ALBANY INTERNATIONAL CORP /DE/ 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm 49 Consolidated Statements of Income /( Loss ) for the years ended December 31, 202 5 , 202 4 , and 20 23 52 Consolidated Statements of Comprehensive Income /(Loss) for the years ended December 31, 202 5 , 202 4 , and 202 3 53 Consolidated Balance Sheets as of December 31, 202 5 and 20 24 54 Consolidated Statements of Cash Flows for the years ended December 31, 202 5 , 202 4 , and 20 23 55 Notes to Consolidated Financial Statements 56 48 Index Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Albany International Corp.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Albany International Corp. 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. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Evaluation of estimated total contract costs at completion for Albany Engineered Composites revenue recognition for certain firm-fixed-price contracts As discussed in Note 3 to the consolidated financial statements, a portion of the Albany Engineered Composites (AEC) segment revenue is earned under firm-fixed-price orders that are placed under definitive agreements, with revenue recognized over time as costs are incurred. 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 is recorded proportionally as costs are incurred. We identified the evaluation of estimated total contract costs at completion for AEC revenue recognition for certain firm-fixed-price contracts as a critical audit matter. A high degree of auditor judgment was required to evaluate the 49 Index estimates of total contract costs at completion because of the varied nature and inherent complexities of the contractual performance obligations. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the AEC revenue process. This included controls related to developing forecasted estimated total contract costs. For certain contracts, we compared the Company’s historical estimates of costs to actual costs incurred to assess the Company’s ability to estimate accurately. We read relevant agreements, including amendments, and inquired of financial and operational personnel of the Company to identify factors that should be considered within the cost to complete estimates. We inspected the Company’s analysis of contract status, including forecasted costs, which we compared against historical costs. /s/ KPMG LLP We have served as the Company’s auditor since 2014. Boston, Massachusetts February 27, 2026 50 Index Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Albany International Corp.: Opinion on Internal Control Over Financial Reporting We have audited Albany International Corp. and subsidiaries' (the Company) 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. 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, 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. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Boston, Massachusetts February 27, 2026 51 Index Albany International Corp. CONSOLIDATED STATEMENTS OF INCOME/(LOSS) For the years ended December 31, (in thousands, except per share amounts) 2025 2024 2023 Net revenues $ 1,182,813 $ 1,230,615 $ 1,147,909 Cost of goods sold 938,893 828,839 724,191 Gross profit 243,920 401,776 423,718 Selling, general and administrative expenses 218,326 210,882 214,915 Technical and research expenses 48,015 46,097 40,627 Restructuring expenses, net 13,682 13,438 282 Operating income/(loss) ( 36,103 ) 131,359 167,894 Interest income ( 5,159 ) ( 4,064 ) ( 6,566 ) Interest expense 25,764 16,613 20,167 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 383 432 490 Net income/(loss) attributable to the Company $ ( 57,342 ) $ 87,623 $ 111,120 Earnings per share: 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 $ 1.09 $ 1.05 $ 1.01 Weighted average shares outstanding: Basic 29,566 31,231 31,171 Diluted 29,566 31,338 31,276 The accompanying notes are an integral part of the consolidated financial statements. 52 Index Albany International Corp. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) For the years ended December 31, (in thousands) 2025 2024 2023 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 Pension settlement/curtailment ( 2,002 ) — — Pension/postretirement plan remeasurement ( 8,361 ) 3,888 4,302 Amortization of pension and postretirement liability adjustments: Prior service credit ( 150 ) ( 150 ) ( 4,122 ) Net actuarial loss 1,151 613 1,383 Payments and amortization related to interest rate swaps included in earnings ( 269 ) ( 13,547 ) ( 15,062 ) Derivative valuation adjustment ( 399 ) 1,261 3,512 Income taxes related to items of other comprehensive income/(loss): Pension settlement/curtailment 422 — — Pension/postretirement plan remeasurement 1,763 ( 1,283 ) ( 673 ) Amortization of pension and postretirement liability adjustments ( 210 ) ( 153 ) 904 Payments and amortization related to interest rate swaps included in earnings 62 3,419 3,811 Derivative valuation adjustment 92 ( 318 ) ( 889 ) Comprehensive income/(loss) ( 4,508 ) 25,234 123,369 Comprehensive income/(loss) attributable to the noncontrolling interest 484 ( 543 ) 949 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. 53 Index Albany International Corp. CONSOLIDATED BALANCE SHEETS At December 31, (in thousands, except share and per share data) 2025 2024 Assets Current assets: Cash and cash equivalents $ 112,350 $ 115,283 Accounts receivable, net 235,084 246,688 Contract assets, net 87,102 166,557 Inventories 121,589 145,845 Income taxes prepaid and receivable 43,937 19,187 Prepaid expenses and other current assets 34,990 37,132 Assets held for sale 293,783 — Total current assets 928,835 730,692 Property, plant and equipment, net 482,568 563,431 Intangibles, net 21,428 38,127 Goodwill 162,507 176,261 Deferred income taxes 68,499 28,757 Other assets 54,872 111,428 Total assets $ 1,718,709 $ 1,648,696 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 64,499 $ 66,095 Accrued liabilities 139,385 141,904 Income taxes payable 35,090 18,367 Liabilities held for sale 203,323 — Total current liabilities 442,297 226,366 Long-term debt 455,663 318,531 Other noncurrent liabilities 86,850 138,830 Deferred taxes and other liabilities 1,797 16,022 Total liabilities 986,607 699,749 Commitments and Contingencies (Note 21) Shareholders’ Equity: Preferred stock, par value $ 5.00 per share; authorized 2,000,000 shares; no ne issued — — Class A Common Stock, par value $ 0.001 per share; authorized 100,000,000 shares; issued 40,989,106 in 2025 and 40,917,539 in 2024 41 41 Additional paid-in capital 460,472 452,933 Retained earnings 976,373 1,065,763 Accumulated items of other comprehensive income: Translation adjustments ( 119,008 ) ( 181,555 ) Pension and postretirement liability adjustments ( 23,911 ) ( 14,328 ) Derivative valuation adjustment ( 619 ) ( 106 ) Treasury stock (Class A), at cost; 12,685,782 shares in 2025 and 9,844,746 in 2024 ( 567,139 ) ( 379,210 ) Total Company shareholders’ equity 726,209 943,538 Noncontrolling interest 5,893 5,409 Total shareholders' equity 732,102 948,947 Total liabilities and shareholders’ equity $ 1,718,709 $ 1,648,696 The accompanying notes are an integral part of the consolidated financial statements. 54 Index Albany International Corp. CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, (in thousands) 2025 2024 2023 OPERATING ACTIVITIES Net income $ ( 56,959 ) $ 88,055 $ 111,610 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 82,712 82,452 70,374 Amortization 5,202 6,842 6,359 Change in deferred taxes and other liabilities ( 43,315 ) ( 15,331 ) ( 2,046 ) Impairment of property, plant, equipment, and inventory ( 390 ) 2,038 1,773 Non-cash interest expense 1,029 1,025 1,404 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 Foreign currency remeasurement (gain)/loss on intercompany loans 8,883 81 ( 2,831 ) Fair value adjustment on foreign currency options — — ( 139 ) Gain on sale of assets ( 1,566 ) ( 513 ) — Changes in operating assets and liabilities that provided/(used) cash, net of impact of business acquisition: Accounts receivable ( 724 ) 31,764 ( 11,038 ) Contract assets ( 23,189 ) 12,289 ( 32,156 ) Inventories 17,627 14,627 15,093 Prepaid expenses and other current assets 1,865 4,002 1,530 Income taxes prepaid and receivable ( 25,060 ) ( 8,574 ) ( 2,897 ) Accounts payable 9,172 ( 3,084 ) ( 5,672 ) Accrued liabilities 7,975 ( 1,275 ) ( 10,441 ) Income taxes payable 14,507 6,918 ( 1,988 ) Noncurrent receivables — ( 780 ) 3,723 Other noncurrent liabilities ( 2,550 ) ( 7,702 ) ( 9,783 ) Other, net 7,669 582 7,605 Net cash provided by operating activities 152,474 218,441 148,056 INVESTING ACTIVITIES Purchase of business, net of cash acquired — — ( 133,470 ) Purchases of property, plant and equipment ( 69,830 ) ( 80,249 ) ( 83,560 ) Purchased software ( 1,675 ) ( 958 ) ( 869 ) Proceeds received from sale of assets 3,243 1,027 — Net cash used in investing activities ( 68,262 ) ( 80,180 ) ( 217,899 ) FINANCING ACTIVITIES Proceeds from borrowings 272,003 145,595 78,040 Principal payments on debt ( 147,044 ) ( 279,838 ) ( 92,274 ) Debt acquisition costs — — ( 4,108 ) Purchase of Treasury shares ( 186,012 ) ( 14,175 ) — Taxes paid in lieu of share issuance ( 2,521 ) ( 2,931 ) ( 3,136 ) Dividends paid ( 32,477 ) ( 32,483 ) ( 31,163 ) Net cash used in financing activities ( 96,051 ) ( 183,832 ) ( 52,641 ) Effect of exchange rate changes on cash and cash equivalents 8,906 ( 12,566 ) 4,128 (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 Cash and cash equivalents at end of period $ 112,350 $ 115,283 $ 173,420 The accompanying notes are an integral part of the consolidated financial statements. 55 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 1. Accounting Policies Basis of Consolidation and Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and include the accounts of Albany International Corp. and its subsidiaries (the Company, Albany, we, us, or our) after elimination of intercompany transactions. 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. See Note 3, Reportable Segments and Geographical Data, of the Notes to the Consolidated Financial Statements for more information on our segments. On August 31, 2023, the Company completed the acquisition of Heimbach GmbH ("Heimbach"), a privately-held manufacturer of paper machine clothing and technical textiles, as further described in Note 24, Business Combination , of the Notes to the Consolidated Financial Statements of our 2023 Annual Report on Form 10-K . The financial results of the acquired company are included in the Machine Clothing reportable segment since the date of the acquisition. 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 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. Estimates 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, 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. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may materially differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of any revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Revenue Recognition 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 generally recognized over time using an input method as the measure of progress. The amount of revenue in excess of progress billings on long-term contracts is included in Contract assets, net, which represent rights to consideration that are conditional on something other than the passage of time, such as completion of remaining performance obligations. For over time contracts, we are required to limit our estimate of contract values to the period of the legally enforceable contract. While certain contracts are expected to be profitable over the course of the program life when including expected renewals, our estimate of contract revenues and costs is limited to the estimated value of enforceable rights and obligations, excluding anticipated renewals. 