What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-02-24 compared with 2022-02-25 · 290 added, 311 removed, 1721 unchanged (26% of the section changed)

94 unchanged sentences

17,835 17,391 16,332

Pension settlement expense 49,128 — —

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

22 unchanged sentences

$ 96,508 $ 118,768 $ 97,243

Other comprehensive income/(loss), before tax:

Other comprehensive income, before tax:

Foreign currency translation and other adjustments

( 40,971 ) ( 20,808 ) 38,927

Pension settlements and curtailments

Reclassification of loss on pension settlement 42,657 — 411

Pension/postretirement plan remeasurement

9 unchanged sentences

25,396 3,764 ( 12,622 )

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

Pension settlements and curtailments

— ( 128 ) ( 74 )

Income taxes related to items of other comprehensive income:

Reclassification of loss on pension settlement ( 16,459 ) — ( 128 )

Pension/postretirement plan remeasurement

84 unchanged sentences

Change in deferred taxes and other liabilities ( 8,496 ) 12,181 11,101

Impairment of property, plant and equipment 856 1,173 3,119

Impairment of property, plant, equipment, and inventory 1,808 856 1,173

Non-cash interest expense 1,118 875 ( 290 )

Write-off of pension liability adjustments due to settlement/curtailment — 411 450

Non-cash portion of pension settlement expense 42,657 — 411

Compensation and benefits paid or payable in Class A Common Stock 4,527 3,146 1,505

Provision for credit losses from uncollected receivables and contract assets ( 1,299 ) 1,628 309

Provision/(recovery) for credit losses from uncollected receivables and contract assets 1,408 ( 1,299 ) 1,628

Foreign currency remeasurement (gain)/loss on intercompany loans ( 4,434 ) ( 3,150 ) 14,246

14 unchanged sentences

INVESTING ACTIVITIES

Purchase of business, net of cash acquired — — ( 30,793 )

Purchases of property, plant and equipment ( 93,675 ) ( 52,793 ) ( 41,463 )

22 unchanged sentences

and its subsidiaries (the Company, Albany, we, us, or our) after elimination of intercompany transactions.

We have a 50 percent interest in an entity in Russia.

The consolidated financial statements include our original investment in the entity, plus our share of undistributed earnings or losses, in the account “Other Assets.”

A subsidiary within our Machine Clothing segment has held a 50 percent interest as partner in a joint venture (“JV”) that supplies paper machine clothing products to local papermakers in Russia.

Our consolidated financial statements include our original investment in the entity, plus our share of undistributed earnings or losses, in the account “Other Assets.” In March 2022, we made the decision to cease doing business in Russia, including giving notice to our JV partner of our intent to exit the venture, resulting in our full write-off of the net book value of our investment.

The Company owns 90 percent of the common equity of Albany Safran Composites, LLC (ASC) which is reported within the Albany Engineered Composites (AEC) segment.

1 unchanged sentence

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Estimates are used in the accounting for, among others, revenue recognition, contract profitability, allowances for doubtful accounts, rebates and sales allowances, inventory allowances, pension and other postretirement benefits, goodwill and intangible assets, contingencies, income taxes, and other accruals.

Estimates are used in the accounting for, among others, revenue recognition, contract profitability, allowances for doubtful accounts, rebates and sales allowances, inventory allowances, financial instruments, including derivatives, pension and other postretirement benefits, goodwill and intangible assets, contingencies, income taxes, and other accruals.

Our estimates are based on historical experience and on various other assumptions, which are believed to be reasonable under the circumstances.

2 unchanged sentences

Revenue Recognition

In our Machine Clothing (MC) business segment, we recognize revenue when we satisfy our performance obligations related to the manufacture and delivery of products.

In our Machine Clothing (MC) business segment, we recognize revenue at the point in time when we satisfy our performance obligations related to the manufacture and delivery of products.

In our Albany Engineered Composites (AEC) business segment, revenue from most long-term contracts is recognized over time using an input method as the measure of progress.

7 unchanged sentences

Products and services provided under long-term contracts represent a significant portion of sales in the Albany Engineered Composites segment.

We have a contract with a major customer for which revenue is recognized under a cost-plus-fee agreement.

We also have fixed price long-term contracts, for which we use the percentage of completion (actual cost to estimated cost) method.

That method requires significant judgment and estimation, which could be considerably different if the underlying circumstances were to change.

When adjustments in estimated contract revenues or costs are required, any changes from prior estimates are included in earnings in the period the change occurs.

The sum of net adjustments to the estimated profitability of long-term contracts increased AEC operating income by $ 6.2 million, $ 9.9 million and $ 10.8 million in 2021, 2020 and 2019, respectively.

The favorable effects in

We have a contract with a major customer for which revenue is recognized under a

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Accounting Policies — (continued)

2021, 2020 and 2019 were largely due to changes in customer demand and to a lesser extent, efficiency improvements during the ramp-up of several programs.

cost-plus-fee agreement.

We also have fixed price long-term contracts, for which we use the percentage of completion (incurred cost to total estimated cost) method.

That method requires significant judgment and estimation, which could be considerably different if the underlying circumstances were to change.

When adjustments in estimated contract revenues or costs are required, any changes from prior estimates are included in earnings in the period the change occurs.

The sum of net adjustments to the estimated profitability of long-term contracts increased AEC operating income by $ 0.5 million, $ 6.2 million and $ 9.9 million in 2022, 2021 and 2020, respectively.

The favorable effects in 2021 and 2020 were largely due to changes in customer demand and to a lesser extent, efficiency improvements during the ramp-up of several programs, and the effects in 2022 were more muted.

Additional accounting policies related to revenue from contracts with customers are set forth in Note 2.

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Deferred income taxes are recognized for the tax consequences of temporary differences and tax attributes by applying enacted statutory tax rates applicable for future years to differences between existing assets and liabilities for financial reporting and income tax return purposes.

The effect of tax rate changes on deferred taxes is recognized in the income tax provision in the period that includes the enactment date.

A valuation allowance is established, as needed, to reduce net deferred tax assets to the amount expected to be realized.

In the event it becomes more likely than not that some or all of the deferred tax asset valuation allowances will not be needed, the valuation allowance will be adjusted.

The effect of tax rate changes on deferred taxes is recognized in

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Accounting Policies — (continued)

the income tax provision in the period that includes the enactment date.

A valuation allowance is established, as needed, to reduce net deferred tax assets to the amount expected to be realized.

In the event it becomes more likely than not that some or all of the deferred tax asset valuation allowances will not be needed, the valuation allowance will be adjusted.

In the ordinary course of business there is inherent uncertainty in quantifying our income tax positions.

27 unchanged sentences

Loss/(gain), before tax, on long-term intercompany loan $ — $ ( 66 ) $ ( 4,985 )

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and highly liquid short-term investments with original maturities of three months or less.

Accounts Receivable

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Accounting Policies — (continued)

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and highly liquid short-term investments with original maturities of three months or less.

Accounts Receivable

Accounts receivable includes trade receivables and bank promissory notes.

11 unchanged sentences

The Company also has Noncurrent receivables in the AEC segment that represent revenue earned which have extended payment terms.

The Noncurrent receivables will be invoiced to the customer, with 2 % interest, over a 10 -year period that started in 2020.

The Noncurrent receivables are invoiced to the customer, with 2 % interest, over a 10 -year period that started in 2020.

See additional information, including accounting policies related to our adoption of the CECL update, set forth in Notes 2 and 11.

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See additional information set forth in Notes 2 and 13.

Effective January 1, 2019, we adopted the provisions of ASC 842, Leases, using the effective date (or modified retrospective) approach for transition.

Under this transition method, periods prior to 2019 have not been restated, and the cumulative effect of initially applying the new standard was recorded as an adjustment to Retained earnings at January 1, 2019.

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Accounting Policies — (continued)

The new standard is intended to increase transparency and comparability among organizations by requiring the recognition of right of use (“ROU”) assets and lease liabilities on the balance sheet.

Most prominent among the changes under the new standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases.

Under the new standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

We applied the new accounting standard to leases existing at the date of initial application of January 1, 2019.

We elected the available package of practical expedients, which permitted us to not reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs.

