What changed in this filing

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Item 1. Financial Statements

2022-07-26 compared with 2022-04-26 · 149 added, 94 removed, 505 unchanged (32% of the section changed)

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Net sales $ 261,369 $ 234,519 $ 505,538 $ 456,880

6 unchanged sentences

Interest expense, net 3,933 4,218 7,542 7,787

Other expense/(income), net ( 3,928 ) 600

Other (income)/expense, net ( 7,045 ) 862 ( 10,973 ) 1,462

Income before income taxes 53,827 44,886 92,900 82,536

14 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Net income $ 39,369 $ 31,440 $ 67,444 $ 59,050

11 unchanged sentences

Derivative valuation adjustment ( 840 ) ( 44 ) ( 3,809 ) 91

Comprehensive income/(loss) 36,437 12,915

Comprehensive income/(loss) attributable to the noncontrolling interest 394 ( 183 )

Comprehensive income/(loss) attributable to the Company $ 36,043 $ 13,098

Comprehensive income 3,291 46,478 39,728 59,394

Comprehensive income attributable to the noncontrolling interest 77 226 471 43

Comprehensive income attributable to the Company $ 3,214 $ 46,252 $ 39,257 $ 59,351

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

2 unchanged sentences

(in thousands, except share data)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Cash and cash equivalents $ 320,870 $ 302,036

38 unchanged sentences

Treasury stock (Class A), at cost;

9,179,776 shares in 2022 and 8,665,090 shares in 2021

9,674,542 shares in 2022 and 8,665,090 in 2021

( 364,923 ) ( 280,143 )

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

OPERATING ACTIVITIES

Net income $ 39,369 $ 31,440 $ 67,444 $ 59,050

Adjustments to reconcile net income to net cash (used in)/provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation 15,679 15,971 31,276 32,560

7 unchanged sentences

Fair value adjustment on foreign currency options 596 1 ( 381 ) 140

Changes in operating assets and liabilities that (used)/provided cash:

Changes in operating assets and liabilities that provided/(used) cash:

Accounts receivable 1,267 ( 129 ) ( 14,407 ) ( 3,365 )

9 unchanged sentences

Other, net 5,182 1,051 4,784 1,908

Net cash (used in)/provided by operating activities ( 5,391 ) 33,686

Net cash provided by operating activities 43,104 61,953 37,713 95,640

INVESTING ACTIVITIES

12 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 17,907 ) 4,904 ( 18,258 ) 2,002

Increase/(decrease) in cash and cash equivalents 5,379 ( 3,445 )

Increase in cash and cash equivalents 13,455 15,459 18,834 12,014

Cash and cash equivalents at beginning of period 307,415 237,871 302,036 241,316

24 unchanged sentences

The segment includes Albany Safran Composites, LLC (“ASC”), in which our customer SAFRAN Group (“Safran”) owns a 10 percent noncontrolling interest.

AEC, through ASC, is the exclusive supplier of the LEAP program of advanced composite fan blades and fan cases under a long-term supply contract.The LEAP engine is used on the Airbus A320neo and Boeing 737 MAX family of jets.

AEC, through ASC, is the exclusive supplier of the LEAP program of advanced composite fan blades and fan cases under a long-term supply contract.

The LEAP engine is used on the Airbus A320neo, Boeing 737 MAX, and COMAC 919 aircraft .

AEC's largest aerospace customer is the SAFRAN Group and sales to SAFRAN (consisting primarily of fan blades and cases for CFM's LEAP engine) accounted for approximately 12 percent of the Company's consolidated Net sales in 2021.

AEC net sales to Safran were $ 40.4 million and $ 27.7 million in the first three months of 2022 and 2021, respectively.

The total of Accounts receivable, Contract assets and Noncurrent receivables due from Safran amounted to $ 83.7 million and $ 79.6 million as of March 31, 2022 and December 31, 2021, respectively.

Other significant programs by AEC include the F-35, Boeing 787, Sikorsky CH-53K and JASSM programs.

AEC net sales to Safran were $ 83.1 million and $ 54.0 million in the first six months of 2022 and 2021, respectively.

