What changed in this filing

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Item 1. Financial Statements

2022-10-25 compared with 2022-07-26 · 139 added, 74 removed, 580 unchanged (27% of the section changed)

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

7 unchanged sentences

Interest expense, net 3,794 3,734 11,336 11,521

Pension settlement expense 49,128 — 49,128 —

Aviation Manufacturing Jobs Protection (AMJP) grant — ( 5,832 ) — ( 5,832 )

Other (income)/expense, net ( 6,918 ) 2,753 ( 17,891 ) 4,215

Income before income taxes 7,640 43,831 100,540 126,367

Income tax expense 14,458 13,446 25,456 23,486

Income tax expense/(benefit) ( 3,183 ) 12,889 22,273 36,375

Net income 10,823 30,942 78,267 89,992

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

2 unchanged sentences

Foreign currency translation and other adjustments ( 38,971 ) ( 14,709 ) ( 79,841 ) ( 16,497 )

Reclassification of loss on pension settlement 42,657 — 42,657 —

Amortization of pension liability adjustments:

4 unchanged sentences

Income taxes related to items of other comprehensive income/(loss):

Reclassification of loss on pension settlement ( 16,459 ) — ( 16,459 ) —

Amortization of prior service credit 344 336 1,031 1,007

9 unchanged sentences

(in thousands, except share data)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Cash and cash equivalents $ 276,482 $ 302,036

49 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

7 unchanged sentences

Non-cash interest expense 279 283 840 593

Non-cash portion of pension settlement expense 42,657 — 42,657 —

Compensation and benefits paid or payable in Class A Common Stock 835 606 3,282 2,232

Provision for credit losses from uncollected receivables and contract assets ( 532 ) 27 1,326 ( 83 )

Provision/(recovery) for credit losses from uncollected receivables and contract assets ( 441 ) ( 1,075 ) 885 ( 1,158 )

Foreign currency remeasurement (gain)/loss on intercompany loans ( 5,369 ) 480 ( 6,629 ) ( 551 )

25 unchanged sentences

Dividends paid ( 6,533 ) ( 6,476 ) ( 19,932 ) ( 19,418 )

Net cash provided by/(used in) financing activities 8,529 ( 40,810 ) 35,404 ( 62,504 )

Net cash used in financing activities ( 44,523 ) ( 6,835 ) ( 9,119 ) ( 69,339 )

Effect of exchange rate changes on cash and cash equivalents ( 12,652 ) ( 4,113 ) ( 30,910 ) ( 2,111 )

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

(Decrease)/increase in cash and cash equivalents ( 44,388 ) 32,887 ( 25,554 ) 44,901

Cash and cash equivalents at beginning of period 320,870 253,330 302,036 241,316

27 unchanged sentences

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 $ 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.

AEC net sales to Safran were $ 125.4 million and $ 81.6 million in the first nine months of 2022 and 2021, respectively.

The total of Accounts receivable, Contract assets and Noncurrent receivables due from Safran amounted to $ 76.4 million and $ 79.6 million as of September 30, 2022 and December 31, 2021, respectively.

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

3 unchanged sentences

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

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

Three months ended September 30, Nine months ended September 30,

(in thousands)

16 unchanged sentences

4,759 4,388 13,799 13,105

Pension settlement expense 49,128 — 49,128 —

AMJP grant — ( 5,832 ) — ( 5,832 )

Other (income)/expense, net ( 6,918 ) 2,753 ( 17,891 ) 4,215

Income before income taxes $ 7,640 $ 43,831 $ 100,540 $ 126,367

$ 53,827 $ 44,886 $ 92,900 $ 82,536

A subsidiary within our Machine Clothing segment has been a partner in a joint venture (“JV”) that supplies paper machine clothing products to local papermakers in Russia.

2 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.

In the third quarter, we took actions to settle certain pension plan liabilities in the U.S., leading to charges totaling $ 49.1 million, which were included as Corporate expenses and other.

This led to a reduction of unfunded pension liabilities of $ 6.2 million.

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 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.

Changes in the estimated profitability of long-term contracts increased operating income by $ 2.6 million for the third quarter of 2022 and $ 2.0 million for the first nine months of 2022.