We implemented processes and internal controls to enable the preparation of financial information related to this standard.

The most significant impacts resulting from the adoption of the new standard were the recognition of ROU assets and lease liabilities for operating leases on our balance sheet for our real estate and automobile operating leases, as well as to the derecognition and reassessment of assets and liabilities related to our primary manufacturing facility in Salt Lake City, Utah (SLC lease) which, previously, had been accounted for as a build-to-suit lease with a failed sale-leaseback.

For that lease, transitional guidance required the derecognition of existing assets and liabilities and a reassessment of lease classification.

We determined that the lease met the criteria for recording as a finance lease and we determined the January 1, 2019 values of the ROU asset and lease liability on the basis of that reassessment.

The change in the SLC lease-related assets and liabilities resulted in a $ 0.3 million pre-tax reduction to Retained earnings at the date of adoption.

We determine if an arrangement is a lease at inception.

A contract is, or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

To assess whether a contract conveys the right to control the use of an identified asset, we assess whether:

• The contract involves the use of an identified asset.

This may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset,

• The lessee has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use, and

• The lessee has the right to direct the use of the asset, which is demonstrated when the lessee has decision-making rights that are most relevant to changing how and for what purpose the asset is used.

Judgment is required in the determination of whether a contract contains a lease, the appropriate classification, allocation of consideration, and the determination of the discount rate for the lease.

Key estimates and judgments include how the Company determines (1) the discount rate it uses to discount the unpaid lease payments to present value, (2) lease term and (3) lease payments.

We have certain lease agreements with lease and non-lease components.

1 unchanged sentence

Additionally, for certain other leases, such as for vehicles, we apply a portfolio approach.

Such new leases are classified as financing or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

Expenses related to operating leases are recognized on a straight-line basis, while those determined to be financing leases are recognized following a front-loaded expense profile, in which interest and amortization are presented separately in the income statement.

Such new leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

Expenses related to operating leases are recognized on a straight-line basis, while those determined to be finance leases are recognized following a front-loaded expense profile, in which interest and amortization are presented separately in the income statement.

Operating lease ROU assets are included in Other assets in the Consolidated Balance Sheets, while finance lease ROU assets are included in Property, plant, and equipment, net.

36 unchanged sentences

Under the income approach, we determine fair value based on estimated future cash flows of each reporting unit, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn.

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.

3 unchanged sentences

See additional information set forth in Note 18.

We have an investment in a company in Russia that is accounted for under the equity method of accounting and is included in Other assets.

We perform regular reviews of the financial condition of the investee to determine if our investment is other than temporarily impaired.

If the financial condition of the investee were to no longer support their valuation, we would record an impairment provision.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Accounting Policies — (continued)

For some AEC contracts, we perform pre-production or nonrecurring engineering services.

2 unchanged sentences

The capitalized costs are amortized into Cost of goods sold over the period over which the asset is expected to contribute to future cash flows, which includes anticipated renewal periods.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Accounting Policies — (continued)

Included in Other assets is $ 16.2 million in 2022 and $ 32.5 million in 2021 for defined benefit pension plans where plan assets exceed the projected benefit obligations.

7 unchanged sentences

See additional information for stock-based compensation plans in Note 22.

No stock options have been granted since 2002.

Unexercised options generally terminate twenty years after the date of grant for all plans, and must be exercised within ten years of retirement.

We recognized no stock option expense during 2022, 2021, or 2020 and there are currently no remaining unvested options for which stock-option compensation costs will be recognized in future periods.

No stock options have been granted since 2002.

We use derivatives from time to time to reduce potentially large adverse effects from changes in currency exchange rates and interest rates.

12 unchanged sentences

Pension and Postretirement Benefit Plans

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Accounting Policies — (continued)

As described in Note 4, we have pension and postretirement benefit plans covering substantially all employees.

Our defined benefit pension plan in the United States was closed to new participants as of October 1998 and, as of February 2009, benefits accrued under this plan were frozen.

Our Pension Plus Plan in the United States was settled during the third quarter of 2022.This was a qualified defined benefit pension plan that was previously terminated in the third quarter of 2021, and prior to that point was closed to new participants and had frozen accrual of benefits.

We have liabilities for postretirement benefits in the U.S.

Substantially all of the liability relates to the U.S.

A majority of the liability relates to the U.S.

Effective January 2005, our postretirement benefit plan in the U.S.

was closed to new participants, except for certain life insurance benefits.

In September 2008, we changed the cost sharing arrangement under this program such that increases in health care costs are the responsibility of plan participants and, in August 2013, we reduced the life insurance benefit for retirees and eliminated that benefit for active employees.

In September 2008, we changed the cost sharing arrangement under this program

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Accounting Policies — (continued)

such that increases in health care costs are the responsibility of plan participants and, in August 2013, we reduced the life insurance benefit for retirees and eliminated that benefit for active employees.

The pension plans are generally trusteed or insured, and accrued amounts are funded as required in accordance with governing laws and regulations.

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aircraft manufacturing/repair businesses who were impacted due to the COVID-19 downturn during 2020.

The Company received $ 2.9 million in cash during the third quarter of 2021, and anticipates receiving the remaining balance in 2022.

Accordingly, the Company recognized $ 5.8 million in its Consolidated Statements of Income for the year ended December 31, 2021, and reflected cash received to date as an operating activity within the Consolidated Statements of Cash Flows.

Recent Accounting Pronouncements

In November 2021, an accounting update was issued which requires new annual disclosures for entities receiving government assistance.

The standard is effective for annual periods in fiscal years beginning after December 15, 2021.

We do not expect it will have a material effect on our financial statements.

In order to receive the grant, AEC was required to make several commitments, including a commitment that the company would not involuntarily furlough or lay-off employees within this segment during the period the grant was intended to cover.

All conditions were met and the Company recognized $ 5.8 million in its Consolidated Statements of Income for the year ended December 31, 2021.

The Company received $ 2.9 million in cash during 2021 and the remainder during 2022 and reflected cash received as an operating activity within the Consolidated Statements of Cash Flows over the periods cash was received.

Subsequent Events

4 unchanged sentences

We recognize revenue when we satisfy a performance obligation by transferring control over a product or service, or a series of distinct goods or services, to the customer which occurs either at a point in time, or over time, depending on the performance obligation in the contract.

A performance

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Revenue Recognition — (continued)

obligation is a promise in the contract to transfer a distinct good or service to the customer, and is the unit of account.

A performance obligation is a promise in the contract to transfer a distinct good or service to the customer, and is the unit of account.

“Control” refers to the ability to direct the use of, and obtain substantially all of the remaining benefits from the product.

2 unchanged sentences

We satisfy this performance obligation upon transferring control of the product to the customer at a specific point in time.

Contracts with customers in the MC segment have various terms that can affect the point in time when revenue is recognized.

Contracts with customers in the MC segment have various terms

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Revenue Recognition — (continued)

that can affect the point in time when revenue is recognized.

Generally, the customer obtains control when the product has been received at the location specified by the customer, at which time the only remaining obligations under the contract may be fulfillment costs, in the form of shipping and handling, which are accrued when control of the product is transferred.

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The selection of the method to measure progress toward completion requires judgment and is based on the nature of the products or services to be provided.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Revenue Recognition — (continued)

generally use the cost-to-cost measure of progress for our contracts because it best depicts the transfer of assets to the customer which occurs as we incur costs to produce the contract deliverables.

We generally use the cost-to-cost measure of progress for our contracts because it best depicts the transfer of assets to the customer which occurs as we incur costs to produce the contract deliverables.

Under the cost-to-cost measure of progress, the extent of progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation.

2 unchanged sentences

When any adjustments of estimated contract revenue or costs are required, any changes from prior estimates are included in revenues or earnings in the period in which the change occurs.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Revenue Recognition — (continued)

In other AEC contracts, revenue is recognized at a point in time because the products are offered to multiple customers, or we do not have an enforceable right to payment until the product is shipped or delivered to the location specified by the customer in the contract.

AEC’s largest source of revenue is derived from the LEAP contract (see Note 10) under a cost-plus-fee agreement.

Beginning in 2018, the fee is variable based on our success in achieving certain cost targets.