The total of Accounts receivable, Contract assets and Noncurrent receivables due from Safran amounted to $ 77.7 million and $ 79.6 million as of June 30, 2022 and December 31, 2021, respectively.

Other significant programs by AEC include the Sikorsky CH-53K, F-35, JASSM, and Boeing 787 programs.

AEC also supplies vacuum waste tanks for the Boeing 7-Series programs, and specialty components for the Rolls Royce lift fan on the F-35, as well as the fan case for the GE9X engine.

2 unchanged sentences

The following tables show data by reportable segment, reconciled to consolidated totals included in the financial statements:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

(in thousands)

2022 2021 2022 2021

Machine Clothing

13 unchanged sentences

Interest expense

Other expense/(income), net ( 3,928 ) 600

4,779 4,619 9,040 8,717

Other (income)/expense, net ( 7,045 ) 862 ( 10,973 ) 1,462

Income before income taxes

4 unchanged sentences

We also wrote down the net book value of our investment in the aforementioned JV to reflect our intent to exit such venture, resulting in $ 0.8 million impairment loss during the first quarter of 2022.

The table below presents restructuring costs by reportable segment:

Three months ended March 31,

(in thousands) 2022 2021

Machine Clothing $ 243 $ ( 69 )

Albany Engineered Composites — 89

Corporate expenses 11 32

Total $ 254 $ 52

Revenue Recognition:

3 unchanged sentences

Changes in the estimated profitability of long-term contracts could be caused by increases or decreases in the contract value, revisions to customer delivery requirements, updated labor or overhead rates, factors affecting the supply chain, changes in the evaluation of contract risks and opportunities, or other factors.

Changes in the estimated profitability of long-term contracts decreased operating income by $ 0.7 million during the first three months of 2022, compared to an insignificant effect in the same period last year.

Changes in the estimated profitability of long-term contracts increased operating income by $ 1.2 million for the second quarter of 2022 and decreased operating income $ 0.6 million for the first half of 2022.

Adjustments in the estimated profitability of long-term contracts increased operating income by $ 4.3 million and $ 3.7 million for the second quarter and first half of 2021, respectively.

We disaggregate revenue earned from contracts with customers for each of our business segments and product groups based on the timing of revenue recognition, and groupings used for internal review purposes.

The following table disaggregates revenue for each product group by timing of revenue recognition:

Three months ended March 31, 2022

Three months ended June 30, 2022

(in thousands)

8 unchanged sentences

Total revenue $ 155,788 $ 105,581 $ 261,369

Three months ended March 31, 2021

Three months ended June 30, 2021

(in thousands)

9 unchanged sentences

$ 163,488 $ 71,031 $ 234,519

Six months ended June 30, 2022

(in thousands)

Point in Time Revenue

Recognition Over Time Revenue

Recognition Total

Machine Clothing $ 303,933 $ 1,799 $ 305,732

Albany Engineered Composites

ASC — 81,373 81,373

Other AEC 8,931 109,502 118,433

Total Albany Engineered Composites 8,931 190,875 199,806

Total revenue $ 312,864 $ 192,674 $ 505,538

Six months ended June 30, 2021

(in thousands) Point in Time Revenue

Recognition Over Time Revenue

Recognition Total

Machine Clothing $ 306,397 $ 1,730 $ 308,127

Albany Engineered Composites

ASC — 53,254 53,254

Other AEC 8,312 87,187 95,499

Total Albany Engineered Composites 8,312 140,441 148,753

Total revenue $ 314,709 $ 142,171 $ 456,880

The following table disaggregates MC segment revenue by significant product groupings (paper machine clothing (PMC) and engineered fabrics), and, for PMC, the geographical region to which the paper machine clothing was sold:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

(in thousands)

2022 2021 2022 2021

Americas PMC $ 79,062 $ 82,343 $ 155,678 $ 155,645

5 unchanged sentences

Contracts in the MC segment are generally for periods of less than a year.

