercial and consumer end marketsbelieve that we serve. Estimated useful lives forare in material compliance with these laws and regulations and do not believe that future compliance with such laws and regulations will have a material adverse effect on our technology intangibles range from three to 15 yearsbusiness, financial condition, results of operations and are determined in part by any legal, regulatory or contractual provisions that limit useful life. Other factors considered include the expected use of the technology by the operating groups, the expected useful life of the product and/or product programs to which the technology relates, and the rate of technology adoption by the industry.cash flows.
International Operations
Approximately 52.6%For the twelve months ended December 31, 2020, 43.9% of our net sales for the year ended December 31, 2017 were derived outside of the United States. We may significantly expand our international operations through organic growth and acquisitions. In addition, approximately 94.9%as of December 31, 2020, 69.3% of our consolidated property and equipment, - net as of December 31, 2017 were located outside of the United States. We operate manufacturing facilities in Australia, Brazil, France, Germany, Romania, Mexico, New Zealand,and South Africa, and Thailand. For information pertaining to the net sales and total assets attributed to our international operations, refer to Note 15, “Segment Information,” included in Item 8, “Financial Statements and Supplementary Data,” within this Annual Report on Form 10-K.Africa.
Website Access to Company Reports
We use our Investor Relations website, www.horizonglobal.com, as a channelvenue for routine distribution of important information, including news releases, analyst presentations and financial information. We post filings as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC, including our annual, quarterly, and current reports on Forms 10-K, 10-Q and 8-K, our proxy statements and any amendments to those reports or statements. All such postings and filings are available on our Investor Relations website free of charge. The SEC also maintains a website, www.sec.gov, that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The content on any website referred to in this Annual Report on Form 10-K is not incorporated by reference into this Annual Report on Form 10-K unless expressly noted.



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Item 1A.    Risk Factors
You should carefully consider each of the risks described below, together with information included elsewhere in this Annual Report on Form 10-K and other documents we file with the SEC. The risks that are highlighted below are not the only ones that we face. Some of ourThese risks and other forward-looking statements that relate principally to our businessfuture events, expectations, trends and operating periods involve certain factors that are subject to change, and important risks and uncertainties that could cause actual results to differ materially. Although the industry in which we operate, while others relate principally to our spin-off from TriMas, to the securities markets in generalrisks are organized by headings, and ownership of our common stock.each risk is discussed separately, many are interrelated. If any of the following risks actually occur, our business, financial condition or results of operations could be negatively affected.
Risks Relating to the COVID-19 Pandemic
The COVID-19 pandemic has disrupted, and may continue to disrupt, our Businessbusiness, which could result in a material adverse impact to our business, results of operations, cash flow, liquidity and financial condition.
In December 2019, an outbreak of COVID-19 occurred in China and has since spread to other parts of the world. On March 11, 2020, the World Health Organization declared COVID-19 to be a global pandemic and recommended containment and mitigation measures. On March 13, 2020, the United States declared a national emergency concerning the outbreak. Along with these declarations, extraordinary and wide-ranging actions were taken by international, federal, state, and local public health and governmental authorities to contain and combat the outbreak and spread of COVID-19 in regions across the United States and the world, including quarantines, social distancing and “stay-at-home” orders, travel restrictions, mandatory business closures and other mandates that substantially restricted individuals’ daily activities and curtailed or ceased many businesses’ normal operations.
To date, the COVID-19 pandemic has surfaced in nearly all regions around the world, negatively impacted the global economy, disrupted consumer spending and global supply chains, and created significant volatility and disruption of financial markets. As a result, we have experienced, and may continue to experience, decreases in demand and customer orders for our products in all sales channels, as well as temporary disruptions and closures of some of our facilities due to decreased demand and government mandates. The COVID-19 pandemic has also impacted various aspects of the supply chain as our suppliers experience similar business disruptions due to operating restrictions from government mandates. We continue to monitor procurement of raw materials and components used in the manufacturing, distribution and sale of our products, but continued disruptions in the supply chain due to the COVID-19 pandemic may cause difficulty in sourcing materials or unexpected shortages or delays in delivery of raw materials and components, and may result in increased costs in our supply chain. We have implemented plans to reduce spending in certain areas of our business, including flexing variable labor, involuntary leave programs, reductions or delays in variable costs and investments, including capital expenditures, and may need to take additional actions to reduce spending in the future.
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Generally, government restrictions have been lifted and economies have reopened; however, certain jurisdictions or regions may have to re-establish restrictions due to a resurgence in COVID-19 cases or otherwise, which could require us, our customers or our suppliers to close or limit operations. Accordingly, the ultimate shape of the economic recovery is uncertain. We will continue to closely monitor and assess the impact of the pandemic on our business, the extent of the impact on our liquidity to meet our short-term obligations and fund our business needs and growth, and our Industryability to meet financial covenants within our credit agreements. While we are closely monitoring the impact of the pandemic on all aspects of our business, the extent of the impact on our results of operations, cash flow, liquidity, and financial performance, as well as our ability to execute near- and long-term business strategies and initiatives, will depend on numerous evolving factors and future developments, which are highly uncertain and cannot be reasonably predicted, including: (a) the duration, severity and scope of the pandemic, including the resurgence of COVID-19 cases; (b) rapidly-changing governmental and public health mandates and guidance to contain and combat the outbreak; (c) the extent and duration of the pandemic’s adverse effect on economic and social activity, consumer confidence, discretionary spending and preferences, labor and healthcare costs, and unemployment rates, any of which may reduce demand for some of our products and impair the ability of those with whom we do business to satisfy their obligations to us; (d) our ability to sell and provide our services and products, including as a result of any restrictions, mandatory business closures, and any stay-at home or similar orders; (e) any temporary reduction in our workforce, closures of our offices and facilities and our ability to adequately staff and maintain our operations; (f) the ability of our customers and suppliers to continue their operations, which could result in terminations of contracts, losses of revenue, and further adverse effects to our supply chain; (g) any impairment in value of our tangible or intangible assets, which could be recorded as a result of weaker economic conditions; and (h) the potential effects on our internal controls, including as a result of changes in working environments and observing stay-at-home and similar orders that are applicable to our employees and business partners, among others. In addition, if the pandemic continues to create disruptions or turmoil in the credit or financial markets, or impacts our credit ratings, it could adversely affect our ability to access capital on favorable terms and continue to meet our liquidity needs.
Given the inherent uncertainty surrounding the COVID-19 pandemic, the pandemic may have an adverse impact on our business, results of operations, cash flow, liquidity, and financial condition.
Risks Relating to Economic Conditions
Our businesses depend upon general economic conditions, and we serve some customers in highly cyclical industries; as such, we may be subject to the loss of sales and margins due to an economic downturn or recession.
Our financial performance depends, in large part, on conditions in the markets that we serve in both the U.S. and global economies. Some of the industries that we serve are highly cyclical, such as the agricultural, automotive, construction, horse/livestock, industrial, marine, military, recreational, trailer and utility markets. We may experience a reduction in sales and margins as a result of a downturn in economic conditions or other macroeconomic factors. Lower demand for our products may also negatively affect the capacity utilization of our production facilities, which may further reduce our operating margins.
Risks Relating to Our Business and Operations
Many of the markets we serve are highly competitive, which could limit the volume of products that we sell and reduce our operating margins.
Many of our products are sold in competitive markets. We believe that the principal points of competition in our markets are product quality and price, design and engineering capabilities, product development, conformity to customer specifications, reliability and timeliness of delivery, customer service and effectiveness of distribution. Maintaining and improving our competitive position will require our continued investment by us in manufacturing, engineering, quality standards, marketing, customer service and support of our distribution networks. We may have insufficient resources in the future to continue to make such investments and, even if we make such investments, we may not be able to maintain or improve our competitive position. We also face the risk of lower-cost foreign manufacturers located in China, Southeast Asia, India and other regions competing in the markets for our products, and we may be driven as a consequence of this competition to increase our investment overseas. Making overseas investments can be highly complicated and we may not always realize the advantages we anticipate from any such investments. Competitive pressure may limit the volume of products that we sell and reduce our operating margins.
We may be unable to successfully implement our business strategies. Our ability to realize our business strategies may be limited.
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Our businesses operate in relatively mature industries and it may be difficult to successfully pursue our growth strategies and realize material benefits therefrom. Even if we are successful, other risks attendant to our businesses and the economy generally may substantially or entirely eliminate the benefits.

We may not achieve our strategic goals for margin expansion, capital structure improvementliquidity management and organic growth; ourgrowth. Our past performance in these areas may not be indicative of future performance. Failure to achieve our strategic goals may adversely impact our results of operations.
Our strategic platforms for value creation and goals for margin expansion, capital structure improvementliquidity management and organic growth are subject to risk and uncertainty and depend on general economic, credit, capital market and other conditions that are beyond our control and are subject to fluctuation. Our past performance with respect to margin expansion, capital structure improvementliquidity management and organic growth both before and after the spin-off, should be considered independent from, and may not be a reliable indicator of, future performance. These strategic goals may need to be revised or may not be met for a number of reasons, including changes in general economic conditions in the United States and abroad, changes in credit and capital market conditions, increased competition in the markets for our products, increases in raw material or energy costs and changes in technology and manufacturing techniques.
Increases in our raw material or energy costs or the loss of critical suppliers could adversely affect our profitability and other financial results.
We are sensitive to price movements in our raw materials supply base. Our largest material purchases are for steel, copper and aluminum. The prices for these products have historically been volatile, fluctuate with worldwide market and economic conditions, import duties and tariffs, and may increase as a result of various factors, including: a reduction in the number of suppliers due to restructurings,restructuring, bankruptcies and consolidations, declining supply due to mine or mill closures and other factors that adversely impact supplier profitability, including increases in supplier operating expenses caused by rising raw material and energy costs. We may be unable to completely offset the impact with price increases on a timely basis due to outstanding commitments to our customers, competitive considerations or our customers’ resistance to accepting such price increases and our financial performance may be adversely impacted by further price

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increases. A failure by our suppliers to continue to supply us with certain raw materials or component parts on commercially reasonable terms, or at all, for any reason, including, without limitation, disruptions in our suppliers’ business due to cybersecurity incidents, terrorist activity, public health crises (such as the COVID-19 pandemic), fires or other natural disasters, could have a material adverse effect on us. To the extent there are energy supply disruptions or material fluctuations in energy costs, our margins could be materially adversely impacted.
In the past, the United States government has indicated its intent to alter its approach to trade policy, including, in some instances, to revise, renegotiate or terminate certain multilateral trade agreements and has also imposed new tariffs on certain foreign goods and raised the possibility of imposing additional increases or new tariffs on other goods. Such actions have, in some cases, led to retaliatory trade measures by certain foreign governments. Such policies could make it more difficult or costly for us to do business in or procure products from those countries. In turn, we may need to raise prices or make changes to our operations, which could negatively impact our revenue or operating results. At this time, it remains unclear what additional actions, if any, will be taken by the U.S. government or foreign governments with respect to tariff and international trade agreements and policies, and we cannot predict future trade policy or the terms of any revised trade agreements or any impact on our business.
Transportation disruptions or increases in our freight cost could adversely affect our profitability and other financial results.
Because certain of our products are procured from international sources, including China, and imported into our manufacturing and distribution center locations around the world, if disruptions in our transportation network occur or our shipping costs substantially increase, we may be unable to sell or timely deliver our products, and our operating expenses could increase. We are dependent upon the transportation systems we use to ship our products, including various transportation modes of freight such as land, water and air. Our attempts to closely match our inventory levels to our product demand intensify the need for our transportation systems to function effectively and without delay.
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The transportation network is subject to disruption or congestion from a variety of causes, including labor disputes or port strikes, acts of war or terrorism, natural disasters, and congestion resulting from higher shipping volumes. A port worker strike, work slow-down, or other transportation disruption in Long Beach, California, where we generally import our products to fulfill certain of our Horizon Americas operating segment orders, could significantly disrupt our business. Our international freight is regularly subjected to inspection by governmental entities. If our delivery times increase unexpectedly for these or any other reasons, our ability to deliver products on time would be materially adversely affected and result in delayed or lost revenue as well as customer imposed penalties. In addition, if increases in fuel prices occur, our transportation costs would likely increase. Moreover, the cost of shipping our products by air freight is greater than other methods. From time to time, we have shipped products using air freight to meet unexpected spikes and shifts in demand between product categories, to bring new product introductions to market quickly and to timely ship products previously ordered. If we rely more heavily upon air freight to deliver our products, our overall shipping costs will increase. A prolonged transportation disruption or a significant increase in the cost of freight could materially adversely affect our business, results of operations, and financial condition.
Our products are typically highly engineered or customer-driven and we are subject to risks associated with changing technology and manufacturing techniques that could place us at a competitive disadvantage.
We believe that our customers rigorously evaluate their suppliers on the basis of product quality, price competitiveness, technical expertise and development capability, new product innovation, reliability and timeliness of delivery, product design capability, manufacturing expertise, operational flexibility, customer service and overall management. Our success depends on our ability to continue to meet our customers’ changing expectations with respect to these criteria. We anticipate that we will remain committed to product research and development, advanced manufacturing techniques and service to remain competitive, which entails significant costs. We may be unable to address technological advances, implement new and more cost-effective manufacturing techniques, or introduce new or improved products, whether in existing or new markets, so as to maintain our businesses’ competitive positions or to grow our businesses as desired.
We depend on the services of key individuals and relationships, the loss of which could materially harm us.
Our success will depend, in part, on the effortsA portion of our senior management,sales is derived from international sources, which exposes us to certain risks which may adversely affect our business and our financial results.
We have operations outside of the United States. For the twelve months ended December 31, 2020, 43.9% of our net sales were derived from sales by our subsidiaries located outside of the United States. In addition, we may expand our international operations through internal growth and acquisitions. International operations, particularly sales to emerging markets and manufacturing in non-U.S. countries, are subject to risks which are not present within U.S. markets, which include, but are not limited to, the following:
•changes in local government regulations and policies including, but not limited to, governmental embargoes, repatriation of earnings, expropriation of property, duty or tariff restrictions, investment limitations and tax policies;
•changes in local economic conditions;
•political and economic instability and disruptions, including labor unrest, civil strife, acts of war, guerrilla activities, insurrection and terrorism;
•legislation that regulates the use of chemicals;
•disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the Foreign Corrupt Practices Act (“FCPA”);
•compliance with international trade laws and regulations, including import and export control and economic sanctions, such as anti-dumping duties and countervailing duties, and/or government authorities that may question our Chief Executive Officer. Our future success will also dependinternational trade and/or customs positions or change their laws in a manner that may impact our business, financial results or operating cash flows;
•difficulties in staffing and managing multi-national operations;
•limitations on among other factors, our ability to attractenforce legal rights and retain remedies;
•tax inefficiencies in repatriating cash flow from non-U.S. subsidiaries that could affect our financial results and reduce our ability to service debt;
•reduced protection of intellectual property rights;
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•increasingly complex laws and regulations concerning privacy and data security, including the European Union’s General Data Protection Regulation;
•the impacts related to the United Kingdom’s withdrawal from the European Union; and
•other qualified personnel. The lossrisks arising out of foreign sovereignty over the servicesareas where our operations are conducted.
We are also exposed to risks relating to U.S. policy with respect to companies doing business in foreign jurisdictions. Changes in laws or policies governing the terms of any of our key employeesforeign trade, in particular increased trade restrictions, tariffs or the failure to attracttaxes on import from countries where we procure or retain employeesmanufacture products, such as China and Mexico, could have a material adverse effect on us.our business and results of operations. For instance, the U.S. and Chinese governments have imposed a series of significant incremental retaliatory tariffs to certain imported goods. With respect to the automotive industry, the U.S. imposed tariffs on imports of certain steel, aluminum and automotive components, with China imposing retaliatory tariffs on certain automotive components. Given the uncertainty regarding the duration of the imposed tariffs, as well as the potential for additional tariffs by the United States, China or other countries, as well as other changes in tax policy, trade regulations or trade agreements, and the Company’s ability to implement strategies to mitigate the impact of changes in tax policy, tariffs or other trade regulations, our exposure to the risks described above could have a material adverse effect on our business and results of operations.
Although our financial results are reported in U.S. dollars, a portion of our sales and operating costs are realized in foreign currencies. Our sales and profitability are impacted by the movement of the U.S. dollar against foreign currencies in the countries in which we generate sales and conduct operations. Long-term fluctuations in relative currency values could have an adverse effect on our operations and financial condition.
In addition, we could be adversely affected by violations of the FCPA and similar worldwide anti-bribery laws as well as export controls and economic sanction laws. The FCPA and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Although we have internal control policies and procedures designed to ensure compliance with these regulations, there can be no assurance that our policies and procedures will protect us from acts committed by employees, agents or business partners of ours (or of businesses we acquire or partner with) that would violate these regulations. Any violation could cause an adverse effect on operations and financial conditions. Additionally, we rely on our suppliers to adhere to our supplier standards of conduct and material violations of such standards of conduct could occur that could have a material effect on our financial condition.
A future impairment of our intangible assets or goodwill could have a material negative impact on our financial results.
AtAs of December 31, 2017,2020, our intangible assets and goodwill were approximately $90.2$58.2 million and $138.2$3.4 million, respectively. Intangibles and goodwill each represented approximately 14%13% and 21%1% of our total assets, respectively. If we experience declines in sales and operating profit or do not meet our current and forecasted operating budget, we may be subject to future impairment charges. Because of the significance of these assets, any future impairment could have a material adverse effect on our financial results.
Risks Relating to Human Capital
We depend on the services of key individuals, the loss of which could materially harm us.
Our success will depend, in part, on the efforts of our senior management. Our future success will also depend on, among other factors, our ability to attract, develop and retain other qualified personnel. The loss of the services of any of our key employees or the failure to attract or retain qualified employees could have a material adverse effect on us.
We may be subject to further unionization and work stoppages at our facilities or our customers may be subject to work stoppages, which could seriously impact the profitability of our business.
As of December 31, 2020, 58% of our work force was unionized under several different unions. We are not aware of any present active union organizing drives at any of our other facilities. We cannot predict the impact of any further unionization of our workplace. Future labor disagreements could result in work stoppages. Any prolonged work stoppages at any of our facilities could have a material adverse effect on our business.
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Many of our direct or indirect customers have unionized work forces. Strikes, work stoppages or slowdowns experienced by these customers or their suppliers could result in slowdowns or closures of assembly plants where our products are included. In addition, organizations responsible for shipping our customers’ products may be impacted by occasional strikes or other activity. Any interruption in the delivery of our customers’ products could reduce demand for our products and could have a material adverse effect on us.
Our healthcare costs for active employees and future retirees may exceed our projections and may negatively affect our financial results.
We provide healthcare benefits for active employees through comprehensive hospital, surgical and major medical benefit provisions, all of which are subject to various cost-sharing features. If our costs under our benefit programs for active employees exceed our projections, our business and financial results could be materially adversely affected. Additionally, foreign competitors and many domestic competitors provide fewer benefits to their employees, and this difference in cost could adversely impact our competitive position.
Risks Relating to Intellectual Property
We may face liability associated with the use of products for which patent ownership or other intellectual property rights are claimed.
We may be subject to claims or inquiries regarding alleged unauthorized use of a third party’s intellectual property. An adverse outcome in any intellectual property litigation could subject us to significant liabilities to third parties, require us to license technology or other intellectual property rights from others, require us to comply with injunctions to cease marketing or using certain products or brands, or require us to redesign, re-engineer, or re-brand certain products or packaging, any of which could affect our business, financial condition and operating results. If we are required to seek licenses under patents or other intellectual property rights of others, we may not be able to acquire these licenses on acceptable terms, if at all. In addition, the cost of responding to an intellectual property infringement claim, in terms of legal fees and expenses and the diversion of management resources, whether or not the claim is valid, could have a material adverse effect on our business, results of operations and financial condition.
We may be unable to adequately protect our intellectual property.
While we believe that our patents, trademarks and other intellectual property have significant value, it is uncertain that this intellectual property or any intellectual property acquired or developed by us in the future, will provide a meaningful competitive advantage. Our patents or pending applications may be challenged, invalidated or circumvented by competitors or rights granted thereunder may not provide meaningful proprietary protection. Moreover, competitors may infringe on our patents or successfully avoid them through design innovation. Policing unauthorized use of our intellectual property is difficult and expensive, and we may not be able to, or have the resources to, prevent misappropriation of our proprietary rights, particularly in countries where the laws may not protect such rights as fully as in the United States. The cost of protecting our intellectual property may be significant and could have a material adverse effect on our financial condition and future results of operations.
We may incur material losses and costs as a result of product liability, recall and warranty claims that may be brought against us.
We are subjectRisks Relating to a variety of litigation incidental to our business, including claims for damages arising out of use of our products, claims relating to intellectual property matters and claims involving employment matters and commercial disputes.
We currently carry insurance and maintain reserves for potential product liability claims. However, our insurance coverage may be inadequate if such claims do arise and any liability not covered by insurance could have a material adverse effect on our business. Although we have been able to obtain insurance in amounts we believe to be appropriate to cover such liability to date, our

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insurance premiums may increase in the future as a consequence of conditions in the insurance business generally or our situation in particular. Any such increase could result in lower net income or cause the need to reduce our insurance coverage. In addition, a future claim may be brought against us that could have a material adverse effect on us. Any product liability claim may also include the imposition of punitive damages, the award of which, pursuant to certain state laws, may not be covered by insurance. Our product liability insurance policies have limits that, if exceeded, may result in material costs that could have an adverse effect on our future profitability. In addition, warranty claims are generally not covered by our product liability insurance. Further, any product liability or warranty issues may adversely affect our reputation as a manufacturer of high-quality, safe products, divert management’s attention, and could have a material adverse effect on our business.
Our business may be materially and adversely affected by compliance obligations and liabilities under environmental laws and regulations.
We are subject to increasingly stringent environmental laws and regulations, including those relating to air emissions, wastewater discharges and chemical and hazardous waste management and disposal. Some of these environmental laws hold owners or operators of land or businesses liable for their own and for previous owners’ or operators’ releases of hazardous or toxic substances or wastes. Other environmental laws and regulations require the obtainment and compliance with environmental permits. To date, costs of complying with environmental, health and safety requirements have not been material. However, the nature of our operations and our long history of industrial activities at certain of our current or former facilities, as well as those acquired, could potentially result in material environmental liabilities.
While we must comply with existing and pending climate change legislation, regulation and international treaties or accords, current laws and regulations have not had a material impact on our business, capital expenditures or financial position. Future events, including those relating to climate change or greenhouse gas regulation could require us to incur expenses related to the modification or curtailment of operations, installation of pollution control equipment or investigation and cleanup of contaminated sites.Financial Matters
We have a substantial amount of debt. To service our debt, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control. If we cannot generate the required cash, we may not be able to make the necessary payments required under our debt.
AtAs of December 31, 2017,2020, we had total long-termgross debt of approximately $293.7$266.1 million (without giving effect to the equity component of our convertible senior notes or any debt discount). Our ability to make payments on our debt, fund our other liquidity needs, and make planned capital expenditures will depend on our ability to generate cash in the future. Our historical financial results have been, and we anticipate that our future financial results will be, subject to fluctuations. Our ability to generate cash, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We cannot guarantee that our business will generate sufficient cash flow from our operations or that future borrowings will be available to us in an amount sufficient to enable us to make payments of our debt, fund other liquidity needs and make planned capital expenditures. Additionally, we cannot guarantee that we will be able to refinance any of our debt on commercially acceptable terms, or at all.
The degree to which we are currently leveraged could have important consequences for shareholders. For example, it could:
▪require us to dedicate a substantial portion of our cash from operations to the payment of debt service, reducing the availability of our cash flow to fund working capital, capital expenditures, acquisition and other general corporate purposes;
▪increase our vulnerability to adverse economic or industry conditions;
▪limit our ability to obtain additional financing in the future to enable us to react to changes in our business; or
▪place us at a competitive disadvantage compared to businesses in our industry that have less debt.
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•require us to dedicate a substantial portion of our cash from operations to the payment of debt service, reducing the availability of our cash flow to fund working capital, capital expenditures, acquisition and other general corporate purposes;
•increase our vulnerability to adverse economic or industry conditions;
•limit our ability to obtain additional financing in the future on acceptable terms and conditions to enable us to react to changes in our business; or
•place us at a competitive disadvantage compared to businesses in our industry that have less debt.
Additionally, any failure to comply with covenants in the instruments governing our debt could result in an event of default which, if not cured or waived, would have a material adverse effect on us.
The terms of the agreements governing our revolving credit facility and our new term loan restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.
The terms of the agreements governing our revolving credit facility and our new term loan contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to:
•incur additional indebtedness and guarantee indebtedness;
•pay dividends or make other distributions or repurchase or redeem capital stock;
•prepay, redeem or repurchase certain debt;
•issue certain preferred stock or similar equity securities;
•make loans and investments;
•sell assets;
•incur liens;
•enter into transactions with affiliates;
•alter the businesses we conduct;
•enter into agreements restricting our subsidiaries’ ability to pay dividends; and
•consolidate, merge or sell all or substantially all of our assets.
In addition, the restrictive covenants in the agreements governing our revolving credit facility and our new term loan require us to maintain specified financial ratios and satisfy other financial condition tests. Although we entered into amendments to the agreements governing our debt in recent years to, among other things, provide for a relaxation of certain of our financial covenants, our ability to meet the financial ratios and tests can be affected by events beyond our control, and we may be unable to meet them.
A breach of the covenants or restrictions under agreements governing our revolving credit facility and our new term loan could result in an event of default under the applicable indebtedness. Such a default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under the agreement governing our revolving credit facility would permit the lenders under our revolving credit facility to terminate all commitments to extend further credit under that facility. Furthermore, if we were unable to repay the amounts due and payable under our revolving credit facility and our new term loan, those lenders could proceed against the collateral granted them to secure that indebtedness. In the event our lenders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. As a result of these restrictions, we may be:
•limited in how we conduct our business;
•unable to raise additional debt or equity financing to operate during general economic or business downturns; and
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•unable to compete effectively or to take advantage of new business opportunities.
These restrictions may affect our ability to grow in accordance with our strategy. In addition, our financial results, our substantial indebtedness and our credit ratings could adversely affect the availability and terms of our financing.
Our borrowing costsaccess to new capital may be impacted by our credit ratings developed by various rating agencies.fluctuations in interest rates.
Two major ratings agencies, Standard & Poor’s and Moody’s, evaluate our credit profile on an ongoing basis and have each assigned ratings for our long-term debt. If our credit ratings were to decline, our ability to access certain financial markets may become limited, the perception of us in the viewAs part of our customers, suppliersongoing business, we are exposed to certain market risks, including fluctuations in interest rates and security holdersuncertainty regarding Federal Reserve policies. An increase in interest rates may worsenresult in tighter capital markets, increasing the cost and as a result, wereducing the availability of debt financing. Restricted access to debt financing could impact that availability of working capital and may be adversely affected.

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affect us.
We have significant operating lease obligations and our failure to meet those obligations could adversely affect our financial condition.
We lease many of our manufacturing facilities and certain capital equipment. Our rentalrent expense in 20172020 under these operating leases was approximately $20.0$15.0 million. A failure to pay our rental obligations would constitute a default allowing the applicable landlord to pursue any remedy available to it under applicable law, which would include taking possession of our property and, in the case of real property, evicting us. These leases are categorized as operating leases and are not considered indebtedness for purposes of our debt instruments.
Risks Relating to Legal and Regulatory Matters
We may incur material losses and costs as a result of product liability, recall and warranty claims that may be brought against us.
A significant product liability lawsuit, warranty claim or product recall involving us could adversely affect our financial performance. In the event that our products fail to perform as expected, regardless of fault, and such failure results in, or is alleged to result in, bodily injury and/or property damage or other losses, we may be subject to further unionizationproduct liability lawsuits and work stoppages at our facilitiesother claims or our customerswe may be subjectrequired to work stoppages, which could seriously impact the profitability of our business.
As of December 31, 2017, approximately 52% of our work force was unionized under several different unions. We are not aware of any present active union organizing drives at any of our other facilities. We cannot predict the impact of any further unionization of our workplace.
Many of our direct or indirect customers have unionized work forces. Strikes, work stoppages or slowdowns experienced by these customers or their suppliers could resultparticipate in slowdowns or closures of assembly plants where our products are included. In addition, organizations responsible for shipping our customers’ products may be impacted by occasional strikesa recall or other activity. Any interruption in the deliverycorrective action involving such products. Further, any product liability or warranty issues may adversely affect our reputation as a manufacturer of our customers’high-quality, safe products, could reduce demand for our productsdivert management’s attention, and could have a material adverse effect on us.
Our healthcare costs for active employees and future retirees may exceed our projections and may negatively affect our financial results.business.
We provide healthcare benefitscurrently carry insurance and maintain reserves for active employees through comprehensive hospital, surgicalproduct liability, warranty claims and major medical benefit provisions, all of which are subject to various cost-sharing features. Ifproduct recall. However, our costs under our benefit programs for active employees exceed our projections, our businessinsurance coverage may be inadequate if such claims do arise and financial results could be materially adversely affected. Additionally, foreign competitors and many domestic competitors provide fewer benefits to their employees, and this difference in cost could adversely impact our competitive position.
A significant portion of our sales is derived from international sources, which exposes us to certain risks which may adversely affect our business and our financial results.
We have extensive operations outside of the United States. Approximately 53% of our net sales for the year ended December 31, 2017 were derived from salesany liability not covered by our subsidiaries located outside of the United States. In addition, we may significantly expand our international operations through internal growth and acquisitions.  International operations, particularly sales to emerging markets and manufacturing in non-U.S. countries, are subject to risks which are not present within U.S. markets, which include, but are not limited to, the following:        
▪volatility of currency exchange between the U.S. dollar and currencies in international markets;
▪changes in local government regulations and policies including, but not limited to, foreign currency exchange controls or monetary policy, governmental embargoes, repatriation of earnings, expropriation of property, duty or tariff restrictions, investment limitations and tax policies       
▪political and economic instability and disruptions, including labor unrest, civil strife, acts of war, guerrilla activities, insurrection and terrorism;       
▪legislation that regulates the use of chemicals;       
▪disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the Foreign Corrupt Practices Act (“FCPA”);       
▪compliance with international trade laws and regulations, including export control and economic sanctions, such as anti-dumping duties;       
▪difficulties in staffing and managing multi-national operations;       
▪limitations on our ability to enforce legal rights and remedies;
▪tax inefficiencies in repatriating cash flow from non-U.S. subsidiaries that could affect our financial results and reduce our ability to service debt;    
▪reduced protection of intellectual property rights;

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▪increasingly complex laws and regulations concerning privacy and data security, including the European Union’s General Data Protection Regulation; and       
▪other risks arising out of foreign sovereignty over the areas where our operations are conducted.  
We are also exposed to risks relating to U.S. policy with respect to companies doing business in foreign jurisdictions, particularly in light of the new U.S. presidential administration. Legislation or other changes in the U.S. tax laws could increase our U.S. income tax liability and adversely affect our after-tax profitability. In addition, the new U.S. presidential administration has introduced greater uncertainty with respect to future tax, trade regulations and trade agreements. Changes in tax policy, trade regulations or trade agreements, such as the disallowance of tax deductions on imported merchandise or the imposition of new tariffs on imported products,insurance could have a material adverse effect on our business. Although we have been able to obtain insurance in amounts we believe to be appropriate to cover such liability to date, our insurance premiums may increase in the future as a consequence of conditions in the insurance business generally or our situation in particular. Any such increase could result in lower net income or cause the need to reduce our insurance coverage. Any product liability claim may also include the imposition of punitive damages, the award of which, pursuant to certain state laws, may not be covered by insurance. Our product liability insurance policies have limits that, if exceeded, may result in material costs that could have an adverse effect on our future profitability. In addition, warranty claims are generally not covered by our product liability insurance.
Our business may be materially and adversely affected by compliance obligations and liabilities under environmental laws and regulations.
We are subject to stringent environmental laws and regulations at the local, state, national and international levels, and existing and any new laws and regulations, including those relating to air emissions, wastewater discharges and chemical and hazardous waste management, could affect our general business operations. Some of these environmental laws hold owners or operators of land or businesses liable for their own and for previous owners’ or operators’ releases of hazardous or toxic substances or wastes. Other environmental laws and regulations require the obtainment and compliance with environmental permits. To date, costs of complying with environmental, health and safety requirements have not been material. However, the nature of our operations and our long history of industrial activities at certain of our current or former facilities, as well as those acquired, could potentially result in material environmental liabilities.
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While we must comply with existing and pending climate change legislation, regulation and international treaties or accords, current laws and regulations have not had a material impact on our business, capital expenditures or financial position. We cannot assess the financial or operational impact of future regulatory changes; however, future events, including those relating to climate change or greenhouse gas regulation, could require us to incur expenses related to the modification or curtailment of operations, installation of pollution control equipment or investigation and cleanup of contaminated sites.
Changes in laws or regulations or the manner of their interpretation or enforcement could adversely impact our financial performance and restrict our ability to operate our business or execute our strategies.
New laws or regulations, or changes in existing laws or regulations, or the manner of their interpretation or enforcement, could increase our cost of doing business and restrict our ability to operate our business or execute our strategies. In particular, there may be significant changes in U.S. laws and regulations and existing international trade agreements by the current U.S. presidential administration that could affect a wide variety of industries and businesses, including those businesses we own and operate. If the current U.S. presidential administration materially modifies U.S. laws and regulations and international trade agreements, our business, financial condition, and results of operations.operations could be adversely affected.
In addition, weWe could be adversely affected by violationschanges to federal, state, and local tax laws due to changes in compliance requirements. We are subject to extensive tax liabilities imposed by multiple jurisdictions, including but not limited to income taxes, indirect taxes (such as excise, sales & use, and gross receipts taxes), payroll taxes, and property taxes. Tax laws and regulations are dynamic and subject to change as new laws are passed and new interpretations of existing laws are issued and applied. The activity could result in increased expenditures for tax liabilities in the FCPA and similar worldwide anti-bribery lawsfuture. Many of these liabilities are subject to periodic audits by the respective taxing authorities. Subsequent changes to our tax liabilities as well as export controls and economic sanction laws. The FCPA and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purposea result of obtaining or retaining business.
Our reputation, ability to do business, and results of operationsthese audits may be impaired by improper conduct by any of our employees, agents, or business partners.
While we strive to maintain high standards, we cannot provide assurance that our internal controls and compliance systems will always protect us from acts committed by our employees, agents, or business partners that would violate U.S. and/or non-U.S. laws or fail to protect our confidential information, including the laws governing payments to government officials, bribery, fraud, anti-kickback and false claims rules, competition, export and import compliance, money laundering, and data privacy laws, as well as the improper use of proprietary information or social media. Any such allegations, violations of law or improper actions could subject us to civil or criminal investigations in the United Statesinterest and in other jurisdictions, could lead to substantial civil or criminal, monetary and non-monetary penalties, and related shareholder lawsuits, could lead to increased costs of compliance, could damage our reputation andwhich could have a material effect on our financial statements.
Our growth strategy includes acquisitions. If we are unable to identify attractive acquisition candidates, successfully integrate acquired operations or realize the intended benefits of our acquisitions, we may be adversely affected.
We may pursue strategic acquisition opportunities. Any acquisition will likely require integration expenses and actions that could negatively impact our results of operations, some of which we may not be able to fully anticipate beforehand. In addition, attractive acquisition candidates may not be identified and acquired in the future, financing for acquisitions may be unavailable on satisfactory terms and we may be unable to accomplish our strategic objectives in effecting a particular acquisition. We may encounter various risks in acquiring other companies, including the possible inability to integrate an acquired business into our operations, diversion of management’s attention and unanticipated problems or liabilities, some or all of which could materially and adversely affect our business strategy and financial condition and results of operations.
We may not realize the growth opportunities and cost synergies that are anticipated from acquisitions.Risks Relating to Cybersecurity
We completed the acquisition of the Westfalia Group in October 2016 and we expect to acquire the Brink Group in the second quarter of 2018. The benefits that are expected to result from these acquisitions will depend, in part, on our ability to realize the anticipated growth opportunities and cost synergies as a result of these acquisitions. Our success in realizing these growth opportunities and cost synergies, and the timing of this realization, depends on the successful integration of the Westfalia Group and the Brink Group. There is a significant degree of difficulty and management distraction inherent in the process of integrating acquisitions as sizable as the Westfalia Group and the Brink Group. The process of integrating operations could cause an interruption of, or loss of, momentum in ours and the Westfalia Group or the Brink Group’s activities. Members of our senior management may be required to devote considerable amounts of time to the integration process, which will decrease the time they will have to manage our business, service existing customers, attract new customers, and develop new products or strategies. If senior management is not able to effectively manage the integration process, or if any significant business activities are interrupted as a result of the integration process, our business could suffer. There can be no assurance that we will successfully or cost-effectively integrate the Westfalia Group or the Brink Group. The failure to do so could have a material adverse effect on our business, financial condition, and results of operations.
Even if we are able to integrate the Westfalia Group and the Brink Group successfully, this integration may not result in the realization of the full benefits of the growth opportunities and cost synergies that we currently expect from this integration, and we cannot guarantee that these benefits will be achieved within anticipated time frames or at all. For example, we may not be able to eliminate duplicative costs. Moreover, we may incur substantial expenses in connection with these integrations. While it is anticipated that certain expenses will be incurred to achieve cost synergies, such expenses are difficult to estimate accurately, and may exceed current estimates. Accordingly, the benefits from these acquisitions may be offset by costs incurred to, or delays in, integrating the businesses.

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Our acquisition agreements by which we have acquired companies include indemnification provisions that may not fully protect us and may result in unexpected liabilities.
Certain of the agreements related to the acquisition of businesses require indemnification against certain liabilities related to the operations of the company for the previous owner. We cannot be assured that any of these indemnification provisions will fully protect us, and as a result we may incur unexpected liabilities that adversely affect our profitability and financial position.
Increased information technology security threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, and products.
We collect, store, have access to and otherwise process certain confidential or sensitive data, including proprietary business information, personal data or other information that is subject to U.S. or international privacy and security laws, regulations and/or customer-imposed controls. Increased global information technology security threats and more sophisticated and targeted computer crime pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data and communications. While we attempt to mitigate these risks by employing a number of measures, monitoring of our networks and systems, and maintenance of backup and protective systems, our systems, networks and products remain potentially vulnerable to compromise from advanced persistent threats, employee malfeasance, human or technological error, and other cybersecurity threats. Depending on their nature and scope, such threats could potentially lead to the compromising of confidential information and communications, improper use of our systems and networks, manipulation and destruction of data, defective products, production downtimes and operational disruptions, which in turn could adversely affect our reputation, customer relationships, competitiveness and results of operations. We may be required to incur significant costs to remedy damages caused by these disruptions or security breaches or to protect against disruption or security breaches in the future. We have cybersecurity insurance related to a breach event covering expenses for notification, credit monitoring, investigation, crisis management, public relations and legal advice. However, damage and claims arising from such incidents may not be covered or may exceed the amount of any insurance available, or may result in increased cybersecurity and other insurance premiums.
A major disruption or failure of our information systems could harm our business.
We depend on integrated information systems to conduct our business. We may experience operating problems with our information systems as a result of system disruptions, failures, viruses, computer hackers or other causes. Any significant disruption or slowdown of our systems could cause customers to cancel orders or cause standard business processes to become inefficient or ineffective. An extended interruption of standard business processes may affect our profitability and financial position.
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Risks Relating to the Spin-off
We remain subject to continuing indemnification liabilities in connection with the Spin-off.
We entered into a separation and distribution agreement with TriMas that provides for, among other things, the principal corporate transactions required to affect the Spin-off, certain conditions to the Spin-off and provisions governing the relationship between our company and TriMas with respect to and resulting from the Spin-off. Among other things, the separation and distribution agreement provides for indemnification obligations designed to make us financially responsible for substantially all liabilities that may exist relating to our Cequent business activities, whether incurred prior to or after the Spin-off, as well as those obligations of TriMas assumed by us pursuant to the separation and distribution agreement. If we are required to indemnify TriMas under the circumstances set forth in the separation and distribution agreement, we may be subject to substantial liabilities.
Moreover, pursuant to the separation and distribution agreement, TriMas agreed to indemnify us for certain liabilities. However, third parties could seek to hold us responsible for any of the liabilities that TriMas has agreed to retain, and there can be no assurance that the indemnity from TriMas will be sufficient to protect us against the full amount of such liabilities, or that TriMas will be able to fully satisfy its indemnification obligations. Even if we ultimately succeed in recovering from TriMas any amounts for which we are held liable, we may be temporarily required to bear these liabilities ourselves. If TriMas is unable to satisfy its indemnification obligations, the underlying liabilities could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Further, TriMas’ insurers may deny coverage to us for liabilities associated with occurrences prior to the Spin-off. Even if we ultimately succeed in recovering from such insurance providers, we may be required to temporarily bear such loss of coverage.
Potential liabilities associated with certain assumed obligations under the tax sharing agreement cannot be precisely quantified at this time.
Under the tax sharing agreement with TriMas, we are responsible generally for certain taxes paid after the Spin-off attributable to us or any of our subsidiaries, whether accruing before, on or after the Spin-off. We have also agreed to be responsible for, and to indemnify TriMas with respect to, all taxes arising as a result of the Spin-off (or certain internal restructuring transactions) failing to qualify as transactions under Sections 368(a) and 355 of the Code for U.S. federal income tax purposes (which could result, for example, from a merger or other transaction involving an acquisition of our shares) to the extent such tax liability arises as a result of any breach of any representation, warranty, covenant or other obligation by us or certain affiliates made in connection with the issuance of the tax opinion relating to the Spin-off or in the tax sharing agreement. As described above, such tax liability would be calculated as though TriMas (or its affiliate) had sold its shares of common stock of our company in a taxable sale for their fair market value, and TriMas (or its affiliate) would recognize taxable gain in an amount equal to the excess of the fair market value of such shares over its tax basis in such shares. Any such tax liability could have a material adverse effect on us.
Risks Relating to Our Common Stock and Convertible Notes
While we are currently in compliance with the NYSE's minimum market capitalization requirement, we could be at risk of being out of compliance and of the NYSE delisting our common stock, which would have an adverse impact on the trading volume, liquidity and market price of our common stock.
On April 30, 2020, we were notified by the New York Stock Exchange (the “NYSE”) that we were not in compliance with the continued listing standard set forth in Section 802.01B of the NYSE Listed Company Manual because our average market capitalization was less than $50 million over a consecutive 30 trading-day period and our stockholders’ equity was less than $50 million. We submitted a plan to the NYSE indicating our intention to seek to cure the market capitalization condition by executing a strategic plan, which resulted in improved operational and financial performance that ultimately led to a recovery of our common stock price and market capitalization and our once again being in compliance with the minimum market capitalization requirement. While we have cured this deficiency and regained compliance with this continued listing standard, there can be no assurance that we will be able to continue to comply with this and other continued listing standards of the NYSE.
A delisting of our common stock from the NYSE could negatively impact us as it would likely reduce the liquidity and market price of our common stock; reduce the number of investors willing to hold or acquire our common stock, and negatively impact our ability to access equity markets and obtain financing.
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Our issuance of any additional shares of our common stock, including pursuant to the exercise of instruments convertible into or exercisable for shares of our common stock, or the issuance of additional instruments convertible into or exercisable for shares of our common stock, could materially and adversely affect the market price of our common stock.
In February 2017, we issued $125.0 million aggregate principal amount of 2.75% Convertible Senior Notes due 2022 (the “Convertible Notes”). The accounting method for convertible debt securities thatConvertible Notes may be settled in cash, such asshares of common stock or a combination of cash and shares of common stock, at our option. In the future, we may issue additional shares of our common stock or other instruments convertible senior notes,into, or exchangeable or exercisable for, shares of our common stock. The Convertible Notes issuance, and any future issuance of shares of our common stock or instruments convertible into, or exercisable or exchangeable into, shares of our common stock, may materially and adversely affect the market price of our common stock.
In connection with the issuance of a term loan in 2019, we issued detachable warrants to purchase up to 6.25 million shares of our common stock, which can be exercised on a cashless basis over a five-year term with an exercise price of $1.50 per share. In addition, in connection with the issuance of our new term loan in February 2021, we issued detachable warrants to purchase up to 3.91 million shares of our common stock, which can be exercised on a cashless basis over a five-year term with an exercise price of $9.00 per share. The warrants could have a materialdilutive effect on our reported financial results.
Under Accounting Standards Codification (“ASC”) 470-20, “Debt with Conversion and Other Options”, which we refercommon stock to as ASC 470-20, an entity must separately account for the liability and equity componentsextent that the market price per share of our common stock exceeds the strike price of the convertible debt instruments (such aswarrants. 
In particular, a substantial number of shares of our convertible senior notes) that may be settled entirely or partially in cashcommon stock are reserved for issuance upon conversion of the Convertible Notes upon exercise and settlement or termination of the warrants that we entered into in a mannerconnection with the Convertible Notes offering and term loans, and upon the exercise of stock options, the vesting of restricted stock awards and deferred restricted stock units to our employees. We cannot predict the size of future issuances or the effect, if any, that reflects the issuer’s economic interest cost. The effect of ASC 470-20they may have on the accountingmarket price for our convertible senior notes is that the equity component is required to be included in the additional paid-in capital sectioncommon stock. The issuance and sale of stockholders’ equity on our consolidated balance sheet and the valuesubstantial amounts of the equity component would be treated as original issue discount for purposes of accounting for the debt componentshares of our convertible senior notes. As a result, we will be required to record a greater amount of non-cash interest expense in current periods presented as a result ofcommon stock, or the amortization of the discounted carrying value of our convertible senior notes to their face amount over the term of the convertible senior notes. We will report lower net income in our financial statements because ASC 470-20 will require interest to include both the current period’s amortization of the debt discountperception that such issuances and the instrument’s coupon interest, whichsales may occur, could adversely affect our reported or future financial results, the tradingmarket price of our common stock and impair our ability to raise capital through the trading pricesale of the convertible senior notes.additional equity or equity-linked securities.
In addition, under certain circumstances, convertible debt instruments (such as our convertible senior notes) that may be settled entirely or partly in cash are currently accounted for utilizing the treasury stock method, the effect of which is that the shares issuable upon conversion of our convertible senior notes are not included in the calculation of diluted earnings per share except to the extent that the conversion value of our convertible senior notes exceeds their principal amount. Under the treasury stock method, for diluted earnings per share purposes, the transaction is accounted for as if the number of shares of common stock that would be necessary to settle such excess, if we elected to settle such excess in shares, are issued. We cannot be sure that the accounting standards in the future will continue to permit the use of the treasury stock method. If we are unable to use the treasury stock method in accounting for the shares issuable upon conversion of our convertible senior notes, then our diluted earnings per share would be adversely affected.
The conditional conversion features of our 2.75% Convertible Senior Notes, due 2022, if triggered, may adversely affect our financial condition.
In the event the conditional conversion features of the Convertible Notes are triggered, holders of the Convertible Notes will be entitled to convert the Convertible Notes at any time during specified periods at their option. If one or more holders elect to convert their Convertible Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock, we would be required to make cash payments to satisfy all or a portion of our conversion obligation based on the conversion rate, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their Convertible Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Convertible Notes as a current rather than long-term liability, which could result in a material reduction of our net working capital.