The fee is variable based on our success in achieving certain cost targets.

Revenue is recognized over time as costs are incurred.

3 unchanged sentences

The following table provides a summary of the composition of each business segment:

Segment Product Group Principal Product or Service Principal Locations

Segment Reporting Unit Principal Product or Service Principal Locations

Machine Clothing (MC) Machine Clothing Paper machine clothing:

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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:

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Revenue Recognition — (continued)

For the year ended December 31,

4 unchanged sentences

Total Machine Clothing Net sales $ 609,461 $ 619,015 $ 572,955

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Revenue Recognition — (continued)

We do not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.

17 unchanged sentences

The segment includes Albany Safran Composites, LLC (“ASC”), in which our customer, SAFRAN Group, owns a 10 percent noncontrolling interest, AEC, through ASC, is the exclusive supplier to 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’s largest aerospace customer is the SAFRAN Group and sales to SAFRAN (consisting primarily of fan blades and

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Reportable Segments and Geographic Data — (continued)

cases for CFM’s LEAP engine) accounted for approximately 12 percent of the Company’s consolidated Net sales in 2021.

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

AEC’s largest aerospace customer is SAFRAN and sales to SAFRAN (consisting primarily of fan blades and cases for CFM’s LEAP engine) accounted for approximately 16 percent of the Company’s consolidated Net sales in 2022.

In 2022, SAFRAN leased manufacturing space from AEC for the GE9X program.

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The total of Accounts receivable, Contract assets and Noncurrent receivable due from SAFRAN amounted to $ 80.8 million and $ 79.6 million as of December 31, 2022 and 2021, respectively.

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

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.

In 2022, approximately 46 percent of AEC sales were related to U.S.

government contracts or programs.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Reportable Segments and Geographic Data — (continued)

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

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17,835 17,391 16,332

Pension settlement expense 49,128 — —

AMJP grant — ( 5,832 ) —

3 unchanged sentences

$ 131,980 $ 165,931 $ 139,074

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.

In March 2022, we made the decision to cease doing business in Russia, including giving notice to our JV partner of our intent to exit the venture.

As a result, we recognized $ 1.5 million expense in the consolidated statement of operations, representing reserves against the risk of uncollectible customer receivables and obsolescence of certain inventory destined for Russian customers.

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.

The table below presents restructuring costs by reportable segment (also see Note 5):

5 unchanged sentences

Albany Engineered Composites

32 2,821 1,833

Corporate expenses

97 169 ( 57 )

Consolidated total

$ 106 $ 1,331 $ 5,736

In the measurement of assets utilized by each reportable segment, we include Inventories, Accounts receivable, net, Contract assets, net, Noncurrent receivables, net, Property, plant and equipment, net, Intangibles, net and

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Reportable Segments and Geographic Data — (continued)

On November 20, 2019, the Company acquired CirComp GmbH, resulting in a $ 35.3 million increase in AEC assets.

The following table presents assets and capital expenditures by reportable segment:

19 unchanged sentences

73,614 31,012 23,718

Corporate 2,510 2,880 2,495

Corporate expenses 2,641 2,510 2,880

Consolidated total

$ 96,348 $ 53,699 $ 42,390

In 2022, the Company extended the lease of its primary manufacturing facility in Salt Lake City, Utah, which resulted in a lease classification change from Finance to Operating and included a non-cash increase of $ 37.1 million to both Other assets and to Other noncurrent liabilities in the Consolidated Balance Sheets.

Due to the non-cash nature of the transaction, those increases are excluded from amounts reported in the Consolidated Statements of Cash Flows.

ALBANY INTERNATIONAL CORP.

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$ 586,779 $ 497,231 $ 503,473

128,698 128,328 146,571

Switzerland 119,069 128,698 128,328

France 76,826 68,929 55,914

China 67,098 57,007 48,586

Brazil 66,175 62,925 60,259

37,547 39,859 73,039

China 63,914 67,098 57,007

Mexico 58,519 37,547 39,859

Italy 20,074 21,523 12,424

Other countries

5 unchanged sentences

$ 278,500 $ 258,453 $ 263,201

China 41,039 40,898 41,799

Mexico 42,320 40,699 41,738

China 33,432 41,039 40,898

France 31,382 33,802 41,107

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The Company has defined benefit pension plans covering certain U.S.

Pension Plus Plan (or the "Plan"), is a qualified defined benefit pension plan that has been closed to new participants since October 1998 and, as of February 2009, benefits accrued under the Plan were frozen.

As a result of the freeze, employees covered by the Plan will receive, at retirement, benefits accrued through February 2009, but no benefits accrue after that date.

In the third quarter of 2022, we took actions to settle pension plan liabilities related to the U.S.

Pension Plus Plan, leading to charges totaling $ 49.1 million.

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

This was a qualified defined benefit pension plan that was previously terminated in the third quarter of 2021, and prior to that point was closed to new participants and had frozen accrual of benefits.

The December 31, 2022 benefit obligations for remaining U.S.

pension and postretirement plans were calculated using the Pri-2012 mortality table with MP-2021 generational projection.

pension funding purposes, the Company uses the plan’s IRS-basis current liability as its funding target, which is determined based on mandated assumptions.

Benefit accruals under the U.S.

Supplemental Executive Retirement Plan (“SERP”), which is an unfunded plan, were similarly frozen.

Pension Plus Plan accounts for 44 percent of consolidated pension plan assets, and 48 percent of consolidated pension plan obligations.

Supplemental Executive Retirement Plan (“SERP”), which is an unfunded plan, have been frozen.

The eligibility, benefit formulas, and contribution requirements for plans outside of the U.S.

vary by location.

On July 29, 2021, the Company notified the participants of the U.S.

Pension Plus Plan of its intent to terminate the Plan.

In order to facilitate such termination, the Company has amended the Plan to, among other things, establish the termination date and set forth the procedures for termination.

The Company also filed the necessary application with the Internal Revenue Service requesting the issuance of a determination letter regarding the Plan’s qualification status at termination.

The Plan was terminated on September 30, 2021.

This has not resulted in a curtailment or settlement charge during the year ended December 31, 2021;

however, the year-end liability on the Consolidated Balance Sheets reflects assumptions and estimates of the impending settlement of the plan.

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Pensions and Other Postretirement Benefit Plans — (continued)

The December 31, 2021 benefit obligations for the U.S.

pension and postretirement plans were calculated using the Pri-2012 mortality table with MP-2020 generational projection.

pension funding purposes, the Company uses the plan’s IRS-basis current liability as its funding target, which is determined based on mandated assumptions.

Benefits under the Company's pension plan in Switzerland utilize a cash balance interest crediting rate for determination of plan liabilities.

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3.08 % 2.75 % 2.70 % 2.75 %

During 2022, pension benefit obligations decrease d by $ 147 million, $ 91.6 million of which was related to the US Pension Plus plan settlement, and $ 47.0 million of which was driven by net actuarial gains, principally resulting from higher discount rates, in addition to employer contributions of $ 7.9 million.

Other postretirement benefit obligations decreased by $ 9.2 million in 2022, primarily driven by net actuarial gains and payments made by the Company to participants of the plan .

During 2021, pension benefit obligations decreased by $ 15.0 million, $ 7.2 million of which was driven by net actuarial gains, principally resulting from higher discount rates, in addition to employer contributions of $ 9.4 million.

Other postretirement benefit obligations decreased by $ 3.1 million in 2021, primarily driven by payments made by the Company to participants of the plans.

During 2020, pension benefit obligations increased by $ 18.6 million, $ 13.3 million of which was driven by net actuarial losses, principally resulting from a lower discount rate.

Other postretirement benefit obligations decreased by $ 6.4 million in 2020, as changes in demographic data assumptions which resulted from a 2020 experience study, were partially offset by lower discount rates.

ALBANY INTERNATIONAL CORP.

117 unchanged sentences

$ ( 34,613 ) $ ( 1,063 ) $ ( 10,424 ) $ ( 4,642 ) $ 1,235 $ ( 2,895 )

Investment Strategy

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Pensions and Other Postretirement Benefit Plans — (continued)

Investment Strategy

Our investment strategy for pension assets differs for the various countries in which we have defined benefit pension plans.

