MSA Safety Annual Report 2021

FY2021 Annual Report · MSA Safety

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One Mission. One Passion. One Purpose.

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2021 Annual Report

Our Mission

That men and women may work in safety and that they,
their families and their communities may live in health
throughout the world.

Our Vision

To be the world’s leading provider of safety solutions
that protect workers when life is on the line. We pursue
this vision with an unsurpassed commitment to integrity,
customer service and product innovation that creates
exceptional value for all MSA stakeholders.

Business of MSA
MSA is in the business of developing,

mining industry provided the foundation for

manufacturing and selling innovative products

the development of safety equipment to better

that enhance the safety and health of workers

protect miners. While the range of markets

and help protect facility infrastructures

served by MSA has evolved greatly over the

throughout the world. MSA’s Core Products

years, the founding philosophy of understanding

include self-contained breathing apparatus, fi xed

customer safety needs and designing innovative

gas and fl ame detection systems, portable gas

safety solutions that address those needs,

detection instruments, industrial head protection

remains unchanged.

products, fi refi ghter helmets and protective

apparel, and fall protection devices.

MSA is headquartered in Cranberry Township,

Pennsylvania, with operations employing

MSA was founded in 1914 by John T. Ryan and

approximately 4,800 associates throughout the

George H. Deike, two mine rescue engineers

world. A publicly held company, MSA’s stock is

who had fi rsthand knowledge of the terrible

traded on the New York Stock Exchange under

human loss that was occurring in underground

the symbol MSA.

coal mines at that time. Their knowledge of the

About the Cover
For more than a century, the mission of MSA has remained unchanged.

In 2021, our associates’ connection to that mission shined brilliantly as

we continued to navigate a global pandemic and a dynamic business

environment. The associates of MSA know what’s at stake. So no matter

where in the world we work, we begin each day with a shared mindset.

We have One Mission, One Passion, and One Purpose — to help protect

people at work. When the MSA team comes to work, we are all-in.

Appropriately so, these core attributes serve as the theme of our 2021
annual report.

2021 ANNUAL SALES
BY REGION

26%

55%
55%

10%

North America

Latin America

Europe, Middle East and Africa

Asia Pacifi c

2021 ANNUAL SALES
BY PRODUCT CATEGORY

11%

21%

38%
38%

30%

Firefi ghter Safety

Industrial Personal Protective
Equipment (PPE)

Fixed Gas and Flame
Detection (FGFD)

Non-Core

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2021 FINANCIAL HIGHLIGHTS

2021 was a successful year, and we closed the year with record quarterly sales in the fourth quarter. The demand and order pace for our products
was strong over the course of the year, and we saw healthy incremental margins as we exited the year, resulting from strategic pricing, productivity
programs and cost discipline. We deployed nearly $400 million of capital on strategic acquisitions and investments in our gas detection and
fi refi ghter safety businesses. Our strong cash fl ow and balance sheet position us well to continue to invest in future growth opportunities.

– Ken Krause, Senior Vice President and Chief Financial Offi cer

NET SALES

$1.4B

+4% Overall
+9% Core Products

KEY FINANCIAL METRICS

ADJUSTED OPERATING INCOME

$241M

17.2% of Net Sales

2021 SALES GROWTH BY PRODUCT CATEGORY

ADJUSTED EARNINGS PER DILUTED SHARE

$4.68

+2% Year Over Year

INDUSTRIAL PERSONAL
PROTECTIVE EQUIPMENT (PPE)*

+14%

FIREFIGHTER
SAFETY

+7%

FIXED GAS &
FLAME DETECTION

+4%

NON-CORE**

-24%

PRODUCT INNOVATION AND STRATEGIC GROWTH

R&D INVESTMENT

4.1%

of Net Sales

SALES VITALITY

~35%

% of Sales from Products Developed
and Launched in the Past 5 Years

Acquisitions and Investments

ACTIVE CAPITAL DEPLOYMENT STRATEGY AND STRONG BALANCE SHEET

CAPITAL ALLOCATION

Acquisitions and Investments

~$400M

Dividends

$69M

CAPEX

$44M

1.6x

Net Debt to
Adjusted EBITDA

CONSISTENTLY INCREASING DIVIDENDS PAID

TOTAL SHAREHOLDER RETURN

DIVIDENDS
PER SHARE

$1.71

$1.75

$1.64

$1.49

$1.38

2017

2018

2019

2020

2021

106%

MSA

S&P MIDCAP 400
INDUSTRIALS

S&P MIDCAP 400

63%

50%

FOR THE 3 YEARS ENDED 12/31/2021

*Includes Portable Gas Detection, Industrial Head Protection, and Fall Protection. **Attributable primarily to a decline in respirator sales related to the pandemic.

This page includes certain non-GAAP fi nancial measures. These fi nancial measures include adjusted operating income, adjusted operating margin, adjusted earnings per diluted share and net debt to adjusted EBITDA.
For an explanation of these measures, together with a reconciliation to the most directly comparable GAAP measures, please visit http://investors.MSAsafety.com and click on Quarterly Results (Q4 2021) under the Financial Information header.

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One Mission. One Passion. One Purpose.

| MSA 2021 Annual Report

Nish Vartanian
Chairman, President and
Chief Executive Offi cer

To Our Shareholders, Customers,
Channel Partners and Associates:

When I look back on 2021 and think about the mission of

MSA Safety, I think about what our mission means to our

shareholders, customers, channel partners, suppliers and

associates around the world. I also think about Dumitru Polscin.

Dumitru is a Moldovan fi refi ghter who was exposed to intense

fl ames and heat while clearing an evacuation route during a

nine-story apartment fi re. Fortunately, Dumitru survived the

ordeal and, in the process, helped rescue a number of children

and other building tenants. He credits his MSA Gallet® F1 XF

Helmet, along with his other protective gear, for helping him

survive the incident.

Over the years, Dumitru has stayed in touch with our company,

sharing with us news of major milestones in his life, including

the birth of his son. Recently, he shared with us the image to the

right. It was an expression of his appreciation for the work we do

at MSA.

For me, this picture captures the essence of the MSA mission

and the reason we come to work every day.

We’ve been focused on that singular mission of protecting

lives for the last 108 years, and in 2021, that focus on our

One Mission, One Passion and One Purpose was a driver

of our success and continues to inspire us each day.

Perseverance in a Dynamic Environment
Our total revenue for the year increased four percent to

$1.4 billion. This level of revenue resulted in adjusted operating

income of $241 million or 17.2 percent of sales, and adjusted

earnings per share of $4.68.

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For the full year, incoming orders were up mid-single digits

over both 2020 and the pre-pandemic levels of 2019. Customer

demand remained strong throughout the year across all our core

products. These include industrial and fi refi ghter head protection,

fall protection, self-contained breathing apparatus (SCBA),

portable gas detection instruments, fi xed gas and fl ame detection

(FGFD) systems, and fi refi ghter protective apparel. Strong

customer demand, coupled with unprecedented supply chain

challenges, also drove our backlog to a record level at year end.

Today, our top priority is to improve the rate of production in our

factories to support backlog and customer orders. Our collective

eff orts focus on identifying the actions we can take now – across

all functions – that help us get our products out the door and

into the hands of our customers, so they in turn can advance

The mission of MSA comes alive in Operations.
That’s why the function was renamed
MissionOPS in 2021.

their own safety programs

and objectives.

On this front, I want to

acknowledge the work of

our Global Supply Chain

team and the dedication of our MissionOPS associates. Their

eff orts are a major reason we were able to achieve exceptional

results in a challenging environment.

Associate repairs fi refi ghter protective apparel at the new MSA Bristol Service Center in
Livingston, Scotland.

MSA and Bacharach appeared together at the AHR Expo in January 2022, the largest
trade show dedicated to the heating, ventilation, air conditioning and refrigeration
markets, marking the fi rst joint product showcase since the acquisition in July 2021.

Pittsburgh-based Bacharach, Inc. is a leader in gas detection

Thanks to our focus on the mission of MSA, combined with the

technologies used in the heating, ventilation, air conditioning

strides we’re making in product development and our continuous

and refrigeration (HVAC-R) markets. The integration of Bacharach

improvement eff orts to manage backlog, I'm enthusiastic that our

solutions into the MSA suite of refrigerant detection technology

company is well positioned to navigate through this environment

enhances MSA’s position as a leader in this space and expands our

and create long-term value for all MSA stakeholders.

reach to these new end markets. It also supports the company’s

Advancing our Strategy
At the same time, our team has remained focused on executing

our Corporate Strategy. Key pillars of this strategy include

expanding our addressable markets and strengthening

MSA’s position as a leader in safety solutions in core markets

and geographies.

This focus, along with a healthy balance sheet, positioned MSA to

deploy nearly $400 million on the acquisitions of Bristol Uniforms

in January and Bacharach, Inc. in July.

commitment to sustainability by providing technologies that

contribute to environmental stewardship programs. We are

thrilled to have welcomed the Bristol and Bacharach teams to

MSA and look forward to realizing continued benefi ts of these

acquisitions into 2022 and beyond.

In addition to company growth through acquisition, we also

established a technology partnership with Perspective Robotics AG.

The company develops advanced situational awareness tools that

utilize tethered drone technology for fi rst responder applications.

This technology, marketed under the brand name Fotokite, aligns

United Kingdom-based Bristol Uniforms is a leading innovator

exceptionally well with the MSA mission and our connected

and provider of protective apparel for the fi re and rescue

fi refi ghter strategy.

services sector. The acquisition strengthens MSA’s position as a

global leader in fi re service personal protective equipment (PPE)

products while providing an avenue to expand our business in

the U.K. and key international markets. In fact, MSA is already

realizing this market development following the recent contract

to provide 5,000 sets of fi refi ghter protective apparel to the Israeli

Fire Service.

Connected Safety Solutions
Each day, our global engineering teams are developing new ways

to use MSA products and the Internet of Things (IoT) to connect

customers to important safety-related data. Ultimately, these

connected solutions can help our customers enhance their own

safety performance and cultures, while improving operational

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One Mission. One Passion. One Purpose.

| MSA 2021 Annual Report

Employees, retirees and special guests cut the ribbon to open MSA’s new 20,000 square-foot gas detection manufacturing facility in the Fall of 2021. This investment reaffi rms MSA’s
Cranberry Township campus as the global center of excellence for gas detection technology.

effi ciencies and minimizing risk. And many of these solutions

LUNAR is a wireless and handheld device that creates an

will work in tandem with MSA+™, our new safety subscription

independent search and rescue network using cloud technology.

off ering. The MSA+ service gives customers valuable insight into

In use, it can deliver next-level fi re-scene management and rescue

their safety performance and data, while helping simplify the

capabilities for incident commanders.

management of their safety programs.

One example of our progress in this area

is MSA’s new Connected Work Platform.

This is a powerful hardware/software

combination that features our new ALTAIR

io™ 4 Gas Detector – a cloud-ready wearable

gas detector designed for a multitude of

industrial applications. When linked to

MSA+, the io 4 Detector transforms into a

fully connected and intuitive gas detection

solution, featuring out-of-the-box cellular

connectivity and GPS location.

But connected technology off ers benefi ts

beyond our gas detection portfolio. For

the fi re service market, we introduced

the Connected Firefi ghter Platform –

a customizable suite of MSA products and

technology that can meet a wide range

The ALTAIR io™ 4 Gas Detection
Wearable Device.

CSR — An Extension of the
MSA Mission
As I’ve noted before, Corporate Social

Responsibility (CSR) is at the heart of what

we do at MSA. While we are dedicated to

helping protect people at work, we are also

focused on expanding programs that help

make MSA fi t for the future. Our investments

in worker safety, talent, environmental

sustainability, crisis management, and

supply chain resiliency all help to create a

better business model. The companies that

consistently improve in these areas are the

ones I believe will have the greatest level of

success going forward.

In 2021, we continued to make strategic

investments in each of these areas. As an

example, we conducted a stakeholder

of fi re service safety needs. MSA off erings under this platform

assessment to help increase transparency on how we prioritize

include the G1 and M1 SCBAs; the MSA Hub scene data and asset

and advance our key social and sustainability commitments.

management device; our FireGrid Platform for capturing, in real

We’re also refreshing our diversity and inclusion strategy, and

time, data from MSA’s ALTAIR 4XR and 5X portable gas detectors;

we’re developing a long-term climate risk strategy. Also, in

and our breakthrough LUNAR® system.

connection with the refi nancing of our credit facility,

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we incorporated a sustainability-linked pricing structure that is

The Newsweek recognition

tied to the company's performance on certain ESG metrics.

is one of several accolades

In addition to the above eff orts, we never forget our mission to

help protect people, which extends to our communities as well.

MSA’s partnership with FIRE AID enhances the company’s ability to help protect
fi refi ghters around the world. At the time of this printing, MSA has donated nearly a
half-million dollars in fi re safety equipment to Ukranian fi refi ghters who are helping
to protect their cities and towns through the ongoing war. Shown above, these
products are being unloaded at the Polish border.

MSA received in 2021. Forbes

identifi ed MSA Safety nationally

as one of America’s best mid-

size employers, a best place

to work for new graduates,

a best employer for diversity,

and a best place to work

in Pennsylvania.

Regionally, the Pittsburgh Post-Gazette named MSA a Top

Workplace in the large company category, representing the

eighth time the company has earned this distinction, as voted

on by associates. MSA was also individually recognized by the

Post-Gazette as a company where new ideas are encouraged.

Looking to the Future
In closing, I’d like to express my gratitude to our entire MSA team,

which stayed focused on our mission, our people, our customers,

and our communities. In a world that’s forever changed, I’m

enthusiastic about the investments we’re making this year to be

an organization that is truly fi t for the future. Certainly, there are

challenges ahead, but there’s also a tremendous opportunity to

As THE Safety Company, we also know a commitment to

harness these times to collectively build the future world in which

protecting people at work must begin at home. That’s why I’m

we want to live.

proud to report that three MSA facilities achieved incredible

milestones in safety over the past year. Our global headquarters

and manufacturing plant in Cranberry Township, Pennsylvania,

surpassed 10 million hours without a Lost Time Incident (LTI).

Additionally, our production facilities in Mohammedia, Morocco,

and Galway, Ireland, exceeded two million hours and one million

I also want to recognize and thank our Board of Directors,

Executive Leadership Team and channel partners for their eff orts

and contributions to MSA’s success in 2021. And to each of you,

the shareholders of MSA, I sincerely thank you for your confi dence

in our team.

hours without an LTI, respectively. And since November 2021, our

Finally, I want to thank our customers around the world. We are

global workforce has achieved a combined three million hours

grateful for your continued trust in the MSA brand. When you’re

and counting without an LTI! The unwavering dedication of our

on the job, we’re there with you, and we know what’s at stake.

associates to not only live our mission for our customers but also

That’s why we remain steadfastly committed to one mission,

for each other at work each day is truly inspiring.

fueled by one passion, and inspired by one purpose.

Refl ecting all of these eff orts, we were pleased to learn in

late 2021 that MSA was recognized by Newsweek as one of

America’s Most Responsible Companies.

This recognition highlights organizations spanning 14 industries

that strive to be excellent corporate citizens. MSA was selected

from a list of candidates that include the top 2,000 public

companies headquartered in the United States, based on revenue.

Nish Vartanian
Chairman, President and Chief Executive Offi cer

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2021 Financial
Contents

Business of MSA

Management’s Discussion and Analysis

Financial Statements and Supplementary Data

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Balance Sheets

Consolidated Statements of Cash Flows

Consolidated Statements of Changes in Retained Earnings,
Accumulated Other Comprehensive Loss and
Noncontrolling Interests

Notes to Consolidated Financial Statements

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
TO

FOR THE TRANSITION PERIOD FROM

Commission File No. 1-15579

MSA SAFETY INCORPORATED

(Exact name of registrant as specified in its charter)

Pennsylvania
(State or other jurisdiction of incorporation or organization)

46-4914539
(IRS Employer Identification No.)

1000 Cranberry Woods Drive
Cranberry Township, Pennsylvania
(Address of principal executive offices)

16066-5207
(Zip Code)

Registrant’s telephone number, including area code: (724) 776-8600

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, no par value

(Title of each class)

MSA

New York Stock Exchange

(Trading symbol(s))

(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨

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 ¨ 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 and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes x No ¨

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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer x

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐
Emerging growth company ☐

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. ¨

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. Yes ☒ No ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x

The aggregate market value of voting stock held by non-affiliates as of June 30, 2021 was approximately $6.1 billion. As of February 11, 2022,
there were outstanding 39,276,924 shares of common stock, no par value.

Portions of the Proxy Statement for the May 13, 2022 Annual Meeting of Shareholders are incorporated by reference into Part III.

DOCUMENTS INCORPORATED BY REFERENCE

9621_FIN_C3.pdf March 14, 2022 pg 1

Item No.
Part I
1.

1A.

1B.

Part II

7A.

9A.

9B.

9C.
Part III
10.

11.

12.

13.

14.
Part IV
15.

Table of Contents

Page

Business

Risk Factors

Unresolved Staff Comments

Properties

Legal Proceedings

Mine Safety Disclosures

Executive Officers of the Registrant

Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities

Selected Financial Data

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Quantitative and Qualitative Disclosures About Market Risk

Financial Statements and Supplementary Data

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Controls and Procedures

Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Directors, Executive Officers and Corporate Governance

Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters

Certain Relationships and Related Transactions, and Director Independence

Principal Accountant Fees and Services

Exhibits and Financial Statement Schedules

16.

Form 10-K Summary

Signatures

85
85

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Forward-Looking Statements

This report may contain (and verbal statements made by MSA® Safety Incorporated (MSA) may contain) forward-
looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future
events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may
cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels
of activity, performance or achievements expressed or implied by these forward-looking statements. These risks and other
factors include, but are not limited to, those listed in this report under “Risk Factors,” “Management’s Discussion and Analysis
of Financial Condition and Results of Operations,” and elsewhere in this report. In some cases, you can identify forward-
looking statements by words such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “potential” or other comparable words. Actual results, performance or outcomes may differ materially
from those expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
We are under no duty to update publicly any of the forward-looking statements after the date of this report, whether as a result
of new information, future events or otherwise.

9621_FIN_C3.pdf March 14, 2022 pg 3

Item 1. Business

PART I

Overview—Established in 1914, MSA Safety Incorporated is the global leader in the development, manufacture and
supply of safety products that protect people and facility infrastructures. Recognized for their market leading innovation, many
MSA products integrate a combination of electronics, mechanical systems and advanced materials to protect users against
hazardous or life-threatening situations. The Company's comprehensive product line, which are governed by rigorous safety
standards across highly regulated industries, is used by workers around the world in a broad range of markets, including fire
service, the oil, gas and petrochemical industry, construction, industrial manufacturing applications, utilities, mining and the
military. The Company's core products include breathing apparatus where self-contained breathing apparatus ("SCBA") is the
principal product, fixed gas and flame detection systems, portable gas detection instruments, industrial head protection
products, firefighter helmets and protective apparel and fall protection devices.

The Company’s leading market positions across nearly all of its core products are supported and enabled by a strong
commitment to investing in new product development that continually raises the bar for safety equipment performance, all
while upholding an unwavering commitment to integrity. We dedicate significant resources to research and development,
which allows us to produce innovative safety products that are often first to market. Our global product development teams
include cross-functional associates throughout the Company, including research and development, marketing, sales, operations
and quality management. Our engineers and technical associates work closely with the safety industry’s leading standards-
setting groups and trade associations to develop industry specific product standards and to anticipate their impact on our
product line.

Segments—We tailor our product offerings and distribution strategy to satisfy distinct customer preferences that vary
across geographic regions. To best serve these customer preferences, we have organized our business into four geographic
operating segments that are aggregated into three reportable geographic segments: Americas, International and Corporate.
Segment information is presented in Note 8 of the consolidated financial statements in Part II Item 8 of this Form 10-K.

Because our consolidated financial statements are stated in U.S. dollars and much of our business is conducted outside
the U.S., currency fluctuations may affect our results of operations and financial position and may affect the comparability of
our results between financial periods.

Products—We manufacture and sell a comprehensive line of safety products to protect the health and safety of workers
and facility infrastructures around the world in the fire service, the oil, gas and petrochemical industry, construction, industrial
manufacturing applications, utilities, mining and the military. Our products protect people against a wide variety of hazardous
or life-threatening situations.

The following is a brief description of each of our product categories:

Core products. MSA's corporate strategy includes a focus on driving sales of core products, where we have leading
market positions and a distinct competitive advantage. Core products, as mentioned above, include breathing apparatus where
SCBA is the principal product, fixed gas and flame detection systems, portable gas detection instruments, industrial head
protection products, firefighter helmets and protective apparel and fall protection devices. Core products comprised
approximately 89% and 85% of sales in 2021 and 2020, respectively.

The following is a brief description of our core product offerings:

Breathing apparatus products. The primary breathing apparatus product is the SCBA. SCBA are used by first responders,

petrochemical plant workers and anyone entering an environment deemed immediately dangerous to life and health. Our
primary breathing apparatus product in the Americas segment, the MSA G1 SCBA, is a revolutionary platform that offers many
customizable and differentiated features. Our newest breathing apparatus product, the MSA M1 SCBA, represents the most
advanced and ergonomic SCBA we have ever launched for our International markets. We sell breathing apparatus across both
the Americas and International segments.

9621_FIN_C3.pdf March 14, 2022 pg 4

Fixed gas and flame detection instruments ("FGFD"). Our permanently installed fixed gas and flame detection

instruments are used in oil, gas and petrochemical applications, wastewater, heating, ventilation and air conditioning ("HVAC")
and general industrial production facilities to detect the presence or absence of various gases in the air. Typical applications of
these instruments include the detection of an oxygen deficiency in confined spaces or the presence of combustible or toxic
gases. The FGFD product line generates a meaningful portion of overall revenue from recurring business including
replacement components and related service. We sell these instruments in both our Americas and International segments. Key
products include:

•

Permanently installed gas detection monitoring systems. This product line is used to monitor for combustible and
toxic gases and oxygen deficiency in virtually any application where continuous monitoring is required. Our systems
are used for gas detection in the oil and gas industry, petrochemical, pulp and paper, wastewater, refrigerant
monitoring, pharmaceutical production and general industrial applications. Our Ultima®X5000 and S5000 gas
monitors enhance facility and worker safety while lowering overall cost of ownership for our customers through
differentiated sensor technology. These systems utilize a wide array of sensor technologies including electrochemical,
catalytic, infrared and ultrasonic.

Flame detectors and open-path infrared gas detectors. These instruments are used for plant-wide monitoring of toxic
gases and for detecting the presence of flames. These systems use infrared optics to detect potentially hazardous
conditions across long distances, making them suitable for use in such applications as offshore oil rigs, storage vessels,
refineries, pipelines and ventilation ducts.

In 2021 we completed the acquisition of Bacharach, Inc. and its affiliated companies (Bacharach), a leader in gas
detection technologies used in the heating, ventilation, air conditioning and refrigeration ("HVAC-R") markets. Bacharach’s
advanced instrumentation technologies help protect lives and the environment, while also increasing operational efficiency for
its diversified customer base. Bacharach's portfolio of gas detection and analysis products are used to detect, measure and
analyze leaks of various gases that are commonly found in both commercial and industrial settings. Bacharach has strong
expertise in the refrigerant leak detection market with customers in the HVAC-R, food retail, automotive, commercial and
industrial refrigeration, and military markets.

Portable gas detection instruments. Our hand-held portable gas detection instruments are used to detect the presence or
absence of various gases in the air. The product line is used by oil, gas and petrochemical workers, general industrial workers,
miners, utility workers, first responders or anyone working in a confined space environment. Typical applications of these
instruments include the detection of an oxygen deficiency in confined spaces or the presence of combustible or toxic gases.
Our single- and multi-gas detectors provide portable solutions for detecting the presence of oxygen, combustible gases and
various toxic gases, including hydrogen sulfide, carbon monoxide, ammonia and chlorine, either singularly or up to six gases at
once. Our ALTAIR® 2X, ALTAIR 4XR and ALTAIR 5X Multigas Detectors, with our internally developed XCell® sensor
technology, provide faster response times and unsurpassed durability. During 2021, we announced the launch of the ALTAIR®
io™ 4 gas detection wearable, designed with fully integrated connectivity for real-time visibility across worksites. We sell
portable gas detection instruments in both our Americas and International segments.

The 2019 acquisition of Sierra Monitor Corporation ("SMC"), a leading provider of fixed gas and flame detection
instruments and Industrial Internet of Things solutions that connect and help protect high-value infrastructure assets, enables
MSA to accelerate its strategy to enhance worker safety and accountability through the use of cloud technology and wireless
connectivity. This business enhances a key focus of the Company's Safety io® subsidiary, launched in 2018 primarily to
leverage the capabilities of its portable gas detection portfolio as it relates to cloud connectivity. Our Safety io® Grid product
offers fleet management and live monitoring capabilities that interface with MSA's portable gas detection instruments.

Industrial head protection. We offer a complete line of industrial head protection and accessories that includes the iconic

V-Gard® helmet brand, a bellwether product in MSA's portfolio for over 50 years. We offer customers a wide range of color
choices and we are a world leader in the application of customized logos. Our industrial head protection products have a wide
user base, including oil, gas and petrochemical workers, steel and construction workers, miners and industrial workers. Our
Fas-Trac® III Suspension system was designed to provide enhanced comfort without sacrificing safety. Our strongest sales of
head protection products have historically been in the Americas segment.

Firefighter helmets and protective apparel. We offer a complete line of fire helmets that includes our Cairns® and
Gallet® helmet brands. Our Cairns helmets are primarily used by firefighters in North America while the Gallet helmets are
primarily used by firefighters across our International segment. Globe® Holding Company, LLC ("Globe") and Bristol
Uniforms, are both leading innovators and providers of firefighter personal protective equipment ("PPE") and boots. MSA's
firefighter safety PPE offering in the Americas segment protects firefighters from head to toe, with Cairns Helmets, our industry
leading G1 SCBA, and Globe turnout gear and boots. MSA's firefighter safety PPE offering in the International segment
includes the XF1 Gallet Helmet and Bristol Uniforms turnout gear, in addition to the M1 SCBA described above.

9621_FIN_C3.pdf March 14, 2022 pg 5

Fall protection. Our broad line of fall protection equipment includes harnesses, lanyards, self-retracting lifelines,
engineered systems and confined space equipment. Fall protection equipment is used by workers in the construction industry,
oil, gas and petrochemical market, utilities industry, aerospace industry, general industrial applications and anyone working at
height. MSA’s new V-Series fall protection equipment has transformed the Company’s harness and self-retracting lanyard
portfolio, with approximately 50 new fall protection products launched over the past several years. The V-Series brand of fall
protection equipment is inspired by MSA's iconic V-Gard hard hat, which is used by millions of workers around the world.
Additionally, we recently launched a patent-pending Personal Fall Limiter with a smart hook connector that uses radio -
frequency identification ("RFID") technology to alert wearers when they are not secured to an anchorage point.

We have patents and pending patents across substantially all of our products.

MSA+™. In late 2021, MSA announced the upcoming launch of MSA+™, our new safety solutions platform that
integrates safety hardware technology, cloud software solutions and safety services. By integrating our offerings and coupling
them with subscription pricing, MSA will improve access to our solutions and facilitate the digital transformation of safety
programs while further accelerating our recurring revenue business. MSA+™ enables the evolution of our customers' safety
landscape while reinforcing our relationships with our global distribution partner network. Through its revenue sharing model,
MSA+™ designed to decrease channel partner overhead and operational expense while building their recurring revenue
business, enabling new value-added services and allowing them to differentiate themselves from the competition.

Non-core products. MSA maintains a portfolio of non-core products. Non-core products reinforce and extend the core

offerings, drawing upon our customer relationships, distribution channels, geographical presence and technical experience.
These products are complementary to the core offerings and sometimes reflect more episodic or contract-driven growth
patterns. Key non-core products include air-purifying respirators ("APR"), eye and face protection, ballistic helmets and gas
masks. Ballistic helmet and gas mask sales are the primary sales to our military customers and were approximately $43 million
globally in 2021 compared to $46 million in 2020.

Customers—Our customers generally fall into two categories: distributors and end-users. In our Americas segment, the

majority of our sales are made through distribution. In our International segment, sales are made through both indirect and
direct sales channels. For the year ended December 31, 2021, no individual customer represented more than 10% of our sales.

Sales and Distribution—Our sales and distribution team consists of marketing, field sales and customer service
organizations. In most geographic areas, our field sales organizations work jointly with select distributors to call on end-users
and educate them about hazards, exposure limits, safety requirements and product applications, as well as the specific
performance attributes of our products. We believe that understanding end-user requirements is critical to increasing MSA's
market share.

The in-depth customer training and education provided by our sales associates to our customers is critical to ensuring

proper use of many of our products, such as SCBA and gas detection instruments. As a result of our sales associates working
closely with end-users, they gain valuable insight into customer preferences and needs. To better serve our customers and to
ensure that our sales associates are among the most knowledgeable and professional in the industry, we place significant
emphasis on training our sales associates in product application, industry standards and regulations.

We believe our sales and distribution strategy allows us to deliver a customer value proposition that differentiates our

products and services from those of our competitors, resulting in increased customer loyalty and demand.

In areas where we use indirect selling, we promote, distribute and service our products to general industry through
authorized national, regional and local distributors. We distribute fire service products primarily through specially trained local
and regional distributors who provide advanced training and service capabilities to volunteer and paid municipal fire
departments. Because of our broad and diverse product line and our desire to reach as many markets and market segments as
possible, we have over 2,400 authorized distributor locations worldwide.

MSA maintains a diversified portfolio of safety products that protect workers and facility infrastructure across a broad

array of end markets. While the Company sells its products through distribution, which can limit end-user visibility, the
Company provides estimated ranges of end market exposure to facilitate understanding of its growth drivers. The Company
estimates that approximately 35%-40% of its overall revenue is derived from the fire service market and approximately
25%-30% of its revenue is derived from the energy market. The remaining revenue is split among construction, utilities, general
industrial applications, military and mining.

9621_FIN_C3.pdf March 14, 2022 pg 6

Competition—The global safety products market is broad and highly fragmented with few participants offering a
comprehensive line of safety products. The sophisticated safety products market in which we compete is comprised of both
core and non-core offerings and is a subset of the larger safety market. We maintain leading positions in nearly all of our core
products. Over the long-term, we believe global demand for safety products will continue to grow. Purchases of these products
are non-discretionary, protecting workers' health in hazardous and life-threatening work environments. Their use is often
mandated by government and industry regulations, which are increasingly enforced on a global basis.

The safety products market is highly competitive, with participants ranging in size from small companies focusing on a
single type of PPE to several large multinational corporations that manufacture and supply many types of sophisticated safety
products. Our main competitors vary by region and product. We believe that participants in this industry compete primarily on
the basis of product characteristics (such as functional performance, technology, cost of ownership, comfort, design and style),
brand name recognition and after-market service support.

We believe we compete favorably within each of our operating segments as a result of our high quality, innovative

offerings and strong brand trust and recognition.

Research and Development—To achieve and maintain our market leading positions, we operate several sophisticated

research and development facilities. We believe our dedication and commitment to innovation and research and development
allows us to produce state-of-the-art safety products that are often first to market and exceed industry standards. Our primary
engineering groups are located in the United States, Germany and China. Our global product development teams include cross-
geographic and cross-functional members from various areas throughout the Company, including research and development,
marketing, sales, operations and quality management. These teams are responsible for setting product line strategies based on
their understanding of customers' needs and available technology, as well as the opportunities and challenges they foresee in
each product area. We believe our team-based, cross-geographical and cross-functional approach to new product development
is a source of competitive advantage. Our approach to the new product development process allows us to tailor our product
offerings and product line strategies to satisfy distinct customer preferences and industry regulations that vary across our
operating segments.

