What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-27 compared with 2025-02-26 · 467 added, 501 removed, 1535 unchanged (39% of the section changed)

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Report of Independent Registered Public Accounting Firm

Consolidated Statements of Income for the years ended December 31, 2024, 2023, and 2022

Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023, and 2022

Consolidated Statements of Income /( Loss ) for the years ended December 31, 202 5 , 202 4 , and 20 23

Consolidated Statements of Comprehensive Income /(Loss) for the years ended December 31, 202 5 , 202 4 , and 202 3

Consolidated Balance Sheets as of December 31, 202 5 and 20 24

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We have audited the accompanying consolidated balance sheets of Albany International Corp.

and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes and financial statement Schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income (loss), comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement Schedule - Valuation and Qualifying Accounts (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S.

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

Albany, New York

Boston, Massachusetts

February 27, 2026

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes and financial statement Schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements), and our report dated February 26, 2025 expressed an unqualified opinion on those consolidated financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income (loss), comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement Schedule - Valuation and Qualifying Accounts (collectively, the consolidated financial statements), and our report dated February 27, 2026 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting (Item 9A).

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

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

Albany, New York

Boston, Massachusetts

February 27, 2026

Albany International Corp.

CONSOLIDATED STATEMENTS OF INCOME

CONSOLIDATED STATEMENTS OF INCOME/(LOSS)

For the years ended December 31,

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13,682 13,438 282

Operating income

131,359 167,894 181,022

Operating income/(loss) ( 36,103 ) 131,359 167,894

Interest income

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25,764 16,613 20,167

Pension settlement expense — — 49,128

Other (income)/expense, net

1,721 ( 6,163 ) ( 14,086 )

Income before income taxes

117,089 160,456 131,980

Income tax expense

29,034 48,846 35,472

Net income 88,055 111,610 96,508

Other expense/(income), net 5,079 1,721 ( 6,163 )

Income/(loss) before income taxes ( 61,787 ) 117,089 160,456

Income tax (benefit)/expense ( 4,828 ) 29,034 48,846

Net income/(loss) ( 56,959 ) 88,055 111,610

Net income attributable to the noncontrolling interest

Net income attributable to the Company $ 87,623 $ 111,120 $ 95,762

Net income/(loss) attributable to the Company $ ( 57,342 ) $ 87,623 $ 111,120

Earnings per share:

Basic earnings per share attributable to Company shareholders

$ 2.81 $ 3.56 $ 3.06

Diluted earnings per share attributable to Company shareholders

$ 2.80 $ 3.55 $ 3.04

Basic earnings (loss) per share attributable to Company shareholders $ ( 1.94 ) $ 2.81 $ 3.56

Diluted earnings (loss) per share attributable to Company shareholders $ ( 1.94 ) $ 2.80 $ 3.55

Dividends declared per share

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Albany International Corp.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

For the years ended December 31,

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2025 2024 2023

$ 88,055 $ 111,610 $ 96,508

Other comprehensive income, before tax:

Net income/(loss) $ ( 56,959 ) $ 88,055 $ 111,610

Other comprehensive income/(loss), before tax:

Foreign currency translation and other adjustments

60,352 ( 56,551 ) 18,593

Reclassification of loss on pension settlement — — 42,657

Pension settlement/curtailment ( 2,002 ) — —

Pension/postretirement plan remeasurement

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( 399 ) 1,261 3,512

Income taxes related to items of other comprehensive income:

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

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

Pension settlement/curtailment 422 — —

Pension/postretirement plan remeasurement

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92 ( 318 ) ( 889 )

Comprehensive income

25,234 123,369 97,565

Comprehensive income/(loss) ( 4,508 ) 25,234 123,369

Comprehensive income/(loss) attributable to the noncontrolling interest

484 ( 543 ) 949

Comprehensive income attributable to the Company

$ 25,777 $ 122,420 $ 96,709

Comprehensive income/(loss) attributable to the Company $ ( 4,992 ) $ 25,777 $ 122,420

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

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Prepaid expenses and other current assets 34,990 37,132

Assets held for sale 293,783 —

Total current assets 928,835 730,692

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Deferred income taxes 68,499 28,757

Noncurrent receivables, net — 4,392

Other assets 54,872 111,428

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Accrued liabilities 139,385 141,904