Some of our defined benefit plans do not require funded trusts and, in those arrangements, the Company funds the plans on a “pay as you go” basis.

The largest of the funded defined benefit plans is the United States plan.

The largest of the funded defined benefit plans is in the United Kingdom.

United States plan:

During 2009, we changed our investment strategy for the United States pension plan by adopting a liability-driven investment strategy.

Under this arrangement, the Company seeks to invest in assets that track closely to the discount rate that is used to measure the plan liabilities.

Accordingly, the plan assets are primarily debt securities.

The change in investment strategy is reflective of the Company’s 2008 decision to freeze benefit accruals under the plan.

Since the settlement of the U.S.

Pension Plus Plan during the third quarter of 2022, there have been no investments made to the remaining plans in the United States.

Non-United States plans:

35 unchanged sentences

Cash and short-term investments

1,095 — — 1,095

Total investments in the fair value hierarchy

33 unchanged sentences

Equity securities

— % — % — % 13 % 13 % 13 %

N/A N/A — % 14 % 15 % 13 %

Debt securities

100 % 98 % 98 % 82 % 80 % 81 %

— % 2 % 2 % 1 % 1 % 1 %

— % — % — % 4 % 6 % 5 %

N/A N/A 98 % 81 % 76 % 80 %

N/A N/A 2 % 1 % 1 % 1 %

N/A N/A — % 4 % 8 % 6 %

— % — % 100 % 100 % 100 % 100 %

36 unchanged sentences

Restructuring

In 2020, AEC reduced its workforce at various locations, principally in the United States, leading to restructuring charges of $ 2.8 million.

In 2017, the Company announced a proposal to discontinue operations at its MC production facility in Sélestat, France.

The restructuring program was driven by the Company’s need to balance manufacturing capacity with demand.

During 2017, we incurred $ 1.1 million of restructuring expense associated with this proposal but were unable to reasonably estimate the total costs for severance and other charges associated with the proposal as there was no assurance, at that time, that approval for the proposal would be obtained.

In 2018, the plan was approved by the French Labor Ministry which led to restructuring expense of $ 10.7 million in 2018, which included severance and outplacement costs for the approximately 50 positions that were terminated under this plan.

In 2019, restructuring charges were $ 0.9 million, in 2020, restructuring charges were $ 1.2 million, and in 2021, restructuring charges were $ 0.4 million.

Since 2017, we have recorded $ 14.3 million of restructuring charges related to this action.

In 2018, the Company discontinued certain manufacturing processes at its AEC facility in Salt Lake City, Utah, which resulted in $ 1.9 million of restructuring in 2018, which included a non-cash restructuring charge of $ 1.7 million, and an additional $ 0.2 million for severance.

The non-cash restructuring charge resulted from writing down manufacturing equipment used in that line of business to its estimated value.

In 2019, the Company wrote off the remaining $ 1.2 million book value of that equipment as the Company was unable to sell it.

To date, we have recorded $ 3.1 million of restructuring charges related to these actions.

Restructuring activities have decreased in the last two years.

Restructuring expense, net during this period has been related primarily to the winding down of restructuring actions taken in years previous.

The following table summarizes charges reported in the Consolidated Statements of Income under “Restructuring expenses, net”:

13 unchanged sentences

Albany Engineered Composites

2,821 2,821 —

Corporate expenses

9 unchanged sentences

$ 5,736 $ 5,736 $ —

$ 2,905 $ 1,269 $ 1,636

We expect that approximately $ 0.9 million of Accrued liabilities for restructuring at December 31, 2021 will be paid within one year and approximately $ 0.1 million will be paid the following year.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Restructuring — (continued)

In 2020, AEC reduced its workforce at various locations, principally in the United States, leading to restructuring charges, and MC recorded charges related to the discontinuance of operations in the Selestat, France location.

As of December 31, 2022, there is no remaining balance in Accrued liabilities for restructuring.

The table below presents the changes in restructuring liabilities for 2022 and 2021, all of which related to termination costs:

11 unchanged sentences

$ 2,195 $ 1,331 $ ( 2,469 ) $ ( 12 ) $ 1,045

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Other expense/(income), net

3 unchanged sentences

Currency transactions $ ( 9,996 ) $ ( 1,179 ) $ 13,569

$ ( 1,179 ) $ 13,569 $ ( 4,471 )

Bank fees and other costs 373 367 348

Pension settlements and curtailments

Sale of IP addresses ( 3,420 ) — —

Bank fees and amortization of debt issuance costs 313 373 367

Components of net periodic pension and postretirement cost other than service ( 1,077 ) 156 1,561

156 1,561 1,105

3,671 ( 2,486 ) 1,011

Other 94 3,671 ( 2,075 )

$ ( 14,086 ) $ 3,021 $ 13,422

In 2021, Other (income)/expense, net included gains related to the revaluation of nonfunctional-currency balances of $ 1.2 million, as compared to a loss of $ 13.6 million during 2020, principally resulting from the effect of variations in the strength of the peso on intercompany demand loans payable by Mexican subsidiaries.

In 2022, Other (income)/expense, net included gains related to the revaluation of nonfunctional-currency balances of $ 10.0 million, as compared to a gain of $ 1.2 million during 2021, principally resulting from a weaker Euro throughout the course of 2022.

As a result of changes in business conditions that occurred in the first quarter of 2020, certain loan repayments were no longer expected in the foreseeable future and, beginning April 1, 2020, the revaluation effects for those loans were recorded in Other comprehensive income, which resulted in a pre-tax gain of $ 5.0 million being recorded in Other comprehensive income in 2020.

The same loans had an insignificant effect on Other comprehensive income in 2021.

In 2020, the Company recorded other income of $ 2.6 million related to a successful claim for a rebate of foreign sales tax paid in previous years.

In 2019, the Company took actions to freeze accrued benefits under the United Kingdom defined benefit pension plan, which resulted in a curtailment charge of $ 0.5 million.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

The same loans had an insignificant effect on Other comprehensive income in 2021 and 2022.

In 2022, the Company recorded a gain of $ 3.4 million on the sale of IP addresses that the Company had no future critical need to retain.

There were no similar gains of this nature in the previous two years.

Provision for income taxes consisted of the following:

1 unchanged sentence

(in thousands) 2022 2021 2020

2021 2020 2019

Income before income taxes:

3 unchanged sentences

Income tax expense/(benefit)

$ 3,348 $ 1,415 $ 780

2,663 2,028 6,357

29,319 26,916 25,255

$ 35,330 $ 30,359 $ 32,392

Federal $ 9,781 $ 3,348 $ 1,415

State 5,126 2,663 2,028

28,605 29,319 26,916

$ 43,512 $ 35,330 $ 30,359

Federal $ ( 9,592 ) $ 9,911 $ 11,211

State ( 1,866 ) ( 24 ) 192

3,418 1,946 69

1 unchanged sentence

Total income tax expense $ 35,472 $ 47,163 $ 41,831

$ 47,163 $ 41,831 $ 44,829

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Income Taxes — (continued)

A reconciliation of the U.S.

2 unchanged sentences

federal statutory tax rate 21.0 % 21.0 % 21.0 %

21.0 % 21.0 % 21.0 %

State taxes, net of federal benefit 2.5 1.8 1.8

1 unchanged sentence

permanent adjustments 1.4 1.1 0.1

Foreign permanent adjustments ( 2.1 ) 0.3 —

Foreign rate differential 3.1 1.2 0.6

2 unchanged sentences

Provision for/(resolution) of tax audits and contingencies, net 0.3 0.1 0.5

Pension Settlement - Release of Residual Tax Effect ( 4.0 ) — —

Tax effect of non-deductible foreign exchange loss on intercompany loan — — 2.7

Impact of amended tax returns ( 0.1 ) ( 1.3 ) —

Return to provision and other adjustments

( 0.1 ) ( 1.0 ) ( 2.4 )

Return to provision ( 1.1 ) ( 1.4 ) ( 1.6 )

Other adjustments ( 1.4 ) 1.0 0.6

Effective income tax rate 26.9 % 28.4 % 30.1 %

28.4 % 30.1 % 25.2 %

The Company recorded a net tax benefit of $ 5.2 million for the release of the residual tax effects that were stranded within other comprehensive income related to the U.S.

pension settlement.