Most contracts in the AEC segment are short duration firm-fixed-price orders representing performance obligations with an original maturity of less than one year.

Remaining performance obligations on contracts that had an original duration of greater than one year totaled $ 263 million and $ 76 million as of March 31, 2022 and 2021, respectively, and related primarily to firm contracts in the AEC segment.

Of the remaining performance obligations as of March 31, 2022, we expect to recognize as revenue approximately $ 79 million during 2022, $ 45 million during 2023, $ 38 million during 2024, and the remainder thereafter.

Most contracts in the AEC segment are relatively short duration firm-fixed-price orders.

Remaining performance obligations on contracts that had an original duration of greater than one year totaled $ 579 million and $ 149 million as of June 30, 2022 and 2021, respectively, and related primarily to firm contracts in the AEC segment.

Of the remaining performance obligations as of June 30, 2022, we expect to recognize as revenue approximately $ 77 million during 2022, $ 96 million during 2023, $ 71 million during 2024, and the remainder thereafter.

Pensions and Other Postretirement Benefit Plans

2 unchanged sentences

The Company accrues the cost of providing these benefits during the active service period of the employees.

The composition of the net periodic benefit cost for the three months ended March 31, 2022 and 2021, was as follows:

The composition of the net periodic benefit cost for the six months ended June 30, 2022 and 2021, was as follows:

Pension plans

12 unchanged sentences

The amount of net periodic benefit cost is determined at the beginning of each year and generally only varies from quarter to quarter when a significant event occurs, such as a curtailment or a settlement.

There were no such events in the first three months of 2022 or 2021.

There were no such events in the first six months of 2022 or 2021.

Service cost for defined benefit pension and postretirement plans are reported in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period.

2 unchanged sentences

The components of Other (Income)/Expense, net are:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

(in thousands)

2022 2021 2022 2021

Currency transaction (gains)/losses $ ( 7,284 ) $ 175 $ ( 11,024 ) $ 341

Bank fees and amortization of debt issuance costs

80 104 176 210

Components of net periodic pension and postretirement cost other than service cost ( 137 ) ( 4 ) ( 273 ) ( 6 )

296 587 148 917

Total $ ( 7,045 ) $ 862 $ ( 10,973 ) $ 1,462

Other (income)/expense, net, included foreign currency related transactions which resulted in gains of $ 3.7 million in the first three months of 2022, as compared to losses of $ 0.2 million in the same period last year.

Current year gains were primarily driven by the remeasurement of intercompany demand loans payable by a Mexican subsidiary.

The following table presents components of income tax expense for the three months ended March 31, 2022 and 2021:

Three months ended March 31,

Other (income)/expense, net, included foreign currency related transactions which resulted in gains of $ 7.3 million and $ 11.0 million in the three and six month periods ended June 30, 2022, respectively, as compared to losses of $ 0.2 million and $ 0.3 million in the three and six month periods ended June 30, 2021, respectively.

The weaker Euro during the three and six month periods ended June 30, 2022 led to the gains on foreign currency related transactions during such periods.

The following table presents components of income tax expense for the three and six months ended June 30, 2022 and 2021:

Three months ended June 30, Six months ended June 30,

(in thousands, except percentages) 2022 2021 2022 2021

Income tax based on income from continuing operations (1) $ 15,165 $ 13,251 $ 26,107 $ 24,583

Provision for change in estimated tax rate 66 ( 218 ) 66 ( 218 )

Income tax before discrete items 15,231 13,033 26,173 24,365

10,942 11,332

Discrete tax expense:

2 unchanged sentences

Impact of amended tax returns ( 17 ) — ( 98 ) —

Adjustments of prior year estimated taxes 104 ( 751 )

Changes in uncertain tax positions 6 278

True-up of prior year estimated taxes ( 612 ) 22 ( 508 ) ( 1,421 )

Enacted tax legislation and rate change — 352 — 352

Provision for/resolution of tax audits and contingencies, net ( 146 ) — ( 140 ) 278

Other 2 53 38 68

Total income tax expense $ 14,458 $ 13,446 $ 25,456 $ 23,486

(1) Calculated at estimated tax rates of 28.0 % and 30.1 %, respectively

(1) Calculated at estimated annual tax rates of 28.2 % and 29.5 % for the three and six months ended June 30, 2022 and 2021.