We believe another important aspect of our approach to new product development is that our engineers and technical
associates work closely with the safety industry’s leading standards-setting groups and trade associations. These organizations
include the National Institute for Occupational Safety and Health ("NIOSH"), the National Fire Protection Association
("NFPA"), American National Standards Institute ("ANSI"), International Safety Equipment Association ("ISEA") and their
overseas counterparts. Key members of our management team understand the impact that these standard-setting organizations
have on our new product development pipeline. As such, management devotes significant time and attention to anticipating a
new standards' impact on our sales and operating results. Because of our understanding of customer needs, membership on
global standards-setting bodies, investment in research and development and our unique new product development process, we
believe we are well positioned to anticipate and adapt to changing product standards. While the length of the approval process
can be unpredictable, we believe that we are well positioned to gain the approvals and certifications necessary to meet new
government and multinational product regulations.

Patents and Intellectual Property—We own significant intellectual property, including a number of domestic and foreign

patents, patent applications and trademarks related to our products, processes and business. Although our intellectual property
plays an important role in maintaining our competitive position in a number of markets that we serve, no single patent, or patent
application, trademark or license is, in our opinion, of such value to us that our business would be materially affected by the
expiration or termination thereof, other than the “MSA” trademark. Our patents expire at various times in the future not
exceeding 20 years. Our general policy is to apply for patents on an ongoing basis in the United States and other countries, as
appropriate, to perfect our patent development. In addition to our patents, we have also developed or acquired a substantial
body of manufacturing know-how that we believe provides a significant competitive advantage over our competitors.

Raw Materials and Suppliers—Many of the components of our products are formulated, machined, tooled or molded in-

house from raw materials, which comprise approximately two-thirds of our cost of sales. For example, we rely on integrated
manufacturing capabilities for breathing apparatus, gas masks, ballistic helmets, hard hats and circuit boards. The primary
materials that we source from third parties include electronic components, high density polyethylene, chemical filter media,
rubber and plastic components, eye and face protective lenses, air cylinders, certain metals and ballistic resistant, flame resistant
and non-ballistic fabrics. We purchase these materials both domestically and internationally, and we believe our supply sources
are both well established and reliable. We have close vendor relationship programs with our key raw material distributors and
tier one supplier partners. Although we generally do not have long-term supply contracts, thus far we have not experienced any
significant problems in obtaining adequate raw materials without such contracts.

Macro-supply chain constraints continue, especially for electronic components, and are not unique to MSA. We continue

to navigate these supply chain issues.

9621_FIN_C3.pdf March 14, 2022 pg 7

Please refer to MSA's Form SD filed on May 27, 2021 for further information on our conflict minerals analysis. Form SD

may be obtained free of charge at www.sec.gov.

Human Capital—As of December 31, 2021, the Company employed approximately 4,800 people worldwide, of which

approximately 2,100 were employed in the United States and 2,700 were employed outside of the United States.
Approximately 28% of our global workforce is covered by collective bargaining agreements or works councils. Overall, we
consider our employee relations to be good. Our culture is important to our success. To that end, we maintain seven core values
that define our culture. They are Integrity, Customer Focus, Diversity and Inclusion, Innovation and Change, Engagement,
Teamwork and Speed and Agility. Our core values are encircled by “A Culture of Safety.”

Workplace Health & Safety—As a company whose mission is dedicated to worker safety, MSA places great
emphasis on the health and safety of our own associates. The Company maintains a global Environmental, Health and
Safety Management System, deploys a variety of programs to reduce and eliminate injuries and promote safety and
regularly measures the progress of those programs. These programs promote personal responsibility for workplace
safety and encourage associates to set a meaningful example as safety ambassadors.

Response to novel coronavirus (COVID-19)—MSA has continued to respond to people-related challenges
resulting from the pandemic. The Company has addressed various country, state, and local restrictions, mandates and
guidelines and maintains compliance programs at all MSA locations designed to operate facilities in a safe manner.
Among other efforts, this includes various associate work and safety protocols.

In addition, to support mental health and emotional well-being, all associates and their dependents worldwide

have access to an Employee Assistance Program, at no cost to them. This includes access to visits with mental health
care providers through the program.

Diversity and Inclusion—Diversity and Inclusion is a Core Value at MSA, and the Company seeks a wide

variety of people, thoughts, perspectives, and ideas.

MSA strives to provide a diverse and inclusive work environment, paired with a culture of excellence in
which associates feel comfortable openly sharing thoughts and ideas. Creating an inclusive environment helps to
recruit and retain talent, promoting engagement, fostering innovation, and achieving MSA’s business objectives.

The Company maintains several Employee Resource Business Groups designed to foster a culture that is both

engaged and inclusive. These groups are voluntary, associate-driven communities that capitalize on the wide variety
of people and perspectives at MSA, driving our core value of Diversity and Inclusion. The Company also maintains
an Executive Diversity Council and several regional councils focused on increasing organizational awareness,
accountability and impact of Diversity and Inclusion initiatives.

MSA also partners with a number of non-profit and community-based organizations to help to build a

pipeline of future talent with differing backgrounds, thoughts, experiences, and perspectives.

Approximately 51% of our U.S. workforce self-identifies as diverse. This includes women who comprise

approximately 41% of our U.S. workforce. Among associates within executive pay grades, 36% self-identify as
diverse. We determine race and gender diversity based on our employees’ self-identification or other information
compiled to meet the requirements of the U.S. government, compiled as of December 31, 2021. We count a diverse
woman as one individual.

Leadership and Development—MSA provides programs to enable continuous learning, growth and development

opportunities.

First, our "MOVE" (Meaningful, Ongoing, Vital Exchanges) Performance Management philosophy is a core
element of associate engagement. Exchanges between associates and supervisors provide a flexible, ongoing feedback
loop to drive and enhance the engagement of associates, while facilitating the achievement of our strategic goals.

9621_FIN_C3.pdf March 14, 2022 pg 8

Second, the MSA Leader model sets the expectations of MSA people leaders. Grounded in core principles

that define MSA’s high performance culture of excellence, the MSA Leader model guides the development of current
and aspiring leaders. It outlines the traits, knowledge, competencies, and experiences that MSA requires for successful
leadership while encouraging leaders to remain true to their personal styles. The model is the foundation of leadership
development at MSA. By combining leadership development, culture, and business acumen, leaders are better
prepared to drive a high-performance culture while maintaining an engaged workforce with opportunities for
development and growth.

Beyond these core programs, MSA designs and delivers a variety of associate leadership and development

programs to further enhance the associate experience and opportunities for growth. Associates are empowered to own
their career development through business-aligned resources, tools and programs.

Compensation and Rewards—MSA’s Global Compensation Philosophy strives to provide total compensation

for all associates at the market median, utilizing base salary, cash incentives and, in some cases, equity grants to
achieve this goal. We further strive to provide above-market compensation opportunities for associates who exceed
goals and expectations. This approach to Total Rewards is designed to help MSA attract, retain and motivate high-
performing individuals who foster an innovative culture and drive business results.

Environmental Matters—Our facilities and operations are subject to laws and regulations relating to environmental
protection and human health and safety. In the opinion of management, compliance with current environmental protection laws
will not have a material adverse effect on our financial condition. See Item 1A, Risk Factors, for further information regarding
our environmental risks which could impact the Company.

Seasonality—Our operating results are not significantly affected by seasonal factors. Sales are generally higher during
the second and fourth quarters. During periods of economic expansion or contraction and following significant catastrophes,
our sales by quarter have varied from this seasonal pattern. Government-related sales tend to increase in the fourth quarter.
Americas segment sales tend to be strong during the oil and gas market turnaround seasons late in the first quarter, early in the
second quarter and then again at the end of the third quarter and beginning of the fourth quarter. International segment sales are
typically weaker for the Europe region in the summer holiday months of July and August and seasonality can be affected by the
timing of delivery of larger orders. Invoicing and the delivery of larger orders can affect sales patterns variably across all
reportable segments.

Available Information—Our Internet address is www.MSAsafety.com. We make the following filings available free of

charge on the Investor Relations page on our website as soon as they have been electronically filed with or furnished to the
Securities and Exchange Commission ("SEC"): our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our
current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as well as our proxy statement. Information contained on our website is not part of this
annual report on Form 10-K or our other filings with the SEC. The SEC maintains an Internet site at www.sec.gov that
contains reports, proxy and information statements and other information regarding issuers like us who file electronically with
the SEC.

9621_FIN_C3.pdf March 14, 2022 pg 9

Item 1A. Risk Factors

RISKS RELATED TO LEGAL AND REGULATORY CHALLENGES

Claims of injuries or potential safety issues related to alleged product defects, or quality concerns against our various
subsidiaries could have a material adverse effect on our business, operating results, financial condition and liquidity.

Our mission, reputation and business success rely on our ability to design and provide safe, high quality and reliable products
that earn and maintain customer trust. Our products are often used in high-risk and unpredictable environments, and MSA and
its subsidiaries face an inherent business risk of exposure to product liability claims. In the event the parties using our products
are injured or any of our products are alleged to be defective, we could be subject to claims. In addition, we may be required to
or may voluntarily recall or redesign certain products or components due to concern about product safety, quality, or reliability.
Any significant claims, recalls or field actions that result in significant expense or negative publicity against us could have a
material adverse effect on our business, operating results, financial condition and liquidity, including any successful claim
brought against us in excess or outside of available insurance coverage.

Our subsidiaries, including Mine Safety Appliances Company, LLC, may experience losses from product liability
claims. Losses from product liability claims could have a material adverse effect on our business, operating results,
financial condition and liquidity, which could introduce volatility from period-to-period in our financial results.

From time to time, product liability claims are made against our various subsidiaries. In most instances the products at issue
were manufactured many years ago and are not currently offered for sale, but in some instances, product liability claims may
relate to current products.

One subsidiary, Mine Safety Appliances Company, LLC (“MSA LLC”) was named as a defendant in 1,675 cumulative trauma
lawsuits comprised of 4,554 claims at December 31, 2021. Cumulative trauma product liability claims involve exposures to
harmful substances (e.g., silica, asbestos and coal dust) that occurred years ago and may have developed over long periods of
time into diseases such as silicosis, asbestosis, mesothelioma or coal worker’s pneumoconiosis. A reserve has been established
with respect to estimated amounts for cumulative trauma product liability claims currently asserted, as well as, incurred but not
reported (“IBNR”) cumulative trauma product liability claims. Because our cumulative trauma product liability risk is subject
to inherent uncertainties, and since MSA LLC is largely self-insured, there can be no certainty that MSA LLC may not
ultimately incur losses in excess of presently recorded liabilities. Many factors affecting cumulative trauma product liability
claims may change over time or as a result of sudden unfavorable events within a single reporting period. Associated losses
could have a material adverse effect on our business, operating results, financial condition and liquidity, or could result in
volatility from period to period.

We will adjust the reserve from time to time based on developments in MSA LLC's actual claims experience, the claims
environment or other significant changes in the factors underlying the assumptions used in establishing the reserve. Each of
these factors may increase or decrease significantly within an individual period depending on, among other things, the timing of
claims filings, settlements, or litigation outcomes during a particular period that are especially favorable or unfavorable to MSA
LLC. We accordingly consider MSA LLC’s claims experience over multiple periods or whether there are changes in MSA
LLC’s claims experience and trends that are likely to continue for a significant time into the future in determining whether to
make an adjustment to the reserve, rather than evaluating such factors solely in the short term. Any future adjustments to the
reserve may be material and could materially impact future periods in which the reserve is adjusted.

In the normal course of business, MSA LLC makes payments to settle these types of cumulative trauma product liability claims
and for related defense costs, and records receivables for the amounts believed to be recoverable under insurance. MSA LLC
has recorded insurance receivables totaling $130.2 million and notes receivables of $48.5 million at December 31, 2021. Since
MSA LLC is now largely self-insured for cumulative trauma claims, additional amounts recorded as insurance receivables will
be limited. Amounts recorded as insurance receivables are based on the amount of future losses presently recorded in the
cumulative trauma product liability reserve. These projected future losses are used to calculate contingent reimbursements
deemed probable of collection under negotiated Coverage-in-Place Agreements. Reimbursements are calculated based on
modeled assumptions, including claims composition, claims characteristics, and timing (each of which are relevant to
calculating reimbursement under the terms of Coverage-In-Place Agreements). These factors, and the potential for future
insurer insolvencies, could affect the timing and amount of receivables actually collected in any given period or in total.

9621_FIN_C3.pdf March 14, 2022 pg 10

Our ability to market and sell our products is subject to existing government laws, regulations and standards. Changes
in such laws, regulations and standards or our failure to comply with them could materially and adversely affect our
results of operations.

Most of our products are required to meet performance and test standards designed to protect the safety of people and
infrastructures around the world. Our inability to comply with these standards could result in declines in revenue, profitability
and cash flow. Changes in laws and regulations could reduce the demand for our products or require us to re-engineer our
products, thereby creating opportunities for our competitors. Regulatory approvals for our products may be delayed or denied
for a variety of reasons that are outside of our control. Additionally, market anticipation of significant new standards can cause
customers to accelerate or delay buying decisions.

We are subject to various federal, state and local laws and regulations across our global organization and any violation
of these laws and regulations could adversely affect our results of operations.

We are subject to numerous, and sometimes conflicting, laws and regulations on matters as diverse as anti-corruption, import/
export controls, product content requirements, trade restrictions, tariffs, taxation, sanctions, internal and disclosure control
obligations, securities regulation, anti-competition, data privacy, Brexit changes and labor relations, among others. This
includes laws and regulations in emerging markets where legal systems may be less developed or familiar to us. Compliance
with diverse legal requirements is costly, time consuming and requires significant resources. Violations of one or more of these
laws or regulations in the conduct of our business could result in significant fines, criminal sanctions against us or our officers,
prohibitions on doing business and damage to our reputation. These actions could result in liability for significant monetary
damages, fines and/or criminal prosecution, unfavorable publicity and other reputational damage and have a material adverse
effect on our business, consolidated results of operations and financial condition.

We are subject to various environmental laws and any violation of these laws could adversely affect our results of
operations.

Included in the extensive laws, regulations and ordinances to which we are subject, are those relating to the protection of the
environment. Examples include those governing discharges to water, discharges to air (including greenhouse gas emissions),
handling and disposal practices for solid and hazardous wastes and the maintenance of a safe workplace. These laws impose
penalties for noncompliance and liability for response costs and certain damages resulting from past and current spills,
disposals, other releases of hazardous materials and other noncompliance with such laws. These environmental laws may
continue to change in the future due to a variety of factors, such as government focus on climate change. We could incur
substantial costs as a result of noncompliance with or liability for cleanup pursuant to these environmental laws. Such laws
continue to change, and we may be subject to more stringent environmental laws in the future. If more stringent environmental
laws are enacted, these future laws could have a material adverse effect on our business, consolidated results of operations and
financial condition.

We are subject to various U.S and foreign tax laws and any changes in these laws related to the taxation of businesses
and resolutions of tax disputes could adversely affect our results of operations.

The U.S. Congress, the Organization for Economic Co-operation and Development (or, OECD) and other government agencies
in jurisdictions in which we and our affiliates invest or do business have maintained a focus on issues related to the taxation of
multinational companies. The OECD has changed numerous long-standing tax principles through its base erosion and profit
shifting project which could adversely impact our effective tax rate.

We are subject to regular review and audit by both foreign and domestic tax authorities. While we believe our tax positions will
be sustained, the final outcome of tax audits and related litigation may differ materially from the tax amounts recorded in our
consolidated financial statements, which could have a material adverse effect on our consolidated results of operations,
financial condition and cash flows.

RISKS RELATED TO SUPPLY AND MANUFACTURING

Our future results are subject to the risk that purchased components and materials are unavailable or available at
excessive cost due to material shortages, excessive demand, currency fluctuation, inflationary pressure and other
factors.

We depend on various components and materials from supply chain partners to manufacture our products. It is possible that any
of our supplier relationships could be terminated or otherwise disrupted. Any sustained interruption in our receipt of adequate
supplies could have a material adverse effect on our business, results of operations and financial condition. Our inability to
successfully manage price fluctuations due to market demand, currency risks or material shortages, or future price fluctuations
could have a material adverse effect on our business and our consolidated results of operations and financial condition.

9621_FIN_C3.pdf March 14, 2022 pg 11

Our plans to continue to improve productivity and reduce complexity may not be successful, which could adversely
affect our ability to compete.

MSA has integrated parts of its European operating segment that have historically been individually managed entities, into a
centrally managed organization model. We have begun to and plan to continue to leverage the benefits of scale created from
this approach and are in the process of implementing a more efficient and cost-effective enterprise resource planning system in
additional locations across the International Segment. MSA runs the risk that these and similar initiatives may not be
completed substantially as planned, may be more costly to implement than expected, or may not result in the efficiencies or cost
savings anticipated. In addition, these various initiatives require MSA to implement a significant amount of organizational
change which could divert management’s attention from other concerns, and if not properly managed, could cause disruptions
in our day-to-day operations and have a negative impact on MSA's financial results. It is also possible that other major
productivity and streamlining programs may be required in the future.

RISKS RELATED TO ECONOMIC, MARKET AND COMPETITIVE CONDITIONS

Unfavorable economic and market conditions could materially and adversely affect our business, results of operations
and financial condition.

We are subject to risks arising from adverse changes in global economic conditions. We have significant operations in a
number of countries outside the U.S., including some in emerging markets. Long-term economic uncertainty in some of the
regions of the world in which we operate, such as Asia, Latin America, the Middle East and Europe, could result in declines in
revenue, profitability and cash flow due to reduced orders, payment delays, supply chain disruptions or other factors caused by
the economic challenges faced by our customers and suppliers.

A portion of MSA's sales are made to customers in the oil, gas and petrochemical market. We estimate that between
approximately 25% - 30% of our global business is sold into the energy market vertical with the most significant exposure in
industrial head protection, portable gas detection and FGFD. Approximately 10% - 15% of consolidated revenue, primarily in
industrial head protection and portable gas detection, is more exposed to a pullback in employment trends across the energy
market. Another 5% - 10% of consolidated revenue, primarily in FGFD is more exposed to a pullback in capital equipment
spending within the energy market. It is possible that the volatility in the oil, gas and petrochemical industry, whether related to
economic, climate-related energy policy, or other conditions, could negatively impact our business and could result in declines
in our consolidated results of operations and cash flow.

Pandemics or disease outbreaks, such as COVID-19, may cause unfavorable economic or market conditions which could
impact demand patterns and/or disrupt global supply chains and manufacturing operations. Collectively, these
outcomes could materially and adversely affect our business, results of operations and financial condition.

Pandemics or disease outbreaks such as COVID-19 could result in a widespread health crisis that could adversely affect the
economies of developed and emerging markets, potentially resulting in an economic downturn that could affect customers’
demand for our products in certain industrial-based end-markets. The spread of pandemics or disease outbreaks may also
disrupt the Company’s manufacturing operations, supply chain, or logistics necessary to import, export and deliver products to
our customers. During a pandemic or crisis, applicable laws and response directives such as U.S. federal vaccine mandates for
federal contractors or OSHA requirements, could, in some circumstances, result in skilled labor impacts including voluntary
attrition or difficulty finding labor, or otherwise adversely affect our ability to operate our plants, obtain inputs from suppliers,
or to deliver our products in a timely manner. Additional vaccine mandates may be announced in other countries in which we
operate or source inputs. Some laws and directives may also hinder our ability to move certain products across borders.
Economic conditions can also influence order patterns. These factors could negatively impact our consolidated results of
operations and cash flow.

A reduction in the spending patterns of government agencies or delays in obtaining government approval for our
products could materially and adversely affect our net sales, earnings and cash flow.

The demand for our products sold to the fire service market, the homeland security market and other government agencies is, in
large part, driven by available government funding. Government budgets are set annually and we cannot assure that
government funding will be sustained at the same level in the future. A significant reduction in available government funding
could result in declines in our consolidated results of operations and cash flow.

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The markets in which we compete are highly competitive, and some of our competitors have greater financial and other
resources than we do. The competitive pressures faced by us could materially and adversely affect our business, results
of operations and financial condition.

The safety products market is highly competitive, with participants ranging in size from small companies focusing on single
types of safety products, to large multinational corporations that manufacture and supply many types of safety products. Our
main competitors vary by region and product. We believe that participants in this industry compete primarily on the basis of
product characteristics (such as functional performance, technology, cost of ownership, comfort, design and style), price,
service and delivery, customer support, the ability to meet the special requirements of customers, brand name trust and
recognition, and e-business capabilities. Some of our competitors have greater financial and other resources than we do and our
business could be adversely affected by competitors’ new product innovations, technological advances made to competing
products and pricing changes made by us in response to competition from existing or new competitors. We may not be able to
compete successfully against current and future competitors and the competitive pressures faced by us could have a material
adverse effect our business, consolidated results of operations and financial condition. In addition, e-business is a rapidly
developing area, and the execution of a successful e-business strategy involves significant time, investment and resources. If
we are unable to successfully expand e-business capabilities in support of our customer needs, our brands may lose market
share, which could negatively impact revenue and profitability.

RISKS RELATED TO NEW AND ADJACENT INITIATIVES

Our plans to improve future profitability through restructuring programs may not be successful and could lead to
unintended consequences.

We have incurred and may incur restructuring charges primarily related to severance costs for staff reductions associated with
our ongoing initiatives to drive profitable growth and right size our operations as well as programs to adjust our operations in
response to current business conditions. For example, in 2021, 143 positions were eliminated in response to the changing
business environment. Our cost structure in future periods is somewhat dependent upon our ability to maintain increased
productivity without backfilling certain positions. If our programs are not successful, there could be a material adverse effect
on our business and consolidated results of operations.

Our inability to successfully identify, consummate and integrate current and future acquisitions or to realize anticipated
cost savings and other benefits could adversely affect our business.

One of our operating strategies is to selectively pursue acquisitions. For example, on July 1, 2021, we completed the
acquisition of Bacharach, Inc., which is a leader in gas detection technologies used in the HVAC-R markets. Please refer to
Note 14 of the consolidated financial statements in Part II Item 8 of this Form 10-K for further details. Any future acquisitions
will depend on our ability to identify suitable acquisition candidates and successfully consummate such acquisitions.
Acquisitions involve a number of risks including:

•

failure of the acquired businesses to achieve the results we expect;

diversion of our management’s attention from operational matters;

our inability to retain key personnel of the acquired businesses;

risks associated with unanticipated events or liabilities;

potential disruption of our existing business; and

customer dissatisfaction or performance problems at the acquired businesses.

If we are unable to integrate or successfully manage businesses that we have recently acquired, including Bacharach, or may
acquire in the future, we may not realize anticipated cost savings, improved manufacturing efficiencies and increased revenue,
which may result in material adverse short and long-term effects on our consolidated operating results, financial condition and
liquidity. Even if we are able to integrate the operations of our acquired businesses into our operations, we may not realize the
full benefits of the cost savings, revenue enhancements or other benefits that we may have expected at the time of acquisition.
In addition, even if we achieve the expected benefits, we may not be able to achieve them within the anticipated time frame, and
such benefits may be offset by costs incurred in integrating the acquired companies and increases in other expenses.

9621_FIN_C3.pdf March 14, 2022 pg 13

If we fail to introduce successful new products or extend our existing product line, we could lose our market position
and our financial performance could be materially and adversely affected.

In the safety products market, there are frequent introductions of new products and product line extensions. If we are unable to
identify emerging customer and technological trends, maintain and improve the competitiveness of our products and introduce
new products, we may lose our market position, which could have a material adverse effect on our business, financial condition
and results of operations. We continue to invest significant resources in research and development and market research.
However, continued product development and marketing efforts are subject to the risks inherent in the development process.
These risks include delays, the failure of new products and product line extensions to achieve anticipated levels of market
acceptance and the risk of failed product introductions.

RISKS RELATED TO CYBERSECURITY OR MISAPPROPRIATION OF OUR CRITICAL INFORMATION

A failure of our information systems or a cybersecurity breach could materially and adversely affect our business,
results of operations and financial condition.

The proper functioning and security of our information systems, including those that support and operate our Safety io and
MSA+™ platforms, is critical to the operation and reputation of our business. Our information systems may be vulnerable to
damage or disruption from natural or man-made disasters, computer viruses, power losses or other system or network failures.
In addition, hackers, cyber-criminals and other persons could attempt to gain unauthorized access to our information systems
with the intent of harming the Company, harming our information systems or obtaining sensitive information such as
intellectual property, trade secrets, financial and business development information, and customer and vendor related
information. If our information systems or security fail, or if there is any compromise or breach of our security, it could result
in a violation of applicable privacy and other laws, legal and financial exposure, remediation costs, negative impacts on our
customers' willingness to transact business with us, or a loss of confidence in our security measures, which could have an
adverse effect on our business, our reputation and our consolidated results of operations and financial condition.

Like many companies, from time to time, we have experienced attempts on our computer systems by unauthorized outside
parties. Because the techniques used by computer hackers and others to access or sabotage networks continually evolve and
generally are not recognized until launched against a target, we may be unable to anticipate, prevent or detect these attacks. As
a result, the impact of any future incident cannot be predicted, including the failure of our information systems or
misappropriation of our technologies and/or processes. Any such system failure or loss of such information could harm our
competitive position or cause us to incur significant costs to remedy the damages caused by the incident. We cannot assure that
ongoing improvements to our infrastructure and cybersecurity programs will be sufficient to prevent or limit the damage from
any future cyber-attack or disruption to our information systems.

Our continued success depends on our ability to protect our intellectual property. If we are unable to protect our
intellectual property, our business could be materially and adversely affected.

Our success depends, in part, on our ability to obtain and enforce patents, maintain trade secret protection and operate without
infringing on the proprietary rights of third parties. We have been issued patents and have registered trademarks with respect to
many of our products, but our competitors could independently develop similar or superior products or technologies, duplicate
any of our designs, trademarks, processes or other intellectual property or design around any processes or designs on which we
have or may obtain patents or trademark protection. In addition, it is possible that third parties may have, or will acquire,
licenses for patents or trademarks that we may use or desire to use, so that we may need to acquire licenses to, or to contest the
validity of, such patents or trademarks of third parties. Such licenses may not be made available to us on acceptable terms, if at
all, and we may not prevail in contesting the validity of third party rights.

We also protect trade secrets, know-how and other confidential information against unauthorized use by others or disclosure by
persons who have access to them, such as our employees, through contractual arrangements. These agreements may not
provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any
unauthorized use, misappropriation or disclosure of such trade secrets, know-how or other proprietary information. Our
inability to maintain the proprietary nature of our technologies could have a material adverse effect on our consolidated results
of operations and financial condition.

9621_FIN_C3.pdf March 14, 2022 pg 14

RISKS RELATED TO HUMAN CAPITAL MANAGEMENT

If we lose any of our key personnel or are unable to attract, train and/or retain qualified personnel or plan the
succession of senior management, our ability to manage our business and continue our growth could be negatively
impacted.

Our success depends in large part on the continued contributions of our key management, engineering and sales and marketing
personnel, many of whom are highly skilled and would be difficult to replace. Our success also depends on the abilities of new
personnel to function effectively, both individually and as a group. If we are unable to attract, effectively integrate and retain
management, engineering or sales and marketing personnel, then the execution of our growth strategy and our ability to react to
changing market requirements may be impeded, and our business could suffer as a result.

In addition, hiring, training, and successfully integrating replacement critical personnel could be time consuming, may cause
additional disruptions to our operations, and may be unsuccessful, which could negatively impact future revenues. Competition
for personnel is intense, and we cannot assure that we will be successful in attracting and retaining qualified personnel. The
hiring of new personnel may also result in increased costs and we do not currently maintain key person life insurance.

Our success also depends on effective succession planning. Failure to ensure effective transfer of knowledge and smooth
transitions involving senior management could hinder our strategic planning and execution. From time to time, senior
management or other key employees may leave the Company. While we strive to reduce the negative impact of such changes,
the loss of any key employee could result in significant disruptions to our operations, including adversely affecting the
timeliness of product releases, the successful implementation and completion of company initiatives, the effectiveness of our
disclosure controls and procedures and our internal control over financial reporting, and the results of our operations.

We may be unable to hire or retain and develop a highly skilled and diverse global workforce or effectively manage
changes in our workforce and respond to shifts in labor availability.

We must hire, retain and develop a highly skilled and diverse global workforce. We compete to hire new personnel with a
variety of capabilities in the many countries in which we manufacture and market our products and then to develop and retain
their skills and competencies. We could experience unplanned or increased turnover of employees with key capabilities, or fail
to develop adequate succession plans for leadership positions or hire and retain a workforce with the skills and in the locations
we need to operate and grow our business. We could also fail to attract and develop personnel with key emerging capabilities
that we need to continue to respond to changing consumer and customer needs and grow our business, including skills in the
areas of manufacturing, engineering, sales, service, and various functional support areas. Occurrence of any of these conditions
could deplete our institutional knowledge base and erode our competitiveness.

We are experiencing an increasingly tight and competitive labor market and could face unforeseen challenges in the availability
of labor, particularly due to consequences associated with the outbreak of COVID-19. A sustained labor shortage or increased
turnover rates within our employee base caused by COVID-19 or related issues such as vaccine mandates, or as a result of
general macroeconomic factors, have led and could lead to increased costs, such as increased overtime to meet demand and
increased wages to attract and retain employees. We have also been negatively affected and could continue to be negatively
affected by labor shortages or constraints experienced by our partners, including our external manufacturing partners and
freight providers. Failure to achieve and maintain a diverse workforce, compensate our employees competitively and fairly,
maintain a safe and inclusive environment or promote the well-being of our employees could affect our reputation and also
result in lower performance and an inability to retain valuable employees.

RISKS RELATED TO DOING BUSINESS INTERNATIONALLY

We have significant international operations and are subject to the risks of doing business in foreign countries.

We have business operations in approximately 40 foreign countries. In 2021, approximately half of our net sales were made by
operations located outside the United States. Those operations are subject to various political, economic and other risks and
uncertainties, which could have a material adverse effect on our business. These risks include the following:

•

unexpected changes in regulatory requirements;

changes in trade policy or tariff regulations;

changes in tax laws and regulations;

unintended consequences due to changes to the Company's legal structure;

additional valuation allowances on deferred tax assets due to an inability to generate sufficient profit in certain foreign
jurisdictions;

9621_FIN_C3.pdf March 14, 2022 pg 15

•

intellectual property protection difficulties or intellectual property theft;

difficulty in collecting accounts receivable;

complications in complying with a variety of foreign laws and regulations, some of which may conflict with U.S. laws;

foreign privacy laws and regulations;

trade protection measures and price controls;

trade sanctions and embargoes;

nationalization and expropriation;

increased international instability or potential instability of foreign governments;

effectiveness of worldwide compliance with MSA's anti-bribery policy, the U.S. Foreign Corrupt Practices Act, and
similar local laws;

difficulty in hiring and retaining qualified employees;

the ability to effectively negotiate with labor unions in foreign countries;

the need to take extra security precautions for our international operations;

costs and difficulties in managing culturally and geographically diverse international operations;

pandemics and similar disasters; and

risks associated with the United Kingdom's decision to exit the European Union, including disruptions to trade and free
movement of goods, services and people to and from the United Kingdom; increased foreign exchange volatility with
respect to the British pound; and additional legal and economic uncertainty.

Any one or more of these risks could have a negative impact on the success of our international operations and, thereby, have a
material adverse effect our business, consolidated results of operations and financial condition.

Because we derive a significant portion of our sales from the operations of our foreign subsidiaries, future currency
exchange rate fluctuations could adversely affect our results of operations and financial condition, and could affect the
comparability of our results between financial periods.

In 2021, our operations outside of the United States accounted for approximately one-half of our net sales. The results of our
foreign operations are generally reported in local currency and then translated into U.S. dollars at the applicable exchange rates
for inclusion in our consolidated financial statements. The exchange rates between some of these currencies and the U.S. dollar
have fluctuated significantly in recent years and may continue to do so in the future. A weakening of the currencies in which
sales are generated relative to the currencies in which costs are denominated would decrease our results of operations and cash
flow. Although the Company uses instruments to hedge certain foreign currency risks, these hedges only offset a portion of the
Company’s exposure to foreign currency fluctuations.