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 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 56 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 1. Accounting Policies — (continued) 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 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. 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. Additional accounting policies related to revenue from contracts with customers are set forth in Note 3, Revenue Recognition , of the Notes to the Consolidated Financial Statements. We limit the concentration of credit risk in receivables by closely monitoring credit and collection policies. We record allowances for sales returns as a deduction in the computation of Net revenues. Such provisions are recorded on the basis of written communication with customers and/or historical experience. Any value added taxes that are imposed on sales transactions are excluded from Net revenues. Cost of Goods Sold Cost of goods sold includes the cost of materials, provisions for obsolete inventories, labor and supplies, shipping and handling costs, depreciation of manufacturing facilities and equipment, purchasing, receiving, warehousing, and other expenses. Cost of goods sold also includes provisions for loss contracts and charges for the write-off of inventories that result from an exit activity. Selling, General, and Administrative ("SG&A") Expenses Selling, general, and administrative expenses are primarily comprised of wages, incentive compensation, benefits, travel, professional fees, revaluation of trade foreign currency balances, global information system costs, and other costs, and are expensed as incurred. Selling expense includes costs related to contract acquisition and provisions for expected credit losses on financial assets measured at amortized cost. Technical and Research Expenses Technical and research expenses are charged to operations as incurred and consist primarily of compensation, supplies, and professional fees incurred in connection with intellectual property. The AEC segment participates in both company-sponsored, and customer-funded research and development. Some customer-funded research and development may be on a cost-sharing basis and considered to be a collaborative arrangement, in which case both parties are active participants and are exposed to the risks and rewards dependent on the success of the activity. In such cases, amounts charged to the collaborating entity are credited against research and development expense. For customer-funded research and development in which we anticipate funding to exceed expenses, we include amounts charged to the customer in Net revenues, while expenses are included in Cost of goods sold. Restructuring Expense We may incur expenses related to exiting a line of business or restructuring of our operations or organizational structure, which could include employee termination costs, costs to consolidate or close facilities, or costs to terminate contractual relationships. Restructuring expenses may also include impairment of Property, plant and equipment, as described below under “Property, Plant and Equipment.” Employee termination costs include severance pay and social costs for periods after employee service is completed. Termination costs related to an ongoing benefit arrangement are recognized when the amount becomes probable and estimable. 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. 57 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 1. Accounting Policies — (continued) Income Taxes 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. In the ordinary course of business there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have determined the amount of the tax benefit to be recognized by estimating the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Where applicable, associated interest and penalties have also been recognized. We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. We have not elected to reclassify stranded tax effects from Accumulated items of other comprehensive income (AOCI) to retained earnings. Earnings Per Share 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. If we report a net loss from continuing operations, the diluted loss per share is equal to the basic earnings per share calculation. Translation of Financial Statements Assets and liabilities of non-U.S. operations are translated at year-end rates of exchange, and the income statement accounts are translated at average monthly exchange rates. Gains or losses resulting from translating non-U.S. currency financial statements into U.S. dollars are recorded in other comprehensive income and accumulated in Shareholders’ equity in the caption “Translation adjustments.” Selling, general, and administrative expenses include foreign currency gains and losses resulting from third party balances, such as receivables and payables, which are denominated in a currency other than the entity’s functional currency. 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 are recorded in other comprehensive income. The following table summarizes foreign currency transaction gains and losses recognized in the income statement: Years ended December 31, (in thousands) 2025 2024 2023 (Gains)/losses included in: Selling, general, and administrative expenses $ 6,252 $ ( 4,495 ) $ 4,181 Other (income)/expense, net 8,883 ( 3,900 ) ( 2,916 ) Total transaction (gains)/losses $ 15,135 $ ( 8,395 ) $ 1,265 58 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 1. Accounting Policies — (continued) Cash and Cash Equivalents 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 Accounts receivable includes trade and other accounts receivables and Bank promissory notes. In connection with certain sales in Asia Pacific, the Company accepts a bank promissory note as customer payment. 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 and Contract assets. 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. See additional information set forth in Note 11, Accounts Receivable , of the Notes to the Consolidated Financial Statements. Contract Assets and Contract Liabilities Contract assets includes unbilled amounts typically resulting from sales under contracts when the cost-to-cost method of revenue recognition is utilized, and revenue recognized exceeds the amount billed to the customer. Contract assets are transferred to Accounts receivable, net, when the entitlement to payment becomes unconditional. Contract liabilities include advance payments and billings in excess of revenue recognized. Contract liabilities are included in Accrued liabilities in the Consolidated Balance Sheet. See additional information set forth in Note 12, Contract Assets and Liabilities , of the Notes to the Consolidated Financial Statements. Inventories Costs included in inventories are raw materials, labor, supplies and allocable depreciation and overhead. Raw materials inventory is valued on an average cost basis. Other inventory cost elements are valued at cost, using the first-in, first-out method. The Company writes down the inventories for estimated obsolescence, and to lower of cost or net realizable value based upon assumptions about future demand and market conditions. Write-downs of inventories are charged to Cost of goods sold. If actual demand or market conditions are less favorable than those projected by the Company, additional inventory write-downs may be required. Once established, the original cost of the inventory less the related write-down represents the new cost basis of such inventories. See additional information set forth in Note 3, Revenue Recognition , and Note 13, Inventories , of the Notes to the Consolidated Financial Statements. Leases 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, 59 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 1. Accounting Policies — (continued) • 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. For most of these leases, we account for the lease and non-lease components as a single lease component, in accordance with the practical expedient that is available for ongoing accounting. Additionally, for certain other leases, such as for vehicles, we apply a portfolio approach. 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 right of use asset ("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. Lease liabilities for both operating and finance leases are included in Accrued liabilities and Other noncurrent liabilities in the Consolidated Balance Sheets. See additional information set forth in Note 20, Leases , of the Notes to the Consolidated Financial Statements. Debt The Company relies on bank financing as an important source of liquidity for business activities. Outstanding debt is classified as current or long-term based on the maturity of the Company's financing arrangements. See additional information set forth in Note 17, Financial Instruments , of the Notes to the Consolidated Financial Statements. Property, Plant and Equipment Property, plant and equipment are recorded at cost, or if acquired as part of a business combination, at fair value. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets for financial reporting purposes. In some cases, accelerated methods are used for income tax purposes. Significant additions or improvements extending assets’ useful lives are capitalized; normal maintenance and repair costs are expensed as incurred. The cost of fully depreciated assets remaining in use is included in the respective asset and accumulated depreciation accounts. When items are sold or retired, related gains or losses are included in Net income. Computer software purchased for internal use, at cost, is amortized on a straight-line basis over five to eight years , depending on the nature of the asset, after being placed into service, and is included in Property, plant, and equipment. 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 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. Business Combinations The total purchase consideration for an acquisition is measured at the fair value of the assets acquired and liabilities assumed as of the acquisition date. Costs that are directly attributable to the acquisition are expensed as incurred. 60 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 1. 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. We recognize goodwill if the fair value of the total purchase consideration and any noncontrolling interest is in excess of the net fair value of the identifiable assets acquired and the liabilities assumed. 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 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. Intangible assets from acquired businesses are recognized at fair value on the acquisition date and consist of customer relationships, customer contracts, technology, intellectual property and other intangible assets. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually. We perform an impairment test of our goodwill at least annually in the second quarter or more frequently whenever events or changes in circumstances indicate the carrying value of goodwill may be impaired. Such events or changes in circumstances may include a significant deterioration in overall economic conditions, changes in the business climate of our industry, a decline in our market capitalization, operating performance indicators, competition, reorganizations of our business, or the disposal of all or a portion of a reporting unit. Our goodwill has been allocated to and is tested for impairment at a level referred to as the reporting unit, which is our business segment level or a level below the business segment. The level at which we test goodwill for impairment requires us to determine whether the operations below the business segment constitute a self-sustaining business for which discrete financial information is available and segment management regularly reviews the operating results. We may use qualitative or quantitative approaches when testing goodwill for impairment. When we use the qualitative approach, we perform a qualitative evaluation of events and circumstances impacting the reporting unit to determine the likelihood of goodwill impairment. Based on that qualitative evaluation, if we determine it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, no further evaluation is necessary. Otherwise, we perform a quantitative impairment test. To perform the quantitative impairment test, we compare the fair value of a reporting unit to its carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit is not impaired. 