The residual tax effects were created as a result of the remeasurement of deferred tax assets and liabilities originally established in other comprehensive income in accordance with the Tax Cuts and Jobs Act lowering the U.S.

corporate tax rate from 35% to 21% as of December 31, 2017.

The Company's subsidiary in Mexico has an intercompany loan payable in U.S.

6 unchanged sentences

was heavily concentrated within Brazil ( 34 % tax rate), China ( 25 % tax rate), and Mexico ( 30 % tax rate).

The foreign rate differential of these jurisdictions was partially offset

The foreign rate differential of these jurisdictions was partially offset by Switzerland ( 7.8 % tax rate).

As a result, the foreign income tax rate differential was primarily attributable to these tax rate differences.

On August 16th, 2022, The Inflation Reduction Act (“IRA”) was enacted, including various provisions which become effective for tax years beginning after December 31, 2022.

Included within the IRA were provisions for a newly enacted Stock Repurchase Excise Tax, Corporate Alternative Minimum Tax, among others.

None of the enacted provisions within the IRA are expected to have a material effect to the Company.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

by Switzerland ( 7.8 % tax rate).

As a result, the foreign income tax rate differential was primarily attributable to these tax rate differences.

Income Taxes — (continued)

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of certain assets and liabilities for financial reporting purposes and income tax purposes.

2 unchanged sentences

(in thousands) 2022 2021 2022 2021

2021 2020 2021 2020

Deferred tax assets:

Accounts receivable, net $ 436 $ 428 $ 1,300 $ 1,378

1,450 762 1,752 1,995

Inventories 1,807 1,450 1,111 1,752

Incentive compensation 4,619 4,580 1,333 1,084

2 unchanged sentences

Tax loss carryforwards 239 217 14,201 19,821

217 517 19,821 24,509

Tax credit carryforwards 2,635 4,643 — —

4,643 9,236 — 954

Derivatives — 468 — —

Leases 7,597 1,658 — —

Reserves 721 991 — —

Deferred revenue 761 239 — —

— — 1,791 638

Other 47 329 1,707 1,791

Deferred tax assets before valuation allowance 28,003 27,915 21,544 30,165

valuation allowance ( 8 ) ( 9 ) ( 9,778 ) ( 10,650 )

( 9 ) ( 9 ) ( 10,650 ) ( 10,261 )

Total deferred tax assets $ 27,995 $ 27,906 $ 11,766 $ 19,515

1 unchanged sentence

Unrepatriated foreign earnings $ 5,827 $ 6,308 $ — $ —

$ 6,308 $ 3,779 $ — $ —

Property, plant, equipment and intangibles, net 3,084 5,356 — —

1 unchanged sentence

Basis difference in investment 4,173 3,985 — —

Derivatives 5,941 — — —

Leases 11,609 2,950 — —

Deferred revenue — — 6,440 10,829

963 519 602 —

Other — — 419 602

Total deferred tax liabilities 32,795 21,065 6,859 11,431

Net deferred tax asset

$ 6,841 $ 18,412 $ 8,084 $ 10,827

Net deferred tax (liability)/asset $ ( 4,800 ) $ 6,841 $ 4,907 $ 8,084

Deferred income tax assets, net of valuation allowances, are expected to be realized through the reversal of existing taxable temporary differences and future taxable income.

2 unchanged sentences

Notes to Consolidated Financial Statements

Income Taxes — (continued)

As of December 31, 2022, the Company's net operating loss, capital loss and tax credit carryforwards were as follows:

20 unchanged sentences

(in thousands) 2022 2021 2020

2021 2020 2019

Unrecognized tax benefits balance at January 1, $ 1,459 $ 5,491 $ 5,834

Increase in gross amounts of tax positions related to prior years 399 278 540

278 540 4,874

Decrease in gross amounts of tax positions related to prior years ( 929 ) ( 4,236 ) ( 637 )

( 4,236 ) ( 637 ) ( 2,239 )

Increase in gross amounts of tax positions related to current years 37 — —

1 unchanged sentence

Decrease due to lapse in statute of limitations — ( 39 ) ( 300 )

( 39 ) ( 300 ) ( 626 )

Currency translation ( 174 ) ( 35 ) 54

15 unchanged sentences

Stock options

Long-term incentive plan

Long-term incentive plans 116 113 20

Weighted average number of shares used in calculating diluted net income per share

5 unchanged sentences

$ 3.04 $ 3.65 $ 3.05

Shares outstanding, net of treasury shares, were 32.1 million as of December 31, 2021, and 32.3 million as of 2020 and 2019.

Shares outstanding, net of treasury shares, were 31.1 million as of December 31, 2022, 32.1 million as of December 31, 2021, and 32.3 million as of December 31, 2020.

ALBANY INTERNATIONAL CORP.

13 unchanged sentences

Pension and postretirement liability adjustments reclassified to Statements of Income, net of tax — 382 — 382

Adjustment related to prior period change in opening valuation allowance — ( 1,346 ) — ( 1,346 )

Net current period other comprehensive income 39,649 10,333 ( 6,409 ) 43,573

2 unchanged sentences

Other comprehensive income/(loss) before reclassifications ( 22,677 ) 1,869 2,812 ( 17,996 )

Pension/postretirement settlements and curtailments, net of tax — 283 — 283

Pension/postretirement plan remeasurement, net of tax — ( 796 ) — ( 796 )

5 unchanged sentences

Other comprehensive income/(loss) before reclassifications ( 40,971 ) — 18,971 ( 22,000 )

Pension/postretirement settlements and curtailments, net of tax — — — —

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

Pension/postretirement plan remeasurement, net of tax — ( 2,663 ) — ( 2,663 )

25 unchanged sentences

Total pretax amount reclassified (b)

41,420 150 941

Income tax effect

26 unchanged sentences

Net income/(loss) attributable to noncontrolling interest

290 ( 1,346 )

Changes in other comprehensive income attributable to noncontrolling interest

( 451 ) 1,139

Noncontrolling interest, end of year

9 unchanged sentences

The Company has Noncurrent receivables in the AEC segment that represent revenue earned, which has extended payment terms.

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

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

As of December 31, 2022 and December 31, 2021, Noncurrent receivables were as follows:

9 unchanged sentences

The estimate reflects the risk of loss due to credit default, even when the risk is remote, and considers available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable expected future economic conditions.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Accounts Rec— (continued)

While an expected credit loss allowance is recorded at the same time the financial asset is recorded, the Company monitors financial assets for credit impairment events to assess whether there has been a significant increase in credit risk since initial recognition, and considers both quantitative and qualitative information.

29 unchanged sentences

Noncurrent receivables expected credit losses $ ( 200 ) $ 62 $ ( 2 ) $ — $ ( 140 )

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Accounts Rec— (continued)

(in thousands)

13 unchanged sentences

Contract liabilities $ 15,176 $ 6,959

Contract assets decreased $ 26.7 million during the year ended December 31, 2021, driven by cash inflows due to significant deliveries of LEAP components, which were delayed in the prior year due to slowdowns in the Boeing 737 MAX program.

Contract assets increased $ 36.1 million during the year ended December 31, 2022.

The increase was primarily due to an increase in unbilled revenue related to the satisfaction of performance obligations, notably for the Sikorsky CH-53K program, in excess of the amounts billed.

Other than the allowance for expected credit losses, there were no other provisions for losses related to our Contract assets during the years ended December 31, 2022 and 2021.

10 unchanged sentences

$ ( 1,059 ) $ 339 $ 16 $ 1 $ ( 703 )

Contract liabilities decreased $ 1.2 million during the year ended December 31, 2021, primarily due to revenue recognition from satisfied performance obligations exceeding the amounts invoiced to customers for contracts that were in a contract liability position.

Contract liabilities increased $ 8.2 million during the year ended December 31, 2022, primarily due to amounts invoiced to customers for contracts that were in a contract liability position exceeding the revenue recognition from satisfied performance obligations.