Income tax expense for the quarter was computed in accordance with ASC 740-270, Income Taxes – Interim Reporting.

Under this method, loss jurisdictions, which cannot recognize a tax benefit with regard to their generated losses, are excluded from the annual effective tax rate (AETR) calculation and their taxes will be recorded discretely in each quarter.

In the first quarter of 2021, the Company recorded a net tax benefit of $ 1.4 million related to the impact of U.S.

amended tax returns and a U.S.

adjustment of prior year estimated taxes.

Additionally, the Company recorded an expense of $ 0.3 million related to the establishment of a foreign uncertain tax position.

Earnings Per Share

The amounts used in computing earnings per share and the weighted average number of shares of potentially dilutive securities are as follows:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

(in thousands, except market price and earnings per share)

2022 2021 2022 2021

Net income attributable to the Company $ 39,201 $ 31,397 $ 66,938 $ 58,980

11 unchanged sentences

Accumulated Other Comprehensive Income (AOCI)

The table below presents changes in the components of AOCI for the period December 31, 2021 to March 31, 2022:

The table below presents changes in the components of AOCI for the period December 31, 2021 to June 30, 2022:

(in thousands)

8 unchanged sentences

Net current period other comprehensive income ( 41,391 ) 308 13,367 ( 27,716 )

March 31, 2022 $ ( 107,610 ) $ ( 38,416 ) $ 8,404 $ ( 137,622 )

The table below presents changes in the components of AOCI for the period December 31, 2020 to March 31, 2021:

June 30, 2022 $ ( 147,271 ) $ ( 38,182 ) $ 11,753 $ ( 173,700 )

The table below presents changes in the components of AOCI for the period December 31, 2020 to June 30, 2021:

(in thousands) Translation

6 unchanged sentences

Net current period other comprehensive income ( 2,181 ) 379 2,146 344

March 31, 2021 $ ( 99,158 ) $ ( 39,152 ) $ ( 8,792 ) $ ( 147,102 )

June 30, 2021 $ ( 85,384 ) $ ( 39,282 ) $ ( 7,398 ) $ ( 132,064 )

The components of our Accumulated Other Comprehensive Income that are reclassified to the Statement of Income relate to our pension and postretirement plans and interest rate swaps.

The table below presents the expense/(income) amounts reclassified from AOCI, and the line items of the Statement of Income that were affected for the three months ended March 31, 2022 and 2021:

Three months ended March 31,

The table below presents the expense/(income) amounts reclassified from AOCI, and the line items of the Statement of Income that were affected for the three and six months ended June 30, 2022 and 2021:

Three months ended June 30, Six months ended June 30,

(in thousands)

2022 2021 2022 2021

Pretax Derivative valuation reclassified from Accumulated Other Comprehensive Income:

7 unchanged sentences

Amortization of net actuarial loss

967 1,108 1,938 2,217

Total pretax amount reclassified (b) ( 155 ) ( 10 ) ( 307 ) ( 20 )

7 unchanged sentences

The table below presents a reconciliation of income attributable to the noncontrolling interest and noncontrolling equity in the Company’s subsidiary Albany Safran Composites, LLC:

Three months ended March 31,

Six months ended June 30,

(in thousands, except percentages) 2022 2021

Net income/(loss) of Albany Safran Composites (ASC) $ 3,702 $ 585

Net income of Albany Safran Composites (ASC) $ 5,690 $ 1,343

Return attributable to the Company's preferred holding 632 647

Net /income/(loss) of ASC available for common ownership $ 3,383 $ 267

Net income of ASC available for common ownership $ 5,058 $ 696

Ownership percentage of noncontrolling shareholder 10 % 10 %

Net /income/(loss) attributable to the noncontrolling interest $ 338 $ 27

Net income attributable to the noncontrolling interest $ 506 $ 70

Noncontrolling interest, beginning of year $ 3,638 $ 3,799

Net income/(loss) attributable to noncontrolling interest 338 27

Net income attributable to noncontrolling interest 506 70

Changes in other comprehensive income attributable to the noncontrolling interest ( 35 ) ( 27 )

4 unchanged sentences

The notes may be presented for payment at maturity, which is less than one year.