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 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 61 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 1. 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. Impairment assessments inherently involve management judgments regarding a number of assumptions such as those described above. Due to the many variables inherent in the estimation of a reporting unit’s fair value and the relative size of our recorded goodwill, differences in assumptions could have a material effect on the estimated fair value of one or more of our reporting units and could result in a goodwill impairment charge in a future period. See additional information set forth in Note 15, Goodwill and Other Intangible Assets , of the Notes to the Consolidated Financial Statements. Other Assets For some AEC contracts, we perform pre-production or nonrecurring engineering services. 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 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. Included in Other assets is $ 10.4 million in 2025 and $ 17.0 million in 2024 for defined benefit pension plans where plan assets exceed the projected benefit obligations. Other assets also include financial assets of $ 1.1 million in 2025 and $ 0.6 million in 2024. See additional information set forth in Note 18, Fair-Value Measurements , of the Notes to the Consolidated Financial Statements. Stock-Based Compensation 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. See additional information for stock-based compensation plans in Note 22, Stock-Based Compensation , of the Notes to the Consolidated Financial Statements. Derivatives From time to time, we use derivatives to mitigate potentially large adverse effects from changes in currency exchange rates and interest rates. 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 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. For those contracts deemed to be a hedge, we formally document the relationship between the derivative instrument and the risk being hedged. In this documentation, we specifically identify the asset, liability, forecasted transaction, cash flow, or net investment that has been designated as the hedged item, and evaluate whether the derivative instrument is expected to reduce the risks associated with the hedged item. To the extent these criteria are not met, we do not use hedge accounting for the derivative. All derivative contracts are recorded at fair value, as a net asset or a net liability on the Consolidated Balance Sheets. The changes in fair values of derivative contracts are recorded each period in earnings or accumulated other comprehensive income, depending on whether a derivative is effective as part of the hedged transaction. 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 62 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 1. 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. For derivatives that are designated and qualify as hedges of net investments in subsidiaries located outside the U.S., changes in the fair value of derivatives are reported in other comprehensive income as part of Translation adjustments. The Company does not engage in derivative instruments for speculative or trading purposes. See Note 17, Financial Instruments, of the Notes to the Consolidated Financial Statements for additional information. 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 certain current and former employees. The pension plans are generally trusteed or insured, and accrued amounts are funded as required in accordance with governing laws and regulations. The annual expense and liabilities recognized for defined benefit pension plans and postretirement benefit plans are developed from actuarial valuations. Inherent in these valuations are key assumptions, including discount rates and expected return on plan assets, which are updated on an annual basis. We consider current market conditions, including changes in interest rates, in determining these assumptions. Discount rate assumptions are based on the population of plan participants and a mixture of high-quality fixed-income investments with durations that match expected future payments. The assumption for expected return on plan assets is based on historical and expected returns on various categories of plan assets. Government Grants The Company recognizes government grants only when there is reasonable assurance that we will comply with the conditions attached to them and the grants will be received. Government grants are recognized in the Consolidated Statements of Income on a systematic basis over the periods in which we recognize as expenses the related costs for which the grants are intended to compensate. A government grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support with no future related costs is recognized in the Consolidated Statements of Income of the period in which it becomes receivable. Recent Accounting Pronouncements New Accounting Standards Adopted In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. 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 63 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 1. Accounting Policies — (continued) 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. 2. 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 ("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. The Company has not aggregated operating segments for purposes of identifying reportable segments. 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. Corporate expenses include wages and benefits for corporate headquarters personnel, costs related to information systems development and support, and professional fees related to legal, audit, and other activities. Corporate expenses are not allocated to the reportable segments, except certain global information system costs discussed below, because the decision-making for these functions lies outside of the segments. Machine Clothing: The MC segment supplies permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel, pulp, nonwovens, fiber cement and several other industrial applications. We sell our MC products directly to customer end-users in countries across the globe. Our products, manufacturing processes, and distribution channels for MC are substantially the same in each region of the world in which we operate. We design, manufacture, and market paper machine clothing (used in the manufacturing of paper, paperboard, tissue and towel) for each section of the paper machine and for every grade of paper. Paper machine clothing products are customized, consumable products of technologically sophisticated design that utilize polymeric materials in a complex structure. Albany Engineered Composites : The AEC segment provides highly engineered, advanced composite structures to customers in the commercial and defense aerospace industries. The segment includes Albany Safran Composites, LLC (“ASC”), in which our customer, SAFRAN Group ("Safran"), owns a 10% 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. 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 64 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 2. 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 (in thousands) MC AEC Corporate Total Net revenues $ 708,066 $ 474,747 $ — $ 1,182,813 Cost of goods sold 384,334 554,559 — 938,893 Gross profit 323,732 ( 79,812 ) — 243,920 Selling, general and administrative expenses 131,175 46,449 40,702 218,326 Technical and research expenses 28,090 15,615 4,310 48,015 Restructuring expenses, net 8,255 3,259 2,168 13,682 Operating income/(loss) $ 156,212 $ ( 145,135 ) $ ( 47,180 ) $ ( 36,103 ) 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. Year ended December 31, 2024 (in thousands) MC AEC Corporate Total Net revenues $ 749,907 $ 480,708 $ — $ 1,230,615 Cost of goods sold 403,863 424,976 — 828,839 Gross profit 346,044 55,732 — 401,776 Selling, general and administrative expenses 123,120 47,421 40,341 210,882 Technical and research expenses 29,832 16,265 — 46,097 Restructuring expenses, net 9,460 3,649 329 13,438 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. Global information systems costs were previously included in Corporate expenses. Year ended December 31, 2023 (in thousands) MC AEC Corporate Total Net revenues $ 670,768 $ 477,141 $ — $ 1,147,909 Cost of goods sold 339,210 384,981 — 724,191 Gross profit 331,558 92,160 — 423,718 Selling, general and administrative expenses 118,196 48,833 47,886 214,915 Technical and research expenses 24,651 15,976 — 40,627 Restructuring expenses, net 282 — — 282 Operating income/(loss) $ 188,429 $ 27,351 $ ( 47,886 ) $ 167,894 65 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 2. 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, (in thousands) 2025 2024 2023 Operating income/(loss) $ ( 36,103 ) $ 131,359 $ 167,894 Reconciling items: Interest income ( 5,159 ) ( 4,064 ) ( 6,566 ) Interest expense 25,764 16,613 20,167 Other (income)/expense, net 5,079 1,721 ( 6,163 ) Income before income taxes $ ( 61,787 ) $ 117,089 $ 160,456 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 Depreciation and amortization Machine Clothing 32,849 33,917 24,616 Albany Engineered Composites 53,731 54,228 50,764 Corporate 1,334 1,149 1,353 Consolidated total $ 87,914 $ 89,294 $ 76,733 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. 66 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 2. Reportable Segments and Geographic Data — (continued) The following table presents assets and capital expenditures by reportable segment: As of December 31, (in thousands) 2025 2024 2023 Segment assets Machine Clothing $ 618,476 $ 600,603 $ 669,907 Albany Engineered Composites 491,802 736,306 800,931 Reconciling items: Cash 112,350 115,283 173,420 Income taxes prepaid, receivable and deferred 112,436 47,944 33,984 Prepaid and Other assets 89,862 148,560 156,772 Assets held for sale 293,783 — — Total assets $ 1,718,709 $ 1,648,696 $ 1,835,014 Capital expenditures and purchased software Machine Clothing $ 30,770 $ 21,270 $ 25,917 Albany Engineered Composites 39,098 58,121 57,404 Corporate 1,637 1,816 1,108 Total capital expenditures and purchased software $ 71,505 $ 81,207 $ 84,429 67 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 2. Reportable Segments and Geographic Data — (continued) The following table shows data by geographic area. Net revenues are based on the location of the operation recording the final sale to the customer. Net revenues recorded by our entity in Switzerland are derived from products sold throughout Europe and Asia, and are invoiced in various currencies. Years ended December 31, (in thousands) 2025 2024 2023 Net revenues United States $ 638,064 $ 650,532 $ 649,500 Switzerland 110,775 109,751 115,207 Germany 77,398 86,991 32,239 France 76,360 81,141 77,573 China 62,335 67,732 65,135 Brazil 68,642 66,943 69,527 Mexico 58,384 57,928 58,874 Other countries 90,855 109,597 79,854 Total Net revenues $ 1,182,813 $ 1,230,615 $ 1,147,909 Property, plant and equipment, net United States $ 202,729 $ 299,370 $ 303,578 China 54,991 52,063 57,070 Germany 48,858 46,033 52,934 Mexico 45,844 38,762 46,759 France 28,015 30,935 31,069 United Kingdom 16,100 16,651 18,306 Canada 16,194 14,313 15,318 Spain 12,808 12,154 14,804 Other countries 57,029 53,150 62,151 Total Property, plant and equipment, net $ 482,568 $ 563,431 $ 601,989 3. 