Revenue recognized for the years ended December 31, 2022 and 2021 that was included in the Contract liability balance at the beginning of the year was $ 5.7 million and $ 5.8 million, respectively.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

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

13 unchanged sentences

2022 2021 Estimated useful life

Land and land improvements

$ 14,832 $ 15,611 25 years for improvements

243,584 246,137 15 to 40 years

Right of use assets

10,971 10,971 10 to 15 years

Machinery and equipment

1,067,059 1,076,092 5 to 15 years

Furniture and fixtures

7,857 8,638 5 years

Computer and other equipment

19,135 19,294 3 to 10 years

63,379 62,400 5 to 8 years

Land and land improvements $ 14,059 $ 14,832 25 years for improvements

Buildings 247,136 243,584 15 to 40 years

Right of use assets (a) — 10,971 10 to 15 years

Machinery and equipment 1,053,700 1,067,059 5 to 15 years

Furniture and fixtures 8,158 7,857 5 years

Computer and other equipment 21,570 19,135 3 to 10 years

Software 66,794 63,379 5 to 8 years

Capital expenditures in progress 92,620 64,238

64,238 46,228

Property, plant and equipment, gross 1,504,037 1,491,055

1,491,055 1,485,371

Accumulated depreciation and amortization ( 1,058,379 ) ( 1,054,638 )

( 1,054,638 ) ( 1,036,817 )

Property, plant and equipment, net $ 445,658 $ 436,417

$ 436,417 $ 448,554

(a) In 2022, the Company extended the lease of its primary manufacturing facility in Salt Lake City, Utah, which resulted in a lease classification change from Finance to Operating, resulting in the reclassification of the Right of use asset from Property, plant, and equipment to Other assets.

Depreciation expense was $ 62.5 million in 2022, $ 65.1 million in 2021, and $ 63.3 million in 2020.

4 unchanged sentences

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable

intangible assets acquired in each business combination.

Goodwill and intangible assets with indefinite useful lives

are not amortized, but are tested for impairment at least annually at the reporting unit level, using either a qualitative

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Goodwill and Other Intangible Assets — (continued)

or quantitative approach.

Impairment is the condition that exists when the carrying amount of a reporting unit,

including goodwill, exceeds its fair value.

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.

Accordingly, no impairment charges

were recorded.

We are continuing to amortize certain patents, trademarks and names, customer contracts, relationships and

technology assets that have finite lives.

The changes in intangible assets and goodwill from December 31, 2020 to December 31, 2022, were as follows:

1 unchanged sentence

Amortization life in years

Balance at December 31, 2020 Other Changes Amortization

Balance at December 31, 2021 Amortization

Currency Translation

11 unchanged sentences

32,527 ( 3,474 ) ( 154 ) 28,899

AEC Other intangibles 5

16 — ( 16 ) — —

Total Finite-Lived intangible assets $ 46,869 $ — $ ( 7,155 ) $ ( 633 ) $ 39,081

Total Finite-Lived intangible assets, net $ 39,081 $ ( 4,842 ) $ ( 428 ) $ 33,811

Indefinite-Lived intangible assets:

2 unchanged sentences

Total Indefinite-Lived intangible assets $ 182,124 $ — $ ( 3,907 ) $ 178,217

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Goodwill and Other Intangible Assets — (continued)

(in thousands, except for years)

1 unchanged sentence

Balance at December 31,

2019 Other Changes Amortization Currency

2020 Amortization Currency

Translation Balance at December 31,

12 unchanged sentences

16 ( 16 ) — —

Total Finite-Lived intangible assets $ 52,892 $ 329 $ ( 7,259 ) $ 907 $ 46,869

Total Finite-Lived intangible assets, net $ 46,869 $ ( 7,155 ) $ ( 633 ) $ 39,081

Indefinite-Lived intangible assets:

2 unchanged sentences

Total Indefinite-Lived intangible assets $ 187,553 $ — $ ( 5,429 ) $ 182,124

On November 20, 2019, the Company acquired CirComp GmbH, a privately-held developer and manufacturer of high-performance composite components located in Kaiserslautern, Germany.

The assets acquired include goodwill of $ 17.7 million and amortizable intangible assets of $ 10.3 million, including measurement period adjustments recorded in 2020.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Goodwill and Other Intangible Assets — (continued)

As of December 31, 2022, the gross carrying amount and accumulated amortization of Finite-Lived intangible assets was $ 77.8 million and $ 44.0 million, respectively.

As of December 31, 2020, the gross carrying amount and accumulated amortization of Finite-Lived intangible assets was $ 78.0 million and $ 31.1 million, respectively.

Amortization expense related to Finite-lived intangible assets was reported in the Consolidated Statement of Income as follows:

5 unchanged sentences

(in thousands)

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Accrued Liabilities

2 unchanged sentences

Salaries, wages and benefits $ 57,867 $ 54,254

Pension and postretirement 10,742 5,941

Returns and allowances 9,798 10,560

Contract liabilities 15,176 6,959

Returns and allowances 9,084 9,798

Dividends 7,778 6,742

Operating and Financing lease liabilities 5,336 5,871

Contract loss reserve 3,608 11,250

Pension and postretirement 6,683 10,742

Operating and Finance lease liabilities 5,929 5,336

Other tax 10,274 9,041

Contract loss reserve 2,359 3,608

Freight 1,966 4,031

1 unchanged sentence

Other 5,830 9,888

$ 124,325 $ 125,459

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Total $ 126,385 $ 124,325

Financial Instruments

Long-term debt, principally to banks and noteholders, consists of:

Long-term debt, principally to banks, consists of:

(in thousands, except interest rates)

1 unchanged sentence

$ 439,000 $ 350,000

Other debt, at an average end of period rate of 5.50 % in both 2021 and 2020, final payment was made on April 20, 2021

Long-term debt

350,000 398,009

current portion

Long-term debt, net of current portion

$ 350,000 $ 398,000

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

Principal payments of $ 439 million are due on long-term debt in 2024.

9 unchanged sentences

Our ability to borrow additional amounts under the Credit Agreement is conditional upon the absence of any defaults, as well as the absence of any material adverse change (as defined in the Credit Agreement).

On June 14, 2021, we entered into interest rate swap agreements for the period October 17, 2022 through October 27, 2024.

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 December 16, 2021 was 0.11 %.

On November 27, 2017, we terminated our interest rate swap agreements, originally entered into on May 9, 2016, that had effectively fixed the interest rate on $ 300 million of revolving credit borrowings, in order to enter into a new interest rate swap with a greater notional amount, and the same maturity as the Credit Agreement.

We received $ 6.3 million when the swap agreements were terminated and that payment was amortized into interest expense through March 2021.

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 December 16, 2021 was 0.11 %, during the swap period.

On December 16, 2021, the all-in-rate on the $ 350 million of debt was 3.735 %.

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Financial Instruments — (continued)

On June 14, 2021, we entered into interest rate swap agreements for the period October 17, 2022 through October 27, 2024.

Under the terms of those 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 of each month, and on December 16, 2022, one month LIBOR was 4.33 %.

On December 16, 2022, t he all-in-rate on the $ 350 million of debt was 2.463 %.

On October 17, 2022 our interest rate swap agreements that were in effect from December 18, 2017 terminated.

These transactions had 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 2.11 % during the period.

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

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 18.

No cash collateral was received or pledged in relation to the swap agreements.

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

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 December 31, 2022, our leverage ratio was 1.25 and our interest coverage ratio was 15.17 .

6 unchanged sentences

Our Credit Agreement contains provisions specifying alternative interest rate calculations to be employed when LIBOR ceases to be available as a benchmark and we have adhered to the ISDA IBOR Fallbacks Protocol, which will govern our derivatives upon the final cessation of USD LIBOR.

ASU 2020-04, Reference Rate Reform, helps limit the accounting impact from contract modifications, including hedging relationships, due to the transition from LIBOR to alternative reference rates that are completed by December 31, 2022.

We adopted certain provisions of ASU 2020-04 during 2021.

Amendments to the Reference Rate Reform standard have helped limit the accounting impact from contract modifications, including hedging relationships, due to the transition from LIBOR to alternative reference rates that are completed by December 31, 2024.

We adopted certain provisions of this standard during 2021.