Current maturities of long-term debt — 4,218

Income taxes payable 35,090 18,367

Liabilities held for sale 203,323 —

Total current liabilities 442,297 226,366

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Non-cash interest expense 1,029 1,025 1,404

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

Compensation and benefits paid or payable in Class A Common Stock 4,715 6,936 4,527

Contract loss provision 139,665 — —

Share-based compensation 10,060 4,715 6,936

Provision/(recovery) for credit losses from uncollected receivables and contract assets ( 139 ) 310 640

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Principal payments on debt ( 147,044 ) ( 279,838 ) ( 92,274 )

Principal payments on finance lease liabilities — — ( 654 )

Debt acquisition costs — — ( 4,108 )

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Taxes paid in lieu of share issuance ( 2,521 ) ( 2,931 ) ( 3,136 )

Proceeds from options exercised — — 17

Dividends paid ( 32,477 ) ( 32,483 ) ( 31,163 )

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Effect of exchange rate changes on cash and cash equivalents 8,906 ( 12,566 ) 4,128

Increase/(decrease) in cash and cash equivalents ( 58,137 ) ( 118,356 ) ( 10,260 )

(Decrease) in cash and cash equivalents ( 2,933 ) ( 58,137 ) ( 118,356 )

Cash and cash equivalents at beginning of period 115,283 173,420 291,776

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

The Company also owns 85 % of Arcari, SRL ("Arcari"), a manufacturer of textile and plastic industrial technical products and conveyor belts, which is a subsidiary of Heimbach GmbH, the paper machine clothing manufacturer recently acquired by the Company and reported within the Machine Clothing segment.

The Company also previously owned 85 % of Arcari, SRL ("Arcari") which was divested during the second quarter of 2025.

Additional information regarding noncontrolling interest is included in Note 10, Noncontrolling Interest , of the Notes to the Consolidated Financial Statements.

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States 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, financial instruments, including derivatives, 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, assets and liabilities held-for-sale, 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.

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This contract period may result in a loss contract provision at contract inception.

Expected losses on projects include losses on contract options that are probable of exercise, excluding

Expected losses on projects include losses on contract options that are probable of exercise, excluding profitable options that may follow.

For contracts with anticipated losses, a provision for the entire amount of the estimated remaining loss is charged against income in the period in which the loss becomes known.

Contract losses

ALBANY INTERNATIONAL CORP.

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Accounting Policies — (continued)

profitable options that may follow.

For contracts with anticipated losses, a provision for the entire amount of the estimated remaining loss is charged against income in the period in which the loss becomes known.

Contract losses are determined considering all direct and indirect contract costs, exclusive of any selling, general or administrative cost allocations, which are treated as period expenses.

are determined considering all direct and indirect contract costs, exclusive of any selling, general or administrative cost allocations, which are treated as period expenses.

Products and services provided under long-term contracts represent a significant portion of Net revenues in the AEC segment.

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

We have contracts with certain customers 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 (incurred cost to total estimated cost) method.

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Termination costs related to an ongoing benefit arrangement are recognized when the amount becomes probable and estimable.

Termination costs related to a one-

Termination costs related to a one-time benefit arrangement are recognized at the communication date to employees.

Costs related to contract termination, relocation of employees, outplacement and the consolidation or the closure of facilities, are recognized when incurred.

ALBANY INTERNATIONAL CORP.

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Accounting Policies — (continued)

time benefit arrangement are recognized at the communication date to employees.

Costs related to contract termination, relocation of employees, outplacement and the consolidation or the closure of facilities, are recognized when incurred.

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.

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Earnings Per Share

Basic net income or loss per share is computed using the weighted average number of shares of Class A Common Stock outstanding during each year.

Basic net earnings or loss per share is computed using the weighted average number of shares of Class A Common Stock outstanding during each year.

Diluted net income per share includes the effect of all potentially dilutive securities.

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Gains or losses resulting from cash and short-term intercompany loans and balances denominated in a currency other than the entity’s functional currency, and foreign currency options are generally included in Other expense, net.

Gains and losses on long-term intercompany loans not intended to be repaid in the foreseeable future are recorded in other comprehensive income.

Gains and losses on long-term intercompany loans not intended to be repaid are recorded in other comprehensive income.

The following table summarizes foreign currency transaction gains and losses recognized in the income statement:

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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.

Cash and cash equivalents consist of cash and highly liquid short-term investments with maturities of three months or less at the date of acquisition by the company.