In addition, because our consolidated financial statements are stated in U.S. dollars, such fluctuations may affect our
consolidated results of operations and financial position, and may affect the comparability of our results between financial
periods. Our inability to effectively manage our exchange rate risks or any volatility in currency exchange rates could have a
material adverse effect on our business, consolidated results of operations and financial condition.

We benefit from free trade laws and regulations, such as the United States-Mexico-Canada Agreement and any changes
to these laws and regulations could adversely affect our results of operations.

Existing free trade laws and regulations, such as the United States-Mexico-Canada Agreement, provide certain beneficial duties
and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements.
Changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on
imports from countries where we manufacture products, such as China and Mexico, could have a material adverse effect on our
business, consolidated results of operations and financial condition.

9621_FIN_C3.pdf March 14, 2022 pg 16

GENERAL RISK FACTORS

Damage to the reputation of MSA or to one or more of our product brands could adversely affect our business.

Developing and maintaining our reputation, as well as the reputation of our brands, is a critical factor in our relationship with
customers, distributors and others. Our inability to address negative publicity or other issues, including concerns about product
safety or quality, real or perceived, could negatively impact our business which could have a material adverse effect on our
business, consolidated results of operations and financial condition.

If our goodwill, other intangible assets and long-lived assets become impaired, we may be required to record significant
charges to earnings.

We review our long-lived assets for impairment when events or changes in circumstances indicate the carrying amount may not
be recoverable. Goodwill and indefinite-lived intangible assets are required to be assessed for impairment at least annually.
Factors that may be considered a change in circumstances, indicating that the carrying amount of our goodwill, indefinite-lived
intangible assets or long-lived assets may not be recoverable, include slower growth rates in our markets, reduced expected
future cash flows, increased country risk premiums as a result of political uncertainty and a decline in stock price and market
capitalization. We consider available current information when calculating our impairment charge. If there are indicators of
impairment, our long-term cash flow forecasts for our operations deteriorate or discount rates increase, we may be required to
recognize additional impairment charges in later periods. See Note 13 of the consolidated financial statements in Part II Item 8
of this Form 10-K for the carrying amounts of goodwill in each of our reporting segments and details on indefinite-lived
intangible assets that we hold.

Risks related to our defined benefit pension and other post-retirement plans could adversely affect our results of
operations and cash flow.

Significant changes in actual investment return on pension assets, discount rates, and other factors could adversely affect our
results of operations and pension contributions in future periods. U.S. generally accepted accounting principles require that we
calculate income or expense for the plans using actuarial valuations. These valuations reflect assumptions about financial
markets and interest rates, which may change based on economic conditions. Funding requirements for our pension plans may
become more significant. However, the ultimate amounts to be contributed are dependent upon, among other things, interest
rates, underlying asset returns and the impact of legislative or regulatory changes related to pension funding obligations. For
further information regarding our pension plans, refer to "Pensions and Other Post-retirement Benefits" in Note 15 of the
consolidated financial statements in Part II Item 8 of this Form 10-K.

If we fail to meet our debt service requirements or the restrictive covenants in our debt agreements or if interest rates
increase, our results of operations and financial condition could be materially and adversely affected.

We have a substantial amount of debt upon which we are required to make scheduled interest and principal payments and we
may incur additional debt in the future. A significant portion of our debt bears interest at variable rates that may increase in the
future.

Our debt agreements require us to comply with certain restrictive covenants. If we are unable to generate sufficient cash to
service our debt or if interest rates increase, our consolidated results of operations and financial condition could be materially
and adversely affected. Additionally, a failure to comply with the restrictive covenants contained in our debt agreements could
result in a default, which if not waived by our lenders, could substantially increase borrowing costs and require accelerated
repayment of our debt. Please refer to Note 12 of the consolidated financial statements in Part II Item 8 of this Form 10-K for
commentary on our compliance with the restrictive covenants.

9621_FIN_C3.pdf March 14, 2022 pg 17

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our principal executive offices are located at 1000 Cranberry Woods Drive, Cranberry Township, PA, United States.

We own or lease our primary facilities. Our primary manufacturing locations in the Americas segment are located in Cranberry
Township, PA; Jacksonville, NC; Murrysville, PA; New Kensington, PA; and Pittsfield, NH, and our primary distribution
center is located in New Galilee, PA. The primary manufacturing locations in the International segment are located in Berlin,
Germany; Bristol, United Kingdom; Châtillon-sur-Chalaronne, France, Devizes, United Kingdom; Galway, Ireland; and
Suzhou, China. Our primary research and development centers are located in Berlin, Germany; Cranberry Township, PA; and
Suzhou, China.

We believe that all of our facilities, including the manufacturing facilities, are in good repair and in suitable condition for

the purposes for which they are used.

Item 3. Legal Proceedings

Please refer to Note 20 to the consolidated financial statements in Part II Item 8 of this Form 10-K.

Item 4. Mine Safety Disclosures

Not applicable.

9621_FIN_C3.pdf March 14, 2022 pg 18

Information about our Executive Officers

The following sets forth the names and ages of our executive officers as of February 18, 2022:

Name
Nishan J. Vartanian(a)
Steven C. Blanco(b)
Kenneth D. Krause(c)
Bob Leenen(d)
Stephanie L. Sciullo(e)

Age Title
62 Chairman, President and Chief Executive Officer since May 2020.
55 Vice President and President, MSA Americas segment since August 2017.
47 Senior Vice President, Chief Financial Officer and Treasurer since February 2018.
48 Vice President and President, MSA International segment since September 2017.
37 Vice President and Chief Legal Officer, Corporate Social Responsibility & Public Affairs

since August 2021.

(a) Prior to his present position, Mr. Vartanian was President and Chief Executive Officer since May 2018; President and

Chief Operating Officer since June 2017; Senior Vice President and President, MSA Americas since July 2015; and
prior thereto served as Vice President and President, MSA North America.

(b) Prior to his present position, Mr. Blanco served as Vice President and General Manager, Northern North America since

August 2015 and prior thereto was Vice President, Global Operational Excellence.

(c) Prior to his present position, Mr. Krause was Vice President, Chief Financial Officer and Treasurer since December
2015; Vice President, Strategic Finance since August 2015; and prior thereto served as Treasurer and Executive
Director, Global Finance and Assistant Treasurer.

(d) Prior to his present position, Mr. Leenen was Regional Chief Financial Officer, MSA International and Finance

Director, Europe since July 2015; and prior thereto served as Finance Director, Europe.

(e) Prior to her present position, Ms. Sciullo served Vice President and Chief Legal Officer since January 2020; as Deputy

General Counsel since 2016 and prior thereto was Associate General Counsel.

9621_FIN_C3.pdf March 14, 2022 pg 19

PART II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Securities

Our common stock is traded on the New York Stock Exchange under the symbol “MSA.” On February 11, 2022, there

were 162 registered holders of our shares of common stock.

Issuer Purchases of Equity Securities

Period
October 1 — October 31, 2021

November 1 — November 30, 2021

December 1 — December 31, 2021

Total Number of
Shares Purchased

Average Price Paid
Per Share

Total 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

— $

183
49

—

148.22
148.51

—

—
—

377,828

402,280
381,921

The share repurchase program authorizes up to $100.0 million in repurchases of MSA common stock in the open market
and in private transactions. The share purchase program has no expiration date. The maximum number of shares that may be
purchased is calculated based on the dollars remaining under the program and the respective month-end closing share price.
We have purchased a total of 527,406 shares, or $42.3 million, since this program's inception.

The above shares purchased during the quarter relate to stock-based compensation transactions.

We do not have any other share repurchase programs.

9621_FIN_C3.pdf March 14, 2022 pg 20

Comparison of Five-Year Cumulative Total Return

The following paragraph compares the most recent five-year performance of MSA stock with (1) the Standard & Poor’s
500 Composite Index (previously used by MSA), (2) the Russell 2000 index (previously used by MSA), (3) S&P Midcap 400
Index (currently being used by MSA) and (4) S&P Midcap 400 Industrials (currently being used by MSA). Because our
competitors are principally privately held concerns or subsidiaries or divisions of corporations engaged in multiple lines of
business, we do not believe it feasible to construct a peer group comparison on an industry or line-of-business basis. The S&P
Midcap 400 Index and the S&P Midcap 400 Industrials, while including corporations both larger and smaller than MSA in
terms of market capitalization, is composed of corporations with an average market capitalization similar to us.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
ASSUMES INITIAL INVESTMENT OF $100

Among MSA Safety Incorporated, the S&P 500 Index, the Russell 2000 Index, S&P Midcap 400, and S&P Midcap 400 Industrials

Comparison of 5 Year Cumulative Total Return
Assumes Initial Investment of $100
December 2021

250.00

200.00

150.00

100.00

50.00

0.00

2016

2017

2018

2019

2020

2021

MSA Safety Incorporated

S&P 500 Index

Russell 2000 Index

S&P Midcap 400

S&P Midcap 400 Industrials

Assumes $100 invested on December 31, 2015 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
During 2021 the Company selected the S&P 400 Midcap 400 Index and S&P Midcap 400 Industrials as the indexes that includes companies
that are of comparable market capitalization to MSA Safety to replace the S&P 500 Index and Russell 2000 index going forward.

2016

2017

2018

2019

2020

2021

Value at December 31,

MSA Safety Incorporated

100.00 $

S&P 500 Index

Russell 2000 Index

S&P Midcap 400

S&P Midcap 400 Industrials

100.00

113.94 $
121.83 1
1
114.65

115.79

123.54

140.81 $
116.49 1
5
102.02

102.39

105.15

191.63 $
153.17 1
8
128.06

129.22

140.43

229.53 $

181.35

153.62

146.70

163.58

234.46

233.41

176.39

183.02

210.11

Item 6. Selected Financial Data

Not applicable.

9621_FIN_C3.pdf March 14, 2022 pg 21

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the historical financial statements and other
financial information included elsewhere in this annual report on Form 10-K. This discussion may contain forward-looking
statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on
current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our
actual results could differ materially from the results contemplated by these forward-looking statements due to a number of
factors, including those discussed in the sections of this annual report entitled “Forward-Looking Statements” and “Risk
Factors.”

This section generally discusses the results of our operations for the year ended December 31, 2021 compared to the year

ended December 31, 2020. For a discussion on the year ended December 31, 2020 compared to the year ended December 31,
2019, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations"
in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission
on February 19, 2021.

MSA Safety Incorporated ("MSA") is organized into four geographical operating segments that are aggregated into three
reportable geographic segments: Americas, International and Corporate. The Americas segment is comprised of our operations
in North America and Latin America geographies. The International segment is comprised of our operations of all geographies
outside of the Americas. Certain global expenses are allocated to each segment in a manner consistent with where the benefits
from the expenses are derived. Please refer to Note 8—Segment Information of the consolidated financial statements in Part II
Item 8 of this Form 10-K for further information.

On July 1, 2021, the Company acquired Bacharach, Inc. and its affiliated companies ("Bacharach") in a transaction
valued at $329.4 million, net of cash acquired. Headquartered near Pittsburgh in New Kensington, Pa., Bacharach is a leader in
gas detection technologies used in the heating, ventilation, air conditioning and refrigeration ("HVAC-R") markets.
Bacharach’s advanced instrumentation technologies help protect lives and the environment, while also increasing operational
efficiency for its diversified customer base. Bacharach's portfolio of gas detection and analysis products are used to detect,
measure and analyze leaks of various gases that are commonly found in both commercial and industrial settings. Bacharach has
strong expertise in the refrigerant leak detection market with customers in the HVAC-R, food retail, automotive, commercial
and industrial refrigeration, and military markets. Refer to Note 14—Acquisitions of the consolidated financial statements in
Part II Item 8 of this Form 10-K for further information.

During July 2021, the Company purchased the remaining 10% noncontrolling interest in MSA (China) Safety Equipment

Co., Ltd. from our former China partner for $19.0 million, inclusive of a $5.6 million distribution.

On January 25, 2021, the Company acquired 100% of the common stock of B T Q Limited, including Bristol Uniforms

and Bell Apparel ("Bristol") in an all-cash transaction valued at $63.0 million, net of cash acquired. Bristol, which is
headquartered in the United Kingdom, is a leading innovator and provider of protective apparel to the fire, rescue services, and
utility sectors. The acquisition strengthens MSA's position as a global market leader in fire service personal protective
equipment ("PPE") products, which include breathing apparatus, firefighter helmets, thermal imaging cameras, and firefighter
protective apparel, while providing an avenue to expand its business in the United Kingdom ("U.K") and key European
markets. The fire service equipment brands of MSA, which include Gallet Firefighter Helmets, the M1 and G1 Self-Contained
Breathing Apparatus range, Cairns Helmets, Globe Manufacturing, and now Bristol, represent more than 460 combined years of
innovation in the fire service industry, with a common mission: protecting the health and safety of firefighters. Bristol is also a
leading manufacturer of flame-retardant, waterproof, and other protective work wear for the utility industry. Marketed under the
Bell Apparel brand, this line complements MSA's existing and broad range of offerings for the global utilities market. Refer to
Note 14—Acquisitions of the consolidated financial statements in Part II Item 8 of this Form 10-K for further information.

During the fourth quarter of 2021, the Company changed its method of accounting for certain inventory in the United

States from the LIFO method to the FIFO method. The FIFO method of accounting for inventory is preferable because it
conforms the Company's entire inventory to a single method of accounting and improves comparability with the Company's
peers. The effects of the change in accounting method from LIFO to FIFO have been retrospectively applied to all periods
presented in all sections of this Annual Report, including Management's Discussion and Analysis. Refer to Note 4—Inventory
of the consolidated financial statements in Part II Item 8 of this Form 10-K for further information related to the change in
accounting principle.

9621_FIN_C3.pdf March 14, 2022 pg 22

BUSINESS OVERVIEW

MSA is a global leader in the development, manufacture and supply of safety products that protect people and facility
infrastructures. Recognized for their market leading innovation, many MSA products integrate a combination of electronics,
mechanical systems and advanced materials to protect users against hazardous or life-threatening situations. The Company's
comprehensive product line, which is governed by rigorous safety standards across highly regulated industries, is used by
workers around the world in a broad range of markets, including fire service, oil, gas and petrochemical industry, construction,
industrial manufacturing applications, utilities, mining and the military. MSA's core products include breathing apparatus, fixed
gas and flame detection systems, portable gas detection instruments, industrial head protection products, firefighter helmets and
protective apparel, and fall protection devices. We are committed to providing our customers with service unmatched in the
safety industry and, in the process, enhancing our ability to provide a growing line of safety solutions for customers in key
global markets.

MSA provides safety equipment to a broad range of customers who must continue to work in times of global pandemic as

is the case with COVID-19. Our customers include first responders, who are tasked with keeping citizens safe, and include
industrial and utility workers tasked with maintaining critical infrastructure. For this reason, in order to successfully fulfill our
mission as The Safety Company, MSA is an essential business and has continued operating its manufacturing facilities during
these times, to the extent practicable, while protecting the health and safety of our workforce, and complying with all applicable
laws, all pursuant to an established pandemic response plan.

The Company has developed a thoughtful, phased approach to reconnecting segments of our workforce that had
converted to remote working conditions due to COVID-19. Through this process in 2021, we returned elements of our
salesforce to in-person customer interactions on a limited basis and instituted a modified hybrid return-to-office protocol for the
majority of our U.S. workforce in the third quarter, with our International segment employees planning to return to the office
once deemed appropriate under the circumstances for each business location. We continue to deploy a phased approach to
reconnect employees while adjusting the characteristics of their physical working environments, providing training and
executing enhanced safety and cleaning protocols, which promotes workspace safety in a manner consistent with the mission
and values of MSA. The Company’s return-to-work plans continue to evolve as needed, such as was the case due to the
Omicron variant.

We tailor our product offerings and distribution strategy to satisfy distinct customer preferences that vary across

geographic regions. To best serve these customer preferences, we have organized our business into four geographical operating
segments that are aggregated into three reportable geographic segments: Americas, International and Corporate. In 2021, 65%
and 35% of our net sales were made by our Americas and International segments, respectively.

Americas. Our largest manufacturing and research and development facilities are located in the United States. We serve
our markets across the Americas with manufacturing facilities in the U.S., Mexico and Brazil. Operations in the other countries
within the Americas segment focus primarily on sales and distribution in their respective home country markets.

International. Our International segment includes companies in Europe, the Middle East and Africa ("EMEA") and the

Asia Pacific region. In our largest International subsidiaries (in Germany, France, United Kingdom, Ireland and China), we
develop, manufacture and sell a wide variety of products. In China, the products manufactured are sold primarily in China as
well as in regional markets. Operations in other International segment countries focus primarily on sales and distribution in
their respective home country markets. Although some of these companies may perform limited production, most of their sales
are of products manufactured in our plants in Germany, France, the U.S., U.K., Ireland and China or are purchased from third-
party vendors.

Corporate. The Corporate segment primarily consists of general and administrative expenses incurred in our corporate

headquarters, costs associated with corporate development initiatives, legal expense, interest expense, foreign exchange gains or
losses and other centrally-managed costs. Corporate general and administrative costs comprise the majority of the expense in
the Corporate segment. During the years ended December 31, 2021, 2020 and 2019 corporate general and administrative costs
were $37.6 million, $28.5 million, and $37.3 million, respectively.

9621_FIN_C3.pdf March 14, 2022 pg 23

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Net Sales

(In millions)
Consolidated
Americas

International

2021
$1,400.2

908.1

492.1

2020
$1,348.2

874.3

473.9

Dollar
Increase
(Decrease)
$52.0

33.8

18.2

Percent
Increase
(Decrease)
3.9%

3.9%

3.8%

Net Sales. Net sales for the year ended December 31, 2021, were $1.40 billion, an increase of $52.0 million, from $1.35 billion
for the year ended December 31, 2020. Constant currency sales increased by 3% for the year ended December 31, 2021.
Please refer to the Net Sales table below for a reconciliation of the year over year sales change.

Net Sales

(Percent Change)
GAAP reported sales change
Currency translation effects

Constant currency sales change

Less: Acquisitions

Organic constant currency change

Year Ended December 31, 2021 versus December 31, 2020

Americas

International

Consolidated

3.9%

—%

3.9%

(3.2)%

0.7%

3.8%

(4.0)%

(0.2)%

(7.7)%

(7.9)%

3.9%

(1.4)%

2.5%

(4.8)%

(2.3)%

Note: Organic constant currency sales change is a non-GAAP financial measure provided by the Company to give a better understanding of
the Company's underlying business performance. Organic constant currency sales change is calculated by deducting the percentage impact
from acquisitions and currency translation effects from the overall percentage change in net sales.

Net sales for the Americas segment were $908.1 million for the year ended December 31, 2021, an increase of $33.8
million, or 4%, compared to $874.3 million for the year ended December 31, 2020. During 2021, constant currency sales in the
Americas segment increased 4% compared to the prior year period, driven by $28 million of Bacharach sales and a general
improvement in business conditions driving a higher level of sales of head protection, portable gas detection and fall protection;
partially offset by APR sales moderating to pre-pandemic levels.

Net sales for the International segment were $492.1 million for the year ended December 31, 2021, an increase of $18.2

million, or 4%, compared to $473.9 million for the year ended December 31, 2020. Constant currency sales in the International
segment was consistent with 2020, due to weaker organic sales volumes across the segment, with more significant weakness in
emerging markets due to an uneven economic recovery due to COVID-19 and lower project business in the Middle East FGFD
market. This weakness was partially offset by $39 million of acquisition related sales, primarily related to Bristol.

Order activity was healthy as we finished the fourth quarter, and continued to show year-over-year improvements to start

2022. Our backlog remains at an elevated level, as a result of an uptick in order pace and ongoing supply chain constraints in
certain product groups.

Looking ahead, we continue to operate in a dynamic environment. There are a number of other evolving factors that will

continue to influence our revenue outlook. These factors include, among other things, supply chain constraints, including
electronic components impacting our fixed and portable gas detection product groups, which have intensified to start 2022;
availability of labor, especially at Globe; the effectiveness/pace of the vaccine rollout globally; risk of additional COVID
outbreaks and/or lockdowns; industrial employment rates; and the pace of economic recovery. These conditions could impact
our future results and growth expectations well into 2022.

Refer to Note 8—Segment Information to the consolidated financial statements in Part II Item 8 of this Form 10-K, for

information regarding sales by product group.

9621_FIN_C3.pdf March 14, 2022 pg 24

Gross profit. Gross profit for the year ended December 31, 2021 was $615.3 million, an increase of $19.8 million, or 3.3%,
compared to $595.5 million for the year ended December 31, 2020. The ratio of gross profit to net sales was 43.9% in 2021
compared to 44.2% in 2020. Strategic pricing, stronger throughput in our factories and lower inventory charges associated with
APR products offset the impacts of $3.8 million of inventory step-up amortization and $5.0 million of intangible asset
amortization related to our 2021 acquisitions, and higher material costs. We have continued to take pricing actions across our
business and will continue to take additional actions to respond to the inflation we are seeing, especially in the U.S. across
electronic components, resins and other inputs. While there could be a number of scenarios on the length of time that these
challenges may persist, we could see these impact our business for the foreseeable future with more meaningful impact well
into 2022.

Selling, general and administrative expenses. Selling, general and administrative ("SG&A") expenses were $332.9 million for
the year ended December 31, 2021, an increase of $42.6 million, or 14.7%, compared to $290.3 million for the year ended
December 31, 2020. Overall, selling, general and administrative expenses were 23.8% of net sales in 2021 compared to 21.5%
of net sales in 2020. Improved business conditions drove $17.7 million of additional variable compensation and $2.6 million of
higher discretionary expense during the period as the business exited the peak pandemic state. SG&A includes $22.3 million of
expenses associated with Bacharach and Bristol operations, which includes $7.1 million of non-recurring deal costs related to
these acquisitions.

Please refer to the Selling, general and administrative expenses table for a reconciliation of the year-over-year expense change.

Selling, general, and administrative expenses

(Percent Change)
GAAP reported change
Currency translation effects

Constant currency change

Less: Acquisitions and related strategic transaction costs

Organic constant currency change

Year Ended
December 31, 2021 versus December 31, 2020

Consolidated
14.7%

(1.0)%

13.7%

(7.3)%

6.4%

Note: Organic constant currency SG&A change is a non-GAAP financial measure provided by the Company to give a better understanding of
the Company's underlying business performance. Organic constant currency SG&A change is calculated by deducting the percentage impact
from acquisitions and related strategic transaction costs and currency translation effects from the overall percentage change in SG&A.

Research and development expense. Research and development expense was $57.8 million for the year ended December 31,
2021, a decrease of $0.5 million, or 0.8%, compared to $58.3 million for the year ended December 31, 2020. Research and
development expense was 4.1% of net sales in 2021, compared to 4.3% of net sales in 2020. We continue to develop new
products for global safety markets, including the recently announced launch of the Altair io4. We capitalized approximately
$8.1 million and $8.2 million of software development costs during the years ended December 31, 2021 and 2020, respectively.

Restructuring charges. During the year ended December 31, 2021, the Company recorded restructuring charges of $16.4
million primarily related to our ongoing initiatives to drive profitable growth and acquisition integration activities. Together
with cost reduction programs executed throughout 2020 and 2021, these programs collectively delivered approximately $15
million of savings throughout the income statement in 2021, and expect to generate annual savings of $25-$30 million
thereafter. This compared to restructuring charges of $27.4 million during the year ended December 31, 2020, primarily related
to footprint rationalization projects including the Company's FGFD manufacturing footprint optimization and the acceleration
of cost reduction programs associated with our ongoing initiatives to drive profitable growth in our International segment. We
remain focused on executing programs to optimize our cost structure and to drive improvements in productivity.

Currency exchange. Currency exchange losses were $0.2 million during the year ended December 31, 2021, compared to $8.6
million during the year ended December 31, 2020. Currency exchange in both periods were related to foreign currency
exposure on unsettled inter-company balances.

Refer to Note 18—Derivative Financial Instruments of the consolidated financial statements in Part II Item 8 of this

Form 10-K for information regarding our currency exchange rate risk management strategy.

9621_FIN_C3.pdf March 14, 2022 pg 25

Product liability expense. Product liability expense during the year ended December 31, 2021 was $185.3 million compared to
$39.0 million for the year ended December 31, 2020. The expense in both periods primarily relates to increases in MSA LLC's
reserve for cumulative trauma product liability claims, and to a far lesser extent, incurred defense costs. Adjustments to the
reserve for the year ended December 31, 2021 totaled $219.0 million net of insurance receivable of $42.9 million. These
adjustments were largely a result of incorporating the increased number of newly filed claims during the year into long term
trends used in the estimate, particularly, the number of newly filed coal claims, which were well in excess of historical
experience. The reserve includes estimated amounts for claims expected to be resolved through the year 2074. Please refer to
Note 20—Contingencies of the consolidated financial statements in Part II Item 8 of this Form 10-K for additional information.

GAAP operating income. Consolidated operating income for the year ended December 31, 2021 was $22.8 million compared
to $171.9 million for the year ended December 31, 2020. The decrease in operating results was driven by the factors described
in the preceding sections.

Adjusted operating income. Americas adjusted operating income for the year ended December 31, 2021 was $202.5 million, a
decrease of $2.8 million or 1%, compared to $205.3 million for the year ended December 31, 2020. The decrease was related
to variable compensation resets and higher SG&A due to the Bacharach acquisition, as well as higher input costs, which was
mostly offset by higher revenue.

International adjusted operating income for the year ended December 31, 2021 was $73.3 million, an increase of $2.2
million, or 3%, compared to adjusted operating income of $71.1 million for the year ended December 31, 2020. The increase in
adjusted operating income is primarily attributable to higher revenue.

Corporate segment adjusted operating loss for the year ended December 31, 2021 was $35.2 million, an increase of $7.1
million, or 25%, compared to an adjusted operating loss of $28.1 million for the year ended December 31, 2020, due primarily
to higher variable compensation expenses related to improved business conditions and the impact of the Bacharach acquisition.

The following tables represent a reconciliation from GAAP operating income to adjusted operating income (loss) and
adjusted EBITDA. Adjusted operating margin % is calculated as adjusted operating income (loss) divided by net sales and
adjusted EBITDA margin % is calculated as adjusted EBITDA divided by net sales.

Adjusted operating income

(In thousands)
Net sales

GAAP operating income

Restructuring charges (Note 3)

Currency exchange losses, net

Product liability expense (Note 20)
Acquisition related costs (Note 14)(a)
Adjusted operating income (loss)

Adjusted operating margin %
Depreciation and amortization(a)
Adjusted EBITDA

Adjusted EBITDA %

Year Ended December 31, 2021

Americas

International

Corporate

Consolidated

$ 908,068

$ 492,114

— $ 1,400,182

22,780

16,433

216

185,264

15,884
240,577

202,496

73,279

(35,198)

22.3 %

14.9 %

31,236

233,732

13,718

86,997

25.7 %

17.7 %

463

45,417

(34,735)

285,994

9621_FIN_C3.pdf March 14, 2022 pg 26

Adjusted operating income

(In thousands)
Net sales

GAAP operating income

Restructuring charges (Note 3)

Currency exchange losses, net

Product liability expense (Note 20)
Acquisition related costs (Note 14)(a)
COVID-19 related costs

Adjusted operating income (loss)

Adjusted operating margin %
Depreciation and amortization(a)
Adjusted EBITDA

Adjusted EBITDA %

Year Ended December 31, 2020

Americas

International

Corporate

Consolidated

$ 874,305

$ 473,918

— $ 1,348,223

171,895

27,381

8,578

39,036

717

757

205,304

71,140

(28,080)

248,364

23.5 %

15.0 %

26,762

232,066

12,521

83,661

26.5 %

17.7 %

391

39,674

(27,689)

288,038

* The year ended December 31, 2020 amounts were adjusted to reflect the change in inventory accounting method, as described
in Notes 1 and 4 to the consolidated financial statements.
(a) Acquisition related costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred
during due diligence and integration. These costs are included in selling, general and administrative expense in the Consolidated
Statements of Income. Acquisition-related costs during 2021 also include $8.8 million of amortization which is included in Cost
of products sold in the Consolidated Statements of Income.

Note: Adjusted operating income (loss) and adjusted EBITDA are non-GAAP financial measures used by the chief operating
decision maker to evaluate segment performance and allocate resources. Adjusted operating income (loss) is reconciled above
to the nearest GAAP financial measure, Operating income (loss), and excludes restructuring, currency exchange, product
liability expense, and acquisition related costs. Adjusted EBITDA is reconciled above to the nearest GAAP financial measure,
Operating income (loss) and excludes depreciation and amortization expense.

Total other (income) expense, net. Total other income, net, for the year ended December 31, 2021, was $0.8 million, an
increase of $4.5 million compared to other expense, net, of $3.7 million for the year ended December 31, 2020, due primarily to
higher pension income driven by a one-time pension settlement and a higher expected rate of return on plan assets.

Income taxes. The reported effective tax rate for the year ended December 31, 2021 was 7.7%, which includes a benefit of
18.3% for share-based payments, a benefit of 10.9% related to higher profits in foreign jurisdictions and settlement of a foreign
audit, and an expense of 15.3% due to nondeductible compensation. This compared to a reported effective tax rate for the year
ended December 31, 2020 of 25.6%, which included a benefit of 3.9% for share-based payments, an expense of 3.4% due to
nondeductible compensation, and expense of 1.5% related to a foreign audit.

We are subject to regular review and audit by both foreign and domestic tax authorities. While we believe our tax
positions will be sustained, the final outcome of tax audits and related litigation may differ materially from the tax amounts
recorded in our consolidated financial statements.

Net income attributable to MSA Safety Incorporated. Net income was $21.3 million for the year ended December 31, 2021, or
$0.54 per diluted share, compared to $124.1 million, or $3.15 per diluted share, for the year ended December 31, 2020, as
positive momentum in the business was offset by the product liability reserve adjustment.

9621_FIN_C3.pdf March 14, 2022 pg 27

Non-GAAP Financial Information

We may provide information regarding financial measures such as organic constant currency changes, financial measures

excluding the impact of acquisitions and related acquisition related costs (including acquisition related amortization and
COVID-19 related costs, consisting of a one-time bonus for essential manufacturing employees), adjusted operating income,
adjusted operating margin percentage, adjusted EBITDA and adjusted EBITDA margin percentage, which are not recognized
terms under U.S. GAAP and do not purport to be alternatives to net sales, selling, general and administrative expense, operating
income or net income as a measure of operating performance. We believe that the use of these non-GAAP financial measures
provide investors with additional useful information and provide a more complete understanding of the underlying results.
Because not all companies use identical calculations, these presentations may not be comparable to similarly titled measures
from other companies. For more information about these non-GAAP measures and a reconciliation to the nearest U.S. GAAP
measure, please refer to the reconciliations referenced above in Management's Discussion & Analysis section and in Note 8—
Segment Information of the consolidated financial statements in Part II Item 8 of this Form 10-K.

We may also provide financial information on a constant currency basis, which is a non-GAAP financial measure. These
references to a constant currency basis do not include operational impacts that could result from fluctuations in foreign currency
rates, which are outside of management's control. To provide information on a constant currency basis, the applicable financial
results are adjusted by translating current and prior period results in local currency to a fixed foreign exchange rate. This
approach is used for countries where the functional currency is the local country currency. This information is provided so that
certain financial results can be viewed without the impact of fluctuations in foreign currency rates, thereby facilitating period-
to-period comparisons of business performance. Constant currency information is not recognized under U.S. GAAP and it is
not intended as an alternative to U.S. GAAP measures.

LIQUIDITY AND CAPITAL RESOURCES

Our main source of liquidity is operating cash flows, supplemented by borrowings. Our principal liquidity requirements

are for working capital, capital expenditures, principal and interest payments on debt, declared dividend payments and
acquisitions. At December 31, 2021, approximately 46% of our long-term debt is at fixed interest rates with repayment
schedules through 2036. The remainder of our long-term debt is at variable rates on an unsecured revolving credit facility that
is due in 2026. At December 31, 2021, approximately 81% of our borrowings are denominated in US dollars, which limits our
exposure to currency exchange rate fluctuations.