While we currently do not expect a significant impact to our operating results, financial position or cash flows from the transition from LIBOR to alternative reference interest rates, we will continue to monitor the impact of this transition until it is completed.

3 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 December 31, 2021, or at December 31, 2020.

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:

We had no Level 3 financial assets or liabilities at December 31, 2022, or at December 31, 2021, other than certain pension assets (see Note 4).

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Fair-Value Measurements — (continued)

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:

December 31, 2022 December 31, 2021

16 unchanged sentences

The fair value of our interest rate swaps are derived from a discounted cash flow analysis based on the terms of the contract and the interest rate curve, and is included in Other assets and/or Other noncurrent liabilities in the Consolidated Balance Sheets.

Amounts determined to be due within one year are reclassified to Other current assets and/or Accrued liabilities in the Consolidated Balance Sheets.

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

3 unchanged sentences

Additionally, non-cash interest income related to the amortization of swap buyouts totaled $ 0.0 million in 2022, $ 0.3 million in 2021, and $ 1.4 million in 2020.

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

Foreign currency instruments are entered into periodically, and consist of foreign currency option contracts and forward contracts that are valued using quoted prices in active markets obtained from independent pricing sources.

These instruments are measured using market foreign exchange prices and are recorded in the Consolidated Balance Sheets as Other assets and Accounts payable, as applicable.

Changes in fair value of these instruments are recorded as gains or losses within Other (income)/expense, net.

When exercised, the foreign currency instruments are net settled with the same financial institution that bought or sold them.

For all positions, whether options or forward contracts, there is risk from the possible inability of the financial institution to meet the terms of the contracts and the risk of unfavorable changes in interest and currency rates, which may reduce the value of the instruments.

We seek to mitigate risk by evaluating the creditworthiness of counterparties and by monitoring the currency exchange and interest rate markets while reviewing the hedging risks and contracts to ensure compliance with our internal guidelines and policies.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Fair-Value Measurements — (continued)

(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:

(in thousands) 2022 2021 2020

Derivatives not designated as hedging

Foreign currency options (gains)/losses $ ( 509 ) 169 64

Other Noncurrent Liabilities

1 unchanged sentence

(in thousands)

Operating leases $ 50,190 $ 11,001

Finance leases — 14,515

Postretirement benefits other than pensions 31,998 41,257

Pension liabilities 23,061 30,850

Finance leases 14,515 16,121

Operating leases 11,001 13,589

Interest rate swap agreements — 5,176

Deferred payroll taxes — 2,593

Incentive and deferred compensation 1,395 3,257

1 unchanged sentence

Total $ 108,758 $ 107,794

Effective January 1, 2019, we adopted the provisions of ASC 842, Leases, using the effective date (or modified retrospective) approach for transition.

Under this transition method, periods prior to 2019 were not been restated and the cumulative effect of initially applying the new standard was recorded as an adjustment to Retained earnings at January 1, 2019.

The most significant impact resulting from the adoption of the new standard was the recognition of right of use assets and lease liabilities for operating leases on our balance sheet for our real estate and automobile operating leases, in addition to the derecognition and reassessment of assets and liabilities related to our primary manufacturing facility in Salt Lake City, Utah (SLC lease), which had been accounted for as a build-to-suit lease with a failed sale leaseback.

For that lease, transitional guidance required the derecognition of existing assets and liabilities and a reassessment of lease classification.

We determined that the lease met the criteria for recording as a finance lease and we determined the January 1, 2019 values of the ROU asset and lease liability on the basis of that reassessment.

The change in the SLC lease-related assets and liabilities resulted in a $ 0.3 million pre-tax reduction to retained earnings at the date of adoption.

Significant changes to our accounting policies as a result of adopting the new standard are discussed below.

We determine if an arrangement is a lease at inception.

A contract is, or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

To assess whether a contract conveys the right to control the use of an identified asset, we assess whether:

• The contract involves the use of an identified asset.

This may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset,

• The lessee has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use, and

Judgment is required in the application of ASC 842, including the determination of whether a contract contains a lease, the appropriate classification, allocation of consideration, and the determination of the discount rate for the lease.

Key estimates and judgments include how the Company determines (1) the discount rate it uses to discount the unpaid lease payments to present value, (2) lease term and (3) lease payments.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Leases — (continued)

Pension and postretirement liabilities decreased during 2022 as a result of actions taken to settle the U.S.

Pension Plus plan, which, in addition to significant net actuarial gains, lead to a reduction in unfunded pension liabilities.

We are generally the lessee in our lease transactions.

For periods ending after December 31, 2018, lessees are required to recognize a lease liability and a right of use asset for leases with terms greater than 12 months, in accordance with the practical expedient that is available for ongoing accounting.

Lessees are required to recognize a lease liability and a right of use (ROU) asset for leases with terms greater than 12 months, in accordance with the practical expedient that is available for ongoing accounting.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease.

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We review the carrying value of ROU assets for impairment whenever events and circumstances indicate that the carrying value of an asset group may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition.

We have operating and finance leases for offices, manufacturing facilities, warehouses, vehicles, and certain equipment.

We have entered into operating and finance leases for offices, manufacturing facilities, warehouses, vehicles, and certain equipment.

Our leases have remaining lease terms of 1 year to 12 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Leases — (continued)

The components of lease expense were as follows:

For the years ended

(in thousands) December 31, 2021 December 31, 2020

(in thousands) December 31, 2022 December 31, 2021 December 31, 2020

Finance lease

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Total lease expense $ 8,444 $ 8,411 $ 9,289

Lease expense for the year ended December 31, 2019 was $ 8.9 million.

Supplemental cash flow information related to leases was as follows:

For the years ended

(in thousands) December 31, 2021 December 31, 2020

(in thousands) December 31, 2022 December 31, 2021 December 31, 2020

Cash paid for amounts included in the measurement of lease liabilities:

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The initial recognition of each ROU asset and lease liability at lease commencement is a noncash transaction that is excluded from amounts reported in the Consolidated Statements of Cash Flows.

Due to the non-cash nature of the transaction, those increases are excluded from amounts reported in the Consolidated Statements of Cash Flows.

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Leases — (continued)

In March 2020, the Company purchased, in cash, the primary CirComp GmbH operating facility in Germany for $ 5.8 million.

This resulted in the recording of land and building assets, and the removal of the finance lease right of use assets and associated lease liabilities.

The purchase is included with Principal payments on finance lease liabilities in the Consolidated Statements of Cash Flows.

Supplemental balance sheet information related to leases was as follows:

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Maturities of lease liabilities as of December 31, 2022 were as follows:

(in thousands) Operating leases Finance leases

(in thousands) Operating leases

Year ending December 31,

2022 $ 4,737 $ 2,838

2023 3,412 3,004

2024 2,199 3,004

2025 1,801 3,004

2026 1,782 3,004

Thereafter 36,834

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Incentive Plans

In 2017, shareholders approved the Albany International 2017 Incentive Plan.

This plan provides key members of management with incentive compensation based on achieving certain performance or service measures.

We have incentive compensation plans that authorize the issuance of stock-based awards for key employees, which are designed to reward short and long-term contributions and provide incentives for recipients to remain with the Company.

We issue stock-based awards in the form of restricted stock units and performance stock units that generally vest between one and five years from the grant date and can be settled in cash or shares.

Expenses associated with these awards are recognized over each respective vesting period.

Liability based awards are settled in cash, while equity based awards are settled in stock.

The Albany International 2017 Incentive Plan provides key members of management with incentive compensation based on achieving certain performance or service measures.

Awards can be paid in cash, shares of Class A Common Stock, Options, or other stock-based or incentive compensation awards pursuant to the Plan.

Participants may elect to receive shares net of applicable income taxes.

Annual awards granted under this plan resulted in cash payments of $ 3.1 million in 2021 and $ 2.4 million in 2020 as a result of performance in in the preceding year.

The Compensation Committee granted the executive management team a multi-year incentive compensation award in each 2019, 2020 and 2021.

Each of these awards vests over three years from the grant date, and the extent of payout is dependent upon the achievement of certain performance metrics during the vesting period, as defined by the Compensation Committee.

Payout is scheduled to occur no later than 90 days after the end of the vesting period.