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The convertible note hedge transactions (“Convertible Note Hedges”) and warrant transactions (“Warrants”) that we entered into in connection with the offering of theour Convertible Senior Notes due 2022 may affect the value of the Convertible Notes and our common stock.
In connection with the offering of the Convertible Notes, we entered into convertible note hedge transactions with certain option counterparties. The Convertible Note Hedges are expected generally to reduce the potential dilution upon conversion of the Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Convertible Notes, as the case may be. We also entered into warrant transactions with each option counterparty. The Warrants could separately have a dilutive effect on our common stock to the extent that the market price per share of our common stock exceeds the strike price of the Warrants. In connection with establishing its initial hedge of the Convertible Note Hedges and Warrants, each option counterparty or an affiliate thereof may have entered into various derivative transactions with respect to our common stock concurrently with or shortly after the pricing of the Convertible Notes. This activity could increase (or reduce the size of any decrease in) the market price of our common stock or the Convertible Notes at that time. In addition, each option counterparty or an affiliate thereof may modify its hedge position by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the Convertible Notes (and is likely to do so during any observation period related to a conversion of the Convertible Notes). This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the Convertible Notes. In addition, if any such Convertible Note Hedges and Warrants fail to become effective, each option counterparty may unwind its hedge position with respect to our common stock, which could adversely affect the value of our common stock and the value of the Convertible Notes.
We are subject to counterparty risk with respect to the convertible note hedge transactions.
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Each option counterparty to the Convertible Note Hedges is a financial institution, and we will be subject to the risk that it might default under the Convertible Note Hedges.  Our exposure to the credit risk of an option counterparty will not be secured by any collateral.  Global economic conditions have from time to time resulted in the actual or perceived failure or financial difficulties of many financial institutions.  If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under our transactions with the option counterparty.  Our exposure will depend on many factors but, generally, the increase in our exposure will be correlated to the increase in the market price and in the volatility of our common stock.  In addition, upon a default by an option counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock.  We can provide no assurances as to the financial stability or viability of any option counterparty.
Risks Relating to the Spin-off
General Risk Factors
Our historical consolidated financial information is not necessarily indicative of our future financial condition,reputation, ability to do business and results of operations or cash flows nor do they reflect what our financial condition, results of operations or cash flows would have been as an independent public company during the periods presented.
Some of the historical consolidated financial information included in this Annual Report on Form 10-K does not reflect what our financial condition, results of operations or cash flows would have been as an independent public company during all periods presented and is not necessarily indicativemay be impaired by improper conduct by any of our future financial condition, future results of operationsemployees, agents, or future cash flows. This is primarily a result ofbusiness partners.
While we strive to maintain high standards, we cannot provide assurance that our internal controls and compliance systems will always protect us from acts committed by our employees, agents, or business partners that would violate U.S. and/or non-U.S. laws or fail to protect our confidential information, including the following factors:
▪these historical consolidated financial results include allocations of expenses for services historically provided by TriMas, and those allocations may be significantly lower than the comparable expenses we would have incurred as an independent company;
▪our working capital requirements and capital expenditures historically have been satisfied as a part of TriMas’ corporate-wide capital allocation and cash management programs; as a result, our debt structure and cost of debt and other capital may be significantly different from that reflected in our historical consolidated financial statements;
▪the historical consolidated financial information may not fully reflect the increased costs associated with being an independent public company, including significant changes that have occurred in our cost structure, management, financing arrangements and business operations as a result of our spin-off from TriMas; and
▪the historical consolidated financial information may not fully reflect the effects of certain liabilities that will be incurred or have been assumed by us and may not fully reflect the effects of certain assets and liabilities that have been retained by TriMas.
We remain subjectlaws governing payments to continuing contingent liabilities of TriMas following the spin-off.
There are several significant areas where the liabilities of TriMas may yet become our obligations. The separationgovernment officials, bribery, fraud, anti-kickback and distribution agreementfalse claims rules, competition, export and employee matters agreement generally provide that we are responsible for substantially all liabilities that relate to

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our Horizon Americasimport compliance, money laundering, and Horizon Asia‑Pacific business activities, whether incurred prior to or after the spin-off,data privacy laws, as well as those liabilitiesthe improper use of TriMas specifically assumed by us. In addition, under the Internal Revenue Code (the “Code”) and the related rules and regulations, each corporation that was a memberproprietary information or social media. Any such allegations, violations of the TriMas consolidated tax reporting group during any taxable periodlaw or portion of any taxable period ending onimproper actions could subject us to civil or before the completion of the spin-off is jointly and severally liable for the federal income tax liability of the entire TriMas consolidated tax reporting group for that taxable period. In connection with the spin-off, we entered into a tax sharing agreement with TriMas that allocated the responsibility for prior period taxes of the TriMas consolidated tax reporting group between us and TriMas. However, if TriMas is unable to pay any prior period taxes for which it is responsible, we could be required to pay the entire amount of such taxes. Other provisions of federal law establish similar liability for other matters, including laws governing tax-qualified pension plans as well as other contingent liabilities.
Potential liabilities associated with certain assumed obligations under the tax sharing agreement cannot be precisely quantified at this time.
Under the tax sharing agreement with TriMas, we are responsible generally for certain taxes paid after the spin-off attributable to us or any of our subsidiaries, whether accruing before, on or after the spin-off. We have also agreed to be responsible for, and to indemnify TriMas with respect to, all taxes arising as a result of the spin-off (or certain internal restructuring transactions) failing to qualify as transactions under Sections 368(a) and 355 of the Code for U.S. federal income tax purposes (which could result, for example, from a merger or other transaction involving an acquisition of our shares) to the extent such tax liability arises as a result of any breach of any representation, warranty, covenant or other obligation by us or certain affiliates made in connection with the issuance of the tax opinion relating to the spin-off orcriminal investigations in the tax sharing agreement. As described above, such tax liability would be calculated as though TriMas (or its affiliate) had sold its sharesUnited States and in other jurisdictions, could lead to substantial civil or criminal, monetary and non-monetary penalties, and related shareholder lawsuits, could lead to increased costs of common stock ofcompliance, could damage our company in a taxable sale for their fair market value,reputation and TriMas (or its affiliate) would recognize taxable gain in an amount equal to the excess of the fair market value of such shares over its tax basis in such shares. That tax liability could have a material adverse effect on our company.
We may not be able to engage in desirable strategic or equity raising transactions following the spin-off. In addition, under some circumstances, we could be liable for any adverse tax consequences resulting from engaging in significant strategic or capital raising transactions.
Even if the spin-off otherwise qualifies as a tax-free distribution under Section 355 of the Code, the spin-off may result in significant U.S. federal income tax liabilities to TriMas under applicable provisions of the Code if 50% or more of TriMas’ shares or our shares (in each case, by vote or value) are treated as having been acquired, directly or indirectly, by one or more persons (other than the acquisition of our common stock by TriMas stockholders in the spin-off) as part of a plan (or series of related transactions) that includes the spin-off. Under those provisions, any acquisitions of TriMas shares or our shares (or similar acquisitions), or any understanding, arrangement or substantial negotiations regarding an acquisition of TriMas shares or our shares (or similar acquisitions), within two years before or after the spin-off are subject to special scrutiny. The process for determining whether an acquisition triggering those provisions has occurred is complex, inherently factual and subject to interpretation of the facts and circumstances of a particular case. If a direct or indirect acquisition of TriMas shares or our shares resulted in a change in control as contemplated by those provisions, TriMas (but not its stockholders) would recognize a taxable gain. Under the tax sharing agreement, there are restrictions on our ability to take actions that could cause the separation to fail to qualify as a tax-free distribution, and we will be required to indemnify TriMas against any such tax liabilities attributable to actions taken by or with respect to us or any of our affiliates, or any person that, after the spin-off, is an affiliate thereof. We may be similarly liable if we breach certain other representations or covenants set forth in the tax sharing agreement. As a result of the foregoing, we may be unable to engage in certain strategic or capital raising transactions that our stockholders might consider favorable, including use of Horizon common stock to make acquisitions and equity capital market transactions, or to structure potential transactions in the manner most favorable to us, without adverse tax consequences, if at all.
Potential indemnification liabilities to TriMas pursuant to the separation and distribution agreement could materially and adversely affect our business, financial condition, results of operations and cash flows.
We entered into a separation and distribution agreement with TriMas that provides for, among other things, the principal corporate transactions required to affect the spin-off, certain conditions to the spin-off and provisions governing the relationship between our company and TriMas with respect to and resulting from the spin-off. Among other things, the separation and distribution agreement provides for indemnification obligations designed to make us financially responsible for substantially all liabilities that may exist relating to our Cequent business activities, whether incurred prior to or after the spin-off, as well as those obligations of TriMas assumed by us pursuant to the separation and distribution agreement. If we are required to indemnify TriMas under the circumstances set forth in the separation and distribution agreement, we may be subject to substantial liabilities.

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In connection with our separation from TriMas, TriMas will indemnify us for certain liabilities. However, there can be no assurance that the indemnity will be sufficient to insure us against the full amount of such liabilities, or that TriMas’ ability to satisfy its indemnification obligations will not be impaired in the future.
Pursuant to the separation and distribution agreement, TriMas agreed to indemnify us for certain liabilities. However, third parties could seek to hold us responsible for any of the liabilities that TriMas has agreed to retain, and there can be no assurance that the indemnity from TriMas will be sufficient to protect us against the full amount of such liabilities, or that TriMas will be able to fully satisfy its indemnification obligations. Moreover, even if we ultimately succeed in recovering from TriMas any amounts for which we are held liable, we may be temporarily required to bear these liabilities ourselves. If TriMas is unable to satisfy its indemnification obligations, the underlying liabilities could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Further, TriMas’ insurers may deny coverage to us for liabilities associated with occurrences prior to the spin-off. Even if we ultimately succeed in recovering from such insurance providers, we may be required to temporarily bear such loss of coverage.
Risks Relating to Ownership of Our Common Stockstatements.
Our stock price may be subject to significant volatility due to our own results or market trends.
If our revenue, earnings or cash flows in any quarter fail to meet the investment community’s expectations, there could be an immediate negative impact on our stock price. Our stock price could also be impacted by broader market trends and world events unrelated to our performance.
Our recent issuance of convertible senior notes, or the issuance of any additional shares of our common stock or instruments convertible into shares of our common stock, could materially and adversely affect the market price of our common stock.
In February 2017, we issued $125.0 million aggregate principal amount of convertible senior notes. The convertible senior notes may be settled in cash, shares of common stock or a combination of cash and shares of common stock, at our option. In the future, we may issued additional shares of our common stock or other instruments convertible into, or exchangeable or exercisable for, shares of our common stock. The recent convertible senior notes issuance, and any future issuance of shares of our common stock or instruments convertible into, or exercisable or exchangeable into, shares of our common stock, may materially and adversely affect the market price of our common stock.
In particular, a substantial number of shares of our common stock is reserved for issuance upon conversion of the convertible senior notes upon exercise and settlement or termination of the warrant transactions that we entered into in connection with the convertible senior notes offering, and upon the exercise of stock options, the vesting of restricted stock awards and deferred restricted stock units to our employees. We cannot predict the size of future issuances or the effect, if any, that they may have on the market price for our common stock. The issuance and sale of substantial amounts of shares of our common stock, or the perception that such issuances and sales may occur, could adversely affect the market price of our common stock and impair our ability to raise capital through the sale of additional equity or equity-linked securities. In addition, the market price of our common stock could also be affected by possible sales of our common stock by investors who view our convertible senior notes as a more attractive means of equity participation in us and by hedging or arbitrage trading activity that we expect to develop involving our convertible senior notes and our common stock.
Anti-takeover provisions contained in our Amended and Restated Certificate of Incorporation, or our “certificate of incorporation,” and Amended and Restated Bylaws, or our “bylaws,” as well as provisions of Delaware law, could impair a takeover attempt that stockholders may consider favorable.
Our certificate of incorporation and bylaws provisions, as amended and restated, may have the effect of delaying, deferring or discouraging a prospective acquiror from making a tender offer for our common stock or otherwise attempting to obtain control of us. These provisions, among other things, establish that our board of directors fixes the number of members of the board, divide the board of directors into three classes with staggered terms and establish advance notice requirements for nomination of candidates for election to the board or for proposing matters that can be acted on by stockholders at stockholder meetings. To the extent that these provisions discourage takeover attempts, they could deprive stockholders of opportunities to realize takeover premiums for their shares of common stock. Moreover, these provisions could discourage accumulations of large blocks of our common stock, thus depriving stockholders of any advantages that large accumulations of common stock might provide.
As a Delaware corporation, we will also be subject to provisions of Delaware law, including Section 203 of the General Corporation Law of the State of Delaware. Section 203 prevents some stockholders holding more than 15% of our voting stock from engaging in certain business combinations unless the business combination or the transaction that resulted in the stockholder becoming an interested stockholder was approved in advance by our board of directors, results in the stockholder holding more than 85% of

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our voting stock, subject to certain restrictions, or is approved at an annual or special meeting of stockholders by the holders of at least 66 2/3% of our voting stock not held by the stockholder engaging in the transaction.
Any provision of our certificate of incorporation or our bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.
We may issue preferred stock with terms that could dilute the voting power or reduce the value of our common stock.
Our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends and distributions, as our board of directors generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. For example, we could grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of our common stock.
We are an “emerging growth company”Anti-takeover provisions contained in our Amended and we cannot be certain ifRestated Certificate of Incorporation, as amended, or our “certificate of incorporation,” and Amended and Restated Bylaws, or our “bylaws,” as well as provisions of Delaware law, could impair a takeover attempt that stockholders may consider favorable.
Our certificate of incorporation and bylaws provisions, as amended and restated, may have the reduced disclosure requirements applicable to emerging growth companies will makeeffect of delaying, deferring or discouraging a prospective acquiror from making a tender offer for our common stock less attractiveor otherwise attempting to investors.obtain control of us. These provisions, among other things, establish that our board of directors fixes the number of members of the board and establish advance notice requirements for nomination of candidates for election to the board or for proposing matters that can be acted on by stockholders at stockholder meetings. To the extent that these provisions discourage takeover attempts, they could deprive stockholders of opportunities to realize takeover premiums for their shares of common stock. Moreover, these provisions could discourage accumulations of large blocks of our common stock, thus depriving stockholders of any advantages that large accumulations of common stock might provide.
We are an “emerging growth company” as definedAs a Delaware corporation, we will also be subject to provisions of Delaware law, including Section 203 of the General Corporation Law of the State of Delaware. Section 203 prevents some stockholders holding more than 15% of our voting stock from engaging in certain business combinations unless the business combination or the transaction that resulted in the Jumpstartstockholder becoming an interested stockholder was approved in advance by our Business Startups Actboard of 2012 (the “JOBS Act”). For as long as we continue to be an emerging growth company we may choose to take advantage of certain exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, which includes, among other things:
▪exemption from the auditor attestation requirements under Section 404 of the Sarbanes-Oxley Act of 2002;
▪reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements;
▪exemption from the requirements ofdirectors, results in the stockholder holding non-binding stockholder votes on executive compensation arrangements; and
▪exemption from any rules requiring mandatory audit firm rotation and auditor discussion and analysis and, unless the SEC otherwise determines, any future audit rules that may be adopted by the Public Company Accounting Oversight Board.
We could be an emerging growth company until the last day of the fiscal year following the fifth anniversary of the consummation of the spin-off, or until the earliest of (i) the last day of the fiscal year in which we have annual gross revenue of $1 billion (subject to adjustment for inflation) or more, (ii) the date on which we have, during the previous three year period, issued more than $1 billion in non-convertible debt85% of our voting stock, subject to certain restrictions, or (iii)is approved at an annual or special meeting of stockholders by the date on which we are deemed to be a large accelerated filer under the federal securities laws. We will qualify as a large accelerated filer asholders of the first dayat least 66 2/3% of the first fiscal year after we have (i) more than $700 million in outstanding common equityour voting stock not held by our non-affiliates and (ii) been public for at least 12 months. The valuethe stockholder engaging in the transaction.
Any provision of our outstanding common equity will be measured each year oncertificate of incorporation or our bylaws or Delaware law that has the last dayeffect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our second fiscal quarter.common stock and could also affect the price that some investors are willing to pay for our common stock.
Under the JOBS Act, emerging growth companies are also permitted to elect to delay adoption of new or revised accounting standards until companies that are not subject to periodic reporting obligations are required to comply, if such accounting standards apply to non-reporting companies. We have made an irrevocable decision to opt out of this extended transition period for complying with new or revised accounting standards.
Changes in laws or regulations or the manner of their interpretation or enforcement could adversely impact our financial performance and restrict our ability to operate our business or execute our strategies.
New laws or regulations, or changes in existing laws or regulations, or the manner of their interpretation or enforcement, could increase our cost of doing business and restrict our ability to operate our business or execute our strategies. In particular, there may be significant changes in U.S. laws and regulations and existing international trade agreements by the current U.S. presidential administration that could affect a wide variety of industries and businesses, including those businesses we own and operate. If the current U.S. presidential administration materially modifies U.S. laws and regulations and international trade agreements, our business, financial condition, and results of operations could be adversely affected.
On December 22, 2017, U.S. tax reform legislation informally known as the Tax Cuts and Jobs Act, or the "2017 Tax Act,” was signed into law.  The 2017 Tax Act makes substantial changes to U.S. tax law, including a reduction in the corporate tax rate, a limitation on deductibility of interest expense, a limitation on the use of net operating losses to offset future taxable income, the

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allowance of immediate expensing of capital expenditures, deemed repatriation of foreign earnings and significant changes to the taxation of foreign earnings going forward. We expect the 2017 Tax Act to have significant effects on us, some of which may be adverse. For example, we would expect impacts on the amount of tax expense and deferred tax assets and liabilities recognized in the financial statements. The extent of the impact remains uncertain at this time and is subject to any other regulatory or administrative developments including any regulations or other guidance promulgated by the U.S. Internal Revenue Service. The 2017 Tax Act contains numerous, complex provisions impacting U.S. multinational companies, and we continue to review and assess the legislative language and its potential impact on us.
Item 1B.    Unresolved Staff Comments
Not applicable.
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Item 2.    Properties
As of December 31, 2017,2020, our material operations were conducted principally through 58our manufacturing and distribution facilities located in 21 countries.our Horizon Americas and Horizon Europe-Africa segments. All of our principal manufacturing facilities are leased. The leases for our manufacturing facilities have initial terms that expire from 2018 through 2027 and are all renewable, at our option, for various terms, provided that we are not in default under the lease agreements. Our corporateglobal headquarters areis located in Troy, Michigan under a lease through November 2027.Plymouth, Michigan. We believe that substantially all of our properties are in generally good condition and there is sufficient capacity to meet current and projected manufacturing, product development and logistics requirements.requirements and have developed a footprint strategy that supports our customers’ global needs.
The following list identifies, by reportable segment, the location of our principal manufacturing and other facilities as of December 31, 2017:
Horizon AmericasHorizon Asia‑PacificHorizon Europe‑Africa
United States:
Indiana:
    South Bend

Michigan:
    Plymouth

Ohio:
    Solon

Texas:
Dallas
    McAllen

Kansas:
Edgerton

International:
Brazil:
Itaquaquecetuba, São Paulo

Canada:
    Mississauga, Ontario

Mexico:
    Reynosa

International:
Australia:
    Keysborough,Victoria

New Zealand:
    Manukau City

Thailand:
    Chon Buri





International:
Germany:
Hartha
Rheda-Wiedenbrück

France:
Luneray
Romania:
    Braşov

South Africa:
    Pretoria
    Springs

United Kingdom:
    Deeside




Item 3.    Legal Proceedings
We are subject to claims and litigation in the ordinary course of business, but we do not believe that any such claim or litigation is likely to have a material adverse effect on our financial position, and results of operations or cash flows. For additional information regarding legal proceedings, refer to Note 14, Contingencies, included in Item 8, “Financial Statements and Supplementary Data,” within this Annual Report on Form 10-K.
Item 4.    Mine Safety Disclosures
Not applicable.

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Supplementary Item. Information About Our Executive Officers of the Company
All executive officers have been employed by us in theirThe current roles since the spin-off. The executive officers of Horizon as of December 31, 2017 are as follows:
A. Mark ZeffiroTerrence G. Gohl. Mr. ZeffiroGohl was appointed our president and chief executive officer on June 30, 2015. Mr. Zeffiro served as Co-Chair ofto our Board from June 29, 2015 to February 14, 2018 and has served as presidentPresident and a director of HorizonChief Executive Officer since our incorporation on January 14, 2015.September 2019. Prior to joining the Company, Mr. Zeffiro previouslyGohl served as group presidentChief Operating Officer of Cequent, whichInternational Automotive Components (“IAC”) Group, a supplier of automotive components and systems, from February 2017 to June 2018. From March 2009 to January 2017, Mr. Gohl served as President and Chief Executive Officer of Key Plastics L.L.C. (“Key Plastics”), a global manufacturer and supplier of injection molded plastic components to automotive OEMs.Prior to joining Key Plastics, from 2004 to March 2009, Mr. Gohl served in various executive management and corporate officer roles with Visteon Corporation, a global automotive leader in cockpit electronics. From 1995 to 2005, Mr. Gohl held executive positions with Tower Automotive, an automotive manufacturer, and Lear Corporation, a global leading supplier of automotive seating and e-systems. Mr. Gohl brings extensive automotive industry leadership to the Horizon Board, with deep expertise in manufacturing, operations and turnaround situations.
Dennis E. Richardville. Mr. Richardville was comprisedappointed Chief Financial Officer on March 16, 2020. Prior to this appointment, Mr. Richardville served as Vice President and Corporate Treasurer of TriMas’ Cequent Americas and Cequent APEA reporting segments specializing in towing, trailering and cargo management products (“Cequent”), beginning inthe Company since January 2015.2020. Prior to joining the Company, Mr. ZeffiroRichardville served as chief financial officer of TriMasDura Automotive Systems, LLC, a global Tier One automotive supplier specializing in the design, engineering and manufacturing of advanced mobility system solutions, from June 2008August 2019 to January 2015 andSeptember 2019. Mr. Richardville served as executive vice president of TriMas from May 2013 until January 2015. Prior to joining TriMas, Mr. Zeffiro held various financial management and business positions with General Electric Company, or GE, a diversified technology and financial services company, and Black and Decker Corporation, or Black & Decker, a global manufacturer of quality power tools and accessories, hardware, home improvement products and fastening systems. From 2004 through 2008, during Mr. Zeffiro’s four-year tenure with Black & Decker, he was vice president of finance for the global consumer product group and Latin America. In addition, Mr. Zeffiro was directly responsible for and functioned as general manager of Black & Decker’s factory store business unit. From 2003 to 2004, Mr. Zeffiro was chief financial officer of First Quality Enterprises,IAC, a private company producing consumer products for the health care market.leading global supplier of automotive components and systems, including interior and exterior trim, from April 2012 to December 2019. From 1988 through 2002, he held a series of operational and financial leadership positions with GE, the most recent of which was chief financial officer of its medical imaging manufacturing division. In April 2015,2007 to 2012, Mr. Zeffiro was appointed to the board of directors of Atkore International Group, Inc., a manufacturer of electrical raceway solutions. Mr. Zeffiro also serves on the board of directors of the Detroit Institute of Arts, where he chairs the finance committee, and the board of trustees of Walsh College, where he sits on the academic committee. Mr. Zeffiro’s position as president and chief executive officer of Horizon provides him the ability to offer the Board firsthand insight into the operations and strategic vision of the Company.  Mr. Zeffiro has extensive knowledge and subject matter expertise in strategic planning, business management, mergers and acquisitions and financial accounting.
David Rice. Mr. Rice was named our chief financial officer on June 30, 2015 in connection with the spin-off from TriMas. From January 14, 2015 through June 29, 2015, Mr. RiceRichardville served as vice president and a directorglobal corporate controller for IAC. Prior to joining IAC, Mr. Richardville held various finance positions with Lear Corporation, Wesley Industries, Inc., MSX International, Inc. and Hayes Lemmerz International Inc. from 1999 to 2007.
Matthew J. Meyer. Mr. Meyer was appointed Chief Accounting Officer on December 12, 2019. Mr. Meyer also held the role of Horizon.principal financial officer from March 3, 2020 until March 16, 2020. Mr. RiceMeyer was previously division finance officerCorporate Controller for TriMas’ subsidiary Cequent Performance Products, Inc. beginningHorizon Global since November 2018. Prior to joining the Company, Mr. Meyer, served in 2011.a variety of management positions for Joyson Safety Systems, a global leader in mobility safety providing safety-critical components, systems and technology to automotive and non-automotive markets, from December 2015 to November 2018, and ultimately served as corporate controller. From January 2015 to December 2015, Meyer served as director, accounting and reporting for Federal-Mogul Holdings Corporation, a developer, manufacturer and supplier of products for automotive, commercial, aerospace, marine, rail and off-road vehicles; and industrial, agricultural and power-generation applications (“Federal-Mogul”). Prior to his appointmentposition with Federal-Mogul, from September 2011 to January 2015, Mr. Meyer served in 2011, a variety of management positions of increasing responsibility, ultimately serving as compliance director for Kelly Services Inc., a global leader in providing workforce solutions, including outsourcing and consulting services. Meyer also served in a variety of positions leading up to an audit manager position with KPMG, LLP, a global network of professional firms providing audit, tax and advisory services, from January 2007 to September 2011.
23



Matthew T. Pollick. Mr. RicePollick has served as our Chief Operating Officer since November 11, 2019. Before joining Horizon, Mr. Pollick served as Executive Vice President of Industrial Management for Gestamp North America, a company dedicated to the design, development and manufacture of metal automotive components, from September 2016 to November 2019. From April 2014 to September 2016, Mr. Pollick was a general manager of Bowling Green Metalforming, a subsidiary of Magna International, a leading global automotive mobility technology and automotive parts supplier (“Magna”). Prior to joining Magna, from April 2002 to April 2014, Mr. Pollick held roles of increasing responsibility at Tower International, a leading manufacturer of engineered automotive structural metal components and assemblies, ultimately serving as its Director of Operations.
James F. Sistek. Mr. Sistek has served as our Chief Administrative Officer since December 9, 2019. Prior to joining Horizon, Mr. Sistek served as senior vice president business operations for Superior Industries International, Inc. (“Superior”), a Tier 1 automotive supplier of aluminum wheels, from August 2014 to January 2019. During his tenure at Superior, Mr. Sistek was directly responsible for product development and launch, supply chain and logistics, quality, information technology and served as the executive lead on a corporate-wide overhaul of the operating model. From January 2013 to August 2014, Mr. Sistek served as president and founder of Infologic, Inc. (“Infologic”), a consulting services company specializing in the optimization of business operations, where he streamlined business processes, supported program development and launch programs, and provided complete technology assessments for Tier 1 suppliers and IT service providers. Prior to forming Infologic, from October 2005 to January 2013, Mr. Sistek held various leadership positions within TriMas, including group controller from 2005 to 2009 andat Visteon Corporation, a global automotive electronics supplier, ultimately serving as vice president of corporate auditshared services and chief information officer from 2009 to 2011. Before joining TriMas in 2005, Mr. Rice held divisional controller positions with GKN Sinter Metals, a leading supplier of powdered metal precision components, from 2004 to 2005, and Mueller Industries, Inc., a manufacturer and distributor of copper, brass, aluminum and plastic fittings, valves and related tubular flow control and industrial products, from 1998 to 2004. Mr. Rice held positions of increasing financial leadership at The Woodbridge Group from 1994 to 1998, a company offering urethane and bead foam technologies to the automotive and commercial vehicle industries and other business sectors. Mr. Rice began his career in public accounting with Coopers and Lybrand and brings over 30 years of accounting and financial leadership, mergers and acquisitions and management of international operations experience.2013.
Jay Goldbaum.  Goldbaum. Mr. Goldbaum was namedhas served as our general counsel effectiveGeneral Counsel, Chief Compliance Officer and Corporate Secretary since November 13, 2017 and continues as chief compliance officer and corporate secretary.2017. Mr. Goldbaum served as legal director, chief compliance officerLegal Director, Chief Compliance Officer and corporate secretaryCorporate Secretary since June 30, 2015 in connection with the spin-off from TriMas.TriMas Corporation (“TriMas”). From January 14, 2015 through June 29, 2015, Mr. Goldbaum served as vice president, corporate secretaryVice President, Corporate Secretary and a director of Horizon. Mr. Goldbaum was previously associate general counsel-commercial law for TriMas beginning in January 2014. Mr. Goldbaum joined TriMas in January 2012 and held the position of legal counsel. Before joining TriMas, Mr. Goldbaum was an associate in the corporate and litigation practice groups at the law firm of Jaffe, Raitt, Heuer & Weiss, P.C. from September 2007 to August 2011.


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PART II

Item 5.    Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common stock, par value $0.01 per share, is listed for trading on the New York Stock Exchange, or NYSE under the symbol “HZN.” As of February 26, 2018,March 8, 2021, there were 260199 holders of record of our common stock.
The high and low sales prices per share of our common stock by quarter, as reported on the New York Stock Exchange through December 31, 2017, are shown below:
  
Price range of
common stock
  High Price Low Price
Year ended December 31, 2017    
1st Quarter $24.75
 $12.26
2nd Quarter $15.59
 $11.80
3rd Quarter $19.26
 $13.34
4th Quarter $18.24
 $13.00
Year ended December 31, 2016    
1st Quarter $12.80
 $8.06
2nd Quarter $13.10
 $10.60
3rd Quarter $20.97
 $10.84
4th Quarter $25.36
 $19.20
Year ended December 31, 2015    
2nd Quarter $16.25
 $15.05
3rd Quarter $15.75
 $8.59
4th Quarter $11.00
 $8.04
Horizon does not intend to declare and pay any dividends on its common stock for the foreseeable future. The Company currently intends to invest its future earnings, if any, to fund its growth, to develop its business, for working capital needs and for general corporate purposes. Any payment of dividends will be at the discretion of Horizon’s board of directors and will depend upon various factors then existing, including earnings, financial condition, results of operations, capital requirements, level of indebtedness, contractual restrictions with respect to payment of dividends, restrictions imposed by applicable law, general business conditions and other factors that Horizon’s board of directors may deem relevant.
Performance Graph
The following graph provides a comparison of the cumulative shareholder return on the Company’s common stock to the returns of the Russell 2000 Index and the average performance of the Company’s selected peer group(1) based on total shareholder return from July 1, 2015 (the first day our common stock began regular-way trading on the NYSE) through December 31, 2017. We have assumed that dividends have been reinvested and returns have been weighted-averaged based on market capitalization. The graph assumes that $100 was invested on July 1, 2015 in each of Horizon’s common stock, the stocks comprising the Russell 2000 Index and the stocks comprising the peer group.

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______________
(1) Includes Ametek Inc., Dorman Products Inc., Douglas Dynamics, Inc., LCI Industries, Federal Signal Corporation, Fox Factory Holding Corp., Gentex Corporation, Gentherm Incorporated, Manitex International Inc., Motorcar Parts of America, Inc., Shiloh Industries, Inc., Spartan Motors, Inc., Standard Motor Products, Inc., Stoneridge, Inc., Strattec Security Corporation, Superior Industries International, Inc., Wabash National Corporation and WABCO Holdings Inc.
Issuer Purchases of Equity Securities
The Company’s purchases of its shares of common stock during the fourth quarter of 2017 were as follows:Not applicable.
25
PeriodTotal Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (a)
October 1 - 31, 2017—
—
813,494
November 1 - 30, 2017—
—
813,494
December 1 - 31, 2017—
—
813,494
Total—

—
__________________________
(a) The Company has a share repurchase program that was announced in May 2017 to purchase up to 1.5 million shares of the Company’s common stock. At the end of the fourth quarter of 2017, 813,494 shares of common stock remains to be purchased under this program. The share repurchase program expires on May 5, 2020.

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Item 6.    Selected Financial Data
The consolidated financial statements for periods prior to the spin-off include the historical results of operations, assets and liabilities of the legal entities that are considered to comprise Horizon. Our historical results of operations, financial position, and cash flows presented in the consolidated financial statements for periods prior to the separation may not be indicative of what they would have been had we actually been a separate stand-alone public entity during such periods, nor are they necessarily indicative of our future results of operations, financial position and cash flows.Not applicable.
The following data should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our audited financial statements included in Item 8, “Financial Statements and Supplementary Data,” within this Annual Report on Form 10-K.
  Year ended December 31,
  
2017(a)
 
2016(a)
 2015 2014 2013
  (dollars in thousands, except per share data)
Statement of Income Data:          
Net sales $892,980
 $649,200
 $575,510
 $611,780
 $588,270
Gross profit 207,600
 160,350
 143,040
 148,090
 125,010
Operating profit 34,760
 6,300
 19,570
 24,460
 5,670
Net income (loss) (4,770) (12,660) 8,300
 15,350
 9,780
Net (loss) attributable to noncontrolling interest (1,220) (300) —
 —
 —
Net income (loss) attributable to Horizon Global (3,550) (12,360) 8,300
 15,350
 9,780
Net income (loss) per share attributable to Horizon Global:          
Basic $(0.14) $(0.66) $0.46
 $0.85
 $0.54
Diluted $(0.14) $(0.66) $0.46
 $0.85
 $0.54
Weighted average common shares outstanding:          
Basic 24,781,349
 18,775,500
 18,064,491
 18,062,027
 18,062,027
Diluted 24,781,349
 18,775,500
 18,160,852
 18,113,416
 18,098,645
(a)2017 and 2016 results include the impact of the Westfalia Group acquisition. Refer to Note 4, “Acquisitions”, in Item 8, “Financial Statements and Supplementary Data,” included within this Annual Report on Form 10-K for additional information.
  As of December 31,
  2017 2016 2015 2014 2013
  (dollars in thousands)
Balance Sheet Data:          
Total assets $661,030
 $613,370
 $331,580
 $339,500
 $360,680
Current maturities, long-term debt 16,710
 22,900
 10,130
 460
 1,300
Long-term debt 258,880
 327,040
 178,610
 300
 670

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Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition contains forward-looking statements regarding industry outlook and our expectations regarding the performance of our business. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under the heading “Forward-Looking Statements,” at the beginning of this Annual Report on Form 10-K. Our actual results may differ materially from those contained in or implied by any forward-looking statements.
The financial information discussed below and included in this Annual Report on Form 10-K for periods prior to the separation may not necessarily reflect what Horizon’s financial condition, results of operations or cash flows would have been had Horizon been a stand-alone public entity during this period or what Horizon’s financial condition, results of operations and cash flows may be in the future. You should read the following discussion together with Item 8, “Financial Statements and Supplementary Data” within this Annual Report on Form 10-K.
Overview
WeHeadquartered in Plymouth, Michigan, Horizon Global Corporation and its consolidated subsidiaries (“Horizon,” “Horizon Global,” “we,” or the “Company”) are a leading designer, manufacturer and distributor of a wide variety of high-quality, custom-engineered towing, trailering, cargo management and other related accessory products on a global basis, servingprimarily servicing the automotive aftermarket, retail, e-commerce, automotive original equipment manufacturers (“automotive OEMs”) and OE channels.automotive original equipment servicers (“automotive OESs”) (collectively, “OEs”) channels, supporting our customers generally through a regional service and delivery model.
Critical factors affecting our ability to succeed include: our
•Our ability to realize the expected future economic benefits of structural realignment ofresulting from the changes made to our manufacturing facilitiesoperations, distribution footprint and management team in recent years, including the operational improvement initiatives implemented in 2019-2020, which are continuously ongoing to support margin expansion;
•Our ability to continue to manage our liquidity, including continuing to deleverage our balance sheet and service our debt obligations and the applicable financial covenants thereto, especially given our recent debt refinancing and capital structure alignment to support business units; ourgrowth and the Company’s long-term strategic plan;
•Our ability to quickly and cost-effectively introduce new products;products to our customers and end-user market with a resulting streamlined customer service model and improved operating margins;
•Our ability to acquirecontinue to successfully launch new products and integrate companiescustomer programs to expand or products that supplement existing product lines, add newrealign our geographic coverage or distribution channels and expand our geographic coverage; ourrealize desired operating efficiencies and product line or customer content penetration;
•Our ability to manage our cost structure more efficiently via global supply base management, internal sourcing and/or purchasing of materials, selective outsourcing and/or purchasing of support functions, working capital management and a global approach to leverage of our administrative functions. functions; and
•Our ability to manage any future business disruption and the operational and financial impacts, including temporary facility closures, liquidity and other economic and business uncertainties related to the novel coronavirus (“COVID-19”) pandemic as further detailed below.
If we are unable to do any of the foregoing successfully, our financial condition and results of operations could be materially and adversely impacted.
26



In December 2019, an outbreak of COVID-19 occurred in China, spread throughout the world and was declared a pandemic. In connection with the COVID-19 pandemic, we have been adhering to mandates and other guidance from local governments and health authorities, as well as the World Health Organization and the Centers for Disease Control. As a result of the pandemic, we experienced temporary decreases in demand and customer orders for our products in one or more of our sales channels, as well as temporary disruptions and closures of some of our facilities as we flexed our operations in response to changes in customer demand or government mandates. The COVID-19 pandemic also impacted various aspects of the supply chain as our suppliers experienced similar business disruptions due to operating restrictions from government mandates. We reportcontinue to monitor the procurement of raw materials and components used in the manufacturing, distribution and sale of our products, but future disruptions in the supply chain due to the COVID-19 pandemic may cause difficulty in sourcing materials or unexpected shortages or delays in delivery of raw materials and components, and may result in increased costs in our supply chain.
As government mandates and operating restrictions began to abate, the demand for our products responded and our facilities returned to full operational status early in the third quarter of 2020. Although we have taken decisive actions to enhance our financial flexibility, minimize the impact to the business and ensure the health and safety of our employees and other individuals of the communities where we conduct business, the extent and duration of the impact of the COVID-19 pandemic remains uncertain and could adversely impact our results of operations in future periods. The actions taken are further summarized in the Liquidity and Capital Resources and Outlook sections below.
Horizon Global reports its business in two operating segments: Horizon Americas and Horizon Europe‑Africa. The Company previously had a third operating segment, Horizon Asia‑Pacific (“APAC”), which was sold in the third quarter of 2019. See Note 4, Discontinued Operations, and Note 18, Segment Information, each included in Item 8, “Financial Statements and Supplementary Data,” within this Annual Report on Form 10-K for further information regarding discontinued operations and the Company’s operating segments, respectively.
Shipping and handling costs associated with outbound freight are accounted for as a fulfillment cost and are included in cost of sales in our consolidated statements of operations. Other shipping and handling expenses, associated with ourwhich primarily relate to Horizon Americas reportable segment’sAmericas’ distribution network, as an element ofare included in selling, general and administrative expenses in our consolidated statements of operations.
27



Supplemental Analysis and Segment Information
Non-GAAP Financial Measures
The Company’s management utilizes Adjusted EBITDA as the key measure of company and segment performance and for planning and forecasting purposes, as management believes this measure is most reflective of the operational profitability or loss of the Company and its operating segments and provides management and investors with information to evaluate the operating performance of its business and is representative of its performance used to measure certain of its financial covenants, further discussed in the Liquidity and Capital Resources section below. Adjusted EBITDA should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered an alternative to net income attributable to Horizon Global, which is the most directly comparable financial measure to Adjusted EBITDA that is prepared in accordance with U.S. GAAP. Adjusted EBITDA, as determined and measured by Horizon Global, should also not be compared to similarly titled measures reported by other companies. The Company also uses operating profit (loss). As to measure stand-alone segment performance.
Adjusted EBITDA is defined as net income attributable to Horizon Global before interest expense, income taxes, depreciation and amortization, and before certain items, as applicable, such gross marginsas severance, restructuring, relocation and related business disruption costs, impairment of goodwill and other intangibles, non-cash stock compensation, certain product liability and litigation claims, acquisition and integration costs, gains (losses) on business divestitures and other assets, board transition support and non-cash unrealized foreign currency remeasurement costs.
Adjusted EBITDA for our operating segments for the twelve months ended December 31, 2020 is as follows:
Twelve Months Ended
December 31, 2020
Horizon AmericasHorizon Europe-AfricaCorporateConsolidated
(dollars in thousands)
Net loss attributable to Horizon Global$(36,560)
Net loss attributable to noncontrolling interest(1,420)
Net loss$(37,980)
Interest expense31,680 
Income tax benefit(1,580)
Depreciation and amortization22,910 
EBITDA$34,030 $6,610 $(25,610)$15,030 
Net loss attributable to noncontrolling interest— 1,420 — 1,420 
Loss from discontinued operations, net of tax— — 500 500 
Severance530 (360)20 190 
Restructuring, relocation and related business disruption costs1,700 170 740 2,610 
Non-cash stock compensation— — 3,000 3,000 
Loss (gain) on business divestitures and other assets1,480 (180)20 1,320 
Board transition support— — (170)(170)
Product liability and litigation claims— 1,510 — 1,510 
Debt issuance costs— 60 1,870 1,930 
Unrealized foreign currency remeasurement costs690 (550)(1,070)(930)
Adjusted EBITDA$38,430 $8,680 $(20,700)$26,410 
28




Adjusted EBITDA for our operating segments for the twelve months ended December 31, 2019 is as follows:
Twelve Months Ended
December 31, 2019
Horizon AmericasHorizon Europe-AfricaCorporateConsolidated
(dollars in thousands)
Net income attributable to Horizon Global$80,750 
Net loss attributable to noncontrolling interest(1,240)
Net income$79,510 
Interest expense58,270 
Income tax benefit(10,820)
Depreciation and amortization21,690 
EBITDA$(4,320)$(3,370)$156,340 $148,650 
Net loss attributable to noncontrolling interest— 1,240 — 1,240 
Income from discontinued operations, net of tax— — (189,520)(189,520)
Severance(200)1,330 2,050 3,180 
Restructuring, relocation and related business disruption costs9,500 (1,190)3,990 12,300 
Non-cash stock compensation— — 2,150 2,150 
Loss on business divestitures and other assets2,070 3,630 — 5,700 
Board transition support— — 1,450 1,450 
Product liability and litigation claims820 1,760 — 2,580 
Debt issuance costs— — 4,070 4,070 
Unrealized foreign currency remeasurement costs— (180)130 (50)
Other560 (450)(170)(60)
Adjusted EBITDA$8,430 $2,770 $(19,510)$(8,310)
29



Segment Information
As a result of the Company’s sale of its APAC segment in 2019, the Company’s operating segments are Horizon Americas reportable segment may not be comparable to those of ourand Horizon Europe‑Africa and Horizon Asia‑Pacific segments, which primarily rely on third-party distributors, for which all costsAfrica. APAC results are includedreported separately as a discontinued operation in cost of sales.
The acquisition of the Westfalia Group, a European leader in towing products, addressed a geographic gap in our global footprint by strengthening our presence in the European market. The Westfalia Group is included in the results of operations and consolidated financial statements beginning October 1, 2016. The pending acquisition of the Brink Group will further strengthen our global platformfor all periods presented. See Note 4, Discontinued Operations, and enhance our product portfolio.