As of March 31, 2022 and December 31, 2021, Accounts receivable consisted of the following:

As of June 30, 2022 and December 31, 2021, Accounts receivable consisted of the following:

(in thousands)

8 unchanged sentences

The Noncurrent receivables will be invoiced to the customer over a 10-year period, which began in 2020.

As of March 31, 2022 and December 31, 2021, Noncurrent receivables consisted of the following:

As of June 30, 2022 and December 31, 2021, Noncurrent receivables consisted of the following:

(in thousands)

10 unchanged sentences

Contract assets and Contract liabilities are reported on the Consolidated Balance Sheets in a net position on a contract-by-contract basis at the end of each reporting period.

As of March 31, 2022 and December 31, 2021, Contract assets and Contract liabilities consisted of the following:

As of June 30, 2022 and December 31, 2021, Contract assets and Contract liabilities consisted of the following:

(in thousands)

5 unchanged sentences

Contract liabilities $ 5,008 $ 6,959

Contract assets decreased $ 0.3 million during the three-month period ended March 31, 2022.

The decrease was primarily due to invoicing to customers exceeding revenue recognized for satisfied performance obligations for contracts that were in a contract asset position.

There were no impairment losses related to our Contract assets during the three month periods ended March 31, 2022 and March 31, 2021.

Contract liabilities decreased $ 1.7 million during the three-month period ended March 31, 2022, primarily due to revenue recognized from satisfied performance obligations exceeding amounts invoiced to customers that were in a contract liability position.

Revenue recognized for the three-month periods ended March 31, 2022 and 2021 that was included in the Contract liability balance at the beginning of the year was $ 4.8 million and $ 4.3 million, respectively.

Contract assets increased $ 23.4 million during the six-month period ended June 30, 2022.

The increase was primarily due to an increase in unbilled revenue related to the satisfaction of performance obligations, in excess of the amounts billed to customers for contracts that were in a contract asset position.

There were no impairment losses related to our Contract assets during the six month periods ended June 30, 2022 and June 30, 2021.

Contract liabilities decreased $ 2.0 million during the six-month period ended June 30, 2022, primarily due to revenue recognized from satisfied performance obligations exceeding amounts invoiced to customers that were in a contract liability position.

Revenue recognized for the six-month periods ended June 30, 2022 and 2021 that was included in the Contract liability balance at the beginning of the year was $ 5.5 million and $ 4.7 million, respectively.

Costs included in inventories are raw materials, labor, supplies and allocable depreciation and overhead.

4 unchanged sentences

Once established, the original cost of the inventory less the related write-down represents the new cost basis of such inventories.

As of March 31, 2022 and December 31, 2021, Inventories consisted of the following:

As of June 30, 2022 and December 31, 2021, Inventories consisted of the following:

(in thousands)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Raw materials $ 65,162 $ 58,689

8 unchanged sentences

Our reportable segments are consistent with our operating segments.

In the second quarter of 2021, management applied the qualitative assessment approach in performing its annual evaluation of goodwill for the Company's Machine Clothing reporting unit and three AEC reporting units and concluded that each reporting unit’s fair value continued to exceed its carrying value.

In the second quarter of 2022, management applied the qualitative assessment approach in performing its annual evaluation of goodwill for the Company's Machine Clothing reporting unit and two AEC reporting units and concluded that each reporting unit’s fair value continued to exceed its carrying value.

In addition, there were no amounts at risk due to the estimated excess between the fair and carrying values.

8 unchanged sentences

(in thousands, except interest rates)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Revolving credit agreement with borrowings outstanding at an end of period interest rate of 3.52 % in 2022 and 3.74 % in 2021 (including the effect of interest rate hedging transactions, as described below), due in 2024

$ 485,000 $ 350,000

We had no current maturities of Long-term debt as of March 31, 2022 or December 31, 2021.