Accounts Receivable

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

In accordance with ASC 326, Current Expected Credit Losses ("CECL"), the Company recognizes an allowance for expected credit losses on financial assets measured at amortized cost, such as Accounts receivable, Contract assets and Noncurrent receivables.

The allowance is determined using a CECL model that is based on an historical average three-year loss rate and is measured by financial asset type on a collective (pool) basis when similar risk characteristics exist, at an amount equal to lifetime expected credit losses.

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.

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

See additional information set forth in Note 11, Accounts Receivable , of the Notes to the Consolidated Financial Statements.

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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,

ALBANY INTERNATIONAL CORP.

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Accounting Policies — (continued)

• 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

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We capitalize internal and external costs incurred related to the software development stage .

Capitalized salaries, travel, and consulting costs related to the software development totaled $ 1.2 million in 2024 and was not material in 2023.

Capitalized salaries, travel, and consulting costs related to the software development totaled $ 1.2 million in both 2025 and 2024.

We review the carrying value of property, plant and equipment and other long-lived 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.

See additional information set forth in Note 14, Property, Plant and Equipment, Net , of the Notes to the Consolidated Financial Statements.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Accounting Policies — (continued)

Business Combinations

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Costs that are directly attributable to the acquisition are expensed as incurred.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Accounting Policies — (continued)

Identifiable assets acquired, liabilities assumed, and noncontrolling interests in an acquisition are measured initially at their fair values at the acquisition date.

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We include the results of operations of the acquired business in the consolidated financial statements beginning on the acquisition date.

Assets and Liabilities Held for Sale

Disposal groups are classified as held-for-sale if their carrying amounts are expected to be recovered through a sale transaction rather than through continuing use.

Disposal groups classified as held-for-sale are measured at the lower of their carrying amount or the fair value less costs of disposal.

Disposal groups are classified as current if the sale is probable within one year of the balance sheet date.

Depreciation or amortization of an asset ceases when it is classified as held-for-sale.

When disposal groups are classified as held-for-sale, prior period amounts are not reclassified to reflect the current period presentation within the Consolidated Balance Sheet.

The determination of the fair value less costs of disposal involves the use of estimates and assumptions that tend to be uncertain.

Determining the fair value of a disposal group quantitatively requires the use of significant estimates and assumptions, including revenue growth rates, operating margins, discount rates, and future market conditions, among others.

For purposes of allocating goodwill to the disposal groups that represent a portion of a reporting unit, we determine the fair value of each disposal group based on income-based valuation techniques, utilizing projected discounted cash flows.

Additionally, there may be adjustments in a future period related to resolution of uncertainties that arise from the terms of the disposal transaction, such as the resolution of purchase price adjustments and indemnifications, resolution of uncertainties that arise from and are directly related to the operations of the component before its disposal.

Goodwill, Intangibles, and Other Assets

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If the carrying value of the reporting unit, including goodwill, exceeds its fair value, a goodwill impairment loss is recognized in an amount equal to that excess.

Determining the fair value of a reporting unit requires the use of significant estimates and assumptions, including revenue growth rates, operating margins, discount rates, and future market conditions, among others.

To determine fair value, we utilize two market-based approaches and an income approach.

Under the market-based approaches, we utilize information regarding the Company, as well as publicly available industry information, to determine earnings multiples.

Determining the fair value of a reporting unit quantitatively requires the use of significant estimates and assumptions, including revenue growth rates, operating margins, discount rates, and future market conditions, among others.

To determine fair value, we utilize a market-based approach and an income approach.

Under the market-based

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Accounting Policies — (continued)

approach, we utilize information regarding the Company, as well as publicly available industry information, to determine earnings multiples.

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.

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These costs are normally considered a fulfillment activity, rather than a performance obligation.

Fulfillment activities that create resources that will be used in satisfying performance obligations in the future, and are expected to be recovered, are capitalized to

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Accounting Policies — (continued)

Other assets, which is classified as a noncurrent asset in the Consolidated Balance Sheets.

Fulfillment activities that create resources that will be used in satisfying performance obligations in the future, and are expected to be recovered, are capitalized to Other assets, which is classified as a noncurrent asset in the Consolidated Balance Sheets.

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.

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We monitor our exposure to these risks and evaluate, on an ongoing basis, the risk of potentially large adverse effects versus the costs associated with hedging such risks.