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Note 18, Segment Information, included in Item 8, “Financial Statements and Supplemental AnalysisSupplementary Data,” within this Annual Report on Form 10-K, for additional information.
The following table summarizes financialFinancial information for our three reportable segments:operating segments for the twelve months ended December 31, 2020 and 2019 is as follows:
 Twelve Months Ended December 31,ChangeConstant Currency Change
2020As a Percentage of Net Sales2019As a Percentage of Net Sales$%$%
(dollars in thousands)
Net Sales      
Horizon Americas$382,380 57.8 %$372,720 54.0 %$9,660 2.6 %$11,030 3.0 %
Horizon Europe‑Africa278,850 42.2 %317,730 46.0 %(38,880)(12.2)%(44,350)(14.0)%
Total$661,230 100.0 %$690,450 100.0 %$(29,220)(4.2)%$(33,320)(4.8)%
Gross Profit   
Horizon Americas$95,850 25.1 %$71,640 19.2 %$24,210 33.8 %$24,760 34.6 %
Horizon Europe‑Africa24,700 8.9 %24,590 7.7 %110 0.4 %(800)(3.3)%
Total$120,550 18.2 %$96,230 13.9 %$24,320 25.3 %$23,960 24.9 %
Selling, General and Administrative Expense
Horizon Americas$67,840 17.7 %$81,450 21.9 %$(13,610)(16.7)%$(12,930)(15.9)%
Horizon Europe‑Africa33,060 11.9 %38,050 12.0 %(4,990)(13.1)%(5,480)(14.4)%
Corporate26,470 N/A34,680 N/A(8,210)(23.7)%(8,210)(23.7)%
Total$127,370 19.3 %$154,180 22.3 %$(26,810)(17.4)%$(26,620)(17.3)%
Operating Profit (Loss)
Horizon Americas$27,950 7.3 %$(10,390)(2.8)%$38,340 369.0 %$38,220 367.9 %
Horizon Europe‑Africa(8,390)(3.0)%(12,100)(3.8)%3,710 30.7 %3,280 27.1 %
Corporate(26,470)N/A(34,680)N/A8,210 23.7 %8,210 23.7 %
Total$(6,910)(1.0)%$(57,170)(8.3)%$50,260 87.9 %$49,710 87.0 %
Capital Expenditures
Horizon Americas$3,670 1.0 %$6,590 1.8 %$(2,920)(44.3)%$(2,830)(42.9)%
Horizon Europe‑Africa9,640 3.5 %3,080 1.0 %6,560 213.0 %6,650 215.9 %
Corporate— N/A50 N/A(50)— %(50)— %
Total$13,310 2.0 %$9,720 1.4 %$3,590 36.9 %$3,770 38.8 %
Depreciation of Property and Equipment and Amortization of Intangibles
Horizon Americas$8,420 2.2 %$8,670 2.3 %$(250)(2.9)%$(140)(1.6)%
Horizon Europe‑Africa14,280 5.1 %11,720 3.7 %2,560 21.8 %2,320 19.8 %
Corporate210 N/A1,300 N/A(1,090)(83.8)%(1,090)(83.8)%
Total$22,910 3.5 %$21,690 3.1 %$1,220 5.6 %$1,090 5.0 %
Adjusted EBITDA
Horizon Americas$38,430 10.1 %$8,430 2.3 %$30,000 355.9 %N/AN/A
Horizon Europe-Africa8,680 3.1 %2,770 0.9 %5,910 213.4 %N/AN/A
Corporate(20,700)N/A(19,510)N/A(1,190)(6.1)%N/AN/A
Total$26,410 4.0 %$(8,310)(1.2)%$34,720 417.8 %N/AN/A
30
  Year ended December 31,
  2017 As a Percentage of Net Sales 2016 As a Percentage of Net Sales 2015 As a Percentage of Net Sales
  (dollars in thousands)
Net Sales            
Horizon Americas $439,700
 49.2 % $443,240
 68.3 % $429,310
 74.6 %
Horizon Europe‑Africa 325,970
 36.5 % 104,080
 16.0 % 50,930
 8.8 %
Horizon Asia‑Pacific 127,310
 14.3 % 101,880
 15.7 % 95,270
 16.6 %
Total $892,980
 100.0 % $649,200
 100.0 % $575,510
 100.0 %
Gross Profit            
Horizon Americas $127,990
 29.1 % $131,320
 29.6 % $116,290
 27.1 %
Horizon Europe‑Africa 46,760
 14.3 % 6,560
 6.3 % 7,650
 15.0 %
Horizon Asia‑Pacific 32,850
 25.8 % 22,470
 22.1 % 19,100
 20.0 %
Total $207,600
 23.2 % $160,350
 24.7 % $143,040
 24.9 %
Selling, General and Administrative Expense            
Horizon Americas $83,680
 19.0 % $86,470
 19.5 % $84,190
 19.6 %
Horizon Europe‑Africa 47,750
 14.6 % 17,180
 16.5 % 7,460
 14.6 %
Horizon Asia‑Pacific 13,940
 10.9 % 11,210
 11.0 % 11,420
 12.0 %
Corporate 26,250
 N/A
 30,290
 N/A
 18,280
 N/A
Total $171,620
 19.2 % $145,150
 22.4 % $121,350
 21.1 %
Net Loss on Disposition of Property and Equipment            
Horizon Americas $(240) (0.1)% $(230) (0.1)% $(1,800) (0.4)%
Horizon Europe‑Africa (800) (0.2)% (280) (0.3)% (290) (0.6)%
Horizon Asia‑Pacific (170) (0.1)% (30) — % (30) — %
Corporate (10) N/A
 —
 N/A
 —
 N/A
Total $(1,220) (0.1)% $(540) (0.1)% $(2,120) (0.4)%
Operating Profit (Loss)            
Horizon Americas $44,060
 10.0 % $38,680
 8.7 % $30,300
 7.1 %
Horizon Europe‑Africa (1,790) (0.5)% (13,320) (12.8)% (100) (0.2)%
Horizon Asia‑Pacific 18,740
 14.7 % 11,230
 11.0 % 7,650
 8.0 %
Corporate (26,250) N/A
 (30,290) N/A
 (18,280) N/A
Total $34,760
 3.9 % $6,300
 1.0 % $19,570
 3.4 %
Capital Expenditures            
Horizon Americas $10,150
 2.3 % $5,550
 1.3 % $5,970
 1.4 %
Horizon Europe‑Africa 13,190
 4.0 % 4,670
 4.5 % 690
 1.4 %
Horizon Asia‑Pacific 2,440
 1.9 % 3,310
 3.2 % 1,360
 1.4 %
Corporate 1,510
 N/A
 1,010
 N/A
 300
 N/A
Total $27,290
 3.1 % $14,540
 2.2 % $8,320
 1.4 %
Depreciation and Amortization            
Horizon Americas $10,660
 2.4 % $10,750
 2.4 % $10,750
 2.5 %
Horizon Europe‑Africa 10,110
 3.1 % 3,290
 3.2 % 2,070
 4.1 %
Horizon Asia‑Pacific 4,310
 3.4 % 4,090
 4.0 % 4,130
 4.3 %
Corporate 260
 N/A
 90
 N/A
 130
 N/A
Total $25,340
 2.8 % $18,220
 2.8 % $17,080
 3.0 %

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Results of Operations
YearTwelve Months Ended December 31, 20172020 Compared with YearTwelve Months Ended December 31, 20162019
Overall,Consolidated net sales increased approximately $243.8decreased $29.3 million, or approximately 37.6%4.2%, to $893.0$661.2 million in 2017,during the twelve months ended December 31, 2020, as compared to $649.2$690.5 million during the twelve months ended December 31, 2019. The decrease in 2016. Netnet sales within ourwas attributable to the impacts of economic uncertainty and business disruptions of the COVID-19 pandemic that began to impact the Company near the end of the first quarter of 2020, and significantly impacted the Company during the second quarter of 2020. During the twelve months ended December 31, 2020, net sales for Horizon Europe‑Africa reportable segment increased $221.9decreased $38.8 million, driven primarily driven by our fourth quarter 2016 acquisitiondeclines in sales volumes in the automotive OEM and automotive OES sales channels, including a decrease of $37.3 million during the Westfalia Group. Net sales within our Horizon Asia‑Pacific reportable segment increasedthree months ended June 30, 2020, primarily caused by $25.4the COVID-19 pandemic. The $29.3 million due to a regional bolt-on acquisition and decrease in consolidated net sales to a new customer. Net sales within our Horizon Americas reportable segment decreased $3.5 million driven by decreases infor the retail and aftermarket channels, which weretwelve months ended December 31, 2020 was partially offset by an increase in net sales within Horizon Americas of $9.7 million driven by higher sales volumes in the aftermarket and e-commerce sales channels, which more than offset the lower volumes in the automotive OE, e-commerce,OEM and industrialretail sales channels. Net sales increased for Horizon Americas during the twelve months ended December 31, 2020 despite a $34.8 million decrease in net sales across all sales channels of Horizon Americas during the three months ended June 30, 2020, the period most significantly impacted by the COVID-19 pandemic.
Gross profit margin (gross profit as a percentage of net sales) approximated 23.2%was 18.2% and 24.7% in 201713.9% during the twelve months ended December 31, 2020 and 2016,2019, respectively. The overall decline inimproved gross profit margin is the result of a shift in concentration of netwas primarily due to improved operating efficiencies and favorable sales from our higher margin Horizon Americas reportable segment to our lower margin Horizon Europe‑Africa reportable segment. Further, gross profit margin declined in our Horizon Americas reportable segment asmix, which more than offset the negative impacts of unfavorable commodity prices more than offset the COVID-19 pandemic and the related declines in sales volume and impacts on operational performance.
Selling, general and administrative (“SG&A”) expenses decreased $26.8 million, primarily attributable to lower distribution center lease, operating and support costs and cost savings realized in 2017 from the consolidation of our manufacturing facilities that occurred in 2016. Gross profit margin improved in our Horizon Asia‑Pacific reportable segmentAmericas, as a result of increased sales volumes and productivity initiatives. An increase in gross profit margin in oura prior-year $6.5 million charge related to the abandonment of leased equipment. In Horizon Europe‑Africa, reportable segment islower administrative and personnel costs were realized as a result of prior-year restructuring and business rationalization projects, and the reimbursement of certain payroll costs as part of government payroll reimbursement programs. Additionally, lower Corporate expenses were primarily dueattributable to a prior-year $5.3 million charge related to lease abandonment and leasehold improvements for the Company’s departure of its former headquarters lease and $2.1 million of prior-year charges related to the acquisition of the Westfalia Group.separation agreement reached with our former chief executive officer and other severance costs.
Operating profit margin (operating profit (loss) as a percentage of net sales) approximated 3.9%was (1.0)% and 1.0% in 2017(8.3)% during the twelve months ended December 31, 2020 and 2016,2019, respectively. Operating profit increased $28.5improved $50.3 million, or 451.7%87.9%, to $34.8an operating loss of $(6.9) million in 2017during the twelve months ended December 31, 2020, as compared to $6.3an operating loss of $(57.2) million in 2016,during the twelve months ended December 31, 2019, primarily as a result of an operating profit margin improvement across all of our reportable segments. Operating profit margin increased in our Horizon Europe‑Africa reportable segment driven by the Westfalia Group. Operating profit margin was positively impacted by $8.4 million of lower expenses compared to 2016 related to the impairment of intangible assets in our Horizon Americas and Horizon Europe-Africa reportable segments. Increased volumes and operational improvements in our Horizon Asia‑Pacific reportable segment also favorably impacted operating profit margin. Further contributing to the increase in operating profit margin was a decrease in corporate expenses primarily due to lower costs associated with the Westfalia Group acquisition.
Interest expense increased approximately $2.3 million, to $22.4 million in 2017, as compared to $20.1 million in 2016, primarily due to additional interest and non-cash amortization of debt discount and issuance costs related our Convertible Notes (as defined below) issued in early 2017.results detailed above.
Other expense, net remained relatively flat at $2.7decreased $4.9 million in 2017to $0.5 million during the twelve months ended December 31, 2020, as compared to $2.6$5.4 million during the twelve months ended December 31, 2019, primarily attributable to the $3.6 million loss on sale related to the Company’s divestiture of its non-automotive business in 2016.Horizon Europe‑Africa in the twelve months ended December 31, 2019, as well as $0.9 million of higher foreign currency gain in the twelve months ended December 31, 2020 as compared to the twelve months ended December 31, 2019.
Interest expense decreased $26.6 million, to $31.7 million during the twelve months ended December 31, 2020, as compared to $58.3 million during the twelve months ended December 31, 2019. Interest expense decreased primarily as a result of the pay down of principal on the Company’s first lien term loan in September 2019, which resulted in lower borrowings as well as lower interest rates compared to the twelve months ended December 31, 2019. In addition, the Company recorded a charge of $8.7 million during the twelve months ended December 31, 2019 as compared to a charge of $0.8 million during the twelve months ended December 31, 2020, related to the write-off of unamortized debt issuance costs due to debt refinancing and modifications completed during the respective periods.
The effective income tax rate for 2017the twelve months ended December 31, 2020 and 20162019, was 195.8%4.0% and 22.8%9.0%, respectively. The 2017 Tax Cuts and Jobs Act (the “2017 Tax Act”) created an $11.9 million tax charge that was the main driver of change inlower effective tax rate. This amount largely reflects transition tax but also includes other provisions of the 2017 Tax Act applicablerate compared to the Company. Two other main factors influencedstatutory tax rate for both periods is attributable to the 2017valuation allowance recorded in the U.S. and 2016 effective tax rates. First, nondeductible transaction costs associated withseveral foreign acquisitionsjurisdictions, which resulted in additional tax expense of $1.6 million and $2.7 million during December 31, 2017 and 2016, respectively. Second,no income tax benefits associatedbenefit recognized for jurisdictional pretax losses, coupled with jurisdictional income mix. In addition, the prior-year included a $6.6 million benefit related to the release of certain unrecognizeduncertain tax positions, were recognizedand the corresponding accrued interest and penalties, in 2017 and 2016 for approximately $4.0 million and $1.3 million, respectively.certain jurisdictions that did not recur.
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Net loss from continuing operations decreased approximately $7.9$72.5 million, to a net loss of $4.8$37.5 million in 2017, fromduring the twelve months ended December 31, 2020, compared to a net loss from continuing operations of $12.7$110.0 million in 2016.during the twelve months ended December 31, 2019. The improvementdecrease was primarily attributable to the resultresults detailed above.
(Loss) income from discontinued operations, net of tax is attributable to the sale of the Company’s former APAC operating segment, which was sold in September 2019 and resulted in a $28.5$180.5 million increasegain recognized and included in operating profit, partially offset byincome from discontinued operations, net of tax during the twelve months ended December 31, 2019. During the twelve months ended December 31, 2020, the remaining post-closing conditions of the sale were completed, including a $2.3 million increasetrue up to net cash proceeds, which resulted in interest expense, a $4.6 million loss on extinguishmentsale of debt due to a prepayment madediscontinued operations of $(0.5) million. APAC has been presented as discontinued operations in our consolidated financial statements in accordance with Accounting Standards Codification 205, “Discontinued Operations.” See Note 4, Discontinued Operations, included in Item 8, “Financial Statements and Supplementary Data,” within this Annual Report on our Term B Loan (as defined below), and by a $13.5 million increase in income tax expense.Form 10-K for further description of the Company’s discontinued operations.
See below for a discussion of operating results by reportable segment.

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Horizon Americas
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Horizon Americas.Net sales decreased approximately $3.5by sales channel, in thousands, for Horizon Americas are as follows:
Twelve Months Ended December 31,Change
20202019$%
Net Sales
Aftermarket$114,750 $96,910 $17,840 18.4 %
Retail100,660 105,970 (5,310)(5.0)%
Automotive OEM77,280 87,700 (10,420)(11.9)%
Automotive OES8,310 6,950 1,360 19.6 %
E-commerce53,850 45,750 8,100 17.7 %
Industrial27,480 29,390 (1,910)(6.5)%
Other50 50 — — %
Total$382,380 $372,720 $9,660 2.6 %
Net sales increased $9.7 million, or 0.8%2.6%, to $439.7$382.4 million in 2017,during the twelve months ended December 31, 2020, as compared to $443.2$372.7 million during the twelve months ended December 31, 2019, primarily attributable to higher volumes in 2016. Netthe aftermarket and e-commerce sales in our retail channel decreased approximately $8.2 million primarilychannels despite the COVID-19 pandemic. The increase was also due to point of sale weaknessa $3.1 million reduction in sales returns and reductions in inventory levels at our mass merchant retail customers, as well as the sale of our Broom and Brush product line during the fourth quarter of 2017. Further contributing to a net sales shortfallallowances in the channel were inventory management efforts by retailers, lost businesstwelve months ended December 31, 2020, as compared with a home improvement customer, as well as delivery delays during the fourth quarter of 2017 as we transitioned to a new distribution facility. Net sales in our aftermarket channel decreased by approximately $5.2 million primarily due to challenges faced during the integration of our ERP system in early 2017, which weretwelve months ended December 31, 2019. The increase was partially offset by increasedlower sales with our warehouse distribution partners. Partially offsetting these decreases were increases in our automotive OE, e-commerce, and industrial channels. Net sales in our automotive OE channel increased approximately $4.0 million due to increased volumes on existing programs with major customers, partially offset by higher volumes in 2016 due to the launch of a new program with another major customer that did not reoccur. Netautomotive OEM and retail sales in our e-commerce channel increasedchannels, which were more negatively impacted by approximately $2.9 million as higher demand as we believe the way consumers do business appears to be evolving to online research and purchasing. Partially offsetting this increase was reduced sales to certain customers who did not maintain channel pricing discipline. Net sales in our industrial channel increased approximately $2.4 million as a result of increased demand from trailer manufacturers and increased production levels. The remainder of the change is due to favorable currency exchange as the Brazilian real strengthened in relation to the U.S. dollar.COVID-19 pandemic.
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Horizon Americas’ gross profit decreased approximately $3.3 million to $128.0increased $24.3 million, or 29.1%33.9%, to $95.9 million, or 25.1% of net sales, in 2017, from approximately $131.3during the twelve months ended December 31, 2020, as compared to $71.6 million, or 29.6%19.2% of net sales, during the twelve months ended December 31, 2019. Gross profit was impacted by the changes in 2016. Negatively impacting gross profit margin was approximately $6.0sales detailed above, as well as the following:
–$13.3 million of unfavorable commodity priceslower scrap costs and freight costs, in advance of pricing actions, and approximately $0.3 million of costs associated with upgrading the paintline in our Mexico manufacturing facility. Partially offsetting these decreases was approximately $3.3 million of lower costs due to the consolidation of our manufacturing facilities during 2016 that did not reoccur in 2017. The remainder of the change is a result of lower sales levels and unfavorable currency exchange.
Selling, general and administrative expenses decreased approximately $2.8 million to $83.7 million, or 19.0% of net sales, in 2017, as compared to $86.5 million, or 19.5% of net sales, in 2016. Approximately $3.4 million of the decrease is primarily due to lower incentive compensationinventory reserves as a result of lower segment performancemore effective inventory management; and approximately $1.5
–$8.9 million of the decrease is due to lower legal costs as a result of an award settlement that was received in the fourth quarter of 2017. These decreases werefavorable manufacturing costs; partially offset by approximately $1.7by:
–$1.2 million higher outbound freight costs.
SG&A expenses decreased $13.7 million to $67.8 million, or 17.7% of costs associated with a projectnet sales, during the twelve months ended December 31, 2020, as compared to optimize our$81.5 million, or 21.9% of net sales, during the twelve months ended December 31, 2019. The decrease in SG&A expenses was attributable to the following:
–$6.5 million prior-year charge related to the abandonment of leased equipment in its Kansas City location;
–$4.8 million lower litigation and other administrative costs; and
–$3.6 million lower distribution footprintcenter lease, operating and unfavorable currency exchange.support costs; partially offset by:
–$2.6 million higher personnel and other variable compensation costs.
Horizon Americas’ operating profit increased approximately $5.4$38.4 million to $44.1an operating profit of $28.0 million, or 10.0%7.3% of net sales, in 2017, from $38.7during the twelve months ended December 31, 2020, as compared to an operating loss of $(10.4) million, or 8.7%(2.8)% of net sales, in 2016.during the twelve months ended December 31, 2019. Operating profit and operating profit margin increased primarily due to approximately $6.0the operational results detailed above.
Horizon Americas’ Adjusted EBITDA increased $30.0 million of lower expense related to $38.4 million during the impairment of intangible assets during 2016. Partially offsetting this decrease were unfavorable commodity prices, higher freight costs, and lower selling, general and administrative expenses.
Horizon Europe-Africa. Net sales increased approximately $221.9 million, or 213.2%, to $326.0 million in 2017,twelve months ended December 31, 2020, as compared to $104.1Adjusted EBITDA of $8.4 million in 2016,during the twelve months ended December 31, 2019. Adjusted EBITDA increased primarily due to the Westfalia Group, acquiredoperational results detailed above.
Horizon Europe-Africa
Net sales by sales channel, in thousands, for Horizon Europe‑Africa are as follows:
Twelve Months Ended December 31,Change
20202019$%
Net Sales
Automotive OEM$149,850 $181,490 $(31,640)(17.4)%
Automotive OES50,290 58,080 (7,790)(13.4)%
Aftermarket73,010 69,370 3,640 5.2 %
Industrial1,670 2,850 (1,180)(41.4)%
E-commerce1,570 1,880 (310)(16.5)%
Other2,460 4,060 (1,600)(39.4)%
Total$278,850 $317,730 $(38,880)(12.2)%
Net sales decreased $38.8 million, or 12.2%, to $278.9 million during the twelve months ended December 31, 2020, as compared to $317.7 million during the twelve months ended December 31, 2019, primarily attributable to lower volumes in the fourthautomotive OEM, automotive OES and industrial sales channels, which were negatively impacted by the COVID-19 pandemic in the twelve months ended December 31, 2020. Net sales of Horizon Europe-Africa were also negatively impacted by $2.1 million related to the sale of its non-automotive business in the first quarter of 2016. The remainder of2019. Partially offsetting the change is primarily due todecrease in sales were increased sales in the aftermarket sales channel despite the COVID-19 pandemic as well as $5.5 million of favorable currency exchange as the strengthening of the euro more than offset the weakening of the British pound in relation to the U.S. dollar.translation.
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Horizon Europe‑Africa’sEurope-Africa’s gross profit increased approximately $40.2 million to $46.8$0.1 million, or 14.3%0.4%, to $24.7 million, or 8.9% of net sales, in 2017,during the twelve months ended December 31, 2020, from approximately $6.6$24.6 million, or 6.3%7.7% of net sales, during the twelve months ended December 31, 2019. The increase in 2016, drivengross profit margin reflects the changes in sales detailed above. Additionally, gross profit was impacted by the Westfalia Group acquisition. Gross profit margin was negatively impacted by $2.7following:
–$6.5 million due to restructuringfavorable labor costs, including the payroll reimbursement costs received in the twelve months ended December 31, 2020 under terms of government payroll reimbursement programs, which includes the KUG (as defined in the Liquidity and Capital Resources section below);
–$5.0 million lower scrap costs and inventory reserves as a result of more effective inventory management;
–$4.0 million favorable manufacturing costs;
–$2.5 million lower freight costs; and
–$0.9 million of favorable currency translation.
SG&A expenses decreased productivity related to the closure of our manufacturing facility in the United Kingdom.
Horizon Europe‑Africa’s selling, general and administrative expenses increased approximately $30.6$5.0 million to $47.8$33.1 million, or 14.6%11.9% of net sales, in 2017,during the twelve months ended December 31, 2020, as compared to $17.2$38.1 million, or 16.5%12.0% of net sales, during the twelve months ended December 31, 2019. The decrease in 2016. Selling, general and administrativeSG&A expenses increased by approximately $23.6 millionwas primarily attributable to the resultsfollowing:
–$2.6 million lower personnel and variable compensation costs, including the payroll reimbursement costs received in the twelve months ended December 31, 2020 under terms of government payroll reimbursement programs, which includes the Westfalia Group, which included approximately $6.4KUG;
–$1.3 million in incremental depreciationlower warehouse expense, litigation and amortization related to purchase accountingother administrative costs;
–$0.6 million lower bad debt expense; and $3.0
–$0.5 million of higher transaction-related expenditures, including professional fees and severance, compared to 2016. Further negatively impacting selling, general, and administrative expenses were increased costs associated with establishing a management structure in the region.favorable currency translation.
Horizon Europe‑Africa’sEurope-Africa’s operating loss decreased approximately $11.5profit improved $3.7 million to an operating loss of $1.8$(8.4) million, or 0.5%(3.0)% of net sales, in 2017, fromduring the twelve months ended December 31, 2020, as compared to an operating loss of $13.3$(12.1) million, or 12.8%(3.8)% of net sales, in 2016,during the twelve months ended December 31, 2019. Operating margin improved primarily due to the inclusion ofoperational results described above.
Horizon Europe-Africa’s Adjusted EBITDA increased $5.9 million to $8.7 million during the Westfalia Group in results for the full year of 2017 compared to only the fourth quarter of 2016. Further, operating loss decreased due to approximately $2.4 million of lower expense related to the impairment of intangible assets during 2016. These decreases to operating loss were partially offset by increased costs associated with establishing a management structure in the region.

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Horizon Asia-Pacific.    Net sales increased approximately $25.4 million, or 25.0%, to $127.3 million in 2017,twelve months ended December 31, 2020, as compared to $101.9Adjusted EBITDA of $2.8 million in 2016. A regional bolt-on acquisition, completed in during the third quarter of 2017, contributed $10.8 million in net sales. The increase in net sales in our industrial channel of approximately $8.1 million is primarily due to a full year of sales from a new product launched in the fourth quarter of 2016 with a new customer. Net sales in our automotive OE channel, exclusive of this acquisition, increased $1.6 million due to increased volumes on existing programs in our businesses in Australia and Thailand. Net sales in our aftermarket channel increased $1.3 million as a result of strong demand within the region. The remainder of the increase is a result of favorable currency exchange as the Australian dollar, Thai baht, and New Zealand dollar strengthened in relation to the U.S. dollar.
Horizon Asia‑Pacific’s gross profit increased approximately $10.4 million to $32.9 million, or 25.8% of net sales in 2017, from approximately $22.5 million, or 22.1% of net sales, in 2016. The improvement in gross profit was driven by the increased sales volumes mentioned above. Gross profit margin was further positively impacted by the results of productivity initiatives in our Australian business and efficiencies realized in Thailand due to restructuring of operations completed in the second quarter of 2017.
Horizon Asia‑Pacific’s selling, general and administrative expenses increased approximately $2.7 million to $13.9 million, or 10.9% of net sales in 2017, as compared to $11.2 million, or 11.0% of net sales, in 2016. The increase in selling, general and administrative expenses is primarily due to increased people costs in support of growth initiatives and operational restructuring costs. Additionally, selling, general and administrative expenses was increased by acquisition-related costs of $1.2 million. Further negatively impacting selling, general and administrative expenses was $0.4 million in unfavorable currency exchange.
Horizon Asia‑Pacific’s operating profit increased approximately $7.5 million to $18.7 million, or 14.7% of net sales, in 2017, from $11.2 million, or 11.0% of net sales in 2016, primarily due to increased volumes and operational improvements across the region.
Corporate Expenses.  Corporate expenses decreased approximately $4.0 million to $26.3 million in 2017, as compared to $30.3 million in 2016. Corporate expenses decreased approximately $6.5 million due to lower expenses related to the acquisition of Westfalia Group and $2.3 million as a result of lower incentive compensation. Partially offsetting these decreases was $1.9 million of expenses related to completed or announced acquisitions in 2017 and the remainder of the change was due to increased professional fees for various human resource, information technology, and compliance initiatives.

Year Ended December 31, 2016 Compared with Year Ended December 31, 2015
Overall, net sales increased approximately $73.7 million, or approximately 12.8%, to $649.2 million in 2016, as compared to $575.5 million in 2015. During the yeartwelve months ended December 31, 2016, net sales increased in all of our reportable segments. Net sales within our Horizon Europe‑Africa reportable segment increased $53.2 million driven by our fourth quarter 2016 acquisition of the Westfalia Group, which added net sales of $54.5 million to Horizon Europe-Africa’s results in 2016. Growth in Horizon Europe-Africa’s automotive OE channel in the legacy businesses in Germany and South Africa were more than offset by declines in legacy businesses elsewhere in Europe and unfavorable currency exchange. Net sales within our Horizon Americas reportable segment were up $13.9 million driven by increases in the automotive OE, e-commerce, and retail channels, which were partially offset by a decline within the aftermarket and industrial channels. Net sales within our Horizon Asia‑Pacific reportable segment increased by $6.6 million primarily due to increases in the automotive OE channel, which were partially offset by unfavorable currency exchange.
Gross profit margin approximated 24.7% and 24.9% in 2016 and 2015, respectively. The overall decrease in gross profit margin primarily relates to our Horizon Europe‑Africa reportable segment, which was negatively impacted by purchase accounting, as well as higher commodity prices, product input costs, and unfavorable currency exchange. The decreases in gross profit margin were partially offset by higher sales volumes in both of our Horizon Americas and Horizon Asia‑Pacific reportable segments. Additionally, margin improvement in our Horizon Americas’ reportable segment and cost savings and productivity initiatives in our Horizon Asia‑Pacific reportable segment partially offset the decline in the gross profit margin.
Operating profit margin approximated 1.0% and 3.4% in 2016 and 2015, respectively. Operating profit decreased $13.3 million, or 67.8%, to $6.3 million in 2016 as compared to $19.6 million in 2015, primarily as a result of the impact of purchase accounting and transaction related expenses within the Horizon Europe-Africa reportable segment. Operating profit margin was also negatively impacted by $6.8 million of incremental expenses related to the impairment of intangible assets and the disposal of property and equipment compared to 2015 in our Horizon Americas and Horizon Europe-Africa reportable segments. Partially offsetting these decreases were favorable product mix and lower input costs in our Horizon Americas reportable segment and cost and productivity initiatives in our Horizon Asia‑Pacific reportable segment.

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Interest expense increased approximately $11.3 million, to $20.1 million in 2016, as compared to $8.8 million in 2015. As we became a public company, we incurred debt in the form of a Term B Loan and ABL Facility (as defined below). The increase in expense in 2016 is partially due to these instruments being outstanding for twelve months compared to only six months in 2015. We also incurred additional debt in the form of the Incremental Term B Loan that was extended to us in the fourth quarter of 2016 in connection with the acquisition of the Westfalia Group.
Other expense, net increased approximately $1.1 million to $2.6 million in 2016, from $3.7 million in 2015, primarily driven by lower foreign currency transaction losses as the U.S. dollar stabilized in relation to the foreign currencies in which we operate.
The effective income tax rate for 2016 was 22.8%, compared to (18.2)% for 2015. The higher effective tax rate for the year ended December 31, 2016 is primarily driven by incurring non-deductible transaction costs related to the Westfalia Group acquisition, which were partially offset by the recognition of income tax benefits associated with the release of certain unrecognized tax positions. The lower tax rate in 2015 was due to the recognition of a $3.3 million tax benefit due to the release of an unrecognized tax contingency due to the expiration of the statute of limitations, which was offset by $2.9 million of tax charges for spin-off related transaction costs. Additionally, the overall effective tax rate for 2015 was reduced by the recognition of benefits associated with losses in certain jurisdictions with higher statutory tax rates.
Net income decreased approximately $21.0 million to a net loss of $12.7 million in 2016, from net income of $8.3 million in 2015. The decrease was primarily the result of a $13.3 million decrease in operating profit, a $11.3 million increase in interest expense, partially offset by $1.1 million decrease in other expenses, net and by a $2.5 million increase in income tax benefit.
See below for a discussion of operating results by reportable segment.
Horizon Americas. Net sales increased approximately $13.9 million, or 3.2%, to $443.2 million in 2016, as compared to $429.3 million in 2015. Net sales in our automotive OE channel increased approximately $14.8 million, primarily driven by new programs and continued growth with global automotive manufacturers. E-commerce increased by approximately $7.6 million, due to increased consumer promotional activity and increased demand from automotive Internet retailers. Net sales in our retail channel increased approximately $0.8 million, driven by growth with our mass merchant and automotive retail customers in our towing, trailering, and broom and brush categories. These increases were partially offset by decreases within our aftermarket and industrial channels. Net sales in our aftermarket channel decreased approximately $4.6 million due to a consumer shift towards the e-commerce channel, lower sales to smaller regional warehouse distributor customers, and macroeconomic conditions in the Brazilian market, which more than offset sales increases to our national warehouse distributor customers. Net sales in our industrial channel decreased approximately $4.0 million, primarily due to lower demand from our OE and warehouse distributor customers servicing energy and agricultural end markets. The remainder of the change in net sales was primarily due to unfavorable currency exchange as the Brazilian real weakened in relation to the U.S. dollar.
Horizon Americas’ gross profit increased approximately $15.0 million to $131.3 million, or 29.6% of net sales, in 2016, from approximately $116.3 million, or 27.1% of net sales, in 2015, due to margin improvement and higher sales levels. Gross profit margin was positively impacted due to a favorable product sales mix within our automotive OE channel, as sales of our higher margin brake controllers and heavy duty towing products increased year-over-year. Further improving gross profit margin in 2016 were favorable commodity prices, lower labor input costs in our Mexican facilities as a result of a strengthened U.S. dollar in relation to the Mexican peso, and lower freight costs as we benefited from efforts to localize supply chain near our manufacturing facility.
Selling, general and administrative expenses increased approximately $2.3 million to $86.5 million, or 19.5% of net sales, in 2016, as compared to $84.2 million, or 19.6% of net sales, in 2015. Selling, general and administrative costs increased due to approximately $3.1 million in higher people costs primarily related to marketing and product design in support of growth initiatives within our e-commerce and retail channels, as well as $1.0 million in increased health insurance costs and $0.6 million related to the implementation of a new ERP system. These increases were partially offset by approximately $2.4 million of lower costs associated with combining our Cequent Consumer Products and Cequent Performance Products businesses.
Horizon Americas’ operating profit increased approximately $8.4 million to $38.7 million, or 8.7% of net sales, in 2016, from $30.3 million, or 7.1% of net sales, in 2015. Operating profit2019. Adjusted EBITDA increased primarily due to favorable product sales mix and lower manufacturing input costs. These effects were partially offset by $4.4 million incremental expense related to the impairment of intangible assets and the disposal of property and equipment compared to 2015.operational results described above.
Horizon Europe‑Africa. Net sales increased approximately $53.2 million, or 104.4%, to $104.1 million in 2016, as compared to $50.9 million in 2015. Approximately $54.5 million of the increase is attributable to the Westfalia Group acquisition in the fourth quarter of 2016. Net sales increased approximately $4.5 million in our legacy Germany and South Africa businesses driven by increased volume on existing programs and new program awards with existing automotive OE customers. These increases were partially offset by a decrease of approximately $0.8 million in the United Kingdom as a result of a strategic decision toCorporate Expenses

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discontinue a distribution partnership and a decrease of approximately $1.2 million in Finland due to weak economic conditions. Net sales were further negatively impacted by approximately $3.9 million of unfavorable currency exchange.
Horizon Europe‑Africa’s gross profit decreased approximately $1.1 million to $6.6 million, or 6.3% of net sales in 2016, from approximately $7.7 million, or 15.0% of net sales, in 2015. Gross profit was negatively impacted by approximately $0.6 million of unfavorable foreign currency exchange. Gross profit margin also decreased by $0.5 million in South Africa and the United Kingdom due to higher commodity prices and product input costs. Gross profit was marginally impacted by the Westfalia Group, as the net sales attributable to the Westfalia Group were offset by its cost of sales, which included approximately $6.7 million of amortization expense related to the fair value step-up of inventory as a result of purchase accounting.
Horizon Europe‑Africa’s selling, general and administrative expenses increased approximately $9.7 million to $17.2 million, or 16.5% of net sales in 2016, as compared to $7.5 million, or 14.6% of net sales in 2015. Selling, general and administrative expenses increased by approximately $9.6 million attributable to the results of the Westfalia Group, which included approximately $1.4 million in transaction-related expenditures including professional fees and severance. Increased costs associated with establishing a management structure in the region were partially offset by approximately $0.7 million of favorable foreign currency exchange.
Horizon Europe‑Africa’s operating loss increased approximately $13.2 million to $13.3 million, or 12.8% of net sales, in 2016, from an operation loss of $0.1 million, or 0.2% of net sales in 2015, primarily due to losses of approximately $9.6 million realized in the Westfalia Group resulting from the impacts of purchase accounting and transaction related expenditures. The operating loss was further increased by $2.3 million due to unfavorable foreign currency exchange. Impairment charges of approximately $2.4 million in 2016 more than offset the impacts of higher sales volumes in our legacy Germany and South Africa businesses as discussed above, as well as plant closure costs in Finland in 2015 that did not recur in 2016.
Horizon Asia‑Pacific.    Net sales increased approximately $6.6 million, or 6.9%, to $101.9 million in 2016, as compared to $95.3 million in 2015. Net sales were negatively impacted by approximately $0.8 million of unfavorable currency exchange. Net sales increased approximately $6.3 million in Australia, driven by increased volume and new program awards with existing OE customers, which outpaced weaker demand in Western Australia due to declining macroeconomic conditions. The remainder of the net sales increase is due to new program awards with OE customers in our New Zealand and Thailand businesses which more than offset the loss of an existing OE contract in Thailand.
Horizon Asia‑Pacific’s gross profit increased approximately $3.4 million to $22.5 million, or 22.1% of net sales in 2016, from approximately $19.1 million, or 20.0% of net sales, in 2015. The improvement in gross profit year-over-year was driven by the higher sales volumes, cost savings and productivity initiatives in our Australia business. This improvement was partially offset by a large OEM recovery in Thailand during 2015 that did not reoccur in 2016.
Horizon Asia‑Pacific’s selling, general and administrative expenses decreased approximately $0.2 million to $11.2 million, or 11.0% of net sales in 2016, as compared to $11.4 million, or 12.0% of net sales in 2015. Selling, general and administrative expenses decreased by approximately $0.5 million due to lower costs associated with promotional activities compared to 2015, which was partially offset by an increase of $0.3 million in people costs primarily resulting from increased sales levels.
Horizon Asia‑Pacific’s operating profit increased approximately $3.6 million to $11.2 million, or 11.0% of net sales, in 2016, from $7.7 million, or 8.0% of net sales in 2015, primarily due to higher sales volumes and cost savings and productivity initiatives in our Australia business.
Corporate Expenses.   Corporate expenses increased approximately $12.0 million to $30.3 million in 2016, as compared to $18.3 million in 2015. Corporate expenses increased approximately $9.4 million due to expenses related to the acquisition of Westfalia Group. The remaining increase is primarily related to the costs of operating as a standalone public company for a full year, versus only six months in 2015. For the first six months of 2015, the consolidated financial statements include expense allocations, related to the spin-off, for certain functions provided by our former parent; however, the allocations may not be comparable to the corporate expenses we incurred as a stand-alone company. Corporate expenses included in operating profitloss decreased $8.2 million to $26.5 million during the twelve months ended December 31, 2020, as compared to $34.7 million during the twelve months ended December 31, 2019. The decrease was primarily attributable to the following:
–$5.3 million prior-year charge related to lease abandonment and leasehold improvements for the Company’s departure of its headquarters lease;
–$2.1 million of prior-year charges related to the separation agreement reached with our former chief executive officer and other severance costs;
–$3.8 million of additional costs incurred in the accompanying consolidated financial statements include amounts that were allocatedprior-year comparable period related to us onprofessional service fees and other costs associated with new debt issuance, amendments, and modifications and related structure changes; and
–$2.2 million lower discretionary and administrative support costs; partially offset by:
–$4.0 million higher personnel and variable compensation costs.
Corporate Adjusted EBITDA was $(20.7) million during the basistwelve months ended December 31, 2020, which was lower by $1.2 million, as compared to Adjusted EBITDA of direct usage when identifiable, with$(19.5) million during the remainder allocated ontwelve months ended December 31, 2019. Adjusted EBITDA declined primarily due to the basis of revenue or headcount.higher personnel and variable compensation costs, partially offset by the lower discretionary and administrative support costs, as described above.
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Liquidity and Capital Resources
Our capital and working capital requirements are funded through a combination of cash on hand, cash flows from operations cash on hand and various borrowings and factoring arrangements described below, including our asset-based revolving credit facility (“ABL Facility”)Revolving Credit Facility (as defined below). We utilize intercompany loans and equity contributions to fund our worldwide operations. See Note 9, “Long-term Debt” included in Item 8, “Financial Statements and Supplementary Data,” within this Annual Report on Form 10-K. As of December 31, 20172020 and 2016, there was $23.72019, we had $18.2 million and $20.2$8.7 million, respectively, of cash and cash equivalents held at foreign subsidiaries. There may be country specific regulations which may restrict or result in increased costs in the repatriation of these funds.

In March 2020, the Company, as guarantor, entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC (“Encina”), as agent for the lenders party thereto, and Horizon Global Americas Inc. and Cequent Towing Products of Canada Ltd., as borrowers (the “ABL Borrowers”). The Loan Agreement provides for an asset-based revolving credit facility (the “Revolving Credit Facility”) in the maximum aggregate principal amount of $75.0 million subject to customary borrowing base limitations contained therein, and may be increased at the ABL Borrowers’ request in increments of $5.0 million, up to a maximum of five times over the life of the Revolving Credit Facility, for a total increase of up to $25.0 million. As of December 31, 2020, the Company had availability of $38.4 million under the Revolving Credit Facility and $26.8 million of cash and cash equivalents in the United States.
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TableAs of ContentsDecember 31, 2020 and 2019, total cash and availability was $83.4 million and $44.9 million, respectively. The Company defines cash and availability as cash and cash equivalents and amounts of cash accessible but undrawn from credit facilities.

In response to the uncertain economic environment caused in part from the COVID-19 pandemic, the Company pursued funding from available government programs and other sources of liquidity designed to strengthen its balance sheet and enhance financial flexibility. These sources included short-term loans, some of which are forgivable if certain conditions are met as well as entering into or modifying other arrangements. A summary of these actions is described below.

In April 2020, Horizon Global Company LLC (the “U.S. Borrower”), a direct U.S.-based subsidiary of the Company, received a loan from PNC Bank, National Association for $8.7 million, pursuant to the Paycheck Protection Program (the “PPP Loan”) under Division A, Title I of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The PPP Loan, which is in the form of a Note dated April 18, 2020 issued by the U.S. Borrower, matures on April 18, 2022. Funds from the PPP Loan may be used for payroll, costs used to continue group health care benefits, rent and utilities. Under the terms of the PPP Loan, certain amounts may be forgiven if they are used for qualifying expenses as described in the CARES Act.

Based on our current and anticipated levels of operationsThe Company submitted its PPP Loan application in good faith in accordance with the CARES Act and the conditionguidance issued by the Small Business Administration (the “SBA”), including the SBA’s Paycheck Protection Program’s Frequently Asked Questions. During 2020, the Company, in accordance with the final guidance issued by the United States Department of the Treasury (the “Treasury”), met the need and sized based criteria of the program.
In December 2020, the Company filed its application of loan forgiveness with PNC Bank, National Association. The potential loan forgiveness for all or a portion of the PPP Loan is determined, subject to limitations, based on the use of loan proceeds for payment of qualifying expenses over the 24 weeks after the loan proceeds were disbursed. The unforgiven portion of our marketsPPP Loan, if any, is payable monthly over two years at an interest rate of 1.0% per annum. The Company has deferred any interest payments until after the Company’s application for forgiveness is completed in accordance with the guidance issued by the SBA and industry,Treasury and the terms of the Company’s PPP Loan. While we currently believe that our cashuse of the loan proceeds will meet the conditions for forgiveness of our PPP loan, there can be no assurance that forgiveness for any portion of the PPP Loan will be obtained.
In April 2020, S.I.A.R.R. SAS (the “French Borrower”), an indirect subsidiary of the Company, received a loan from BNP Paribas (the “French Loan”) for $5.5 million. The French Loan, issued pursuant to an agreement dated April 9, 2020, between the French Borrower and BNP Paribas, matures on hand, cash flowApril 9, 2021. The French Loan bears interest at a rate of 0.5% per annum. The French Borrower, at its election, may repay the French Loan in full on April 9, 2021 or in monthly installments for a period of five years from the date of election.
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In March 2020, Westfalia-Automotive GmbH (“Westfalia”), an indirect subsidiary of the Company, was approved for a government payroll reimbursement program in Germany under the Kurzarbeitergeld (the “KUG”). The KUG is designed to reimburse employers for payroll costs incurred and paid to employees affected by the business disruption and government mandated operating restrictions in place due to the COVID-19 pandemic for the period March 1, 2020 through August 31, 2020. Westfalia was approved to receive reimbursement of certain costs for the period March 19, 2020 through August 31, 2020. The Company was reimbursed $3.3 million for qualifying payroll costs under terms of the KUG for the twelve months ended December 31, 2020.
The Company also proactively took the following measures to reduce costs and ensure appropriate liquidity:
–pursued additional governmental grant or loan programs in the jurisdictions in which it operates;
–participated in payroll or payroll tax deferral programs such as those enacted by the CARES Act;
–successfully negotiated with certain landlords to defer short-term rent payments;
–assessed its supplier base and related payment terms and amended, extended and/or retimed supplier payments;
–reduced or retimed investments, including capital expenditures, that did not materially impact future business opportunities or our organic growth; and
–reduced reliance on temporary employees in both administrative and operations functions.
Additionally, in the United States, the Company did not furlough or otherwise voluntarily reduce its workforce. To protect the continued employment of its U.S.-based employees, the Company, in addition to the other cost savings measures described above, implemented a temporary 20% wage reduction for all employees in the United States. In some cases, employees outside of the United States were furloughed in response to government mandated operational restrictions and availability underfluctuations in customer demand. To the extent available, the Company availed itself of local government programs to support furloughed employees, such as those described above.
We believe the combination of these sources, as well as the changes to our ABL Facilitycapital structure following our recent refinancing activities and fully summarized below, will enable us to meet our working capital, capital expenditures debt service and other funding requirements. However, ourOur ability to fund our working capital needs, debt payments and other obligations, and to comply with financial covenants, including borrowing base limitations under our ABLRevolving Credit Facility, depends on our future operating performance and cash flowsflow and many factors outside of our control, including the costs of raw materials, the state of the automotive accessories market, and financial and economic conditions and other factors. Any future acquisitions, joint ventures or other similar transactions will likely require additional capitalthe extent and there can be no assurance that any such capital will be available to us on acceptable terms, if at all.
On February 1, 2017, the Company completed an underwritten public offering of 4.6 million shares of common stock, which included the exercise in full by the underwriters of their option to purchase 0.6 million shares of common stock, at a public offering price of $18.50 per share (the “Common Stock Offering”). Proceeds from the Common Stock Offering were approximately $79.9 million, net of underwriting discounts, commissions, and offering-related transaction costs.
Concurrently, the Company completed an underwritten public offering of $125.0 million aggregate principal amount of Convertible Notes. The Convertible Notes mature on July 1, 2022 unless earlier converted in accordance with the terms prior to such date, and bears interest at a rate of 2.75% per annum. We used net proceeds from the Convertible Notes offering, along with proceeds from the issuance of common stock, to prepay $177.0 millionduration of the Term B Loan. Additionally, on March 31, 2017, we entered intoimpact of the Third Amendment to the Term B Loan. This amendment allowed us to repay the existing Original Term B Loan and Incremental Term Loans and provided for the Replacement Term Loan, which reduced the required principal payments by $2.7 million per quarter and reduced the interest rate by 1.5% per annum. Refer to Note 9, “Long-term Debt” included in Item 8, “Financial Statements and Supplementary Data,” within this Annual Report on Form 10-K for additional information.COVID-19 pandemic.
Cash Flows - Operating Activities
CashNet cash provided by and used for operating activities in 2017during the twelve months ended December 31, 2020 and 2019 was approximately $14.2$39.1 million as compared to $35.4and $(68.5) million, in 2016. In 2017,respectively.
During the twelve months ended December 31, 2020, the Company generated $36.5$7.4 million in cash flows, based on the reported net loss of $4.8$(37.5) million and after considering the effects of non-cash items related to gains and losses on dispositions of property and equipment, depreciation, amortization stock compensation, loss on extinguishment of debt, amortization of inventory step-up recorded as part of purchase accounting, changes in deferred income taxes,intangible assets, amortization of original issuance discount and debt issuance costs, deferred income taxes, stock compensation, paid-in-kind interest, and other, net. In 2016,During the twelve months ended December 31, 2019, the Company generated $20.0used $(63.0) million based on the reported net loss of $12.7$(110.0) million and after considering the effects of similar non-cash items.items, as well as write-off of certain operating lease assets.
Changes in operating assets and liabilities sourced $31.7 million and used approximately $22.3$(5.5) million of cash in 2017during the twelve months ended December 31, 2020 and generated approximately $15.4 million of cash in 2016. 2019, respectively.
Increases in accounts receivable resulted in a net use of cash of $9.5$(12.2) million in 2017, while decreases in accounts receivable resulted in a source of cash of $4.7 million in 2016.during the twelve months ended December 31, 2020. The increase in accounts receivable during 2020 resulted from higher sales activity in 2017 was primarily driventhe fourth quarter of 2020 as compared to the fourth quarter of 2019, partially offset by an increasepull ahead collection efforts in tax-related receivables.the fourth quarter of 2020. The decrease in accounts receivables resulted in a net source of cash of $19.3 million during the twelve months ended December 31, 2019. The decrease in accounts receivable in 2016during 2019 was due to improvedprimarily driven by pull ahead collection efforts and timing of sales withinin the fourth quarter.quarter of 2019.
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Changes in inventory resulted in a net use of cash of $17.7 million in 2017, as compared to a source of cash of $10.7$24.2 million in 2016. The increase in inventory in 2017 was primarily due to sales shortfall in our Americas reportable segment inand $8.4 million during the fourth quarter driven by a system stock take-out by our retail customerstwelve months ended December 31, 2020 and delivery delays related to the transition to a new distribution center.2019, respectively. The decrease in inventory in 2016during the twelve months ended December 31, 2020 was primarily the result ofdue to improved inventory management in addition to an extension of our traditional selling season in the reductionlast half of safety stock held atthe year. The decrease in inventory during the twelve months ended December 31, 20152019 was due to support the transition out of Juarezhigher inventory scrap and El Paso facilities, and a manufacturing slow down near the end of the year in anticipation of a new ERP going live.reserves as well as improved inventory management.
Changes in prepaid expenses and other assets resulted in a net source of cash of $1.4 million in 2017, as compared to a use of cash of approximately $6.3$(4.9) million in 2016. The decrease in prepaid expenses and other assets in 2017 was primarily due to a change in$(3.0) million during the timing of payments as certain large contracts were renewed late in 2016.twelve months ended December 31, 2020 and 2019, respectively. The increase in prepaid expenses and other assets in 2016during the twelve months ended December 31, 2020 and 2019 was primarily due to the timingmix of paymentsinvoicing from vendors and renewals of contracts.subsequent payment.
Changes in accounts payable and accrued liabilities resulted in a net source of cash of $3.5$24.6 million in 2017,and a use of cash $(30.1) million during the twelve months ended December 31, 2020 and 2019, respectively. The source of cash for the twelve months ended December 31, 2020, as compared to a net sourcethe use of cash of approximately $6.3 million in 2016. The decrease in accounts payable and accrued liabilities in 2017 wasfor the twelve months ended December 31, 2019, is primarily due to a reduction in certain compensation accruals related to bonuses as certain performance targets were not met during the year. The increase in accounts payable and accrued liabilities in 2016 was primarily related to the timingmix of payments made to suppliers mix ofand vendors and the related terms as well as increases in certain compensation accruals primarily related to bonuses and severance payments.