If a participant terminates employment prior to the award becoming fully vested, the person may

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Incentive Plans — (continued)

forfeit all or a portion of the incentive compensation award.

Annual awards granted under this plan resulted in cash payments of $ 4.5 million in 2022 and $ 3.1 million in 2021 as a result of performance in the preceding year.

The Compensation Committee granted the executive management team a multi-year incentive compensation award in each of 2020, 2021 and 2022.

Payout is scheduled to occur no later than 90 days after the end of the vesting period.

If a participant terminates employment prior to the award becoming fully vested, the person may forfeit all or a portion of the incentive compensation award.

The grant date share price is determined when the awards are approved each year and that price is used to measure the cost for the share-based portion of an award.

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The weighted average period for recognition of that cost is approximately 2 years.

The determination of compensation expense for the PSP is based on the number of outstanding share units, the end-of-period share price, and Company performance.

Information with respect to the PSP is presented below:

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Incentive Plans — (continued)

The determination of compensation expense for the PSP is based on the number of outstanding share units, the end-of-period share price, and Company performance.

Information with respect to the PSP is presented below:

Number of shares Weighted average value per

33 unchanged sentences

The expense recorded for this plan was $ 4.6 million in 2022, $ 4.8 million in 2021, and $ 3.6 million in 2020.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Shareholders’ Equity

3 unchanged sentences

The Class B Common Stock is convertible into an equal number of shares of Class A Common Stock at any time.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Shareholders’ Equity — (continued)

As of December 31, 2022, there were no Class B Common Stock outstanding nor any were anticipated to be issued.

In 2019, a public offering of a portion of the Standish Family shares reduced the number of Class A Common Stock reserved for the conversion of Class B shares, by 1.6 million.

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The timing and amount of any share repurchases will be based on the Company’s liquidity, general business and market conditions, debt covenant restrictions and other factors, including alternative investment opportunities and capital structure.

Through December 31, 2021, the Company has repurchased 285,286 shares for a total of cost of $ 24.4 million.

As of December 31, 2022, the Company has repurchased in total 1,308,003 shares for a total cost of $ 109.4 million.

Of this, 1,022,717 shares were purchased in 2022 for $ 85.1 million and 285,286 shares were purchased in 2021 for $ 24.4 million.

Activity in Shareholders’ equity for 2020, 2021, and 2022 is presented below:

6 unchanged sentences

January 1, 2020 39,099 $ 39 1,618 $ 2 $ 432,518 $ 698,496 $ ( 175,981 ) 8,409 $ ( 256,391 ) $ 4,006 $ 702,689

Net income attributable to the Company — — — — — 132,398 — — — 985 133,383

Net income — — — — — 98,589 — — — ( 1,346 ) 97,243

Adoption of accounting standards (a) — — — — — ( 1,443 ) — — — — ( 1,443 )

7 unchanged sentences

— — — — — ( 1,245 ) — — — — ( 1,245 )

Conversion of Class B shares to Class A shares (b) 1,616 2 ( 1,616 ) ( 1 ) — ( 1 ) — — — — —

Cumulative translation adjustments — — — — — — 39,649 — — 1,139 40,788

Pension and postretirement liability adjustments — — — — — — 10,333 — — — 10,333

Derivative valuation adjustment — — — — — — ( 7,832 ) — — — ( 7,832 )

December 31, 2019 39,099 $ 39 1,618 $ 2 $ 432,518 $ 698,496 $ ( 175,981 ) 8,409 $ ( 256,391 ) $ 4,006 $ 702,689

Net income attributable to the Company — — — — — 98,589 — — — ( 1,346 ) 97,243

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Shareholders’ Equity — (continued)

Adoption of accounting standards (c) — — — — — ( 1,443 ) — — — — ( 1,443 )

(in thousands) Class A

Additional paid-in capital Retained earnings Accumulated items of other

comprehensive income Class A

Treasury Stock

Noncontrolling Interest Total Equity

Shares Amount Shares Amount Shares Amount

Derivative valuation adjustment — — — — — — ( 6,409 ) — — — ( 6,409 )

December 31, 2020 39,115 $ 39 1,618 $ 2 $ 433,696 $ 770,746 $ ( 132,408 ) 8,391 $ ( 256,009 ) $ 3,799 $ 819,865

Net income — — — — — 118,478 — — — 290 118,768

Compensation and benefits paid or payable in shares 20 — — — 2,441 — — — — — 2,441

1 unchanged sentence

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

Dividends declared

Purchase of Treasury shares (b) — — — — — — — 285 ( 24,375 ) — ( 24,375 )

Class A Common Stock, $ 0.81 per share

2 unchanged sentences

— — — — — ( 647 ) — — — — ( 647 )

Conversion of Class B shares to Class A shares (c) 1,618 2 ( 1,618 ) ( 2 ) — — — — — — —

Cumulative translation adjustments — — — — — — ( 22,677 ) — — ( 451 ) ( 23,128 )

2 unchanged sentences

December 31, 2021 40,760 $ 41 — $ — $ 436,996 $ 863,057 $ ( 145,984 ) 8,665 $ ( 280,143 ) $ 3,638 $ 877,605

Net income attributable to the Company — — — — — 118,478 — — — 290 118,768

Net income — — — — — 95,762 — — — 746 96,508

Compensation and benefits paid or payable in shares 24 — — — 3,727 — — — — — 3,727

5 unchanged sentences

— — — — — ( 27,501 ) — — — — ( 27,501 )

Class B Common Stock, $ 0.81 per share

— — — — — ( 647 ) — — — — ( 647 )

Conversion of Class B shares to Class A shares (e) 1,618 2 ( 1,618 ) ( 2 ) — — — — — — —

Cumulative translation adjustments — — — — — — ( 40,971 ) — — 110 ( 40,861 )

Pension and postretirement liability adjustments — — — — — — ( 3,491 ) — — — ( 3,491 )

Derivative valuation adjustment — — — — — — 7,930 — — — 7,930

December 31, 2021 40,760 $ 41 — $ — $ 436,996 $ 863,057 $ ( 145,984 ) 8,665 $ ( 280,143 ) $ 3,638 $ 877,605

(a) As described in Note 20, the Company adopted ASC 842, Leases effective January 1, 2019, which resulted in an increase to Retained earnings of less than $ 0.1 million.

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

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Shareholders’ Equity — (continued)

(b) In the second quarter of 2019, Standish Family Holdings, LLC executed a secondary offering of Albany shares.

As a result of the offering, 1.6 million shares of Class B Common Stock previously owned by Standish Family Holdings, LLC were converted to Class A Common Stock and then sold to third parties.

Costs associated with the offering were charged directly to Standish Family Holdings, LLC.

(c) As described in Note 1, the Company adopted the provisions of ASC 326, Current expected credit losses (CECL) effective January 1, 2020, which resulted in a decrease to Retained earnings of $ 1.4 million.

(d) On October 25, 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 thousands) Class A

Additional paid-in capital Retained earnings Accumulated items of other

comprehensive income Class A

Treasury Stock

Noncontrolling Interest Total Equity

Shares Amount Shares Amount Shares Amount

Derivative valuation adjustment — — — — — — 19,321 — — — 19,321

December 31, 2022 40,785 $ 41 — $ — $ 441,540 $ 931,318 $ ( 144,927 ) 9,675 $ ( 364,923 ) $ 4,494 $ 867,543

(a) As described in Note 1, the Company adopted the provisions of ASC 326, Current expected credit losses (CECL) effective January 1, 2020, which resulted in a decrease to Retained earnings of $ 1.4 million.

(b) On October 25, 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.

(e) In the third and fourth quarters of 2021, Standish Family Holdings, LLC executed a secondary offering of Albany shares.

(c) In the third and fourth quarters of 2021, Standish Family Holdings, LLC executed a secondary offering of Albany shares.

As a result of the offerings, 1.6 million shares of Class B Common Stock previously owned by Standish Family Holdings, LLC were converted to Class A Common Stock and then sold to third parties.

Costs associated with the offering were charged directly to Standish Family Holdings, LLC.

(d) In 2022, as part of the Share Repurchase program, the Company repurchased 1,022,717 shares totaling $ 85.1 million.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data