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 68 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 3. 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. 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. 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. 69 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 3. Revenue Recognition — (continued) The sum of net adjustments to the estimated profitability of long-term contracts decreased AEC revenue by $ 69.1 million and operating income by $ 165.8 million in 2025. The decrease in profitability was primarily driven by a few large complex programs, including adjustments of $ 155.9 million for various CH-53K programs, based on changes to estimated material input costs, labor hours, and future overhead rates over the remainder of the contract. Comparatively, adjustments in the estimated profitability of long-term contracts decreased operating income by $ 43.2 million and $ 4.1 million in 2024 and 2023 respectively. The unfavorable effects in 2024 related to higher labor, material, and scrap costs. The unfavorable effects in 2023 related to additional reserves taken on certain contracts and inflationary factors decreasing anticipated margins. 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, with contract billings adjusted annually to reflect actual costs. 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. 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 15 % of the Company’s consolidated Net revenues in 2025. In 2025, SAFRAN leased manufacturing space from AEC for the GE9X program. Rent paid by SAFRAN under this lease amounted to $ 1.0 million in 2025 and $ 1.0 million in 2024. AEC sales to SAFRAN were $ 177.0 million in 2025, $ 178.1 million in 2024, and $ 187.6 million in 2023. The total of Accounts receivable and Contract assets due from SAFRAN amounted to $ 60.8 million and $ 78.5 million as of December 31, 2025 and 2024, respectively. 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 World-wide 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. 70 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 3. Revenue Recognition — (continued) T he following table presents disaggregated revenue for each product group by timing of revenue recognition: For the year ended December 31, 2025 (in thousands) Point in Time Revenue Recognition Over Time Revenue Recognition Total Machine Clothing $ 703,980 $ 4,086 $ 708,066 Albany Engineered Composites ASC — 173,094 173,094 Other AEC 14,128 287,525 301,653 Total Albany Engineered Composites 14,128 460,619 474,747 Total net revenues $ 718,108 $ 464,705 $ 1,182,813 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 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 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) 2025 2024 2023 Americas PMC $ 351,211 $ 341,204 $ 349,544 Eurasia PMC 277,226 301,436 250,048 Engineered Fabrics 79,629 107,267 71,176 Total Machine Clothing net revenues $ 708,066 $ 749,907 $ 670,768 71 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 3. 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. 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 $ 1.0 billion as of December 31, 2025, $ 1.1 billion as of December 31, 2024, and $ 1.2 billion as of December 31, 2023, and related primarily to firm contracts in the AEC segment. Of the remaining performance obligations as of December 31, 2025, we expect to recognize as revenue approximately $ 166 million during 2026, $ 182 million during 2027, $ 154 million during 2028, and the remainder thereafter. 4. Pension, Postretirement, and Other Benefit Plans Voluntary Savings Plan The Company maintains a voluntary savings plan covering all employees in the United States. The Plan, known as the Prosperity Plus Savings Plan, is a qualified plan under section 401(k) of the U.S. Internal Revenue Code. The Company matches, in the form of cash, between 50 % and 100 % of employee contributions up to a defined maximum. The investment of employee contributions to the plan is self-directed. The Company’s cost of the plan amounted to $ 8.5 million in 2025, $ 7.8 million in 2024, and $ 7.3 million in 2023. The plan allows for discretionary matching contributions. The Company uses such discretion to provide profit sharing contributions to plan participants. Such contributions are based on Company performance and vary from year to year and contributions are generally made in the first quarter following the Company’s fiscal year-end. The Company’s profit-sharing plan covers all employees in the United States. After the close of each year, the Board of Directors reviews and approves the amount of the profit-sharing contribution. Company contributions to the plan are in the form of cash. The expense recorded for this plan was $ 3.2 million in 2025, $ 2.4 million in 2024, and $ 4.9 million in 2023. Pension and Postretirement Plans The Company has defined benefit pension and postretirement plans covering certain current and former U.S. and non-U.S. employees. The eligibility, benefit formulas, and contribution requirements for plans vary by location. As of December 31, 2025, U.S. benefit obligations exist through the U.S. Supplemental Executive Retirement Plan (“SERP”), a frozen unfunded pension plan, and the U.S. postretirement welfare plan ("PRW"), a frozen plan which provides various medical, dental, and life insurance benefits. The U.S. Pension Plus Plan, a qualified defined benefit pension plan was terminated in 2021 and settled during 2022. The Company recognizes the funded status of each defined benefit and other postretirement benefit plan. Each overfunded plan is recognized as an asset and each underfunded plan is recognized as a liability. Company pension plan disclosures for U.S. and non-U.S. plans have been combined for both 2025 and 2024, except where indicated below. The Company’s pension and postretirement benefit costs and benefit obligations are based on actuarial valuations that are affected by many assumptions, the most significant of which are the assumed discount rate, expected rate of return on pension plan assets, and mortality. Each of the assumptions is reviewed and updated annually, as appropriate. The assumed rates of return for pension plan assets are determined for each major asset category based on historical rates of return for assets in that category and expectations of future rates of return based, in part, on simulated future capital market performance. The assumed discount rate is based on yields from a portfolio of currently available high-quality fixed-income investments with durations matching the expected future payments, based on the demographics of the plan participants and the plan provisions. Gains and losses arise from changes in the assumptions used to measure the benefit obligations, and experience different from what had been assumed, including asset returns different than what had been expected. The Company amortizes gains and losses in excess of a “corridor” over the average future service of the plan’s current participants. The corridor is defined as 10% of the greater of the plan’s projected benefit obligation or market-related value of plan 72 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 4. Pension, Postretirement, and Other Benefit Plans — (continued) assets. The market-related value of plan assets is also used to determine the expected return on plan assets component of net periodic cost. To the extent the Company’s unrecognized net losses and unrecognized prior service costs, including the amount recognized through accumulated other comprehensive income, are not reduced by future favorable plan experience, they will be recognized as a component of the net periodic cost in future years. The following table sets forth the plan benefit obligations: As of December 31, 2025 As of December 31, 2024 (in thousands, except percentages) Pension plans Other postretirement benefits Pension plans Other postretirement benefits Benefit obligation, beginning of year $ 137,111 $ 26,715 $ 158,323 $ 28,684 Service cost 1,156 40 1,812 46 Interest cost 6,013 1,414 6,114 1,416 Plan participants' contributions 266 — 530 — Actuarial (gain)/loss 3,533 1,235 ( 3,868 ) ( 709 ) Benefits paid ( 10,464 ) ( 2,566 ) ( 9,423 ) ( 2,651 ) Acquisitions/Divestiture ( 374 ) — — — Settlements and curtailments ( 15,043 ) — ( 7,805 ) — Foreign currency changes 12,121 41 ( 8,572 ) ( 71 ) Benefit obligation, end of year $ 134,319 $ 26,879 $ 137,111 $ 26,715 Accumulated benefit obligation $ 129,003 $ — $ 132,198 $ — Weighted average assumptions used to determine benefit obligations, end of year: Discount rate — U.S. plan 4.84 % 5.21 % 5.44 % 5.61 % Discount rate — non-U.S. plans 4.71 % 4.95 % 4.32 % 4.70 % Cash balance interest crediting rate - Switzerland pension plan 1.20 % — 1.15 % — Compensation increase — U.S. plan N/A N/A N/A N/A Compensation increase — non-U.S. plans 2.90 % 2.75 % 2.68 % 2.75 % During 2025, pension benefit obligations decreased by $ 2.8 million, related to several factors including benefit payments made to participants of the plan which resulted in a decrease of $ 10.5 million, and settlement and curtailments which resulted in a decrease of $ 15.0 million, offset by foreign currency changes, with an increase of $ 12.1 million, as well as several other offsetting items. Other postretirement benefit obligations increased by $ 0.2 million in 2025, primarily driven by interest costs and actuarial losses. During 2024, pension benefit obligations decreased by $ 21.2 million, related to several factors including benefit payments made to participants of the plan which resulted in a decrease of $ 9.4 million, and foreign currency changes which resulted in a decrease of $ 8.6 million, as well as several other offsetting items. Other postretirement benefit obligations decreased by $ 2.0 million in 2024, primarily driven by payments made by the Company to participants of the plan. 73 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 4. Pension, Postretirement, and Other Benefit Plans — (continued) The following sets forth information about plan assets: As of December 31, 2025 As of December 31, 2024 (in thousands) Pension plans Other postretirement benefits Pension plans Other postretirement benefits Fair value of plan assets, beginning of year $ 103,137 $ — $ 112,688 $ — Actual return on plan assets, net of expenses 668 — ( 408 ) — Employer contributions 5,644 2,566 8,744 2,651 Plan participants' contributions 266 — 530 — Benefits paid ( 10,464 ) ( 2,566 ) ( 9,423 ) ( 2,651 ) Acquisitions — — — — Settlements ( 14,767 ) — ( 3,811 ) — Other — — — — Foreign currency changes 7,127 — ( 5,183 ) — Fair value of plan assets, end of year $ 91,611 $ — $ 103,137 $ — The funded status of the plans was as follows: As of December 31, 2025 As of December 31, 2024 (in thousands) Pension plans Other postretirement benefits Pension plans Other postretirement benefits Fair value of plan assets $ 91,611 $ — $ 103,137 $ — Benefit obligation 134,319 26,879 137,111 26,715 Funded status $ ( 42,708 ) $ ( 26,879 ) $ ( 33,974 ) $ ( 26,715 ) Accrued benefit cost, end of year $ ( 42,708 ) $ ( 26,879 ) $ ( 33,974 ) $ ( 26,715 ) Amounts recognized in the consolidated balance sheets consist of the following: Noncurrent asset $ 10,406 $ — $ 16,982 $ — Current liability ( 5,332 ) ( 2,727 ) ( 4,915 ) ( 2,772 ) Noncurrent liability ( 47,782 ) ( 24,152 ) ( 46,041 ) ( 23,943 ) Net amount recognized $ ( 42,708 ) $ ( 26,879 ) $ ( 33,974 ) $ ( 26,715 ) Amounts recognized in accumulated other comprehensive income consist of: Net actuarial loss $ 28,845 $ 2,597 $ 19,529 $ 1,345 Prior service cost/(credit) ( 93 ) ( 237 ) ( 96 ) ( 360 ) Net amount recognized $ 28,752 $ 2,360 $ 19,433 $ 985 The composition of the net pension plan funded status as of December 31, 2025 was as follows: (in thousands) U.S. plan Non-U.S. plans Total Pension plans with pension assets $ — $ 10,406 $ 10,406 Pension plans without pension assets ( 3,636 ) ( 49,478 ) ( 53,114 ) Total $ ( 3,636 ) $ ( 39,072 ) $ ( 42,708 ) The underfunded balance in the U.S. relates to the Supplemental Executive Retirement Plan. 74 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 4. Pension, Postretirement, and Other Benefit Plans — (continued) The composition of the net periodic benefit plan cost for the years ended December 31, 2025, 2024, and 2023, was as follows: Pension plans Other postretirement benefits (in thousands, except percentages) 2025 2024 2023 2025 2024 2023 Components of net periodic benefit cost: Service cost $ 1,156 $ 1,812 $ 1,478 $ 40 $ 46 $ 60 Interest cost 6,013 6,114 5,151 1,414 1,416 1,874 Expected return on assets ( 4,538 ) ( 5,430 ) ( 4,347 ) — — — Amortization of prior service cost/(credit) ( 28 ) ( 26 ) ( 32 ) ( 122 ) ( 124 ) ( 4,090 ) Amortization of net actuarial loss 1,185 647 555 ( 34 ) ( 34 ) 828 Settlement 2,355 ( 33 ) — — — — Curtailment (gain)/loss ( 4,356 ) ( 37 ) — — — — Net periodic benefit cost $ 1,787 $ 3,047 $ 2,805 $ 1,298 $ 1,304 $ ( 1,328 ) Weighted average assumptions used to determine net cost: Discount rate — U.S. plan 5.44 % 5.15 % 5.49 % 5.61 % 5.21 % 5.55 % Discount rate — non-U.S. plans 4.32 % 4.05 % 5.15 % 4.70 % 4.70 % 5.20 % Cash balance interest crediting rate - Switzerland pension plan 1.15 % 1.30 % 2.15 % — — — Expected return on plan assets — U.S. plan N/A N/A N/A N/A N/A N/A Expected return on plan assets — non-U.S. plans 4.82 % 4.98 % 5.21 % N/A N/A N/A Rate of compensation increase — U.S. plan N/A N/A N/A N/A N/A N/A Rate of compensation increase — non-U.S. plans 2.68 % 2.89 % 3.08 % 2.75 % 2.75 % 2.75 % Pretax (gains)/losses on plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31, 2025, 2024, and 2023, was as follows: Pension plans Other postretirement benefits (in thousands) 2025 2024 2023 2025 2024 2023 Settlements/curtailments $ 2,002 $ 70 $ — $ — $ — $ — Asset/liability loss/(gain) 7,126 ( 2,023 ) 4,365 1,235 ( 709 ) ( 6,131 ) Amortization of actuarial gain/(loss) ( 1,185 ) ( 646 ) ( 554 ) 34 34 ( 828 ) Amortization of prior service cost/(credit) 28 26 32 122 124 4,090 Currency impact 1,349 ( 748 ) 757 ( 16 ) 28 ( 8 ) Cost/(benefit) in Other comprehensive income $ 9,320 $ ( 3,321 ) $ 4,600 $ 1,375 $ ( 523 ) $ ( 2,877 ) 75 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 4. Pension, Postretirement, and Other 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 are in Canada and the United Kingdom. For the countries in which the Company has funded pension trusts, the investment strategy may also be liability driven or, in other cases, to achieve a competitive, total investment return, achieving diversification between and within asset classes and managing other risks. Investment objectives for each asset class are determined based on specific risks and investment opportunities identified. Actual allocations to each asset class vary from target allocations due to periodic investment strategy changes, market value fluctuations, the length of time it takes to fully implement investment allocation positions, and the timing of benefit payments and contributions. Fair-Value Measurements The following tables present plan assets as of December 31, 2025, and 2024, using the fair-value hierarchy, which has three levels based on the reliability of inputs used, as described in Note 18, Fair-Value Measurements , of the Notes to the Consolidated Financial Statements. Certain investments that are measured at fair value using net asset value ("NAV") as a practical expedient are not required to be categorized in the fair value hierarchy table. The total fair value of these investments is included in the table below to permit reconciliation of the fair value hierarchy to amounts presented in the funded status table above. As of December 31, 2025 and 2024, there were no investments expected to be sold at a value materially different than NAV. Assets at Fair Value as of December 31, 2025 (in thousands) Quoted prices in active markets Level 1 Significant other observable inputs Level 2 Significant unobservable inputs Level 3 Total Common Stocks and equity funds $ — $ — $ — $ — Debt securities 283 43,281 — 43,564 Insurance contracts — — 3,998 3,998 Real Estate — — — — Hedge Funds — — — — Cash and short-term investments 6,643 — — 6,643 Total investments in the fair value hierarchy $ 6,926 $ 43,281 $ 3,998 54,205 Investments at net asset value: Common Stocks and equity funds 12,689 Fixed income funds 24,717 Limited partnerships — Total plan assets $ 91,611 76 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 4. Pension, Postretirement, and Other Benefit Plans — (continued) Assets at Fair Value as of December 31, 2024 (in thousands) Quoted prices in active markets Level 1 Significant other observable inputs Level 2 Significant unobservable inputs Level 3 Total Common Stocks and equity funds $ — $ 4,241 $ — $ 4,241 Debt securities — 49,940 — 49,940 Insurance contracts — — 3,528 3,528 Real Estate — — 3,244 3,244 Hedge Funds — — 836 836 Cash and short-term investments 5,323 — — 5,323 Total investments in the fair value hierarchy $ 5,323 $ 54,181 $ 7,608 67,112 Investments at net asset value: Common Stocks and equity funds 13,124 Fixed income funds 22,901 Limited partnerships — Total plan assets $ 103,137 The following tables present a reconciliation of Level 3 assets held during the years ended December 31, 2025 and 2024: (in thousands) December 31, 2024 Net realized gains Net unrealized gains Net purchases, issuances and settlements Net transfers (out of) Level 3 December 31, 2025 Insurance contracts - total level 3 assets $ 7,608 $ — $ 81 $ ( 3,691 ) $ — $ 3,998 (in thousands) December 31, 2023 Net realized gains Net unrealized gains Net purchases, issuances and settlements Net transfers (out of) Level 3 December 31, 2024 Insurance contracts - total level 3 assets $ 7,597 $ — $ 58 $ ( 47 ) $ — $ 7,608 None of the Company's U.S. pension plans held assets during 2025 or 2024. The asset allocation for the Company’s non-U.S. pension plans for 2025 and 2024, and the target allocation, by asset category, are as follows: Non-U.S. Plans Target Allocation Percentage of plan assets at plan measurement date Asset category 2025 2024 Equity securities 12 % 12 % 15 % Debt securities 31 % 31 % 70 % Real estate 1 % 1 % 3 % Other (1) 56 % 56 % 12 % 100 % 100 % 100 % (1) Other includes hedged equity and absolute return strategies, as well as private equity. The Company has procedures to monitor the performance of these investments and compares asset valuations to audited financial statements of the funds. 77 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 4. Pension, Postretirement, and Other Benefit Plans — (continued) The targeted plan asset allocation is based on an analysis of the actuarial liabilities, a review of viable asset classes, and an analysis of the expected rate of return, risk, and other investment characteristics of various investment asset classes. At the end of 2025 and 2024, the projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with projected benefit obligation and an accumulated benefit obligation in excess of plan assets were as follows: Plans with projected benefit obligation in excess of plan assets (in thousands) 2025 2024 Projected benefit obligation $ 58,331 $ 55,067 Fair value of plan assets 5,217 4,111 Plans with accumulated benefit obligation in excess of plan assets (in thousands) 2025 2024 Accumulated benefit obligation $ 55,260 $ 52,493 Fair value of plan assets 4,463 3,509 Information about expected cash flows for the pension and other benefit obligations are as follows: (in thousands) Pension plans Other postretirement benefits Expected employer contributions and direct employer payments in the next fiscal year $ 5,931 $ 2,727 Expected benefit payments 2026 10,324 2,727 2027 9,640 2,626 2028 9,707 2,525 2029 9,589 2,423 2030 9,810 2,324 2031 to 2035 (expected, combined) 46,753 10,126 78 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 5. Restructuring At MC, restructuring actions were taken throughout 2024 and 2025 in order to cease operations at several facilities. Prior year actions at the Company's MC forming fabric manufacturing facility in Chungju, South Korea, at the Company's Heimbach engineered fabric manufacturing facility in Rochdale, UK, and at the Company's Heimbach paper machine clothing facility in Olten, Switzerland, concluded in 2025. Additional actions were announced in 2025 to close engineered fabric facilities in Ballo, Italy and Saint Junien, France as well as a facility in Manchester, United Kingdom. These actions drove $ 8.3 million of restructuring charges during 2025, compared to $ 9.5 million in 2024, a decrease that is primarily due to the timing of the announced actions. Restructuring expenses were a result of workforce reductions, fixed asset impairments, and related costs. The Company incurred an additional $ 0.3 million recorded in Costs of goods sold due to the write-off of inventory compared to $ 1.7 million in 2024. We expect to incur additional restructuring expenses related to these actions into 2026. At AEC, restructuring activities were related to reductions in the workforce at various AEC locations, which resulted in restructuring expenses of $ 3.3 million for the year ended 2025 and $ 3.6 million for the year ended 2024. Restructuring expenses incurred at MC and AEC during 2023 were not significant. The following table summarizes charges reported in the Consolidated Statements of Income under “Restructuring expenses, net” and "Cost of goods sold": Year ended December 31, 2025 (in thousands) Total restructuring costs incurred Termination and other costs - restructuring Impairment of assets - Cost of goods sold Machine Clothing $ 8,511 $ 8,255 $ 256 Albany Engineered Composites 3,259 3,259 — Corporate 2,168 2,168 — Total restructuring expense $ 13,938 $ 13,682 $ 256 Year ended December 31, 2024 (in thousands) Total restructuring costs incurred Termination and other costs - restructuring Impairment of assets - Cost of goods sold Machine Clothing $ 11,165 $ 8,298 $ 2,867 Albany Engineered Composites 3,649 3,649 — Corporate 329 329 — Total restructuring expense $ 15,143 $ 12,276 $ 2,867 Year ended December 31, 2023 (in thousands) Total restructuring costs incurred Termination and other costs Impairment of assets - Cost of goods sold Machine Clothing $ 282 $ 282 $ — Albany Engineered Composites — — — Corporate — — — Total restructuring expense $ 282 $ 282 $ — 79 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 5. Restructuring — (continued) The table below presents the changes in restructuring liabilities for 2025 and 2024: (in thousands) December 31, 2024 Restructuring charges accrued Payments and Other December 31, 2025 Total termination and other costs $ 4,996 $ 13,682 $ ( 15,912 ) $ 2,766 As of December 31, 2025, we expect that the total $ 2.8 million of Accrued liabilities for restructuring will be paid within one year. (in thousands) December 31, 2023 Restructuring charges accrued Payments and Other December 31, 2024 Total termination and other costs $ — $ 12,276 $ ( 7,280 ) $ 4,996 6. Other (Income)/Expense, net The components of Other expense/(income), net, are: Years ended December 31, (in thousands) 2025 2024 2023 Currency transactions $ 8,883 $ ( 3,900 ) $ ( 2,916 ) Derivative instruments losses/(gains) ( 3,735 ) 3,459 ( 351 ) Components of net periodic pension and postretirement cost other than service 3,890 2,493 ( 61 ) Other ( 3,959 ) ( 331 ) ( 2,835 ) Total other (income)/expense, net $ 5,079 $ 1,721 $ ( 6,163 ) Other (income)/expense, net included foreign currency related transactions associated with cash and intercompany balances which resulted in losses of $ 8.9 million during 2025 and gains of $ 3.9 million during 2024. In addition, changes in the fair value of derivative instruments included gains of $ 3.7 million during 2025 and losses of $ 3.5 million in 2024, driven by currency rate movements, most notably the Brazilian Real and Mexican Peso. Net periodic pension and postretirement costs, other than service costs, were $ 3.9 million during 2025 and $ 2.5 million during 2024. Other (income)/expense, net, also included 2025 bank fees, amortization of debt issuance costs, and gains or losses on the sale of assets. 