We had no current maturities of Long-term debt as of June 30, 2022 or December 31, 2021.

On October 27, 2020, we entered into a $ 700 million unsecured Four-Year Revolving Credit Facility Agreement (the “Credit Agreement”) which amended and restated the prior amended and restated $ 685 million Five-Year Revolving Credit Facility Agreement, which we had entered into on November 7, 2017 (the “Prior Agreement”).

Under the Credit Agreement, $ 427 million of borrowings were outstanding as of March 31, 2022.

Under the Credit Agreement, $ 485 million of borrowings were outstanding as of June 30, 2022.

The applicable interest rate for borrowings was LIBOR plus a spread, based on our leverage ratio at the time of borrowing.

At the time of the last borrowing on March 31, 2022, the spread was 1.625 %.

At the time of the last borrowing on June 27, 2022, the spread was 1.625 %.

The spread was based on a pricing grid, which ranged from 1.500 % to 2.000 %, based on our leverage ratio.

Based on our maximum leverage ratio and our Consolidated EBITDA, and without modification to any other credit agreements, as of March 31, 2022, we would have been able to borrow an additional $ 273 million under the Agreement.

Based on our maximum leverage ratio and our Consolidated EBITDA, and without modification to any other credit agreements, as of June 30, 2022, we would have been able to borrow an additional $ 215 million under the Agreement.

The Credit Agreement contains customary terms, as well as affirmative covenants, negative covenants and events of default that are comparable to those in the Prior Agreement.

3 unchanged sentences

These transactions have the effect of fixing the LIBOR portion of the effective interest rate (before addition of the spread) on $ 350 million of indebtedness drawn under the Credit Agreement at the rate of 0.838 % during the period.

Under the terms of these transactions, we pay the fixed rate of 0.838 % and the counterparties pay a floating rate based on the one-month LIBOR rate at each monthly calculation date, which on March 16, 2022 was 0.44 %.

Under the terms of these transactions, we pay the fixed rate of 0.838 % and the counterparties pay a floating rate based on the one-month LIBOR rate at each monthly calculation date.

The monthly calculation date is the 16th day of each month, and on June 16, 2022, one-month LIBOR was 1.51 %.

On November 28, 2017, we entered into interest rate swap agreements for the period December 18, 2017 through October 17, 2022.

Under the terms of these transactions, we pay the fixed rate of 2.11 % and the counterparties pay a floating rate based on the one-month LIBOR rate at each monthly calculation date, which on March 16, 2022 was 0.

44 %, during the swap period.

On March 16, 2022, the all-in-rate on the $ 350 million of debt was 3.735 %.

Under the terms of these transactions, we pay the fixed rate of 2.11 % and the counterparties pay a floating rate based on the one-month LIBOR rate at each monthly calculation date.

The monthly calculation date is the 16th day of each month, and on June 16, 2022, one-month LIBOR was 1.51 %.

On June 16, 2022, the all-in-rate on the $ 350 million of debt was 3.735 %.

These interest rate swaps are accounted for as a hedge of future cash flows, as further described in Note 14.

1 unchanged sentence

Under the Credit Agreement, we are currently required to maintain a leverage ratio (as defined in the agreement) of not greater than 3.50 to 1.00 and minimum interest coverage (as defined) of 3.00 to 1.00.

As of March 31, 2022, our leverage ratio was 1.32 to 1.00 and our interest coverage ratio was 14.80 to 1.00.

As of June 30, 2022, our leverage ratio was 1.43 to 1.00 and our interest coverage ratio was 15.19 to 1.00.

We may purchase our Common Stock or pay dividends to the extent our leverage ratio remains at or below 3.50 to 1.00, and may make acquisitions with cash, provided our leverage ratio does not exceed the limits noted above.

Indebtedness under the Credit Agreement is ranked equally in right of payment to all unsecured senior debt.

We were in compliance with all debt covenants as of March 31, 2022.