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coupled with improved working capital management during the twelve months ended December 31, 2020.
Cash Flows - Investing Activities
Net cash used for investing activities in 2017during the twelve months ended December 31, 2020 was approximately $40.7$(13.2) million,, as compared to $108.4net cash provided by investing activities of $206.5 million during the twelve months ended December 31, 2019. During the twelve months ended December 31, 2019, net proceeds from the sale of business were $214.6 million, related to the sale of the APAC operating segment and the non-automotive business in 2016.Horizon Europe-Africa. During 2017, we acquired Best Bars for total cash consideration paid of $19.8 million. In addition, we invested approximately $27.3the twelve months ended December 31, 2020, capital expenditure needs increased to $(13.3) million in capital expenditures, as we have continued our investment incompared to $(9.7) million during the twelve months ended December 31, 2019, which related to growth, capacity and productivity-related capital projects. Cash received fromprojects, primarily within Horizon Europe‑Africa for the disposition of assets was approximately $6.4twelve months ended December 31, 2020.
We expect our capital spending in the twelve months ended December 31, 2021 to be $23.2 million, in 2017 primarily related to support for product development, growth and included $4.3 million net cash received frommaintenance for the sale of our Broom and Brush product line. During 2016, we acquired businesses for total cash consideration paid of $94.4 million, net of cash acquired, the largest of which was the acquisition of the Westfalia Group. In addition, we invested approximately $14.5 million in capital expenditures. Cash received from the disposition of assets was approximately $0.5 million.business.
Cash Flows - Financing Activities
Net cash provided by financing activities was approximately $3.7$12.7 million and $100.5net cash used for financing activities was $(164.7) million in 2017 during the twelve months ended December 31, 2020 and 2016,2019, respectively. During 2017, we receivedthe twelve months ended December 31, 2020, net proceeds of $121.1 million from the issuance of our Convertible Notes,Revolving Credit Facility, net of issuance costs; $79.9costs, were $21.9 million and proceeds from the issuance of common stock,PPP Loan were $8.7 million. During the twelve months ended December 31, 2020 and 2019, net of offering costs; $20.9 million fromrepayments on the issuance of Warrants; and our net borrowing from our ABL Facility totaled $10.0 million. We used$(19.9) million and $(43.5) million, respectively. During the twelve months ended December 31, 2019, net proceeds from borrowings on under our second lien term loan were $35.5 million, net of issuance costs and a use cash of approximately $189.8$(173.4) million for repayments on our Term B Loan, $29.7 million for payments on Convertible Note Hedges, netfirst lien term loan, including transaction costs. Additionally, during the twelve months ended December 31, 2019, proceeds from the issuance of issuance costs,Series A Preferred Stock and approximately $10.0 million to repurchase shares as part of our Share Repurchase Program. During 2016, we entered into an amendment to the Original Term B Loan to finance, in part, the acquisition of the Westfalia Group and received proceeds, net of repayments and transaction costs, of $138.2warrants totaled $10.6 million. We used $39.0 million of the Incremental Loans to repay Westfalia Group debt that we assumed as part of the acquisition.
Factoring Arrangements
We haveThe Company has factoring arrangements with financial institutions to sell certain accounts receivable under non-recourse agreements.receivable. Total receivables sold under thecertain non-recourse factoring arrangements was approximately $257.5$237.1 million and $20.7$258.4 million forduring the yearstwelve months ended December 31, 20172020 and December 31, 2016,2019, respectively. We utilize factoring arrangements as part of our financing for working capital.capital needs. The costs of participating in these arrangements are immaterial to our results. Refer to Note 3, “Summary of Significant Accounting Policies,” in Item 8, “Financial Statements and Supplementary Data,” included within this Annual Report report on Form 10-K for additional information.
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Our Debt and Other Commitments
We and certain of our subsidiaries are party to the ABLasset-based Revolving Credit Facility, an asset-based revolving credit facility thatas defined and described above. The Revolving Credit Facility provides for $99.0$75.0 million of funding on a revolving basis, subject to borrowing base availability. The ABL Facilityavailability, and matures in Junefiscal year 2022. As of December 31, 2020, there was $24.2 million outstanding on the Revolving Credit Facility bearing interest at a weighted average rate of 5.0%.
In addition, the Company and bears interest on outstanding balances at variable rates as outlined in thecertain of its subsidiaries, have been or are parties to other long-term credit agreement. On June 30, 2015, we entered into a term loan agreement (the “Original Term B Loan”) under which we borrowed an aggregate amount of $200.0 million. On September 19, 2016, we entered into the First Amendment to the Original Term B Loan (the “Term Loan Amendment”) which provided for incremental commitments in an aggregate principal amount of $152.0 million (the “Incremental Term Loans”). On March 31, 2017, we entered into the Third Amendment to the Original Term B Loan (the “Replacement Term Loan”) which amended the Term B Loan to provide for a new term loan commitment. The proceeds fromagreements, including the Replacement Term Loan, were used to repay in full theas defined and described below. As of December 31, 2020, there was $90.2 million outstanding principal of the Term B Loan. As part of the amendment, the interest rate was reduced by 1.5% per annum and the quarterly principal payments required under the Original Term B Loan and the Term Loan Amendment of $4.6 million in total were reduced to an aggregate principal payment of $1.9 million. On and afteron the Replacement Term Loan Amendment effective date, each reference to “Term B Loan” is deemed to be a reference to the Replacement Term Loan. The Term B Loan matures in June 2021 and bearsbearing cash interest at variable rates in accordance with the credit agreement. Refer to Note 9, “Long-term Debt,” in Item 8, “Financial Statements4.00% and Supplementary Data,” included within this Annual Report report on Form 10-K for additional information.paid-in-kind interest at 7.75%.
OnIn February 1, 2017, the Company completed a public offering of 2.75% Convertible Senior Notes due 2022 (the “Convertible Notes”) in an aggregate principal amount of $125.0 million. Interest is payable on January 1 and July 1 of each year, beginning on July 1, 2017.year.
At December 31, 2017 there was $10.0 millionFirst Lien Term Loan Agreement
In February 2019, the Company amended and restated the existing term loan agreement (the “First Lien Term Loan Agreement”) to permit the Company to enter into the Senior Term Loan Agreement, as defined and described below, and tightened certain indebtedness, asset sale, investment and restricted payment baskets.
In March 2019, the Company amended the existing term loan agreement (“Sixth Term Amendment”) to permit the Company to enter into the Second Lien Term Loan Agreement, as defined and described below, amend certain financial covenants to make them less restrictive and make certain other affirmative and negative covenants more restrictive.
In September 2019, the Company amended the existing term loan agreement (the “Eighth Term Amendment”) to provide consent for the sale of APAC, provide consent for the Company to meet its prepayment obligation of the First Lien Term Loan, remove prepayment penalties and make certain negative covenants less restrictive. In September 2019, the Company paid down a portion of its First Lien Term Loan’s outstanding onprincipal plus fees and paid-in-kind interest in the ABL Facility and $149.6 million outstanding onamount of $172.9 million.
In May 2020, the Term B Loan bearing interest at 6.07%.
On February 16, 2018, weCompany entered into amendments, limited waivers and consents in connection with its Loan Agreement and the Fourth AmendmentFirst Lien Term Loan Agreement (the “Tenth Term Amendment”), with an effective date of April 1, 2020, that, among other things, consented to the Term BCompany’s applying for, obtaining and incurring the PPP Loan (the “2018 Replacement Termand French Loan, Amendment”) to further amendeach as defined and described above.
As a result of the Original Term B Loan. The 2018 Replacement Term Loan Amendment, providesas defined and described below, the outstanding balance and any accrued interest has been replaced by the Replacement Term Loan, as defined and described below.
Senior Term Loan Agreement
In February 2019, the Company entered into a credit agreement (the “Senior Term Loan Agreement”) with Cortland Capital Markets Services LLC, as administrative agent and collateral agent, and the lenders party thereto. The Senior Term Loan Agreement provided for a new termshort-term loan commitment (the “2018 Replacement Term Loan”)facility in an originalthe aggregate principal amount of $385.0$10.0 million, all of which was borrowed by the Company. Certain of the lenders under the Company’s First Lien Term Loan Agreement were the lenders under the Senior Term Loan Agreement.
The Senior Term Loan Agreement required the Company to obtain additional financing in amounts and on terms acceptable to the lenders. The Senior Term Loan Agreement was repaid on March 15, 2019, in conjunction with the additional financing further detailed below.
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Second Lien Term Loan Agreement
In March 2019, the Company entered into a credit agreement (the “Second Lien Term Loan Agreement”) with Cortland Capital Markets Services LLC, as administrative agent and collateral agent, and Corre Partners Management L.L.C. as representative of the lenders, and the lenders party thereto. The Second Lien Term Loan Agreement provided for a term loan facility in the aggregate principal amount of $51.0 million. The Second Lien Term Loan Agreement was secured by a second lien on substantially the same collateral as the First Lien Term Loan, bore an interest rate of LIBOR plus 11.5% payable in kind through an increase in principal balance, and was subject to various affirmative and negative covenants including a secured net leverage ratio tested quarterly, commencing with the fiscal quarter ending on December 31, 2019, which was not to exceed (x) 6.75 to 1.00 as of the last day of any fiscal quarter ending on or prior to June 30, 2020 and (y) 5.25 to 1.00 as of the last day of any fiscal quarter ending on or after September 30, 2020.
Pursuant to the Second Lien Term Loan Agreement, the Company was required to issue detachable warrants to purchase up 6.25 million shares of its common stock, which can be exercised on a cashless basis over a five-year term with an exercise price of $1.50 per share. In March 2019, warrants to purchase 3,601,902 shares of common stock were issued and the Company also issued 90,667 shares of Series A Preferred Stock in the interim that were convertible into additional warrants upon receipt of shareholder approval of the issuance of such additional warrants and the shares of common stock issuable upon exercise thereof. Upon receipt of such shareholder approval on June 25, 2019, the 90,667 shares of Series A Preferred Stock were converted into warrants to purchase 2,952,248 shares of common stock.
In connection with the entry into the Second Lien Term Loan Agreement, we agreed to appoint four new members to our board of directors within seven business days of closing, and that the four new members of our board will constitute a majority of our board of directors.
The proceeds, fromnet of applicable fees, of the 2018Second Lien Term Loan Agreement were used to repay all amounts outstanding under the Senior Term Loan Agreement and to provide additional liquidity and working capital for the Company.
In September 2019, the Company amended the existing Second Lien Term Loan Agreement (“Second Lien Amendment”) to remove the prepayment requirement related to the use of APAC sale proceeds and made certain negative covenants less restrictive.
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In May 2020, the Company entered into amendments, limited waivers and consents in connection with its Loan Agreement and the Second Lien Term Loan Agreement (“the Second Lien Third Amendment”), with an effective date of April 1, 2020, that, among other things, consented to the Company’s applying for, obtaining and incurring the PPP Loan and French Loan, each as defined and described above.
As a result of the Replacement Term Loan will be usedAmendment, as defined and described below, the outstanding balance and any accrued interest has been replaced by the Replacement Term Loan, as defined and described below.
Replacement Term Loan
On July 3, 2020, the Company entered into a limited consent to (i) repay in fullthe Loan Agreement, that consented to the Company’s entering into the 2020 Replacement Term Loan Amendment, as defined and described below.
On July 6, 2020, the Company entered into the Replacement Term Loan Amendment (the “Eleventh Term Amendment”) to amend the First Lien Term Loan Agreement and Second Lien Term Loan Agreement. The Eleventh Term Amendment provided replacement term loans (the “Replacement Term Loan”) that refinanced and replaced the outstanding balances under the First Lien Term Loan Agreement and Second Lien Term Loan Agreement, plus any accrued interest thereon. The interest on the Replacement Term Loan was payable at LIBOR plus 10.75% per annum, subject to a 1.00% LIBOR floor, of which 4.00% was payable in cash and LIBOR plus 6.75% was payable-in-kind (“PIK”) interest (provided that the Company may elect on not more than one occasion to pay all interest as PIK interest). Borrowings under the Eleventh Term Amendment were to mature on the earlier of: (i) June 30, 2022 and (ii) April 1, 2022 if the Convertible Notes, as defined above, were not repaid or otherwise discharged prior to such date. Additionally, the Eleventh Term Amendment provided for a 1.00% PIK closing fee, which was added to the principal amount of the Replacement Term B Loan (ii) to consummateon the acquisitionclosing date;provided for a prepayment penalty on the entire principal amount of the Brink GroupReplacement Term Loan in an amount equal to 3.0% of the aggregate principal amount prepaid prior to December 31, 2021; and payamended the fixed charge coverage ratio covenant beginning with the fiscal quarter ending June 30, 2021, as follows:
•June 30, 2021: 1.10 to 1.00
•September 30, 2021: 1.25 to 1.00
•December 31, 2021 and each fiscal quarter ending thereafter: 1.40 to 1.00
Senior Term Loan Credit Agreement
On February 2, 2021, the Company entered into a credit agreement (the “Senior Term Loan Credit Agreement”) with Atlantic Park Strategic Capital Fund, L.P. (“Atlantic Park”), as administrative agent and collateral agent, and the lenders party thereto (collectively, the “Lenders”). The Senior Term Loan Credit Agreement provides for an initial term loan facility in the aggregate principal amount of $100.0 million, all of which has been borrowed by the Company, and a delayed draw term loan facility in the aggregate principal amount of up to $125.0 million, which may be drawn by the Company in up to three separate borrowings through June 30, 2022. A ticking fee of 25 basis points per annum will accrue on the undrawn portion of the acquisition consideration thereofdelayed draw term loan facility.
The proceeds received by the Company from the initial borrowings under the Senior Term Loan Credit Agreement were used to repay in full all outstanding debt and accrued interest on the feesCompany’s Replacement Term Loan. As a result of the repayment, the credit agreement governing the Company’s Replacement Term Loan has been terminated and expenses incurredis no longer in connection therewith,effect.
Interest on the Senior Term Loan Credit Agreement is payable in cash on a quarterly basis at the interest rate of LIBOR plus 7.50% per annum, subject to a 1.00% LIBOR floor, and (iii)is subject to various affirmative and negative covenants, including a secured net leverage ratio tested quarterly, commencing with the fiscal quarter ending March 31, 2023, not to exceed: 6.50 to 1.00. The Senior Term Loan Credit Agreement also contains a financial covenant that stipulates the Company will not make Capital Expenditures (as defined in the Senior Term Loan Credit Agreement) exceeding $27.5 million during any fiscal year. To the extent that the amount of Capital Expenditures is less than $27.5 million in any fiscal year, up to 50% of the difference may be carried forward and used for general corporate purposes. Refer to Note 18, “Subsequent Events,”Capital Expenditures in the immediately succeeding fiscal year.

Following a one-year no-call period, the Senior Term Loan Credit Agreement provides for a 2.5% call premium for years two through five and no premium thereafter. All outstanding borrowings made under the Senior Term Loan Credit Agreement mature on February 2, 2027.
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All of Contentsthe indebtedness under the Senior Term Loan Credit Agreement is and will be guaranteed by the Company’s existing and future United States, Canadian and Mexican subsidiaries and certain other foreign subsidiaries and is and will be secured by substantially all of the assets of the Company and such guarantors.



Item 8, “Financial Statements and Supplementary Data,” included within this Annual Report report on Form 10-K for additional information.Pursuant to the Senior Term Loan Credit Agreement, the Company issued warrants (the “Senior Term Loan Warrants”) to Atlantic Park to purchase in the aggregate up to 3,905,486 shares of the Company’s common stock, with an exercise price of $9.00 per share, subject to adjustment as provided in the Senior Term Loan Warrants. The Senior Term Loan Warrants are exercisable at any time prior to February 2, 2026.
The agreements governingCompany estimates it incurred $11.4 million of debt issuance costs and fees associated with the ABLabove transactions. The transactions will be accounted for in the first quarter of 2021.
Additionally, on February 2, 2021, the Company entered into a limited consent of the Loan Agreement for the Company’s Revolving Credit Facility, that among other modifications, consented to the Company’s entering into the Senior Term Loan Credit Agreement.
Covenant and Term BLiquidity Matters
The Loan containAgreement contains various negative and affirmative covenants and other requirements affecting us and our subsidiaries, including restrictions on incurrence of debt, liens, mergers, investments, loans, advances, guarantee obligations, acquisitions, asset dispositions, sale-leaseback transactions, hedging agreements, dividends and other restricted payments, transactions with affiliates, restrictive agreements and amendments to charters, bylaws, and other material documents. The ABLRevolving Credit Facility does not include any financial maintenance covenants other than a springing minimum fixed charge coverage ratio of at least 1.00 to 1.00 on a trailing twelve-month basis, whichfinancial covenant that stipulates the Company will be tested only upon the occurrence of an event of default or certain other conditions as specifiednot make Capital Expenditures (as defined in the agreement. The Term B Loan contains customary negative covenants, and also contains a financial maintenance covenant which requires us to maintain a net leverage ratio notAgreement) exceeding 5.00 to 1.00 through the$30.0 million during any fiscal quarter ending March 31, 2018; 4.75 to 1.00 through the fiscal quarter ending September 30, 2018; and thereafter, 4.50 to 1.00. At December 31, 2017, we were in compliance with our financial covenants contained in the ABL Facility and the Term B Loan, respectively.
On July 3, 2017, our Australian subsidiary entered into an new agreement to provide for revolving borrowings up to an aggregate amount of $32.0 million. The agreement includes two sub-facilities: (i) Facility A has a borrowing capacity of $20.3 million, matures on July 3, 2020, and is subject to interest at Bank Bill Swap rate plus a margin determined based on the most recent net leverage ratio; (ii) Facility B has a borrowing capacity of $11.7 million, matures on July 3, 2018 and is subject to interest at Bank Bill Swap rate plus 0.9% per annum. Borrowings under this arrangement are subject to financial and reporting covenants. Financial covenants include maintaining a net leverage ratio not exceeding 2.50 to 1.00 during the period commencing on the date of the agreement and ending on the first anniversary of the date of the agreement; and 2.00 to 1.00 thereafter; working capital coverage ratio (working capital over total debt) greater than 1.75 to 1.00 and a gearing ration (senior debt to senior debt plus equity) not exceeding 50%. As of December 31, 2017, we were in compliance with all covenants.year.
We are subject to variable interest rates on our Replacement Term B Loan and ABLRevolving Credit Facility. At December 31, 2017,2020, 1-Month LIBOR and 3-Month LIBOR approximated 1.56%0.14% and 1.69%0.24%, respectively.
The Company is in compliance with all of its financial covenants as of December 31, 2020.
In addition to our long-term debt, we have other cash commitments related to leases. We account for these lease transactions as operating leases and annual rent expense related thereto approximated $20.0 million for the yeartwelve months ended December 31, 2017.2020 and 2019 was $15.0 million and $18.8 million, respectively. We expect to continue to utilize leasing as a financing strategy in the future to meet capital expenditure needs and to reduce debt levels.

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The following is a reconciliation of net income, as reported, which is a U.S. GAAP measure of our operating results, to Consolidated Bank EBITDA, as defined in our credit agreement, for the year ended December 31, 2017. We present Consolidated Bank EBITDA to show our performance under our financial covenants.
  Year ended
December 31, 2017
  (dollars in thousands)
Net loss attributable to Horizon Global $(3,550)
Bank stipulated adjustments:  
Interest expense, net (as defined) 22,410
Income tax expense 9,750
Depreciation and amortization 25,340
Extraordinary charges 2,520
Non-cash compensation expense (a)
 3,630
Other non-cash expenses or losses 2,180
Pro forma EBITDA of permitted acquisition 840
Interest-equivalent costs associated with any Specified Vendor Receivables Financing 1,490
Debt extinguishment costs 4,640
Items limited to 25% of consolidated EBITDA:  
Non-recurring expense or costs (b)
 2,440
Acquisition integration costs (c)
 11,210
Synergies related to permitted acquisition (d)
 1,480
EBITDA limitation for non-recurring expenses or costs (e)
 —
Consolidated Bank EBITDA, as defined $84,380
  December 31, 2017
  (dollars in thousands)
Total Consolidated Indebtedness $268,170
Consolidated Bank EBITDA, as defined 84,380
Actual leverage ratio 3.18 x
Covenant requirement 5.00 x
______________
(a) Non-cash compensation expenses resulting from the grant of restricted units of common stock and common stock options.
(b) Under our credit agreement, costs and expenses related to cost savings projects, including restructuring and severance expenses, are not to exceed $5 million in any fiscal year and $20 million in aggregate, commencing on or after January 1, 2015.
(c)Under our credit agreement, costs and expenses related to the integration of the Westfalia Group acquisition are not to exceed $10 million in any fiscal year and $30 million in aggregate, or other permitted acquisitions are not to exceed $7.5 million in any fiscal year and $20 million in aggregate.
(d)Under our credit agreement, the add back for the amount of reasonably identifiable and factually supportable “run rate” cost savings, operating expense reductions, and other synergies cannot exceed $12.5 million for the Westfalia Group acquisition.
(e)The amounts added to Consolidated Net Income pursuant to items in notes b-d shall not exceed 25% of Consolidated EBITDA, excluding these items, for such period.
Refer to Note 9, “10, Long-term Debt,” and Note 13, Leases, in Item 8, “Financial Statements and Supplementary Data,” included within this Annual Report on Form 10-K for additional information.
Contractual Obligations
Under various agreements, we are obligated to make future cash payments in fixed amounts. These include payments under our long-term debt agreements, rent payments required under operating and capital lease agreements and interest obligations on our term loans and convertible debt.

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Consolidated EBITDA
Consolidated EBITDA (defined as “Consolidated EBITDA” in our Replacement Term Loan Agreement) is a comparable measure to how the Company assesses performance. As discussed further in the Supplemental Analysis and Segment Information section above, we use certain non-GAAP financial measures to assess performance and measure our covenant compliance in accordance with the Replacement Term Loan Agreement, which includes Adjusted EBITDA at the operating segment level. For the measurement of Contents



The following table summarizes our contractual obligations over various future periods related to these items asReplacement Term Loan Agreement financial covenants, the definition of December 31, 2017.
  Payments Due by Periods
  Total 
Less than
One Year
 1 - 3 Years 3 - 5 Years 
More than
5 Years
  (dollars in thousands)
Contractual cash obligations:          
ABL Facility $10,000
 $—
 $10,000
 $—
 $—
Term B Loan 149,610
 7,770
 15,540
 126,300
 —
Convertible Notes 125,000
 —
 —
 125,000
 —
Bank facilities 22,140
 7,660
 1,530
 180
 12,770
Operating and capital lease obligations 90,880
 19,390
 31,620
 22,470
 17,400
Interest obligations 42,760
 11,700
 27,590
 3,470
 —
Deferred purchase price 5,690
 2,080
 3,610
 —
 —
Total contractual obligations $446,080
 $48,600
 $89,890
 $277,420
 $30,170
The liability related to unrecognized tax benefits has been excluded fromConsolidated EBITDA limits the contractual obligations table because a reasonable estimate of the timing and amount of cash flows from future tax settlements cannotnon-recurring expenses or costs including restructuring, moving and severance that can be determined. For additional information, referexcluded to Note 16, “Income Taxes,” included$10 million in Item 8, “Financial Statementsany cumulative four fiscal quarter period. Similarly, the definition limits the amount of fees, costs and Supplementary Data,” within this Annual Report on Form 10-K.expenses incurred in connection with any proposed asset sale that can be excluded to $5 million in any cumulative four fiscal quarter period.
The reconciliations of net income (loss) attributable to Horizon Global to EBITDA, EBITDA to Adjusted EBITDA and Adjusted EBITDA to Consolidated EBITDA are as follows:
Twelve Months Ended December 31,
20202019Change
(dollars in thousands)
Net (loss) income attributable to Horizon Global$(36,560)$80,750 $(117,310)
Net loss attributable to noncontrolling interest(1,420)(1,240)(180)
Net (loss) income$(37,980)$79,510 $(117,490)
Interest expense31,680 58,270 (26,590)
Income tax benefit(1,580)(10,820)9,240 
Depreciation and amortization22,910 21,690 1,220 
EBITDA$15,030 $148,650 $(133,620)
Net loss attributable to noncontrolling interest1,420 1,240 180 
Loss (income) from discontinued operations, net of tax500 (189,520)190,020 
EBITDA from continuing operations$16,950 $(39,630)$56,580 
Adjustments pursuant to Term Loan Agreements:
Losses on sale of receivables1,410 1,590 (180)
Non-cash equity grant expenses3,000 2,150 850 
Other non-cash expenses or losses (gains)(810)3,710 (4,520)
Term Loans related fees, costs and expenses— 2,920 (2,920)
Lender agent related professional fees, costs, and expenses380 840 (460)
Non-recurring expenses or costs (a)
5,410 19,940 (14,530)
Non-cash losses on asset sales90 (300)390 
Other(20)470 (490)
Adjusted EBITDA$26,410 $(8,310)$34,720 
Non-recurring expense limitation (a) (b)
— (9,940)9,940 
Other20 (470)490 
Consolidated EBITDA$26,430 $(18,720)$45,150 
(a) Non-recurring expenses or costs including severance, restructuring and relocation are not to, in aggregate, exceed $10 million in adjustments in determining Consolidated EBITDA in any four fiscal quarter period.
(b) Fees, costs and expenses incurred in connection with any proposed asset sale are not to, in aggregate, exceed $5 million in adjustments in determining Consolidated EBITDA in any four fiscal quarter period.
Credit Rating
WeThe Company’s debt agreements do not require that we maintain a credit rating.
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Outlook
The Company began 2020 with strong performance and certain of our outstanding debt obligations are rated by Standard & Poor’s and Moody’s. On January 26, 2018, Moody’s awarded a rating of B2operating results demonstrated strong demand for our prospective $380 million ($150 million at time of rating, prior to refinancing) senior secured term loan to be issued earlyproducts. The COVID-19 pandemic caused significant business and economic disruption globally and resulted in 2018. Moody’s also maintained our corporate family rating of B2economic uncertainty and confirmed our outlook as stable. On January 25, 2018, Standard & Poor’s issued a rating of B for our prospective $380 million ($150 million at the time of the rating, prior to refinancing) senior secured term loan and assigned the Company a negative outlook. Standard & Poor’s maintained our B corporate credit rating and the B- rating of our Convertible Notes. If our credit ratings were to decline, our ability to access certain financial markets may become limited, our cost of borrowings may increase, the perception of uschallenges, both in the viewshort term and long term. The Company continues to prioritize the health of our customers, suppliersits employees and security holders may worsen and as a result, we may be adversely affected.
Outlook
Our global business remains susceptible to economic conditions that could adversely affect our results. In the near-term, the economies that most significantly affect our demand, including the United States, European Union, and Australia, are expected to continue to grow. The impact of tax reformothers in the U.S. should continuecommunities where it does business and has taken the following decisive actions to drive growth inensure the near-term; however, the longer-term implicationswelfare of tax reformthese groups, based on economic growth are not yet fully understood. We continue to monitor the trade policy discussions taking place in Washington, D.C.guidance from local governments and the impact any changes could have on our operations. If geopolitical tensions, particularly in East Asia, escalate, it may affect global consumer sentiment affecting the expected economic growth in the near-term.
Our 2017 financial results did not meet our expectations, despite increasing operating profit by $28.5 million. In the fourth quarter of 2017, we experienced performance issues including: manufacturing inefficiencies in our Reynosa, Mexico manufacturing facility, as well as startup inefficiencies in both our new Kansas City distribution facility in the Americas segment and our Romanian manufacturing facility in the Europe-Africa segment. In response to these challenges, we have made organizational changes, enlisted the assistance of manufacturing consultants, and identified additional cost reduction projects, including the closure of two non-manufacturing facilities in our Americas segment. We are focused on executing our targeted action plan we have publicly communicated and we have already initiated many of the projects.
Shortly after the completion of the acquisition of Westfalia in the fourth quarter of 2016, we initiated projects to achieve significant cost reductions and efficiencies in our Europe-Africa segment. In 2017, we were pleased with the results of our efforts to reduce costs and increase efficiencies; however, the costs associated with executing these projects limited their impact on our 2017 results. We expect the positive momentum from these projects,health authorities, as well as the executionWorld Health Organization and the Centers for Disease Control, designed to reduce the risk of spreading COVID-19:
–requiring administrative employees to work remotely;
–temporarily eliminating domestic and international travel;
–gating measures defined and implemented for essential workers to enter facilities;
–providing and requiring the use of personal protective equipment by all employees during working hours;
–requiring essential on-site employees to practice social distancing, including refraining from handshaking, hugging or other forms of physical greeting and maintaining 6 feet of distance from coworkers where possible;
–professionally sanitizing each facility on a regular basis;
–sanitizing equipment between uses;
–requiring frequent hand washing, including before and after the use of shared equipment;
–conducting temperature checks on employees at the start of each shift;
–ensuring availability of hand sanitizer at each facility and encouraging frequent application; and
–requiring employees to stay home if they are experiencing cold or flu-like symptoms.
The Company is currently at a full operational status and will continue to fulfill and deliver upon the strong trend in customer orders, as experienced throughout the last half of 2020, signaling increased consumer demand and an extension of our targeted actiontraditional selling season.
We also remain focused on maintaining liquidity to fund our operations, while considering future maturities in our capital structure, which have been addressed and will continue to be addressed as the Company continues to execute upon its business plan and operational improvement initiatives in 2021. These initiatives were put in place to result in improved margins in both the Americasstreamline and Europe-Africa segments in the long-term. In the short-term, the costs associated with executing these initiatives, including severance, unrecoverable lease obligations,simplify its operations and professional service fees, may affectprovide a roadmap to achieve our resultsstrategic priorities of margin expansion, liquidity management and cash flows.organic business growth.
We believe the unique globalstrategic footprint we enjoy in our market space will benefit us as our OE customers continue to demonstrate a preference for stronger relationships with few suppliers. We believe that our strong brand positions, portfolio of product offerings, and existing customer relationships present a long-term opportunity for us.us and provide leverage to see balanced growth in OE and aftermarket business. That position and brand recognition allows us flexibility to bring our products to market in various channels that we believe provide us the ability to leverage our current operational footprint to meet or exceed our customer demands.
While a strong global economy offers opportunities for growth and cost leverage, we are committed to delivering on our internal projects to drive margin improvement. We believe our internal projects, if executed well, will have a positive impact on our margins in future periods.
Our strategic priorities are to improve margins, reduce our leverage, and drive top line growth.
Impact of New Accounting Standards
See Note 2,, “New Accounting Pronouncements,” included in Item 8, “Financial Statements and Supplementary Data,” within this Annual Report on Form 10-K.
Critical Accounting Estimates
The following discussion of accounting policies is intended to supplement the accounting policies presented in Note 3, “Summary of Significant Accounting Policies” included in Item 8, “Financial Statements and Supplementary Data,” within this Annual Report on Form 10-K. Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, our evaluation of business and macroeconomic trends, and information from other outside sources, as appropriate.
Revenue Recognition. Revenue is recognizedmeasured based on a consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when there is evidence ofit satisfies a sale, delivery has occurredperformance obligation by transferring control over a product or services have been rendered, the sales price is fixed or determinable and the collectability of receivables is reasonably assured. Net sales is comprised of gross revenues less estimates of expected returns, trade discounts and customer allowances, which include incentives such as cooperative advertising agreements, volume discounts and other supply agreements in connection with various programs. Such deductions are recorded during the period the related revenue is recognized.service to a customer.
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Sales Related Accruals.  Net sales isare comprised of gross revenues less estimates of expected returns, trade discounts and customer allowances, which include incentives for items such as cooperative advertising agreements, volume discounts and other supply agreements in connection with various customer programs. On at least a quarterly basis, we perform detailed reviews of our sales related accruals by evaluating specific customer contractual commitments, assessing current incentive programs and other relevant information in order to assess the adequacy of the reserve. Reductions to revenue and estimated accruals are recorded in the period in which revenue is recognized.
Allowance for Doubtful Accounts. We maintain an allowance for doubtful accounts to reflect management’s best estimate of probable credit losses inherent in our accounts receivable balances. Determination of the allowances requires management to exercise judgment about the timing, frequency and severity of credit losses that could materially affect the allowances for doubtful accounts and, therefore, net income. The level of the allowance is based on quantitative and qualitative factors including historical loss experience, delinquency trends, economic conditions and customer credit risk. We perform detailed reviews of our accounts receivable portfolio on at least a quarterly basis to assess the adequacy of the allowance. Over the past two years, the allowance for doubtful accounts has approximated 3.3%was 3.0% to 4.7%4.3% of gross accounts receivable. We do not believe that significant credit risk exists due to our diverse customer base.
Impairment of Long-Lived Assets and Definite-Lived Intangible Assets.  We review the Company’s financial performance for indicators of impairment on at least a quarterly basis, the financial performance of each business unit for indicators of impairment.basis. In reviewing for impairment indicators, we also consider events or changes in circumstances such as business prospects, customer retention, market trends, potential product obsolescence, competitive activities and other economic factors. An impairment loss is recognized when the carrying value of an asset group exceeds the future net undiscounted cash flows expected to be generated by that asset group. The impairment loss recognized is the amount by which the carrying value of the asset group exceeds its fair value.
Goodwill and Indefinite-Lived Intangibles. We assessreview goodwill and indefinite-lived intangible assets for impairment at the reporting unit level on an annual basis as of October 1, after the annual forecasting process is complete.1. More frequent evaluations may be required if we experience changes in our business climate or as a result of other triggering events that take place. If the carrying value exceeds fair value, the asset is considered impaired and is reduced to fair value.
In assessing goodwill for impairment, we may choose to initially evaluateWe perform a qualitative factors to determine ifassessment of whether it is more likely than not that thea reporting unit’s fair value of a reporting unit is less than its carrying amount. If the qualitative assessmentnot, no further goodwill impairment testing is not conclusive,performed. If so, then the impairment analysis for goodwill is performed at the reporting unit level using a quantitative approach. Our qualitative assessment involves significant estimates, assumptions, and judgments, including, but not limited to, macroeconomic conditions, industry and market conditions, financial performance of the Company, reporting unit specific events and changes in the Company’s share price. 
The quantitative test is a comparison of the fair value of the reporting unit, determined using a combination of the income and market approaches, to its recorded amount. If the recorded amount exceeds the fair value, an impairment is recorded to reduce the carrying amount to fair

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value, but will not exceed the amount of goodwill that is recorded. Indefinite-lived intangible assets are tested for impairment by comparing the fair value, as determined using the relief from royalty method, compared to the carrying amount of the intangible assets.
The process of evaluating goodwill and indefinite-lived intangibles for impairment is subjective and requires significant judgment at many points during the analysis. If we elect to perform an optional qualitative analysis, we consider many factors including, but not limited to, general economic conditions, industry and market conditions, financial performance and key business drivers, long-term operating plans, and potential changes to significant assumptions used in the most recent fair value analysis for either the reporting unit or respective intangible. When performing a quantitative goodwill or indefinite-lived intangibles impairment test, we generally determine fair value using an income-based approach, a market-based approach or a combination of both methods. Thethe fair value determination consists primarily of using significant unobservable inputs (Level 3) under the fair value measurement standards. We believe the most critical assumptions and estimates in determining the estimated fair value of our reporting units or indefinite-lived intangibles include, but are not limited to, the amounts and timing of expected future cash flows which is largely dependent on expected EBITDA margins, the discount rate applied to those cash flows, and terminal growth rates and royalty rates. The assumptions used in determining our expected future cash flows consider various factors such as historical operating trends and long-term operating strategies and initiatives. The discount rate used by each reporting unit is based on our assumption of a prudent investor’s required rate of return of assuming the risk of investing in a particular company in a specific country. The terminal growth rate reflects the sustainable operating income a reporting unit could generate in a perpetual state as a function of revenue growth, inflation and future margin expectations.
GoodwillWe review indefinite-lived intangible assets for impairment test
Goodwill allocatedannually or more frequently if events or changes in circumstances indicate the assets might be impaired. Similar to our Horizon Europe‑Africa reporting unit was approximately $126.2 million as of December 31, 2017. In connection with our annualthe goodwill impairment test, we performed a quantitative assessment as of October 1, 2017, utilizing a combination ofdescribed above, the income and market approaches, the results of which we weighted evenly. No impairment was indicated as the fair value of the reporting unit substantially exceeded its carrying value. In the fourth quarter of 2017, we experienced a significant decline in our market capitalization. Further, the reporting unit did not perform in-line with expectations during the fourth quarter, driven by a delayed closure and additional costs incurred relating to closing facilities in the United Kingdom and Sweden, delayed realization of price increases and inefficiencies transferring production to lower cost manufacturing sites. Because of the decline in market capitalization and fourth quarter results we identified an indicator of impairment in the fourth quarter. As a result, we performed an interim quantitative assessment as of December 31, 2017, utilizing a combination of the income and market approaches, which we weighted evenly. The results of the quantitative analysis performed indicated the fair value of the reporting unit exceeded the carrying value by approximately 1%. Key assumptions used in the analysis were a discount rate of 13.0%, EBITDA margin and the terminal growth rate of 2.5%. The primary driver in the reduction of the fair value of the reporting unit was a reduction of expected future cash flows. Since the acquisition in the Westfalia Group, we have invested, and intend to continue to invest, in cost savings and productivity initiatives that will drive strong future profitability. While these investments have resulted in lower than projected post-acquisition EBITDA for the reporting unit, we continue to believe these projects will result in significant future earnings. Future events and changing market conditions may, however, lead us to reevaluate the assumptions we have used to test for goodwill impairment, including key assumptions used in our expected EBITDA margins and cash flows, as well as other key assumptions with respect to matters out of our control, such as discount rates, currency exchange rates and market multiple comparables. Based on the results of the quantitative test, we performed sensitivity analysis around the key assumptions used in the analysis, the results of which were: a) a 100 basis point decline in EBITDA margin used to determine expected future cash flows would have resulted in an impairment of approximately $27.5 million, and b) a 50 basis point increase in the discount rate would have resulted in an impairment of approximately $13.5 million.
Goodwill allocated to our Horizon Americas and Horizon Asia‑Pacific reporting units was approximately $5.3 million and $6.8 million, respectively, as of December 31, 2017. We performedCompany first performs a qualitative assessment for goodwill impairment in the Horizon Americas and Horizon Asia‑Pacific reportable segments at October 1, 2017, which was updated as of December 31, 2017 based on the indicators noted above. For our Horizon Americas segment, we performed a quantitative analysis as of October 1, 2016, which resulted in no impairment as the fair value of the reporting unit substantially exceeded the carrying value. Goodwill in the Horizon Asia-Pacific was the result of an acquisition completed in the third quarter of 2017. Based on the results of the qualitative analysis performed we do not believe thatwhether it is more likely than not that an indefinite-lived intangible asset is impaired. If necessary, the Company then performs a quantitative impairment test by comparing the estimated fair value of the reporting units is less thatasset, based upon its forecasted cash flows using the relief from royalty method, to its carrying amounts; therefore, we determined a quantitative assessment is not required.value.
Indefinite-lived intangible asset impairment test
We conducted the annual indefinite-lived intangible asset impairment tests as of October 1, 2017,See Note 6, Goodwill and as a result of the impairment indicators noted above we performed an interim assessment as of December 31, 2017. BasedOther Intangible Assets included in Item 8, “Financial Statements and Supplementary Data,” within this Annual Report on the results of our analyses there were certain trade names where the estimated fair values only slightly exceeded the carrying values. Key assumptions used in the analysis were discount rates of 13% to 15.5% and royalty rates ranging from 0.5% to 3.0%. Based on the results of the quantitative test, we performed sensitivity analysis around the key assumptions used in the analysis, the results of which were: a) a 50 basis

Form 10-K for further information.
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point increase in the discount rate used during our testing would not have resulted in a material impairment to any of our trade names, and b) a 25 basis point decrease in the royalty rates used during our testing would have resulted in an impairment of approximately $4.7 million to our Westfalia trade name.
Subsequent impairment indicators
Subsequent to December 31, 2017, the Company’s market capitalization has declined, primarily due to a pre-release of our estimated 2017 results that fell short of our previously communicated guidance, which may be an indicator of impairment. As noted above, the revised expectations were included in our interim goodwill impairment assessment. The Company will continue to assess the impact of its market capitalization and any other indicators of potential impairment. It is possible that if the Company’s market capitalization decline is more than temporary, or if other indicators of impairment are identified, an interim impairment analysis may be necessary, which could result in an impairment of goodwill, indefinite-lived intangible assets and other long-lived assets in 2018.
Income Taxes.  We compute income taxes using the asset and liability method, whereby deferred income taxes using current enacted tax rates are provided for the temporary differences between the financial reporting basis and the tax basis of assets and liabilities and for operating loss and tax credit carryforwards. Under this method, changes in tax rates and laws are recognized in income in the period such changes are enacted. We determine valuation allowances based on an assessment of positive and negative evidence on a jurisdiction-by-jurisdiction basis and record a valuation allowanceare utilized to reduce deferred tax assets to the amount more likely than not to be realized. To make this assessment, we evaluatedevaluate historical operating results, the existence of cumulative losses in the most recent fiscal years, expectations for future pretax operating income, the time period over which our temporary differences will reverse and the implementation of feasible and prudent tax planning strategies. Recognized income tax positions are measured at the largest amount that ishas a greater than 50% likelylikelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Changes in existing tax laws could also affect actual tax results and the valuation of deferred tax assets over time. We record interest and penalties related to unrecognizeduncertain tax benefitspositions in income tax expense.
The 2017 Tax Act was signed into law on December 22, 2017. The 2017 Tax Act significantly revises the U.S. corporateWe are also currently subject to tax controversies in various jurisdictions, and these jurisdictions may assess additional income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21%, eliminating certain deductions, imposingliabilities against us. Developments in audits could have a mandatory one-time taxmaterial effect on accumulated earnings of foreign subsidiaries as of 2017, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. Since the 2017 Tax Act was passed lateour operating results or cash flows in the fourth quarterperiod for which that development occurs, as well as for subsequent periods. We regularly assess the likelihood of 2017,an adverse outcome resulting from these proceedings to determine the adequacy of our tax accruals. Although we have accounted forbelieve our estimates are reasonable, the 2017 Tax Act on a provisional basis asfinal outcome of December 31, 2017. Our accounting for certainaudits could be materially different from our historical income tax effects is incomplete, but we have determined reasonable estimates for those effects. Our reasonable estimates areprovisions and accruals.
Refer to Note 19, Income Taxes, to the consolidated financial statements included in our financial statements asItem 8, “Financial Statements and Supplementary Data,” of December 31, 2017. We expect to complete our accounting during the one-year measurement period from the enactment date.this Annual Report on Form 10-K for additional information.
Emerging Growth Company
The JOBSUnder the Jumpstart Our Business Startups (“JOBS”) Act, establishes a class of company called an “emerging growth company,” which generally is a company whose initial public offering was completed after December 8, 2011 and had total annual gross revenues of less than $1.07 billion during its most recently completed fiscal year. We currently qualifywe qualified as an emerging growth company.
As an emerging growth company we are eligible to take advantage of certain exemptions from various reporting requirements that are not available to public reporting companies that do not qualify for this classification, including without limitation the following:
▪An emerging growth company is exempt from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and financial statements, commonly known as an “auditor discussion and analysis.”
▪An emerging growth company is not required to hold a nonbinding advisory stockholder vote on executive compensation or any golden parachute payments not previously approved by stockholders.
▪
An emerging growth company is not required to comply with the requirement of auditor attestation of management’s assessment of internal control over financial reporting, which is required for other public reporting companies by Section 404 of the Sarbanes-Oxley Act.
▪An emerging growth company is eligible for reduced disclosure obligations regarding executive compensation in its periodic and annual reports, including without limitation exemption from the requirement to provide a compensation discussion and analysis describing compensation practices and procedures.

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▪A company that is an emerging growth company is eligible for reduced financial statement disclosure in registration statements, which must include two years of audited financial statements rather than the three years of audited financial statements that are required for other public reporting companies.
For as long as we continue to be an emerging growth company, we expect that we will take advantage of the reduced disclosure obligations available to us as a result of this classification. We will remain an emerging growth company(“EGC”) until the earlier of (i) December 31, 2020, the last daywhich allowed us an extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the fiscal yearJOBS Act. Effective December 31, 2020, we no longer qualify for EGC status following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act; (ii) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion (subject to further adjustment for inflation) or more; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under applicable SEC rules. We expect that we will remain an emerging growth company for the foreseeable future, but cannot retain our emerging growth company status indefinitely and will no longer qualify as an emerging growth company on or before December 31, 2020.Act.
Emerging growth companies may elect to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to “opt out” of such extended transition period, and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for companies that are not “emerging growth companies.” Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.
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 interest rates, 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. A 10% change in average exchange rates versus the U.S. Dollar would have resulted in an approximate $46.3 million and $21.4 million change to our net sales for the years ended December 31, 2017 and 2016, respectively.
We are exposed to market risk from changes in the interest rates on a significant portion of our outstanding debt. Outstanding balances under our Term B Loan, at the Company’s election, bear interest at variable rates based on a margin over defined LIBOR. Based on the amount outstanding on the Term B Loan as of December 31, 2017 and 2016, a hypothetical unfavorable change of 100 basis points in the LIBOR would result in an approximate $1.5 million and $2.6 million increase, respectively, to our annual interest expense.
We use derivative financial instruments to manage our currency risks. We are also subject to interest risk as it relates to long-term debt, for which we 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 9, “Long-term Debt,” and Note 10, “Derivative Instruments,” included in Item 8, “Financial Statements and Supplementary Data,” within this Annual Report on Form 10-K for additional information.

Not applicable.
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Item 8.    Financial Statements and Supplementary Data


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the shareholders and the Board of Directors of
Horizon Global Corporation
Troy, MI

Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Horizon Global Corporation and subsidiaries (the “Company”) as of December 31, 20172020 and 2016,2019, the related consolidated statements of income (loss),operations, comprehensive (loss) income, (loss), cash flows, and shareholders’ equity for each of the threetwo years in the period ended December 31, 20172020 and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20172020 and 2016,2019, and the results of its operations and its cash flows for each of the threetwo years in the period ended December 31, 2017,2020, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Horizon Global Corporation spin-off to TriMas Corporation Shareholders

Emphasis of Matter — Subsequent Events
As discussed in Note 121 to the financial statements, the Company entered into a Senior Term Loan Credit Agreement on February 2, 2021, the proceeds from which were used to repay in full all outstanding debt and accrued interest on the Company’s Replacement Term Loan.
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) relates 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.
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Sales Related Accruals — Refer to Note 3 to the consolidated financial statements prior
Critical Audit Matter Description
Provisions for customer volume rebates, product returns, discounts, allowances, and cooperative advertising are variable consideration and are recorded as a reduction of revenue in the same period the related sales are recorded. The Company uses the most likely amount method to June 30, 2015,estimate variable consideration. On at least a quarterly basis, the accompanying consolidated financial statements have been prepared from the separate records maintained by TriMas Corporation and may not necessarily be indicativeCompany performs detailed reviews of the financial condition, or resultsadequacy of operationsthese sales related accruals by evaluating specific customer contractual commitments and cash flows that would have existed hadassessing current incentive programs and other relevant information, such as historical averages adjusted for any expected changes due to current business conditions.
We identified the Company been operatedadequacy of sales related accruals as a stand-alone company duringcritical audit matter because of the period priorvolume of the inputs and assumptions utilized by management in estimating these accruals. The sales related accruals consists of accruals for specific customers, each of which requires management judgment and creates estimation uncertainty. This required both extensive audit effort due to June 30, 2015 presented. For the periods subsequent June 30, 2015,volume and complexity of the consolidated financial statements are derived fromaccruals and a high degree of auditor judgment when performing audit procedures to evaluate the historical accounting recordsreasonableness of Horizon Global Corporation on a stand-alone basis.management’s estimates.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the estimation of sales related accruals included the following, among others:

•We obtained an understanding of management’s processes over calculating the accruals, including understanding relevant inputs and assumptions.
•We evaluated key inputs and assumptions relevant to the accruals, including evaluating specific customer contractual commitments and assessing current incentive programs and other relevant information, which were compared to source documents.
•We tested management’s process for calculating sales related accruals.
/s/ Deloitte & Touche LLP

Detroit, Michigan
March 1, 201811, 2021
We have served as the Company’sCompany's auditor since 2014


2014.
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HORIZON GLOBAL CORPORATION
Horizon Global Corporation
Consolidated Balance SheetsCONSOLIDATED BALANCE SHEETS    
(Dollars in thousands)

 December 31, December 31,
 2017 2016 20202019
Assets    Assets
Current assets:    Current assets:  
Cash and cash equivalents $29,570
 $50,240
Cash and cash equivalents$44,970 $11,770 
Restricted cashRestricted cash5,720 0 
Receivables, net 91,770
 77,570
Receivables, net87,420 71,680 
Inventories 171,500
 146,020
Inventories115,320 136,650 
Prepaid expenses and other current assets 10,950
 12,160
Prepaid expenses and other current assets11,510 8,570 
Total current assets 303,790
 285,990
 Total current assets264,940 228,670 
Property and equipment, net 113,020
 93,760
Property and equipment, net74,090 75,830 
Operating lease right-of-use assetsOperating lease right-of-use assets47,310 45,770 
Goodwill 138,190
 120,190
Goodwill3,360 4,350 
Other intangibles, net 90,230
 86,720
Other intangibles, net58,230 60,120 
Deferred income taxes 4,290
 9,370
Deferred income taxes1,280 430 
Other assets 11,510
 17,340
Other assets7,280 5,870 
Total assets $661,030
 $613,370
 Total assets$456,490 $421,040 
Liabilities and Shareholders' Equity    Liabilities and Shareholders' Equity
Current liabilities:    Current liabilities:  
Current maturities, long-term debt $16,710
 $22,900
Short-term borrowings and current maturities, long-term debtShort-term borrowings and current maturities, long-term debt$14,120 $4,310 
Accounts payable 138,730
 111,450
Accounts payable99,520 78,450 
Short-term operating lease liabilitiesShort-term operating lease liabilities12,180 9,880 
Accrued liabilities 53,070
 63,780
Accrued liabilities59,100 48,850 
Total current liabilities 208,510
 198,130
 Total current liabilities184,920 141,490 
Gross long-term debtGross long-term debt251,960 236,550 
Unamortized debt issuance costs and discountUnamortized debt issuance costs and discount(20,570)(31,500)
Long-term debt 258,880
 327,040
Long-term debt231,390 205,050 
Deferred income taxes 14,870
 25,730
Deferred income taxes3,130 4,040 
Long-term operating lease liabilitiesLong-term operating lease liabilities46,340 48,070 
Other long-term liabilities 38,370
 30,410
Other long-term liabilities14,560 13,790 
Total liabilities 520,630
 581,310
 Total liabilities480,340 412,440 
Commitments and contingent liabilities —

—
Contingencies (See Note 14)Contingencies (See Note 14)00
Shareholders' equity:    Shareholders' equity:
Preferred stock $0.01 par: Authorized 100,000,000 shares;
Issued and outstanding: None		 —
 —
Common stock, $0.01 par: Authorized 400,000,000 shares;
25,625,571 shares issued and 24,939,065 outstanding at December 31, 2017, respectively, and 20,899,959 shares issued and outstanding at December 31, 2016		 250
 210
Preferred stock, $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: NaNPreferred stock, $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: NaN0 0 
Common stock, $0.01 par: Authorized 400,000,000 shares; 27,089,673 shares issued and 26,403,167 outstanding at December 31, 2020, and 26,073,894 shares issued and 25,387,388 outstanding at December 31, 2019Common stock, $0.01 par: Authorized 400,000,000 shares; 27,089,673 shares issued and 26,403,167 outstanding at December 31, 2020, and 26,073,894 shares issued and 25,387,388 outstanding at December 31, 2019260 250 
Common stock warrants issued, outstanding and exercisable for 5,815,039 and 6,487,674 shares of common stock at December 31, 2020 and December 31, 2019, respectivelyCommon stock warrants issued, outstanding and exercisable for 5,815,039 and 6,487,674 shares of common stock at December 31, 2020 and December 31, 2019, respectively9,510 10,610 
Paid-in capital 159,490
 54,800
Paid-in capital166,610 163,240 
Treasury stock, at cost: 686,506 shares at December 31, 2017 and no shares at December 31, 2016 (10,000) —
Treasury stock, at cost: 686,506 shares at December 31, 2020 and December 31, 2019Treasury stock, at cost: 686,506 shares at December 31, 2020 and December 31, 2019(10,000)(10,000)
Accumulated deficit (17,860) (14,310)Accumulated deficit(178,530)(141,970)
Accumulated other comprehensive income (loss) 10,010
 (8,340)
Total Horizon Global shareholders' equity 141,890
 32,360
Accumulated other comprehensive lossAccumulated other comprehensive loss(6,540)(9,790)
Total Horizon Global shareholders' (deficit) equityTotal Horizon Global shareholders' (deficit) equity(18,690)12,340 
Noncontrolling interest (1,490) (300)Noncontrolling interest(5,160)(3,740)
Total shareholders' equity 140,400
 32,060
Total shareholders' (deficit) equity Total shareholders' (deficit) equity(23,850)8,600 
Total liabilities and shareholders' equity $661,030
 $613,370
 Total liabilities and shareholders' equity$456,490 $421,040 
The accompanying notes are an integral part of these financial statements.