We may use interest rate swaps in the management of interest rate exposures and foreign currency derivatives to manage foreign currency exposure related to assets and liabilities (including net investments in subsidiaries located outside the U.S.) denominated in foreign currencies.

When we enter into a derivative contract, we make a determination whether the transaction is deemed to be a hedge for accounting purposes.

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Gains and losses on derivative contracts reported in accumulated other comprehensive income are subsequently included in earnings in the periods in which earnings are affected by the hedged item.

For transactions that are designated as an effective hedge, we perform an evaluation of the effectiveness of the hedge on the date of inception and on an ongoing basis.

For transactions that are designated as an

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Accounting Policies — (continued)

effective hedge, we perform an evaluation of the effectiveness of the hedge on the date of inception and on an ongoing basis.

The related gains and losses of derivative instruments, including those designated in hedge accounting relationships, are included as operating activities in the Consolidated Statements of Cash Flows.

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Pension, Postretirement, and Other Benefit Plans

As described in Note 4, Pension, Postretirement, and Other Benefit Plans , of the Notes to the Consolidated Financial Statements, we have pension and postretirement benefit plans covering substantially all employees.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Accounting Policies — (continued)

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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New Accounting Standards Adopted

In November 2023, the FASB issued Accounting Standards Update No.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The guidance is to be applied retrospectively to all prior periods presented in the financial statements.

Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

The adoption of this standard had an impact on the segment disclosures presented in this Annual Report on Form 10-K, however, there was no impact to the results of operations, cash flows, and financial condition.

See Note 3, Reportable Segments and Geographic Data , of the Notes to the Consolidated Financial Statements for additional information.

New Accounting Standards Not Yet Adopted

In December 2023, the FASB issued Accounting Standards Update No.

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ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes.

The guidance is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

In March 2024, the FASB issued Accounting Standards Update No.

2024-01, "Compensation - Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards" (ASU 2024-01), which clarifies how an entity determines whether profits interest or similar awards should be considered within the scope of ASC 718 as a share-based payment arrangement or under ASC 710 or other ASC topics in a manner similar to a cash bonus or profit-sharing arrangement.

The guidance is effective for annual periods beginning after December 15, 2024, and interim periods beginning within those annual periods.

Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance.

ASU 2024-01 should be applied either (1) retrospectively to all prior periods presented in the financial statements or (2) prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments.

The adoption of this standard had an impact on the income tax disclosures presented in this Annual Report on Form 10-K, however, there was no impact to the results of operations, cash flows, and financial condition.

We elected to adopt ASU 2023-09 prospectively as permitted by the guidance.

See Note 7, Income Taxes , of the Notes to the Consolidated Financial Statements for additional information.

New Accounting Standards Not Yet Adopted

In September 2025, the Financial Accounting Standards Board (FASB) issued guidance to improve the accounting for costs related to internal-use software.

The new guidance eliminates project stages and requires capitalizing software costs to begin when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended.

Additionally, disclosures for property, plant and equipment will be required for all capitalized software costs.

The guidance is

ALBANY INTERNATIONAL CORP.

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Accounting Policies — (continued)

currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued Accounting Standards Update No.

2024-03, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses" (ASU 2024-03), which requires a public business entity to disclose specific information about certain costs and expenses in the notes to the financial statements for interim and annual reporting periods.

The objective of the disclosure requirements is to provide disaggregated information of the public entity's expenses to help investors better understand the entity's performance;

better assess the entity's prospects for future cash flows;

and compare an entity's performance over time and with that of other entities.

The disaggregation of relevant expense captions presented on the face of the income statement may include but is not limited to the following natural expenses:

(1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization.

The guidance is effective for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027.

Early adoption is permitted.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

In March 2024, the U.S.

Securities and Exchange Commission ("SEC") adopted the final rule under SEC Release No.

33-11275, "The Enhancement and Standardization of Climate-Related Disclosures for Investors".

This rule would require registrants to disclose certain climate-related information in registration statements and annual reports.

In April 2024, the SEC voluntarily stayed the final rule as a result of legal challenges that are pending judicial review.

The disclosure requirements would apply to the Company's fiscal year beginning January 1, 2025, pending resolution of the stay.

The Company is currently evaluating the final rule to determine its impact on the Company's disclosures.

Revenue Recognition

We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable.

Revenue is measured based on the consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third parties.