Ad justments in the estimated profitability of long-term contracts increased operating income by $ 2.1 million and $ 2.4 million for the three and nine month periods ended September 30, 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 June 30, 2022

Three months ended September 30, 2022

(in thousands)

8 unchanged sentences

Total revenue $ 158,309 $ 102,254 $ 260,563

Three months ended June 30, 2021

Three months ended September 30, 2021

(in thousands)

9 unchanged sentences

$ 156,895 $ 75,547 $ 232,442

Six months ended June 30, 2022

Nine months ended September 30, 2022

(in thousands)

8 unchanged sentences

Total revenue $ 471,173 $ 294,928 $ 766,101

Six months ended June 30, 2021

Nine months ended September 30, 2021

(in thousands) Point in Time Revenue

8 unchanged sentences

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 June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

(in thousands)

8 unchanged sentences

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.

Remaining performance obligations on contracts that had an original duration of greater than one year totaled $ 600 million and $ 155 million as of September 30, 2022 and 2021, respectively, and related primarily to firm contracts in the AEC segment.

Of the remaining performance obligations as of September 30, 2022, we expect to recognize as revenue approximately $ 46 million during 2022, $ 124 million during 2023, $ 107 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 six months ended June 30, 2022 and 2021, was as follows:

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

Pension plans

10 unchanged sentences

1,493 1,625 1,412 1,695

Net periodic benefit cost $ 1,127 $ 1,647 $ ( 635 ) $ ( 497 )

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 six months of 2022 or 2021.

Net periodic benefit cost/(credit) $ 1,688 $ 2,462 $ ( 952 ) $ ( 745 )

Settlement charge 49,128 — — —

Net benefit cost/(credit) $ 50,816 $ 2,462 $ ( 952 ) $ ( 745 )

The amount of net benefit cost/(credit) 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.

In the third quarter, we took actions to settle certain pension plan liabilities for a plan in the U.S., leading to charges totaling $ 49.1 million.

No similar charges were incurred in the prior year.

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 June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

(in thousands)

6 unchanged sentences

Total $ ( 6,918 ) $ 2,753 $ ( 17,891 ) $ 4,215

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,

Other (income)/expense, net, included foreign currency gains of $ 6.6 million and $ 17.7 million in the three and nine month periods ended September 30, 2022, respectively, as compared to losses of $ 0.5 million and $ 0.8 million in the three and nine month periods ended September 30, 2021, respectively.

The weaker Euro during the three and nine month periods ended September 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 nine months ended September 30, 2022 and 2021:

Three months ended September 30, Nine months ended September 30,

(in thousands, except percentages) 2022 2021 2022 2021

9 unchanged sentences

Provision for/resolution of tax audits and contingencies, net 24 — ( 116 ) 278

US Pension Settlement - Release of Residual Tax Effect ( 5,217 ) — ( 5,217 ) —

Other 322 20 359 88

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

(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.

Total income tax expense/(benefit) $ ( 3,183 ) $ 12,889 $ 22,273 $ 36,375

(1) Calculated at estimated annual tax rates of 28.9 % and 30.0 % for the three and nine months ended September 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.

The Company's policy for releasing income tax effects from accumulated other comprehensive income is the specific identification approach, whereas these items are released to income tax expense when the individual items are disposed of, terminated or extinguished.

The Tax Cuts and Jobs Act lowered the U.S.

corporate tax rate from 35% to 21% as of December 31, 2017, creating residual tax effects as a result of the remeasurement of deferred tax assets and liabilities originally established in other comprehensive income.

As a result of the U.S.

pension liability settlement (see Note 3), and consistent with the Company's policy, in the third quarter of 2022, the Company recorded a net tax benefit of $ 5.2 million for the release of the residual tax effects within other comprehensive income related to the U.S.

pension settlement.