At December 31, 2021, the Company had cash and cash equivalents totaling $141.4 million, and access to sufficient

capital, providing ample liquidity and flexibility to continue to maintain our balanced capital allocation strategy. At
December 31, 2021, $572.4 million of the existing $900.0 million senior revolving credit facility was unused, including letters
of credit issued under the facility. The facility also provides an accordion feature that allows the Company to access an
additional $400.0 million of capacity pending approval by MSA’s board of directors and from the bank group. The Company
believes our healthy balance sheet and access to significant capital at the year ended December 31, 2021, positions us well to
navigate through challenging business conditions.

Operating activities. Operating activities provided cash of $199.1 million in 2021, compared to providing cash of $206.6

million in 2020. The reduced operating cash flow as compared to the same period in 2020 was primarily related to increased
working capital and payments for subsidiary MSA LLC's product liability claims exceeding collections from insurance
companies by $24.1 million in the year ended December 31, 2021, compared to $12.9 million in 2020. MSA LLC presently
funds its operating expenses and legal liabilities from its own operating cash flow and other investments, as well as limited
amounts of insurance reimbursements and intercompany notes. The subsidiary is not party to the Company's credit facility.
Now that MSA LLC is largely self-insured for its historical cumulative trauma product liability claims, associated insurance
reimbursements received in any given period are limited, and generally do not fully offset cash outlay in that same period. In
recent years, MSA LLC’s contingent liabilities have been funded without a material impact on the Company’s consolidated
capital allocation priorities. Please refer to Note 20—Contingencies of the consolidated financial statements in Part II Item 8 of
this Form 10-K for additional information.

9621_FIN_C3.pdf March 14, 2022 pg 28

Investing activities. Investing activities used cash of $415.5 million for the year ended December 31, 2021, compared to
using $72.8 million in 2020. The acquisitions of Bacharach and Bristol and capital expenditures, partially offset by maturities
of short-term investments, net of purchases, drove cash outflows from investing activities during the year ended December 31,
2021, while capital expenditures and the purchase of short-term investments, net of proceeds from maturities, drove cash
outflows from investing activities during the same period in 2020. During 2021 we incurred capital expenditures of $43.8
million, including approximately $8.1 million associated with software development and other growth programs, compared to
capital expenditures of $48.9 million, including $8.2 million associated with software development and other growth programs,
in the same period in 2020. The reduced capital expenditures in 2021 was a result of MSA's ramping up APR production in our
Jacksonville, NC facility in 2020. We remain active in evaluating additional acquisition opportunities that will allow us to
continue to grow in key end markets and geographies.

Financing activities. Financing activities provided cash of $203.9 million for the year ended December 31, 2021,
compared to using cash of $126.5 million in 2020. During 2021, we had net proceeds on long-term debt of $293.2 million to
fund the acquisitions of Bacharach and Bristol and buy-out our minority partner in our China business, as compared to net
payments on long-term debt of $44.0 million during the same period in 2020. We paid cash dividends, exclusive of a
$5.6 million dividend to our former noncontrolling interest partner in China as part of the buy-out, of $68.6 million during
2021, compared to $66.6 million during 2020. We also used cash of $6.2 million during 2021 to repurchase shares, compared
to using $29.1 million during the same period in 2020. In 2020, $20.1 million of our repurchase activity was related to
purchases under our 2015 stock repurchase program.

CUMULATIVE TRANSLATION ADJUSTMENTS

The year-end position of the U.S. dollar relative to international currencies at December 31, 2021, resulted in a translation

loss of $25.4 million being recorded to cumulative translation adjustments shareholders' equity account for the year ended
December 31, 2021, compared to a $22.3 million translation gain being recorded to the cumulative translation adjustments
account during 2020.

COMMITMENTS AND CONTINGENCIES

We are obligated to make future payments under various contracts, including debt and lease agreements. Our significant

cash obligations as of December 31, 2021, are as follows:

(In millions)
Long-term debt

Operating leases

Inventory costing method
change tax
Transition tax

Totals

Total

2022

2023

2024

2025

2026

Thereafter

600.4 $

— $

8.3 $

334.3 $

241.2

59.2

10.7

2.0

10.6

2.7

—

8.5

2.7

0.7

6.4

2.7

1.3

4.2

2.6

—

3.7

—

25.8

—

672.3 $

13.3 $

20.2 $

18.7 $

15.1 $

338.0 $

267.0

The significant obligations table does not include obligations to taxing authorities due to uncertainty surrounding the

ultimate settlement of amounts and timing of these obligations.

We expect to meet our future debt service obligations through cash provided by operations. Approximately $334.4
million of debt payable in 2026 relates to our unsecured senior revolving credit facility. We expect to generate sufficient
operating cash flow to make payments against this amount each year. To the extent that a balance remains when the facility
matures in 2026, we expect to refinance the remaining balance through new borrowing facilities. Interest expense on fixed rate
debt over the next five years is expected to be approximately $7.9 million in 2022, $7.8 million in 2023, $7.6 million in 2024,
$7.1 million in 2025, and $7.0 million in 2026. We expect total interest expense for 2022 to be between $13 million and $15
million.

9621_FIN_C3.pdf March 14, 2022 pg 29

The Company had outstanding bank guarantees and standby letters of credit with banks as of December 31, 2021 totaling
$10.9 million, of which $1.5 million relate to the senior revolving credit facility. These letters of credit serve to cover customer
requirements in connection with certain sales orders and insurance companies. The Company is also required to provide cash
collateral in connection with certain arrangements. At December 31, 2021, the Company has $0.5 million of restricted cash in
support of these arrangements.

We expect to make net contributions of $7.7 million to our pension plans in 2022 which are primarily associated with our

International segment. We have not been required to make contributions to our U.S. based qualified defined benefit pension
plan in many years.

We have purchase commitments for materials, supplies, services and property, plant and equipment as part of our

ordinary conduct of business.

Please refer to Note 20—Contingencies to the consolidated financial statements in Part II Item 8 of this Form 10-K for

further discussion on the Company's product liabilities.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles (U.S.

GAAP). The preparation of these financial statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses and the related disclosures. We evaluate these estimates and judgments on
an on-going basis based on historical experience and various assumptions that we believe to be reasonable under the
circumstances. However, different amounts could be reported if we had used different assumptions and in light of different facts
and circumstances. Actual amounts could differ from the estimates and judgments reflected in our consolidated financial
statements. A summary of the Company's significant accounting policies is included in Note 1—Significant Accounting
Policies to the consolidated financial statements in Part II, Item 8 of this Form 10-K.

The more critical judgments and estimates used in the preparation of our consolidated financial statements are discussed
in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-K for the
year ended December 31, 2021. During 2021, the Company made acquisitions that raised business combinations to a critical
accounting policy and estimate.

Business combinations. In accordance with the accounting guidance for business combinations, the Company uses the

acquisition method of accounting to allocate costs of acquired businesses to the assets acquired and liabilities assumed based on
their estimated fair values at the dates of acquisition. The excess costs of acquired businesses over the fair values of the assets
acquired and liabilities assumed will be recognized as goodwill. The valuations of the acquired assets and liabilities will impact
the determination of future operating results. In addition to using management estimates and negotiated amounts, the Company
uses a variety of information sources to determine the estimated fair values of acquired assets and liabilities including: third-
party appraisals for the estimated value and lives of identifiable intangible assets and property, plant and equipment; third-party
actuaries for the estimated obligations of defined benefit pension plans and similar benefit obligations; and legal counsel or
other experts to assess the obligations associated with legal, environmental and other contingent liabilities.

The business and technical judgment of management was used in determining which intangible assets have indefinite

lives and in determining the useful lives of finite-lived intangible assets in accordance with the accounting guidance for
goodwill and other intangible assets.

Cumulative trauma product liability. The Company and its subsidiaries face an inherent business risk of exposure to

product liability claims arising from the alleged failure of our products to prevent the types of personal injury or death against
which they are designed to protect. Product liability claims are categorized as either single incident or cumulative trauma.

Single incident product liability claims involve incidents of short duration that are typically known when they occur and

involve observable injuries, which provide an objective basis for quantifying damages. The Company estimates its subsidiaries'
liability for single incident product liability claims based on expected settlement costs for asserted single incident product
liability claims and an estimate of costs for single incident product liability claims incurred but not reported ("IBNR"). Single
incident product liability exposures are evaluated on an annual basis, or more frequently if changing circumstances warrant.
Adjustments are made to the reserve as appropriate.

9621_FIN_C3.pdf March 14, 2022 pg 30

Cumulative trauma product liability claims involve exposures to harmful substances (e.g., silica, asbestos and coal dust)

that occurred years ago and may have developed over long periods of time into diseases such as silicosis, asbestosis,
mesothelioma, or coal worker’s pneumoconiosis. MSA LLC's combined cumulative trauma product liability reserve is based
upon estimates of its liability for asserted and IBNR cumulative trauma product liability claims. In addition, in connection with
finalizing and reporting the Company's results of operations, management works annually (unless significant changes in trends
or new developments warrant an earlier review) with an outside valuation consultant and outside legal counsel to review MSA
LLC's potential exposure to all cumulative trauma product liability claims. Each of these factors may increase or decrease
significantly within an individual period depending on, among other things, the timing of claims filings or settlements, or
litigation outcomes during a particular period that are especially favorable or unfavorable to MSA LLC. We accordingly
consider MSA LLC’s claims experience over multiple periods and/or whether there are changes in MSA LLC’s claims
experience and trends that are likely to continue for a significant time into the future in determining whether to make an
adjustment to the reserve, rather than evaluating such factors solely in the short term.

Please refer to Note 20—Contingencies to the consolidated financial statements in Part II Item 8 of this Form 10-K for

further discussion on the Company's product liabilities.

Income taxes. We recognize deferred tax assets and liabilities using enacted tax rates to record the tax effect of temporary
differences between the book and tax basis of recorded assets and liabilities. We record valuation allowances to reduce deferred
tax assets to the amounts that we estimate are probable to be realized. When assessing the need for valuation allowances, we
consider projected future taxable income and prudent and feasible tax planning strategies. Should a change in circumstances
lead to a change in our judgments about the realizability of deferred tax assets in future years, we adjust the related valuation
allowances in the period that the change in circumstances occurs.

We record an estimated income tax liability based on our best judgment of the amounts likely to be paid in the various tax

jurisdictions in which we operate. We record tax benefits related to uncertain tax positions taken or expected to be taken on a
tax return when such benefits meet a more likely than not threshold. We recognize interest related to unrecognized tax benefits
in interest expense and penalties in operating expenses. The tax liabilities ultimately paid are dependent on a number of factors,
including the resolution of tax audits, and may differ from the amounts recorded. Tax liabilities are adjusted through income
when it becomes probable that the actual liability differs from the amount recorded.

Pensions and other post-retirement benefits. We sponsor certain pension and other post-retirement benefit plans.
Accounting for the net periodic benefit costs and credits for these plans requires us to estimate the cost of benefits to be
provided well into the future and to attribute these costs over the expected work life of the employees participating in these
plans. These estimates require our judgment about discount rates used to determine these obligations, expected returns on plan
assets, rates of future compensation increases, rates of increase in future health care costs, participant withdrawal and mortality
rates and participant retirement ages. Differences between our estimates and actual results may significantly affect the cost of
our obligations under these plans and could cause net periodic benefit costs and credits to change materially from year-to-year.
Discount rates and plan asset valuations are point-in-time measures. The discount rate assumptions used in determining
projected benefit obligations for our U.S. and foreign plans were based on the spot rate method at December 31, 2021.

Expected returns on plan assets are based on capital market expectations by asset class.

The following table summarizes the impact of changes in significant actuarial assumptions on our December 31, 2021

actuarial valuations.

(In thousands)
(Decrease) increase in net benefit cost

Impact of Changes in Actuarial Assumptions

Change in Discount
Rate

Change in Expected
Return

Change in Market Value
of Assets

(1)%

(5)%

$ (7,600) $ 9,302 $ (4,958) $ 4,958 $ (1,028) $ 1,050

(Decrease) increase in projected benefit obligation

(86,513) 109,624

Increase (decrease) in funded status

86,513

(109,624)

—

32,514

(32,514)

9621_FIN_C3.pdf March 14, 2022 pg 31

Goodwill and Indefinite-lived Intangible Assets. On October 1st of each year, or more frequently if indicators of
impairment exist or if a decision is made to sell a business, we evaluate goodwill for impairment. Such indicators may include
a decline in expected cash flows, a significant adverse change in the business climate, unanticipated competition, slower growth
rates, or negative developments in equity and credit markets, among others.

All goodwill is assigned to and evaluated for impairment at the reporting unit level, which is defined as an operating

segment or one level below an operating segment. The evaluation of impairment involves using either a qualitative or
quantitative approach as outlined in Accounting Standards Codification ("ASC") Topic 350. In 2021, we performed a
quantitative test at October 1, 2021. Quantitative testing involves comparing the estimated fair value of each reporting unit to its
carrying value. We estimate reporting unit fair value using a weighted average of fair values determined by discounted cash
flow ("DCF") and market approach methodologies, as we believe both are important indicators of fair value. A number of
assumptions and estimates are involved in the application of the DCF model, including sales volumes and prices, costs to
produce, tax rates, capital spending, discount rates, and working capital changes. Cash flow forecasts are generally based on
approved business unit operating plans for the early years and historical relationships in later years. The market approach
methodology measures value through an analysis of peer companies. The analysis entails measuring the multiples of EBITDA
at which peer companies are trading.

In the event the carrying value is in excess of the estimated fair value of a reporting unit per the weighted average of the
DCF and market approach models, an impairment loss equal to such excess would be recognized, which could materially and
adversely affect reported consolidated results of operations and shareholders’ equity. At October 1, 2021, based on our
quantitative test, the fair values of each of our reporting units exceeded their carrying value by at least 56%.

The intangible asset with an indefinite life is also subject to impairment testing on October 1st of each year, or more

frequently if indicators of impairment exist. The impairment test compares the fair value of the intangible asset with its
carrying amount. We perform a quantitative assessment of the indefinite lived trade name intangible asset as outlined in ASC
350 by comparing the estimated fair value of the trade name intangible asset to its carrying value. We estimate the fair value
using the relief from royalty income approach. A number of significant assumptions and estimates are involved in the
application of the relief from royalty model, including sales volumes and prices, royalty rates and tax rates. Forecasts are based
on sales generated by the underlying trade name assets and are generally based on approved business unit operating plans for
the early years and historical relationships in later years. At October 1, 2021, based on our quantitative test, the fair value of the
trade name asset exceeded its carrying value by approximately 29%.

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING STANDARDS

None

9621_FIN_C3.pdf March 14, 2022 pg 32

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of adverse changes in the value of a financial instrument caused by changes in currency

exchange rates, interest rates and equity prices. We are exposed to market risks related to currency exchange rates and interest
rates.

Currency exchange rates. We are subject to the effects of fluctuations in currency exchange rates on various

transactions and on the translation of the reported financial position and operating results of our non-U.S. companies from local
currencies to U.S. dollars. A hypothetical 10% strengthening or weakening of the U.S. dollar would increase or decrease our
reported sales and net income for the year ended December 31, 2021 by approximately $61.4 million and $5.3 million, or 4.4%
and 24.9%, respectively.

When appropriate, we may attempt to limit our transactional exposure to changes in currency exchange rates through

forward contracts or other actions intended to reduce existing exposures by creating offsetting currency exposures. At
December 31, 2021, we had open foreign currency forward contracts with a U.S. dollar notional value of $99.0 million. A
hypothetical 10% increase in December 31, 2021 forward exchange rates would result in a $9.9 million increase in the fair
value of these contracts.

Interest rates. We are exposed to changes in interest rates primarily as a result of borrowing and investing activities used
to maintain liquidity and fund business operations. Because of the relatively short maturities of temporary investments and the
variable rate nature of our revolving credit facility, these financial instruments are reported at carrying values which
approximate fair values.

At December 31, 2021, we had $274.3 million of fixed rate debt which matures at various dates through 2036. The

incremental increase in the fair value of fixed rate long-term debt resulting from a hypothetical 10% decrease in interest rates
would be approximately $10.5 million. However, our sensitivity to interest rate declines and the corresponding increase in the
fair value of our debt portfolio would unfavorably affect earnings and cash flows only to the extent that we elected to
repurchase or retire all or a portion of our fixed rate debt portfolio at prices above carrying values.

At December 31, 2021, we had $326.1 million of variable rate borrowings under our revolving credit facility. A 100

basis point increase or decrease in interest rates could have a $3.8 million impact on future earnings under our current capital
structure.

9621_FIN_C3.pdf March 14, 2022 pg 33

Item 8. Financial Statements and Supplementary Data

Management’s Reports to Shareholders

Management’s Report on Responsibility for Financial Reporting

Management of MSA Safety Incorporated (the Company) is responsible for the preparation of the consolidated financial

statements included in this annual report. The consolidated financial statements were prepared in accordance with accounting
principles generally accepted in the United States of America and include amounts that are based on the best estimates and
judgments of management. The other financial information contained in this annual report is consistent with the consolidated
financial statements.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. The
Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles.

The Company’s internal control over financial reporting includes policies and procedures that (1) pertain to the

maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with
authorizations of management and the directors of the Company; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on our
financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,

projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31,

2021. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on our assessment and those criteria,
management has concluded that the Company maintained effective internal control over financial reporting as of December 31,
2021.

The Company acquired B T Q Limited ("Bristol") and Bacharach, Inc. ("Bacharach") on January 25, 2021, and July 1,

2021, respectively, which collectively represented approximately 19% and 48% of the Company's total assets and net assets as
of December 31, 2021 and 5% and (29%) of total sales and net income for the year ended December 31, 2021. As the Bristol
and Bacharach acquisitions were completed during the first and third quarters of 2021, respectively, the scope of the Company's
2021 assessment of the effectiveness of its internal control over financial reporting does not include the Bristol and Bacharach
acquisitions. This exclusion is pursuant to the SEC's general guidance that an assessment of a recently acquired business'
internal control over financial reporting may be omitted from the scope of the Company's assessment of its internal control over
financial reporting for twelve months following the date of acquisition.

The Company's independent registered public accounting firm that audited the consolidated financial statements included

in this annual report issued an attestation report on the Company's internal control over financial reporting.

/s/ NISHAN J. VARTANIAN
Nishan J. Vartanian
Chairman, President and Chief Executive Officer

/s/ KENNETH D. KRAUSE

Kenneth D. Krause
Sr. Vice President, Chief Financial Officer and Treasurer

February 18, 2022

9621_FIN_C3.pdf March 14, 2022 pg 34

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of MSA Safety Incorporated

Opinion on Internal Control over Financial Reporting

We have audited MSA Safety Incorporated’s internal control over financial reporting as of December 31, 2021, based on
criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) (the COSO criteria). In our opinion, MSA Safety Incorporated (the Company)
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the
COSO criteria.

As indicated in the accompanying Management's Report on Internal Control Over Financial Reporting, management's
assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal
controls of B T Q Limited ("Bristol") and Bacharach, Inc. ("Bacharach"), which are included in the 2021 consolidated financial
statements of the Company and collectively constituted 19% and 48% of total and net assets, respectively, as of December 31,
2021 and 5% and (29)% of revenues and net income, respectively, for the year then ended. Our audit of internal control over
financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Bristol
and Bacharach.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated
statements of income, comprehensive income, cash flows, and changes in retained earnings, accumulated other comprehensive
loss and noncontrolling interests for each of the three years in the period ended December 31, 2021, and the related notes and
financial statement schedule listed in the Index at Item 15(a) 2 and our report dated February 18, 2022 expressed an unqualified
opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report
on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.

9621_FIN_C3.pdf March 14, 2022 pg 35

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Pittsburgh, Pennsylvania
February 18, 2022

9621_FIN_C3.pdf March 14, 2022 pg 36

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of MSA Safety Incorporated

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of MSA Safety Incorporated (the Company) as of December
31, 2021 and 2020, the related consolidated statements of income, comprehensive income, cash flows, and changes in retained
earnings, accumulated other comprehensive loss and noncontrolling interests for each of the three years in the period ended
December 31, 2021, and the related notes and financial statement schedule listed in the Index at Item 15(a) 2 (collectively
referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S. generally accepted
accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework), and our report dated February 18, 2022 expressed an unqualified opinion thereon.

Change in Accounting Principle

As discussed in Notes 1 and 4 to the consolidated financial statements, in 2021 the Company elected to change its method of
accounting for certain inventories in the United States from the last-in, first-out (“LIFO”) method to the first-in, first-out
(“FIFO”) method for all years presented.

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 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. 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.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex
judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on
the critical audit matters or on the accounts or disclosures to which they relate.

9621_FIN_C3.pdf March 14, 2022 pg 37

Valuation of cumulative trauma product liability claims

Description of the Matter As more fully described in Notes 1 and 20 to the consolidated financial statements, the
Company's subsidiary MSA LLC is named as a defendant in lawsuits comprised of
cumulative trauma product liability claims involving alleged exposures to potentially
harmful substances (e.g., silica, asbestos, and coal dust) that occurred years ago and may
have developed over long periods of time into diseases such as silicosis, asbestosis,
mesothelioma, or coal worker’s pneumoconiosis. It is probable that MSA LLC will incur
losses related to asserted and incurred but not reported (IBNR) claims and that the amount of
losses can be reasonably estimated. At December 31, 2021, the Company’s reserve for
cumulative trauma product liability claims was $409.8 million, representing its best estimate
of the expected losses related to these claims.

Auditing management’s accounting for and disclosure of loss contingencies arising from
cumulative trauma product liability claims was especially challenging, as the estimate of
probable loss is highly subjective. In particular, the estimate was sensitive to significant
assumptions that included, among others, the number of claims asserted against MSA LLC
and the counsel asserting those claims, the percentage of claims resolved through settlement
and the values of settlements paid to claimants.

How We Addressed the Matter
in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of
relevant internal controls over the Company’s assessment and measurement of its estimate of
probable loss for cumulative trauma product liability claims. Our audit procedures included
testing controls over the Company’s assessment and measurement of the best estimate of the
expected losses related to cumulative trauma product liability claims.

To test the Company’s assessment of cumulative trauma product liability claims, we
performed audit procedures which included, among others: reading the minutes of the
meetings of the committees of the board of directors, requesting and receiving internal and
external legal counsel letters, meeting with internal and external counsel to discuss the
claims, meeting with management’s valuation consultant, testing the completeness and
accuracy of data from underlying systems that are used in the Company’s assessment,
performing a historical lookback analysis on claims data, performing a search for new or
contrary evidence affecting the assessment, and obtaining a representation letter from the
Company. Additional audit procedures to test the Company’s valuation of the expected
losses related to cumulative trauma product liability claims included: evaluating significant
assumptions underlying the estimate, including the number of claims asserted against MSA
LLC and the counsel asserting those claims, the percentage of claims resolved through
settlement and the values of settlements paid to claimants. We engaged our actuarial
specialists to assist in the analysis of the significant assumptions and methodology used by
management. Our procedures also included evaluating the sufficiency of the Company’s
disclosures with respect to cumulative trauma product liability claims described in Note 20
to the consolidated financial statements.

9621_FIN_C3.pdf March 14, 2022 pg 38

Valuation of customer relationship intangible assets in the acquisition of Bacharach, Inc.
Description of the Matter As discussed in Note 14 to the consolidated financial statements, during the year ended

December 31, 2021, the Company completed the acquisition of Bacharach, Inc.
("Bacharach") for a total purchase price of approximately $341.1 million. The acquisition
was accounted for as a business combination. The consideration paid in the acquisition must
be allocated to the acquired assets and liabilities assumed generally based on their fair value
with the excess of the purchase price over those fair values allocated to goodwill.

Auditing the Company’s accounting for its acquisition of Bacharach was complex due to the
significant estimation uncertainty involved in estimating the fair value of customer
relationship intangible assets. The total fair value ascribed to customer relationship
intangible assets amounted to $123.0 million. The Company used the excess earnings
approach to value the customer relationship intangible assets. The significant assumptions
used to estimate the fair value of customer relationships included the forecasted sales and
operating expenses inclusive of synergies expected to be achieved by combining the
Company and Bacharach. These significant assumptions are forward-looking and could be
affected by future economic and market conditions.

How We Addressed the Matter
in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of
the Company’s controls over its accounting for the acquisition of Bacharach. For example,
we tested controls that address the risks of material misstatement relating to the valuation of
the customer relationship intangible assets, including management’s review of the methods
and significant assumptions used to develop such estimates.

To test the estimated fair value of the acquired customer relationship intangible assets, our
audit procedures included, among others, assessing the appropriateness of the valuation
methodologies used, evaluating the significant assumptions discussed above, and evaluating
the completeness and accuracy of the underlying data supporting the significant assumptions
and estimates. For the forecasted sales and operating expenses inclusive of synergies
expected to be achieved by combining the Company and Bacharach, we compared the
financial projections to current industry and economic trends and the historic financial
performance of the acquired business. We also performed sensitivity analyses to evaluate the
changes in the fair value of the intangible assets that would result from changes in the
significant assumptions. We involved our valuation specialist to assist in evaluating the
methodologies and testing certain significant assumptions used to estimate the fair value of
the customer relationship intangible assets.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2014.

Pittsburgh, Pennsylvania
February 18, 2022

9621_FIN_C3.pdf March 14, 2022 pg 39

MSA SAFETY INCORPORATED

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)
Net sales

Cost of products sold

Gross profit

Selling, general and administrative

Research and development

Restructuring charges (Note 3)

Currency exchange losses, net

Product liability (Note 20) and other operating expense

Operating income

Interest expense

Other income, net (Note 16)
Total other (income) expense, net

Income before income taxes

Provision for income taxes (Note 10)

Net income

Net income attributable to noncontrolling interests

Net income attributable to MSA Safety Incorporated

Earnings per share attributable to MSA Safety Incorporated common
shareholders (Note 9):

Basic

Diluted

Dividends per common share

Year ended December 31,

2021

2020

2019

$ 1,400,182 $ 1,348,223 $ 1,401,981

784,834

615,348

752,731

595,492

763,352

638,629

332,862

290,334

330,502

57,793

16,433

216

185,264

22,780

58,268

27,381

8,578

39,036

57,848

13,846

19,814

28,372

171,895

188,247

10,758

9,432

13,589

(11,582)

(5,684)

(11,094)

(824)

3,748

2,495

23,604

1,816

21,788

168,147

43,009

125,138

185,752

46,545

139,207

(448) $

(1,061) $

(1,209)

21,340 $

124,077 $

137,998

0.54 $

1.75 $

3.19 $

3.15 $

1.71 $

3.56

3.52

1.64

*Year ended December 31, 2020 and 2019 amounts have been adjusted to reflect the change in inventory accounting method,
as described in Notes 1 and 4 to the consolidated financial statements.

The accompanying notes are an integral part of the consolidated financial statements.

9621_FIN_C3.pdf March 14, 2022 pg 40

MSA SAFETY INCORPORATED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)
Net income

Other comprehensive income, net of tax:

Foreign currency translation adjustments (Note 6)

Pension and post-retirement plan actuarial gains (losses), net of tax (Note 6)
Unrealized (losses) gains on available-for-sale securities (Note 6)

Year ended December 31,

2021

2020

2019

$ 21,788 $ 125,138 $ 139,207

(25,354) 22,260

58,256

9,296

(1,657)

(5,559)

(4)

(7)

578

Reclassifications from accumulated other comprehensive (loss) into net income (Note 6)

267

216

15,261

Total other comprehensive income, net of tax

Comprehensive income

Comprehensive income attributable to noncontrolling interests

Comprehensive income attributable to MSA Safety Incorporated

33,165

31,765

8,623

54,953

156,903

147,830

(356)

(1,220)

(1,136)

$ 54,597 $ 155,683 $ 146,694

*Year ended December 31, 2020 and 2019 amounts have been adjusted to reflect the change in inventory accounting method,
as described in Notes 1 and 4 to the consolidated financial statements.

The accompanying notes are an integral part of the consolidated financial statements.

9621_FIN_C3.pdf March 14, 2022 pg 41

MSA SAFETY INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)
Assets
Cash and cash equivalents
Trade receivables, less allowance for credit loss of $5,789 and $5,344
Inventories (Note 4)
Investments, short-term (Note 19)
Prepaid income taxes
Notes receivable, insurance companies (Note 20)
Prepaid expenses and other current assets

Total current assets

Property, plant and equipment, net (Note 5)
Operating lease right-of-use assets, net (Note 17)
Prepaid pension cost (Note 15)
Deferred tax assets (Note 10)
Goodwill (Note 13)
Intangible assets, net (Note 13)
Notes receivable, insurance companies, noncurrent (Note 20)
Insurance receivable (Note 20) and other noncurrent assets

Total assets

Liabilities
Notes payable and current portion of long-term debt (Note 12)
Accounts payable
Employees’ compensation
Insurance and product liability (Note 20)
Income taxes payable (Note 10)
Accrued restructuring (Note 3) and other current liabilities

Total current liabilities

Long-term debt, net (Note 12)
Pensions and other employee benefits (Note 15)
Noncurrent operating lease liabilities (Note 17)
Deferred tax liabilities (Note 10)
Product liability (Note 20) and other noncurrent liabilities

Total liabilities

Commitments and contingencies (Note 20)

Shareholders' Equity
Preferred stock, 4.5% cumulative, $50 par value (Note 7)
Common stock, no par value (180,000,000 shares authorized; 62,081,391 shares issued;
39,276,518 and 39,067,902 shares outstanding at December 31, 2021 and 2020, respectively)
Treasury shares, at cost (Note 7)
Accumulated other comprehensive loss (Note 6)
Retained earnings

Total MSA Safety Incorporated shareholders’ equity

Noncontrolling interests (Note 14)

Total shareholders’ equity
Total liabilities and shareholders’ equity

December 31,

2021

2020

140,895 $
254,187
280,617
48,974
21,235
3,914
42,982
792,804

160,672
252,283
244,966
74,982
26,185
3,796
38,541
801,425

207,793
50,178
163,283
35,257
636,858
306,948
44,626
158,649

189,620
53,451
97,545
35,665
443,272
161,051
48,540
89,062
$ 2,396,396 $ 1,919,631

— $

106,780
49,884
55,125
5,366
113,451
330,606

20,000
86,854
40,277
43,706
3,580
116,128
310,545

597,651
189,973
40,706
33,337
369,735

287,157
208,068
44,639
20,760
201,268
$ 1,562,008 $ 1,072,437

3,569

260,121
(330,376)
(149,140)
1,050,214
834,388
—
834,388

242,693
(327,756)
(182,397)
1,103,092
839,201
7,993
847,194
$ 2,396,396 $ 1,919,631

*December 31, 2020 amounts have been adjusted to reflect the change in inventory accounting method, as described in
Notes 1 and 4 to the consolidated financial statements.

The accompanying notes are an integral part of the consolidated financial statements.