48

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HORIZON GLOBAL CORPORATION
Horizon Global Corporation
Consolidated Statements of Income (Loss)CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share and per share amounts)data)

 Year ended December 31, Twelve Months Ended December 31,
 2017 2016 2015 20202019
Net sales $892,980
 $649,200
 $575,510
Net sales$661,230 $690,450 
Cost of sales (685,380) (488,850) (432,470)Cost of sales(540,680)(594,220)
Gross profit 207,600
 160,350
 143,040
Gross profit120,550 96,230 
Selling, general and administrative expenses (171,620) (145,150) (121,350)Selling, general and administrative expenses(127,370)(154,180)
Net loss on dispositions of property and equipment (1,220) (540) (2,120)
Impairment of intangible assets —
 (8,360) —
Operating profit 34,760
 6,300
 19,570
Other expense, net:      
Net (loss) gain on dispositions of property and equipmentNet (loss) gain on dispositions of property and equipment(90)780 
Operating lossOperating loss(6,910)(57,170)
Other expense, netOther expense, net(470)(5,390)
Interest expense (22,410) (20,080) (8,810)Interest expense(31,680)(58,270)
Loss on extinguishment of debt (4,640) —
 —
Other expense, net (2,730) (2,610) (3,740)
Other expense, net (29,780) (22,690) (12,550)
Income (loss) before income tax 4,980
 (16,390) 7,020
Income tax benefit (expense) (9,750) 3,730
 1,280
Net income (loss) (4,770) (12,660) 8,300
Loss from continuing operations before income taxLoss from continuing operations before income tax(39,060)(120,830)
Income tax benefitIncome tax benefit1,580 10,820 
Net loss from continuing operationsNet loss from continuing operations(37,480)(110,010)
(Loss) income from discontinued operations, net of income taxes(Loss) income from discontinued operations, net of income taxes(500)189,520 
Net (loss) incomeNet (loss) income(37,980)79,510 
Less: Net loss attributable to noncontrolling interest (1,220) (300) —
Less: Net loss attributable to noncontrolling interest(1,420)(1,240)
Net income (loss) attributable to Horizon Global $(3,550) $(12,360) $8,300
Net income (loss) per share attributable to Horizon Global:      
Basic $(0.14) $(0.66) $0.46
Diluted $(0.14) $(0.66) $0.46
Net (loss) income attributable to Horizon GlobalNet (loss) income attributable to Horizon Global$(36,560)$80,750 
Net (loss) income per share attributable to Horizon Global:Net (loss) income per share attributable to Horizon Global:
Basic:Basic:
Continuing operationsContinuing operations$(1.40)$(4.30)
Discontinued operationsDiscontinued operations(0.02)7.49 
TotalTotal$(1.42)$3.19 
Diluted:Diluted:
Continuing operationsContinuing operations$(1.40)$(4.30)
Discontinued operationsDiscontinued operations(0.02)7.49 
TotalTotal$(1.42)$3.19 
Weighted average common shares outstanding:      Weighted average common shares outstanding:
Basic 24,781,349
 18,775,500
 18,064,491
Basic25,797,529 25,297,576 
Diluted 24,781,349
 18,775,500
 18,160,852
Diluted25,797,529 25,297,576 
The accompanying notes are an integral part of these financial statements.

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43


HORIZON GLOBAL CORPORATION
Horizon Global Corporation
Consolidated Statements of Comprehensive Income (Loss)CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Dollars in thousands)

  Year ended December 31,
  2017 2016 2015
Net income (loss) $(4,770) $(12,660) $8,300
Other comprehensive income (loss), net of tax:      
Foreign currency translation 17,840
 (10,590) (9,510)
Derivative instruments (Note 10) 540
 (220) (640)
Total other comprehensive income (loss) 18,380
 (10,810) (10,150)
Total comprehensive income (loss) 13,610
 (23,470) (1,850)
Less: Comprehensive loss attributable to noncontrolling interest (1,190) (300) —
Comprehensive income (loss) attributable to Horizon Global $14,800
 $(23,170) $(1,850)

Twelve Months Ended December 31,
20202019
Net (loss) income$(37,980)$79,510 
Other comprehensive income (loss), net of tax:
Foreign currency translation and other3,250 1,650 
Derivative instruments0 (1,940)
Total other comprehensive income (loss), net of tax3,250 (290)
Total comprehensive (loss) income(34,730)79,220 
Less: Comprehensive loss attributable to noncontrolling interest(1,420)(1,240)
Comprehensive (loss) income attributable to Horizon Global$(33,310)$80,460 
The accompanying notes are an integral part of these financial statements.


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50


HORIZON GLOBAL CORPORATION
Horizon Global Corporation
Consolidated Statements of Cash FlowsCONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
  Year ended December 31,
  2017 2016 2015
Cash Flows from Operating Activities:      
Net income (loss) $(4,770) $(12,660) $8,300
Adjustments to reconcile net income (loss) to net cash provided by operating activities, net of acquisition impact:      
Net loss on dispositions of property and equipment 1,220
 540
 2,120
Impairment of intangible assets —
 8,360
 —
Depreciation 14,930
 10,260
 9,740
Amortization of intangible assets 10,410
 7,960
 7,340
Amortization of original issuance discount and debt issuance costs 6,940
 2,090
 830
Deferred income taxes (100) (8,430) (4,920)
Non-cash compensation expense 3,630
 3,860
 2,530
Loss on extinguishment of debt 4,640
 —
 —
Amortization of purchase accounting inventory step-up 420
 6,680
 —
(Increase) decrease in receivables (9,540) 4,740
 (5,460)
(Increase) decrease in inventories (17,710) 10,650
 (30)
(Increase) decrease in prepaid expenses and other assets 1,410
 (6,300) 140
Increase in accounts payable and accrued liabilities 3,540
 6,300
 5,870
Other, net (860) 1,360
 450
Net cash provided by operating activities 14,160
 35,410
 26,910
Cash Flows from Investing Activities:      
Capital expenditures (27,290) (14,540) (8,320)
Acquisition of businesses, net of cash acquired (19,800) (94,370) —
Net proceeds from disposition of product line, property and equipment 6,350
 470
 1,510
Net cash used for investing activities (40,740) (108,440) (6,810)
Cash Flows from Financing Activities:      
Proceeds from borrowing on credit facilities 52,310
 41,820
 119,340
Repayments of borrowings on credit facilities (50,910) (40,200) (118,890)
Proceeds from Term B Loan, net of issuance costs —
 148,180
 192,820
Repayments of borrowings on Term B Loan, including transaction fees (189,760) (10,000) (5,000)
Proceeds from ABL Facility, net of issuance costs 139,100
 118,430
 57,120
Repayments of borrowings on ABL Facility (129,100) (118,430) (59,430)
Repayments of Westfalia Group debt —
 (39,000) —
Repurchase of common stock (10,000) —
 —
Proceeds from sale of common stock in connection with the Company's equity offering, net of issuance costs 79,920
 —
 —
Proceeds from issuance of Convertible Notes, net of issuance costs 121,130
 —
 —
Proceeds from issuance of Warrants, net of issuance costs 20,930
 —
 —
Payments on Convertible Note Hedges, inclusive of issuance costs (29,680) —
 —
Cash dividend paid to former parent —
 —
 (214,500)
Net transfers from former parent —
 —
 27,630
Other, net (240) (300) —
Net cash provided by (used for) financing activities 3,700
 100,500
 (910)
Effect of exchange rate changes on cash 2,210
 (750) (1,390)
Cash and Cash Equivalents:      
Increase (decrease) for the year (20,670) 26,720
 17,800
At beginning of year 50,240
 23,520
 5,720
At end of year $29,570
 $50,240
 $23,520
Supplemental disclosure of cash flow information:      
Cash paid for interest $14,270
 $17,330
 $7,870
Non-cash investing/financing activities:      
Non-cash equity issuance for acquisition of businesses $—
 $49,960
 $—
Twelve Months Ended December 31,
 20202019
Cash Flows from Operating Activities:  
Net (loss) income$(37,980)$79,510 
Less: Net (loss) income from discontinued operations(500)189,520 
Net loss from continuing operations(37,480)(110,010)
Adjustments to reconcile net loss from continuing operations to net cash provided by (used for) operating activities:
Net loss (gain) on dispositions of property and equipment90 (780)
Depreciation16,290 15,940 
Amortization of intangible assets6,620 5,750 
Write off of operating lease assets0 10,780 
Amortization of original issuance discount and debt issuance costs14,200 22,060 
Deferred income taxes(2,060)(7,280)
Non-cash compensation expense3,000 2,150 
Paid-in-kind interest8,120 9,720 
(Increase) decrease in receivables(12,230)19,290 
Decrease in inventories24,220 8,380 
Increase in prepaid expenses and other assets(4,900)(2,990)
Increase (decrease) in accounts payable and accrued liabilities24,590 (30,140)
Other, net(1,370)(11,350)
Net cash provided by (used for) operating activities for continuing operations39,090 (68,480)
Cash Flows from Investing Activities:
Capital expenditures(13,310)(9,720)
Net proceeds from sale of business0 214,570 
Net proceeds from disposition of property and equipment90 1,620 
Net cash (used for) provided by investing activities for continuing operations(13,220)206,470 
Cash Flows from Financing Activities:  
Proceeds from borrowing on credit facilities7,220 13,450 
Repayments of borrowings on credit facilities(4,800)(7,490)
Proceeds from Revolving Credit Facility, net of issuance costs54,680 0 
Repayments of borrowings on Revolving Credit Facility(32,760)0 
Proceeds from ABL revolving debt, net of issuance costs8,000 79,790 
Repayments of borrowings on ABL revolving debt(27,920)(123,240)
Repayments of borrowings on First Lien Term Loan, including transaction fees0 (173,430)
Proceeds from Second Lien Term Loan, net of issuance costs0 35,500 
Proceeds from Paycheck Protection Program Loan8,670 0 
Proceeds from issuance of Series A Preferred Stock0 5,340 
Proceeds from issuance of Warrants0 5,270 
Other, net(440)100 
Net cash provided by (used for) financing activities for continuing operations12,650 (164,710)
Discontinued Operations:
Net cash (used for) provided by discontinued operating activities(500)11,430 
Net cash used for discontinued investing activities0 (1,120)
Net cash provided by discontinued financing activities0 0 
Net cash (used for) provided by discontinued operations(500)10,310 
Effect of exchange rate changes on cash and cash equivalents and restricted cash900 530 
Cash and Cash Equivalents and Restricted Cash:
Increase (decrease) for the year38,920 (15,880)
At beginning of year11,770 27,650 
At end of year$50,690 $11,770 
Supplemental disclosure of cash flow information:
Cash paid for interest$8,930 $20,060 
Cash paid for taxes, net of refunds$1,560 $80 
The accompanying notes are an integral part of these financial statements.

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HORIZON GLOBAL CORPORATION
Horizon Global Corporation
Consolidated Statements of Shareholders’ EquityCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Dollars in thousands)

  Common Stock Paid-in Capital Treasury Stock Parent Company Investment Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Horizon Global Shareholders' Equity Noncontrolling Interest Total Shareholders' Equity
Balances at December 31, 2014 $—
 $—
 $—
 $180,800
 $—
 $7,390
 $188,190
 $—
 $188,190
Net income —
 —
 —
 3,680
 4,620
 —
 8,300
 —
 8,300
Other comprehensive loss, net of tax —
 —
 —
 —
 —
 (10,150) (10,150) —
 (10,150)
Issuance of common stock 180
 —
 —
 (180) —
 —
 —
 —
 —
Net transfers to former parent —
 —
 —
 23,670
 —
 5,230
 28,900
 —
 28,900
Cash dividend paid to former parent —
 —
 —
 (214,500) —
 —
 (214,500) —
 (214,500)
Non-cash compensation expense —
 1,260
 —
 —
 —
 —
 1,260
 —
 1,260
Reclassification of net parent investment to accumulated deficit —
 —
 —
 6,530
 (6,530) —
 —
 —
 —
Balances at December 31, 2015 $180
 $1,260
 $—
 $—
 $(1,910) $2,470
 $2,000
 $—
 $2,000
Net loss —
 —
 —
 —
 (12,360) —
 (12,360) (300) (12,660)
Other comprehensive loss, net of tax —
 —
 —
 —
 —
 (10,810) (10,810) —
 (10,810)
Issuance of common stock 30
 49,930
 —
 —
 —
 —
 49,960
 —
 49,960
Shares surrendered upon vesting of employees' share based payment awards to cover tax obligations
 —
 (330) —
 —
 —
 —
 (330) —
 (330)
Exercise of stock options —
 40
 —
 —
 —
 —
 40
 —
 40
Non-cash compensation expense —
 3,860
 —
 —
 —
 —
 3,860
 —
 3,860
Impact of adoption of new accounting guidance related to stock based compensation —
 40
 —
 —
 (40) —
 —
 —
 —
Balances at December 31, 2016 $210
 $54,800
 $—
 $—
 $(14,310) $(8,340) $32,360
 $(300) $32,060
Net loss —
 —
 —
 —
 (3,550) —
 (3,550) (1,220) (4,770)
Other comprehensive income, net of tax —
 —
 —
 —
 —
 18,350
 18,350
 30
 18,380
Issuance of common stock, net of issuance costs 40
 79,880
 ��
 —
 —
 —
 79,920
 —
 79,920
Repurchase of common stock —
 —
 (10,000) —
 —
 —
 (10,000) —
 (10,000)
Shares surrendered upon vesting of employees' share based payment awards to cover tax obligations —
 (260) —
 —
 —
 —
 (260) —
 (260)
Exercise of stock options —
 50
 —
 —
 —
 —
 50
 —
 50
Non-cash compensation expense —
 3,630
 —
 —
 —
 —
 3,630
 —
 3,630
Issuance of Warrants, net of issuance costs —
 20,930
 —
 —
 —
 —
 20,930
 —
 20,930
Initial equity component of the 2.75% Convertible Senior Notes due 2022, net of issuance costs and tax —
 20,010
 —
 —
 —
 —
 20,010
 —
 20,010
Convertible Note Hedges, net of issuance costs and tax —
 (19,550) —
 —
 —
 —
 (19,550) —
 (19,550)
Balances at December 31, 2017 $250
 $159,490
 $(10,000) $—
 $(17,860) $10,010
 $141,890
 $(1,490) $140,400

 Common StockCommon Stock WarrantsPaid-in CapitalTreasury StockAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Horizon Global Shareholders' (Deficit) EquityNoncontrolling InterestTotal Shareholders' (Deficit) Equity
Balances at January 1, 2019$250 $0 $160,990 $(10,000)$(222,720)$7,760 $(63,720)$(2,500)$(66,220)
Net income (loss)— — — — 80,750 — 80,750 (1,240)79,510 
Other comprehensive loss, net of tax— — — — — (290)(290)— (290)
Shares surrendered upon vesting of employees' share based payment awards to cover tax obligations— — (10)— — — (10)— (10)
Non-cash compensation expense— — 2,150 — — — 2,150 — 2,150 
Issuance of warrants and preferred stock— 10,720 — — — — 10,720 — 10,720 
Exercise of stock warrants— (110)110 — — — — — 0 
Amounts reclassified from accumulated other comprehensive loss— — — — — (17,260)(17,260)— (17,260)
Balances at December 31, 2019$250 $10,610 $163,240 $(10,000)$(141,970)$(9,790)$12,340 $(3,740)$8,600 
Net loss— — — — (36,560)— (36,560)(1,420)(37,980)
Other comprehensive income, net of tax— — — — — 3,250 3,250 — 3,250 
Shares surrendered upon vesting of employees' share based payment awards to cover tax obligations— — (440)— — — (440)— (440)
Non-cash compensation expense— — 2,720 — — — 2,720 — 2,720 
Exercise of stock warrants10 (1,100)1,090 — — — — — 0 
Balances at December 31, 2020$260 $9,510 $166,610 $(10,000)$(178,530)$(6,540)$(18,690)$(5,160)$(23,850)
The accompanying notes are an integral part of these financial statements.

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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
Horizon Global Corporation and its consolidated subsidiaries (“Horizon,” “Horizon Global”Global,” “we,” or the “Company”) isare a global designer, manufacturer and distributor of a wide variety of high quality, custom-engineered towing, trailering, cargo management and other related accessories. These products are designed to support automotive original equipment manufacturers (“automotive OEMs”) and automotive original equipment suppliersservicers (“automotive OESs”) (collectively, “OEs”), aftermarket and retail customers within the agricultural, automotive, construction, horse/livestock, industrial, marine, military, recreational, trailer and utility markets. The Company groups its business into operating segments into reportable segmentsgenerally by the region in which sales and manufacturing efforts are focused. TheAs a result of the Company’s reportablesale of its Horizon Asia-Pacific operating segment (“APAC”) in 2019, the Company’s operating segments are Horizon Americas Horizon Europe‑Africa, and Horizon Asia‑Pacific.Europe‑Africa. See Note 15, “18, Segment Information,” for further information on each of the Company’s reportableoperating segments.
On June 30, 2015, Horizon became an independent company APAC results are reported separately as a result of the distribution by TriMas Corporation (“TriMas” or “former parent”) of 100 percent of the outstanding common shares of Horizon Global to TriMas shareholders (the “spin-off”). Each TriMas shareholder of record as of the close of business on June 25, 2015 (the “Record Date”) received two Horizon Global common shares for every five TriMas common shares held as of the Record Date. The spin-off was completed on June 30, 2015 and was structured to be tax-free to both TriMas and Horizon Global shareholders.
On July 1, 2015, Horizon Global common shares began regular trading on the New York Stock Exchange under the ticker symbol “HZN”. Pursuant to the separation and distribution agreement with TriMas, on June 30, 2015, the Company paid a cash dividend to TriMas of $214.5 million.
The accompanyingdiscontinued operations in our consolidated financial statements for the period prior to the spin-offall periods presented. Discontinued operations are derived from TriMas’ historical accounting records on a carve-out basis. For the periods subsequent to the spin-off, the consolidated financial statements are derived from the historical accounting records of Horizon on a stand-alone basis. As such, the consolidated statements of income (loss), consolidated statement of comprehensive income (loss) and consolidated statement of cash flows for the years ended December 31, 2017 and 2016 consist of the consolidated results of Horizon on a stand-alone basis. further discussed in Note 4, Discontinued Operations.
The consolidated financial statements for the year ended December 31, 2015 consist of the consolidated results of Horizon on a stand-alone basis for the six months ended December 31, 2015, and the consolidated results of operations of Horizon as historically managed under TriMas, on a carve-out basis, for the six months ended June 30, 2015.
For the period prior to the separation, the consolidated financial statements include expense allocations for certain functions provided by our former parent; however, the allocations may not reflect the expenses the Company would have incurred as an independent, publicly traded company for the period presented. These expenses were allocated to the Company on the basis of direct usage when identifiable, with the remainder allocated on the basis of revenue or headcount. Transactions historically treated as intercompany between the Company and our former parent have been includedprepared in these consolidated financial statements and were considered effectively settled for cash ataccordance with accounting principles generally accepted in the timeUnited States of the spin-off.Americas (“U.S. GAAP”).
2.2. New Accounting Pronouncements
New accounting pronouncements not yet adopted
In August 2017,2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-12, “Derivatives2020-06, “Debt—Debt with Conversion and Hedging (Topic 815)Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Targeted Improvements to Accounting for Hedging Activities”Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2017-12”2020-06”). ASU 2017-12 eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also modifies2020-06 simplifies the accounting for components excludedconvertible instruments by removing certain separation models in Accounting Standards Codification (“ASC”) 470-20, “Debt—Debt with Conversion and Other Options,” for convertible instruments. Under ASU 2020-06, the embedded conversion features no longer are separated from the assessment of hedge effectiveness, eases documentation and assessment requirements and modifies certain disclosure requirements. ASU 2017-12 is effectivehost contract for fiscal years beginning after December 15, 2018, including interim periods within those annual periods,convertible instruments with early adoption permitted and should be applied on a modified retrospective basis. The Company is in the process of assessing the impact of the adoption of ASU 2017-12 on its consolidated financial statements.
In May 2017, the FASB issued ASU 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”). ASU 2017-09 amends the scope of modification accounting for share-based payment arrangements and provides guidance on when an entity would beconversion features that are not required to apply modification accounting. This guidance is effectivebe accounted for all entitiesas derivatives under ASC 815, “Derivatives and Hedging,” or that do not result in substantial premiums accounted for annual periods beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted and should be applied on a prospective basis. The Company will adoptas paid-in capital. For smaller reporting companies, ASU 2017-09 on January, 1, 2018 on a prospective basis.
In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). ASU 2017-04 eliminates the requirement to perform a hypothetical purchase price allocation to

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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

measure the amount of goodwill impairment. Instead, under ASU 2017-04, the goodwill impairment would be 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. ASU 2017-042020-06 is effective for fiscal years, and interim periods within those years, beginning after December 15, 20192023, with early adoption permitted. The Company has early adopted ASU 2017-04 for its annual goodwill impairment test during the fourth quarter of 2017 and there was no impact on the consolidated financial statements.
In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”). ASU 2017-01 provides clarification on the definition of a business and adds guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance is effective for public entitiespermitted for fiscal years beginning after December 15, 2017, including interim periods within those annual periods,2020. We are currently assessing the impact of this update on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides temporary optional guidance to ease the potential burden in accounting for (or recognize the effects of) reference rate reform on financial reporting. The relief provided by this guidance is elective and shouldapplies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be applied on a prospective basis. ASU 2017-01 isdiscontinued because of reference rate reform initiatives being undertaken in an effort to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The optional amendments of this guidance are effective for all entities upon adoption. We are currently assessing the Company for any new acquisitions (or disposals) startingimpact of this update on January 1, 2018.the Company’s consolidated financial statements.
In OctoberJune 2016, the FASB issued ASU 2016-16, “Income Taxes2016-13, “Financial Instruments - Credit Losses (Topic 740)326): Intra-Entity TransfersMeasurement of Assets Other Than Inventory”Credit Losses on Financial Instruments” (“ASU 2016-16”2016-13”). ASU 2016-16 provides an amendment to2016-13 replaces the accountingcurrent incurred loss model guidance related to the recognition of income tax consequences of an intra-entity transfer of an asset other than inventory.with a new method that reflects expected credit losses. Under the newthis guidance, an entity is requiredwould recognize an allowance for credit losses equal to recognize the income tax consequencesits estimate of an intra-entity transfer of an asset other than inventory when the transfer occurs. Under the current guidance, the income tax effects are deferred until the asset has been sold to an outside party. The Company will adopt ASU 2016-16expected credit losses on January 1, 2018, on a modified retrospective basis, which will not have a material impact on the financial statements.
assets measured at amortized cost. In August 2016,November 2019, the FASB issuedextended the effective date of ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)” (“2016-13 for smaller reporting companies. As a result, ASU 2016-15”). ASU 2016-15 was issued to reduce differences in practice with respect to how specific transactions are classified in the statement of cash flows. This guidance2016-13 is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted and should be applied on a retrospective basis. The Company will adopt ASU 2016-15 on January 1, 2018, which will not have a material impact on the financial statements.
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which supersedes the leases requirements in “Leases (Topic 840)” (“ASU 2016-02”). The objective of this update is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods,2022, with early adoption permitted. The Companystandard is innot expected to have a significant impact on the process of assessing the impact of the adoption of ASU 2016-02 on itsCompany's consolidated financial statements.
In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” This guidance provides that inventory not measured using the last-in, first out (“LIFO”) or retail inventory methods should be measured at the lower of cost and net realizable value. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory. As of January 1, 2017, the provisions of this ASU became effective for the Company on a prospective basis and did not have a material impact on the Company’s consolidated financial position or results of operations.
Accounting Standards Update 2014-09pronouncements recently adopted
In May 2014,There were no new accounting pronouncements adopted during the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09” or “Topic 606”). ASU 2014-09 supersedes most of the existing guidance on revenue recognition in Accounting Standard Codification (“ASC”) Topic 605, “Revenue Recognition” (“Topic 605”), and establishes a broad principle that would require an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this principle, an entity identifies the contract with a customer, identifies the separate performance obligations in the contract, determines the transaction price, allocates the transaction price to the separate performance obligations and recognizes revenue when each separate performance obligation is satisfied. The FASB has subsequently issued additional ASUs to clarify certain elements of Topic 606. This guidance is effective for Horizon Global beginning on January 1, 2018 and entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. The Company will adopt ASU 2014-09 using the modified retrospective approach whereby a cumulative-effect adjustment to the opening balance of retained earnings is recognized as of the date of adoption.year ended December 31, 2020.
The Company has drafted its accounting policy for Topic 606 based on its evaluation of the five steps in the new revenue recognition model, which included a detailed review of its business and contracts active during and through the end of 2017. While the Company


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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

continues to assess all potential impacts of the new standard, the Company does not expect that the adoption of the new revenue standard will have a material impact on the Company’s revenues, results of operations or financial position.
There are also certain considerations related to internal control over financial reporting that are associated with implementing the new guidance under Topic 606. The Company has evaluated its control framework for revenue recognition and is currently implementing necessary changes to its internal controls to address risks associated with the new standard. Disclosure requirements under the new guidance in Topic 606 have been significantly expanded in comparison to the disclosure requirements under the former guidance. The Company is currently concluding its assessment of the new disclosure requirements and is in process of drafting its disclosures under Topic 606 which will be finalized and incorporated in the Company’s Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2018.
3. Summary of Significant Accounting Policies
Principles of Consolidation.  The consolidated financial statements include the assets, liabilities, revenues and expenses of Horizon Global and its subsidiaries as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015.wholly-owned subsidiaries. In addition, the consolidated financial statements include the consolidation of a variable interest entity (“VIE”) thatfor which the Company has been deemed to be the primary beneficiary of. The consolidated financial statements include the assetsbeneficiary. Intercompany accounts and liabilities of the VIE at December 31, 2017 and 2016, and the revenues and expenses of the VIE for the period beginning October 1, 2016. Intercompany transactions have been eliminated.eliminated in consolidation.
Use of Estimates.  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of AmericaU.S. GAAP requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, goodwill and other intangibles, valuation allowances for receivables, inventories and deferred income tax assets, asset impairments, valuation of derivatives, estimates related to lease liability and operating lease right-of-use (“ROU”) asset valuations, estimated future unrecoverable lease costs, estimated unrecognizeduncertain tax benefits,positions, legal and product liability matters, valuation of debt instruments and warrants, assets and obligations related to employee benefits, and allocated expenses, and the respective allocation methods. Actual results may differ from such estimates and assumptions.
Cash and Cash Equivalents.  The Company considers cash on hand and on deposit and investments in all highly liquid debt instruments with initial maturities of three months or less to be cash and cash equivalents.
Restricted Cash. Restricted cash consists of cash that must be maintained as collateral for letters of credit or other restrictions. The Company considers the expected timing of the release of the restrictions to determine the appropriate financial statement classification. Refer to Note 10, Long-term Debt, for additional information.
Account Receivables.  Receivables are presentedconsist primarily of amounts from contracts with customers for the sale of towing, trailering, cargo management and other related accessories. As of December 31, 2020 and 2019, receivables were $87.4 million and $71.7 million, respectively, net of allowances for doubtful accounts of approximately $3.1$2.7 million and $3.8$3.2 million, at December 31, 2017 and 2016, 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 receivableaccount receivables balances. The Company does not believe that significant credit risk exists due to its diverse customer base.
Account Receivables Factoring. The Company has factoring arrangements with financial institutions to sell certain accounts receivablereceivables under certain non-recourse agreements. TotalDuring the twelve months ended December 31, 2020 and 2019, total receivables sold under the factoring arrangements were approximately $257.5$237.1 million and $20.7$258.4 million, as of December 31, 2017 and 2016, respectively. The sales of accounts receivable in accordance with the factoring arrangements are reflected as a reduction of Receivables,receivables, net in the consolidated balance sheets as they meet the applicable criteria of ASC 860, “Transfers and Servicing.” TheAs of December 31, 2020 and 2019, the holdback amountamounts due from the factoring institutions was approximately $3.1were $8.7 million and $3.0$5.7 million, as of December 31, 2017 and 2016, respectively, and isare shown in Receivables,receivables, net in the consolidated balance sheets. Cash proceeds from these arrangements are included in the change in receivables under the operating activities section of the consolidated statements of cash flows. The Company pays factoring fees associated with the sale of receivables based on the dollar value of the receivables sold. TotalDuring the twelve months ended December 31, 2020 and 2019, total factoring fees were $0.7 million and $0.1$1.0 million for the years ended December 31, 2017 and 2016. The Company had no factoring arrangements for the year ended December 31, 2015.each period.
Inventories.  Inventories are stated at lower of cost or net realizable value, with cost determined using the first-in, first-out method.basis. Direct materials, direct labor and allocations of variable and fixed manufacturing-related overhead are included in inventory cost. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation.
Property and Equipment.  Property and equipment additions, including significant improvements, are recorded at cost. Upon retirement or disposal of property and equipment, the historical cost and accumulated depreciation are removed from the accounts, and any gain or loss is included in the accompanying consolidated statements of income (loss).operations. Repair and maintenance costs are charged to expense as incurred.


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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Depreciation and Amortization.Depreciation. Depreciation is computed principally using the straight-line method over the estimated useful lives of the assets. Annual depreciation rates are as follows: building
Fixed Asset CategoryEstimated Useful Life
Building and Land/Building Improvements10 - 40 years
Machinery and Equipment3 - 15 years
Leases.  The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets; short-term operating lease liabilities; and land/building improvements 10 to 40 years, and machinerylong-term operating lease liabilities in our consolidated balance sheets. Finance leases are included in property and equipment, three to 15 years. Customer relationship intangiblesnet; short-term borrowings and current maturities, long-term debt; and long-term debt in our consolidated balance sheets. Short-term leases with terms of twelve months or less are amortized over periods ranging from five to 25 years, while technologynot recognized on the balance sheet and other intangibles are amortized over periods ranging from three to 15 years. Capitalized debt issuance costs are amortizedexpensed over the lease term.
ROU assets represent our right to use an underlying termsasset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the related debt.lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.
Impairment of Long-Lived Assets and Definite-Lived Intangible Assets.  The Company reviews its financial performance for indicators of impairment on at least a quarterly basis, the financial performance of each business unit for indicators of impairment.basis. In reviewing for impairment indicators, the Company also considers events or changes in circumstances such as business prospects, customer retention, market trends, potential product obsolescence, competitive activities and other economic factors. An impairment loss is recognized when the carrying value of an asset group exceeds the future net undiscounted cash flows expected to be generated by that asset group. The impairment loss recognized is the amount by which the carrying value of the asset group exceeds its fair value.
Goodwill.  Goodwill relating tois acquired in a single business reporting unit is included as an assetcombination and represents the excess of purchase consideration over the applicable segment. Goodwill arising from major acquisitions that involve multiple reportable segments is allocated to the reporting units based on the relative fair value of the reporting unit.assets acquired and liabilities assumed. 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 for evaluating operating results. For purposes of the Company’s 2017 goodwill impairment test, the Company had three reporting units within its three reportable segments, all of which had goodwill. 
Goodwill is reviewed by the Company for impairment on a reporting unit basis annually on October 1st or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. During 2017, the Company has elected to early adopt ASU 2017-04, which eliminates the second step of the two-step goodwill impairment test. The Company performs a qualitative assessment (Step Zero) of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. If not, no further goodwill impairment testing is performed. If so, then the Company performs testing for possible impairment in a one-step quantitative process. The fair value of a reporting unit is compared with its carrying value, including goodwill. If fair value exceeds the carrying value, goodwill is not considered to be impaired. If the fair value of a reporting unit is below the carrying value, then goodwill is considered to be impaired in the amount of the excess of a reporting unit’s carrying value over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.
The Company prepared a qualitative assessment of the carrying value of goodwill within its Horizon Americas and Horizon Asia‑Pacific reporting units as of our annual testing date at October 1, 2017, using the criteria in ASC 350-20-35-3 to determine whether it is more likely than not that the reporting unit’s fair value is less than its carrying value. As a result of the impairment indicators discussed in detail below, we updated our analysis as of December 31, 2017. Based on the qualitative analysis performed, the Company does not believe that it is more likely than not that the that the fair value of the reporting units is less than the carrying amounts; therefore, the quantitative step is not required for the 2017 goodwill impairment test.
The Company exercised its unconditional option provided by ASC 350-20-35-3B to bypass the qualitative assessment (Step Zero) of goodwill in its Horizon Europe-Africa reporting unit. The Company prepared a quantitative assessment to estimate the fair value of its Horizon Europe-Africa reporting unit at the annual testing date of October 1, 2017 utilizing a weighting of the income approach and the market approach. Based on the Step One analysis performed, the Horizon Europe-Africa reporting unit’s fair value substantially exceeded its carrying value; therefore, there is no goodwill impairment as a result of this 2017 goodwill impairment test.
In the fourth quarter of 2017, the Company experienced a significant decline in its market capitalization. Further, the Horizon Europe‑Africa reporting unit did not perform in-line with expectations during the fourth quarter, driven by delayed closure and additional costs incurred relating to closing facilities in the United Kingdom and Sweden, delayed realization of price increases and inefficiencies transferring production to lower cost manufacturing sites. Because of the decline in market capitalization and fourth quarter results, the Company identified an indicator of impairment in the fourth quarter. As a result of the indicators identified, the Company performed an interim quantitative assessment as of December 31, 2017, utilizing a combination of the income and market approaches, which was weighted evenly. The results of the quantitative analysis performed indicated the fair value of the reporting unit exceeded the carrying value by approximately 1%. Key assumptions used in the analysis were a discount rate of 13%, EBITDA margin and a terminal growth rate of 2.5%. The primary driver in the reduction of the fair value of the reporting unit was a reduction of expected future cash flows. Since the acquisition of the Westfalia Group, as further described in Note 4, “Acquisitions”, the Company has invested, and intends to continue to invest, in cost savings and productivity initiatives that will drive strong future profitability. While these investments have resulted in lower post-acquisition EBITDA, the Company continues to believe these projects will result in significant future earnings. Future events and changing market conditions may, however,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

lead the Company to reevaluate the assumptions that have been used to test for goodwill impairment, including key assumptions used in the expected EBITDA margins, cash flows and discount rates, as well as other assumptions with respect to matters outFor purposes of the Company’s control, such as currency exchange rates and market multiple comparables.
Subsequent to December 31, 2017, the Company’s market capitalization has declined, primarily due to a pre-release of our estimated 2017 results that fell short of our previously communicated guidance, which may be an indicator of impairment. As noted above, the revised expectations were included in our interimannual goodwill impairment assessment. Thetest, the Company will continue to assess the impacthad 1 reporting unit with a goodwill balance which is also one of its market capitalizationoperating segments, Horizon Americas. This reporting unit had goodwill of $3.1 million at the 2020 annual test for impairment. See Note 6, Goodwill and any other indicators of potential impairment. It is possible that if the Company’s market capitalization decline is more than temporary, or if other indicators of impairment are identified, an interim impairment analysis may be necessary, which could result in an impairment of goodwill, indefinite-lived intangible assets and other long-lived assets in 2018.Other Intangible Assets, for further information.
Indefinite-Lived Intangibles. The Company assesses indefinite-lived intangible assets primarily trademarks and trade names, for impairment annually on October 1st by reviewing relevant quantitativequalitative factors. More frequent evaluations may be required if the Company experiences changes in its business climate or as a result of other triggering events that take place.events.
Indefinite-lived intangible assets are tested for impairment by comparing the fair value of each intangible asset with its carrying value. The value of indefinite-lived intangible assets are based on the present value of projected cash flows using a relief from royalty approach. If the carrying value exceeds fair value, the intangible asset is considered impaired and is reduced to fair value. See Note 6, Goodwill and Other Intangible Assets, for further information.
We conducted
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Revenue Recognition and Sales Related Accruals.  Revenue is recognized when obligations under the annual indefinite-lived intangibleterms of a contract with the Company’s customers are satisfied; generally, this occurs with the transfer of control of its towing, trailering, cargo management and other related accessory products. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring its products. Sales, value added and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company’s payment terms vary by the type and location of its customers and the products offered. The term between invoicing and when payment is due is not significant.
For the majority of the Company’s sales arrangements, the Company deems control to transfer at a single point in time and recognizes revenue when it ships products from its manufacturing facilities to its customers. Once a product has shipped, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the asset. The Company considers control to transfer upon shipment because the Company has a present right to payment at that time, the customer has legal title to the asset, impairment tests asand the customer has significant risks and rewards of October 1, 2017,ownership of the asset.
Provisions for customer volume rebates, product returns, discounts and allowances, including incentives for cooperative advertising, are variable consideration and are recorded as a resultreduction of the impairment indicators noted above we performed an interim assessment as of December 31, 2017. Based on the results of our analyses there were certain trade names where the estimated fair values only slightly exceeded the carrying values. Key assumptions usedrevenue in the analysis were discount rates of 13% to 15.5% and royalty rates ranging from 0.5% to 3.0%.
Self-insurance.  Horizon has historically, indirectly as a component of TriMas, participated in TriMas’ self-insurance plans and has been allocated a portion of the related expenses and liabilities for the period presented prior to the spin-off. TriMas was generally self-insured for losses and liabilities related to workers’ compensation, health and welfare claims and comprehensive general, product and vehicle liability. Liabilities associated with the risks were estimated by considering historical claims experience and other actuarial assumptions. Following the spin-off, the Company continued to participate in TriMas’ health and welfare plan through December 31, 2015 and reimbursed them for claims paid on its behalf.
Horizon instituted self-insurance plans for losses and liabilities related to workers’ compensation and comprehensive general, product and vehicle liability at the time of spin-off which ran through June 30, 2016. The Company was generally responsible for up to $1.0 million per occurrence under our comprehensive general, product and vehicle liability plan and $0.5 million under our workers’ compensation plan. Beginning on July 1, 2016, Horizon is fully insured for workers’ compensation and retain no liability for claims under the new plan, and are generally responsible for up to $0.8 million per occurrence under our comprehensive general, product and vehicle liability plan. Reserves for claim losses, including an estimate of related litigation defense costs, are recorded based upon the Company’s estimates of the aggregate liability for claims incurred using actuarial assumptions about future events. Changes in assumptions for factors such as actual experience could cause these estimates to change.
Revenue Recognition.  Revenues from product sales are recognized when products are shipped or provided to customers, the customer takes ownership and assumes risk of loss, the sales price is fixed and determinable and collectability is reasonably assured. Net sales is comprised of gross revenues less estimates of expected returns, trade discounts and customer allowances, which include incentives such as cooperative advertising agreements, volume discounts and other supply agreements in connection with various programs. Such deductions are recorded during thesame period the related sales are recorded. Such provisions are calculated using historical averages adjusted for any expected changes due to current business conditions. The Company uses the most likely amount method to estimate variable consideration. For the twelve months ended December 31, 2020 and 2019, adjustments to estimates of variable consideration for previously recognized revenue were insignificant.
The Company expenses costs incurred to obtain a contract with a customer when the amortization period is recognized.one year or less. These costs include sales commissions as the Company has determined annual compensation is commensurate with annual sales activities.
The Company does not adjust consideration for the effects of a significant financing component when the period between shipment of its products and customer’s payment is one year or less.
Cost of Sales.Cost of sales includes material, labor and overhead costs incurred in the manufacturemanufacturing of products sold in the period. Material costs include raw material, purchased components, outside processing and inbound freightshipping and handling costs. Overhead costs consist of variable and fixed manufacturing costs, wages and fringe benefits, and purchasing, receiving and inspection costs.
Research and Development Costs. Research and development (“R&D”) costs are expensed as incurred. During the twelve months ended December 31, 2020 and 2019, R&D expenses were $13.3 million and $13.2 million, respectively, and are included in cost of sales in the accompanying consolidated statements of operations.
Selling, General and Administrative Expenses.Selling, general and administrative expenses include the following: costs related to the advertising, sale marketing and distributionmarketing of the Company’s products, shipping and handling costs, amortization of customer intangible assets, costs associated with the Company’s distribution network, costs of finance, human resources, legalback office support functions executive management costs and other administrative expenses.
ResearchShipping and Development Costs. ResearchHandling Expenses. Shipping and development (“R&D”)handling costs associated with outbound freight are expensedaccounted for as incurred. R&D expenses were approximately $15.4 million, $10.4 million and $4.1 million for the years ended December 31, 2017, 2016 and 2015, respectively,a fulfillment cost and are included in cost of sales in the accompanying consolidated statements of income (loss).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Shipping and Handling Expenses.  Freight costs are included in cost of sales. ShippingOther shipping and handling expenses, including those ofwhich primarily relate to Horizon Americas’ distribution network, are included in selling, general and administrative expenses in the accompanying consolidated statements of income (loss). Shippingoperations. During the twelve months ended December 31, 2020 and 2019, other shipping and handling costs were $13.3 million, $9.1$17.0 million and $7.6$20.6 million, for the years ended December 31, 2017, 2016 and 2015, respectively.
Advertising and Sales Promotion Costs.Advertising and sales promotion costs are expensed as incurred. Advertising costs were approximately $6.2 million, $6.1 million and $7.8 million forDuring the yearstwelve months ended December 31, 2017, 20162020 and 2015,2019, advertising and sales promotion costs were $2.6 million and $2.3 million, respectively, and are included in selling, general and administrative expenses in the accompanying consolidated statements of income (loss).operations.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Income Taxes.  For the purposes of the consolidated financial statements as of and for the six months ended June 30, 2015, the Company’s income tax expense and deferred income tax balances have been estimated as if the Company filed income tax returns on a stand-alone basis separate from former parent. As a stand-alone entity, deferred income taxes and effective tax rates may differ from those in the historical periods.
Following the spin-off, the  The Company computes income taxes using the asset and liability method, whereby deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of assets and liabilities and for operating loss and tax credit carryforwards. Under thethis method, changes in tax rates and laws are recognized in income in the period such changes are enacted. Valuation allowances are determined based on an assessment of positive and negative evidence on a jurisdiction-by-jurisdiction basis and are utilized to reduce deferred tax assets to the amount more likely than not to be realized. The Company recognizes the effect of income tax positions only if those positions arehave a probability of more likely than not of being sustained.sustained in an audit. Recognized income tax positions are measured at the largest amount that ishas greater than 50% likelylikelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognizeduncertain tax benefitspositions within income tax expense. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheets.
The provision for federal, foreign, and state and local income taxes is calculated on income before income taxes based on current tax law and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provision differs from the amounts currently payable because certain items of income and expense are recognized in different reporting periods for financial reporting purposes than for income tax purposes.
Foreign Currency Translation.  The financial statements of subsidiaries located outside of the United States are measured using the currency of the primary economic environment in which they operate as thetheir functional currency. When translating into U.S. dollars, income and expense items are translated at period average monthly exchange rates and assets and liabilities are translated at exchange rates in effect at the balance sheet date. Translation adjustments resulting from translating the functional currency into U.S. dollars are deferred as a component of accumulated other comprehensive income (loss) (“AOCI”) in the consolidated balance sheets.
Foreign Currency Remeasurement.  The effects of remeasuring monetary assets and liabilities of the Company’s businesses denominated in currencies other than their functional currency are recorded as transaction gains and losses as a component of other expense, net in the consolidated statements of shareholders’ equity. Net foreignoperations. Additionally, gains and losses resulting from transactions denominated in a currency other than the functional currency are recorded as transaction gains orand losses were approximatelyas a $0.8 million loss for the year ended December 31, 2017, a $0.5 million gain for the year ended December 31, 2016, and a $1.4 million loss for the year ended December 31, 2015. Net foreign currency transaction gains or losses are included incomponent of other expense, net in the accompanying consolidated statements of income (loss).operations. During the twelve months ended December 31, 2020 and 2019, net foreign currency transaction gains were $0.9 million and $0.1 million, respectively.
Derivative Financial Instruments.  The Company records all derivative financial instruments at fair value on the balance sheets as either assets or liabilities, and changes in their fair values are immediately recognized in earnings if the derivatives do not qualify as effective hedges. If a derivative is designated as a fair value hedge, then the effective portion of changes in the fair value of the derivative are offset against the changes in the fair value of the underlying hedged item. If a derivative is designated as a cash flow hedge, then the effective portion of the changes in the fair value of the derivative is recognized as a component of other comprehensive income (loss)AOCI until the underlying hedged item is recognized in earnings or the forecasted transaction is no longer probable of occurring. When the underlying hedged transaction is realized or the hedged transaction is no longer probable, the gain or loss included in accumulated other comprehensive lossAOCI is recorded inreclassified into earnings and reflected in the consolidated statements of income (loss)operations through the same line item as the underlying hedged item.
The Company formally documents hedging relationships for all derivative transactions and the underlying hedged items, as well as its risk management objectives and strategies for undertaking the hedge transactions.transactions at the time of transaction.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fair Value of Financial Instruments.  In accounting for and disclosing the fair value of these instruments, the Company uses the following hierarchy:
▪Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;
▪Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and
▪Level 3 inputs are unobservable inputs for the asset or liability.
▪Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;
▪Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and
▪Level 3 inputs are unobservable inputs for the asset or liability.
Valuation of the Company’s foreign currency forward contracts and cross currency swaps are based on the income approach, which uses observable inputs such as forward currency exchange rates and swap rates. The carrying valueThere were no outstanding derivatives contracts at December 31, 2020 and 2019.
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Business Combinations. The Company records assets acquired and liabilities assumed from acquisitions at fair value. The fair value of working capital accounts generally approximate book value. The valuation of inventory, property, plant and equipment, and intangible assets require significant assumptions. Inventory is recorded based on the estimated selling price less costs to sell, including completion, disposal and holding period costs with a reasonable profit margin. Property, plant and equipment is recorded at fair value using a combination of both the cost and market approaches for both the real and personal property acquired. Under the cost approach, consideration is given to the amount required to construct or purchase a new asset of equal value at current prices, with adjustments in value for physical deterioration, as well as functional and economic obsolescence. Under the market approach, recent transactions for similar types of assets are used as the basis for estimating fair value. For trademark/trade names and technology and other intangible assets, the estimated fair value is based on projected discounted future net cash flows using the relief-from-royalty method. For customer relationship intangible assets, the estimated fair value is based on projected discounted future cash flows using the excess earnings method. The relief-from-royalty and excess earnings method are both income approaches that utilize key assumptions such as forecasts of revenue and expenses over an extended period of time, royalty rate percentages, tax rates, and estimated costs of debt and equity capital to discount the projected cash flows.HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Earnings (Loss) Per Share.  Basic earnings (loss) per share (“EPS”) is computed based upon the weighted average number of common shares outstanding for each period. Diluted EPS is computed based on the weighted average number of common shares and common equivalent shares.shares outstanding for each period. Common equivalent shares represent the effect of stock-based awards, warrants, and convertible notes during each period presented, which, if exercised, earned, or converted, would have a dilutive effect on earnings per share. On June 30, 2015, 18,062,027 shares of our common stock were distributed to TriMas shareholders of record to complete the spin-off from TriMas. For comparative purposes we have used weighted average shares of 18,062,027 to calculate basicEPS. Dilutive EPS for all periods prior to the spin-off. Dilutive earnings per share areis calculated to give effect to stock options and warrants, restricted shares outstanding, and convertible notes during each period. Loss per share excludes certain dilutive securities as inclusion results in an anti-dilutive effect.
Environmental Obligations.  The Company is subject to increasingly stringent environmental laws and regulations, including those relating to air emissions, wastewater discharges and chemical and hazardous waste management and disposal. Some of these environmental laws hold owners or operators of land or businesses liable for their own and for previous owners’ or operators’ releases of hazardous or toxic substances or wastes. Other environmental laws and regulations require the obtainment and compliance with environmental permits. To date, costs of complying with environmental health and safety requirements have not been material; however, the Company cannot quantify with certainty the potential impact of future compliance efforts and environmental remediation actions.
While the Company must comply with existing and pending climate change legislation, regulation and international treaties or accords, current laws and regulations have not had a material impact on the Company’s business, capital expenditures or financial position. 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.
Contingencies and Ordinary Course Claims.  The Company is subject to claims and litigation inIn the ordinary course of business, butthe Company is subject of, or party to, various pending or threatened legal actions and other contingent liability actions, including those arising from alleged defects related to our products, product warranties, recalls, breach of contracts, intellectual property matters, international trade, customs and duties matters, employment-related matters and other litigation. Litigation is always subject to inherent uncertainty and the Company is not able to reasonably predict if any matter will be resolved in a manner that is materially adverse to the Company.
An accrual for potential losses related to these contingencies is established when there is a probable occurrence of loss and the amount can be reasonably estimated. The Company does not believerecord liabilities when the likelihood that a liability has been incurred is probable, but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. When the Company evaluates matters for accrual and disclosure purposes, management takes into consideration factors such as our historical experience with matters of a similar nature, the specific facts and circumstances asserted and the related jurisdictional legal proceedings, the likelihood that we will prevail, and the severity of any suchpotential loss. We monitor and update our accruals as matters progress over time.
The Company carries product liability, recall and other insurance to defray some of the costs if a claim settlement or litigation is likelyjudgment exceeds our self-insured retention limit. Refer to have a material adverse effect on its financial position and results of operations or cash flows.Note 14, Contingencies, for additional information.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Stock-based Compensation.  The Company measures stock-based compensation expense at fair value as of the grant date in accordance with U.S. GAAP and recognizes such expenses over the vesting period of the stock-based employee awards. Stock options are issued with an exercise price equal to the opening market price of Horizon common shares on the date of grant. The fair value of stock options is determined using a Black-Scholes option pricing model, which incorporates assumptions regarding the expected volatility, expected option life, risk-free interest rate and expected dividend yield. In addition, the Company periodically updates its estimate of attainment for each restricted share with a performance factor based on current and forecasted results, reflecting the change from prior estimate, if any, in current period compensation expense.
Other Comprehensive Income (Loss).  The Company refers to other comprehensive income (loss) as revenues, expenses, gains and losses that under U.S. GAAP are included in comprehensive income (loss) but are excluded from net earningsincome (loss) as these amounts are recorded directly as an adjustment to accumulated deficit.AOCI. Other comprehensive income (loss) is comprised of foreign currency translation adjustments and changes in unrealized gains and losses on forward currency contracts and cross currency swaps.
Net transfers (to)
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4. Discontinued Operations
On September 19, 2019, the Company completed the sale of its subsidiaries that comprised APAC to Hayman Pacific BidCo Pty Ltd., an affiliate of Pacific Equity Partners, for $209.6 million in net cash proceeds after payment of transaction costs, in a net debt free sale. The sale resulted in the recognition of a gain of $180.5 million, of which $17.3 million was related to the cumulative translation adjustment that was reclassified to earnings, which is reflected within the income from parent.  Net transfers (to) from parent indiscontinued operations, net of income taxes line of the consolidated statements of cash flows and statements of shareholders’ equity represent the total net effect of the settlement of intercompany transactions with TriMas.operations.
Reclassifications. Certain amounts in prior years’ financial statements have been reclassified to conform to the current presentation.
4. Acquisitions
2017 Acquisition
On July 3, 2017, the Company completed the acquisition of Best Bars Limited (“Best Bars”), within the Horizon Asia-Pacific reportable segment, for total consideration of $19.8 million, subject to a net working capital adjustment which has not been finalized. Best Bars is a provider of towing solutions and automotive accessories to OE and aftermarket customers in New Zealand. The Company believeshas classified APAC’s operating results and the acquisition will expand its opportunities for revenue and margin growth, increase its market share and further develop its global OE footprint. Supplemental pro forma disclosures are not includedgain on the sale as the amounts are deemed immaterial. Revenues and earnings of the acquiree since the acquisition date includeddiscontinued operations in the Company’saccompanying consolidated statements of income (loss) are immaterial.operations for all periods presented in accordance with ASC 205, “Discontinued Operations.” Prior to the sale, APAC was included as a separate operating segment.
In the first quarter of 2020, the remaining post-closing conditions of the sale were completed, resulting in a true up to net cash proceeds, for which we recognized a loss on sale of discontinued operations of $0.5 million.
The following table summarizesCompany’s results from discontinued operations through the fair valuedate of consideration paid for Best Bars, and the assets acquired and liabilities assumed:sale of APAC, September 19, 2019 are as follows:
Twelve Months Ended
December 31, 2019
(dollars in thousands)
Net sales$92,300 
Cost of sales(68,530)
Gross profit23,770 
Selling, general and administrative expenses(9,580)
Other expense, net(400)
Interest expense(310)
Income before income tax expense13,480 
Income tax expense(4,450)
Gain on sale of discontinued operations180,490 
Income from discontinued operations, net of income taxes$189,520 