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 June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

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

13 unchanged sentences

Accumulated Other Comprehensive Income (AOCI)

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

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

(in thousands)

4 unchanged sentences

( 79,841 ) — 17,569 ( 62,272 )

Pension settlement expense, net of tax — 26,198 — 26,198

Interest expense related to swaps reclassified to the Consolidated Statements of Income, net of tax — — 2,006 2,006

2 unchanged sentences

Net current period other comprehensive income ( 79,841 ) 25,877 19,575 ( 34,389 )

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:

September 30, 2022 $ ( 185,721 ) $ ( 12,613 ) $ 17,961 $ ( 180,373 )

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

(in thousands) Translation

6 unchanged sentences

Net current period other comprehensive income ( 17,124 ) 602 4,019 ( 12,503 )

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

September 30, 2021 $ ( 100,327 ) $ ( 39,059 ) $ ( 5,525 ) $ ( 144,911 )

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 and six months ended June 30, 2022 and 2021:

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

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 nine months ended September 30, 2022 and 2021:

Three months ended September 30, Nine months ended September 30,

(in thousands)

7 unchanged sentences

Pretax pension and postretirement liabilities reclassified from Accumulated Other Comprehensive Income:

Pension settlement expense 42,657 — 42,657 —

Amortization of prior service credit ( 1,123 ) ( 1,119 ) ( 3,368 ) ( 3,356 )

3 unchanged sentences

Income tax effect

( 16,411 ) 5 ( 16,317 ) 11

Effect on net income due to items reclassified from Accumulated Other Comprehensive Income $ 26,090 $ ( 11 ) $ 25,877 $ ( 25 )

5 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:

Six months ended June 30,

Nine months ended September 30,

(in thousands, except percentages) 2022 2021

12 unchanged sentences

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

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

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

(in thousands)

September 30,

2022 December 31,

7 unchanged sentences

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

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

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

(in thousands)

September 30,

2022 December 31,

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

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

(in thousands)

September 30,

2022 December 31,

4 unchanged sentences

Contract liabilities $ 5,672 $ 6,959

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

Contract assets increased $ 36.2 million during the nine-month period ended September 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.

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

Contract liabilities decreased $ 1.3 million during the nine-month period ended September 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 nine-month periods ended September 30, 2022 and 2021 that was included in the Contract liability balance at the beginning of the year was $ 5.0 million and $ 5.3 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 June 30, 2022 and December 31, 2021, Inventories consisted of the following:

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

(in thousands)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Raw materials $ 66,911 $ 58,689

19 unchanged sentences

(in thousands, except interest rates)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Revolving credit agreement with borrowings outstanding at an end of period interest rate of 3.87 % in 2022 and 3.74 % in 2021 (including the effect of interest rate hedging transactions, as described below), due in 2024

$ 447,000 $ 350,000

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

We had no current maturities of Long-term debt as of September 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, $ 485 million of borrowings were outstanding as of June 30, 2022.

Under the Credit Agreement, $ 447 million of borrowings were outstanding as of September 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 June 27, 2022, the spread was 1.625 %.

At the time of the last borrowing on September 26, 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 June 30, 2022, we would have been able to borrow an additional $ 215 million under the Agreement.

Based on our maximum leverage ratio and our Consolidated EBITDA, and without modification to any other credit agreements, as of September 30, 2022, we would have been able to borrow an additional $ 253 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.

4 unchanged sentences

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 %.

The monthly calculation date is the 16th day of each month, and on September 16, 2022, one-month LIBOR was 2.94 %.

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

1 unchanged sentence

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 %.

The monthly calculation date is the 16th day of each month, and on September 16, 2022, one-month LIBOR was 2.94 %.

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

As of September 30, 2022, our leverage ratio was 1.22 to 1.00 and our interest coverage ratio was 15.79 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 June 30, 2022.

We were in compliance with all debt covenants as of September 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 June 30, 2022, or at December 31, 2021.

We had no Level 3 financial assets or liabilities at September 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:

June 30, 2022 December 31, 2021

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

As of September 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 $ 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.

Interest (income)/expense related to payments under the active swap agreements totaled $ 2.8 million for the nine month period ended

September 30, 2022, and $ 5.3 million for the nine month period ended September 30, 2021.

Additionally, non-cash interest income related to the amortization of swap buyouts totaled $ 0.0 million for the nine month period ended September 30, 2022 and $ 0.3 million for the nine month period ended September 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 June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 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 3,614 claims as of June 30, 2022.