9621_FIN_C3.pdf March 14, 2022 pg 42

MSA SAFETY INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
Operating Activities
Net income
Depreciation and amortization
Stock-based compensation (Note 11)
Pension expense (Note 15) and other charges
Deferred income tax (benefit) provision (Note 10)
Losses on asset dispositions, net
Pension contributions (Note 15)
Currency exchange losses, net (Note 6)
Product liability expense (Note 20)
Collections on insurance receivable and notes receivable,
insurance companies (Note 20)
Product liability payments (Note 20)
Changes in:

Trade receivables
Inventories (Note 4)
Accounts payable
Other current assets and liabilities
Other noncurrent assets and liabilities
Cash Flow From Operating Activities

Investing Activities

Capital expenditures
Purchase of short-term investments (Note 19)
Proceeds from maturities of short-term investments (Note 19)
Acquisitions, net of cash acquired (Note 14)
Property disposals and other investing
Cash Flow Used In Investing Activities

Financing Activities

Year ended December 31,
2020

2019

2021

$ 21,788 $ 125,138 $ 139,207
38,020
13,760
3,382
1,731
371
(5,537)
19,814
26,619

50,317
18,908
2,448
(38,850)
788
(5,543)
216
185,264

39,674
6,920
10,082
(2,254)
236
(5,596)
8,578
39,036

15,443

10,853

21,035

(39,548)

(23,727)

(54,504)

4,374
(17,827)
13,299
823
(12,755)

7,677
(13,645)
(3,069)
7,749
(1,097)

(8,855)
(25,263)
9,775
(4,796)
(9,797)
164,962

199,145

206,555

(43,837)

(48,905)

(36,604)
(133,913) (199,318) (169,245)
174,670
175,000
160,000
(33,196)
—
(392,437)
218
454
(5,286)
(64,157)
(72,769)
(415,473)

—

Payments on short-term debt, net (Note 12)
Payments on long-term debt (Note 12)
Proceeds from long-term debt (Note 12)
Debt issuance costs
Cash dividends paid
Acquisition of noncontrolling interests in consolidated subsidiaries
Distribution to noncontrolling interests
Company stock purchases (Note 7)
Exercise of stock options (Note 7)
Employee stock purchase plan (Note 7)
Cash Flow Provided by (Used In) Financing Activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(Decrease) increase in cash, cash equivalents and restricted cash
Beginning cash, cash equivalents and restricted cash
Ending cash, cash equivalents and restricted cash

(66,578)

(2,106)
(68,586)
(13,381)
(5,632)
(6,171)
5,770
855
203,925

(65)
(1,346,557) (1,031,000) (880,500)
864,000
987,000
1,639,733
—
—
(63,523)
—
—
(12,648)
7,471
641
(84,624)
(126,529)
(4,242)
1,234
11,939
8,491
161,034
140,604
152,543
$ 141,438 $ 161,034 $ 152,543

(29,144)
12,446
747

(7,193)
(19,596)

—
—

Supplemental cash flow information:

Cash and cash equivalents
Restricted cash included in prepaid expenses and other current assets
Total cash, cash equivalents and restricted cash
Interest paid in cash
Income tax paid in cash

$ 140,895 $ 160,672 $ 152,195
348
152,543

543
$ 141,438

362
161,034

9,288 $

9,856 $ 14,490
$
$ 45,556 $ 61,072 $ 48,673

*Year ended December 31, 2020 and 2019 have been adjusted to reflect the change in inventory accounting method, as
described in Notes 1 and 4.

The accompanying notes are an integral part of the consolidated financial statements.

9621_FIN_C3.pdf March 14, 2022 pg 43

MSA SAFETY INCORPORATED

CONSOLIDATED STATEMENTS OF CHANGES IN RETAINED EARNINGS,

ACCUMULATED OTHER COMPREHENSIVE LOSS AND NONCONTROLLING INTERESTS

(In thousands)

Balances at January 1, 2019 (Originally reported)
Inventory accounting method change
Balances at January 1, 2019 (As adjusted)

Net income

Foreign currency translation adjustments

Pension and post-retirement plan adjustments, net of tax of $3,072

Unrecognized net gains on available-for-sale securities (Note 19)

Reclassification of currency translation from accumulated other comprehensive
loss into net income (Note 6)
(Income) loss attributable to noncontrolling interests

Common dividends

Preferred dividends ($0.5625 per share)

Cumulative effect of the adoption of ASU 2016-16

Balances at December 31, 2019
Net income

Foreign currency translation adjustments

Pension and post-retirement plan adjustments, net of tax of ($2,245)

Unrecognized net losses on available-for-sale securities (Note 19)

Reclassification of currency translation from accumulated other comprehensive
loss into net income (Note 6)
(Income) loss attributable to noncontrolling interests

Common dividends

Preferred dividends ($0.5625 per share)

Balances at December 31, 2020
Net income

Foreign currency translation adjustments

Pension and post-retirement plan adjustments, net of tax of ($18,564)
Unrecognized net losses on available-for-sale securities (Note 19)

Reclassification of currency translation from accumulated other comprehensive
loss into net income (Note 6)
(Income) loss attributable to noncontrolling interests

Acquisition of noncontrolling interests in consolidated subsidiaries

Distributions to noncontrolling interests (Note 14)

Common dividends

Preferred dividends ($0.5625 per share)

Balances December 31, 2021

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Noncontrolling
Interests

$ 935,577 $

(218,927) $

5,637

31,769

967,346

139,207

—

(1,209)

(63,481)

(42)

3,772

—

(218,927)

—

5,637

—

(1,657)

(5,559)

578

15,261

—

(3,772)

—

1,136

—

1,045,593

(214,003)

6,773

125,138

—

22,260

9,296

(7)

216

—

(1,061)

(66,537)

(41)

(159)

1,220

—

1,103,092

(182,397)

7,993

21,788
—
—
—

—

(448)

—

(5,632)

(68,545)

(41)

—

(25,354)
58,256

(4)

267

—

$ 1,050,214 $

(149,140) $

—
—
—
—

—

356

(8,349)

—

*The balances at January 1, 2019 and the year ended December 31, 2020 and 2019 have been adjusted to reflect the change in
inventory accounting method, as described in Notes 1 and 4 to the consolidated financial statements.

The accompanying notes are an integral part of the consolidated financial statements.

9621_FIN_C3.pdf March 14, 2022 pg 44

MSA SAFETY INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Significant Accounting Policies

General Information and Basis of Presentation—The consolidated financial statements of MSA Safety Incorporated
("MSA" or "the Company") are prepared in conformity with accounting principles generally accepted in the United States of
America ("U.S. GAAP") and require management to make certain judgments, estimates, and assumptions. These may affect the
reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated
financial statements. They also may affect the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates upon subsequent resolution of identified matters.

During the fourth quarter of 2021, the Company changed its method of accounting for certain inventory in the United
States from the last-in, first-out ("LIFO") method to the first-in, first-out ("FIFO") method. All prior periods presented have
been retrospectively adjusted to apply the new method of accounting. See Note 4—Inventories for more information on the
change in inventory accounting method.

Principles of Consolidation—The consolidated financial statements include the accounts of the Company and all

subsidiaries. Intercompany accounts and transactions are eliminated.

Reclassifications—Certain reclassifications of prior years' data have been made to conform to the current year

presentation. These reclassifications relate to additional captions disclosed within the operating activities section of the
Consolidated Statements of Cash Flows, but do not change the overall cash flow from operating activities for the prior years as
previously reported.

Noncontrolling Interests—Noncontrolling interests reflect noncontrolling shareholders’ investments in certain
consolidated subsidiaries and their proportionate share of the income and accumulated other comprehensive loss of those
subsidiaries. During July 2021, the Company purchased the remaining noncontrolling interests in MSA (China) Safety
Equipment Co., Ltd. See Note 14—Acquisitions for further detail.

Currency Translation—The functional currency of all significant non-U.S. subsidiaries is the local country currency.
Assets and liabilities of these operations are translated at year-end exchange rates. Income statement accounts are translated
using the average exchange rates for the reporting period. Translation adjustments for these subsidiaries are reported as a
component of shareholders’ equity and are not included in net income. Foreign currency transaction gains and losses are
included in net income for the reporting period.

Cash Equivalents—Cash equivalents include temporary deposits with financial institutions and highly liquid investments

with original maturities of 90 days or less. Highly liquid investments consist of money market funds which were $8.7 million
and $0.6 million at December 31, 2021 and 2020, respectively. These funds are valued at net asset value (“NAV”). These funds
are required to price and transact at a NAV per share that fluctuates based upon the pricing of the underlying portfolio of
securities. This requirement may impact the value of these fund shares.

Restricted Cash—Restricted cash, which is designated for use other than current operations, is included in prepaid

expenses and other current assets in the Consolidated Balance Sheets. Restricted cash balances were $0.5 million and $0.4
million at December 31, 2021 and 2020, respectively. These balances were used to support letter of credit balances.

Inventories—Inventories are stated at the lower of cost or net realizable value, which approximates current replacement

cost. Cost is determined using the FIFO method. It is the Company's general policy to write-down any inventory balance in
excess of the last 24 months of consumption and any inventory identified as obsolete.

Investment securities—The Company’s investment securities, primarily consisting of fixed income securities, are
classified as available-for-sale. The securities are recorded at fair market value and included in “Investments, short-term” in the
accompanying Consolidated Balance Sheets with changes in fair market value recorded in other comprehensive income, net of
tax. The purchases and sales of these investments are classified as investing activities in the Consolidated Statements of Cash
Flows.

9621_FIN_C3.pdf March 14, 2022 pg 45

Property and Depreciation—Property is recorded at cost. Depreciation is computed primarily using the straight-line

method over the estimated useful lives of the assets, generally as follows: buildings 20 to 40 years, and machinery and
equipment 3 to 10 years. Expenditures for significant renewals and improvements are capitalized. Ordinary repairs and
maintenance are expensed as incurred. Gains or losses on property dispositions are included in other (income) expense, net and
the cost and related accumulated depreciation are removed from the accounts. Depreciation expense for the years ended
December 31, 2021, 2020 and 2019 was $33.0 million, $27.7 million and $26.5 million, respectively. Properties, plant, and
equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such
assets or asset groups may not be recoverable.

Software Development Costs—Software development costs consist of costs incurred to create, enhance and deploy the

Company’s broad range of wireless technology and cloud-based computing safety services. Software development costs, other
than software development costs qualifying for capitalization, are expensed as incurred. Costs of computer software developed
or obtained for internal use that are incurred in the preliminary project and post implementation stages are expensed as incurred.
Certain costs incurred during the application and development stage, which primarily include compensation and related
expenses, are capitalized. Additionally, costs of upgrades and enhancements are capitalized when it is probable that the
upgrades and enhancements will result in added functionality. Capitalized costs are amortized through Cost of products sold
using the straight-line method over the estimated useful life, which is normally three years, beginning in the period in which the
software is ready for its intended use or when the upgrade or enhancement is deployed. During 2021, 2020 and 2019 there was
approximately $8.1 million, $8.2 million and $5.0 million, respectively, of software development costs capitalized.

Lessee Arrangements—At the inception of our contracts, we determine if the contract is or contains a lease. A contract is

or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. Right-of-use assets and operating lease liabilities are recognized based on the present value of lease payments
over the lease term at commencement. We use our incremental borrowing rate ("IBR") at the recognition date in determining
the present value of future payments for leases that do not have a readily determinable implicit rate. Our IBR reflects a fully
secured rate based on our credit rating, taking into consideration the repayment timing of the lease and any impacts due to the
economic environment in which the lease operates.

Our lease payments are largely fixed. Variable lease payments that depend on an index or a rate are included in the lease
payments and are measured using the prevailing index or rate at the measurement date, with differences between the calculated
lease payment and the actual lease payment being expensed in the period of the change. Other variable lease payments,
including utilities, consumption and common area maintenance as well as repairs, maintenance and mileage overages on
vehicles, are expensed during the period incurred. A majority of our real estate leases include options to extend the lease and
options to early terminate the lease. Leases with an early termination option generally involve a termination payment. If we are
reasonably certain to exercise an option to extend a lease, the extension period is included as part of the right-of-use asset and
the lease liability. Some of our leases contain residual value guarantees. These are guarantees made to the lessor that the value
of an underlying asset returned to the lessor at the end of a lease will be at least a specified amount. Our leases do not contain
restrictions or covenants that restrict us from incurring other financial obligations. For our leases, we have elected to not apply
the recognition requirements to leases of less than twelve months. These leases are expensed on a straight-line basis and are not
included within the Company's operating lease asset or liability.

Lease right-of-use assets and liabilities are recognized based on the present value of the fixed future lease payments over
the lease term. Operating leases are included in Operating lease right-of-use assets, net, Accrued restructuring and other current
liabilities, and Noncurrent operating lease liabilities in our Consolidated Balance Sheets. Finance leases are included in
Property, plant and equipment, net, Accrued restructuring and other current liabilities, and Product liability and other
noncurrent liabilities in our Consolidated Balance Sheets. Lease expense for all operating leases is classified in Cost of
products sold or Selling, general and administrative expense in the Consolidated Statements of Income. For finance leases, the
amortization of the right-of-use asset is included in depreciation and amortization, and the interest is included in interest
expense.

Lessor Arrangements—The Company derives a portion of its revenue from various leasing arrangements where the

Company is the lessor, primarily fire service contracts entered into by Bristol which was acquired in January 2021 (Note 14).
Such arrangements provide for monthly payments covering equipment provided, maintenance and interest. These arrangements
meet the criteria to be accounted for as sales-type leases under Accounting Standards Codification ("ASC") 842 and contain
both lease and non-lease components. For a component to be separate, the customer would be able to benefit from the right of
use of the component separately or with other resources readily available to the customer and the right of the use is not highly
dependent or highly interrelated with the other rights to use the other underlying assets or components.

Revenue from equipment provided is considered a lease component and recognized with point in time revenue
recognition upon lease commencement. Upon the recognition of such revenue, an asset is established for the investment in

9621_FIN_C3.pdf March 14, 2022 pg 46

sales-type leases. Maintenance revenue, which is considered a non-lease component, and interest are recognized monthly over
the lease term. Lease revenues and interest earned by the Company, included in the Consolidated Statements of Income, were
not material to any of the years ended December 31, 2021, 2020 and 2019.

Net investment in sales-type leases of $6.1 million and $27.2 million were included in Prepaid expenses and other current

assets and Insurance receivable and other noncurrent assets, respectively, in the Consolidated Balance Sheets as of December
31, 2021. The portion in Insurance receivable and other noncurrent assets at December 31, 2021 is expected to be collected
over the next eight years.

Goodwill and Other Intangible Assets—Intangible assets with a finite useful life are amortized on a straight-line basis

over their useful lives. Indefinite lived intangible assets are assessed for possible impairment annually on October 1st or
whenever circumstances change such that the recorded value of the asset may not be recoverable. We performed a quantitative
assessment of the indefinite lived trade name intangible asset as outlined in ASC 350 by comparing the estimated fair value of
the trade name intangible asset to its carrying value. We estimate the fair value using the relief from royalty income approach.
A number of assumptions and estimates are involved in the application of the relief from royalty model, including sales
volumes and prices, royalty rates and tax rates. Forecasts are based on sales generated by the underlying trade name assets and
are generally based on approved business unit operating plans for the early years and historical relationships in later years.
Based on these assessments, no impairments were identified during the years ended December 31, 2021, 2020 or 2019.

Goodwill is not amortized, but is subject to impairment assessments. On October 1st of each year, or more frequently if

indicators of impairment exist or if a decision is made to sell a business, we evaluate goodwill for impairment. Judgment is
involved in determining if an indicator of impairment has occurred. Such indicators may include a decline in expected cash
flows, a significant adverse change in the business climate, unanticipated competition, slower growth rates, or negative
developments in equity and credit markets, among others.

All goodwill is assigned to and evaluated for impairment at the reporting unit level, which is defined as an operating

segment or one level below an operating segment. The evaluation of impairment involves using either a qualitative or
quantitative approach as outlined in ASC Topic 350. In 2021, we performed a two-step quantitative test at October 1, 2021.
Step 1 of the quantitative testing involves comparing the estimated fair value of each reporting unit to its carrying value. We
estimate reporting unit fair value using a weighted average of fair values determined by discounted cash flow ("DCF") and
market approach methodologies, as we believe both are important indicators of fair value. A number of assumptions and
estimates are involved in the application of the DCF model, including sales volumes and prices, costs to produce, tax rates,
capital spending, discount rates, and working capital changes. Cash flow forecasts are generally based on approved reporting
unit operating plans for the early years and historical relationships in later years. The market approach methodology measures
value through an analysis of peer companies. The analysis entails measuring the multiples of earnings before interest, taxes,
depreciation and amortization ("EBITDA") at which peer companies are trading.

There has been no impairment of our goodwill during the years ended December 31, 2021, 2020 or 2019.

Revenue Recognition—We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with
Customers. Revenue from the sale of products is recognized when there is persuasive evidence of an arrangement and control
passes to the customer, which generally occurs either when product is shipped to the customer or, in the case of most U.S.
distributor customers, when product is delivered to the distributor's delivery site. We establish our shipping terms according to
local practice and market characteristics. We do not ship product unless we have an order or other documentation authorizing
shipment to our customers. Our payment terms vary by the type and location of our customer and the products offered. The
term between invoicing and when payment is due is not significant. Revenue is measured as the amount of consideration we
expect to receive in exchange for transferring goods or providing services. Amounts billed and due from our customers are
classified as receivables on the Consolidated Balance Sheets. We make appropriate provisions for credit losses which have
historically been insignificant in relation to our net sales. Certain contracts with customers, primarily distributor customers,
have an element of variable consideration that is estimated when revenue is recognized under the contract to the extent that it is
material to the individual contract. Variable consideration includes volume incentive rebates, performance guarantees, price
concessions and returns. Rebates are based on achieving a certain level of purchases and other performance criteria that are
documented in established distributor programs. These rebates are estimated based on projected sales to the customer and
accrued as a reduction of net sales as they are earned by the customer. The rebate accrual is reviewed monthly and adjustments
are made as the estimate of projected sales changes. Product returns, including an adjustment for restocking fees if it is
material, are estimated based on historical return experience and revenue is adjusted. Sales, value add and other taxes collected
with revenue-producing activities and remitted to governmental authorities are excluded from revenue.

Depending on the terms of the arrangement, we may defer revenue for which we have a future obligation, including
training, extended warranty, maintenance and technical services, until such time that the obligation has been satisfied. We use
an observable price, or a cost plus margin approach when one is not available, to determine the stand-alone selling price for

9621_FIN_C3.pdf March 14, 2022 pg 47

separate performance obligations. We have elected to recognize the cost for shipping and handling as an expense when control
of the product has passed to the customer. These costs are included within the Cost of products sold line on the Consolidated
Statements of Income. Amounts billed to customers for shipping and handling are included in net sales.

Product Warranties—Estimated expenses related to product warranties and additional service actions are charged to Cost

of products sold in the period in which the related revenue is recognized or when significant product quality issues are
identified.

Research and Development—Research and development costs are expensed as incurred.

Income Taxes—Deferred income taxes are recognized for temporary differences between financial and tax reporting.

Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled. If it is more likely than not that some portion or all of a deferred tax asset
will not be realized, a valuation allowance is recognized. We record tax benefits related to uncertain tax positions taken or
expected to be taken on a tax return when such benefits meet a more likely than not threshold. We recognize interest related to
unrecognized tax benefits in interest expense and penalties in operating expenses. Deferred taxes are booked for available cash
in excess of working capital for non-U.S. subsidiaries as these earnings are not considered to be permanently reinvested.

Stock-Based Compensation—We recognize expense for employee and non-employee director stock-based compensation

based on the grant date fair value of the awards. Except for retirement-eligible participants, for whom there is no requisite
service period, this expense is recognized ratably over the requisite service periods following the date of grant. For retirement-
eligible participants, this expense is recognized over an accelerated period of at least one year.

Derivative Instruments—We may use derivative instruments to minimize the effects of changes in currency exchange
rates. We do not enter into derivative transactions for speculative purposes and do not hold derivative instruments for trading
purposes. Changes in the fair value of derivative instruments designated as fair value hedges are recorded in the balance sheet
as adjustments to the underlying hedged asset or liability. Changes in the fair value of derivative instruments that do not qualify
for hedge accounting treatment are recognized in the Consolidated Statements of Income and Consolidated Statements of Cash
Flows as Currency exchange losses, net in the current period.

Commitments and Contingencies—For asserted claims and assessments, liabilities are recorded when a loss is deemed to

be probable and the amount of the loss is reasonably estimable. Management assesses the probability of an unfavorable
outcome with respect to asserted claims or assessments based on many factors such as the nature of the matter, available
defenses and case strategy, progress of the matter, views and opinions of legal counsel and other advisors, applicability and
success of appeals processes, and the outcome of similar historical matters, among others. Once an unfavorable outcome is
assessed to be probable, management evaluates estimates of the potential loss, and the most reasonable loss estimate is recorded
(or, if the estimate of the loss is a range, and no amount within the range is considered to be a better estimate than any other
amount, the minimum amount in the range is recorded). If a loss is deemed to be reasonably possible but less than probable and/
or such loss cannot be reasonably estimated, then the matter is disclosed and no liability is recorded.

With respect to unasserted claims or assessments, management first determines whether it is probable that a claim or
assessment may be asserted and then, if so, the degree of probability of an unfavorable outcome. If an unfavorable outcome is
probable, management assesses whether the amount of potential loss can be reasonably estimated and, if so, accrues the most
reasonable estimate of the loss (or, if the estimate of the loss is a range, and no amount within the range is considered to be a
better estimate than any other amount, the minimum amount in the range is recorded). If an unfavorable outcome is reasonably
possible but less than probable, or the amount of loss cannot be reasonably estimated, then the matter is disclosed and no
liability is recorded. Legal matters are reviewed on a continuous basis to determine if there has been a change in management’s
judgment regarding the likelihood and/or estimate of a potential loss. Please refer to Note 20 for further details on product
liability related matters.

Concentration of credit and business risks - We are exposed to credit risk in the event of nonpayment by customers,

principally in the oil, gas and petrochemical, fire service, construction, utilities, and mining industries. Changes in these
industries or other developments may significantly affect our financial performance and management's estimates. We mitigate
our exposure to credit risk by performing ongoing credit evaluations and, when deemed necessary, requiring letters of credit,
credit insurance, prepayments, guarantees or other collateral. No individual customer represented more than 10% of our sales
or receivables.

9621_FIN_C3.pdf March 14, 2022 pg 48

Note 2—Cash and Cash Equivalents

Several of the Company's affiliates participate in a notional cash pooling arrangement to manage global liquidity
requirements. As part of a master netting arrangement, the participants combine their cash balances in pooling accounts at the
same financial institution with the ability to offset bank overdrafts of one participant against positive cash account balances held
by another participant. Under the terms of the master netting arrangement, the financial institution has the right, ability and
intent to offset a positive balance in one account against an overdrawn amount in another account. Amounts in each of the
accounts are unencumbered and unrestricted with respect to use. As such, the net cash balance related to this pooling
arrangement is included in Cash and cash equivalents in the Consolidated Balance Sheets.

The Company's net cash pool position consisted of the following:

(In thousands)
Gross cash pool position

Less: cash pool borrowings

Net cash pool position

Note 3—Restructuring Charges

December 31, 2021
63,970
$

(58,008)

5,962

During the years ended December 31, 2021, 2020 and 2019, we recorded restructuring charges of $16.4 million, $27.4

million and $13.8 million, respectively. These charges were primarily related to our ongoing initiatives to drive profitable
growth and right size our operations.

Americas segment restructuring charges of $4.6 million during the year ended December 31, 2021, were primarily related

to integration related activities and costs associated with our global Fixed Gas & Flame Detection manufacturing footprint
optimization as well as programs to adjust our operations in response to current business conditions. International segment
restructuring charges of $11.2 million during the year ended December 31, 2021, were primarily related to our initiatives to
drive profitable growth and right size our operations. Corporate segment restructuring charges of $0.6 million during the year
ended December 31, 2021, were primarily related to programs to adjust our operations in response to current business
conditions.

A total of 143 positions were eliminated in 2021. There were 66 positions eliminated in the Americas segment, 71 in the

International segment and 6 in the Corporate segment.

Americas segment restructuring charges of $4.7 million during the year ended December 31, 2020, were primarily related

to costs associated with our global Fixed Gas & Flame Detection manufacturing footprint optimization as well as programs to
adjust our operations in response to current business conditions. International segment restructuring charges of $21.9 million
during the year ended December 31, 2020, were primarily related to severance costs for staff reductions and footprint
optimization associated with our ongoing initiatives to drive profitable growth. Corporate segment restructuring charges of
$0.8 million during the year ended December 31, 2020, were primarily related to programs to adjust our operations in response
to current business conditions.

A total of 121 positions were eliminated in 2020. There were 42 positions eliminated in the Americas segment and 76 in

the International segment 3 in the Corporate segment.

Americas segment restructuring charges of $0.5 million during the year ended December 31, 2019, were related to
severance costs for staff reductions in our Latin America Region. International segment restructuring charges of $12.7 million
during the year ended December 31, 2019, were primarily related to severance costs for staff reductions associated with our
ongoing initiatives to drive profitable growth and a non-cash settlement charge for the termination of our pension plan in the
United Kingdom. Corporate segment restructuring charges of $0.6 million during the year ended December 31, 2019, related
primarily to the legal and operational realignment of our U.S. and Canadian operations.

A total of 99 positions were eliminated in 2019. There were 12 positions were eliminated in the Americas segment and 87

in the International segment.

9621_FIN_C3.pdf March 14, 2022 pg 49

Activity and reserve balances for restructuring charges by segment were as follows:

(in millions)

Americas

International

Corporate

Total

Reserve balances at January 1, 2019

0.5 $

4.0 $

— $

Restructuring charges

Currency translation and other adjustments

Cash payments / utilization

0.5

(0.1)

(0.6)

12.7

(0.6)

(10.2)

0.6

—

(0.6)

Reserve balances at December 31, 2019

0.3 $

5.9 $

— $

Restructuring charges

Currency translation and other adjustments

Cash payments / utilization

4.7

(0.1)

(2.1)

Reserve balances at December 31, 2020

2.8 $

Restructuring charges

Currency translation and other adjustments

Cash payments / utilization

4.6

(0.1)

(4.0)

21.9

0.1

(8.6)

19.3 $

11.2

(0.2)

(12.9)

0.8

—

0.4 $

0.6

—

(0.7)

Reserve balances at December 31, 2021

3.3 $

17.4 $

0.3 $

4.5

13.8

(0.7)

(11.4)

6.2

27.4

—

22.5

16.4

(0.3)

(17.6)

21.0

(0.4)

(11.1)

Restructuring reserves at December 31, 2021 and 2020 are included in Accrued restructuring and other current liabilities in our
Consolidated Balance Sheets.

Note 4—Inventories

During the fourth quarter of 2021, the Company changed its method of accounting for certain inventory in the United

The following table sets forth the components of inventory:

(In thousands)
Finished products

Work in process

Raw materials and supplies

Total inventories

December 31,

2021

2020
As adjusted

87,657 $

6,534

186,426
280,617

81,048

2,618

161,300
244,966

9621_FIN_C3.pdf March 14, 2022 pg 50

As a result of the retrospective application of the change in accounting method, the following financial statement line

items within the accompanying consolidated financial statements were adjusted, as follows:

December 31, 2021

December 31, 2020

December 31, 2019

As
computed
under
LIFO1

As
reported
under
FIFO

Effect of
Change

As
originally
reported

As
Adjusted

Effect of
Change

As
originally
reported

As
Adjusted

Effect of
Change

$ 792,410 $ 784,834 $ (7,576) $ 757,775 $ 752,731 $ (5,044) $ 765,369 $ 763,352 $ (2,017)

$ 16,028 $ 23,604 $ 7,576 $ 163,103 $ 168,147 $ 5,044 $ 183,735 $ 185,752 $ 2,017

(40) $

1,816 $ 1,856 $ 41,941 $ 43,009 $ 1,068 $ 46,086 $ 46,545 $ 459

$ 16,068 $ 21,788 $ 5,720 $ 121,162 $ 125,138 $ 3,976 $ 137,649 $ 139,207 $ 1,558

$ 15,620 $ 21,340 $ 5,720 $ 120,101 $ 124,077 $ 3,976 $ 136,440 $ 137,998 $ 1,558

(In thousands, except per
share amounts)

Consolidated
Statements of
Income

Cost of products sold
Income before
income taxes
(Benefit) Provision
for income taxes
Net income

Net income
attributable to MSA
Safety Incorporated

Earnings per share

Basic

Diluted

0.39 $

0.54 $ 0.15 $

3.09 $

3.05 $

3.19 $ 0.10 $

3.15 $ 0.10 $

3.52 $

3.48 $

3.56 $ 0.04

3.52 $ 0.04

Consolidated
Statements of
Comprehensive
Income

Net income

$ 16,068 $ 21,788 $ 5,720 $ 121,162 $ 125,138 $ 3,976 $ 137,649 $ 139,207 $ 1,558

Total comprehensive
income attributable to
MSA Safety
Incorporated

Consolidated
Balance Sheets
Inventories
Deferred tax
liabilities
Retained earnings

Consolidated
Statements of Cash
Flows

Net income
Deferred income tax
(benefit) provision

$ 48,877 $ 54,597 $ 5,720 $ 151,707 $ 155,683 $ 3,976 $ 145,136 $ 146,694 $ 1,558

$ 225,894 $ 280,617 $ 54,723 $ 197,819 $ 244,966 $ 47,147

$ 21,637 $ 33,337 $ 11,700 $ 10,916 $ 20,760 $ 9,844

$ 1,007,191 $ 1,050,214 $ 43,023 $ 1,065,789 $ 1,103,092 $ 37,303

$ 16,068 $ 21,788 $ 5,720 $ 121,162 $ 125,138 $ 3,976 $ 137,649 $ 139,207 $ 1,558

$ (40,706) $ (38,850) $ 1,856 $

(3,322) $

(2,254) $ 1,068 $

1,272 $

1,731 $ 459

Inventories

$ (10,251) $ (17,827) $ (7,576) $

(8,601) $ (13,645) $ (5,044) $ (23,246) $ (25,263) $ (2,017)

1 Information presented as of and for the year ended December 31, 2021 reflect financial statement data had the LIFO
inventory accounting method been applied for the year ended December 31, 2021.

9621_FIN_C3.pdf March 14, 2022 pg 51

As a result of the retrospective application of the change in accounting principle, the following financial statement line

items within the unaudited interim 2021 and 2020 quarterly condensed consolidated financial statements were adjusted, as
follows:

(unaudited)

Three months ended

(In thousands, except per
share amounts)
Consolidated
Statements of Income

Cost of products sold
Income before income
taxes
Provision for income
taxes

Net income

Net income attributable
to MSA Safety
Incorporated

Earnings per share

Basic

Diluted

(unaudited)

(In thousands, except per
share amounts)
Consolidated
Statements of Income

Cost of products sold
Income before income
taxes
Provision for income
taxes

Net income

Net income attributable
to MSA Safety
Incorporated

Earnings per share

Basic

Diluted

March 31, 2021

June 30, 2021

September 30, 2021

As
originally
reported

As
adjusted

Effect of
Change

As
originally
reported

As
adjusted

Effect of
Change

As
originally
reported

As
adjusted

Effect of
Change

$173,688 $173,643

$(45)

$188,374 $188,289

$(85)

$194,199 $190,758 $(3,441)

$46,340

$46,385

$45

$35,171

$35,256

$85

$27,463

$30,904

$3,441

$9,740

$9,749

$36,600

$36,636

$36

$9,784

$9,808

$25,387

$25,448

$24

$61

$8,640

$9,724

$18,823

$21,180

$1,084

$2,357

$36,414

$36,450

$36

$25,125

$25,186

$61

$18,823

$21,180

$2,357

0.93 $

0.92 $

— $

0.64 $

— $

0.48 $

0.54 $

0.64 $

— $

0.48 $

0.54 $

0.06

Three months ended

March 31, 2020

June 30, 2020

September 30, 2020

As
originally
reported

As
adjusted

Effect of
Change

As
originally
reported

As
adjusted

Effect of
Change

As
originally
reported

As
adjusted

Effect of
Change

$183,786 $183,697

$(89)

$172,853 $172,693

$(160)

$172,160 $170,254 $(1,906)

$56,897

$56,986

$89

$47,824

$47,984

$160

$39,961

$41,867

$1,906

$13,095

$13,116

$43,802

$43,870

$21

$68

$11,429

$11,468

$36,395

$36,516

$39

$121

$11,727

$12,286

$559

$28,234

$29,581

$1,347

$43,674

$43,742

$68

$36,055

$36,176

$121

$28,034

$29,381

$1,347

1.12 $

1.11 $

— $

0.93 $

— $

0.72 $

0.75 $

0.92 $

— $

0.71 $

0.74 $

0.03

9621_FIN_C3.pdf March 14, 2022 pg 52

Note 5—Property, Plant, and Equipment

The following table sets forth the components of property, plant and equipment:

(In thousands)

Land

Buildings

Machinery and equipment

Construction in progress

Total

Less accumulated depreciation

Property, plant and equipment, net

December 31,

2021

2020

5,131 $

136,272

435,652

36,552

613,607

4,275

128,887

422,333

38,753

594,249

(405,814)

(404,629)

207,793 $

189,620

The Company has unamortized computer software costs of $15.7 million and $12.6 million as of December 31, 2021 and

2020, respectively, included in property, plant and equipment, net.