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  Acquisition Date
  (dollars in thousands)
Consideration  
Cash paid $19,800
   
Recognized amounts of identifiable assets acquired and liabilities assumed  
Receivables 2,100
Inventories 2,340
Other intangibles 7,690
Prepaid expenses and other current assets 110
Property and equipment 2,250
Accounts payable and accrued liabilities (1,680)
Total identifiable net assets 12,810
Goodwill 6,990
  $19,800

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. Revenues
2016 Acquisition
On October 4, 2016,The Company disaggregates revenue from contracts with customers by major sales channel. The Company determined that disaggregating revenue into these categories best depicts how the Company completednature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The automotive OEM channel represents sales to automotive vehicle manufacturers. The automotive OES channel primarily represents sales to automotive vehicle dealerships. The aftermarket channel represents sales to automotive installers and warehouse distributors. The retail channel represents sales to direct-to-consumer retailers. The industrial channel represents sales to non-automotive manufacturers and dealers of agricultural equipment, trailers, and other custom assemblies. The e-commerce channel represents sales to direct-to-consumer retailers who utilize the acquisition of 100% of the equity interest in Westfalia-Automotive Holding GmbH and TeIJs Holding B.V. (collectively, the “Westfalia Group”). The acquisition was effective October 1, 2016, and was for total consideration of approximately $141.5 million, net of cash acquired. The consideration was in the form of approximately $91.6 million paid in cash, net of cash acquired, and approximately $49.9 million paid through the issuance of 2,704,310 shares ofInternet to purchase the Company’s common stock.products. The fair value of the common stock was $18.48, determined based on the price of the Company’s common stock on October 4, 2016, which was $19.87, withother channel represents sales that do not fit into a discount applied due to restrictions on marketability.
The Westfalia Group is a leading global towing company. Headquartered in Rheda-Wiedenbrück, Germany, with operating facilities in 11 countries, it manufactures towingcategory described above and trailering products, including more than 1,700 different types of towbars, wiring kits and carrier systems for cars and light utility vehicles. The Company believes the acquisition will expand its opportunities for revenue and margin growth, increase its market share and augment its global OE footprint with access to new markets and customers.
The following table summarizes the fair value of consideration paid for the Westfalia Group, and the assets acquired and liabilities assumed:
  Acquisition Date
  (dollars in thousands)
Consideration  
Cash paid $91,580
Issuance of common stock 49,960
Total consideration $141,540
Recognized amounts of identifiable assets acquired and liabilities assumed  
Receivables $19,700
Inventories 43,290
Other intangibles(a)
 47,780
Prepaid expenses and other current assets 1,740
Property and equipment 47,480
Accounts payable and accrued liabilities (54,150)
Long-term debt (59,140)
Other long-term liabilities (31,210)
Total identifiable net assets 15,490
Goodwill(b)
 126,050
  $141,540
___________________________
(a) Consists of approximately $33.6 million of customer relationships with an estimated useful life of 16.3 years, $3.4 million of technology and other intangible assets with an estimated useful life of 10 years and $10.8 million of trademark/trade names with an indefinite useful life.
(b) All of the goodwill was assignedthese sales are considered ancillary to the Company’s Horizon Europe‑Africa reportable segment and is expected to be deductible for tax purposes.core operating activities.
The results of operations of the Westfalia Group are included in the Company’s results beginning October 1, 2016. The actual amounts of net sales by segments and operating loss of the Westfalia Group included in the accompanying consolidated statements of income (loss) for the year ended December 31, 2016disaggregated by major sales channel are $54.5 million and $9.6 million, respectively.as follows:

Twelve Months Ended
December 31, 2020
Horizon AmericasHorizon Europe-AfricaTotal
(dollars in thousands)
Net Sales
Automotive OEM$77,280 $149,850 $227,130 
Automotive OES8,310 50,290 58,600 
Aftermarket114,750 73,010 187,760 
Retail100,660 0 100,660 
Industrial27,480 1,670 29,150 
E-commerce53,850 1,570 55,420 
Other50 2,460 2,510 
Total$382,380 $278,850 $661,230 

Twelve Months Ended
December 31, 2019
Horizon AmericasHorizon Europe-AfricaTotal
(dollars in thousands)
Net Sales
Automotive OEM$87,700 $181,490 $269,190 
Automotive OES6,950 58,080 65,030 
Aftermarket96,910 69,370 166,280 
Retail105,970 0 105,970 
Industrial29,390 2,850 32,240 
E-commerce45,750 1,880 47,630 
Other50 4,060 4,110 
Total$372,720 $317,730 $690,450 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. Goodwill and Other Intangible Assets
The following table summarizesnovel coronavirus (“COVID-19”) pandemic and the supplemental pro formarelated wide-ranging actions taken by international, federal, state, and local public health and governmental authorities to combat the pandemic and spread of COVID-19 in regions across the United States and the world resulted in a temporary decline in the financial performance of the Company, primarily related to the first half of the year, and at the same time pressure on its near-term financial forecasts. Consequently, the Company identified an indicator of impairment on its goodwill and indefinite-lived intangible assets in its Horizon Americas reporting unit and on its indefinite-lived intangible assets in its Horizon Europe-Africa reporting unit in the first quarter of 2020.
As a result of the indicator, the Company performed an interim quantitative impairment assessment of the goodwill recorded for the Horizon Americas reporting unit as of March 31, 2020, by considering the market and income approaches. The results of the combined entityquantitative analysis performed indicated the fair value of the reporting unit exceeded the carrying value. Key assumptions used in the analysis were a discount rate of 14.0%, Adjusted EBITDA (as defined below) margin and a terminal growth rate of 3.0%. The primary driver in the reduction of the fair value of the reporting unit was a reduction of expected future cash flows during the remainder of 2020 to reflect the uncertainty surrounding the full impact of the COVID-19 pandemic. Future events and changing market conditions, including operating restrictions may, however, lead the Company to re-evaluate the assumptions that have been used to test for goodwill impairment, including key assumptions used in the expected Adjusted EBITDA margin, cash flows and discount rate, as ifwell as other assumptions with respect to matters outside of the Company’s control, such as currency rates and the aforementioned geographical government shutdowns and operating restrictions.
Adjusted EBITDA is defined as net income attributable to Horizon Global before interest expense, income taxes, depreciation and amortization, and before certain items, as applicable, such as severance, restructuring, relocation and related business disruption costs, impairment of goodwill and other intangibles, non-cash stock compensation, certain product liability and litigation claims, acquisition had occurredand integration costs, gains (losses) on January 1, 2015. The supplemental pro forma information presented below is for informational purposesbusiness divestitures and is not necessarily indicativeother assets, board transition support and non-cash unrealized foreign currency remeasurement costs.
In addition, as a result of either futurethe indicator of impairment identified, the Company performed an interim impairment assessment of its indefinite-lived intangible assets as of March 31, 2020 in the Horizon Americas and Horizon Europe‑Africa operating segments. Based on the results of operations or resultsour analyses, the estimated fair values of the trade names exceeded the carrying values. Key assumptions used in the analyses were a discount rate of 14.5% and royalty rates ranging from 0.5% to 1.9%.
The Company performed an annual goodwill impairment test as of October 1, 2020 and 2019, for the Horizon Americas reporting unit. The assessment indicated that might have been achieved hadit was more likely than not that the acquisition been consummated on Januaryfair value of the reporting unit exceeded its carrying value.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Changes in the carrying amount of goodwill are as follows:
Horizon AmericasHorizon Europe‑AfricaTotal
(dollars in thousands)
Balances at January 1, 2019$4,500 $0 $4,500 
Foreign currency translation(150)0 (150)
Balances at December 31, 20194,350 0 4,350 
Foreign currency translation(990)0 (990)
Balances at December 31, 2020$3,360 $0 $3,360 
The gross carrying amounts and accumulated amortization of the Company’s other intangible assets are as follows:
 December 31, 2020
Intangible Category by Useful LifeGross Carrying
Amount		Accumulated
Amortization		Net Carrying Amount
 (dollars in thousands)
Finite-lived intangible assets:  
Customer relationships, 2 - 20 years$166,420 $(135,140)$31,280 
Technology and other, 3 - 15 years22,250 (16,710)5,540 
Trademark/Trade names, 1 - 8 years150 (150)0 
Total finite-lived intangible assets188,820 (152,000)36,820 
Trademark/Trade names, indefinite-lived21,410 — 21,410 
Total other intangible assets$210,230 $(152,000)$58,230 
 December 31, 2019
Intangible Category by Useful LifeGross Carrying
Amount		Accumulated
Amortization		Net Carrying Amount
 (dollars in thousands)
Finite-lived intangible assets:  
Customer relationships, 2 - 20 years$164,150 $(129,310)$34,840 
Technology and other, 3 - 15 years21,420 (17,260)4,160 
Trademark/Trade names, 1 - 8 years150 (150)0 
Total finite-lived intangible assets185,720 (146,720)39,000 
Trademark/Trade names, indefinite-lived21,120 — 21,120 
Total other intangible assets$206,840 $(146,720)$60,120 
On March 1, 2015:
  
Pro forma Combined (a)
  Year ended December 31,
  2016 2015
  (dollars in thousands)
Net sales $811,330
 $787,930
Net loss attributable to Horizon Global $(12,780) $(18,350)
Basic earnings (loss) per share attributable to Horizon Global $(0.61) $(0.88)
Diluted earnings (loss) per share attributable to Horizon Global $(0.61) $(0.88)
___________________________
(a) The supplemental pro forma results reflect certain material adjustments, as follows:
1.Pre-tax pro forma adjustments for inventory step-up of $6.7 million for each of the years ended December 31, 2016 and December 31, 2015, respectively, associated with the acquisition.
2.Pre-tax pro forma adjustments for depreciation expense of $1.4 million and $2.0 million for the years ended December 31, 2016 and December 31, 2015, respectively, on the property and equipment associated with the acquisition.
3.Pre-tax pro forma adjustments for amortization expense of $1.4 million and $1.5 million for the years ended December 31, 2016 and December 31, 2015, respectively, on the intangible assets associated with the acquisition.
4.
Pre-tax pro forma adjustments for financing costs of $0.5 million and $0.6 million for the years ended December 31, 2016 and December 31, 2015, respectively, on the incremental debt associated with the acquisition.
5.
Pre-tax pro forma adjustments for transaction costs of $10.3 million for each of the years ended December 31, 2016 and December 31, 2015, respectively, associated with the acquisition.
6.Pre-tax pro forma adjustments of $8.1 million and $10.7 million for the years ended December 31, 2016 and December 31, 2015, respectively, to reflect interest expense incurred on the incremental term loan and revolver borrowings incurred in order to fund the acquisition.
Total acquisition costs incurred by2019, the Company entered into an agreement of sale of certain business assets in connection with its purchaseHorizon Europe-Africa operating segment, via a share and asset sale (the “Sale”). Under the terms of the Westfalia Group, primarilySale, effective March 1, 2019, the Company disposed of certain non-automotive business assets that operated using the Terwa brand for $5.5 million, which included a $0.5 million note receivable. The Sale resulted in a $3.6 millions loss recorded in other expense, net in the consolidated statements of operations, including a $3.0 million reduction of net intangibles related to third-customer relationships.

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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Amortization expense related to other intangible assets as included in the accompanying consolidated statements of operations are as follows:
Twelve Months Ended
December 31,
20202019
(dollars in thousands)
Technology and other, included in cost of sales$1,160 $530 
Customer relationships, included in selling, general and administrative expenses5,460 5,220 
Total amortization expense$6,620 $5,750 
Estimated amortization expense for the next five fiscal years beginning after December 31, 2020 are as follows:
Twelve Months Ended
December 31,		Estimated Amortization Expense
(dollars in thousands)
2021$4,860 
2022$4,550 
2023$4,280 
2024$4,050 
2025$3,990 
The Company performed an annual qualitative indefinite-lived impairment assessment as of October 1, 2020 and 2019. The assessment indicated that it was more likely than not that the fair value of each of the indefinite-lived intangible assets exceeded its respective carrying value. We do not believe there is risk for impairment as of December 31, 2020.
7. Inventories
Inventories consist of the following components:
December 31,
20202019
 (dollars in thousands)
Finished goods$58,600 $82,080 
Work in process13,070 12,820 
Raw materials43,650 41,750 
Total inventories$115,320 $136,650 
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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. Property and Equipment, Net
Property and equipment, net consists of the following components:
December 31,
 20202019
 (dollars in thousands)
Land and land improvements$520 $470 
Buildings23,040 21,290 
Machinery and equipment134,750 121,740 
Total property and equipment158,310 143,500 
Accumulated depreciation(84,220)(67,670)
Property and equipment, net$74,090 $75,830 
Depreciation expense as included in the accompanying consolidated statements of operations are as follows:
Twelve Months Ended
December 31,
20202019
(dollars in thousands)
Depreciation expense, included in cost of sales$15,210 $13,360 
Depreciation expense, included in selling, general and administrative expenses1,080 2,580 
Total depreciation expense$16,290 $15,940 
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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. Accrued and Other Long-term Liabilities
Accrued liabilities consist of the following components:
December 31,
20202019
(dollars in thousands)
Customer incentives$15,870 $14,270 
Accrued compensation12,130 6,760 
Customer claims6,520 7,540 
Short-term tax liabilities5,570 90 
Litigation settlements1,600 1,110 
Accrued professional services1,510 3,680 
Deferred purchase price1,370 790 
Restructuring650 2,340 
Other13,880 12,270 
Total accrued liabilities$59,100 $48,850 
Other long-term liabilities consist of the following components:
December 31,
 20202019
 (dollars in thousands)
Litigation settlements$2,930 $0 
Deferred purchase price1,650 2,370 
Restructuring1,070 1,600 
Long-term tax liabilities130 340 
Other8,780 9,480 
Total other long-term liabilities$14,560 $13,790 
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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. Long-term Debt
The Company’s long-term debt consists of the following components:
December 31,
 20202019
 (dollars in thousands)
Revolving Credit Facility$24,230 $0 
ABL Facility0 20,020 
Replacement Term Loan90,210 0 
First Lien Term Loan0 25,210 
Second Lien Term Loan0 56,960 
Convertible Notes125,000 125,000 
Paycheck Protection Program Loan8,670 0 
Bank facilities, capital leases and other long-term debt17,970 13,670 
Gross debt266,080 240,860 
Less:
Short-term borrowings and current maturities, long-term debt14,120 4,310 
Gross long-term debt251,960 236,550 
Less:
Unamortized debt issuance costs and original issuance discount on Replacement Term Loan9,100 0 
Unamortized debt issuance costs and original issuance discount on First Lien Term Loan0 700 
Unamortized debt issuance costs and discount on Second Lien Term Loan0 12,730 
Unamortized debt issuance costs and discount on Convertible Notes11,470 18,070 
Unamortized debt issuance costs and discount20,570 31,500 
Long-term debt$231,390 $205,050 
ABL Facility
On December 22, 2015, the Company entered into an Amended and Restated Loan Agreement among the Company, Horizon Global Americas Inc. (“HGA”), Cequent UK Limited, Cequent Towing Products of Canada Ltd. (“Cequent Towing”), certain other subsidiaries of the Company party legal, accountingthereto as guarantors, the lenders party thereto and tax diligence fees, were approximately $10.3Bank of America, N.A., as agent for the lenders (the “ABL Loan Agreement”), under which the lenders party thereto agreed to provide the Company and certain of its subsidiaries with a committed asset-based revolving credit facility (the “ABL Facility”) providing for revolving loans up to an aggregate principal amount of $99.0 million.
The ABL Facility consisted of (i) a U.S. sub-facility, in an aggregate principal amount of up to $85.0 million (subject to availability under a US-specific borrowing base), (ii) a Canadian sub-facility, in an aggregate principal amount of up to $2.0 million (subject to availability under a Canadian-specific borrowing base), and (iii) a UK sub-facility in an aggregate principal amount of up to $3.0 million (subject to availability under a UK-specific borrowing base).
In March 2020, the Company paid in full all outstanding debt incurred under the ABL Facility, which the Company accounted for as a debt extinguishment in accordance with guidance in ASC 405-20, “Extinguishment of which were incurred Liabilities.” As a result of the debt extinguishment,during 2016. Thesethe twelve months ended December 31, 2020, the Company recognized $0.8 million of unamortized debt issuance costs are recordedin interest expense and $0.6 million of additional costs in selling, general and administrative expenses in the accompanying consolidated statements of income (loss)operations, in accordance with ASC 470-50, “Modifications and Extinguishments” (“ASC 470-50”).

During the twelve months ended December 31, 2020 and 2019, the Company recognized $0.4 million and $1.6 million for amortization of debt issuance costs, respectively, in the accompanying consolidated statements of operations.
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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. GoodwillAs of December 31, 2020 and 2019, the Company had 0 and $7.7 million of letters of credit issued and outstanding under the ABL Facility. The letters of credit were collateralized with a line block on the ABL Facility. During the twelve months ended December 31, 2020, certain letters of credit were reissued under the Revolving Credit Facility, as defined below, with a total of $3.1 million issued and outstanding as of December 31, 2020, with no cash collateral requirement. Other Intangible Assets
Goodwill
Changesletters of credit were reissued under the Revolving Credit Facility, with a cash collateral requirement, with a total of $4.9 million as of December 31, 2020. The cash collateral requirement is 105% of the outstanding letters of credit, for a total amount of $5.1 million as of December 31, 2020. Cash collateral is presented in restricted cash in the carryingaccompanying consolidated balance sheets.
Revolving Credit Facility
In March 2020, the Company, as guarantor, entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC (“Encina”), as agent for the lenders party thereto, and HGA and Cequent Towing, as borrowers (the “ABL Borrowers”). The Loan Agreement provides for an asset-based revolving credit facility (the “Revolving Credit Facility”) in the maximum aggregate principal amount of goodwill$75.0 million subject to customary borrowing base limitations contained therein, and may be increased at the ABL Borrowers’ request in increments of $5.0 million, up to a maximum of five times over the life of the Revolving Credit Facility, for a total increase of up to $25.0 million.
The interest on the years ended December 31, 2017loans under the Loan Agreement is payable in cash at the interest rate of LIBOR plus 4.00% per annum, subject to a 1.00% LIBOR floor, provided that if for any reason the loans are converted to base rate loans, interest will be paid in cash at the customary base rate plus a margin of 3.00% per annum. All interest, fees, and 2016 are as follows:
  Horizon Americas Horizon Europe‑Africa Horizon Asia‑Pacific Total
 (dollars in thousands)
Balances at December 31, 2015 $4,410
 $—
 $—
 $4,410
Goodwill from acquisitions (a)
 —
 126,050
 —
 126,050
Foreign currency translation and other 960
 (11,230) —
 (10,270)
Balances at December 31, 2016 5,370
 114,820
 —
 120,190
Goodwill from acquisitions (b)
 —
 —
 6,990
 6,990
Foreign currency translation and other (90) 11,340
 (240) 11,010
Balances at December 31, 2017 $5,280
 $126,160
 $6,750
 $138,190
__________________________
(a) Attributableother monetary obligations due may, in Encina’s discretion but upon prior notice to the acquisitionABL Borrowers, be charged to the loan account and thereafter be deemed to be part of the Westfalia Group, as further described in Note 4, “Acquisitions”.
(b) AttributableRevolving Credit Facility subject to the acquisitionsame interest rate. There are no amortization payments required under the Loan Agreement. Borrowings under the Loan Agreement mature on the earlier of: (i) March 13, 2023 and (ii) 90 days prior to the maturity of Best Bars,the Company’s Replacement Term Loan, as further describeddefined below, as may be in Note 4, “Acquisitions”.
Other Intangible Assets
In May 2016, the Company made a decisioneffect from time to simplify its brand offering in the Horizon Americas’ reportable segment. Based on this decision, the Company no longer expects that the economic benefit of certain indefinite-lived trade names extends beyond the foreseeable future.time, unless earlier terminated. As a result of the 2020 Replacement Term Loan Amendment, as defined below, the maturity of all borrowings under the Revolving Credit Facility were extended to fiscal year 2022 and are presented in gross long-term debt in the second quarteraccompanying consolidated balance sheets as of 2016,December 31, 2020. All of the indebtedness under the Loan Agreement is and will be guaranteed by the Company determinedand certain of the Company’s existing and future North American subsidiaries and is and will be secured by substantially all of the assets of the Company, such other guarantors, and the ABL Borrowers.
The Loan Agreement also contains a financial covenant that trade namesstipulates the ABL Borrowers and guarantors under the Loan Agreement will not make Capital Expenditures (as defined in the Loan Agreement) exceeding $30.0 million during any fiscal year.
Debt issuance costs of $2.3 million were incurred in connection with an aggregate carrying value of $2.4 million shouldthe Loan Agreement. These debt issuance costs will be assigned finite useful lives. In accordance with ASC 350, “Intangibles - Goodwill and Other,” these trade names were first tested for impairment as indefinite-lived intangible assets resulting in non-cash intangible asset impairment charges of $2.2 million. The remaining $0.2 million was reclassified to amortizable intangible assets during the second quarter of 2016 and amortized within selling, general and administrative costsinto interest expense over the remaindercontractual term of the year.
Loan Agreement. During the Company’s annual indefinite-lived impairment testing in the fourth quarter of 2016, due to the macroeconomic conditions in Brazil and declining sales and sales projections as a result of competitive pressures in the United Kingdom, the Company determined that certain trade names with an aggregate carrying value of $6.9 million were impaired. In accordance with ASC 350, “Intangibles - Goodwill and Other,” the indefinite-lived assets were tested for impairment with fair value measurements derived from a relief from royalty method, which considers projected revenue and an estimated royalty rate. It was determined that the carrying value of these trade names exceeded their estimated fair value. As a result, non-cash intangible asset impairment charges of $3.8 million and $2.4 million were recorded in the Horizon Americas and Horizon Europe‑Africa reportable segments, respectively. No impairment charges were recorded during the yeartwelve months ended December 31, 2017. Refer to Note 3, “Summary2020, the Company recognized $1.2 million for amortization of Significant Accounting Policies” for further discussion.debt issuance costs in the accompanying consolidated statements of operations. As of December 31, 2020, there was $1.1 million of unamortized debt issuance costs included in other assets in the accompanying consolidated balance sheets.

As of December 31, 2020, there was $24.2 million outstanding under the Revolving Credit Facility and as of December 31, 2019, there was $20.0 million outstanding under the ABL Facility, with a weighted average interest rate of 5.0% and 5.5%, respectively. As of December 31, 2020, the Company had $38.4 million of availability under the Revolving Credit Facility and as of December 31, 2019, the Company had $33.1 million of availability under the ABL Facility.
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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

First Lien Term Loan Agreement
On June 30, 2015, the Company entered into a credit agreement among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A. (the “Term Loan Agreement”) under which the Company borrowed an aggregate of $200.0 million (the “Original Term B Loan”). The gross carrying amountsTerm Loan Agreement has been subsequently amended and accumulated amortizationrestated on several occasions and is collectively referred to as the “First Lien Term Loan Agreement.” The Original Term B Loan has also been subsequently amended on several occasions and is collectively referred to as the “First Lien Term Loan.” In conjunction with the entry into the Revolving Credit Facility referenced above, Cortland Capital Markets Services LLC served as administrative agent and collateral agent for the First Lien Term Loan.
In July 2018, the Company entered into the Fourth Amendment to the Term Loan Agreement which provided for additional borrowings of $50.0 million (the “2018 Incremental Term Loan”; the 2017 Replacement Term Loan, as increased by the 2018 Incremental Term Loan, the “2018 Term B Loan”). Interest on borrowings under the 2018 Term B Loan was payable at LIBOR, with a 1.0% floor, plus 6.0% per annum.
In February 2019, the Company amended and restated the existing 2018 Term Loan Agreement (the “First Lien Term Loan Agreement”) to permit the Company to enter into the Senior Term Loan Agreement and tightened certain indebtedness, asset sale, investment and restricted payment baskets.
In March 2019, the Company amended the existing term loan agreement (“Sixth Term Amendment”) to permit the Company to enter into the Second Lien Term Loan Agreement, as well as amended the interest rate on the First Lien Term Loan Agreement to add 3.0% paid-in-kind (“PIK”) interest in addition to the existing cash interest.
In September 2019, the Company amended the existing First Lien Term Loan Agreement (“Eighth Term Amendment”) to provide consent for the sale of the Company’s other intangibles asAPAC segment, provide consent for the Company to meet its prepayment obligation of the First Lien Term Loan, remove prepayment penalties and make certain negative covenants less restrictive. In September 2019, the Company paid down a portion of its First Lien Term Loan’s outstanding principal plus fees and paid-in-kind interest in the amount of $172.9 million.
During the twelve months ended December 31, 2017 and 2016 are summarized below. The2019, the Company amortizes these assets over periods ranging from one to 25 years.
  As of December 31, 2017 As of December 31, 2016
Intangible Category by Useful Life 
Gross Carrying
Amount
 
Accumulated
Amortization
 
Gross Carrying
Amount
 
Accumulated
Amortization
  (dollars in thousands)
Finite-lived intangible assets:        
Customer relationships, 5 - 25 years $180,850
 $(121,750) $170,690
 $(112,560)
Technology and other, 3 - 15 years 19,950
 (15,260) 18,410
 (14,560)
Trademark/Trade names, 1 - 8 years 730
 (190) 150
 (150)
Total finite-lived intangible assets 201,530
 (137,200) 189,250
 (127,270)
Trademark/Trade names, indefinite-lived 25,900
 —
 24,740
 —
Total other intangible assets $227,430
 $(137,200) $213,990
 $(127,270)
Amortizationrecognized $8.7 million of unamortized debt issuance costs in interest expense related to intangible assets as included in the accompanying consolidated statements of income (loss) is summarized as follows:
  Year ended December 31,
  2017 2016 2015
  (dollars in thousands)
Technology and other, included in cost of sales $710
 $170
 $190
Customer relationships & Trademark/Trade names, included in selling, general and administrative expenses 9,700
 7,790
 7,150
Total amortization expense $10,410
 $7,960
 $7,340
Estimated amortization expenseoperations, in accordance with ASC 470-50, due to the extinguishment of debt for certain lenders in the next five fiscal years beginning after loan syndicate in connection with various amendments to the First Lien Term Loan Agreement occurring during 2019. During the twelve months ended December 31, 2017 is2019, the Company also recognized $0.7 million of additional costs in selling, general and administrative expenses in the accompanying consolidated statements of operations, in accordance with ASC 470-50.
In May 2020, the Company entered into an amendment, limited waiver and consent (the “Tenth Term Amendment”) with an effective date of April 1, 2020, to amend the First Lien Term Loan Agreement and to consent to the Company’s entering into, among other things, the PPP Loan and French Loan, each as follows:defined and described below.
Year ended December 31, Estimated Amortization Expense
  (dollars in thousands)
2018 $7,740
2019 7,240
2020 7,040
2021 5,490
2022 5,240
6. Inventories
Inventories consistAs a result of the following components:Replacement Term Loan Amendment, as defined and described below, the outstanding balance and any accrued interest has been replaced by the Replacement Term Loan, as defined and described below.
During the twelve months ended December 31, 2020 and 2019, the Company recognized $0.2 million and $2.8 million, respectively, of amortization of debt issuance and discount costs, in the accompanying consolidated statements of operations.
During the twelve months ended December 31, 2020 and 2019, the Company recognized $0.4 million and $3.2 million, respectively, of PIK interest, on the First Lien Term Loan. As of December 31, 2020 and 2019, the Company had 0 and $25.2 million, respectively, of aggregate principal amount outstanding, and as of December 31, 2019, bearing cash interest at 8.1% under the First Lien Term Loan.
As of December 31, 2019, the Company’s First Lien Term Loan traded at 97.8% of par value. The valuation of the First Lien Term Loan was determined based on Level 2 inputs under the fair value hierarchy.
68
  December 31,
2017		 December 31,
2016
  (dollars in thousands)
Finished goods $105,070
 $89,410
Work in process 16,590
 16,270
Raw materials 49,840
 40,340
Total inventories $171,500
 $146,020

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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Senior Term Loan Agreement
7. PropertyIn February 2019, the Company entered into a credit agreement (the “Senior Term Loan Agreement”) with Cortland Capital Markets Services LLC, as administrative agent and Equipment, Net
Propertycollateral agent, and equipment consiststhe lenders party thereto. The Senior Term Loan Agreement provided for a short-term loan facility in the aggregate principal amount of $10.0 million, all of which was borrowed by the Company. Certain of the following components:lenders under the Company’s First Lien Term Loan Agreement were the lenders under the Senior Term Loan Agreement.
  December 31,
2017		 December 31,
2016
  (dollars in thousands)
Land and land improvements $480
 $520
Buildings 23,370
 20,120
Machinery and equipment 162,830
 138,470
  186,680
 159,110
Less: Accumulated depreciation 73,660
 65,350
Property and equipment, net $113,020
 $93,760
Depreciation expense as includedThe Senior Term Loan Agreement required the Company to obtain additional financing in amounts and on terms acceptable to the lenders. The Senior Term Loan Agreement was repaid on March 15, 2019, in conjunction with the additional financing further detailed below. During the twelve months ended December 31, 2019, the Company incurred debt issuance costs of $0.5 million in connection with the Senior Term Loan Agreement, which were recorded to selling, general and administrative expenses in the accompanying consolidated statements of income (loss) isoperations.
Second Lien Term Loan Agreement
In March 2019, the Company entered into a credit agreement (the “Second Lien Term Loan Agreement”) with Cortland Capital Markets Services LLC, as follows:administrative agent and collateral agent, and Corre Partners Management L.L.C., as representative of the lenders, and the lenders party thereto. The Second Lien Term Loan Agreement provided for a term loan facility in the aggregate principal amount of $51.0 million. The proceeds, net of applicable fees, of the Second Lien Term Loan Agreement were used to repay all amounts outstanding under the Senior Term Loan Agreement and to provide additional liquidity and working capital for the Company. Interest on borrowings under the Second Lien Term Loan Agreement Loan was payable in-kind at the customary eurocurrency rate plus a margin of 11.5%. The Second Lien Term Loan Agreement was secured by a second lien on substantially the same collateral as the First Lien Term Loan, bearing an interest rate of LIBOR plus 11.5% payable in-kind through an increase in principal balance.
In September 2019, the Company amended the Second Lien Term Loan Agreement (“Second Lien Amendment”) to remove the prepayment requirement related to the use of APAC sale proceeds and made certain negative covenants less restrictive.
  Year ended December 31,
  2017 2016 2015
  (dollars in thousands)
Depreciation expense, included in cost of sales $13,730
 $8,800
 $8,210
Depreciation expense, included in selling, general and administrative expense 1,200
 1,460
 1,530
Total depreciation expense $14,930
 $10,260
 $9,740
Pursuant to the Second Lien Term Loan Agreement, the Company was required to issue detachable warrants to purchase up to 6.25 million shares of its common stock, which can be exercised on a cashless basis over a five-year term with an exercise price of $1.50 per share. In March 2019, warrants to purchase 3,601,902 shares of common stock were issued and the Company also issued 90,667 shares of Series A Preferred Stock in the interim that were convertible into additional warrants to purchase 2,952,248 shares of common stock upon receipt of shareholder approval of the issuance of such additional warrants and the shares of common stock issuable upon exercise thereof.
8. AccruedIn accordance with ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and other long-term liabilities
As of December 31, 2017ASC 815, “Derivatives and 2016, accrued wagesHedging” (“ASC 815”), the (i) Second Lien Term Loan; (ii) Series A Preferred Stock, and bonus(iii) warrants are all freestanding instruments and proceeds were approximately $9.9allocated to each instrument on March 15, 2019 on a relative fair value basis: (i) $40.3 million; (ii) $5.3 million and $16.7(iii) $5.4 million, respectively. No other classification
The Series A Preferred Stock was not within the scope of accrued liabilities exceeded 5% of current liabilitiesASC 480 and did not meet the criteria for liability classification. The Series A Preferred Stock was classified as temporary equity as of DecemberMarch 31, 2017 and 2016.
Other long-term liabilities consist2019, as the Series A Preferred Stock was entitled to receive two times its liquidation value in cash upon occurrence of a liquidation or deemed liquidation event, which is outside the control of the following components:Company. After receipt of shareholder approval at the Company’s annual meeting of shareholders on June 25, 2019, the 90,667 shares of Series A Preferred Stock were automatically converted into warrants to purchase 2,952,248 shares of common stock and $5.3 million was reclassified to common stock warrants within shareholders’ equity in the Company’s consolidated balance sheets. The warrants also do not meet the criteria for liability classification under ASC 480. However, the warrants meet the definition of a derivative under ASC 815, and are determined to be indexed to the Company’s common stock and meet the requirements for equity classification pursuant to ASC 815-40, “Derivatives and Hedging-Contracts in Entity’s Own Equity” (“ASC 815-40”).
The Company determined the fair value of the Second Lien Term Loan using a discount rate build up approach. The fair values of the Series A Preferred Stock and warrants were determined using an option pricing method. The debt discount of $10.7 million created by the relative fair value allocation of the equity component is being amortized as additional non-cash interest expense using the effective interest method over the contractual term of the loan.
69
  December 31,
2017		 December 31,
2016
  (dollars in thousands)
Long-term tax liabilities $13,750
 $9,720
Cross currency swap 7,830
 —
Deferred purchase price 3,350
 5,070
Other 13,440
 15,620
Total other long-term liabilities $38,370
 $30,410

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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In May 2020, the Company entered into an amendment, limited waiver and consent (the “Second Lien Third Amendment”), with an effective date of April 1, 2020, to amend the Second Lien Term Loan Agreement and to consent to the Company’s entering into, among other things, the PPP Loan and French Loan, each as defined and described below.
9. Long-term Debt issuance costs of $3.8 million and original issuance discount of $1.0 million were incurred in connection with entry into the Second Lien Term Loan Agreement.
As a result of the Replacement Term Loan Amendment, as defined and described below, the outstanding balance and any accrued interest has been replaced by the Replacement Term Loan, as defined and described below.
During the twelve months ended December 31, 2020 and 2019, the Company recognized $2.7 million and $2.8 million, respectively, for amortization of debt issuance and discount costs, in the accompanying consolidated statements of operations.
During the twelve months ended December 31, 2020 and 2019, the Company recognized $3.4 million and $6.5 million, respectively, of PIK interest on its Second Lien Term Loan. As of December 31, 2020 and 2019, the Company had 0 and $57.0 million, respectively, of aggregate principal amount outstanding, and as of December 31, 2019 bearing interest at 13.3% under the Second Lien Term Loan.
The Company’s Second Lien Term Loan had a fair value of $46.0 million as of December 31, 2019. The valuation of the Second Lien Term Loan was determined based on Level 2 inputs under the fair value hierarchy.
Replacement Term Loan
On July 6, 2020, the Company entered into the Replacement Term Loan Amendment (the “Eleventh Term Amendment”) to amend the Term Loan Agreement. The Eleventh Term Amendment provided replacement term loans (the “Replacement Term Loan”) that refinanced and replaced the outstanding balances under the First Lien Term Loan Agreement and Second Lien Term Loan Agreement, plus any accrued interest thereon. The remaining unamortized debt issuance and original issuance discount costs related to the First Lien Term Loan Agreement and Second Lien Term Loan Agreement will be amortized into interest expense over the contractual term of the Replacement Term Loan using the effective interest method.
The interest on the Replacement Term Loan was LIBOR plus 10.75% per annum, subject to a 1.00% LIBOR floor, of which 4.00% was payable in cash and the remainder of which was PIK interest (provided that the Company may elect on not more than one occasion to pay all interest as PIK interest). Borrowings under the Eleventh Term Amendment were to mature on the earlier of: (i) June 30, 2022 and (ii) April 1, 2022 if the Convertible Notes, as defined below, were not repaid or otherwise discharged prior to such date. Additionally, the Eleventh Term Amendment provided for a 1.00% PIK closing fee, which was added to the principal amount of the Replacement Term Loan on the closing date; provided for a prepayment penalty on the entire principal amount of the Replacement Term Loan in an amount equal to 3.0% of the aggregate principal amount prepaid prior to December 31, 2021; and amended the fixed charge coverage ratio covenant beginning with the fiscal quarter ending June 30, 2021, as follows:
•June 30, 2021: 1.10 to 1.00
•September 30, 2021: 1.25 to 1.00
•December 31. 2021 and each fiscal quarter ending thereafter: 1.40 to 1.00
During the twelve months ended December 31, 2020, the Company recognized $0.2 million of additional costs in selling, general and administrative expense in the accompanying consolidated statements of operations, in accordance with ASC 470-50.
As of December 31, 2020, the Company had total unamortized debt issuance and discount costs of $9.1 million, all of which are recorded as a reduction of the long-term debt consistsbalance on the Company’s accompanying consolidated balance sheets. During the twelve months ended December 31, 2020, the Company recognized $2.3 million for amortization of debt issuance and discount costs in the accompanying consolidated statements of operations.
As of December 31, 2020, the Company had $90.2 million of aggregate principal amount outstanding under the Replacement Term Loan. The Company made a one-time election to pay all interest as PIK interest on the first interest payment date. As a result of this election, during the twelve months ended December 31, 2020 the Company recognized $4.3 million of PIK interest.
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All of the following:indebtedness under the Replacement Term Loan is guaranteed by the Company’s existing and future material domestic subsidiaries and is be secured by substantially all of the assets of the Company and such guarantors.
  December 31,
2017		 December 31,
2016
  (dollars in thousands)
ABL Facility $10,000
 $—
Term B Loan 149,620
 337,000
Convertible Notes 125,000
 —
Bank facilities, capital leases and other long-term debt 25,780
 21,660
  310,400
 358,660
Less:    
Unamortized debt issuance costs and original issuance discount on Term B Loan 4,940
 8,720
Unamortized debt issuance costs and discount on the Convertible Notes 29,870
 —
Current maturities, long-term debt 16,710
 22,900
Long-term debt $258,880
 $327,040
As of December 31, 2020, the Company’s Replacement Term Loan traded at103.6%. The valuation of the Replacement Term Loan was determined based on Level 2 inputs under the fair value hierarchy.
Convertible Notes
OnIn February 1, 2017, the Company completed a public offering of 2.75% Convertible Senior Notes due 2022 (the “Convertible Notes”) in an aggregate principal amount of $125.0 million. Interest is payable on January 1 and July 1 of each year, beginning on July 1, 2017. The Convertible Notes are convertible into 5,005,000 shares of the Company’s common stock, based on an initial conversion price of $24.98 per share. The Convertible Notes will mature on July 1, 2022 unless earlier converted.
The Convertible Notes are convertible at the option of the holder (i) during any calendar quarter beginning after March 31, 2017, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business days after any five consecutive trading day period in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of such period was less than 98% of the product of the last reported sale price of the Company’s common stock $1,000 and the conversion rate on each such trading day; (iii) upon the occurrence of specified corporate events; and (iv) on or after January 1, 2022 until the close of business on the second scheduled trading day immediately preceding the maturity date. During the fourth quarter of 2017,2020, no conditions allowing holders of the Convertible Notes to convert have been met. Therefore, the Convertible Notes arewere not convertible during the fourth quarter of 20172020 and are classified as long-term debt. Should conditions allowing holders of the Convertible Notes to convert be met in the fourth quarter of 2017 or a future quarter, the Convertible Notes will be convertible at their holders’ option during the immediately following quarter. As of December 31, 2017,2020, the if-converted value of the Convertible Notes did not exceed the principal value of those Convertible Notes.
Upon conversion by the holders, the Company may elect to settle such conversion in shares of its common stock, cash, or a combination thereof. Because the Company may elect to settle conversion in cash, the Company separated the Convertible Notes into their liability and equity components by allocating the issuance proceeds to each of those components in accordance with Accounting Standards Codification (“ASC”)ASC 470-20, “Debt-Debt“Debt-Debt with Conversion and Other Options.” The Company first determined the fair value of the liability component by estimating the fair value of a similar liability that does not have an associated equity component. The Company then deducted that amount from the issuance proceeds to arrive at a residual amount, which represents the equity component. The Company accounted for the equity component as a debt discount (with an offset to paid-in capital in excess of par value). The debt discount created by the equity component is being amortized as additional non-cash interest expense using the effective interest method over the contractual term of the Convertible Notes ending on July 1, 2022.
The Company allocated offering costs of $3.9 million to the debt and equity components in proportion to the allocation of proceeds to the components, treating them as debt issuance costs and equity issuance costs, respectively. The debt issuance costs of $2.9 million are being amortized as additional non-cash interest expense using the effective interest method over the contractual term of the Convertible Notes. The Company presents debt issuance costs as a direct deduction from the carrying value of the liability component. The carrying value of the liability component at December 31, 2017,2020 and 2019, was $95.1$113.5 million and $106.9 million, respectively, including total unamortized