We were defending 3,603 claims as of September 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 June 30) 3,609 8 13 3,614 $ —

2022 (As of September 30) 3,609 27 21 3,603 $ 5

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

As of September 30, 2022, we had resolved, by means of settlement or dismissal, 38,007 claims.

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

Of this amount, almost 100 % was paid by our insurance carrier, who has confirmed that we have approximately $ 140 million of remaining coverage under primary and excess policies that should be available with respect to current and future asbestos claims.

Of this amount,

almost 100 % was paid by our insurance carrier, who has confirmed that we have approximately $ 140 million of remaining coverage under primary and excess policies that should be available with respect to current and future asbestos claims.

The Company’s subsidiary, Brandon Drying Fabrics, Inc.

(“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 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.

While Brandon was defending against 7,709 claims as of September 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.

10 unchanged sentences

Changes in Shareholders’ Equity

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

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

Additional paid-in capital

33 unchanged sentences

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:

Net income — — — — — 10,694 — — — 129 10,823

Compensation and benefits paid or payable in shares — — — — 835 — — — — — 835

Options exercised — — — — 10 — — — — — 10

Shares issued to Directors' — — — — — — — — — — —

Purchase of Treasury shares (a) — — — — — — — — — — —

Dividends declared

Class A Common Stock, $ 0.21 per share

— — — — — ( 6,533 ) — — — — ( 6,533 )

Class B Common Stock, $ 0.21 per share

— — — — — — — — — — —

Cumulative translation adjustments — — — — — — ( 38,450 ) — — ( 56 ) ( 38,506 )

Pension and postretirement liability adjustments — — — — — — ( 629 ) — — — ( 629 )

Settlement of certain pension liabilities — — — — — — 26,198 — — — 26,198

Derivative valuation adjustment — — — — — — 6,208 — — — 6,208

September 30, 2022 40,785 $ 41 — $ — $ 440,295 $ 920,966 $ ( 180,373 ) 9,675 $ ( 364,923 ) $ 4,182 $ 820,188

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

Additional paid-in capital

8 unchanged sentences

Options exercised 6 — — — 128 — — — — — 128

Shares issued to Directors' — — — — — — — — — — —

Dividends declared

20 unchanged sentences

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

Net income — — — — — 30,862 — — — 80 30,942

Compensation and benefits paid or payable in shares — — — — 845 — — — — — 845

Options exercised 1 — — — 4 — — — — — 4

Shares issued to Directors' — — — — — — — — — — —

Dividends declared

Class A Common Stock, $ 0.20 per share

— — — — — ( 6,478 ) — — — — ( 6,478 )

Class B Common Stock, $ 0.20 per share

— — — — — — — — — — —

Conversion of Class B shares to Class A shares (b) 1,617 2 ( 1,617 ) ( 2 ) — — — — — — —

Cumulative translation adjustments — — — — — — ( 14,943 ) — — ( 192 ) ( 15,135 )

Pension and postretirement liability adjustments — — — — — — 223 — — — 223

Derivative valuation adjustment — — — — — — 1,873 — — — 1,873

September 30, 2021 40,760 $ 41 1 $ 0 $ 436,079 $ 841,162 $ ( 144,911 ) 8,380 $ ( 255,768 ) $ 3,730 $ 880,333

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

During the nine month period ending September 30, 2022, the Company repurchased 1,022,717 shares totaling $ 85.1 million.

(b) In the third quarter of 2021, Standish Family Holdings, LLC and J.S.

Standish Company (the "Selling Stockholders") agreed to sell to J.P.

Morgan Securities LLC 1,566,644 shares of the Company’s Class A Common Stock, par value $ 0.001 per share, to be issued upon conversion of an equal number of shares of the Company’s Class B common stock, par value $ 0.001 per share, at a price per share of $ 75.9656 (the "Transaction").

Immediately following the Transaction, the Selling Stockholders and related persons (including Christine L.

Standish and John C.

Standish) hold in the aggregate shares of the Company’s common stock

entitling them to cast less than one percent of the combined votes entitled to be cast by all stockholders of the Company.

Costs associated with the Transaction were borne directly by the Selling Stockholders.

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