80 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 7. Income Taxes Provision for income taxes consisted of the following: Years ended December 31, (in thousands) 2025 2024 2023 Income before income taxes: U.S. $ ( 114,505 ) $ 26,660 $ 68,872 Non-U.S. 52,718 90,429 91,584 $ ( 61,787 ) $ 117,089 $ 160,456 Income tax expense/(benefit) Current: Federal $ 1,920 $ 2,682 $ 17,005 State 2,021 4,724 2,030 Non-U.S. 27,502 34,053 34,110 $ 31,443 $ 41,459 $ 53,145 Deferred: Federal $ ( 25,281 ) $ 1,699 $ ( 1,700 ) State ( 1,731 ) ( 804 ) 863 Non-U.S. ( 9,259 ) ( 13,320 ) ( 3,462 ) $ ( 36,271 ) $ ( 12,425 ) $ ( 4,299 ) Total income tax expense $ ( 4,828 ) $ 29,034 $ 48,846 Cash payments for taxes in 2025 consisted of the following: Years ended December 31, (in thousands) 2025 Income Taxes Paid: Domestic Federal $ 2,291 State 2,319 Foreign Brazil 12,588 Canada 4,787 China 6,836 France 2,308 Mexico 8,166 Other 3,143 Total $ 42,438 Cash payments for taxes amounted to $ 47.3 million in 2024, and $ 54.5 million in 2023. 81 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 7. Income Taxes — (continued) A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, 2025 (in thousands) Amount Percent U.S. federal statutory income tax rate ( 12,976 ) 21.0 % Domestic federal Effect of changes in tax laws or rate enacted in the current period — — % Effect of cross-border tax laws Subpart F income 552 ( 0.9 ) % Other 73 ( 0.1 ) % Tax credits Research & Development Tax Credit ( 1,004 ) 1.6 % Foreign Tax Credit - Generation, Utilization, and Expiration 1,025 ( 1.7 ) % Other ( 162 ) 0.3 % Changes in valuation allowances ( 1,486 ) 2.4 % Nontaxable or nondeductible items Officer's compensation 612 ( 1.0 ) % Other ( 674 ) 1.1 % Changes in unrecognized tax benefits ( 581 ) 0.9 % Other ( 7 ) — % State and Local Income Taxes, Net of Federal Tax Effect (a) 1,048 ( 1.7 ) % Foreign tax effects Brazil State and local (Social Contribution) 3,362 ( 5.4 ) % Foreign Rate Differential 1,500 ( 2.4 ) % Other ( 371 ) 0.6 % Canada Foreign Rate Differential ( 341 ) 0.6 % Withholding tax 1,476 ( 2.4 ) % State and local (Quebec & Ontario) 545 ( 0.9 ) % Other 233 ( 0.4 ) % China Foreign Rate Differential 677 ( 1.1 ) % Withholding tax 2,414 ( 3.9 ) % Other ( 84 ) 0.1 % Spain State and local (Trade Tax) ( 762 ) 1.2 % Foreign Rate Differential ( 630 ) 1.0 % UK Return to provision ( 664 ) 1.1 % Foreign Rate Differential ( 157 ) 0.3 % Other foreign jurisdictions Foreign Rate Differential 796 ( 1.3 ) % Withholding tax 1,188 ( 1.9 ) % Other ( 430 ) 0.7 % Effective income tax rate ( 4,828 ) 7.8 % 82 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 7. Income Taxes — (continued) Years ended December 31, 2024 2023 U.S. federal statutory tax rate 21.0 % 21.0 % State taxes, net of federal benefit 2.3 1.9 Non-U.S. local income taxes 2.3 1.4 U.S. permanent adjustments 0.6 0.8 Foreign permanent adjustments 1.0 0.7 Foreign rate differential 2.1 2.0 Net U.S. tax on non-U.S. earnings and foreign withholdings 2.8 5.1 Provision for/(resolution) of tax audits and contingencies, net ( 1.3 ) 0.3 U.S. Pension Settlement - Release of Residual Tax Effect — — Change in valuation allowances 4.4 ( 1.2 ) Impact of Mexico net operating loss inflation revaluation ( 2.2 ) — Establishment of deferred tax asset for Non-U.S. reserves ( 4.3 ) — Impact of amended tax returns ( 0.8 ) — Return to provision ( 2.2 ) ( 1.2 ) Other adjustments ( 0.9 ) ( 0.4 ) Effective income tax rate 24.8 % 30.4 % In 2024, the Company also recorded new valuation allowances totaling $ 6.7 million and released a valuation allowance of $ 6.3 million in a non-U.S. jurisdiction due to positive evidence indicating that a full valuation allowance was no longer required. The remaining increase in valuation allowance is due to increases in deferred tax assets in entities that already had established valuation allowances. On July 4, 2025, the President signed into law the One Big Beautiful Bill Act (OBBBA). The OBBBA retains the 21% corporate tax rate and makes permanent several tax provisions from the Tax Cuts and Jobs Act of 2017, including immediate expensing of domestic R&D, enhanced interest deductibility, and 100 percent bonus depreciation effective in 2025. Revisions to the international tax rules become effective in 2026. In the fourth quarter of 2025, we completed our assessment of the OBBBA, and the impacts were not material. The Company has operations which constitute a taxable presence in 22 countries outside of the United States. The Company is subject to audit in the U.S. and various foreign jurisdictions. Our open tax years for major jurisdictions generally range from 2019-2024. We believe appropriate provisions for all outstanding tax issues have been made for all jurisdictions and all open years. During the periods reported, income outside of the U.S. was heavily concentrated within Brazil ( 34 % tax rate), and China ( 25 % tax rate). As a result, the foreign income tax rate differential was primarily attributable to these tax rate differences. 83 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 7. 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. Significant components of the Company’s deferred tax assets and liabilities are as follows: For the year ended December 31 U.S. Non-U.S. (in thousands) 2025 2024 2025 2024 Deferred tax assets: Accounts receivable, net $ 667 $ 502 $ 1,466 $ 1,138 Inventories 2,542 2,473 1,471 1,636 Incentive compensation 2,289 1,453 1,054 750 Property, plant, equipment and intangibles, net — — — — Pension, post retirement benefits - non-current 6,388 6,440 4,832 2,202 Tax loss carryforwards 30 49 49,776 32,963 Tax credit carryforwards 3,935 3,602 238 29 Leases 13,149 12,192 2,500 2,205 Reserves 32,871 2,639 6,999 7,150 Deferred revenue — — — — Other 749 373 239 909 Deferred tax assets before valuation allowance 62,769 29,723 68,575 48,982 Less: valuation allowance ( 340 ) ( 1,826 ) ( 17,135 ) ( 13,670 ) Total deferred tax assets $ 62,429 $ 27,897 $ 51,440 $ 35,312 Deferred tax liabilities: Unrepatriated foreign earnings $ 5,744 $ 4,961 $ — $ — Property, plant, equipment and intangibles, net 9,822 4,626 17,440 14,483 Basis difference in partner capital 989 1,420 — — Basis difference in investment 5,732 5,081 — — Derivatives — 38 151 125 Leases 12,201 11,433 2,303 2,053 Deferred revenue 279 380 2,688 4,663 Other ( 11,743 ) — ( 144 ) — Total deferred tax liabilities 23,024 27,939 22,438 21,324 Net deferred tax (liability)/asset $ 39,405 $ ( 42 ) $ 29,002 $ 13,988 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. 84 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 7. Income Taxes — (continued) As of December 31, 2025, the Company's net operating loss, capital loss and tax credit carryforwards were as follows: (in thousands) Expiration Period Net Operating and Capital Loss Carryforwards Tax Credit Carryforwards Jurisdiction U.S. Federal 2026 - 2045 $ — $ 2,558 U.S. State 2035 - 2042 30 1,010 U.S. State Indefinite — 367 Non-U.S. 2026 - 2040 3,287 — Non-U.S. Indefinite 45,806 — Balance at end of year $ 49,123 $ 3,935 The Company records the residual U.S. and foreign taxes on certain amounts of foreign earnings that have been targeted for repatriation to the U.S. These amounts are not considered to be indefinitely reinvested, and the Company accrued for the tax cost on these earnings to the extent they cannot be repatriated in a tax-free manner. The Company has targeted for repatriation $ 122.2 million of current year and prior year earnings of the Company’s foreign operations. If these earnings were distributed, the Company would be subject to foreign withholding taxes of $ 5.2 million and U.S. income taxes of $ 1.3 million which have already been recorded. The accumulated undistributed earnings of the Company’s foreign operations not targeted for repatriation to the U.S. are intended to remain indefinitely invested in foreign operations. No additional income taxes have been provided on the indefinitely invested foreign earnings at December 31, 2025. If these earnings were distributed, the Company could be subject to income taxes and additional foreign withholding taxes. Determining the amount of unrecognized deferred tax liability related to any additional outside basis difference in these entities is not practical due to the complexities of the hypothetical calculation. The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefits. If recognized, the $ 2.3 million would impact the effective tax rate as of December 31, 2025 as follows: (in thousands) 2025 2024 2023 Unrecognized tax benefits balance at January 1, $ 3,142 $ 2,741 $ 792 Increase in gross amounts of tax positions related to prior years 678 1,102 2,373 Decrease in gross amounts of tax positions related to prior years — ( 224 ) — Increase in gross amounts of tax positions related to current years — 196 Decrease due to settlements with tax authorities ( 1,714 ) ( 460 ) — Increase (decrease) due to lapse in statute of limitations — 116 ( 656 ) Currency translation 206 ( 133 ) 36 Unrecognized tax benefits balance at December 31, $ 2,312 $ 3,142 $ 2,741 The Company recognizes interest and penalties related to unrecognized tax benefits within its global operations as a component of income tax expense. The Company recognized $ 0.2 million, $ 0.4 million and $ 0.5 million interest and penalties related to the unrecognized tax benefits noted above, for the years 2025, 2024 and 2023, respectively. 85 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 8. Earnings Per Share The amounts used in computing earnings per share and the weighted average number of shares of potentially dilutive securities are as follows: Years ended December 31, (in thousands, except market price and earnings per share) 2025 2024 2023 Net income attributable to the Company $ ( 57,342 ) $ 87,623 $ 111,120 Weighted average number of shares: Weighted average number of shares used in calculating basic net income/(loss) per share 29,566 31,231 31,171 Effect of dilutive stock-based compensation plans: Restricted stock units and multi-year awards (a) — 107 105 Weighted average number of shares used in calculating diluted net income/(loss) per share 29,566 31,338 31,276 Net income/(loss) per share: Basic $ ( 1.94 ) $ 2.81 $ 3.56 Diluted (a) $ ( 1.94 ) $ 2.80 $ 3.55 Shares outstanding, net of treasury shares, were 28.3 million as of December 31, 2025, 31.1 million as of December 31, 2024, and 31.2 million as of December 31, 2023. (a) Restricted stock units and multi-year awards of 0.2 million were not included in the computation of diluted earnings per share, as their effects would be anti-dilutive as of December 31, 2025. 