9621_FIN_C3.pdf March 14, 2022 pg 53

Note 6—Reclassifications Out of Accumulated Other Comprehensive Loss

(In thousands)
Pension and other post-retirement benefits(a)
Balance at beginning of period

MSA Safety Incorporated

Noncontrolling Interests

2021

2020

2019

2021

2020

2019

$ (115,552) $ (124,848) $ (115,517)

$ — $ — $ —

Unrecognized net actuarial gains (losses)

54,384

(6,322)

(19,479)

—

Tax (expense) benefit

(12,804)

1,997

5,847

—

Total other comprehensive gain (loss) before
reclassifications, net of tax
Amounts reclassified from accumulated other
comprehensive loss into net income:

41,580

(4,325)

(13,632)

—

Amortization of prior service credit (Note 15)

(95)

(216)

(180)

—

Recognized net actuarial losses (Note 15)

22,531

18,079

11,028

—

Tax benefit

(5,760)

(4,242)

(2,775)

—

Total amount reclassified from accumulated other
comprehensive loss, net of tax, into net income

Reclassification to retained earnings due to the
adoption of ASU 2018-02

16,676

13,621

8,073

—

(3,772)

—

Total other comprehensive income (loss)

$ 58,256 $

9,296 $

(9,331)

$ — $ — $ —

Balance at end of period
Available-for-sale securities
Balance at beginning of period

Unrealized (loss) gain on available-for-sale
securities (Note 19)
Balance at end of period
Foreign currency translation
Balance at beginning of period

Reclassification from accumulated other
comprehensive loss into net income(b)
Acquisition of noncontrolling interests in
consolidated subsidiaries
Foreign currency translation adjustments

$ (57,296) $ (115,552) $ (124,848)

$ — $ — $ —

(1) $

6 $

(572)

$ — $ — $ —

(4)

(5) $

(7)

(1) $

578

—

$ — $ — $ —

$ (66,844) $ (89,161) $ (102,838)

$ 372 $ 213 $ 286

267

—

216

—

15,261 (c)

—

(280) —

—

(25,262)

22,101

(1,584)

(92)

159

(73)

Balance at end of period
(a)Reclassifications out of accumulated other comprehensive loss and into net income are included in the computation of net
periodic pension and other post-retirement benefit costs (refer to Note 15—Pensions and Other Post-retirement Benefits).
(b)Included in Currency exchange losses, net, within the Consolidated Statements of Income.
(c)Reclassifications out of accumulated other comprehensive loss and into net income relate primarily to the approval of our
plan to close our South Africa affiliates.

$ (91,839) $ (66,844) $ (89,161)

$ — $ 372 $ 213

9621_FIN_C3.pdf March 14, 2022 pg 54

Note 7—Capital Stock

Preferred Stock - The Company has authorized 100,000 shares of $50 par value 4.5% cumulative preferred nonvoting
stock which is callable at $52.50. There are 71,340 shares issued at both December 31, 2021 and 2020 and 52,998 shares held
in treasury at both December 31, 2021 and 2020. The Treasury shares at cost line of the Consolidated Balance Sheet includes
$1.8 million related to preferred stock. There were no shares of preferred stock purchased and subsequently held in treasury
during the year ended December 31, 2021, and 120 shares of preferred stock purchased and subsequently held in treasury
during the year ended December 31, 2020. The Company has also authorized 1,000,000 shares of $10 par value second
cumulative preferred voting stock. No shares have been issued as of December 31, 2021 or 2020.

Common Stock - The Company has authorized 180,000,000 shares of no par value common stock. There were

62,081,391 shares issued as of both December 31, 2021 and December 31, 2020. There were 39,276,518 and 39,067,902 shares
outstanding at December 31, 2021 and 2020, respectively.

Treasury Shares - The Company's stock repurchase program authorizes up to $100.0 million to repurchase MSA
common stock in the open market and in private transactions. The share repurchase program has no expiration date. The
maximum number of shares that may be purchased is calculated based on the dollars remaining under the program and the
respective month-end closing share price. Under the program, there were no shares repurchased during 2021, 175,000 shares
repurchased during 2020 and 33,465 shares were repurchased during 2019. We do not have any other share repurchase
programs. There were 22,804,873 and 23,013,489 Treasury shares at December 31, 2021 and 2020, respectively.

The Company issues Treasury shares for all stock based benefit plans. Shares are issued from Treasury at the average

Treasury share cost on the date of the transaction. There were 246,376 and 471,681 Treasury shares issued for these purposes
during the years ended December 31, 2021 and 2020, respectively.

9621_FIN_C3.pdf March 14, 2022 pg 55

Common stock activity is summarized as follows:

(Dollars in thousands)
Balance at January 1, 2019

Restricted stock awards

Restricted stock expense

Restricted stock forfeitures

Stock options exercised

Stock option expense

Stock option forfeitures

Performance stock issued

Performance stock expense

Performance stock forfeitures

Stock consideration in acquisition

Employee stock purchase plan

Treasury shares purchased

Share repurchase program

Balances December 31, 2019
Restricted stock awards

Restricted stock expense

Restricted stock forfeitures

Stock options exercised

Stock option expense

Stock option forfeitures

Performance stock issued

Performance stock expense

Performance stock forfeitures

Employee stock purchase plan

Treasury shares purchased

Share repurchase program

Balances December 31, 2020
Restricted stock awards

Restricted stock expense

Restricted stock forfeitures

Stock options exercised

Stock option expense

Stock option forfeitures
Performance stock issued

Performance stock expense

Employee stock purchase plan

Treasury shares purchased
Acquisition of noncontrolling interests in consolidated
subsidiaries

Dollars

Issued

Treasury

Common
Stock

Treasury
Cost

62,081,391

(23,554,868) $

211,806 $ (296,390)

—

96,893

(1,253)

1,253

—

193,681

—

7,397

(483)

5,107

492

(5)

—

2,364

—

139,478

(1,778)

1,778

—

5,895

(87,811)

(33,465)

6,574

(215)

921

564

—

(9,301)

(3,347)

62,081,391

(23,240,197) $

229,127 $ (303,566)

—

55,691

—

274,672

—

(773)

7,065

(807)

8,590

153

(40)

773

—

3,856

—

134,824

(1,826)

1,826

—

6,494

(69,973)

(175,000)

1,305

(755)

654

—

(9,025)

(20,113)

62,081,391
—
—

(23,013,489) $
53,934
—

242,693 $ (326,156)
762
—

(762)
6,562

—

—
—

—

122,119

—
—

64,543

—

5,730

(37,710)

(765)

4,003

90
(9)

(939)

13,227

772

—

1,767

—
—

939

—

(6,171)

—

(4,751)

—

Balances December 31, 2021

62,081,391

(22,804,873) $

260,121 $ (328,776)

9621_FIN_C3.pdf March 14, 2022 pg 56

Note 8—Segment Information

The Company has four geographical operating segments that are based on management responsibilities: Northern North

America, Latin America, Europe, Middle East & Africa ("EMEA"), and Asia Pacific ("APAC"). The operating segments have
been aggregated (based on economic similarities, the nature of their products, end-user markets and methods of distribution)
into three reportable segments: Americas, International, and Corporate.

The Americas segment is comprised of our operations in North America and Latin America geographies. The

International segment is comprised of our operations in all geographies outside of the Americas. Certain global expenses are
allocated to each segment in a manner consistent with where the benefits from the expenses are derived.

The Company's sales are allocated to each segment based primarily on the country destination of the end-customer.

Adjusted operating income (loss), adjusted operating margin, adjusted EBITDA and adjusted EBITDA margin are the

measures used by the chief operating decision maker to evaluate segment performance and allocate resources. Adjusted
operating income (loss) is defined as operating income excluding restructuring charges, currency exchange gains (losses),
product liability expense, acquisition related costs and COVID-19 related costs, consisting of a one-time bonus for essential
manufacturing employees and adjusted operating margin is defined as adjusted operating income (loss) divided by segment
sales to external customers. Adjusted EBITDA is defined as adjusted operating income (loss) plus depreciation and
amortization and adjusted EBITDA margin is defined as adjusted EBITDA divided by segment sales to external customers.
Adjusted operating income (loss), adjusted operating margin, adjusted EBITDA and adjusted EBITDA margin are not
recognized terms under U.S. GAAP, and therefore, do not purport to be alternatives to operating income or operating margin as
a measure of operating performance. Further, the Company's measure of adjusted operating income (loss), adjusted operating
margin, adjusted EBITDA and adjusted EBITDA margin may not be comparable to similarly titled measures of other
companies. Adjusted operating income (loss) and adjusted EBITDA on a consolidated basis is presented in the following table
to reconcile the segment operating performance measure to operating income as presented on the Consolidated Statements of
Income.

The accounting principles applied at the operating segment level in determining operating income (loss) are generally the

same as those applied at the consolidated financial statement level. Sales and transfers between operating segments are
accounted for at market-based transaction prices and are eliminated in consolidation.

9621_FIN_C3.pdf March 14, 2022 pg 57

Reportable segment information is presented in the following table:

(In thousands)

2021

Net sales to external customers
Operating income
Restructuring charges (Note 3)
Currency exchange losses, net

Product liability expense (Note 20)
Acquisition related costs(a) (Note 14)
Adjusted operating income (loss)
Adjusted operating margin %
Depreciation and amortization
Adjusted EBITDA
Adjusted EBITDA margin %
Noncash items:

Pension (income) expense

Total Assets
Capital expenditures

2020

Net sales to external customers
Operating income
Restructuring charges (Note 3)
Currency exchange losses, net (Note 6)
Product liability expense (Note 20)
Acquisition related costs(a) (Note 14)
COVID-19 related costs
Adjusted operating income (loss)
Adjusted operating margin %
Depreciation and amortization
Adjusted EBITDA
Adjusted EBITDA margin %
Noncash items:

Pension expense

Total Assets
Capital expenditures

2019

Net sales to external customers
Operating income

Restructuring charges (Note 3)
Currency exchange losses, net (Note 6)
Product liability expense (Note 20)
Acquisition related costs(a) (Note 14)
Adjusted operating income (loss)
Adjusted operating margin %
Depreciation and amortization
Adjusted EBITDA
Adjusted EBITDA margin %
Noncash items:

Pension (income) expense

Total Assets
Capital expenditures

Americas

International

Corporate

Reconciling
Items(1)

Consolidated
Totals

$ 908,068

$ 492,114

— $

202,496

73,279

(35,198)

22.3 %

14.9 %

31,236
233,732

13,718
86,997

25.7 %

17.7 %

463
(34,735)

— $ 1,400,182
22,780
16,433
216

185,264
15,884
240,577

45,417
285,994

$ (2,916)
1,661,619
25,148

$ 5,790
720,257
11,408

— $

13,034
7,281

—
1,486
—

2,874
2,396,396
43,837

$ 874,305

$ 473,918

— $

205,304

71,140

(28,080)

— $ 1,348,223
171,895
27,381
8,578
39,036
717
757
248,364

—

23.5 %

15.0 %

26,762
232,066

12,521
83,661

26.5 %

17.7 %

391
(27,689)

—
—

39,674
288,038

$
910
1,273,302
43,181

$ 8,113
617,698
5,724

— $

29,761
—

— $

9,023
(1,130) 1,919,631
48,905

—

$ 915,118

$ 486,863

— $

— $ 1,401,981
188,247

13,846
19,814
26,619
4,400
252,926

38,020
290,946

—

—
—

228,512

60,011

(35,597)

25.0 %

12.3 %

24,691
253,203

12,938
72,949

27.7 %

15.0 %

$ (6,111)
1,171,896
26,823

$ 7,044
586,313
9,781

391
(35,206)

— $

22,367
—

1,220
—

— $

933
1,781,796
36,604

*Americas & International operating income, adjusted operating income (loss), adjusted operating margin %, adjusted
EBITDA, adjusted EBITDA margin % and segment assets in 2020 and 2019 were adjusted to reflect the change in
inventory accounting method, as described in Notes 1 and 4.

9621_FIN_C3.pdf March 14, 2022 pg 58

(a)Acquisition related costs include advisory, legal, accounting, valuation, and other professional or consulting fees
incurred during due diligence and integration. These costs are included in Selling, general and administrative expense in
the Consolidated Statements of Income. Acquisition-related costs also include the acquisition related amortization, which
is included in Cost of products sold in the Consolidated Statements of Income.
(1)Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating
segments.

Geographic information on Net sales to external customers, based on country of origin:

(In thousands)
United States

Other

Total

2021

2020

2019

746,825 $

750,315 $

785,155

653,357

597,908

616,826

$ 1,400,182 $ 1,348,223 $ 1,401,981

Geographic information on tangible long-lived assets, net, based on country of origin:

(In thousands)
United States

Other

Total

2021

2020

2019

155,667 $

134,234 $

113,528

102,304

108,837

105,185

257,971 $

243,071 $

218,713

9621_FIN_C3.pdf March 14, 2022 pg 59

Total Net sales by product group was as follows:

2021

(In thousands)

Breathing Apparatus
Fixed Gas & Flame Detection (a)
Firefighter Helmets & Protective Apparel (b)
Portable Gas Detection
Industrial Head Protection
Fall Protection
Other (c)
Total

2020

(In thousands)

Breathing Apparatus
Fixed Gas & Flame Detection
Firefighter Helmets & Protective Apparel
Portable Gas Detection
Industrial Head Protection
Fall Protection
Other (c)
Total

2019

(In thousands)

Breathing Apparatus
Fixed Gas & Flame Detection
Firefighter Helmets & Protective Apparel
Portable Gas Detection
Industrial Head Protection
Fall Protection
Other (c)
Total

Consolidated

Americas

International

Dollars
$ 322,412
299,018
203,914
162,761
143,601
117,731
150,745
$ 1,400,182

Percent
23%
21%
15%
12%
10%
8%
11%
100%

Dollars
$ 217,340
182,515
137,086
109,543
108,869
69,108
83,607
$ 908,068

Percent
24%
20%
15%
12%
12%
8%
9%
100%

Dollars
$ 105,072
116,503
66,828
53,218
34,732
48,623
67,138
$ 492,114

Percent
21%
24%
14%
11%
7%
10%
13%
100%

Consolidated

Americas

International

Dollars
$ 329,179
287,414
162,207
142,581
125,921
103,075
197,846
$ 1,348,223

Percent
24%
21%
12%
11%
9%
8%
15%
100%

Dollars
$ 220,650
158,924
133,653
90,545
92,075
58,060
120,398
$ 874,305

Percent
25%
18%
15%
10%
11%
7%
14%
100%

Dollars
$ 108,529
128,490
28,554
52,036
33,846
45,015
77,448
$ 473,918

Percent
23%
27%
6%
11%
7%
10%
16%
100%

Consolidated

Americas

International

Dollars
$ 317,678
292,988
178,012
169,479
145,403
125,869
172,552
$ 1,401,981

Percent
23%
21%
13%
12%
10%
9%
12%
100%

Dollars
$ 212,463
159,892
142,043
113,914
112,673
78,054
96,079
$ 915,118

Percent
23%
17%
16%
12%
12%
9%
11%
100%

Dollars
$ 105,215
133,096
35,969
55,565
32,730
47,815
76,473
$ 486,863

Percent
22%
27%
7%
11%
7%
10%
16%
100%

(a) Fixed Gas & Flame Detection include sales from the Bacharach acquisition from July 1, 2021 onward (Americas and
International).
(b) Firefighter Helmets & Protective Apparel include sales from the Bristol acquisition from January 25, 2021 onward
(International).
(c) Other products include sales of Air Purifying Respirators.

9621_FIN_C3.pdf March 14, 2022 pg 60

Note 9—Earnings per Share

Basic earnings per share is computed by dividing net income, after the deduction of preferred stock dividends and
undistributed earnings allocated to participating securities, by the weighted average number of common shares outstanding
during the period. Diluted earnings per share assumes the issuance of common stock for all potentially dilutive share
equivalents outstanding not classified as participating securities. Participating securities are defined as unvested stock-based
payment awards that contain nonforfeitable rights to dividends.

Amounts attributable to MSA Safety Incorporated common shareholders:
(In thousands, except per share amounts)
Net income

Preferred stock dividends

Net income available to common equity

Dividends and undistributed earnings allocated to participating securities

2021

2020

2019

21,340 $

124,077 $

137,998

(41)

(42)

21,299

124,036

137,956

(24)

(84)

(183)

Net income available to common shareholders

21,275 $

123,952 $

137,773

Basic weighted-average shares outstanding

Stock options and other stock-based awards

Diluted weighted-average shares outstanding

Antidilutive stock options

Earnings per share:

Basic

Diluted

39,173

276

39,449

—

38,885

401

39,286

—

38,653

536

39,189

—

0.54 $

3.19 $

3.15 $

3.56

3.52

* Year ended December 31, 2020 and 2019 amounts have been adjusted to reflect the change in inventory accounting method,
as described in Notes 1 and 4 to the consolidated financial statements.

Note 10—Income Taxes

(In thousands)
Components of income before income taxes

U.S. (loss) income

Non-U.S. income

Income before income taxes

Provision for income taxes

Current

Federal

State

Non-U.S.

Total current provision

Deferred

Federal

State

Non-U.S.

Total deferred (benefit) provision

Provision for income taxes

2021

2020

2019

(59,746) $

109,726 $

128,569

83,350

58,421

57,183

23,604 $

168,147 $

185,752

13,179 $
5,000

23,587 $
4,896

22,487

16,780

40,666 $

45,263 $

(29,631) $

(7,204)

(2,015)

(38,850)

(573) $

(579)

(1,102)

(2,254)

13,770
5,436

25,608

44,814

6,137

1,412

(5,818)

1,731

1,816 $

43,009 $

46,545

*Year ended December 31, 2020 and 2019 amounts have been adjusted to reflect the change in inventory accounting method,
as described in Notes 1 and 4 to the consolidated financial statements.

9621_FIN_C3.pdf March 14, 2022 pg 61

On June 10, 2021 the United Kingdom ("U.K.") Parliament announced royal assent for Bill No. 12, on the Finance Act of

2021. This bill will increase the statutory rate from 19% to 25% in April 2023. The Company recorded this impact on its
deferred tax balances in the second quarter of 2021.

Reconciliation of the U.S. federal income tax rates to our effective tax rate:

U.S. federal income tax rate

Nondeductible compensation

Valuation allowances

Employee share-based payments

Taxes on non-U.S. income

State income taxes-U.S.

Research and development credit

Foreign exchange on entity closures

Taxes on non-U.S. income - U.S., Canadian & European reorganization

2021

2020

2019

21.0 %

15.3 %

7.0 %

(18.3) %

(10.9) %

(7.0) %

(5.3) %

(0.4) %

— %

6.3 %

21.0 %

3.4 %

0.8 %

(3.9) %

2.6 %

2.0 %

(1.2) %

— %

0.7 %

0.2 %

1.9 %

0.4 %

(2.6) %

(0.5) %

2.9 %

(0.6) %

1.8 %

0.3 %

0.5 %

Other
Effective income tax rate

25.1 %
*Year ended December 31, 2020 and 2019 amounts have been adjusted to reflect the change in inventory accounting method,
as described in Notes 1 and 4 to the consolidated financial statements.

25.6 %

7.7 %

Components of deferred tax assets and liabilities:

(In thousands)
Deferred tax assets

Product liability

Capitalized research and development

Employee benefits

Net operating losses and tax credit carryforwards

Accrued expenses and other reserves

Share-based compensation

Other

Total deferred tax assets

Valuation allowances

Net deferred tax assets

Deferred tax liabilities

Goodwill and intangibles

Property, plant and equipment

Employee benefits

Inventory

Other

Total deferred tax liabilities

Net deferred taxes

December 31,

2021

2020

71,709 $

25,644

—

9,404

4,627

3,619

4,785

119,788

(8,812)

110,976

33,689

22,915

10,539

6,310

5,195

3,588

6,034

88,270

(7,188)
81,082

(79,285)

(39,040)

(17,088)

(14,649)

(8,985)

—

(1,264)

(10,591)

(2,434)

(1,897)

(109,056)

(66,177)

1,920 $

14,905

*December 31, 2020 amounts have been adjusted to reflect the change in inventory accounting method, as described in Notes 1
and 4 to the consolidated financial statements.

At December 31, 2021, we had net operating loss carryforwards of approximately $39.8 million. All net operating loss

carryforwards without a valuation allowance may be carried forward for a period of at least six years.

9621_FIN_C3.pdf March 14, 2022 pg 62

A reconciliation of the change in the tax liability for unrecognized tax benefits for the years ended December 31, 2021

and 2020 is as follows:

(In thousands)
Beginning balance

Adjustments for tax positions related to the current year

Adjustments for tax positions related to prior years

Settlements

Statute expiration

Ending balance

2021

2020

8,092 $

182

733

(3,211)

(859)

4,937 $

5,119

425

2,950

—

(402)

8,092

The total amount of unrecognized tax benefits, if recognized, would reduce our future effective tax rate. We have
recognized tax benefits associated with these liabilities in the amount of $2.5 million and $2.7 million at December 31, 2021
and 2020, respectively.

We recognize interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. Our

liability for accrued interest and penalties related to uncertain tax positions was $0.8 million and $1.0 million at December 31,
2021 and 2020, respectively.

We are subject to regular review and audit by both foreign and domestic tax authorities. While we believe our tax
positions will be sustained, the final outcome of tax audits and related litigation may differ materially from the tax amounts
recorded in our consolidated financial statements.

We file a U.S. federal income tax return along with various state and foreign income tax returns. Examinations of our

U.S. federal returns have been completed through 2018. Various state and foreign income tax returns may be subject to tax
audits for periods after 2015.

Note 11—Stock Plans

The 2016 Management Equity Incentive Plan provides for various forms of stock-based compensation for eligible key

employees through May 2026. Management stock-based compensation includes stock options, restricted stock, restricted stock
units and performance stock units. Additionally, 2019 amounts granted include outstanding Sierra Monitor Corporation awards
converted into MSA awards after the acquisition. See Note 14—Acquisitions for more information. The 2017 Non-Employee
Directors’ Equity Incentive Plan provides for grants of stock options and restricted stock to non-employee directors through
May 2027. Stock options are granted at market prices and expire after ten years. Stock options are exercisable beginning three
years after the grant date. Restricted stock and restricted stock units are granted without payment to the Company and generally
vest three years after the grant date. Restricted stock and restricted stock units are valued at the market value of the stock on the
grant date. Performance stock units with a market condition are valued at an estimated fair value using a Monte Carlo
simulation model. The final number of shares to be issued for performance stock units may range from zero to 200% of the
target award based on achieving the specified performance targets over the performance period and further range based upon
the achieved market metric over the performance period. In general, unvested stock options, restricted stock and performance
stock units are forfeited if the participant’s employment with the Company terminates for any reason other than retirement,
death or disability. We issue Treasury shares for stock option exercises and grants of restricted stock and performance stock.
Please refer to Note 7—Capital Stock for further information regarding stock compensation share issuance. As of December 31,
2021, there were 714,999 and 87,051 shares, respectively, reserved for future grants under the management and non-employee
directors’ equity incentive plans.

9621_FIN_C3.pdf March 14, 2022 pg 63

Stock-based compensation expense was as follows:

(In thousands)
Restricted stock units

Stock options

Performance stock units

Total stock-compensation expense before income taxes

Income tax benefit

2021

2020

2019

5,797 $

6,258 $

13,030

18,908

4,633

113

549

6,920

1,668

6,914

487

6,359

13,760

3,357

Total stock-compensation expense, net of income tax benefit

14,275 $

5,252 $

10,403

We did not capitalize any stock-based compensation expense, and all expense is recorded in selling, general and

administrative expense in 2021, 2020, and 2019.

The Company utilized the Black-Scholes valuation model for estimating the fair value of stock option expense with the

following weighted average assumptions. There were no stock options granted in 2021 or 2020.

Fair value per option

Risk-free interest rate

Expected dividend yield

Expected volatility

Expected life (years)

2019
$ 59.07

2.3 %

1.7 %

31 %

6.4

The risk-free interest rate is based on the U.S. Treasury yield curve. Expected dividend yield is based on the most recent
annualized dividend divided by the one year average closing share price. Expected volatility is based on the historical volatility
using daily stock prices. Expected life is based on historical stock option exercise data.

A summary of option activity follows:

Outstanding January 1, 2019

Granted

Exercised

Forfeited

Outstanding December 31, 2019

Exercised

Forfeited

Outstanding December 31, 2020

Exercised

Forfeited

Outstanding December 31, 2021

Weighted
Average
Exercise Price

Exercisable at
Year-end

735,001 $

23,285

(198,535)

(95)

559,656
(274,704)

(954)

283,998

(122,087)

(210)

161,701 $

43.79

43.54

38.16

49.19

45.78
45.31

42.00
46.23

47.25

43.75

45.47

552,682

281,593

161,347

9621_FIN_C3.pdf March 14, 2022 pg 64

For various exercise price ranges, characteristics of outstanding and exercisable stock options at December 31, 2021 were

as follows:

Range of Exercise Prices
$33.01 – $45.00

$45.01 – $57.93

$33.01 – $57.93

Range of Exercise Prices
$33.01 – $45.00

$45.01 – $57.93

$33.01 – $57.93

Stock Options Outstanding

Weighted-Average

Exercise Price

Remaining Life

126,985 $

34,716

161,701 $

44.46

49.18

45.47

2.04

2.79

2.20

Stock Options Exercisable

Weighted-Average

Exercise Price

Remaining Life

126,985 $

34,362

161,347 $

44.46

49.17

45.46

2.04

2.75

2.19

Cash received from the exercise of stock options was $5.8 million, $12.4 million and $7.5 million for the years ended

December 31, 2021, 2020 and 2019, respectively. The tax benefit we realized from these exercises was $4.3 million, $6.4
million and $4.8 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Stock options become exercisable when they are vested. The aggregate intrinsic value of stock options exercisable at
December 31, 2021 was $17.0 million. The aggregate intrinsic value of all stock options outstanding at December 31, 2021 was
$17.1 million.

9621_FIN_C3.pdf March 14, 2022 pg 65

A summary of restricted stock unit activity follows:

Unvested January 1, 2019

Granted

Vested

Forfeited

Unvested at December 31, 2019

Granted

Vested

Forfeited

Unvested at December 31, 2020

Granted

Vested

Forfeited

Unvested at December 31, 2021

A summary of performance stock unit activity follows:

Unvested at January 1, 2019

Granted

Vested

Performance adjustments

Forfeited

Unvested at December 31, 2019

Granted

Vested

Performance adjustments

Forfeited

Unvested at December 31, 2020

Granted

Vested

Performance adjustments

Unvested at December 31, 2021

Weighted Average
Grant Date
Fair Value

205,449 $

70,160

(97,253)

(5,655)

172,701

51,468

(70,399)

(7,579)

146,191

43,146

(65,225)

(5,769)

118,343 $

68.97

104.53

56.47

85.48

90.38

124.61

81.58

106.54

105.83

167.13

95.43

132.54

132.62

Weighted Average
Grant Date
Fair Value

218,886 $

83,819

(139,478)

76,960

(2,152)

238,035

67,479

(132,036)

33,499

(6,765)

200,212
52,309
(64,543)

5,357

193,335 $

68.43

101.03

44.75

44.24

99.82

85.39

127.48

73.00

72.36

111.60

104.69
175.59
85.41

88.45

129.86

The 2021 performance adjustments above relate primarily to 2018 performance unit awards that exceeded the
performance targets when vested during 2021, including the final number of shares issued, which were 105.4% of the target
award based on actual results during the three year performance period.

During the years ended December 31, 2021, 2020 and 2019, the total intrinsic value of stock options exercised (the
difference between the market price on the date of exercise and the option price paid to exercise the option) was $13.0 million,
$24.6 million and $14.6 million, respectively. The fair values of restricted stock vested during the years ended December 31,
2021, 2020 and 2019 were $6.2 million, $5.7 million and $5.5 million, respectively. The fair value of performance stock units
vested during the years ended December 31, 2021, 2020 and 2019 was $5.5 million, $9.6 million and $6.2 million, respectively.

On December 31, 2021, there was $12.6 million of unrecognized stock-based compensation expense. The weighted

average period over which this expense is expected to be recognized was approximately 1.6 years.

9621_FIN_C3.pdf March 14, 2022 pg 66

Note 12—Long-Term Debt

Long-Term Debt

(In thousands)
2010 Senior Notes payable through 2021, 4.00%, net of debt issuance costs

2016 Senior Notes payable through 2031, 3.40%, net of debt issuance costs
2021 Senior Notes payable through 2036, 2.69%, net of debt issuance costs

2021 Senior Notes payable through 2036, 2.69%, net of debt issuance costs

Senior revolving credit facility maturing in 2026, net of debt issuance costs

Total

Short-term debt

Long-term debt

December 31,

2021

2020

— $

74,203

99,694

324,060

597,651

—

20,000

74,926

—

212,231

307,157

20,000

597,651 $

287,157

On May 24, 2021, the Company entered into a Fourth Amended and Restated Credit Agreement (the “Revolving Credit
Facility" or "Facility”) that extended its term through May 24, 2026 and increased the capacity to $900.0 million. Under the
amended agreement, the Company may elect either a Base rate of interest (“BASE”) or an interest rate based on the London
Interbank Offered Rate (“LIBOR”). The BASE is a daily fluctuating per annum rate equal to the highest of (i) 0.00%, (ii) the
Prime Rate, (iii) the Federal Funds Open Rate plus one half of one percent (0.5%), (iv) the Overnight Bank Funding Rate, plus
one half of one percent (0.5%), or (v) the Daily LIBOR Rate plus one percent (1.00%). The Company pays a credit spread of 0
to 175 basis points based on the Company’s net EBITDA leverage ratio and elected rate (BASE or LIBOR). The Company has
a weighted average revolver interest rate of 1.22% as of December 31, 2021. At December 31, 2021, $572.4 million of the
existing $900.0 million senior revolving credit facility was unused, including letters of credit issued under the facility. The
facility also provides an accordion feature that allows the Company to access an additional $400.0 million of capacity pending
approval by MSA’s board of directors and from the bank group.

On July 1, 2021, the Company entered into a Third Amended and Restated Multi-Currency Note Purchase and Private
Shelf Agreement (the “Prudential Note Agreement”) with PGIM, Inc. (“Prudential”). The Prudential Note Agreement provided
for (i) the issuance of $100.0 million of 2.69% Series C Senior Notes due July 1, 2036 and (ii) the establishment of an
uncommitted note issuance facility whereby the Company may request, subject to Prudential’s acceptance in its sole discretion,
the issuance of up to $335.0 million aggregate principal amount of senior unsecured notes. As of December 31, 2021, the
Company had issued £54.9 million (approximately $74.3 million at December 31, 2021) of 3.4% Series B Senior Notes due
January 22, 2031. The Company also had issued $100.0 million of 4.00% Series A Senior Notes, of which the final
$20.0 million was repaid on October 13, 2021.

On July 1, 2021, the Company entered into a Second Amended and Restated Master Note Facility (the “NYL Note
Facility”) with NYL Investors. The NYL Note Facility provided for (i) the issuance of $100.0 million of 2.69% Series A
Senior Notes due July 1, 2036 and (ii) the establishment of an uncommitted note issuance facility whereby the Company may
request, subject to NYL Investors’ acceptance in its sole discretion, the issuance of up to $200.0 million aggregate principal
amount of senior unsecured notes.