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 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.

A contract’s transaction price is allocated to each material distinct performance obligation and is recognized as revenue when, or as, the performance obligation is satisfied.

In our MC segment, our primary performance obligation in most contracts is to provide solution-based, custom-designed fabrics and belts to the customer.

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.

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.

In the MC segment, contracts with certain customers may also obligate us to provide various product-related services at no additional cost to the customer.

When this obligation is material in the context of the contract with the customer, we recognize a separate performance obligation and allocate revenue to those services on a relative estimated standalone selling price basis.

The standalone selling price for these services is determined based upon an analysis of the services offered and an assessment of the price we might charge for such services as a separate offering.

As we typically provide such services on a stand-ready basis, we recognize this revenue over time.

Revenue allocated to such service performance obligations is the only MC revenue that is recognized over time.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Revenue Recognition — (continued)

In our AEC segment, we primarily enter into contracts to manufacture and deliver highly engineered advanced composite products to our customers.

A significant portion of AEC revenue is earned under a mix of short duration and long duration, firm-fixed-price orders that are placed under master agreements that contain general terms and conditions applicable to all orders placed under the master agreements.

We assess each contract at its inception to determine whether it should be combined with other contracts.

When making this determination we consider factors such as whether two or more contracts were negotiated and executed at or near the same time or were negotiated with an overall profit objective.

If combined, we treat the combined contracts as a single contract for revenue recognition purposes.

We evaluate the products or services promised in each contract at inception to determine whether the contract should be accounted for as having one or more performance obligations.

For most AEC contracts, the nature of our promise (or our performance obligation) to the customer is to provide a significant service of integrating a complex set of tasks and components into a single project or capability, which will often result in the delivery of multiple highly interdependent and interrelated units.

At the inception of a contract, we determine the transaction price based on the consideration we expect to receive for the products or services being provided under the contract.

For contracts where a portion of the price may vary, we estimate variable consideration at the most likely amount, which is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur.

We analyze the risk of a significant revenue reversal and if necessary, constrain the amount of variable consideration recognized in order to mitigate this risk.

We estimate the transaction price based on our current rights, and do not contemplate future modifications (including unexercised options) or follow-on contracts until they become legally enforceable.

Many AEC contracts are subsequently modified to include changes in specifications, requirements or price, which may create new or change existing enforceable rights and obligations.

Depending on the nature of the modification, we consider whether to account for the modification as an adjustment to the existing contract or as a separate contract.

Generally, we are able to conclude that such modifications are not distinct from the existing contract, due to the significant integration of the obligations, and the interrelated nature of tasks, provided for in the modification and the existing contract.

Therefore, such modifications are accounted for as if they were part of the existing contract, and we accumulate the values of such modifications in our estimates of contract value.

Revenue is recognized over time for substantially all of our contracts in AEC as most of our contracts have provisions that are deemed to transfer control to the customer over time.

Revenue is recognized based on the extent of progress towards completion of the performance obligation.

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.

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.

Revenue, including profit, is recorded proportionally as costs are incurred.

Accounting for long-term contracts requires significant judgment and estimation, which could be considerably different if the underlying circumstances were to change.

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.

The sum of net adjustments to the estimated profitability of long-term contracts decreased AEC Operating income by $ 43.2 million and $ 4.1 million in 2024 and 2023, respectively, and increased AEC Operating income by $ 0.5 million in 2022.

The unfavorable effects in 2024 related to higher labor, material and scrap costs.

The negative change in estimated profitability in 2024 was primarily driven by a few large complex programs, including approximately $ 25.5 million for the various CH-53K programs, $ 11.4 million on our Gulfstream program, $ 3.9 million on our F-35 program, and $ 2.2 million on our GE Platforms program.

The unfavorable effects in 2023 related to additional reserves taken on certain contracts and inflationary factors decreasing anticipated margins.

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

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.

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Revenue Recognition — (continued)

AEC’s largest source of revenue is derived from the LEAP contract (see Note 10, Noncontrolling Interest , of the Notes to the Consolidated Financial Statements) under a cost-plus-fee agreement.

The fee may vary within a narrow range based on our success in achieving certain cost targets.

Revenue is recognized over time as costs are incurred.

Under this contract, there is judgment involved in determining applicable contract costs and expected margin, and therefore, in determining the amount of revenue to be recognized.