86 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 9. Accumulated Other Comprehensive Income ("AOCI") The table below presents changes in the components of AOCI from January 1, 2023 to December 31, 2025: (in thousands) Translation adjustments Pension and postretirement liability adjustments Derivative valuation adjustment Total Other Comprehensive Income January 1, 2023 $ ( 146,851 ) $ ( 15,783 ) $ 17,707 $ ( 144,927 ) Other comprehensive income/(loss) before reclassifications 21,950 ( 3,357 ) 2,623 21,216 Pension/postretirement plan remeasurement, net of tax — 3,629 — 3,629 Interest expense related to swaps reclassified to the Statements of Income, net of tax — — ( 11,251 ) ( 11,251 ) Pension and postretirement liability adjustments reclassified to Statements of Income, net of tax — ( 1,835 ) — ( 1,835 ) Net current period other comprehensive income 21,950 ( 1,563 ) ( 8,628 ) 11,759 December 31, 2023 $ ( 124,901 ) $ ( 17,346 ) $ 9,079 $ ( 133,168 ) Other comprehensive income/(loss) before reclassifications ( 56,654 ) 103 943 ( 55,608 ) Pension/postretirement plan remeasurement, net of tax — 2,605 — 2,605 Interest expense related to swaps reclassified to the Statements of Income, net of tax — ( 10,128 ) ( 10,128 ) Adjustment related to prior period change in opening valuation allowance — 310 — 310 Net current period other comprehensive income ( 56,654 ) 3,018 ( 9,185 ) ( 62,821 ) December 31, 2024 $ ( 181,555 ) $ ( 14,328 ) $ ( 106 ) $ ( 195,989 ) Other comprehensive income/(loss) before reclassifications 62,547 ( 2,195 ) ( 307 ) 60,045 Pension/postretirement settlements and curtailments, net of tax — ( 1,580 ) — ( 1,580 ) Pension/postretirement plan remeasurement, net of tax — ( 6,598 ) — ( 6,598 ) Interest expense related to swaps reclassified to the Statements of Income, net of tax — — ( 207 ) ( 207 ) Pension and postretirement liability adjustments reclassified to Statements of Income, net of tax — 791 — 791 Net current period other comprehensive income/(loss) 62,547 ( 9,582 ) ( 514 ) 52,451 December 31, 2025 $ ( 119,008 ) $ ( 23,910 ) $ ( 620 ) $ ( 143,538 ) The components of our Accumulated Other Comprehensive Income that are reclassified to the Statement of Income relate to our pension and postretirement plans and interest rate swaps. 87 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 9. Accumulated Other Comprehensive Income (AOCI) — (continued) The table below presents the expense/(income) amounts reclassified, and the line items of the Statement of Income that were affected for the years ended December 31, 2025, 2024, and 2023. (in thousands) 2025 2024 2023 Pretax Derivative valuation reclassified from Accumulated Other Comprehensive Income: (Income)/Expense related to interest rate swaps included in Income before taxes (a) $ ( 269 ) $ ( 13,547 ) $ ( 15,062 ) Income tax effect 62 3,419 3,811 Effect on net income due to items reclassified from Accumulated Other Comprehensive Income $ ( 207 ) $ ( 10,128 ) $ ( 11,251 ) Pretax pension and postretirement liabilities reclassified from Accumulated Other Comprehensive Income: Amortization of prior service credit $ ( 150 ) $ ( 150 ) $ ( 4,122 ) Amortization of net actuarial loss 1,151 613 1,383 Total pretax amount reclassified (b) 1,001 463 ( 2,739 ) Income tax effect ( 210 ) ( 153 ) 904 Effect on net income due to items reclassified from Accumulated Other Comprehensive Income $ 791 $ 310 $ ( 1,835 ) ________________________ (a) Reported as Interest expense, net in our Consolidated Statements of Income, are payments related to the interest rate swap agreements and amortization of swap buyouts (see Note 17, Financial Instruments , and Note 18, Fair-Value Measurements , of the Notes to the Consolidated Financial Statements). (b) Reported as Other (income)/expense, net in our Consolidated Statements of Income, the accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 4, Pension, Postretirement, and Other Benefit Plans , of the Notes to the Consolidated Financial Statements). 10. Noncontrolling Interest Effective October 31, 2013, SAFRAN S.A. ("SAFRAN") acquired a 10 % equity interest in a new Albany subsidiary, Albany Safran Composites, LLC ("ASC"). Under the terms of the transaction agreements, ASC will be the exclusive supplier to SAFRAN of advanced 3D-woven composite parts in accordance with agreed upon scope parameters defined between both companies, for use in aircraft and rocket engines, thrust reversers and nacelles, and aircraft landing and braking systems (the “SAFRAN Applications”). AEC may develop and supply parts other than advanced 3D-woven composite parts for all aerospace applications, as well as advanced 3D-woven composite parts for any aerospace applications that are not SAFRAN Applications (such as airframe applications) and any non-aerospace applications. The agreement provides SAFRAN an option to purchase Albany’s remaining 90 % interest upon the occurrence of certain bankruptcy or performance default events, or if Albany’s Engineered Composites business is sold to a direct competitor of SAFRAN. The purchase price is based initially on the same valuation of ASC used to determine SAFRAN’s 10 % equity interest, and increases over time as LEAP production increases. In accordance with the operating agreement, Albany received a $ 28.0 million preferred holding in ASC which includes a preferred return based on the Company’s revolving credit agreement. The common shares of ASC are owned 90 % by Albany and 10 % by SAFRAN. On August 31, 2023, the Company acquired all the outstanding shares of Heimbach, a privately held manufacturer of paper machine clothing with headquarters in Düren, Germany. In July 2021, Heimbach acquired 85 % of Arcari, SRL (“Arcari”). Arcari is a manufacturer of textile and plastic industrial technical products and conveyor belts. 88 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 10. Noncontrolling Interest — (continued) On April 1, 2025, Heimbach sold its 85 % controlling interest in Arcari to the minority shareholder and recorded a gain of $ 1.6 million included in Other (Income) expense on the sale. In connection with the sale, the corresponding value of the noncontrolling interest was reduced to zero . The Company did not retain any ownership in Arcari as a result of the sale and accordingly there was no impact on operating results during the fourth quarter of 2025. The table below presents a reconciliation of income attributable to the noncontrolling interest and noncontrolling equity in the Company’s subsidiaries: ASC Noncontrolling Interest: (in thousands, except percentages) 2025 2024 Net income/(loss) of Albany Safran Composites (ASC) $ 6,474 $ 4,759 Less: Return attributable to the Company's preferred holding 1,799 1,329 Net income/(loss) of ASC available for common ownership $ 4,675 $ 3,430 Ownership percentage of noncontrolling shareholder 10 % 10 % Net income/(loss) attributable to noncontrolling interest $ 468 $ 343 Noncontrolling interest, beginning of year $ 4,983 $ 5,423 Net income/(loss) attributable to noncontrolling interest 468 343 Changes in other comprehensive income attributable to noncontrolling interest 442 ( 783 ) ASC noncontrolling interest, end of year $ 5,893 $ 4,983 Arcari noncontrolling interest, end of year $ — $ 426 Total noncontrolling interest, end of year $ 5,893 $ 5,409 11. Accounts Receivable As of December 31, 2025 and 2024, Accounts receivable consisted of the following: (in thousands) December 31, 2025 December 31, 2024 Trade and other accounts receivable $ 221,592 $ 231,136 Bank promissory notes 17,844 19,637 Allowance for expected credit losses ( 4,352 ) ( 4,085 ) Accounts receivable, net $ 235,084 $ 246,688 Allowances for expected credit losses are 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. The risk of loss due to credit default increases when one or more events occur that can have a detrimental impact on estimated future cash flows of that financial asset. Evidence that a financial asset is subject to greater credit risk includes observable data about significant financial difficulty of the customer, a breach of contract, such as a default or past due event, or it becomes probable that the customer will enter bankruptcy or other financial reorganization, among other factors. It may not be possible to identify a single discrete event, but rather, the combined effect of several events that may cause an increase in risk of loss. The probability of default is driven by the relative financial health of our customer base and that of the industries in which we operate, as well as the broader macro-economic environment. A changing economic environment or forecasted economic scenario can lead to a different probability of default and can suggest that credit risk has changed. 89 ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 11. Accounts Receivable— (continued) At each reporting period, the Company will recognize the amount of change in current expected credit losses as an allowance gain or loss in Selling, general, and administrative expenses in the Consolidated Statements of Income. Financial assets are written-off when the Company has no reasonable expectation of recovering the financial asset, either in its entirety, or a portion thereof. This is the case when the Company determines that the customer does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. The following tables present the (increases)/decreases in the allowance for credit losses for Accounts receivable: (in thousands) December 31, 2024 (Charge)/ benefit Currency translation Other December 31, 2025 Specific customer reserves $ ( 2,934 ) $ 81 $ ( 314 ) $ ( 47 ) $ ( 3,214 ) Incremental expected credit losses ( 1,151 ) ( 18 ) ( 84 ) 115 ( 1,138 ) Accounts receivable expected credit losses $ ( 4,085 ) $ 63 $ ( 398 ) $ 68 $ ( 4,352 ) (in thousands) December 31, 2023 (Charge)/ benefit Currency translation Other December 31, 2024 Specific customer reserves $ ( 2,484 ) $ ( 541 ) $ 128 $ ( 37 ) $ ( 2,934 ) Incremental expected credit losses ( 2,776 ) 157 76 1,392 ( 1,151 ) Accounts receivable expected credit losses $ ( 5,260 ) $ ( 384 ) $ 204 $ 1,355 $ ( 4,085 ) 12. Contract Assets and Liabilities Contract assets and Contract liabilities (included in Accrued liabilities) are reported in the Consolidated Balance Sheets in a net position, on a contract-by-contract basis at the end of each reporting period. Contract assets and contract liabilities are summarized as follows: (in thousands) December 31, 2025 December 31, 2024 Contract assets $ 87,573 $ 167,397 Allowance for expected credit losses ( 471 ) ( 840 ) Contract assets, net $ 87,102 $ 166,557 Contract liabilities $ 33,397 $ 6,085 Contract assets, net decreased $ 79.5 million during the year ended December 31, 2025 primarily due to a decrease in unbilled revenue related to commercial and defense programs. There were no impairment losses related to our Contract assets during the year ended December 31, 2025 and 2024. The following tables present the (increases)/ decreases in the allowance for credit losses for Contract assets: (in thousands) December 31, 2024 (Charge)/ benefit Currency translation Other December 31, 2025 Contract assets expected credit losses $ ( 840 ) $ 76 $ ( 17 ) $ 310 $ ( 471 ) 90 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 12. Contract Assets and Liabilities— (continued) (in thousands) December 31, 2023 (Charge)/ benefit Currency translation Other December 31, 2024 Contract assets expected credit losses $ ( 908 ) $ 52 $ 16 $ — $ ( 840 ) Contract liabilities increased $ 27.3 million during the year ended December 31, 2025, 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, 2025 and 2024 that was included in the Contract liability balance at the beginning of the year was $ 5.6 million and $ 4.3 million, respectively. 13. Inventories As of December 31, 2025 and 2024, inventories consisted of the following: (in thousands) December 31, 2025 December 31, 2024 Raw materials $ 60,311 $ 76,559 Work in process 46,952 54,917 Finished goods 14,326 14,369 Total inventories $ 121,589 $ 145,845 14. Property, Plant and Equipment, net The table below sets forth the components of property, plant and equipment as of December 31, 2025 and 2024: (in thousands) 2025 2024 Estimated useful life Land and land improvements $ 31,007 $ 28,161 25 years for improvements Buildings 296,052 306,273 15 to 40 years Machinery and equipment 1,176,690 1,188,661 5 to 15 years Furniture and fixtures 11,176 11,457 5 years Computer and other equipment 20,096 25,024 3 to 10 years Software 69,475 69,932 5 to 8 years Capital expenditures in progress 71,517 75,262 Property, plant and equipment, gross 1,676,013 1,704,770 Accumulated depreciation and amortization ( 1,193,445 ) ( 1,141,339 ) Property, plant and equipment, net $ 482,568 $ 563,431 Depreciation expense was $ 82.7 million in 2025, $ 82.5 million in 2024, and $ 70.4 million in 2023. Software amortization is recorded in Selling, general, and administrative expense and was $ 2.1 million in 2025, $ 1.9 million in 2024, and $ 1.9 million in 2023. Capital expenditures, including purchased software, were $ 71.5 million in 2025, $ 81.2 million in 2024, and $ 84.4 million in 2023. Unamortized software cost was $ 5.7 million, $ 5.4 million, and $ 6.6 million in each of the years ended December 31, 2025, 2024, and 2023, respectively. Expenditures for maintenance and repairs are charged to income as incurred and amounted to $ 30.7 million in 2025, $ 25.4 million in 2024, and $ 22.4 million in 2023. 