The Revolving Credit Facility, Prudential Note Agreement and NYL Note Facility require the Company to comply with

specified financial covenants, including a requirement to maintain a minimum fixed charges coverage ratio of not less than 1.50
to 1.00 and a consolidated leverage ratio not to exceed 3.50 to 1.00; except during an acquisition period, defined as four
consecutive fiscal quarters beginning with the quarter of acquisition, in which case the consolidated net leverage ratio shall not
exceed 4.00 to 1.00; in each case calculated on the basis of the trailing four fiscal quarters. In addition, the agreements contain
negative covenants limiting the ability of the Company and its subsidiaries to incur additional indebtedness or issue guarantees,
create or incur liens, make loans and investments, make acquisitions, transfer or sell assets, enter into transactions with
affiliated parties, make changes in its organizational documents that are materially adverse to lenders or modify the nature of
the Company's or its subsidiaries' business. All credit facilities exclude the subsidiary, Mine Safety Appliances Company,
LLC.

On July 1, 2021, the Company acquired Bacharach for $329.4 million, net of cash acquired. The acquisition was partially
financed by $200.0 million of 2.69% Senior Notes from the Prudential Note Agreement and NYL Note Facility. The remaining
purchase price was financed under the Revolving Credit Facility.

9621_FIN_C3.pdf March 14, 2022 pg 67

During August 2021, the Company amended its Revolving Credit Facility to transition from Sterling LIBOR reference

rates to Sterling Overnight Interbank Average Rate ("SONIA") reference rates. The Company will apply the optional
expedients in ASC 848, Reference Rate Reform, to this modification and potential future modifications driven by reference rate
reform, accounting for the modifications as a continuation of the existing contracts. Therefore, these modifications will not
require remeasurement at the modification date or a reassessment of previous accounting determinations. As such, the
Company does not anticipate the change in reference rates will have an impact on the Company’s consolidated financial
statements. Management continues to evaluate the Company’s other outstanding U.S. LIBOR based contracts to determine
whether reference rate modifications are necessary.

As of December 31, 2021, MSA was in full compliance with the restrictive covenants under its various credit agreements.

Approximate maturities on our long-term debt over the next five years are none in 2022, $8.3 million in 2023,

$8.3 million in 2024, $8.3 million in 2025, $334.4 million in 2026 and $241.1 million thereafter.

The Company had outstanding bank guarantees and standby letters of credit with banks as of December 31, 2021, totaling

$10.9 million, of which $1.5 million relate to the senior revolving credit facility. The letters of credit serve to cover customer
requirements in connection with certain sales orders and insurance companies. The Company is also required to provide cash
collateral in connection with certain arrangements. At December 31, 2021, the Company has $0.5 million of restricted cash in
support of these arrangements.

Note 13—Goodwill and Intangible Assets

Changes in goodwill during the years ended December 31, 2021 and 2020, were as follows:

(In thousands)
Net balance at January 1

Additions and measurement period adjustments (Note 14)

Currency translation

Net balance at December 31

2021

2020

443,272 $

436,679

199,454

(5,868)

—

6,593

636,858 $

443,272

At December 31, 2021, goodwill of $448.7 million and $188.2 million related to the Americas and International

reportable segments, respectively.

Changes in intangible assets, net of accumulated amortization, during the years ended December 31, 2021 and 2020, were

as follows:

(In thousands)
Net balance at January 1

Additions (Note 14)

Amortization expense

Currency translation

Net balance at December 31

2021

2020

161,051 $

171,326

164,426
(16,814)

(1,715)
306,948 $

121
(11,570)

1,174
161,051

(In millions)

December 31, 2021

December 31, 2020

Weighted Average
Useful Life (years)

Gross
Carrying
Amount

Accumulated
Amortization
and Reserves

Net
Carrying
Amount

Gross
Carrying
Amount

Accumulated
Amortization
and Reserves

Net
Carrying
Amount

$ 185.7 $

(27.9) $ 157.8 $

59.7 $

(20.4) $

66.1

50.4

35.2

5.4

3.3

$ 346.1 $

(23.8)

(25.5)

(13.6)

(5.3)

42.3

24.9

21.6

0.1

66.4

30.2

19.4

5.4

(20.7)

(21.3)

(12.5)

(5.3)

(3.0)
0.3
(99.1) $ 247.0 $ 184.1 $

3.0

(2.8)
0.2
(83.0) $ 101.1

39.3

45.7

8.9

6.9

0.1

Intangible Assets:
Customer relationships

Distribution agreements

Technology related assets
Patents, trademarks and
copyrights
License agreements
Other
Total

9621_FIN_C3.pdf March 14, 2022 pg 68

At December 31, 2021, the above intangible assets balance includes a trade name related to the Globe acquisition with an

indefinite life totaling $60.0 million.

Intangible asset amortization expense over the next five years is expected to be approximately $20 million in 2022, $18

million in 2023 - 2025 and $17 million in 2026.

Note 14—Acquisitions

Acquisition of Bacharach

On July 1, 2021, we acquired 100% of the common stock of Bacharach in an all cash transaction valued at $329.4 million,

net of cash acquired.

Headquartered near Pittsburgh in New Kensington, PA, Bacharach is a leader in gas detection technologies used in the

heating, ventilation, air conditioning, and refrigeration ("HVAC-R") markets. This acquisition expanded MSA’s gas detection
portfolio and leverages MSA’s product and manufacturing expertise into new markets.

Bacharach's operating results are included in our consolidated financial statements from the acquisition date within the

Americas, International and Corporate reportable segments. The acquisition qualifies as a business combination and has been
accounted for using the acquisition method of accounting.

The following table summarizes the preliminary fair values of the Bacharach assets acquired and liabilities assumed at the

date of the acquisition:

(In millions)

Current assets (including cash of $11.7 million)

Property, plant and equipment and other noncurrent assets

Customer relationships

Developed technology

Trade name

Goodwill

Total assets acquired

Total liabilities assumed

Net assets acquired

July 1, 2021

32.1

4.7

123.0

20.5

15.0

194.5

389.8

(48.7)

341.1

The amounts in the table above are subject to change upon completion of the valuation of the assets acquired and

liabilities assumed. This valuation is expected to be completed by the second quarter of 2022.

Assets acquired and liabilities assumed in connection with the acquisition have been recorded at their preliminary fair
values. Fair values were determined by management, based in part on an independent valuation performed by a third party
valuation specialist. The valuation methods used to determine the fair value of intangible assets included the excess earnings
approach for customer relationships using customer inputs and contributory charges; the relief from royalty method for trade
name and developed technologies; and the cost method for assembled workforce which is included in goodwill. A number of
significant assumptions and estimates were involved in the application of these valuation methods, including forecasted sales
volumes and prices, royalty rates, costs to produce, tax rates, capital spending, discount rates, attrition rates and working capital
changes. Cash flow forecasts were generally based on Bacharach pre-acquisition forecasts, coupled with estimated MSA sales
synergies. Identifiable intangible assets with finite lives are subject to amortization over their estimated useful lives. The
customer relationships and trade name acquired in the Bacharach transaction will be amortized over a period of 21 years.
Estimated future amortization expense related to the identifiable intangible assets is approximately $9.0 million annually for
2022 through 2026, and $109.0 million thereafter. The step up to fair value of acquired inventory as part of the purchase price
allocation totaled $2.3 million. The amortization of the inventory step up was included in Cost of products sold in the
Consolidated Statements of Income.

9621_FIN_C3.pdf March 14, 2022 pg 69

Goodwill is calculated as the excess of the purchase price over the fair value of net assets acquired and represents the
future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.
Among the factors that contributed to a purchase price in excess of the fair value of the net tangible and intangible assets
acquired were the acquisition of an assembled workforce, the expected synergies and other benefits that we believe will result
from combining the operations of Bacharach with our operations. Goodwill of $194.5 million related to the Bacharach
acquisition has been recorded, with $155.6 million and $38.9 million allocated to the Americas reportable segment and
International reportable segment, respectively. This Goodwill is non-deductible for tax purposes.

Acquisition of Bristol Uniforms and Bell Apparel

On January 25, 2021, we acquired 100% of the common stock of B T Q Limited, including Bristol in an all-cash

transaction valued at $63.0 million, net of cash acquired.

Bristol, which is headquartered in the U.K., is a leading innovator and provider of protective apparel to the fire, rescue

services, and utility sectors. The acquisition strengthens MSA's position as a global market leader in fire service personal
protective equipment products, which include breathing apparatus, firefighter helmets, thermal imaging cameras, and firefighter
protective apparel, while providing an avenue to expand its business in the U.K. and key European markets. The fire service
equipment brands of MSA, which include Gallet Firefighter Helmets, the M1 and G1 Self-Contained Breathing Apparatus
range, Cairns Helmets, Globe Manufacturing, and now Bristol, represent more than 460 combined years of innovation in the
fire service industry, with a common mission: protecting the health and safety of firefighters. Bristol is also a leading
manufacturer of flame-retardant, waterproof, and other protective work wear for the utility industry. Marketed under the Bell
Apparel brand, this line complements MSA's existing and broad range of offerings for the global utilities market.

Bristol's operating results are included in our consolidated financial statements from the acquisition date as part of the

International reportable segment. The acquisition qualifies as a business combination and will be accounted for using the
acquisition method of accounting.

The following table summarizes the preliminary fair values of the Bristol assets acquired and liabilities assumed at the

date of the acquisition:

(In millions)

Current assets (including cash of $13.3 million)

Net investment in sales-type leases, noncurrent

Property, plant and equipment and other noncurrent assets

Customer relationships

Trade name and other intangible assets

Goodwill

Total assets acquired

Total liabilities assumed

Net assets acquired

January 25, 2021

37.1

29.0

12.0

4.5

1.4

4.9

88.9

(12.6)

76.3

The amounts in the table above are subject to change upon completion of the valuation of the assets acquired and

liabilities assumed. This valuation is expected to be completed in the first quarter of 2022.

9621_FIN_C3.pdf March 14, 2022 pg 70

Assets acquired and liabilities assumed in connection with the acquisition have been recorded at their preliminary fair
values. Fair values were determined by management, based in part on an independent valuation performed by a third party
valuation specialist. The valuation methods used to determine the fair value of intangible assets included the excess earnings
approach for customer relationships using customer inputs and contributory charges; the relief from royalty method for trade
name; and the cost method for assembled workforce which is included in goodwill. A number of significant assumptions and
estimates were involved in the application of these valuation methods, including forecasted sales volumes and prices, royalty
rates, costs to produce, tax rates, capital spending, discount rates, attrition rates and working capital changes. Cash flow
forecasts were generally based on Bristol pre-acquisition forecasts, coupled with estimated MSA sales synergies. Identifiable
intangible assets with finite lives are subject to amortization over their estimated useful lives. The customer relationships and
trade name acquired in the Bristol transaction will be amortized over a period of 15 years. Estimated future amortization
expense related to the identifiable intangible assets is approximately $0.5 million annually in 2022 and 2023, $0.4 million
annually during 2024 through 2026, and $3.5 million thereafter. The step up to fair value of acquired inventory as part of the
purchase price allocation totaled $1.5 million. The amortization of the inventory step up was included in Cost of products sold
in the consolidated statement of income.

Goodwill is calculated as the excess of the purchase price over the fair value of net assets acquired and represents the
future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.
Among the factors that contributed to a purchase price in excess of the fair value of the net tangible and intangible assets
acquired were the acquisition of an assembled workforce, the expected synergies and other benefits that we believe will result
from combining the operations of Bristol with our operations. Goodwill of $4.9 million related to the Bristol acquisition has
been recorded in the International reportable segment and is non-deductible for tax purposes.

The operating results of the Bristol and Bacharach acquisitions have been included in our consolidated financial

statements from their acquisition dates through December 31, 2021. Our results for the year ended December 31, 2021, include
net sales and net loss of $67.2 million and $6.3 million, respectively.

The following unaudited pro forma information presents our combined results as if the Bristol and Bacharach acquisitions
had occurred at the beginning of 2020. The unaudited pro forma financial information was prepared to give effect to events that
are (1) directly attributable to the acquisition; (2) factually supportable; and (3) expected to have a continuing impact on the
combined company's results. There were no material transactions between MSA and Bristol or Bacharach during the periods
presented that are required to be eliminated. The unaudited pro forma combined financial information does not reflect any cost
savings, operating synergies or revenue enhancements that the combined companies may achieve as a result of the acquisition
or the costs to integrate the operations or the costs necessary to achieve cost savings, operating synergies or revenue
enhancements.

Pro forma combined financial information (Unaudited)

(In millions, except per share amounts)

Net sales
Net income

Basic earnings per share
Diluted earnings per share

Year Ended December 31,

2021

2020

1,437.9 $
10.2

0.26
0.26

1,470.4
114.6

2.94
2.91

*Year ended December 31, 2020 amounts have been adjusted to reflect the change in inventory accounting method, as
described in Notes 1 and 4 to the consolidated financial statements.

The unaudited pro forma combined financial information is presented for information purposes only and is not intended to

represent or be indicative of the combined results of operations or financial position that we would have reported had the
acquisition been completed as of the date and for the periods presented, and should not be taken as representative of our
consolidated results of operations or financial condition following the acquisition. In addition, the unaudited pro forma
combined financial information is not intended to project the future financial position or result of operations of the combined
company.

The unaudited pro forma combined financial information was prepared using the acquisition method of accounting under

existing U.S. GAAP. MSA has been treated as the acquirer.

Our results include $7.1 million of Bristol and Bacharach transaction costs. Including transaction costs, total acquisition

related costs were $15.9 million, $0.7 million, and $4.4 million for the years ended December 31, 2021, 2020, and 2019. These
costs are reported in selling, general and administrative expenses.

9621_FIN_C3.pdf March 14, 2022 pg 71

Acquisition of Noncontrolling Interest

During July 2021, we purchased the remaining 10% noncontrolling interest in MSA (China) Safety Equipment Co., Ltd.

from our partner in China for $19.0 million, inclusive of a $5.6 million distribution.

Note 15—Pensions and Other Post-retirement Benefits

We maintain various defined benefit and defined contribution plans covering the majority of our employees. Our
principal U.S. plan is funded in compliance with the Employee Retirement Income Security Act ("ERISA"). It is our general
policy to fund current costs for the international plans, except in Germany and Mexico, where it is common practice and
permissible under tax laws to maintain an unfunded liability.

We provide health care benefits and limited life insurance for certain retired employees who are covered by our principal

U.S. defined benefit pension plan until they become Medicare-eligible.

9621_FIN_C3.pdf March 14, 2022 pg 72

Defined benefit pension plan and other post-retirement benefits plan information is provided in the following tables:

(In thousands)
Change in Benefit Obligations

Benefit obligations at January 1
Service cost
Interest cost
Participant contributions
Plan amendments
Actuarial (gains) losses(a)
Benefits paid
Curtailments
Settlements
Transfers(b)
Acquisitions
Currency translation
Benefit obligations at December 31

Change in Plan Assets

Fair value of plan assets at January 1
Actual return on plan assets
Employer contributions
Participant contributions
Acquisitions
Settlements
Benefits paid
Transfers(b)
Administrative expenses paid
Currency translation
Fair value of plan assets at December 31

Funded Status

Funded status at December 31
Unrecognized transition losses
Unrecognized prior service credit (cost)
Unrecognized net actuarial losses
Net amount recognized

Amounts Recognized in the Balance Sheets

Noncurrent assets
Current liabilities
Noncurrent liabilities
Net amount recognized

Amounts Recognized in Accumulated Other Comprehensive Loss

Net actuarial losses
Prior service cost (credit)
Unrecognized net initial obligation
Total (before tax effects)

Pension Benefits

Other Benefits

2021

2020

2021

2020

$ 670,857 $ 603,551 $

12,910
11,518
287
(243)
(10,277)
(25,117)
(439)
(3,190)
(19,312)
26,231
(8,863)

12,094
14,905
396
(430)

54,606
(24,496)
(1,559)
(506)
—
—
12,296

$ 654,362 $ 670,857 $

$ 586,822 $ 515,858 $

80,366
5,543
287
25,476
(1,365)
(25,117)
(19,312)
(67)
(647)

87,769
5,596
396
—
(506)
(24,496)

—
(172)
2,377

$ 651,986 $ 586,822 $

32,225 $
398
476
345
—
(1,518)
(3,021)
—
—
—
926
—
29,831 $

— $
—
2,676
345
—
—
(3,021)
—
—
—
— $

28,151
396
716
370
—
5,284
(2,692)
—
—
—
—
—
32,225

—
—
2,322
370
—
—
(2,692)
—
—
—
—

(2,376) $
—
1,186
95,674
94,484 $

(84,035) $

4
1,717
169,028
86,714 $

(29,831) $
—
(767)

13,570
(17,028) $

(32,225)
—
(1,125)
16,686
(16,664)

$ 163,283 $
(6,569)
(159,090)
(2,376) $

97,545 $
(6,600)
(174,980)
(84,035) $

— $
(2,739)
(27,092)
(29,831) $

—
(2,849)
(29,376)
(32,225)

95,674 $ 169,028 $
1,186
—

1,717
4

96,860 $ 170,749 $
$
$ 608,436 $ 619,167 $

13,570 $
(767)
—
12,803 $
— $

16,686
(1,125)
—
15,561
—

Accumulated Benefit Obligations for all Defined Benefit Plans
(a)Actuarial (gains) losses for both periods relate primarily to the increase/decrease in discount rates used in measuring plan
obligations as of December 31, 2021 and 2020, respectively.
(b)Transfers consist of Netherlands defined benefit plan conversion to a defined contribution plan.

9621_FIN_C3.pdf March 14, 2022 pg 73

(In thousands)
Components of Net Periodic Benefit Cost

Service cost

Interest cost

Expected return on plan assets

Amortization of transition amounts

Amortization of prior service cost (credit)

Recognized net actuarial losses

Settlement/curtailment (gain) loss
Net periodic benefit cost(a)

Pension Benefits

Other Benefits

2021

2020

2019

2021

2020

2019

$ 12,910 $ 12,094

$ 10,342

398 $

396 $

11,518

14,905

(37,368)

(34,029)

—

164

—

178

17,458

(2,234)

15,799
1,135 (b)

18,803

(38,644)

223

10,159
2,497 (c)
3,382

476

—

716

—

354

996

—

(358)

(394)

(405)

1,597

1,145

—

869

—

2,448 $ 10,082
(a) Components of net periodic benefit cost other than service cost are included in the line item Other income, net, and service
costs are included in the line items Cost of products sold and Selling, general and administrative in the Consolidated Statements
of Income.
(b) Relates primarily to the conversion of our Netherlands pension plan into a defined contribution plan and is included in
"Restructuring charges" on the Consolidated Statements of Income.
(c) Relates to the termination of our pension plan in the U.K. and is included in Restructuring charges on the Consolidated
Statements of Income.

$ 2,113 $ 1,863 $ 1,814

The Company utilizes a spot rate approach, which discounts the individual plan specific expected cash flows underlying
the service and interest cost using the applicable spot rates derived from a yield curve used in the determination of the benefit
obligation to the relevant projected cash flows. For plans where the discount rate is not derived from plan specific expected cash
flows, the Company uses a single weighted-average discount rate derived from the yield curve used to measure the projected
benefit obligation at the beginning of the period for measuring both the projected benefit obligations and the service and interest
cost components of net periodic benefit cost for pension and other post-retirement benefits.

Information for pension plans with an accumulated benefit obligation in excess of plan assets:

(In thousands)
Aggregate accumulated benefit obligations (ABO)

Aggregate fair value of plan assets

Pension Benefits

2021

2020

181,511 $

22,265

209,351

40,294

Information for pension plans with a projected benefit obligation in excess of plan assets:

(In thousands)
Aggregate projected benefit obligations (PBO)

Aggregate fair value of plan assets

Assumptions used to determine benefit obligations

Average discount rate

Rate of compensation increase

Assumptions used to determine net periodic benefit cost

Average discount rate - Service cost
Average discount rate - Interest cost
Expected return on plan assets
Rate of compensation increase

Pension Benefits

2021

2020

187,924 $

22,265

223,343

41,764

Pension Benefits

Other Benefits

2021

2020

2021

2020

2.70 %

4.58 %

2.80 %

1.69 %

7.13 %
2.90 %

2.28 %

2.93 %

3.08 %

2.52 %

7.10 %
2.93 %

2.66 %

2.91 %

2.42 %

1.48 %

—
3.00 %

2.21 %

3.00 %

2.42 %

1.48 %

—
3.00 %

9621_FIN_C3.pdf March 14, 2022 pg 74

Discount rates for all U.S. and foreign plans were determined using the aforementioned spot rate methodology for 2021

and 2020. Aside from sovereign bonds used in Mexico, the remaining plans' discount rates were determined using various
corporate bonds and by matching our projected benefit obligation payment stream to current yields on high quality bonds.

The expected return on assets for the 2021 net periodic pension cost was determined by multiplying the expected returns
of each asset class (based on capital market expectations) by the expected percentage of the total portfolio invested in that asset
class. A total return was determined by summing the expected returns over all asset classes.

Equity securities

Fixed income securities

Pooled investment funds

Insurance contracts

Cash and cash equivalents

Total

Pension Plan Assets at
December 31,

2021

2020

51 %

49 %

100 %

The overall objective of our pension investment strategy is to earn a rate of return over time to satisfy the benefit
obligations of the pension plans and to maintain sufficient liquidity to pay benefits and meet other cash requirements of our
pension funds. Investment policies for our primary U.S. pension plan are determined by the plan’s Investment Committee and
set forth in the plan’s investment policy. Asset managers are granted discretion for determining sector mix, selecting securities
and timing transactions, subject to the guidelines of the investment policy. An aggressive, flexible management of the portfolio
is permitted and encouraged, with shifts of emphasis among equities, fixed income securities and cash equivalents at the
discretion of each manager. No target asset allocations are set forth in the investment policy. For our non-U.S. pension plans,
our investment objective is generally met through the use of pooled investment funds and insurance contracts.

The fair values of the Company's pension plan assets are determined using NAV as a practical expedient, or by

information categorized in the fair value hierarchy level based on the inputs used to determine fair value, as further discussed in
Note 19—Fair Value Measurements.

The fair values at December 31, 2021, were as follows:

(In thousands)
Equity securities

Fixed income securities

Pooled investment funds

Insurance contracts

Cash and cash equivalents

Total

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

Fair Value

Significant
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total

NAV

329,795 $

66,897 $

262,898 $

— $

161,965
146,081

4,211

9,934

—
146,081

—

8,637

86,543
—

—

1,297

75,422
—

—

651,986 $

221,615 $

350,738 $

75,422 $

—

—
—

4,211

—

4,211

9621_FIN_C3.pdf March 14, 2022 pg 75

The fair values of the Company's pension plan assets at December 31, 2020, were as follows:

(In thousands)
Equity securities

Fixed income securities

Pooled investment funds

Insurance contracts

Cash and cash equivalents

Total

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

Fair Value

Significant
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total

NAV

283,516 $

66,847 $

216,669 $

— $

148,173

123,119

24,396

7,618

—

76,502

71,671

123,119

—

6,681

—

937

—

24,396

—

586,822 $

196,647 $

294,108 $

71,671 $

24,396

Equity securities consist primarily of publicly traded U.S. and non-U.S. common stocks. Equities are valued at closing

prices reported on the listing stock exchange.

Fixed income securities consist primarily of U.S. government and agency bonds and U.S. corporate bonds. Fixed income
securities are valued at closing prices reported in active markets or based on yields currently available on comparable securities
of issuers with similar credit ratings. When quoted prices are not available for identical or similar bonds, the bond is valued
under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar instruments, and may
include adjustments, for certain risks that may not be observable, such as credit and liquidity risks.

A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is
significant to the fair value measurement. Pooled investment funds consist of mutual and collective investment funds that
invest primarily in publicly traded equity and fixed income securities. Pooled investment funds are valued using the NAV
provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus
its liabilities, divided by the number of shares outstanding. The underlying securities are generally valued at closing prices
reported in active markets, quoted prices of similar securities, or discounted cash flows approach that maximizes observable
inputs such as current value measurement at the reporting date. These investments are not classified in the fair value hierarchy
in accordance with guidance in ASU 2015-07.

Insurance contracts are valued in accordance with the terms of the applicable collective pension contract. The fair value
of the plan assets equals the discounted value of the expected cash flows of the accrued pensions which are guaranteed by the
counterparty insurer.

Cash equivalents consist primarily of money market and similar temporary investment funds. Cash equivalents are

valued at closing prices reported in active markets.

The preceding methods may produce fair value measurements that are not indicative of net realizable value or reflective
of future fair values. Although we believe the valuation methods are appropriate and consistent with other market participants,
the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a
different fair value measurement at the reporting date.

The following table presents a reconciliation of Level 3 assets:

(In thousands)
Balance January 1, 2020

Net realized and unrealized losses

Net purchases, issuances and settlements
Balance December 31, 2020
Net realized and unrealized gains
Net purchases, issuances and settlements
Balance December 31, 2021

9621_FIN_C3.pdf March 14, 2022 pg 76

Insurance
Contracts

21,502

2,564

330

24,396

(881)

(19,304)

4,211

The following table presents amounts related to Level 3 assets recognized in accumulated other comprehensive loss:

(In thousands)
Net actuarial losses

Prior service cost

Total (before tax effects)

Insurance
Contracts

373

907

1,280

We expect to make net contributions of $7.7 million to our pension plans in 2022, which are primarily associated with

statutorily required plans in the International reporting segment.

For the 2021 beginning of the year measurement purposes (net periodic benefit expense), a 5.9% increase in the costs of
covered health care benefits was assumed, decreasing by 0.2% for each successive year to 4.5% in 2029 and thereafter. For the
2021 end of the year measurement purposes (benefit obligation), a 5.9% increase in the costs of covered health care benefits
was assumed, decreasing by approximately 0.2% for each successive year to 4.5% in 2030 and thereafter.

Expense for defined contribution pension plans was $11.7 million in 2021, $10.6 million in 2020 and $8.3 million in

2019.

Estimated pension benefits to be paid under our defined benefit pension plans during the next five years are $28.3 million

in 2022, $29.3 million in 2023, $29.6 million in 2024, $30.8 million in 2025 and $31.4 million in 2026, and an aggregated
$163.0 million for the five years thereafter. Estimated other post-retirement benefits to be paid during the next five years are
$2.7 million in 2022, $2.4 million in 2023, $2.4 million in 2024, $2.1 million in 2025, $2.1 million in 2026, and an aggregated
$10.2 million for the five years thereafter.

Note 16—Other Income, Net

(In thousands)
Components of net periodic benefit cost other than service cost (Note 15)

Interest income

Loss on asset dispositions, net

Other, net

Total other income, net

Year ended December 31,

2021

2020

2019

8,321 $

1,680 $

3,256

3,498

(788)

(236)

793

742

7,997

4,411

(371)

(943)

11,582 $

5,684 $

11,094

During the years ended December 31, 2021, 2020 and 2019, we recognized $3.3 million, $3.5 million and $4.4 million of

other income, respectively, related to interest earned on cash balances, short-term investments and notes receivables from
insurance companies. Please refer to Note 20—Contingencies for further discussion on the Company's notes receivables from
insurance companies.

9621_FIN_C3.pdf March 14, 2022 pg 77

Note 17—Leases

As a lessee, we have various operating lease agreements primarily related to real estate, vehicles and office and plant

equipment. The components of lease expense were as follows:

(In thousands, except percentage and year amounts)
Lease cost:

Operating lease cost recognized as rent expense

Total lease cost

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows related to operating leases

Non-cash other information:

Right-of-use assets obtained in exchange for new operating lease liabilities

Right-of-use assets obtained in acquisitions

Weighted-average remaining lease term (in years):

Operating leases

Weighted-average discount rate:

Operating leases

Year Ended December 31,

2021

2020

14,230

12,997

Other Information

14,440

13,476

21,857

4,795

10,737

—

December 31,

2021

2020

2.49 %

3.89 %

Rent expense was $14.2 million, $13.0 million and $13.4 million in 2021, 2020 and 2019, respectively. We did not have

any lease transactions with related parties. We did not have any significant leases not yet commenced.

At December 31, 2021, future lease payments under operating leases were as follows:

(In thousands)

2022

2023

2024
2025

2026

After 2026

Operating Leases

Less: Imputed interest

Present value of operating lease liabilities
Less: Current portion operating lease liabilities(a)
$
Noncurrent operating lease liabilities
(a) Included in Accrued restructuring and other current liabilities on the Consolidated Balance Sheet.

10,588

8,527

6,354
4,200

3,698

25,801

59,168

8,920

50,248

9,542

40,706

9621_FIN_C3.pdf March 14, 2022 pg 78

Note 18—Derivative Financial Instruments

As part of our currency exchange rate risk management strategy, we enter into certain derivative foreign currency

forward contracts that do not meet the U.S. GAAP criteria for hedge accounting but have the impact of partially offsetting
certain foreign currency exposures. We account for these forward contracts at fair value and report the related gains or losses in
currency exchange losses, net, in the Consolidated Statements of Income. At December 31, 2021, the notional amount of open
forward contracts was $99.0 million and there were no unrealized gains/losses on these contracts. All open forward contracts
will mature during the first quarter of 2022.

The following table presents the Consolidated Balance Sheets location and fair value of assets and liabilities associated

with derivative financial instruments:

(In thousands)
Derivatives not designated as hedging instruments:

Foreign exchange contracts: other current liabilities

Foreign exchange contracts: other current assets

December 31,

2021

2020

128 $

619 $

157

160

The following table presents the Consolidated Statements of Income location and impact of derivative financial

instruments:

Loss (Gain)
Recognized in Income

Year ended
December 31,

(In thousands)

Consolidated Statements of Income Location

2021

2020

Derivatives not designated as hedging instruments:

Foreign exchange contracts

Currency exchange losses, net

5,107 $

(7,457)

Note 19—Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value hierarchy consists of three broad levels, which
gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest
priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are:

Level 1—Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either

directly or indirectly.

Level 3—Unobservable inputs for the asset or liability.

The valuation methodologies we used to measure financial assets and liabilities were limited to the pension plan assets

described in Note 15—Pensions and Other Post-retirement Benefits and the derivative financial instruments described in Note
18—Derivative Financial Instruments. See Note 15 for the fair value hierarchy classification of pension plan assets. We
estimate the fair value of the derivative financial instruments, consisting of foreign currency forward contracts, based upon
valuation models with inputs that generally can be verified by observable market conditions and do not involve significant
management judgment. Accordingly, the fair values of the derivative financial instruments are classified within Level 2 of the
fair value hierarchy. With the exception of our investments in marketable securities and fixed rate long-term debt both as
disclosed below, we believe that the reported carrying amounts of our remaining financial assets and liabilities approximate
their fair values.

9621_FIN_C3.pdf March 14, 2022 pg 79

We value our investments in available-for-sale marketable securities, primarily fixed income, at fair value using quoted

market prices for similar securities or pricing models. Accordingly, the fair values of the investments are classified within
Level 2 of the fair value hierarchy. The amortized cost basis of our investments was $49.0 million and $74.9 million as of
December 31, 2021, and 2020, respectively. The fair value of our investments was $49.0 million and $75.0 million as of
December 31, 2021, and 2020, respectively, which was reported in Investments, short-term in the accompanying Consolidated
Balance Sheets. The change in fair value is recorded in other comprehensive income, net of tax. The Company does not intend
to sell, nor is it more likely than not that we will be required to sell, these securities prior to recovery of their cost, as such,
management believes that any unrealized gains or losses are temporary; therefore, no impairment gains or losses relating to
these securities have been recognized. All investments in marketable securities have maturities of one year or less and are
currently in an unrealized loss position as of December 31, 2021.

The reported carrying amount of fixed rate long-term debt (including the current portion) was $274.3 million and $95.0

million at December 31, 2021, and 2020, respectively. The fair value of this debt was $279.8 million and $113.0 million at
December 31, 2021, and 2020, respectively. The fair value of this debt was determined using Level 2 inputs by evaluating like
rated companies with publicly traded bonds where available or current borrowing rates available for financings with similar
terms and maturities.