Payment terms granted to MC and AEC customers reflect general competitive practices.

Terms vary with product, competitive conditions, and the country of operation.

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

Segment Product Group Principal Product or Service Principal Locations

Machine Clothing (MC) Machine Clothing Paper machine clothing:

Permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel, and pulp

Engineered fabrics:

Belts used in the manufacture of nonwovens, fiber cement and several other industrial applications

Albany Engineered Composites (AEC) Albany Safran Composites (ASC)

Airframe and engine Components (Other AEC)

3D-woven, injected composite components for aircraft engines

Composite airframe and engine components for military and commercial aircraft

Rochester, NH Commercy, France Queretaro, Mexico

Salt Lake City, UT Boerne, TX Queretaro, Mexico Kaiserslautern, Germany

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 presents disaggregated revenue for each product group by timing of revenue recognition:

For the year ended December 31, 2024

(in thousands) Point in Time Revenue Recognition Over Time Revenue Recognition Total

Machine Clothing $ 745,978 $ 3,929 $ 749,907

Albany Engineered Composites

ASC — 175,888 175,888

Other AEC 19,518 285,302 304,820

Total Albany Engineered Composites 19,518 461,190 480,708

Total net revenues $ 765,496 $ 465,119 $ 1,230,615

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Revenue Recognition — (continued)

For the year ended December 31, 2023

(in thousands) Point in Time Revenue Recognition Over Time Revenue Recognition Total

Machine Clothing $ 666,990 $ 3,778 $ 670,768

Albany Engineered Composites

ASC — 184,184 184,184

Other AEC 20,546 272,411 292,957

Total Albany Engineered Composites 20,546 456,595 477,141

Total net revenues $ 687,536 $ 460,373 $ 1,147,909

For the year ended December 31, 2022

(in thousands) Point in Time Revenue Recognition Over Time Revenue Recognition Total

Machine Clothing $ 605,863 $ 3,598 $ 609,461

Albany Engineered Composites

ASC — 165,775 165,775

Other AEC 19,167 240,484 259,651

Total Albany Engineered Composites 19,167 406,259 425,426

Total net revenues $ 625,030 $ 409,857 $ 1,034,887

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:

Years ended December 31,

(in thousands) 2024 2023 2022

Americas PMC $ 341,204 $ 349,544 $ 321,170

Eurasia PMC 301,436 250,048 207,115

Engineered Fabrics 107,267 71,176 81,176

Total Machine Clothing net revenues $ 749,907 $ 670,768 $ 609,461

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

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

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

Remaining performance obligations on contracts that had an original duration of greater than one year totaled $ 1.1 billion as of December 31, 2024, $ 1.2 billion as of December 31, 2023, and $ 553 million as of December 31, 2022, and related primarily to firm contracts in the AEC segment.

Of the remaining performance obligations as of December 31, 2024, we expect to recognize as revenue approximately $ 151 million during 2025, $ 147 million during 2026, $ 143 million during 2027, and the remainder thereafter.

effective in the first quarter of 2028 with early adoption permitted as of the beginning of an annual reporting period.

Upon adoption, the guidance may be applied prospectively, retrospectively or using a modified transition approach.

We are evaluating the impact of this guidance on our consolidated financial statements.

In November 2024, the FASB issued guidance to improve the disclosure of expenses in commonly presented expense captions.

The new guidance requires a public entity to provide tabular disclosure, on an annual and interim basis, of amounts for the following expense categories:

(1) purchases of inventory, (2) employee compensation, (3) depreciation and (4) intangible asset amortization, as included in each relevant expense caption.

Additionally, on an annual and interim basis, a qualitative description is required for amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.

A relevant expense caption is an expense caption presented on the face of the income statement that contains any of the expense categories noted.

The guidance also requires certain amounts that are currently required to be disclosed to be included in the same tabular disclosure as these disaggregation requirements.

Furthermore, on an annual and interim basis, a public entity is required to separately disclose selling expenses and annually, disclose a description of the selling expenses.

The guidance is effective for 2027 annual reporting, and in the first quarter of 2028 for interim reporting, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted.

We are evaluating the impact of this guidance on our consolidated financial statements.

Reportable Segments and Geographic Data

The Company is organized based on the nature of its products and is composed of two reportable segments, Machine Clothing (“MC”), and Albany Engineered Composites ("AEC”), each overseen by a segment president.