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debt discount and debt issuance costs of $29.9$11.5 million and $18.1 million. The $1.0 million portion of offering costs allocated to equity issuance costs was charged to paid-in capital. The carrying amount of the equity component was $20.0 million at December 31, 2017,2020 and 2019, respectively, net of issuance costs and taxes.
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Interest expense recognized relating to the contractual interest coupon, amortization of debt discount and amortization of debt issuance costs on the Convertible Notes included in the accompanying consolidated statements of income (loss)operations are as follows:
Twelve Months Ended
December 31,
20202019
(dollars in thousands)
Contractual interest coupon on convertible debt$3,457 $3,490 
Amortization of debt issuance costs$530 $530 
Amortization of "equity discount" related to debt$6,071 $5,590 
  Year ended December 31,
  2017 2016
  (dollars in thousands)
Contractual interest coupon on convertible debt $3,190
 $—
Amortization of debt issuance costs $490
 $—
Amortization of "equity discount" related to debt $4,380
 $—
The estimated fair value of the Convertible Notes based on a market approach as of December 31, 20172020 and 2019 was approximately $120.3$113.3 million and $100.0 million, respectively, which representsboth represent a Level 2 valuation. valuation. The estimated fair value was determined based on the estimated or actual bids and offers of the Convertible Notes in an over-the-counter market on the last business day of the period.
In connection with the issuance of the Convertible Notes, the Company entered into convertible note hedge transactions (the “Convertible Note Hedges”) in privately negotiated transactions with certain of the underwriters or their affiliates (in this capacity, the “option counterparties”). The Convertible Note Hedges provide the Company with the option to acquire, on a net settlement basis, 5,005,000 shares of its common stock, which is equal to the number of shares of common stock that notionally underlie the Convertible Notes, at a strike price of $24.98, which corresponds to the conversion price of the Convertible Notes. The Convertible Note Hedges have an expiration date that is the same as the maturity date of the Convertible Notes, subject to earlier exercise. The Convertible Note Hedges have customary anti-dilution provisions similar to the Convertible Notes. The Convertible Note Hedges have a default settlement method of net-share settlement but may be settled in cash or shares, depending on the Company’s method of settlement for conversion of the corresponding Convertible Notes. If the Company exercises the Convertible Note Hedges, the shares of common stock it will receive from the option counterparties to the Convertible Note Hedges will cover the shares of common stock that it would be required to deliver to the holders of the converted Convertible Notes in excess of the principal amount thereof. The aggregate cost of the Convertible Note Hedges was $29.0 million (or $7.5 million net of the total proceeds from the Warrants sold, as discussed below), before the allocation of issuance costs of approximately $0.7 million. The Convertible Note Hedges are accounted for as equity transactions in accordance with ASC 815-40, “Derivatives and Hedging-Contracts in Entity’s own Equity.”815-40.
In connection with the issuance of the Convertible Notes, the Company also sold net-share-settled warrants (the “Warrants”) in privately negotiated transactions with the option counterparties for the purchase of up to 5,005,000 shares of its common stock at a strike price of $29.60 per share, for total proceeds of $21.5 million before the allocation of $0.6$0.5 million of issuance costs. The Company also recorded the Warrants within shareholders’ equity in accordance with ASC 815-40. The Warrants have customary anti-dilution provisions similar to the Convertible Notes. As a result of the issuance of the Warrants, the Company will experience dilution to its diluted earnings per share if its average closing stock price exceeds $29.60 for any fiscal quarter. The Warrants expire on various dates from October 2022 through February 2023 and must be net-settled in shares of the Company’s common stock. Therefore, upon exercise of the Warrants, the Company will issue shares of its common stock to the purchasers of the Warrants that represent the value by which the price of the common stock exceeds the strike price stipulated within the particular warrant agreement.
ABL FacilityPaycheck Protection Program Loan
On December 22, 2015, theIn April 2020, Horizon Global Company entered into an amended and restated loan agreement among the Company, Cequent Performance Products, Inc. (“Cequent Performance”LLC (the “U.S. Borrower”), Cequent Consumer Products, Inc. (“Cequent Consumer”), Cequent UK Limited, Cequent Towing Products of Canada Ltd., certain other subsidiariesa direct U.S.-based subsidiary of the Company, party theretoreceived a loan from PNC Bank, National Association for $8.7 million, pursuant to the Paycheck Protection Program (the “PPP Loan”) under Division A, Title I of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The PPP Loan, which is in the form of a Note dated April 18, 2020 issued by the U.S. Borrower, matures on April 18, 2022. Funds from the PPP Loan may be used for payroll, costs used to continue group health care benefits, rent and utilities. Under the terms of the PPP Loan, certain amounts may be forgiven if they are used for qualifying expenses as guarantors,described in the lenders party theretoCARES Act.
The Company submitted its PPP Loan application in good faith in accordance with the CARES Act and Bank of America, N.A., as agent for the lendersguidance issued by the Small Business Administration (the “ABL Loan Agreement”“SBA”), under whichincluding the lenders party thereto agreed to provideSBA’s Paycheck Protection Program’s Frequently Asked Questions. During 2020, the Company, in accordance with the final guidance issued by the United States Department of the Treasury (the “Treasury”), met the need and certainsized based criteria of its subsidiaries with a committed asset-based revolving credit facility (the “ABL Facility”) providing for revolving loans up to an aggregate principal amount of $99.0 million.

the program.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In December 2020, the Company filed its application of loan forgiveness with PNC Bank, National Association. The potential loan forgiveness for all or a portion of the PPP Loan is determined, subject to limitations, based on the use of loan proceeds for payment of qualifying expenses over the 24 weeks after the loan proceeds were disbursed. The unforgiven portion of our PPP Loan, if any, is payable monthly over two years at an interest rate of 1.0% per annum. The Company has deferred any interest payments until the Company’s application for forgiveness is completed in accordance with the guidance issued by the SBA and Treasury and the terms of the Company’s PPP Loan. While we currently believe that our use of the loan proceeds will meet the conditions for forgiveness of our PPP Loan, there can be no assurance that forgiveness for any portion of the PPP Loan will be obtained.
The ABLFrench Loan Agreement provides for the increase
In April 2020, S.I.A.R.R. SAS (the “French Borrower”), an indirect subsidiary of the U.S. sub-facilityCompany, received a loan from BNP Paribas (the “French Loan”) for $5.5 million. The French Loan, issued pursuant to an aggregate principal amount of $85.0 million to up to $94.0 million (subject to availability under a U.S.-specific borrowing base) (the “U.S. Facility”),agreement dated April 9, 2020, between the French Borrower and the establishment of two new sub-facilities, (i) a Canadian sub-facility, in an aggregate principal amount of up to $2.0 million (subject to availability under a Canadian-specific borrowing base) (the “Canadian Facility”) and (ii) a U.K. sub-facility in an aggregate principal amount of up to $3.0 million (subject to availability under a U.K.-specific borrowing base) (the “U.K. Facility”). The ABL Facility also includes a $20.0 million letter of credit sub-facility, whichBNP Paribas, matures on June 30, 2020.
Borrowings under the ABL Facility bearApril 9, 2021. The French Loan bears interest at a rate of 0.5% per annum. The French Borrower, at its election, may repay the Company’s election, at either (i)French Loan in full on April 9, 2021 or in monthly installments for a period of five years from the Base Rate (as defined per the credit agreement, the “Base Rate”) plus the Applicable Margin (as defined per the credit agreement “Applicable Margin”), or (ii) the London Interbank Offered Rate (“LIBOR”) plus the Applicable Margin.date of election.
Covenant and Liquidity Matters
The Company incurs fees with respect to the ABL Facility, including (i) an unused line fee of 0.25% times the amount by which the revolver commitments exceed the average daily revolver usage during any month, (ii) facility fees equal to the applicable margin in effect for LIBOR revolving loans, as defined per the credit agreement, times the average daily stated amount of letters of credit, (iii) a fronting fee equal to 0.125% per annum on the stated amount of each letter of credit and (iv) customary administrative fees.
All of the indebtedness of the U.S. Facility is and will be guaranteed by the Company’s existing and future material domestic subsidiaries and is and will be secured by substantially all of the assets of the Company and such guarantors. In connection with the ABL Loan Agreement, Cequent Performance and certain other subsidiaries of the Company party to the ABL Loan Agreement entered into a foreign facility guarantee and collateral agreement (the “Foreign Collateral Agreement”) in order to secure and guarantee the obligation under the Canadian Facility and the U.K. Facility. Under the Foreign Collateral Agreement, Cequent Performance and the other subsidiaries of the Company party thereto granted a lien on certain of their assets to Bank of America, N.A., as the agent for the lenders and other secured parties under the Canadian Facility and U.K. Facility.
The ABL Loan Agreement contains customary negative covenants, and does not include any financial maintenance covenants other than a springing minimum fixed charge coverage ratio of at least 1.00 to 1.00 on a trailing twelve-month basis, which will be tested only upon the occurrence of an event of default or certain other conditions as specified in the agreement. At December 31, 2017, the Company was in compliance with all of its financial covenants contained in the ABL Facility.
Debt issuance costs of approximately $2.5 million were incurred in connection with the entry into and amendment of the ABL Facility. These debt issuance costs will be amortized into interest expense over the contractual term of the loan. The Company recognized $0.5 million, $0.5 million and $0.1 million during the years ended December 31, 2017, December 31, 2016 and December 31, 2015, respectively, related to the amortization of debt issuance costs, which is included in the accompanying consolidated statements of income (loss). There were $1.3 million and $1.8 million of unamortized debt issuance costs included in other assets in the accompanying consolidated balance sheet as of December 31, 2017 and December 31, 2016, respectively.
There was $10.0 million outstanding under the ABL Facility as of December 31, 2017 with a weighted average interest rate of 3.6%. As of December 31, 2016 there were no amounts outstanding. Total letters of credit issued at December 31, 2017 and 2016 were $6.3 million and $7.0 million, respectively. The Company had $58.5 million and $68.7 million in availability under the ABL Facility as of December 31, 2017 and 2016, respectively.
Term Loan
On June 30, 2015, the Company entered into a term loan agreement (“Original Term B Loan”) under which the Company borrowed an aggregate of $200.0 million, which matures on June 30, 2021. On September 19, 2016, the Company entered into the First Amendment to the Original Term B Loan (the “Term Loan Amendment”) which amended the Term B Loan to provide for incremental commitments in an aggregate principal amount of $152.0 million (the “Incremental Term Loans”) that were extended to the Company on October 3, 2016. The Original Term B Loan and Incremental Term Loans are collectively referred to as the “Term B Loan”. On March 31, 2017, the Company entered into the Third Amendment to the Term B Loan (the “Replacement Term Loan Amendment”), which amended the Term B Loan to provide for a new term loan commitment (the “Replacement Term Loan”). The proceeds from the Replacement Term Loan were used to repay in full the outstanding principal amount of the Term B Loan. As a result of the Replacement Term Loan Amendment, the interest rate was reduced by 1.5% per annum. Additionally, quarterly principal payments required under the Original Term B Loan and Term Loan Amendment of $2.5 million and $2.1 million, respectively, were reduced to an aggregate quarterly principal payment of $1.9 million. On and after the Replacement Term Loan Amendment effective date, each reference to “Term B Loan” is deemed to be a reference to the Replacement Term Loan.

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The Term B Loan permits the Company to request incremental term loan facilities, subject to certain conditions, in an aggregate principal amount, together with the aggregate principal amount of incremental equivalent debt incurred by the Company, of up to $75.0 million, plus an additional amount such that the Company’s pro forma first lien net leverage ratio (as defined in the term loan agreement) would not exceed 3.50 to 1.00 as a result of the incurrence thereof.
Borrowings under the Term B Loan bear interest, at the Company’s election, at either (i) the Base Rate plus 3.5% per annum, or (ii) LIBOR, with a 1% floor, plus 4.5% per annum. Principal payments required under the Term B Loan are $1.9 million due each calendar quarter beginning June 2017. Commencing with the fiscal year ending December 31, 2017, and for each fiscal year thereafter, the Company will also be required to make prepayments of outstanding amounts under the Term B Loan in an amount equal to 50.0% of the Company’s excess cash flow for such fiscal year, as defined in the Term B Loan, subject to adjustments based on the Company’s leverage ratio and optional prepayments of term loans and certain other indebtedness.
All of the indebtedness under the Term B Loan is and will be guaranteed by the Company’s existing and future material domestic subsidiaries and is and will be secured by substantially all of the assets of the Company and such guarantors. The Term B Loan contains customary negative covenants, and also contains a financial maintenance covenant which requires the Company to maintain a net leverage ratio not exceeding 5.00 to 1.00 through the fiscal quarter ending March 31, 2018; 4.75 to 1.00 through the fiscal quarter ending September 30, 2018; and thereafter, 4.50 to 1.00. At December 31, 2017, the Company was in compliance with its financial covenants as described in the Term B Loan.
During the first quarter of 2017, the Company used a portion of the net proceeds from the Convertible Notes offering as described above, along with proceeds from the Common Stock Offering as described in Note 12, “Earnings per Share”, to prepay a total of $177.0 million of the Term B Loan. In accordance with ASC 470, “Debt - Modifications and Extinguishments”, the prepayment was determined to be an extinguishment of the existing debt. As a result, the pro-rata share of the unamortized debt issuance costs and original issuance discount related to the prepayment, aggregating to $4.6 million, was recorded as a loss on the extinguishment of debt in the condensed consolidated statements of income (loss). The remaining unamortized debt issuance costs and original issuance discount, including $2.4 million additional transactions fees incurred in connection to the Replacement Term Loan Amendment, was approximately $6.1 million. Both the aggregate debt issuance costs and the original issue discount will be amortized into interest expense over the remaining life of the Term B Loan. The Company recognized $1.6 million, $1.6 million and $0.7 million during the years ended December 31, 2017, December 31, 2016 and December 31, 2015 related to the amortization of debt issuance costs and original issue discount, which is included in the accompanying consolidated statements of income (loss). The Company had an aggregate principal amount outstanding of $149.6 million and $337.0 million as of December 31, 2017 and 2016, respectively, under the Term B Loan bearing interest at 6.1%, and had $4.9 million and $8.7 million as of December 31, 2017 and 2016, respectively, of unamortized debt issuance costs and original issue discount, all of which are recorded as a reduction of the debt balance on the Company’s consolidated balance sheet.
The Company’s Term B Loan traded at approximately 101.4% and 101.6% of par value as of December 31, 2017 and December 31, 2016. The valuation of the Term B Loan was determined based on Level 2 inputs under the fair value hierarchy, as defined in Note 3, “Summary of Significant Accounting Polices.”
Bank facilities
On July 3, 2017, our Australian subsidiaries entered into a new agreement (collectively, the “Australia Loans”) to provide for revolving borrowings with an aggregate principal amount of $32.0 million as of December 31, 2017. The Australia Loans include two sub-facilities: (i) Facility A, with a borrowing capacity of $20.3 million that matures on July 3, 2020 and (ii) Facility B, with a borrowing capacity of $11.7 million that matures on July 3, 2018. There were $6.6 million outstanding under the Australian Loans as for December 31, 2017. As of December 31, 2016, no amounts were outstanding under the old revolving debt facility.
Borrowings under Facility A bear interest at the Bank Bill Swap Bid Rate (“BBSY”) plus a margin determined based on the most recent net leverage ratio (as defined per the Australian credit agreement). The margin is to be determined on the first day of the period as follows: (i) 1.10% per annum if the net leverage ratio is less than 1.50 to 1.00; (ii) 1.20% per annum if the net leverage ratio is less than 2.00 to 1.00 and (iii) 1.30% if the net leverage ratio is less than 2.50 to 1.00. Borrowings under Facility B bear interest at the BBSY plus a margin of 0.9% per annum.
The Australian Loans contain financial covenants, which require our Australian subsidiaries to maintain: (i) a net leverage ratio not exceeding 2.50 to 1.00 during the period commencing on the date of the agreement and ending on the first anniversary of the date of the agreement; and 2.00 to 1.00 thereafter; (ii) a working capital coverage ratio (as defined per the Australian credit agreement) greater than 1.75 to 1.00 at all times; and (iii) a gearing ratio (defined as the ratio of senior debt to senior debt plus equity) not to exceed 50%.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2020.
Long-term Debt Maturities
Future maturities of the face value of long-term debt at December 31, 20172020 are as follows:
Future Maturities of
Long-Term Debt
(dollars in thousands)
2021$14,120 
2022242,660 
202370 
202470 
202570 
Thereafter9,090 
    Total$266,080 
Years ending December 31, Future maturities of long-term debt
  (dollars in thousands)
2018 $16,970
2019 9,670
2020 19,110
2021 127,950
2022 125,010
Thereafter 11,690
    Total $310,400
10.11. Derivative Instruments
Foreign Currency Exchange Rate Risk
As of December 31, 2017,In the past, the Company was party to forward contracts to hedge changes in foreign currency exchange rates with notional amounts of approximately $23.0 million. The Company useshas used foreign currency forward contracts to mitigate the risk associated with fluctuations in currency rates impacting cash flows related to certain payments for contract manufacturing in its lower-cost manufacturing facilities. The foreign currency forward contracts hedgehedged currency exposure between the Mexican peso and the U.S. dollar the Thai baht and the Australian dollar and the U.S. dollar and the Australian dollar and maturematured at specified monthly settlement dates through December 2018.2019. At inception, the Company designated the foreign currency forward contracts as cash flow hedges. Upon the performance of contract manufacturing or purchase of certain inventories the Company de-designatesde-designated the foreign currency forward contract.contracts.
On October 4, 2016, the Company entered into a cross currency swap arrangement to hedge changes in foreign currency exchange rates. As of December 31, 2017, the notional amount of the cross currency swap was approximately $115.4 million. The Company usesused the cross currency swap to mitigate the risk associated with fluctuations in currency rates impacting cash flows related to a non-U.S. denominatednon-functional currency intercompany loan of €110.0 million. The cross currency swap hedgeshedged currency exposure between the euroEuro and the U.S. dollar and maturesmatured on January 3, 2019 with a liability of $2.5 million. The Company entered into forward contracts to settle the cross currency swap, which resulted in a $0.9 million offset to the liability. These settlements resulted in a net realized gain reclassified from AOCI of $0.6 million during 2019. The Company makesmade quarterly principal payments of €1.4 million, plus interest at a fixed rate of 5.4% per annum, in exchange for $1.5 million, plus interest at a fixed rate of 7.2% per annum.annum during the term of the cross currency swap arrangement. At inception, the Company designated the cross currency swap as a cash flow hedge. Changes in the currency rate resultresulted in reclassification of amounts from accumulated other comprehensive income (loss)AOCI to earnings to offset the re-measurement gain or loss on the non-U.S. denominated intercompany loan.
On August 16, 2017, the Company’s Australian subsidiary entered into a cross currency swap arrangement to hedge changes in foreign currency exchange rates. As of December 31, 2017, the notional amount of the cross currency was approximately $5.9 million. The Australian subsidiary uses the cross currency swap to mitigate the risk associated with fluctuations in currency rates related to a non-functional currency intercompany loan of NZ$10.0 million. The floating-to-floating cross currency swap hedges currency exposure between the New Zealand dollar and the Australian dollar and matures on June 30, 2020. The Australian subsidiary makes quarterly principal payments of NZ$0.8 million, plus interest at the 3-month Bank Bill Benchmark Rate (“BKBM”) in New Zealand plus a margin of .31% per annum, in exchange for A$0.8 million, plus interest at the 3-month BBSY in Australia per annum. At inception, the cross currency swap was not designated as a hedging instrument.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

There were no outstanding derivatives contracts at December 31, 2020 and 2019.
Financial Statement Presentation
As of December 31, 2017 and 2016, the fair value carrying amount of the Company’s derivative instruments were recorded as follows:
    Asset / (Liability) Derivatives
  Balance Sheet Caption December 31, 2017 December 31, 2016
    (dollars in thousands)
Derivatives designated as hedging instruments      
Foreign currency forward contracts Prepaid expenses and other current assets $—
 $670
Foreign currency forward contracts Accrued liabilities (670) (760)
Cross currency swap Other assets —
 5,720
Cross currency swap Other long-term liabilities (7,830) —
Total derivatives designated as hedging instruments   (8,500) 5,630
Derivatives not designated as hedging instruments      
Foreign currency forward contracts Prepaid expenses and other current assets 110
 —
Foreign currency forward contracts Accrued liabilities (90) (130)
Cross currency swap Other assets 90
 —
Total derivatives de-designated as hedging instruments   110
 (130)
Total derivatives   $(8,390) $5,500
The following table summarizes the gain or loss recognized in accumulated other comprehensive income (loss) (“AOCI”) and the amounts reclassified from AOCI into earnings are as follows:
Twelve Months Ended
December 31, 2019
Cost of SalesInterest Expense
(dollars in thousands)
Total Amounts of Expense Line Items Presented in the Statements of Operations in Which the Effects of Cash Flow Hedges are Recorded$(594,220)$(58,270)
Amount of Gain Reclassified from AOCI into Earnings
Derivatives classified as cash flow hedges:
Foreign currency forward contracts$1,850 $0 
Cross currency swap$0 $900 
12. Restructuring
The Company’s restructuring activities are undertaken as necessary to execute management’s strategy and streamline operations, consolidate and take advantage of available capacity and resources, and ultimately achieve productivity improvements and net cost reductions. The Company's restructuring charges consist primarily of employee costs (principally severance and/or termination benefits) and facility closure and other costs.
To the amounts recognized directly into earnings asextent these programs involve voluntary separations, no liabilities are generally recorded until offers to employees are accepted. If employees are involuntarily terminated, a liability is generally recorded at the communication date. Estimates of December 31, 2017 and 2016, and forrestructuring charges are based on information available at the years ended December 31, 2017, 2016 and 2015.
  Amount of Gain (Loss)
Recognized in AOCI
on Derivative
(Effective Portion, net of tax)		 Location of Gain (Loss) Reclassified from AOCI into Earnings
(Effective Portion)		 Amount of Gain (Loss) Reclassified from
AOCI into Earnings
  As of December 31,  Year ended December 31,
  2017 2016  2017 2016 2015
  (dollars in thousands)   (dollars in thousands)
Derivative instruments            
Foreign currency forward contracts $(660) $(320) Cost of sales $940
 $(1,620) $(590)
Cross currency swap $270
 $(610) Other expense, net $(15,820) $7,510
 $—
Over the next 12 months, the Company expects to reclassify approximately $0.7 million of pre-tax deferred losses, related to the foreign currency forward contracts, from AOCI totime such charges are recorded. Related charges are recorded in cost of sales asand selling, general and administrative expenses in the contract manufacturing and inventory purchases are settled. Over the next 12 months, the Company expects to reclassify approximately $0.4 million of pre-tax deferred gains, related to the cross currency swap, from AOCI to other expense, net as an offset to the re-measurement gains or losses on the non-U.S. denominated intercompany loan.
Derivatives not designated as hedging instruments
The gain or loss resulting from the change in fair value on de-designated forward contracts is reported within cost of sales on the Company’saccompanying consolidated statements of income (loss). There was no gainoperations.
The Company’s consolidated restructuring liabilities and related activity for each type of exit cost is as follows:
Employee CostsFacility Closure and Other CostsTotal
(dollars in thousands)
Balances at December 31, 2019$1,830 $2,110 $3,940 
Payments and other(a)
(1,830)(390)(2,220)
Balances at December 31, 2020$0 $1,720 $1,720 
(a)Other consists primarily of changes in the liability balance due to foreign currency translation and the finalization of employee costs and facility closures.
13. Leases
The Company leases certain facilities, automobiles and equipment under non-cancellable operating leases. Our leases have remaining lease terms of one year to eleven years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. Leases with an initial term of twelve months or loss on de-designated derivatives for the year ended December 31, 2017. The gain and loss on de-designated derivatives amounted to $0.3 million and $0.1 million, respectively, for the years ended December 31, 2016 and 2015, respectively. The gain or loss resulting from the change in fair valueless are not recorded on the floating-to-floating cross currency swapconsolidated balance sheets; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.
Most leases include one or more options to renew. The exercise of lease renewal options is recorded within other expense, net ontypically at the Company’s consolidated statementssole discretion; therefore, the majority of income (loss).renewals to extend the lease terms are not included in the Company’s ROU assets and lease liabilities as they are not reasonably certain of exercise. The gain on this cross currency swap was $0.1 millionCompany regularly evaluates the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in the lease term. The Company combines lease and non-lease components which are accounted for as a single lease component as the year ended December 31, 2017.

Company has elected the practical expedient to group lease and non-lease components for all leases. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Refer to Note 3, Summary of Significant Accounting Policies, for more information.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



Additional cost, cash flow and balance sheet information for the Company’s leases are as follows:
During 2016,
Twelve Months Ended
December 31,
 20202019
 (dollars in thousands)
Operating lease cost$14,970 $18,830 
Operating cash flows from operating leases$16,050 $18,000 
ROU assets obtained in exchange for operating lease obligations(a)
$9,940 $56,540 
(a) 2019 reflects the impact of adopting ASC 842, “Leases” and is net of $24.2 million of disposals.
December 31,
 20202019
Weighted average remaining lease term (years)6.06.8
Weighted average discount rate8.4 %8.7 %
In 2019, the Company entered into forward contracts to acquireabandoned two operating lease ROU assets. First, in September 2019, the Company ceased use of its former Troy, Michigan headquarters office lease. In conjunction with the lease abandonment, the Company accelerated the recognition of expense of its ROU asset and wrote it off, which resulted in a total$4.3 million charge. Second, in November 2019, the Company ceased use of €125leased equipment in its Kansas City location. In conjunction with the lease abandonment, the Company accelerated the recognition of expense of its ROU asset and wrote it off, which resulted in a $6.5 million or $140.0 million, to hedge changescharge. Each of these charges are recorded in foreign currency related to the cash portion of the purchase priceselling, general and debt acquired of the Westfalia Group acquisition. These forward contracts were sold for approximately $140.1 million; the resulting gain of $0.1 million is included within otheradministrative expense net in the Company’saccompanying consolidated statements of income (loss)operations for the yeartwelve months ended December 31, 2016. Additionally, the Company purchased a currency option to buy €55.0 million2019.
Future maturities of operating lease liabilities at a specified exchange rate in connection with the Westfalia Group acquisition. Upon entering the agreement the Company paid a premium of approximately $0.9 million. This option was sold for approximately $0.4 million; the resulting loss of $0.5 million is included within other expense, net in the Company’s consolidated statements of income (loss) for the year ended December 31, 2016.2020 are as follows:
Fair Value Measurements
The fair value of the Company’s derivatives are estimated using an income approach based on valuation techniques to convert future amounts to a single, discounted amount. The Company’s derivatives are recorded at fair value in its consolidated balance sheets and are valued using pricing models that are primarily based on market observable external inputs, including spot and forward currency exchange rates, benchmark interest rates, and discount rates consistent with the instrument’s tenor, and consider the impact of the Company’s own credit risk, if any. Changes in counterparty credit risk are also considered in the valuation of derivative financial instruments. Fair value measurements and the fair value hierarchy level for the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and December 31, 2016 are shown below.
Operating Leases
(dollars in thousands)
2021$16,230 
202214,050 
202311,070 
20248,490 
20257,970 
2026 and thereafter16,650 
Total lease payments74,460 
Less imputed interest(15,940)
Present value of lease liabilities$58,520 
75
  Frequency Asset / (Liability) Quoted Prices in Active Markets for Identical Assets
(Level 1)		 Significant Other Observable Inputs
(Level 2)		 Significant Unobservable Inputs
(Level 3)
    (dollars in thousands)
December 31, 2017          
Foreign currency forward contracts Recurring $(650) $—
 $(650) $—
Cross currency swaps Recurring $(7,740) $—
 $(7,740) $—
December 31, 2016          
Foreign currency forward contracts Recurring $(220) $—
 $(220) $—
Cross currency swap Recurring $5,720
 $—
 $5,720
 $—
11. Leases
The Company leases certain equipment and facilities under non-cancellable operating leases. Rental expense for the Company totaled approximately $20.0 million in 2017, $16.8 million in 2016 and $15.8 million in 2015.
Minimum payments for operating leases having initial or remaining non-cancellable lease terms in excess of one year at December 31, 2017 are summarized below (in thousands):
December 31, Minimum payments
  (dollars in thousands)
2018 $17,020
2019 15,550
2020 14,360
2021 13,180
2022 7,820
Thereafter 17,390
Total $85,320

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. Contingencies
12.During the fourth quarter of 2018, the Company was notified by two OEM customers of potential claims related to product sold by Horizon Europe‑Africa arising from potentially faulty components provided by a third-party supplier. The claims resulted from the failure of products not functioning to specifications, but the claims did not allege any damage and only sought replacement of the product. The Company performed an assessment of the facts and circumstances for all asserted and unasserted claims and considered all factors including the Company’s recall insurance. The Company recorded a $1.7 million charge for the twelve months ended December 31, 2019.
As of December 31, 2019, the Company had $3.9 million recorded in accrued liabilities for the remaining unpaid settlement obligations and an insurance-related asset of $0.4 million recorded in prepaid expenses and other current assets in the accompanying consolidated balance sheets. In the first quarter of 2020, the Company settled its outstanding obligations related to the claim. The Company has 0 remaining liability or insurance-related asset.
On April 29, 2020, the Company agreed to a settlement (the “Settlement”) related to certain intellectual property infringement claims made against one of the Company’s subsidiaries in its Horizon Europe‑Africa operating segment. The Company settled all historical and future associated claims for $4.4 million to be paid evenly in semi-annual installments on June 30 and December 31 of each year through December 31, 2024. As a result of the Settlement, the Company recorded a $1.5 million charge during the first quarter of 2020 and also recorded $0.5 million of royalties in the accompanying consolidated statements of operations for the twelve months ended December 31, 2020.
As of December 31, 2020, the Company had recorded $0.9 million in prepaid expenses and other current assets and $1.8 million in other assets in the accompanying consolidated balance sheets related to the future royalties to be recognized by the Company over the life of future programs connected to the Settlement. In addition, $1.0 million was recorded in accrued liabilities and $2.9 million in other long-term liabilities in the accompanying consolidated balance sheets related to the remaining semi-annual installment payments to be paid.
15. Earnings (Loss) per Share
On June 30, 2015, approximately 18.1 million common shares of Horizon Global were distributed to TriMas shareholders in conjunction with the spin-off. For comparative purposes, and to provide a more meaningful calculation for weighted average shares, this amount was assumed to be outstanding as of the beginning of the 2015 period presented in the calculation of basic weighted average shares.
On February 1, 2017, the Company completed an underwritten public offering of 4.6 million shares of common stock, which includes the exercise in full by the underwriters of their option to purchase 0.6 million shares of common stock, at a public offering price of $18.50 per share (the “Common Stock Offering”). Proceeds from the Common Stock Offering were approximately $79.9 million, net of underwriting discounts, commissions, and offering-related transaction costs.
Basic earnings (loss) per share is computed using net income (loss) attributable to Horizon Global and the number of weighted average shares outstanding. Diluted earnings (loss) per share is computed using net income (loss) attributable to Horizon Global and the number of weighted average shares outstanding, adjusted to give effect to the assumed exercise of outstanding stock options and warrants, vesting of restricted shares outstanding and conversion of the Convertible Notes.
DueNotes, where dilutive to net losses for the years ended December 31, 2017 and 2016, the effect of potentially dilutive securities had an antidilutive effect and therefore were excluded from the computation of diluted lossearnings per share.
The following table sets forth the reconciliation of the numerator and the denominator of basic earnings per share attributable to Horizon Global and diluted earnings per share attributable to Horizon Global for the years ended December 31, 2017, 2016 and 2015:
76
  Year Ended December 31,
  2017 2016 2015
  (dollars in thousands, except for per share amounts)
Numerator:      
Net income (loss) attributable to Horizon Global $(3,550) $(12,360) $8,300
Denominator:      
Weighted average shares outstanding, basic 24,781,349
 18,775,500
 18,064,491
Dilutive effect of stock-based awards —
 —
 96,361
Weighted average shares outstanding, diluted 24,781,349
 18,775,500
 18,160,852
       
Basic earnings (loss) per share attributable to Horizon Global $(0.14) $(0.66) $0.46
Diluted earnings (loss) per share attributable to Horizon Global $(0.14) $(0.66) $0.46

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A reconciliation of the numerator and the denominator of basic loss per share attributable to Horizon Global and diluted loss per share attributable to Horizon Global is as follows:
The
Twelve Months Ended
December 31,
20202019
(dollars in thousands, except for per share amounts)
Numerator:
Net loss from continuing operations$(37,480)$(110,010)
Add: (Loss) income from discontinued operations, net of tax(500)189,520 
Less: Net loss attributable to noncontrolling interest(1,420)(1,240)
Net (loss) income attributable to Horizon Global$(36,560)$80,750 
Denominator:
Weighted average shares outstanding, basic25,797,529 25,297,576 
Dilutive effect of common stock equivalents0 0 
Weighted average shares outstanding, diluted25,797,529 25,297,576 
Basic (loss) income per share attributable to Horizon Global
Continuing operations$(1.40)$(4.30)
Discontinued operations$(0.02)$7.49 
Total$(1.42)$3.19 
Diluted (loss) income per share attributable to Horizon Global
Continuing operations$(1.40)$(4.30)
Discontinued operations$(0.02)$7.49 
Total$(1.42)$3.19 
Due to losses from continuing operations for the twelve months ended December 31, 2020 and 2019, the effect of certain potentially dilutive securities were excluded from the computation of weighted average diluted shares outstanding, for years ended December 31, 2017, 2016 and 2015, as inclusion would have resulted in anti-dilution. A summary of these anti-dilutive common stock equivalents is provided in the table below:are as follows:
Twelve Months Ended
December 31,
20202019
Number of options18,961 54,847 
Exercise price of options$9.20 - $11.02 $9.20 - $11.29
Restricted stock units1,823,573 1,172,228 
Convertible Notes5,005,000 5,005,000 
Convertible Notes warrants5,005,000 5,005,000 
Second Lien Term Loan warrants6,280,251 4,381,411 
  Year Ended December 31,
  2017 2016 2015
Number of options 343,782
 331,485
 212,088
Exercise price of options $9.20 - $11.29
 $9.20 - $11.29
 $9.20 - $11.29
Restricted stock units 584,335
 526,751
 —
Convertible Notes 4,566,205
 —
 —
Warrants 4,566,205
 —
 —
For purposes of determining diluted earningsloss per share, the Company has elected a policy to assume that the principal portion of the Convertible Notes, as described in Note 9, “10, Long-term Debt,” is settled in cash and the conversion premium is settled in shares. Therefore, the Company has adopted a policy of calculating the diluted earningsloss per share effect of the Convertible Notes using the treasury stock method. As a result, the dilutive effect of the Convertible Notes is limited to the conversion premium, which is reflected in the calculation of diluted earningsloss per share as if it were a freestanding written call option on the Company’s shares. Using the treasury stock method, the Warrants issued in connection with the issuance of the Convertible Notes are considered to be dilutive when they are in the money relative to the Company’s average common stock price during the period. The Convertible Note Hedges purchased in connection with the issuance of the Convertible Notes are always considered to be anti-dilutive and therefore do not impact the Company’s calculation of diluted earningsloss per share.
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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. Equity Awards
Description of the Plan
Horizon employees and non-employee directors participate in the Horizon Global Corporation 2015 Equity and Incentive Compensation Plan (as amended and restated, the “Horizon 2015 Plan”). The Horizon 2015 Plan authorizes the Compensation Committee of the Horizon Board of Directors to grant stock options (including “incentive stock options” as defined in Section 422 of the U.S. Internal Revenue Code), restricted shares, restricted stock units, performance shares, performance stock units, cash incentive awards, and certain other awards based on or related to our common stock to Horizon employees and non-employee directors. No more than 2.04.4 million Horizon common shares may be delivered under the Horizon 2015 Plan.
On June 19, 2020, the shareholders approved the Horizon Global Corporation 2020 Equity and Incentive Compensation Plan (the “Horizon 2020 Plan”). Horizon employees, non-employee directors and certain consultants participate in the Horizon 2020 Plan. The Horizon 2020 Plan authorizes the Compensation Committee of the Horizon Board of Directors to grant stock options (including “incentive stock options” as defined in Section 422 of the U.S. Internal Revenue Code), appreciation rights, restricted shares, restricted stock units, performance shares, performance stock units, cash incentive awards, dividend equivalents and certain other awards based upon terms and conditions described in the Horizon 2020 Plan. No more than 4.1 million Horizon common shares may be delivered under the Horizon 2020 Plan, plus (A) the total number of shares remaining available for awards under the Horizon 2015 Plan, as described above, as of June 19, 2020, plus (B) the shares that are subject to awards granted under the Horizon 2020 Plan or the Horizon 2015 Plan that are added (or added back, as applicable) to the aggregate number of shares available under the Horizon 2020 Plan pursuant to the share counting rules of the Horizon 2020 Plan. These shares may be shares of original issuance or treasury shares, or a combination of both.
Stock Options
The following table summarizes HorizonHorizon’s stock option activity from December 31, 2016 to December 31, 2017:is as follows:
Number of Stock OptionsWeighted Average Exercise PriceAverage  Remaining Contractual Life (Years)Aggregate Intrinsic Value
 Number of Stock Options Weighted Average Exercise Price Average  Remaining Contractual Life (Years) Aggregate Intrinsic Value
Outstanding at December 31, 2016 347,585
 $10.37
    
Outstanding at December 31, 2019Outstanding at December 31, 201937,737 $10.52 
Granted —
 —
   Granted0 0 
Exercised (6,593) 10.26
   Exercised0 0 
Canceled, forfeited (2,643) 10.08
   Canceled, forfeited(18,776)10.61 
Expired —
 —
   Expired0 0 
Outstanding at December 31, 2017 338,349
 $10.38
 7.8 $1,231,917
Outstanding at December 31, 2020Outstanding at December 31, 202018,961 $10.43 5.0$0 
As of December 31, 2017, there was $0.1 million in2020, the unrecognized compensation costscost related to stock options that is expected to be recognized over a weighted average period of 0.5 years. The Company recognized approximately $0.3 million, $0.8 millionimmaterial. For the twelve months ended December 31, 2020 and $0.2 million of2019, the stock-based compensation expense recognized by the Company related to stock options forwas immaterial. There was 0 aggregate intrinsic value on the years endedoutstanding options at December 31, 2017, 2016 and 2015, respectively.2020. Stock-based compensation expense is included in selling, general and administrative expenses in the accompanying consolidated statements of income.

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operations.
Restricted UnitsShares
During 2017,2020, the Company granted an aggregate of 185,4231,502,072 restricted stock units (“RSUs”) and performance stock units (“PSUs”) to certain key employees and non-employee directors. The total grants consisted of: (i) 22,449284,859 time-based restricted stock units that vest ratablyRSUs vesting on (1)a ratable basis on March 1, 2018, (2)3, 2021, March 1, 20193, 2022 and (3) March 1, 2020;3, 2023; (ii) 50,416277,228 time-based restricted stock units that vest ratablyRSUs vesting on (1) March 1, 2018, (2) March 1, 2019, (3) March 1, 2020 and (4) March 1,June 24, 2021; (iii) 72,865 market-based performance stock units21,351 time-based RSUs vesting on a ratable basis on April 2, 2021, March 3, 2022 and March 3, 2023 and (iv) 918,634 PSUs that vest on March 1, 2020; (iv) 33,426 time-based restricted stock units that vest on July 1, 2018, and (v) 6,267 time-based restricted stock units that vest on July 1, 2019.3, 2023 (the “2020 PSUs”).
The performance criteria for the 2020 PSUs is based on the Company’s three-year cumulative EBITDA. The grant date fair values for the PSUs and RSUs granted during 2020 are based on the closing trading price of the Company’s common stock on the date of grant.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
During 2019, the Company granted an aggregate of 1,950,296 RSUs and PSUs to certain key employees and non-employee directors. The total grants consisted of: (i) 353,592 time-based RSUs that vest on May 15, 2020; (ii) 27,840 time-based RSUs that vest on September 10, 2020; (iii) 245,134 time-based RSUs that vest on September 19, 2020; (iv) 25,000 time-based RSUs that vest on November 13, 2020; (v) 25,000 time-based RSUs that vest on December 9, 2020; (vi) 5,000 time-based RSUs that vest on May 15, 2021; (vii) 411,373 time-based RSUs that vest on March 19, 2022; (viii) 857,357 market-based PSUs (the “2019 PSUs”), of which 757,357 vest on March 19, 2022, with the remaining 100,000 vesting on a ratable basis on September 23, 2020, September 23, 2021 and September 23, 2022.
For the 2019 PSUs, the performance stock unitscriteria for the market-based PSUs is based on the Company’s total shareholder return (“TSR”) relative to the TSR of the common stock of a pre-defined industry peer group,group. TSR is measured over a period beginning January 1, 20172019 and ending December 31, 2019.2021. TSR is calculated as the Company’s average closing stock price for the 20-trading days at the end of the performance period plus Company dividends, divided by the Company’s average closing stock price for the 20-trading days prior to the start of the performance period. Depending on the performance achieved, the amount of shares earned can vary from 0% of the target award to a maximum of 200% of the target award. The Company estimated the grant-date fair value of the awards subject to a market condition using a Monte Carlo simulation model, using the following weighted averageweighted-average assumptions: risk-free interest rate of 1.52%2.43% and annualized volatility of 38.5%84.1%. Due to the lack of adequate stock price history of Horizon common stock, the expected volatility is based on the historical volatility of the common stock of the peer group. The grant date fair value of the performance stock units2019 PSUs was $18.41.$3.69.
The grant date fair value of restricted stock unitsRSUs is expensed over the vesting period. Restricted stock unitRSU fair values are based on the closing trading price of the Company’s common stock on the date of grant. Changes in the number of restricted stock unitsRSUs outstanding for the yeartwelve months ended December 31, 2017 were2020 are as follows:
Number of Restricted Stock Units(a)
Weighted Average Grant Date Fair Value
Outstanding at December 31, 20191,393,085 $4.30 
  Granted1,502,072 2.92 
Vested(639,403)3.91 
  Canceled, forfeited(455,072)4.90 
Outstanding at December 31, 20201,800,682 $3.14 
  Number of Restricted Shares Weighted Average Grant Date Fair Value
Outstanding at December 31, 2016 557,563
 $11.90
  Granted 185,423
 17.49
Vested (153,086) 12.52
  Canceled, forfeited (7,289) 12.21
Outstanding at December 31, 2017 582,611
 $13.51
(a)Includes PSUs at 100% attainment.
As of December 31, 2017,2020, there was $3.1 million in unrecognized compensation costs related to unvested restricted stock unitsRSUs that is expected to be recognized over a weighted average period of 0.82.0 years.
TheDuring the twelve months ended December 31, 2020 and 2019, the Company recognized approximately $3.3 million, $3.0$2.7 million and $2.3$2.2 million, respectively, of stock-based compensation expense related to restricted shares during the years ended December 31, 2017, 2016 and 2015, respectively.RSUs. Stock-based compensation expense is included in selling, general and administrative expenses in the accompanying consolidated statements of income.operations.
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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. Shareholders’ Equity
Preferred Stock
The Company is authorized to issue 100,000,000 shares of Horizon Global preferred stock, par value of $0.01 per share. ThereAs of December 31, 2020 and 2019, there were no0 preferred shares outstanding at December 31, 2017 or December 31, 2016.outstanding.
Common Stock
The Company is authorized to issue 400,000,000 shares of Horizon Global common stock, par value of $0.010.01 per share. AtAs of December 31, 2017,2020, there were 25,625,57127,089,673 shares of common stock issued and 24,939,06526,403,167 shares of common stock outstanding. AtAs of December 31, 2016,2019, there were 20,899,95926,073,894 shares of common stock issued and 25,387,388 shares of common stock outstanding.
Common Stock Warrants
In connection with the Second Lien Term Loan the Company entered into in March 2019, the Company became obligated to issue detachable warrants to purchase up to 6.25 million shares of its common stock, which can be exercised on a cashless basis over a five year term with an exercise price of $1.50 per share.
The Company also issued 90,667 shares of Series A Preferred Stock in March 2019 in connection with the Second Lien Term Loan that were convertible into additional warrants upon receipt of shareholder approval of the issuance of such additional warrants and the shares of common stock issuable upon exercise thereof. The Series A Preferred Stock was presented as temporary equity in the March 31, 2019 condensed consolidated balance sheet. Upon receipt of such shareholder approval on June 25, 2019, the 90,667 shares of Series A Preferred Stock were converted into warrants to purchase 2,952,248 shares of common stock. See Note 10, Long-term Debt, for additional information.
As of December 31, 2020, warrants for 739,111 shares have been exercised on a net basis, resulting in the issuance of 519,206 shares of the Company’s common stock. As of December 31, 2020, warrants to purchase 5,815,039 shares of common stock were issued and remain outstanding. During the twelve months ended December 31, 2020 and 2019, the Company recognized $1.1 million and $0.1 million, respectively, of non-cash transactions in connection with warrants exercised.
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HORIZON GLOBAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Share Repurchase Program
In April 2017, the Board of Directors authorized a share repurchase program of up to 1.5 million shares of the Company’s issued and outstanding common stock during the period beginning on May 5, 2017 and ending May 5, 2020 (the “Share Repurchase Program”). The Share Repurchase Program providesprovided for share purchases in the open market or otherwise, depending on share

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price, market conditions and other factors, as determined by the Company. In addition, the Company’s ABL Faciliy and Replacement Term Loan Amendment place certain limitations on the Company’s ability to repurchase its common stock. As of December 31, 2017,2020 and 2019, cumulative shares purchased totaled 686,506 at an average purchase price per share of $14.55, excluding commissions. The repurchased shares are presented as treasury stock, at cost, onin the accompanying consolidated balance sheets. No shares were repurchased during 2020 or 2019 and the Share Repurchase Program expired on May 5, 2020.
Accumulated Other Comprehensive Income (Loss)
Changes in AOCI attributable to Horizon Global by component, net of tax, for the yearstwelve months ended December 31, 2017, 2016,2020 and 20152019 are summarized as follows:
   Derivative Instruments Foreign Currency Translation Total
 (dollars in thousands)
Balances at December 31, 2014 $(70) $7,460
 $7,390
Net transfer from former parent —
 5,230
 5,230
Net unrealized losses arising during the period (a)
 (1,310) (9,510) (10,820)
Less: Net realized losses reclassified to net income (b)
 (670) —
 (670)
Net current-period change (640) (4,280) (4,920)
Balances at December 31, 2015 (710) 3,180
 2,470
Net unrealized gains (losses) arising during the period (a)
 3,170
 (10,590) (7,420)
Less: Net realized gains reclassified to net income (b)
 3,390
 —
 3,390
Net current-period change (220) (10,590) (10,810)
Balances at December 31, 2016 (930) (7,410) (8,340)
Net unrealized gains (losses) arising during the period (a)
 (8,810) 17,810
 9,000
Less: Net realized losses reclassified to net income (b)
 (9,350) —
 (9,350)
Net current-period change 540
 17,810
 18,350
Balances at December 31, 2017 $(390) $10,400
 $10,010
__________________________
 Derivative InstrumentsForeign Currency Translation and OtherTotal
(dollars in thousands)
Balances at January 1, 2019$1,960 $5,800 $7,760 
Net unrealized gains arising during the period(a)
820 1,650 2,470 
Less: Net realized gains reclassified to net income(a)
2,760 0 2,760 
Amounts reclassified from AOCI(b)
(20)(17,240)(17,260)
Net change(1,960)(15,590)(17,550)
Balances at December 31, 2019$0 $(9,790)$(9,790)
Net unrealized gains arising during the period0 3,250 3,250 
Net change0 3,250 3,250 
Balances at December 31, 2020$0 $(6,540)$(6,540)
(a) Derivative instruments, net ofThere was no income tax benefit (expense) of $5.2 million, $(2.5) million, and $0.1 millionimpact for derivative instruments during the yearstwelve months ended December 31, 2017, 2016, and 2015, respectively.2019. See Note 10, “11, Derivative Instruments,,” for further details.
(b) Derivative instruments, netRecognition of income tax benefit (expense)loss associated with the sale of $5.5 million, $(2.5) million, and $(0.8) million for the years ended December 31, 2017, 2016, and 2015, respectively.Company’s APAC segment. See Note 10, “Derivative Instruments4, Discontinued Operations,” for further details.
15.18. Segment Information
HorizonThe Company groups its business into operating segments into reportable segmentsgenerally by the region in which sales and manufacturing efforts are focused.focused, which are grouped on the basis of similar product, market and operating factors. Each operating segment has discrete financial information evaluated regularly by the Company’s chief operating decision maker in determining resource allocation and assessing performance. The Company reports the results of its business in three reportable2 operating segments: Horizon Americas Horizon Europe‑Africa, and Horizon Asia‑Pacific.Europe‑Africa. Horizon Americas is comprised of the Company’s North American and South American operations. Horizon Europe‑Africa is comprised of the Company’s European and South African operations, while Horizon Asia‑Pacific is comprised of the Australia, Thailand, and New Zealand operations. See below for further information regarding the types of products and services provided within each reportableoperating segment.
Previously, the Company had 3 operating segments. However, as a result of its sale in the third quarter of 2019, we have removed APAC as a separate operating segment and its results are presented as a discontinued operation in the accompanying consolidated financial statements. Historical information has been retrospectively adjusted to reflect these changes. Please see Note 4, Discontinued Operations, for additional information.
Horizon Americas - A market leader in the design, manufacture and distribution of a wide variety of high-quality, custom engineered towing, trailering and cargo management products and related accessories. These products are designed to support automotive OEMs, automotive OESs, aftermarket and retail customers in the agricultural, automotive, construction, industrial, marine, military, recreational vehicle, trailer and utility end markets. Products include brake controllers, cargo management, heavy-duty towing products, jacks and couplers, protection/securing systems, trailer structural and electrical components, tow bars, vehicle roof racks, vehicle trailer hitches and additional accessories.
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Horizon Europe‑Africa- With a product offering similar to Horizon Americas, Horizon Europe‑Africa focuses its sales and manufacturing efforts in the Europe and Africa regions of the world.