Note 20—Contingencies

Product liability

The Company and its subsidiaries face an inherent business risk of exposure to product liability claims arising from the

alleged failure of our products to prevent the types of personal injury or death against which they are designed to protect.
Product liability claims are categorized as either single incident or cumulative trauma.

Single incident product liability claims. Single incident product liability claims involve incidents of short duration that

are typically known when they occur and involve observable injuries, which provide an objective basis for quantifying
damages. Management has established reserves for the single incident product liability claims of its various subsidiaries,
including, asserted single incident product liability claims and incurred but not reported ("IBNR") single incident claims. To
determine the reserves, Management makes reasonable estimates of losses for single incident claims based on the number and
characteristics of asserted claims, historical experience, sales volumes, expected settlement costs, and other relevant
information. The reserve for single incident product liability claims was $1.4 million at both December 31, 2021 and
December 31, 2020. Single incident product liability expense was nominal for the year ended December 31, 2021 compared to
a benefit of $1.7 million and $0.5 million for the years ended December 31, 2020 and 2019, respectively. Single incident
product liability exposures are evaluated on an annual basis, or more frequently if changing circumstances warrant.
Adjustments are made to the reserve as appropriate. The reserve has not been discounted to present value and does not include
future amounts which will be spent to defend the claims.

Cumulative trauma product liability claims. Cumulative trauma product liability claims involve alleged exposures to

potentially harmful substances (e.g., silica, asbestos and coal dust) that occurred years ago and may have developed over long
periods of time into diseases such as silicosis, asbestosis, mesothelioma, or coal worker’s pneumoconiosis. One of the
Company's affiliates, Mine Safety Appliances Company, LLC ("MSA LLC"), was named as a defendant in 1,675 lawsuits
comprised of 4,554 claims as of December 31, 2021. These lawsuits mainly involve respiratory protection products allegedly
manufactured and sold by MSA LLC or its predecessors. The product models alleged were manufactured many years ago by
MSA LLC and are no longer sold.

9621_FIN_C3.pdf March 14, 2022 pg 80

A summary of asserted cumulative trauma product liability lawsuits and claims activity is as follows:

Open lawsuits, beginning of period

New lawsuits

Settled and dismissed lawsuits

Open lawsuits, end of period

Asserted claims, beginning of period
New claims
Settled, inactive and dismissed claims
Asserted claims, end of period

2021

2020

2019

1,622

432

1,605

402

(379)

(385)

1,675

1,622

1,481

346

(222)

1,605

2021

2020

2019

2,878
2,134

(458)
4,554

2,456
917

(495)
2,878

2,355
486

(385)
2,456

The increases in the number of claims in 2020 and in 2021 are largely the result of an increase in claims alleging injuries

from exposure to coal dust, including claims brought by plaintiffs' counsel with which MSA LLC does not have substantial
prior experience.

Management has established a reserve for MSA LLC's potential exposure to cumulative trauma product liability claims.
MSA LLC's total cumulative trauma product liability reserve was $409.8 million, including $2.5 million for claims settled but
not yet paid and related defense costs, as of December 31, 2021 and $221.5 million, including $7.8 million for claims settled
but not yet paid and related defense costs, as of December 31, 2020. The reserve includes estimated amounts related to asserted
and IBNR asbestos, silica, and coal dust claims expected to be resolved through the year 2074. The reserve has not been
discounted to present value and does not include future amounts which will be spent to defend the claims. Defense costs are
recognized in the Consolidated Statements of Income as incurred.

At December 31, 2021, $46.7 million of the total reserve for cumulative trauma product liability claims is recorded in the
Insurance and product liability line within other current liabilities in the Consolidated Balance Sheet and the remainder, $363.1
million, is recorded in the Product liability and other noncurrent liabilities line. At December 31, 2020, $35.3 million of the
total reserve for cumulative trauma product liability claims is recorded in the Insurance and product liability line within other
current liabilities in the Consolidated Balance Sheet and the remainder, $186.2 million, is recorded in the Product liability and
other noncurrent liabilities line.

Total cumulative trauma liability losses were $228.2 million, $77.8 million, and $36.1 million for the years ended
December 31, 2021, 2020 and 2019, respectively, and related to updates to our cumulative trauma product liability reserve in
each year as well as the defense of cumulative trauma product liability claims. Uninsured cumulative trauma product liability
losses, which were included in Product liability and other operating expense on the Consolidated Statements of Income for the
years ended December 31, 2021, 2020 and 2019, were $185.3 million, $39.0 million and $27.1 million, respectively, and
represent the total cumulative trauma product liability losses net of any estimated insurance receivables as discussed below.

MSA LLC's cumulative trauma product liability reserve is based upon a reasonable estimate of MSA LLC’s current and

potential future liability for cumulative trauma product liability claims, in accordance with applicable accounting principles. To
develop a reasonable estimate of MSA LLC’s potential exposure to cumulative trauma product liability claims, management
performs an annual comprehensive review of MSA LLC’s cumulative trauma product liability claims in consultation with an
outside valuation consultant and outside legal counsel. The review process takes into account MSA LLC’s historical claims
experience, developments in MSA LLC’s claims experience over the past year, developments in the tort system generally, and
any other relevant information. Quarterly, management and outside legal counsel review whether significant new developments
have occurred which could materially impact recorded amounts, and if warranted, management reviews changes with an outside
valuation consultant. Adjustments to the reserve for the year ended December 31, 2021 totaled $219.0 million. These
adjustments were largely a result of newly filed claims experienced during the year and in particular, the number of newly filed
coal claims, which were well in excess of historical experience. Numerous additional factors, data points, and developments
were analyzed during the annual review process.

9621_FIN_C3.pdf March 14, 2022 pg 81

The estimate of MSA LLC’s potential liability for cumulative trauma product liability claims, and the corresponding
reserve, are based upon numerous assumptions derived from MSA LLC’s historical experience. Those assumptions include the
incidence of applicable diseases in the general population, the number of claims that may be asserted against MSA LLC in the
future, the years in which such claims may be asserted, the counsel asserting those claims, the percentage of claims resolved
through settlement, the types and severity of illnesses alleged by claimants to give rise to their claims, the venues in which the
claims are asserted, and numerous other factors, which influence how many claims may be brought against MSA LLC, whether
those claims ultimately are resolved for payment, and at what values.

Cumulative trauma product liability litigation is inherently unpredictable and MSA LLC's expense with respect to
cumulative trauma product liability claims could vary significantly in future periods. It is difficult to reasonably estimate how
many claims will be newly asserted against MSA LLC in any given period or over the lifetime of MSA LLC's claims
experience, particularly for coal dust claims. Case solicitation and filing activity, in our experience, is unique to each plaintiffs’
counsel and also influenced by external factors. Once asserted it is unclear at the time of filing whether a claim will be actively
litigated, or the extent of ultimate loss, if any, in the absence of discovery at initial case stages. Even when a case is actively
litigated, it is often difficult to determine if the lawsuit will be dismissed without payment or settled, because of sufficiency of
product identification, statute of limitations challenges, or other defenses. This difficulty is increased when claims are asserted
by plaintiffs’ counsel with which MSA LLC does not have substantial prior experience, as claims experience can vary
significantly among different plaintiffs' counsel. As a result of all of these factors, it is typically unclear until late into litigation
the extent of loss that will be experienced on account of any particular claim, or inventories of claims. Actual loss amounts for
settled claims are highly variable and turn on a case-by-case analysis of the relevant facts. As more information is learned about
asserted claims and potential future trends, adjustments may be made to the cumulative trauma product liability reserve as
appropriate.

As a result of such uncertainties, MSA LLC’s actual claims experience may differ in one or more respects from the
assumptions used in establishing the reserve, and there can be no assurance that the actuarial models employed will accurately
predict future experience. MSA LLC’s experience in future periods may vary from the reserve currently established, and MSA
LLC may ultimately incur losses in excess of presently recorded liabilities. Any adjustments as a result of this experience could
materially impact our consolidated financial statements in future periods.

Insurance Receivable and Notes Receivable, Insurance Companies

Many years ago, MSA LLC purchased insurance policies from various insurance carriers that, subject to common contract

exclusions, provided coverage for cumulative trauma product liability losses (the "Occurrence-Based Policies"). While we
continue to pursue reimbursement under certain remaining Occurrence-Based Policies, the vast majority of these policies have
been exhausted, settled or converted into either (1) negotiated settlement agreements with scheduled payment streams (recorded
as notes receivables) or (2) negotiated Coverage-in-Place Agreements (recorded as insurance receivables). As a result, MSA
LLC is largely self-insured for cumulative trauma product liability claims, and additional amounts recorded as insurance
receivables or notes receivables will be limited.

When adjustments are made to amounts recorded in the cumulative trauma product liability reserve, we calculate amounts

due to be reimbursed pursuant to the terms of the negotiated Coverage-In-Place Agreements, including cumulative trauma
product liability losses and related defense costs, and we record the amounts probable of reimbursement as insurance
receivables. These amounts are not subject to current coverage litigation.

Insurance receivables at December 31, 2021 totaled $130.2 million, of which $8.6 million is reported in Prepaid expenses

and other current assets in the Consolidated Balance Sheet and $121.6 million is reported in Insurance receivable and other
noncurrent assets. Insurance receivables at December 31, 2020 totaled $97.0 million, of which $12.0 million was reported in
Prepaid expenses and other current assets in the Consolidated Balance Sheet and $85.0 million was reported in Insurance
receivable and other noncurrent assets. The vast majority of the $130.2 million insurance receivables balance at December 31,
2021, is attributable to reimbursement believed to be due under the terms of signed Coverage-In-Place Agreements and a
portion of this amount represents the estimated recovery of IBNR amounts not yet incurred.

9621_FIN_C3.pdf March 14, 2022 pg 82

A summary of insurance receivables balance and activity related to cumulative trauma product liability losses is as

follows:

(In millions)
Balance beginning of period

Additions

Collections

Balance end of period

2021

2020

97.0 $

43.5

(10.3)

130.2 $

63.8

39.0

(5.8)

97.0

We record formal notes receivables due from scheduled payment streams according to negotiated settlement agreements

with insurers. These amounts are not subject to current coverage litigation.

Notes receivable from insurance companies at December 31, 2021 totaled $48.5 million, of which $3.9 million is reported

in Notes receivable, insurance companies, current on the Consolidated Balance Sheet and $44.6 million is reported in Notes
receivable, insurance companies, noncurrent. Notes receivable from insurance companies at December 31, 2020, totaled $52.3
million, of which $3.8 million was reported in Notes receivable, insurance companies, current on the Consolidated Balance
Sheet and $48.5 million was reported in Notes receivable, insurance companies, noncurrent.

A summary of notes receivables from insurance companies balance is as follows:

(In millions)
Balance beginning of period

Additions

Collections

Balance end of period

December 31,

2021

2020

52.3 $

1.3

(5.1)

48.5 $

56.0

1.4

(5.1)

52.3

The vast majority of the insurance receivables balances at both December 31, 2021 and 2020, is attributable to

reimbursement under the terms of signed agreements with insurers and is not currently subject to litigation. The collectability
of MSA LLC's insurance receivables and notes receivables is regularly evaluated and the Company believes that the amounts
recorded are probable of collection. The determination that the recorded insurance receivables are probable of collection is
based on the terms of the settlement agreements reached with the insurers, our history of collection, and the advice of MSA
LLC's outside legal counsel and consultants. Various factors could affect the timing and amount of recovery of the insurance
and notes receivables, including assumptions regarding various aspects of the composition and characteristics of future claims
(which are relevant to calculating reimbursement under the terms of certain Coverage-In-Place Agreements) and the extent to
which the issuing insurers may become insolvent in the future.

Other Litigation

Two subsidiaries of the Company, Globe Manufacturing Company, LLC ("Globe") and MSA LLC, are defending a small

number of lawsuits in which plaintiffs assert that certain of those entities’ products allegedly containing per- and
polyfluoroalkyl substances (“PFAS”) have caused injury, health issues, or environmental issues. PFAS are a large class of
substances that are widely used in everyday products. Specifically, Globe builds turnout gear from technical fabrics sourced
from a small pool of specialty textile manufacturers. These protective fabrics have been tested and certified to meet industry
standards, and some of them contain PFAS to achieve water, oil, or chemical resistance. No manufacturer of firefighter
protective clothing is able to meet current National Fire Protection Association safety standards while offering coats or pants
that are completely PFAS free.

Globe and MSA LLC believe they have valid defenses to these lawsuits. These matters are at a very early stage with

numerous factual and legal issues to be resolved. Defense costs relating to these lawsuits are recognized in the Consolidated
Statement of Income as incurred. Globe and MSA LLC are also pursuing insurance coverage and indemnification related to the
lawsuits.

Product Warranty

The Company provides warranties on certain product sales. Product warranty reserves are established in the same period

that revenue from the sale of the related products is recognized, or in the period that a specific issue arises as to the functionality
of the Company's product. The determination of such reserves requires the Company to make estimates of product return rates
and expected costs to repair or to replace the products under warranty.

9621_FIN_C3.pdf March 14, 2022 pg 83

The amounts of the reserves are based on established terms and the Company's best estimate of the amounts necessary to

settle future and existing claims on products sold as of the balance sheet date. If actual return rates and/or repair and
replacement costs differ significantly from estimates, adjustments to recognize additional cost of sales may be required in future
periods.

The following table reconciles the changes in the Company's accrued warranty reserve:

(In thousands)
Beginning warranty reserve

Warranty payments

Warranty claims

Provision for product warranties and other adjustments

Ending warranty reserve

December 31,

2021

2020

2019

11,428 $

(8,987)

10,225

(243)
12,423 $

12,715 $

(10,861)

10,233

(659)
11,428 $

14,214

(12,664)

12,033

(868)
12,715

Warranty expense for the years ended December 31, 2021, 2020 and 2019 was $10.0 million, $9.6 million and $11.2

million, respectively and is included in Costs of products sold on the Consolidated Statements of Income.

Note 21—Quarterly Financial Information (Unaudited)

(In thousands, except per share amounts)
Net sales

Quarters

2021

3rd

1st

2nd

4th

Year

$ 308,428 $ 341,289 $ 340,197 $ 410,268 $ 1,400,182

Gross profit
Net income (loss) attributable to MSA Safety Incorporated

134,785

153,000

149,439

178,124

615,348

36,450

25,186

21,180

(61,476)

21,340

Earnings (loss) per share(1)
Basic

Diluted

(In thousands, except earnings per share)
Net sales

Gross profit

Net income attributable to MSA Safety Incorporated

Earnings per share(1)
Basic

Diluted

0.93 $

0.64 $

0.54 $

(1.57) $

0.92

0.64

0.54

(1.57)

0.54

Quarters

2020

3rd

1st

2nd

4th

Year

$ 341,145 $ 314,438 $ 304,392 $ 388,248 $ 1,348,223

157,448
43,742

141,745
36,176

134,138
29,381

162,161
14,778

595,492
124,077

1.12 $

0.93 $

0.75 $

0.39 $

1.11

0.92

0.74

0.38

3.19

3.15

*Certain amounts have been adjusted to reflect the retrospective application of the Company's change in inventory accounting
method, as described in Notes 1 and 4 to the consolidated financial statements.
(1) Per share amounts are calculated independently for each period presented; therefore, the sum of the quarterly per share
amounts may not equal the per share amounts for the year.

9621_FIN_C3.pdf March 14, 2022 pg 84

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. Based on their evaluation as of the end of the period covered by

this Form 10-K, the Company’s principal executive officer and principal financial officer have concluded that the Company’s
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the
“Exchange Act”)) are effective to ensure that information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including
the principal executive officer and principle financial officer, as appropriate to allow timely decisions regarding required
disclosure.

Management has excluded B T Q Limited ("Bristol") and Bacharach, Inc. ("Bacharach") from its assessment of internal
control over financial reporting as of December 31, 2021 because they were acquired by the Company in a purchase business
combination in the first and third quarters of 2021, respectively. Both entities are wholly-owned by MSA.

(b) Changes in internal control. There were no changes in the Company’s internal control over financial reporting that
occurred during the Company’s most recent fiscal quarter, that have materially affected, or are reasonably likely to materially
affect, the Company’s internal control over financial reporting.

See Item 8. Financial Statements and Supplementary Data—“Management’s Report on Internal Control Over Financial

Reporting” and “Report of Independent Registered Public Accounting Firm.”

Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

9621_FIN_C3.pdf March 14, 2022 pg 85

Item 10. Directors, Executive Officers and Corporate Governance

Item 11. Executive Compensation

PART III

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

Item 14. Principal Accountant Fees and Services

With respect to this Part III, incorporated by reference herein pursuant to Rule 12b—23 are (1) “Election of

Directors,” (2) “Executive Compensation,” (3) “Other Information Concerning the Board of Directors,” (4) “Stock Ownership,”
and (5) “Selection of Independent Registered Public Accounting Firm,” appearing in the Proxy Statement filed pursuant to
Regulation 14A in connection with the registrant’s Annual Meeting of Shareholders to be held on May 13, 2022. The
information appearing in such Proxy Statement under the caption “Audit Committee Report” and the other information
appearing in such Proxy Statement and not specifically incorporated by reference herein is not incorporated herein. As to
Item 10 above, also see the information reported in Part I of this Form 10-K, under the caption “Information about our
Executive Officers,” which is incorporated herein by reference. As to Item 10 above, the Company has adopted a Code of
Ethics applicable to its principal executive officer, principal financial officer and principal accounting officer and other
Company officials. The text of the Code of Ethics is available on the Company’s website at www.MSAsafety.com. Any
amendment to, or waiver of, a required provision of the Code of Ethics that applies to the Company’s principal executive,
financial or accounting officer will also be posted on the Company’s Internet site at that address.

As to Item 12 above, the following table sets forth information as of December 31, 2021 concerning common stock

issuable under the Company’s equity compensation plans.

Plan Category
Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

Total

Number of securities
to be issued upon
exercise of
outstanding
options,
warrants and rights
(a)

Weighted average
exercise price of
outstanding options,
warrants and rights
(b)

Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column (a))
(c)

161,701 $

None

161,701

45.47

—

45.47

802,050 *

None

802,050

*Includes 714,999 shares available for issuance under the Amended and Restated 2016 Management Equity Incentive Plan and
87,051 shares available for issuance under the 2017 Non-Employee Directors’ Equity Incentive Plan.

9621_FIN_C3.pdf March 14, 2022 pg 86

Item 15. Exhibits and Financial Statement Schedules

PART IV

(a) 1. Financial Statements and Report of Independent Registered Public Accounting Firm (see Part II, Item 8 of this

Form 10-K).

The following information is filed as part of this Form 10-K.

Management's Report on Responsibility for Financial Reporting and Management's Report on Internal
Control Over Financial Reporting

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)

Consolidated Statements of Income—three years ended December 31, 2021

Consolidated Statements of Comprehensive Income—three years ended December 31, 2021

Consolidated Balance Sheets—December 31, 2021 and 2020

Consolidated Statements of Cash Flows—three years ended December 31, 2021
Consolidated Statements of Changes in Retained Earnings and Accumulated Other Comprehensive
Income—three years ended December 31, 2021

Notes to Consolidated Financial Statements

Page

(a) 2. The following additional financial information for the three years ended December 31, 2021 is filed with the report

and should be read in conjunction with the above financial statements:

Schedule II—Valuation and Qualifying Accounts

All other schedules are omitted because they are not applicable, not material or the required information is shown in the

consolidated financial statements and consolidated notes to the financial statements listed above.

(a) 3. Exhibits

Several of the following exhibits are incorporated herein by reference under Rule 12b-32 of the Securities Exchange Act

of 1934, as amended, as indicated next to the name of the exhibit. Several other instruments, which would otherwise be required
to be listed below, have not been so listed because those instruments do not authorize securities in an amount that exceeds 10%
of the total assets of the registrant and its subsidiaries on a consolidated basis. The registrant agrees to furnish a copy of any
instrument that was so omitted on that basis to the Commission upon request.

3(i)

3(ii)

4(d)

10(a)*

10(b)*

10(c)*

10(d)*

10(e)*

10(f)*

Amended and restated Articles of Incorporation, filed as Exhibit 3.1 to Form 8-K on March 7, 2014, is incorporated
herein by reference.

Amended and restated By-laws of the registrant, filed as Exhibit 3.2 to Form 8-K on March 7, 2014, is incorporated
herein by reference.

Description of MSA Safety Incorporated Securities Registered under Section 12 of the Securities Exchange Act of
1934, as amended, filed as Exhibit 4(d) to Form 10-K on February 20, 2020, is incorporated herein by reference.

MSA Safety Incorporated Amended and Restated 2016 Management Equity Incentive Plan, filed as Appendix A to
the registrant’s definitive proxy statement dated March 31, 2016, is incorporated herein by reference.

Retirement Plan for Directors, as amended effective April 1, 2001, filed as Exhibit 10(a) to Form 10-Q on May 10,
2006, is incorporated herein by reference.

Supplemental Pension Plan as of May 5, 1998, filed as Exhibit 10(d) to Form 10-Q on August 12, 2003, is
incorporated herein by reference.

Supplemental Pension Plan as amended and restated effective January 1, 2005, filed as Exhibit 10.3 to Form 10-Q
on April 30, 2009, is incorporated herein by reference.

2017 Non-Employee Directors’ Equity Incentive Plan, filed as Exhibit A to the registrant's definitive proxy
statement dated April 7, 2017, is incorporated herein by reference.

Executive Insurance Program as Amended and Restated as of January 1, 2006, filed as Exhibit 10(a) to Form 10-Q
on August 7, 2007, is incorporated herein by reference.

9621_FIN_C3.pdf March 14, 2022 pg 87

10(g)*

10(h)*

10(i)*

10(j)*

10(k)*

10(l)*

10(m)

10(n)

10(o)

10(p)

31.1

31.2

Annual Incentive Bonus Plan as of May 5, 1998, filed as Exhibit 10(g) to Form 10-Q on August 12, 2003, is
incorporated herein by reference.

Supplemental Executive Retirement Plan, effective January 1, 2008, filed as Exhibit 10.2 to Form 10-Q on
April 30, 2009, is incorporated herein by reference.

Form of Change-in-Control Severance Agreement between the registrant and its executive officers, filed as
Exhibit 10.1 to Form 10-Q on April 30, 2009, is incorporated herein by reference.

2003 Supplemental Savings Plan, effective January 1, 2003, filed as Exhibit 10(k) to Form 10-K on February 24,
2014, is incorporated herein by reference.

2005 Supplemental Savings Plan, effective January 1, 2005, filed as Exhibit 10.4 to Form 10-Q on April 30, 2009,
is incorporated herein by reference.

Amended and Restated CEO Annual Incentive Award Plan filed as Appendix B to the registrant’s definitive proxy
statement dated March 31, 2016, is incorporated herein by reference.

Fourth Amended and Restated Credit Agreement, dated as of May 24, 2021, by and among MSA Safety
Incorporated, MSA UK Holdings Limited, MSA Great Britain Holdings Limited, MSA International Holdings
B.V., as borrowers, various MSA subsidiaries, as guarantors, various financial institutions, as lenders, and PNC
Bank National Association, as administrative agent, filed as Exhibit 10.1 to Form 8‑K/A on May 26, 2021, is
incorporated herein by reference.

Third Amended and Restated Multi-Currency Note Purchase and Private Shelf Agreement dated July 1, 2021 with
PGIM, Inc. and the noteholders party thereto, filed as Exhibit 10.1 to Form 8‑K/A on July 16, 2021, is incorporated
herein by reference.

Second Amended and Restated Master Note Facility dated as of July 1, 2021 with NYL Investors LLC and the
noteholders party thereto, filed as Exhibit 10.2 to Form 8‑K/A on July 16, 2021, is incorporated herein by
reference.

Agreement and Plan of Merger, dated May 23, 2021, by and among MSA Advanced Detection, LLC, a
Pennsylvania limited liability company, Cardinal Merger Subsidiary, Inc., a Delaware corporation, MSA Safety
Incorporated, a Pennsylvania corporation, Viking Topco, Inc., a Delaware corporation, and Laurel Solutions
Holdings LLC, a Delaware limited liability company, solely in its capacity as a representative of the stockholders
of Viking Topco, Inc., filed as Exhibit 10.1 to Form 8‑K on May 24, 2021, is incorporated herein by reference.

Change in Accounting Principle Preferability Letter is filed herewith.

Affiliates of the registrant is filed herewith.

Consent of Ernst & Young LLP, independent registered public accounting firm is filed herewith.

Certification of Nishan J. Vartanian pursuant to Rule 13a-14(a) is filed herewith.

Certification of Kenneth D. Krause pursuant to Rule 13a-14(a) is filed herewith.

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.§1350 is filed herewith.

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

*The exhibits marked by an asterisk are management contracts or compensatory plans or arrangements.

Item 16. Form 10-K Summary

None.

9621_FIN_C3.pdf March 14, 2022 pg 88

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.

MSA SAFETY INCORPORATED

SIGNATURES

February 18, 2022
(Date)

/s/ NISHAN J. VARTANIAN

Nishan J. Vartanian
Chairman, 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.

Signature

Title

Date

/S/ NISHAN J. VARTANIAN
Nishan J. Vartanian

Chairman, President and Chief Executive Officer
(Principal Executive Officer)

February 18, 2022

/S/ KENNETH D. KRAUSE
Kenneth D. Krause

Sr. Vice President, Chief Financial Officer and
Treasurer

February 18, 2022

/S/ JONATHAN D. BUCK
Jonathan D. Buck

Chief Accounting Officer and Controller
(Principal Accounting Officer)

/S/ ROBERT A. BRUGGEWORTH
Robert A. Bruggeworth

Director

/S/ GREGORY B. JORDAN
Gregory B. Jordan

Director

/S/ WILLIAM M. LAMBERT
William M. Lambert

Director

/S/ DIANE M. PEARSE
Diane M. Pearse

Director

/S/ REBECCA B. ROBERTS
Rebecca B. Roberts

Director

/S/ SANDRA PHILLIPS ROGERS
Sandra Phillips Rogers

Director

/S/ JOHN T. RYAN III
John T. Ryan III

Director

/s/ LUCA SAVI
Luca Savi

Director

/S/ WILLIAM R. SPERRY
William R. Sperry

Director

9621_FIN_C3.pdf March 14, 2022 pg 89

February 18, 2022

MSA SAFETY INCORPORATED

VALUATION AND QUALIFYING ACCOUNTS

THREE YEARS ENDED DECEMBER 31, 2021

SCHEDULE II

Allowance for doubtful accounts:

Balance at beginning of year

Additions—

Charged to costs and expenses

Deductions—

Deductions from reserves, net (1)(2)

Balance at end of year

Income tax valuation allowance:

Balance at beginning of year

Additions—

Charged to costs and expenses (3)

Deductions—

Deductions from reserves (3)

Balance at end of year

(1) Bad debts written off, net of recoveries.

2021

2020

(In thousands)

2019

5,344 $

4,860 $

5,369

1,645

1,172

1,200

5,789 $

688

5,344 $

2,015

2,524

4,860

7,188 $

5,936 $

5,039

2,575

2,854

951

8,812 $

1,602

7,188 $

1,138

241

5,936

(2) Activity for 2021, 2020 and 2019 includes currency translation gains (losses) of $79, $(107) and $(1,058), respectively.

(3) Activity for 2021, 2020 and 2019 includes currency translation gains (losses) of $29, $(41) and $104, respectively.

9621_FIN_C3.pdf March 14, 2022 pg 90

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9621_FIN_C3.pdf March 14, 2022 pg 91

Board of Directors and Executive Leadership Team

Board of Directors
(As of April 1, 2022)

Robert A. Bruggeworth (1) (3) (6)

John T. Ryan III (4) (5)

President and Chief Executive Officer, Qorvo, Inc.

Retired (2008); formerly Chief Executive Officer and

(high-performance RF components and compound

Chairman of the Company

semiconductors manufacturer); Director, Qorvo, Inc.

Luca Savi (3)

Gregory B. Jordan (5)

Chief Executive Officer and President, ITT Inc. (manufacturer

Executive Vice President, General Counsel and

of critical components and customized technology solutions);

Chief Administrative Officer of The PNC Financial Services

Director, ITT Inc.

Group, Inc. (financial services provider)

William M. Lambert (5)

William R. Sperry (2) (4)

Executive Vice President and Chief Financial Officer of Hubbell

Retired (2018); formerly Chief Executive Officer and Chairman

Incorporated (international manufacturer of quality electrical

of the Company; Director, Kennametal, Inc.

and electronic products)

Diane M. Pearse (2) (4)

Nishan J. Vartanian

Retired (February 2022); formerly Chief Executive Officer and

Chairman, President and Chief Executive Officer

President, Hickory Farms, LLC

Rebecca B. Roberts (3) (6)

Retired (2011); formerly President of Chevron Pipe Line

Company; Director, Black Hills Corporation; Director, AbbVie, Inc.

(1) Lead Independent Director

Sandra Phillips Rogers (2) (5) (6)

Group Vice President, General Counsel, Chief Legal Officer

and Chief Diversity Officer, Toyota Motor North America,

Inc. (automobile manufacturer and seller); Director,

The Chemours Company

(2) Member of the Audit Committee

(3) Member of the Compensation Committee

(4) Member of the Finance Committee

(5) Member of the Law Committee

(6) Member of the Nominating and Corporate Governance Committee

Executive Leadership Team
(As of April 1, 2022)

Nishan J. Vartanian

Gregory L. Martin

Chairman, President and Chief Executive Officer

Vice President, Product Strategy and Development

Steven C. Blanco

David B. McArthur

Vice President and President, MSA Americas

Vice President, Global Customer Marketing

R. Anne Herman

Vice President, MissionOPS

Kenneth D. Krause

Senior Vice President, Chief Financial Officer and Treasurer

Bob W. Leenen

Vice President and President, MSA International

and Chief Customer Officer

Stephanie L. Sciullo

Vice President and Chief Legal Officer,

Corporate Social Responsibility and Public Affairs

Markus H. Weber

Vice President and Chief Information Officer

Glennis A. Williams

Vice President and Chief Human Resource Officer

Organization

In June 2021, MSA elected Luca Savi to its Board of Directors. Born and educated in Italy, Mr. Savi is the

Chief Executive Offi cer and President of ITT Inc. With his broad experience serving in key leadership roles

across multiple industries in Europe, China and the United States, Mr. Savi’s international experience and

perspective will serve MSA well as the company continues to advance its strategic growth programs.

Section 302 Certifi cations and NYSE
CEO Certifi cation

In June 2021, the Company’s Chief Executive Offi cer submitted
to the New York Stock Exchange the annual certifi cation as to
compliance with the Exchange’s Corporate Governance Listing
Standards required by Section 303A.12(a) of the Exchange’s Listed
Company Manual. The certifi cation was unqualifi ed.

The Company’s reports fi led with the Securities and Exchange
Commission during the past year, including the Form 10-K for the
year ended December 31, 2021, have contained the certifi cations
of the Company’s Chief Executive Offi cer and Chief Financial Offi cer
regarding the quality of the Company’s public disclosure required
by Section 302 of the Sarbanes-Oxley Act.

Shareholders’ Inquiries

Additional copies of the Company’s 2021 Annual Report, including
Form 10-K, as fi led with the Securities and Exchange Commission,
may be obtained by shareholders after April 1, 2022. Printed and
electronic versions are available. Requests should be directed to the
Chief Financial Offi cer, who can be reached at one of the following:

Phone:
Internet:
U.S. Mail:

724-741-8221
www.MSAsafety.com
MSA
Chief Financial Offi cer
1000 Cranberry Woods Drive
Cranberry Township, PA 16066

Untitled-2 3

3/23/22 3:20 PM

1000 Cranberry Woods Drive

Cranberry Township, PA 16066

724-776-8600

www.MSAsafety.com

Untitled-2 4

3/23/22 3:20 PM