These segments are reflective of how the Company's Chief Executive Officer, who is its Chief Operating Decision Maker

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Reportable Segments and Geographic Data — (continued)

("CODM"), reviews operating results for the purpose of allocating resources and assessing performance.

These segments are reflective of how the Company's Chief Executive Officer, who is its Chief Operating Decision Maker ("CODM"), reviews operating results for the purpose of allocating resources and assessing performance.

Our CODM evaluates each segment's performance based on metrics such as net revenues, gross profit, and other key financial data, to assess performance and allocate resources that align with company-wide goals.

Annual incentive targets are established for the segment presidents based on these metrics, in addition to Earnings before interest, taxes, depreciation, and amortization (EBITDA) and cash flows, which are reviewed in summary each month, and in more depth each quarter.

The Company has not aggregated operating segments for purposes of identifying reportable segments.

Effective December 31, 2024, the Company adopted the provisions of ASU 2023-07, which expanded the content and frequency of segment disclosures required under ASC 280.

The accounting policies of the segments are the same as those described in Note 1, Accounting Policies , of the Notes to the Consolidated Financial Statements.

7 unchanged sentences

Paper machine clothing products are customized, consumable products of technologically sophisticated design that utilize polymeric materials in a complex structure.

On August 31, 2023, the Company completed the acquisition of Heimbach, a privately-held manufacturer of paper machine clothing and technical textiles.

The financial results of the acquired company are included in the Machine Clothing reportable segment.

Albany Engineered Composites :

2 unchanged sentences

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, A321neo, Boeing 737 MAX, and COMAC 919 aircraft.

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 14 % of the Company’s consolidated Net revenues in 2024.

In 2024, SAFRAN leased manufacturing space from AEC for the GE9X program.

Rent paid by SAFRAN under this lease amounted to $ 1.0 million in 2024 and $ 1.0 million in 2023.

AEC sales to SAFRAN were $ 178.1 million in 2024, $ 187.6 million in 2023, and $ 169.3 million in 2022.

The total of Accounts receivable, Contract assets and Noncurrent receivable due from SAFRAN amounted to $ 78.5 million and $ 93.8 million as of December 31, 2024 and 2023, respectively.

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

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

In 2024, approximately 36 % of AEC net revenues were related to U.S.

government contracts or programs.

The following tables show data by reportable segment that is regularly provided to the CODM, reconciled to consolidated totals included in the financial statements:

AEC also supplies vacuum waste tanks for Boeing commercial programs, and specialty components for the Rolls Royce lift fan

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Reportable Segments and Geographic Data — (continued)

on the F-35, as well as the fan case for the GE9X engine.

In 2025, approximately 35 % of AEC net revenues were related to U.S.

government contracts or programs.

The following tables show data by reportable segment that is regularly provided to the CODM, reconciled to consolidated totals included in the financial statements:

Year ended December 31, 2025

7 unchanged sentences

Operating income/(loss) $ 156,212 $ ( 145,135 ) $ ( 47,180 ) $ ( 36,103 )

Certain prior year amounts have been reclassified in order to conform to current year presentation.

Global information system costs previously included in Corporate expenses are allocated to the segments.

Management believes this presentation better reflects the performance of the segments and is how management will review segment performance on a going forward basis.

For the year ended December 31, 2025, Selling, general and administrative expenses include global information systems costs of $ 17.3 million, $ 17.6 million and $ 0.2 million for MC, AEC and Corporate, respectively.

Global information systems costs were previously included in Corporate expenses.

Year ended December 31, 2024

7 unchanged sentences

Operating income/(loss) $ 183,632 $ ( 11,603 ) $ ( 40,670 ) $ 131,359

Certain prior year amounts have been reclassified in order to conform to current year presentation.

Global information system costs previously included in Corporate expenses are allocated to the segments.

Management believes this presentation better reflects the performance of the segments and is how management will review segment performance on a going forward basis.

For the year ended December 31, 2024, Selling, general and administrative expenses include global information systems costs of $ 15.2 million, $ 15.7 million and $ 1.0 million for MC, AEC and Corporate, respectively.

9 unchanged sentences

Operating income/(loss) $ 188,429 $ 27,351 $ ( 47,886 ) $ 167,894

For the year ended December 31, 2022, Selling, general and administrative expenses include global information systems costs of $ 10.0 million, $ 11.8 million and $ 1.0 million for MC, AEC and Corporate, respectively.