The Company’s operating segment activity and total assets are as follows:
 Twelve Months Ended
December 31,
 20202019
 (dollars in thousands)
Net Sales  
Horizon Americas$382,380 $372,720 
Horizon Europe‑Africa278,850 317,730 
Total$661,230 $690,450 
Operating Profit (Loss)  
Horizon Americas$27,950 $(10,390)
Horizon Europe‑Africa(8,390)(12,100)
Corporate(26,470)(34,680)
Total$(6,910)$(57,170)
Capital Expenditures  
Horizon Americas$3,670 $6,590 
Horizon Europe‑Africa9,640 3,080 
Corporate0 50 
Total$13,310 $9,720 
Depreciation of Property and Equipment and Amortization of Intangibles  
Horizon Americas$8,420 $8,670 
Horizon Europe‑Africa14,280 11,720 
Corporate210 1,300 
Total$22,910 $21,690 

 December 31,
 20202019
 (dollars in thousands)
Total Assets  
Horizon Americas$212,570 $224,430 
Horizon Europe-Africa206,900 185,810 
Corporate37,020 10,800 
Total$456,490 $421,040 
70
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Horizon Asia‑Pacific - With a product offering similar to Horizon Americas, Horizon Asia‑Pacific focuses itsThe Company’s net sales and manufacturing efforts in the Asia-Pacific regionnet fixed assets attributed to each subsidiary’s country of the world.
Segment activity isdomicile are as follows:
 Twelve Months Ended
December 31,
 20202019
 (dollars in thousands)
Net Sales
Total U.S. $370,840 $362,690 
Non-U.S.  
Germany207,450 209,120 
Other Europe63,470 95,700 
Other Americas11,540 7,000 
South Africa7,930 15,940 
Total non-U.S.290,390 327,760 
Total$661,230 $690,450 

December 31,
20202019
(dollars in thousands)
Property and equipment, net
Total U.S. $22,720 $25,650 
Non-U.S.
Germany36,690 36,480 
Other Europe7,940 7,780 
South Africa4,340 3,930 
Other Americas2,400 1,990 
Total non-U.S.51,370 50,180 
Total$74,090 $75,830 
During the twelve months ended December 31, 2020 and 2019, external export sales from the U.S. to other countries were $44.8 million and $36.5 million, respectively.
19. Income Taxes
  Year ended December 31,
  2017 2016 2015
  (dollars in thousands)
Net Sales      
Horizon Americas $439,700
 $443,240
 $429,310
Horizon Europe‑Africa 325,970
 104,080
 50,930
Horizon Asia‑Pacific 127,310
 101,880
 95,270
Total $892,980
 $649,200
 $575,510
Operating Profit (Loss)      
Horizon Americas $44,060
 $38,680
 $30,300
Horizon Europe‑Africa (1,790) (13,320) (100)
Horizon Asia‑Pacific 18,740
 11,230
 7,650
Corporate (26,250) (30,290) (18,280)
Total $34,760
 $6,300
 $19,570
Capital Expenditures      
Horizon Americas $10,150
 $5,550
 $5,970
Horizon Europe‑Africa 13,190
 4,670
 690
Horizon Asia‑Pacific 2,440
 3,310
 1,360
Corporate 1,510
 1,010
 300
Total $27,290
 $14,540
 $8,320
Depreciation and Amortization      
Horizon Americas $10,660
 $10,750
 $10,750
Horizon Europe‑Africa 10,110
 3,290
 2,070
Horizon Asia‑Pacific 4,310
 4,090
 4,130
Corporate 260
 90
 130
Total $25,340
 $18,220
 $17,080
The Company’s loss from continuing operations before income tax, by tax jurisdiction, are as follows:
 Twelve Months Ended
December 31,
 20202019
 (dollars in thousands)
Domestic$(22,430)$(91,100)
Foreign(16,630)(29,730)
  Loss from continuing operations before income tax$(39,060)$(120,830)
83
  As of December 31,
  2017 2016
  (dollars in thousands)
Total Assets    
Horizon Americas $209,210
 $197,840
Horizon Europe - Africa 341,750
 299,500
Horizon Asia‑Pacific 88,210
 61,920
Corporate 21,860
 54,110
Total $661,030
 $613,370

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The income tax benefit (expense) are as follows:
 Twelve Months Ended
December 31,
 20202019
 (dollars in thousands)
Current income tax benefit (expense):
Federal$770 $(1,660)
State and local(180)60 
Foreign(1,070)5,140 
  Total current income tax benefit (expense)(480)3,540 
Deferred income tax benefit (expense):
Federal170 140 
State and local180 (290)
Foreign1,710 7,430 
  Total deferred income tax benefit2,060 7,280 
Income tax benefit$1,580 $10,820 
The following tables presentcomponents of deferred taxes are as follows:
December 31,
 20202019
 (dollars in thousands)
Deferred tax assets:  
Receivables, net$510 $600 
Inventories2,310 3,750 
Disallowed interest deduction25,690 19,210 
Operating lease liabilities14,660 14,150 
Accrued liabilities and other long-term liabilities8,890 7,970 
Tax loss and credit carryforwards31,570 31,670 
Gross deferred tax asset83,630 77,350 
Valuation allowances(55,180)(50,370)
Net deferred tax asset28,450 26,980 
Deferred tax liabilities:
Property and equipment, net(2,090)(3,190)
Other intangibles, net(12,270)(12,790)
Operating lease right-of-use assets(11,870)(11,240)
Other(4,070)(3,370)
Gross deferred tax liability(30,300)(30,590)
Net deferred tax liability$(1,850)$(3,610)
ASC 740, “Income Taxes,” requires that companies assess whether a valuation allowance should be established based on the Company’s net sales for eachconsideration of all available evidence using a “more likely than not” standard. In making such judgments, significant weight is given to evidence that can be objectively verified. A cumulative loss in recent years is significant negative evidence in considering whether deferred tax assets are realizable and also restricts the three years ended December 31, 2017, 2016, and 2015; and net fixed assets at each year ended December 31, 2017 and 2016, attributedamount of reliance that can be placed on projections of future taxable income to each subsidiary’s continentsupport the recovery of domicile. Australia and Germany are the only non-U.S. countries for which net sales were significant to the consolidated net sales of the Company. Australia, Germany, and the United Kingdom are the only countries in which property and equipment - net are significant to the consolidated property and equipment - net of the Company.deferred tax assets.

84
  Year ended December 31,
  2017 2016 2015
  (dollars in thousands)
Net Sales      
Total U.S.  $423,090
 $428,770
 $412,500
Non-U.S.      
Australia 69,760
 60,020
 73,640
Germany 194,120
 52,350
 14,680
Other Europe 114,940
 39,520
 24,810
Asia 58,140
 41,940
 21,630
Africa 16,320
 12,130
 11,440
Other Americas 16,610
 14,470
 16,810
Total non-U.S 469,890
 220,430
 163,010
Total $892,980
 $649,200
 $575,510
  As of December 31,
  2017 2016
  (dollars in thousands)
Property and equipment - net    
Total U.S.  $5,770
 $4,700
Non-U.S.    
Australia 10,730
 11,120
Germany 48,400
 41,940
United Kingdom 22,920
 17,450
Other Europe 9,830
 5,690
Asia 7,720
 5,220
Africa 5,260
 4,970
Other Americas 2,390
 2,670
Total non-U.S 107,250
 89,060
Total $113,020
 $93,760
The Company’s export sales from the U.S. approximated $34.6 million, $32.6 million and $33.8 million for the years ended 2017, 2016 and 2015, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presentsIn prior years, the Company’sCompany established valuation allowances against substantially all of its net sales contributed by product group for the years ended deferred tax assets of its domestic and certain other foreign jurisdictions. As of December 31, 2017, 20162020 and 2015.
  Year ended December 31,
  2017 2016 2015
Towing 70.3% 62.7% 58.1%
Trailering 16.8% 21.5% 23.8%
Cargo Management 6.3% 8.9% 9.5%
Other 6.6% 6.9% 8.6%
  100.0% 100.0% 100.0%
16. Income Taxes
The Company’s income before income taxes, by2019, certain foreign jurisdictions were in a three-year cumulative pre-tax loss position; therefore, the Company recorded valuation allowances of $0.5 million and $4.0 million, respectively, against certain of its deferred tax jurisdiction, consistedassets. In addition, as of the following:
  Year ended December 31,
  2017 2016 2015
  (dollars in thousands)
Income (loss) before income taxes:      
Domestic $(3,880) $(14,630) $(9,750)
Foreign 8,860
 (1,760) 16,770
  Income (loss) before income taxes $4,980
 $(16,390) $7,020
Current income tax benefit (expense):      
Federal $(7,680) $(1,170) $550
State and local (240) (970) (610)
Foreign (2,190) (2,560) (3,580)
  Total current income tax expense (10,110) (4,700) (3,640)
Deferred income tax benefit (expense):      
Federal (3,000) 3,800
 3,840
State and local (390) 450
 (40)
Foreign 3,750
 4,180
 1,120
  Total deferred income tax benefit 360
 8,430
 4,920
Income tax benefit (expense) $(9,750) $3,730
 $1,280

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The components of deferred taxes at December 31, 2017 and 2016 are as follows:
  As of December 31,
  2017 2016
  (dollars in thousands)
Deferred tax assets:    
Receivables, net $460
 $1,440
Inventories 3,280
 6,300
Accrued liabilities and other long-term liabilities 10,600
 13,670
Tax loss and credit carryforwards 12,930
 6,070
Gross deferred tax asset 27,270
 27,480
Valuation allowances (10,560) (7,220)
Net deferred tax asset 16,710
 20,260
Deferred tax liabilities:    
Property and equipment, net (4,300) (5,230)
Goodwill and other intangibles, net (19,710) (30,250)
Other (3,280) (1,140)
Gross deferred tax liability (27,290) (36,620)
Net deferred tax (liability) asset $(10,580) $(16,360)
The Company has an on-going analysis against certain2020, the deferred tax assets in the U.S. Based on positive evidence and economic outlook,certain foreign jurisdictions that previously had recognized a valuation allowance were deemed realizable; therefore, the Company maintains it is more likely than not the U.S.recorded a $2.6 million tax benefit. The ultimate realization of these deferred tax assets will be realized and therefore does not require a valuation allowance asis dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.
As of December 31, 2017.
The following is a reconciliation of our provision for income taxes to income tax expense computed at2020, the U.S. federal statutory rate:
  Year ended December 31,
  2017 2016 2015
  (dollars in thousands)
U.S. federal statutory rate 35% 35% 35%
Tax at U.S. federal statutory rate $1,740
 $(5,730) $2,460
State and local taxes, net of federal tax benefit 340
 340
 650
Differences in statutory foreign tax rates (3,680) (1,230) (4,350)
Unrecognized tax benefits (3,950) (1,260) (2,950)
Tax holiday(1)
 (950) (460) (1,190)
Withholding taxes 300
 300
 590
Tax credits (590) 70
 (300)
Net change in valuation allowance 3,020
 1,600
 1,480
Spin-off related restructuring costs —
 —
 2,450
Transaction Costs 1,610
 2,670
 —
Tax Reform 11,850
 —
 —
Other, net 60
 (30) (120)
Income tax expense (benefit) $9,750
 $(3,730) $(1,280)
__________________________
(1) Tax holiday related to Thailand which expired on December 31, 2017.
The Company has recorded deferred tax assets on $0.6of $42.8 million of federal operating loss carryforward, $59.3 million of various state operating loss carryforwards and $44.9$72.1 million of various foreign operating loss carryforwards. The federal loss carryforward has an indefinite carryforward period, the majority of the state tax loss carryforwards expire between 2029 - 2037 and

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2028 through 2038, however, certain states now have indefinite carryforward periods. In addition, the majority of foreign losses have indefinite carryforward periods. A significant amount of the deferred tax assets discussed above are offset by a corresponding valuation allowance within the jurisdiction to which the deferred tax assets relate.
The Company made cash paymentsA reconciliation of the Company’s provision for federal and state income taxes to income tax benefit computed at the U.S. federal statutory rate is as follows:
Twelve Months Ended
December 31,
 20202019
(dollars in thousands)
U.S. federal statutory rate21 %21 %
Tax at U.S. federal statutory rate$8,210 $25,370 
State and local taxes, net of federal tax benefit1,390 3,370 
Differences in statutory foreign tax rates2,810 4,310 
Uncertain tax positions(20)6,620 
Tax credits250 (4,460)
Net change in valuation allowance(4,030)(24,970)
Restructuring charges(5,030)950 
Transition tax700 (1,740)
Other, net(2,700)1,370 
   Income tax benefit$1,580 $10,820 
Certain foreign subsidiary earnings are subject to U.S. taxation. No deferred taxes have been provided for taxes that would result upon repatriation of $1.0 million and $2.2 million forour foreign investments to the years ended December 31, 2017 and 2016, respectively. Cash payments made for foreign income taxes of $6.7 million and $2.6 million, for the years ended December 31, 2017 and 2016, respectively.
In general,U.S. as it is the practice and intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations that position hasor should not changed following incurringgive rise to additional income tax liabilities as a result of the transition tax under the 2017distribution of such earnings.
Uncertain Tax Cuts and Jobs Act. No deferred taxes have been provided for withholding taxes or other taxes that would result upon repatriation of our foreign investments to the United States. Furthermore, in light of provisions in the Tax Cuts and Jobs Act (the “Act”), the financial reporting over tax basis in our foreign investments is insignificant asPositions
As of December 31, 2017.
Unrecognized Tax Benefits
The2020 and 2019, the Company has approximately $7.3had $0.2 million and $8.9$0.2 million, respectively, of unrecognizeduncertain tax benefitspositions (“UTBs”UTPs”) as of December 31, 2017 and 2016, respectively.. If the unrecognized tax benefitsUTPs were recognized, the impact to the Company’s effective tax rate would be to reduceincrease reported income tax expensebenefit for the yearstwelve months ended December 31, 20172020 and 2016 approximately $7.32019, by $0.2 million and $8.9$0.2 million, respectively.
A reconciliation of the change in the UTBs and related accrued interest and penalties for the years ended December 31, 2017 and 2016 is as follows:
85
  
Unrecognized
Tax Benefits
  (dollars in thousands)
Balance at December 31, 2015 $4,570
Tax positions related to current year:  
Additions 1,690
Reductions —
Tax positions related to prior years:  
Additions 2,870
Reductions —
Lapses in the statutes of limitations (1,120)
Cumulative Translation Adjustment 840
Balance at December 31, 2016 $8,850
Tax positions related to current year:  
Additions —
Reductions —
Tax positions related to prior years: 

Additions 50
Reductions (30)
Settlements —
Lapses in the statutes of limitations (2,110)
Cumulative Translation Adjustment 550
Balance at December 31, 2017 $7,310
The Company recognizes interest accrued related to UTBs and penalties as income tax expense. Related to the unrecognized tax benefits noted above, the Company has accrued penalties and interest of $2.1 million during 2017 and recognized a liability for interest and penalties of $3.4 million as of December 31, 2017. During 2016, the Company has accrued penalties and interest of $(0.2) million and recognized a liability for interest and penalties of $5.6 million.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A reconciliation of the change in the UTPs as of December 31, 2020 and 2019 is as follows:
Uncertain Tax Positions
(dollars in thousands)
Balances at January 1, 2019$5,660 
Tax positions related to current year:
Additions0 
Reductions0 
Tax positions related to prior years:
Additions20 
Reductions(4,970)
Settlements0 
Lapses in the statutes of limitations(400)
Cumulative translation adjustment(100)
Balance at December 31, 2019$210 
Tax positions related to current year:
Additions0 
Reductions0 
Tax positions related to prior years:
Additions0 
Reductions0 
Settlements0 
Lapses in the statutes of limitations0 
Cumulative translation adjustment10 
Balance at December 31, 2020$220 
The decreaseCompany recognizes interest and penalties on UTPs as income tax expense. During the twelve months ended December 31, 2020 and 2019, the Company recognized 0 expense and a net benefit of $1.2 million, respectively, related to interest and penalties. As of December 31, 2020 and 2019, the Company had a liability of $0.2 million and $0.2 million, respectively, related to interest and penalties.
During the twelve months ended December 31, 2020 and 2019, the change in UTBsUTPs and liabilities for interest and penalties for tax positions related to prior years is primarily related torelates foreign currency translation during 2020 and the roll-offexpiration of certain statutes of limitations and resolution of income tax examinations in certain jurisdictions during 2019.
Management monitors changes in currency exchange rates during 2017.tax statutes and regulations and the issuance of judicial decisions to determine the potential impact to UTPs. As of December 31, 2020, the Company estimated $0.1 million of UTPs are expected to be released in the next twelve months.
Income tax returns are filed in multiple domestic and foreign jurisdictions, which are subject to examinations by taxing authorities. As of December 31, 2017,2020, the Company is subject to U.S. federal tax examination for tax years 20152017 through 2017.2020. The Company is subject to state, local, and foreign income tax examinations for tax years 20102013 through 2017.2020. The Company’s German jurisdiction is subject to German federal tax examination for tax years 2017 through 2020. The timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next twelve months we may reach resolution of income tax examinations in one or more foreign jurisdictions. The Company does not believe that the results of these examinations will have a significant impact on the Company’s tax position or its effective tax rate.
Management monitors changes in tax statutes and regulations and the issuance of judicial decisions to determine the potential impact to unrecognized tax benefits. As of December 31, 2017, the Company estimated that approximately $7.4 million of unrecognized tax benefits in foreign jurisdictions is expected to be released in the next twelve months.
Other Matters
On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. The Act changed many aspects of corporate income taxation, including the reduction of the corporate income tax rate from 35% to 21% and imposition of a one-time tax on deemed repatriated earnings of foreign subsidiaries.
The SEC issued a Staff Accounting Bulletin No. 118 (“SAB 118”), which allows a provisional estimate when a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Act. SAB 118 allows for adjustments to provisional amounts during a measurement period of up to one year. In accordance with SAB 118, the Company has made reasonable estimates related to the liability associated with the transition tax, the remeasurement of U.S. deferred tax balances and other deferred tax adjustments based on provisions of the Act. As a result, the Company has recognized income tax expense of $11.9 million associated with these items in 2017.
The Company is continuing to evaluate how the provisions of the Act will be accounted for under ASC 740, “Income Taxes”. The analysis is provisional and is subject to change due to the additional time required to accurately calculate and review the complex tax law. The Company will assess any regulatory guidance that may be issued which could have an impact on the provisional estimates. The Company will continue to gather information and perform additional analysis on these estimates, including, but not limited to, the amount of earnings and profits subject to the transition tax, the calculation of foreign tax credits, remeasurement of U.S deferred taxes and other deferred tax adjustments until the filing of its associated federal and state income tax returns. Any measurement period adjustments will be reported as a component of provision for incomes taxes in the reporting period the amounts are determined.

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Other Matters
17. Summary Quarterly Financial DataOn March 27, 2020, the United States enacted the CARES Act to provide certain relief due to the COVID-19 pandemic. The CARES Act, among other things, includes various income and payroll tax provisions. The CARES Act did not have a significant impact our consolidated financial statements and income tax provision based on the Company’s existing domestic valuation allowance and historical operating performance. Additionally, on December 27, 2020, the United States passed additional legislation that clarifies expenses paid with the proceeds of a PPP loan that is forgiven are considered to be deductible. The Company expects its expenses paid with proceeds of its PPP Loan to be deductible, to the extent the PPP Loan is forgiven. See Note 10,Long-term Debt, for additional information on the Company’s PPP Loan.
20. Other Expense, Net
Other expense, net consists of the following components:
Twelve Months Ended
December 31,
20202019
(dollars in thousands)
Customer pay discounts$(1,410)$(1,510)
Foreign currency gain910 50 
Loss on sale of business0 (3,630)
Other30 (300)
Total$(470)$(5,390)
  Three months ended
  March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017
  (unaudited, dollars in thousands, except for per share data)
Net sales $203,280
 $253,590
 $240,120
 $195,990
Gross profit $45,390
 $67,670
 $58,420
 $36,120
Net income (loss) $(10,160) $19,970
 $6,560
 $(21,140)
Net income (loss) attributable to Horizon Global $(9,860) $20,260
 $6,890
 $(20,840)
Net income (loss) per share attributable to Horizon Global:        
Basic $(0.41) $0.80
 $0.28
 $(0.84)
Diluted $(0.41) $0.79
 $0.27
 $(0.84)
  Three months ended
  March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016
  (unaudited, dollars in thousands, except for per share data)
Net sales $146,110
 $167,760
 $151,720
 $183,610
Gross profit $37,610
 $45,710
 $42,510
 $34,520
Net income (loss) $2,190
 $7,330
 $370
 $(22,550)
Net income (loss) attributable to Horizon Global $2,190
 $7,330
 $370
 $(22,250)
Net income (loss) per share attributable to Horizon Global:        
Basic $0.12
 $0.40
 $0.02
 $(1.07)
Diluted $0.12
 $0.40
 $0.02
 $(1.07)
18.21. Subsequent Events
Senior Term Loan Credit Agreement
On February 16, 2018,2, 2021, the Company entered into the Fourth Amendment to the Term B Loana credit agreement (the “2018 Replacement“Senior Term Loan Amendment”Credit Agreement”) to further amendwith Atlantic Park Strategic Capital Fund, L.P. (“Atlantic Park”), as administrative agent and collateral agent, and the Original Term B Loan, dated as of June 30, 2015.lenders party thereto (collectively, the “Lenders”). The 2018 ReplacementSenior Term Loan AmendmentCredit Agreement provides for a newan initial term loan commitment (the “2018 Replacement Term Loan”)facility in an originalthe aggregate principal amount of $385.0$100.0 million, all of which has been borrowed by the Company, and extendeda delayed draw term loan facility in the maturity dateaggregate principal amount of up to $125.0 million, which may be drawn by the sixth anniversaryCompany in up to three separate borrowings through June 30, 2022. A ticking fee of 25 basis points per annum will accrue on the undrawn portion of the 2018delayed draw term loan facility.
The proceeds received by the Company from the initial borrowings under the Senior Term Loan Credit Agreement were used to repay in full all outstanding debt and accrued interest on the Company’s Replacement Term Loan Amendment effective date.Loan. As a result of the 2018repayment, the credit agreement governing the Company’s Replacement Term Loan Amendment,has been terminated and is no longer in effect.
Interest on the Senior Term Loan Credit Agreement is payable in cash on a quarterly basis at the interest rate of LIBOR plus 7.50% per annum, subject to a 1.00% LIBOR floor, and is subject to various affirmative and negative covenants, including a secured net leverage ratio tested quarterly, commencing with the fiscal quarter ending March 31, 2023, not to exceed: 6.50 to 1.00. The Senior Term Loan Credit Agreement also contains a financial covenant that stipulates the Company will not make Capital Expenditures (as defined in the Senior Term Loan Credit Agreement) exceeding $27.5 million during any fiscal year. To the extent that the amount of Capital Expenditures is less than $27.5 million in any fiscal year, up to 50% of the difference may be carried forward and used for Capital Expenditures in the immediately succeeding fiscal year.
Following a one-year no-call period, the Senior Term Loan Credit Agreement provides for a 2.5% call premium for years two through five and no premium thereafter. All outstanding borrowings made under the 2018 ReplacementSenior Term Loan Credit Agreement mature on February 2, 2027.
All of the indebtedness under the Senior Term Loan Credit Agreement is and will bear interest, atbe guaranteed by the Company’s election, at either (i) the Base Rate plus 4% per annum, or (ii) LIBOR, with a 1% floor, plus 5% per annum. Principal payments required under the 2018 Replacement Term Loanexisting and future United States, Canadian and Mexican subsidiaries and certain other foreign subsidiaries and is and will be approximately $2.4 million per quarter for the first eight quarters following the date the 2018 Replacement Term Loan Amendment becomes effective, and approximately $4.8 million per quarter thereafter.
The proceeds from the 2018 Replacement Term Loan will be used to (i) repay in full the outstanding principal amountsecured by substantially all of the existing term loans, (ii) to consummate the acquisition of Brink International B.V. and its subsidiaries, expected to close in the second quarter of 2018, and pay a portionassets of the acquisition consideration thereofCompany and the fees and expenses incurred in connection therewith, and (iii) for general corporate purposes.

such guarantors.
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HORIZON GLOBAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Pursuant to the Senior Term Loan Credit Agreement, the Company issued warrants (the “Senior Term Loan Warrants”) to Atlantic Park to purchase in the aggregate up to 3,905,486 shares of the Company’s common stock, with an exercise price of $9.00 per share, subject to adjustment as provided in the Senior Term Loan Warrants. The Senior Term Loan Warrants are exercisable at any time prior to February 2, 2026.
The Company estimates it incurred $11.4 million of debt issuance costs and fees associated with the above transactions. The transactions will be accounted for in the first quarter of 2021.
Additionally, on February 2, 2021, the Company entered into a limited consent of the Loan Agreement for the Company’s Revolving Credit Facility, that among other modifications, consented to the Company’s entering into the Senior Term Loan Credit Agreement.
88


Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A.    Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Evaluation of disclosure controls and procedures
As of the end of the period covered by this Annual Report on Form 10-K, our managementan evaluation was carried out an evaluation, under the supervision andby management, with the participation of the Company’s chief executive officerChief Executive Officer and chief financial officer,Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as(as such term is defined in Exchange Act Rule 13a-15(e). and Rule 15d-15(e) of the Exchange Act) pursuant to Rule 13a-15 of the Exchange Act. The Company’s disclosure controls and procedures are designed only to provide reasonable assurance that they will meet their objectives. Based upon that evaluation, the chief executive officerChief Executive Officer and chief financial officerChief Financial Officer concluded that, as of December 31, 2020, the Company’s disclosure controls and procedures wereare effective as of the end of the period covered by this Annual Report on Form 10-K.to provide reasonable assurance that they would meet their objectives.
Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f), for the Company. Under the supervision of the chief executive officerChief Executive Officer and chief financial officer,Chief Financial Officer, management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 20172020 based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control-Integrated Framework (2013).” Based on its evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2017.2020.
Changes in Internal Control Over Financial Reporting
During the fiscal quarter ended December 31, 2017, the Company implemented a plan that called for modifications and additions to the Company’s internal control over financial reporting related to the accounting for revenue as a result of the new revenue recognition standard, ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. Although the new revenue standard is expected to have an immaterial impact on our ongoing net income, the Company is currently modifying and adding new controls designed to address risks associated with recognizing revenue under the new standard. The Company is therefore augmenting internal control over financial reporting as follows:
▪Enhancing the risk assessment process to take into account risks associated with the new revenue recognition standard.
▪Adding controls that address risks associated with the five-step model for recording revenue, including the revision of the Company’s contract review controls.
There were no other changes in the Company’s internal control over financial reporting that occurred during the fiscal quarterthree months ended December 31, 2017,2020, that have materially affected, or isare reasonably likely to materially affect, its internal control over financial reporting. As a result of the COVID-19 pandemic, certain employees of the Company began working remotely in March 2020. Management has taken measures to ensure that our internal control over financial reporting remained effective and were not materially affected during the period. We are continually monitoring and assessing the impact of the COVID-19 pandemic on our internal controls to minimize the impact on their design and operating effectiveness.
Item 9B.    Other Information
Not applicable.

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PART III
Item 10.    Directors, Executive Officers and Corporate Governance
The information required by Item 10 regarding our directors and corporate governance matters is incorporated by reference herein to the proxy statement for the Company’s 20182021 Annual Meeting of Stockholders (the “Proxy Statement”) sections entitled “Proposal 1 - Election of Directors” and “Corporate Governance.” The information required by Item 10 regarding our executive officers appears as a supplementary item following Item 4 under Part I of this Annual Report on Form 10-K under the title “Information About Our Executive Officers of the Company.Officers.” The information required by Item 10 regarding compliance with Section 16(a) of the Securities Exchange Act of 1934, as amended, is incorporated by reference herein to the Proxy Statement section entitled “Section 16(a) Beneficial Ownership Reporting Compliance.”
The Spirit and The Letter.Effective as of July 1, 2015, the Board adopted the Company’s code of conduct, titled “The Spirit and The Letter”,Letter,” that applies to all directors and employees, including the Company’s principal executive officer, principal financial officer, and other persons performing similar executive management functions. The Spirit and The Letter is posted on the Company’s website, www.horizonglobal.com, in the Corporate Governance subsection of the Investor Relations section. All amendments to The Spirit and The Letter, if any, will be also posted on the Company’s website, along with all waivers, if any, of The Spirit and The Letter involving senior officers.
Item 11.    Executive Compensation
The information required by Item 11 is incorporated by reference herein to the Proxy Statement section entitled “Executive Compensation. - Compensation Discussion and Analysis.”
Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by Item 12 is incorporated by reference herein to the Proxy Statement section entitled “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”
Item 13.    Certain Relationships and Related Transactions, and Director Independence
The information required by Item 13 is incorporated by reference herein to the Proxy Statement section entitled “Transactions with Related PersonsParties.” and “Corporate Governance”.
Item 14.    Principal Accountant Fees and Services
The information required by Item 14 is incorporated by reference herein to the Proxy Statement section entitled “Fees Paid toProposal 2 - Ratification of Appointment of Independent AuditorRegistered Public Accounting Firm.”



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PART IV
Item 15.    Exhibits and Financial Statement Schedules
(a) Listing of Documents
(1)   Financial Statements
The Company’s consolidated financial statements included in Item 8 hereof, as required at December 31, 20172020 and December 31, 2016,2019, and for the periods ended December 31, 2017, 2020 and December 31, 2016 and December 31, 2015,2019, consist of the following:
Consolidated Balance Sheets
Consolidated Statements of Income (Loss)Operations
Consolidated Statements of Comprehensive Income (Loss)
Consolidated Statements of Cash Flows
Consolidated Statements of Shareholders’ Equity
Notes to Consolidated Financial Statements
(2)   Financial Statement Schedules
Financial Statement Schedule of the Company appended hereto, as required for the periods ended December 31, 2017, 2020, and December 31, 2016 and December 31, 2015,2019, consists of the following:
Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable, not required, or the information is otherwise included in the financial statements or the notes thereto.

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(3)   Exhibits
Exhibits Index:
2.1(c)*2.1(q)
2.2(i)*
Share Purchase Agreement, dated as of August 24, 2016, among Horizon Global Corporation and Blitz K 16-102 GmbH and Parcom Deutschland I GmbH & Co. KG, Co-Investment Partners Europe L.P., BaryernLB Private Equity GmbH, Walter Gnauert, Dr. Bernd Welzel, Frank Klebedanz, Jürgen Lotter and Westfalia Mitarbeiterbeteiligungs GmbH & Co. KG.
2.3*
Sale and Purchase Agreement, dated asAugust 16, 2019, by and among certain subsidiaries of December 13, 2017, among Horizon Global Corporation and Cequent Nederland Holdings B.V. and Cooperatief H2 Equity Partners Fund IV Holding W.A., Stichting Administratiekantoor Brink I, and Stichting Administratiekantoor Brink II.Hayman Pacific BidCo Pty. Ltd.
3.1(d)3.1(p)
Amended and Restated Certificate of Incorporation of Horizon Global Corporation.
3.2(b)
Amended and Restated By-laws of Horizon Global Corporation.
4.1(j)4.1(i)
4.2(j)4.2(i)
10.1(c)4.3(s)
Tax Sharing Agreement, dated asDescription of June 30, 2015, by and between Horizon Global Corporation and TriMas Corporation.Securities Registered Under Section 12 of the Securities Exchange Act of 1934.
10.2(c)4.4(n)
10.3(c)4.5(n)
10.4(c)4.6(w)
10.5(c)10.1(c)
Loan Agreement, dated as of June 30, 2015, among the Company, Cequent Performance Products, Inc., Cequent Consumer Products, Inc., the lenders party thereto and Bank of America, N.A., as agent for the lenders.
10.6(f)
Amended and Restated Loan Agreement, dated as of December 22, 2015, among Horizon Global Corporation, Cequent Performance Products, Inc., Cequent Consumer Products, Inc., Cequent UK Limited, Cequent Towing Products of Canada Ltd., the subsidiary guarantors party thereto, the lenders party thereto and Bank of America, N.A., as agent for the lenders.
10.7(f)
Foreign Facility Guarantee and Collateral Agreement, dated as of December 22, 2015, among Cequent Performance Products, Inc., certain of its subsidiaries party thereto as grantors and Bank of America, N.A., as agent.
10.8(i)
Waiver and First Amendment to Amended and Restated Loan Agreement, dated as of October 4, 2016, to the Amended and Restated Loan Agreement, dated as of December 22, 2015, by and among Horizon Global Corporation, Cequent Performance Products, Inc., Cequent Consumer Products, Inc., Cequent UK Limited, Cequent Towing Products of Canada Ltd., the other parties thereto, the lenders party thereto and Bank of America, N.A., as administrative agent.
10.9(l)
Second Amendment to Amended and Restated Loan Agreement, dated as of January 11, 2017, to the Amended and Restated Loan Agreement, dated as of December 22, 2015, by and among Horizon Global Corporation, Cequent Performance Products, Inc., Cequent Consumer Products, Inc., Cequent UK Limited, Cequent Towing Products of Canada Ltd., the other parties thereto, the lenders party thereto and Bank of America, N.A., as administrative agent.
10.10(c)
Term Loan Credit Agreement, dated as of June 30, 2015, among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative and collateral agent.
10.11(i)10.2(h)
10.12(l)10.3(k)
10.13(k)10.4(j)*
10.14(d)**10.5(l)
2018 Replacement Term Loan Amendment Agreement (Fourth Amendment to Credit Agreement), dated as of February 16, 2018, among Horizon Global Corporation, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.
10.6(m)
Fourth Amendment to Credit Agreement, dated as of July 31, 2018, to the Term Loan Credit Agreement, dated as of June 30, 2015, by and among Horizon Global Corporation, the lenders party thereto and JPMorgan Chase Bank, N.A. as administrative agent.
10.7(d)**
Horizon Global Corporation Executive Retirement Plan effective as of July 1, 2015.

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10.15(e)10.8(e)**
Horizon Global Corporation Executive Severance/Change of Control Policy effective as of July 1, 2015.
10.16(a)10.9(a)
Form of Indemnification Agreement.
10.17(e)10.10(e)**
Form of Restricted Stock Units Agreement - Founders Grant - under the 2015 Equity and Incentive Compensation Plan.
10.18(e)**
Form of Restricted Stock Units Agreement - 2015 Board of Directors - under the 2015 Equity and Incentive Compensation Plan.
10.19(e)**
Form of Nonqualified Stock Option Agreement - 2015 LTI - under the 2015 Equity and Incentive Compensation Plan.
10.20(e)10.11(e)**
Form of Nonqualified Stock Option Agreement - Special Award - under the 2015 Equity and Incentive Compensation Plan.
10.21(e)10.12(f)**
10.22(e)**
Form of Horizon Replacement Restricted Stock Unit Award Agreement (Converted in connection with the adjustment of TriMas 2013 Performance Stock Units - 2011 Plan).
10.23(e)**
Form of Horizon Replacement Restricted Stock Unit Award Agreement (Converted in connection with the adjustment of TriMas 2014 Performance Stock Units - 2011 Plan).
10.24(g)**
Form of Restricted Stock Units Agreement - CEO Award Program - 2016 Grant - under the Amended and Restated 2015 Equity and Incentive Compensation Plan.
10.25(g)**
Form of Restricted Stock Units Agreement - Annual Grant - under the Amended and Restated 2015 Equity and Incentive Compensation Plan.
10.26(g)**
Form of Restricted Stock Units Award Agreement - CEO Grant - under the Amended and Restated 2015 Equity and Incentive Compensation Plan.
10.27(g)10.13(f)**
10.28(g)10.14(f)**
10.29(h)10.15(g)**
Horizon Global Corporation Amended and Restated 2015 Equity and Incentive Compensation Plan.
10.30(i)10.16(l)**
10.17(l)**
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Table of Contents


10.18(l)**
10.19(l)**
10.20(l)**
10.21(m)**
10.22(h)
10.31(j)10.23(i)
10.32(j)10.24(i)
10.33(j)10.25(i)
10.34(j)10.26(i)
10.35(j)10.27(i)
10.36(j)10.28(i)
10.37(j)10.29(i)
10.38(j)10.30(i)
10.39(j)10.31(i)
10.40(j)10.32(i)
Additional Call Option Confirmation, dated as of January 27, 2017, by and between the Company and Bank of America, N.A.
10.41(j)10.33(i)
10.42(j)10.34(i)
21.110.35(g)
Updated Exhibit A to Horizon Global Corporation Executive Severance/Change of Control Policy effective as of November 6, 2018.
10.36(o)
10.37(o)
10.38(o)
10.39(p)
10.40(r)
10.41(r)
10.42(r)
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Table of Contents


10.43(t)*
10.44(t)*
10.45(u)
10.46(u)
10.47(u)
10.48(u)
10.49(v)*
10.50(v)*
10.51*
10.52*
21.1
Horizon Global Corporation Subsidiary List.
23.1
Consent of Independent Registered Public Accounting Firm.

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31.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INSInline XBRL Instance Document. (not part of filing)
101.SCHInline XBRL Taxonomy Extension Schema Document.
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
_________________________
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(a)Incorporated by reference to the Exhibits filed with our Registration Statement on Form S-1 filed on March 31, 2015 (Reg. No. 333-203138).
(b)Incorporated by reference to the Exhibits filed with our Registration StatementCurrent Report on Form S-1/A8-K filed on June 11, 2015February 20, 2019 (Reg. No. 333-203138)001-37427).
(c)Incorporated by reference to the Exhibits filed with our Current Report on Form 8-K filed on July 6, 2015 (File No. 001-37427).
(d)Incorporated by reference to the Exhibits filed with our Quarterly Report on Form 10-Q filed on August 11, 2015 (File No. 001-37427).
(e)Incorporated by reference to the Exhibits filed with our Quarterly Report on Form 10-Q filed on November 10, 2015 (File No. 001-37427).
(f)Incorporated by reference to the Exhibits filed with our Current Report on Form 8-K filed on December 23, 2015 (File No. 001-37427).
(g)Incorporated by reference to the Exhibits filed with our Quarterly Report on Form 10-Q filed on May 3, 2016 (File No. 001-37427).
(h)(g)Incorporated by reference to the Exhibits filed with our CurrentAnnual Report on Form 8-K10-K filed on May 23, 2016March 18, 2019 (File No. 001-37427).
(i)(h)Incorporated by reference to the Exhibits filed with our Current Report on Form 8-K filed on October 11, 2016 (File No. 001-37427).
(j)(i)Incorporated by reference to the Exhibits filed with our Current Report on Form 8-K filed on February 1, 2017 (File No. 001-37427).
(k)(j)Incorporated by reference to the Exhibits filed with our Current Report on Form 8-K filed on April 6, 2017 (File No. 001-37427).
(l)(k)Incorporated by reference to the Exhibits filed with our Annual Report on Form 10-K filed on March 10, 2017 (File No. 001-37427).
(l)Incorporated by reference to the Exhibits filed with our Quarterly Report on Form 10-Q filed on May 3, 2018 (File No. 001-37427).
(m)Incorporated by reference to the Exhibits filed with our Quarterly Report on Form 10-Q filed on August 7, 2018 (File No. 001-37427).
(n)Incorporated by reference to the Exhibits filed with our Current Report on Form 8-K filed on March 18, 2019 (File No. 001-37427).
(o)Incorporated by reference to the Exhibits filed with our Quarterly Report on Form 10-Q filed on May 9, 2019 (File No. 001-37427).
(p)Incorporated by reference to the Exhibits filed with our Quarterly Report on Form 10-Q filed on August 8, 2019 (File No. 001-37427).
(q)Incorporated by reference to the Exhibit filed with our Current Report on Form 8-K filed on September 25, 2019 (File No. 001-37427).
(r)Incorporated by reference to the Exhibits filed with our Quarterly Report on Form 10-Q filed on November 12, 2019 (File No. 001-37427).
(s)Incorporated by reference to the Exhibits filed with our Annual Report on Form 10-K filed on March 16, 2020 (File No. 001-37427).
(t)Incorporated by reference to the Exhibits filed with our Quarterly Report on Form 10-Q filed on May 18, 2020 (File No. 001-37427).
(u)Incorporated by reference to the Exhibits filed with our Quarterly Report on Form 10-Q filed on August 7, 2020 (File No. 001-37427).
(v)Incorporated by reference to the Exhibits filed with our Quarterly Report on Form 10-Q filed on November 5, 2020 (File No. 001-37427).
(w)Incorporated by reference to the Exhibits filed with our Current Report on Form 8-K filed on February 3, 2021 (File No. 001-37427).
* Certain exhibits and schedules wereare omitted in the original filing pursuant to Item 601(b)(2)601(a)(5) of Regulation S-K, and the Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted exhibits and schedules upon request.


** Management contracts and compensatory plans or arrangement required to be filed as an exhibit pursuant Item 15(b) of Form 10-K.

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Item 16.    Form 10-K Summary
None.

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HORIZON GLOBAL CORPORATION
(Registrant)
HORIZON GLOBAL CORPORATION
(Registrant)
BY:		/s/ TERRENCE G. GOHL
DATE:March 11, 2021
BY:/s/ A. MARK ZEFFIRO
DATE:March 1, 2018
Name: A. Mark ZeffiroTerrence G. Gohl
Title: President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
NameTitleDate
/s/ TERRENCE G. GOHLPresident and Chief Executive Officer and DirectorMarch 11, 2021
Terrence G. Gohl(Principal Executive Officer)
NameTitleDate
/s/ A. MARK ZEFFIRODENNIS E. RICHARDVILLEPresident and Chief Executive Officer and DirectorMarch 1, 2018
A. Mark Zeffiro(Principal Executive Officer)
/s/ DAVID G. RICEChief Financial OfficerMarch 1, 201811, 2021
David G. RiceDennis E. Richardville(Principal Financial and Accounting Officer)
/s/ DENISE ILITCHMATTHEW J. MEYERChief Accounting OfficerMarch 11, 2021
Matthew J. Meyer(Principal Accounting Officer)
/s/ JOHN C. KENNEDYChair of the Board of DirectorsMarch 1, 201811, 2021
Denise IlitchJohn C. Kennedy
/s/ DAVID C. DAUCHFREDERICK A. HENDERSONDirectorMarch 1, 201811, 2021
David C. DauchFrederick A. Henderson
/s/ RICHARDRYAN L. DEVORELANGDONDirectorMarch 1, 201811, 2021
RichardRyan L. DeVoreLangdon
/s/ SCOTT G. KUNSELMANBRETT N. MILGRIMDirectorMarch 1, 201811, 2021
Scott G. KunselmanBrett N. Milgrim
/s/ RICHARD D. SIEBERTDEBRA S. OLERDirectorMarch 1, 201811, 2021
Richard D. SiebertDebra S. Oler
/s/ SAMUEL VALENTI IIIMARK D. WEBERDirectorMarch 1, 201811, 2021
Samuel Valenti IIIMark D. Weber
/s/ HARRY J. WILSONDirectorMarch 11, 2021
Harry J. Wilson

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SCHEDULE II
PURSUANT TO ITEM 15(a)(2)
OF FORM 10-K
VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARSTWELVE MONTHS ENDED
DecemberDECEMBER 31, 2017, 20162020 AND 20152019
(Dollars in thousands)
    ADDITIONS    
DESCRIPTION 
BALANCE
AT
BEGINNING
OF PERIOD
 
CHARGED
TO
COSTS AND
EXPENSES
 
CHARGED
(CREDITED)
TO OTHER
ACCOUNTS(1)
 
DEDUCTIONS(2)
 
BALANCE
AT END
OF PERIOD
Allowance for doubtful accounts deducted from accounts receivable in the balance sheet          
Year ended December 31, 2017 $3,810
 $640
 $(1,340) $10
 $3,100
Year ended December 31, 2016 $2,960
 $910
 $50
 $110
 $3,810
Year ended December 31, 2015 $3,230
 $470
 $320
 $1,060
 $2,960
  ADDITIONS 
DESCRIPTIONBALANCE
AT
BEGINNING
OF PERIOD		CHARGED
TO
COSTS AND
EXPENSES
OTHER(1)
DEDUCTIONS(2)
BALANCE
AT END
OF PERIOD
Allowance for doubtful accounts    
Twelve Months Ended
December 31, 2020		$3,210 $860 $(10)$(1,330)$2,730 
Twelve Months Ended
December 31, 2019		$4,840 $1,540 $(1,450)$(1,720)$3,210 
______________
(1) Allowance of companies acquired, and otherOther adjustments, net.
(2) Deductions, representing uncollectible accounts written-off, less recoveries of amounts written-off in prior years.

  ADDITIONS 
DESCRIPTIONBALANCE
AT
BEGINNING
OF PERIOD		CHARGED
TO
COSTS AND
EXPENSES
OTHER(1)
DEDUCTIONSBALANCE
AT END
OF PERIOD
Reserve for inventory valuation    
Twelve Months Ended
December 31, 2020		$17,980 $(4,310)$10 $(70)$13,610 
Twelve Months Ended
December 31, 2019		$13,180 $7,640 $(300)$(2,540)$17,980 
______________
(1) Primarily relates to other adjustments, net as well as reserves derecognized in conjunction with the sale of the non-automotive business in 2019.
  ADDITIONS 
DESCRIPTIONBALANCE
AT
BEGINNING
OF PERIOD		CHARGED
TO
COSTS AND
EXPENSES
OTHER(1)
DEDUCTIONS(2)
BALANCE
AT END
OF PERIOD
Deferred tax valuation allowance    
Twelve Months Ended
December 31, 2020		$50,370 $520 $6,910 $(2,620)$55,180 
Twelve Months Ended
December 31, 2019		$26,650 $4,040 $19,680 $0 $50,370 
______________
(1) Primarily relates to tax benefits that have previously been reserved.
(2) Primarily relates to tax benefits previously reserved deemed realizable.
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