We were in compliance with all debt covenants as of June 30, 2022.

Currently, our Credit Agreement and certain of our derivative instruments reference one-month USD LIBOR-based rates, which are set to discontinue after June 30, 2023.

9 unchanged sentences

Level 3 inputs are unobservable data points for the asset or liability, and include situations in which there is little, if any, market activity for the asset or liability.

We had no Level 3 financial assets or liabilities at March 31, 2022, or at December 31, 2021.

We had no Level 3 financial assets or liabilities at June 30, 2022, or at December 31, 2021.

The following table presents the fair-value hierarchy for our Level 1 and Level 2 financial and non-financial assets and liabilities, which are measured at fair value on a recurring basis:

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

(in thousands)

11 unchanged sentences

Unrealized gains and losses on the swaps flow through the caption Derivative valuation adjustment in the Shareholders’ equity section of the Consolidated Balance Sheets.

As of March 31, 2022, these interest rate swaps were determined to be highly effective hedges of interest rate cash flow risk.

As of June 30, 2022, these interest rate swaps were determined to be highly effective hedges of interest rate cash flow risk.

Amounts accumulated in Other comprehensive income are reclassified as Interest expense, net when the related interest payments (that is, the hedged forecasted transactions), and amortization related to the swap buyouts, affect earnings.

Interest (income)/expense related to payments under the active swap agreements totaled $ 1.7 million for the three month period ended March 31, 2022, and $ 1.7 million for the three month period ended March 31, 2021.

Additionally, non-cash interest income related to the amortization of swap buyouts totaled $0.0 million for the three month period ended March 31, 2022 and $ 0.3 million for the three month period ended March 31, 2021.

Interest (income)/expense related to payments under the active swap agreements totaled $ 2.9 million for the six month period ended June 30, 2022, and $ 3.5 million for the six month period ended June 30, 2021.

Additionally, non-cash interest income related to the amortization of swap buyouts totaled $ 0.0 million for the six month period ended June 30, 2022 and $ 0.3 million for the six month period ended June 30, 2021.

We operate our business in many regions of the world, and currency rate movements can have a significant effect on operating results.

6 unchanged sentences

(Gains)/losses related to changes in fair value of derivative instruments that were recognized in Other (income)/expense, net in the Consolidated Statements of Income were as follows:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

(in thousands) 2022 2021 2022 2021

5 unchanged sentences

is a defendant in suits brought in various courts in the United States by plaintiffs who allege that they have suffered personal injury as a result of exposure to asbestos-containing paper machine clothing synthetic dryer fabrics marketed during the period from 1967 to 1976 and used in certain paper mills.

We were defending 3,616 claims as of March 31, 2022.

We were defending 3,614 claims as of June 30, 2022.

The following table sets forth the number of claims filed, the number of claims settled, dismissed or otherwise resolved, and the aggregate settlement amount during the periods presented:

3 unchanged sentences

2021 3,615 32 26 3,609 93

2022 (As of March 31) 3,609 2 9 3,616 $ —

2022 (As of June 30) 3,609 8 13 3,614 $ —

We anticipate that additional claims will be filed against the Company and related companies in the future but are unable to predict the number and timing of such future claims.

2 unchanged sentences

Our insurance carrier has defended each case and funded settlements under a standard reservation of rights.

As of March 31, 2022, we had resolved, by means of settlement or dismissal, 37,982 claims.

As of June 30, 2022, we had resolved, by means of settlement or dismissal, 37,988 claims.

The total cost of resolving all claims was $ 10.5 million.

2 unchanged sentences

(“Brandon”), is also a separate defendant in many of the asbestos cases in which Albany is named as a defendant, despite never having manufactured any fabrics containing asbestos.

While Brandon was defending against 7,709 claims as of March 31, 2022, only twelve claims have been filed against Brandon since January 1, 2012, and only $ 15,000 in settlement costs have been incurred since 2001.

While Brandon was defending against 7,709 claims as of June 30, 2022, only twelve claims have been filed against Brandon since January 1, 2012, and only $ 15,000 in settlement costs have been incurred since 2001.