Global information systems costs were previously included in Corporate expenses.

ALBANY INTERNATIONAL CORP.

1 unchanged sentence

Reportable Segments and Geographic Data — (continued)

For the year ended December 31, 2023, Selling, general and administrative expenses include global information systems costs of $ 10.9 million, $ 14.2 million and $ 2.1 million for MC, AEC and Corporate, respectively.

Global information systems costs were previously included in Corporate expenses.

The following table reconciles Operating income (loss) to Income before income taxes:

Years ended December 31,

1 unchanged sentence

2025 2024 2023

Machine Clothing

Operating income/(loss) $ ( 36,103 ) $ 131,359 $ 167,894

Reconciling items:

Interest income

( 5,159 ) ( 4,064 ) ( 6,566 )

Albany Engineered Composites

Interest expense

25,764 16,613 20,167

Consolidated total

Other (income)/expense, net

5,079 1,721 ( 6,163 )

Machine Clothing

Income before income taxes

$ ( 61,787 ) $ 117,089 $ 160,456

Albany Engineered Composites

Interest income, Interest expense, and Other income/expense are not allocated to the business segments.

The following table summarizes depreciation and amortization by segment:

Years ended December 31,

(in thousands)

2025 2024 2023

Consolidated total $ 401,776 $ 423,718 $ 389,782

Depreciation and amortization

6 unchanged sentences

$ 87,914 $ 89,294 $ 76,733

Operating income/(loss)

Machine Clothing

183,632 188,429 196,212

Albany Engineered Composites

( 11,603 ) 27,351 19,805

( 40,670 ) ( 47,886 ) ( 34,995 )

Operating income

$ 131,359 $ 167,894 $ 181,022

Reconciling items:

Interest income

( 4,064 ) ( 6,566 ) ( 3,835 )

Interest expense

16,613 20,167 17,835

Pension settlement expense — — 49,128

Other (income)/expense, net

1,721 ( 6,163 ) ( 14,086 )

Income before income taxes

$ 117,089 $ 160,456 $ 131,980

Interest income, Interest expense, Pension settlement expense, Other income/expense, and Income taxes are not allocated to the business segments.

Results for the years ended December 31, 2024 and December 31, 2023 include Heimbach, which was acquired August 31, 2023.

Heimbach contributed Net revenues of $ 141.6 million and $ 51.2 million in 2024 and 2023, respectively.

Heimbach reduced MC's Operating income by $ 20.0 million and $ 6.3 million in 2024 and 2023, respectively.

Depreciation expense for Heimbach on Property, plant, and equipment, net was $ 12.4 million and $ 4.0 million in 2024 and 2023, respectively;

and amortization expense on Intangibles, net was $ 1.0 million and $ 0.3 million in 2024 and 2023, respectively.

In the third quarter of 2022, 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.

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 Goodwill.

Results for the years ended December 31, 2025, December 31, 2024, and December 31, 2023 include Heimbach, which was acquired August 31, 2023.

Depreciation expense for Heimbach on Property, plant, and equipment, net was $ 10.9 million, $ 12.4 million, and $ 4.0 million in 2025, 2024, and 2023 respectively;

and amortization expense on Intangibles, net was $ 1.0 million, $ 1.0 million, and $ 0.3 million in 2025, 2024, and 2023 respectively.

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

Assets held-for-sale have been removed from segment assets and presented as a reconciling item.

ALBANY INTERNATIONAL CORP.

16 unchanged sentences

89,862 148,560 156,772

Assets held for sale 293,783 — —

$ 1,718,709 $ 1,648,696 $ 1,835,014

4 unchanged sentences

39,098 58,121 57,404

Corporate expenses 1,816 1,108 602

Corporate 1,637 1,816 1,108

Total capital expenditures and purchased software

31 unchanged sentences

$ 482,568 $ 563,431 $ 601,989

Revenue Recognition

Revenue is measured based on the consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third parties.

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.

A contract’s transaction price is allocated to each material distinct performance obligation and is recognized as revenue when, or as, the performance obligation is satisfied.

In our MC segment, our primary performance obligation in most contracts is to provide solution-based, custom-designed fabrics and belts to the customer.

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.

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

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

Revenue Recognition — (continued)

contract may be fulfillment costs, in the form of shipping and handling, which are accrued when control of the product is transferred.