Brandon was acquired by the Company in 1999 and has its own insurance policies covering periods prior to 1999.

4 unchanged sentences

Mount Vernon is contractually obligated to indemnify the Company against any liability arising out of such products.

We deny any liability for products sold by Mount Vernon prior to the acquisition of the

Mount Vernon assets.

We deny any liability for products sold by Mount Vernon prior to the acquisition of the Mount Vernon assets.

Pursuant to its contractual indemnification obligations, Mount Vernon has assumed the defense of these claims.

3 unchanged sentences

Changes in Shareholders’ Equity

The following table summarizes changes in Shareholders’ Equity for the period December 31, 2021 to March 31, 2022:

The following table summarizes changes in Shareholders’ Equity for the period December 31, 2021 to June 30, 2022:

Additional paid-in capital

19 unchanged sentences

March 31, 2022 40,781 $ 41 — $ — $ 437,748 $ 884,133 $ ( 137,622 ) 9,180 $ ( 324,080 ) $ 4,032 $ 864,252

The following table summarizes changes in Shareholders’ Equity for the period December 31, 2020 to March 31, 2021:

Net income — — — — — 39,201 — — — 168 39,369

Compensation and benefits paid or payable in shares 4 — — — 902 — — — — — 902

Options exercised — — — — — — — — — — —

Shares issued to Directors' — — — — 800 — — ( 13 ) 285 — 1,085

Purchase of Treasury shares (a) — — — — — — — 508 ( 41,128 ) — ( 41,128 )

Dividends declared

Class A Common Stock, $ 0.21 per share

— — — — — ( 6,529 ) — — — — ( 6,529 )

Class B Common Stock, $ 0.21 per share

— — — — — — — — — — —

Cumulative translation adjustments — — — — — — ( 39,661 ) — — ( 91 ) ( 39,752 )

Pension and postretirement liability adjustments — — — — — — 234 — — — 234

Derivative valuation adjustment — — — — — — 3,349 — — — 3,349

June 30, 2022 40,785 $ 41 — $ — $ 439,450 $ 916,805 $ ( 173,700 ) 9,675 $ ( 364,923 ) $ 4,109 $ 821,782

The following table summarizes changes in Shareholders’ Equity for the period December 31, 2020 to June 30, 2021:

Additional paid-in capital

18 unchanged sentences

March 31, 2021 39,141 $ 39 1,618 $ 2 $ 433,811 $ 791,854 $ ( 147,102 ) 8,391 $ ( 256,009 ) $ 3,616 $ 826,211

Net income — — — — 0 31,397 — — — 43 31,440

Compensation and benefits paid or payable in shares — — — — 692 — — — — — 692

Options exercised 1 — — — 21 — — — — — 21

Shares issued to Directors' — — — — 706 — — ( 11 ) 241 — 947

Dividends declared

Class A Common Stock, $ 0.20 per share

— — — — — ( 6,150 ) — — — — ( 6,150 )

Class B Common Stock, $ 0.20 per share

— — — — — ( 323 ) — — — — ( 323 )

Cumulative translation adjustments — — — — — — 13,774 — — 183 13,957

Pension and postretirement liability adjustments — — — — — — ( 130 ) — — — ( 130 )

Derivative valuation adjustment — — — — — — 1,394 — — — 1,394

June 30, 2021 39,142 $ 39 1,618 $ 2 $ 435,230 $ 816,778 $ ( 132,064 ) 8,380 $ ( 255,768 ) $ 3,842 $ 868,059

(a) In October 2021, the Company's Board of Directors authorized the Company to repurchase shares of up to $ 200 million through open market purchases, privately negotiated transactions or otherwise, and to determine the prices, times and amounts.

In 2021, the Company repurchased 285,286 shares totaling $ 24.4 million.

During the three months period ending March 31, 2022, the Company repurchased 514,686 shares totaling $ 43.9 million.

During the six months period ending June 30, 2022, the Company repurchased 1,022,717 shares totaling $ 85.1 million.

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

What changed 10-Q

Item 1. Financial Statements