91 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 15. 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, however, these assets are tested for impairment at least annually at the reporting unit level, using either a qualitative or quantitative approach. Impairment is the condition that exists when the carrying amount of a reporting unit, including goodwill, exceeds its fair value. In the second quarter of 2025, the Company applied a qualitative assessment approach in performing its annual evaluation of goodwill and indefinite-lived trademark intangibles for the Company's Machine Clothing reporting unit and Engineered Composites reporting units. Based on the qualitative evaluation of the events and circumstances impacting the reporting units, management determined it is more likely than not that the fair value of each reporting unit exceeded its carrying amount, and no further evaluation was necessary. In the third quarter of 2025, the Company revised its estimates and assumptions used in certain program estimates at completion of its AEC reporting unit, most significantly the CH-53K program. As a result of the changes in estimates, we performed a quantitative assessment of the AEC reporting unit's goodwill for impairment. As part of the quantitative assessment, management used the income and market approach to determine fair value by considering projected cash flows and market multiples for each reporting unit. Management performed the quantitative assessments and concluded that each reporting unit’s fair value continued to significantly exceed its carrying value. Accordingly, no impairment charges were recorded. In the second quarter of 2025, the Company wrote-off the remaining Finite-lived intangible assets balance at our Arcari, SRL location due to restructuring actions being taken to cease operations at the manufacturing facility. This decision resulted in a non-cash write-off of intangibles for $ 0.3 million. In the fourth quarter of 2024, the Company wrote-off the remaining Finite-lived intangible assets balance at our Rochdale, UK location due to restructuring actions being taken to cease operations at the manufacturing facility. This decision resulted in a non-cash write-off of intangibles for $ 0.3 million, which is presented as other changes in the table below for intangible assets and goodwill in 2024. 92 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 15. Goodwill and Other Intangible Assets — (continued) We 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, 2023 to December 31, 2025, were as follows: (in thousands, except for years) Amortization life in years Balance at December 31, 2024 Reclassified to Held for Sale Other Changes Amortization Currency Translation Balance at December 31, 2025 Finite-lived intangible assets: AEC Trademarks and trade names 6 - 15 $ 11 $ — $ — $ ( 11 ) $ — $ — AEC Technology 10 - 15 2,680 — — ( 616 ) 352 2,416 AEC Intellectual property 15 828 — — ( 83 ) — 745 AEC Customer relationships 8 - 15 21,892 ( 13,384 ) — ( 3,504 ) 225 5,229 Heimbach Developed technology 9 7,004 — ( 315 ) ( 988 ) 881 6,582 Total Finite-Lived intangible assets, net $ 32,415 $ ( 13,384 ) $ ( 315 ) $ ( 5,202 ) $ 1,458 $ 14,972 Indefinite-lived intangible assets: Heimbach Trade name $ 5,712 $ — $ — $ — $ 744 $ 6,456 MC Goodwill 63,988 — — — 5,923 69,911 AEC Goodwill 112,273 ( 21,829 ) — — 2,152 92,596 Total Indefinite-lived intangible assets $ 181,973 $ ( 21,829 ) $ — $ — $ 8,819 $ 168,963 (in thousands, except for years) Amortization life in years Balance at December 31, 2023 Acquisition Amortization Currency Translation Balance at December 31, 2024 Finite-lived intangible assets: AEC Trademarks and trade names 6 - 15 $ 22 $ — $ ( 11 ) $ — $ 11 AEC Technology 10 - 15 3,426 — ( 569 ) ( 177 ) 2,680 AEC Intellectual property 15 911 — ( 83 ) — 828 AEC Customer relationships 8 - 15 25,485 — ( 3,480 ) ( 113 ) 21,892 Heimbach Developed technology 9 8,732 ( 289 ) ( 953 ) ( 486 ) 7,004 Total Finite-Lived intangible assets, net $ 38,576 $ ( 289 ) $ ( 5,096 ) $ ( 776 ) $ 32,415 Indefinite-lived intangible assets: Heimbach Trade name $ 6,070 $ — $ — $ ( 358 ) $ 5,712 MC Goodwill 66,873 — — ( 2,885 ) 63,988 AEC Goodwill 113,308 — — ( 1,035 ) 112,273 Total Indefinite-lived intangible assets $ 186,251 $ — $ — $ ( 4,278 ) $ 181,973 93 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 15. Goodwill and Other Intangible Assets — (continued) As of December 31, 2025, the gross carrying amount and accumulated amortization of Finite-lived intangible assets was $ 35.1 million and $ 20.1 million, respectively. Amortization expense related to Finite-lived intangible assets was reported in the Consolidated Statement of Income as follows: $ 0.9 million in Cost of goods sold and $ 4.3 million in Selling, general and administrative expenses in 2025; $ 1.1 million in Cost of goods sold and $ 4.2 million in Selling, general and administrative expenses in 2024; and $ 0.4 million in Cost of goods sold and $ 4.1 million in Selling, general and administrative expenses in 2023. Estimated amortization expense of intangibles for the years ending December 31, 2026 through 2030, is as follows: Year Annual amortization (in thousands) 2026 $ 2,000 2027 1,900 2028 1,900 2029 1,800 2030 1,200 16. Accrued Liabilities Accrued liabilities as of December 31, 2025 and 2024 consist of the following: (in thousands) 2025 2024 Salaries, wages and benefits $ 46,403 $ 57,253 Contract liabilities 33,397 6,085 Returns and allowances 10,787 9,422 Dividends 7,928 8,431 Pension and postretirement 8,059 8,744 Operating lease liabilities 4,274 7,607 Other tax 5,400 7,329 Contract loss reserve 600 10,524 Freight 2,318 3,256 Professional fees 5,032 5,539 Restructuring 2,766 4,996 Other 12,421 12,718 Total accrued liabilities $ 139,385 $ 141,904 94 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 17. Financial Instruments Debt principally consists of a revolving credit agreement and foreign bank debt assumed in the acquisition of Heimbach. The following table represents our outstanding debt as of December 31, 2025 and 2024: (in thousands, except interest rates) 2025 2024 Borrowings under the Amended Credit Agreement (1): USD borrowings $ 350,000 $ 225,000 EUR borrowings 105,663 93,485 Foreign bank debt — 46 Total bank debt 455,663 318,531 Less: Current maturities of long-term debt — — Long-term debt $ 455,663 $ 318,531 (1) The credit facility matures in August 2028. At the end of the December 31, 2025 and December 31, 2024, the USD interest rate in effect was 5.56 % and 5.77 %, respectively, including the effect of interest rate swaps; at the end of December 31, 2025, the EURIBOR interest rate was 3.73 % and 4.09 % at the end of December 31, 2024, including the effect of interest rate swaps. There are no principal payments on long-term debt until 2028, at which time the balance of $ 455.7 million is due. Cash payments of interest amounted to $ 24.6 million in 2025, $ 14.7 million in 2024 and $ 18.7 million in 2023. Amended Credit Agreement On August 16, 2023, we entered into a $ 800 million unsecured committed Five-Year Revolving Credit Facility Agreement, amended on June 28, 2024 (collectively, the “Amended Credit Agreement”), which matures in August of 2028. The applicable interest rate for borrowings under the Amended Credit Agreement is based on both Term SOFR and EURIBOR plus a spread, which is based on our leverage ratio (as defined in the Amended Credit Agreement) at the time of a borrowing as follows: Leverage Ratio Commitment Fee ABR Spread Term Benchmark/ Daily Simple SOFR Spread < 1.00 :1.00 0.275 % 0.500 % 1.500 % ≥ 1.00 :1.00 and < 2.00 :1.00 0.300 % 0.625 % 1.625 % ≥ 2.00 :1.00 and < 3.00 :1.00 0.325 % 0.750 % 1.750 % ≥ 3.00 :1.00 0.350 % 1.000 % 2.000 % As of December 31, 2025, the applicable interest rate for borrowings under the Amended Credit Agreement was based on one-month term SOFR and one-month EURIBOR, plus the spread, which was 1.625 %. As of December 31, 2025, there was $ 456 million of borrowings outstanding under the Amended Credit Agreement and we had borrowings available of $ 344 million, based on our maximum leverage ratio and our consolidated EBITDA (as defined in the Amended Credit Agreement). Under the Amended Credit Agreement, we are required to maintain a leverage ratio (as defined in the Amended Credit Agreement) of not greater than 3.75 to 1.00, or 4.25 to 1.00 after a significant acquisition. We are also required to maintain a minimum interest coverage ratio (as defined in the Amended Credit Agreement) of greater than 3.00 to 1.00. If our leverage ratio exceeds 3.50 to 1.00, we will be restricted in paying dividends to a maximum amount of $ 40 million in a calendar year. 95 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 17. Financial Instruments — (continued) As of December 31, 2025, our leverage ratio was 1.66 to 1.00 and our interest coverage ratio was 8.30 to 1.00. As of December 31, 2025, we were in compliance with all applicable covenants. We anticipate continued compliance in each of the next four quarters while continuing to monitor future compliance based on current and future economic conditions. The borrowings are guaranteed by certain of the Company’s subsidiaries as defined in the Amended Credit Agreement. Our ability to borrow additional amounts under the Amended Credit Agreement is conditional upon the absence of any defaults, as well as the absence of any material adverse change (as defined in the Amended Credit Agreement). Indebtedness under the Amended Credit Agreement is ranked equally in right of payment to all unsecured senior debt. In November, 2024, we entered into two interest rate swap agreements: A USD interest rate swap agreement and a EUR interest rate swap agreement. The USD interest rate swap agreement covers the period November 15, 2024 through November 15, 2026. This transaction has the effect of fixing the SOFR portion of the interest rate (before the credit spread) on $ 125 million of the US indebtedness drawn under the Amended Credit Facility. Under the terms of this transaction, the Company pays a fixed rate of 3.987 % and our counterparty pays a floating rate based on the one-month SOFR rate at each monthly calculation date. The EUR interest rate swap agreement covers the period November 14, 2024 through November 15, 2026. This transaction has the effect of fixing the EURIBOR portion of the interest rate (before the credit spread) on EUR 45 million of the EUR indebtedness drawn under the Amended Credit Facility. Under the terms of this transaction, the Company pays a fixed rate of 2.277 % and our counterparty pays a floating rate based on the one-month EURIBOR rate at each monthly calculation date. These interest rate swaps are accounted for as a hedge of future cash flows, as further described in Note 18, Fair-Value Measurements , of the Notes to the Consolidated Financial Statements. No cash collateral was received or pledged in relation to the swap agreements. 18. Fair-Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data. Level 3 - Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. We had no Level 3 financial assets or liabilities at December 31, 2025, or at December 31, 2024, other than certain pension assets (see Note 4, Pension, Postretirement, and Other Benefit Plans , of the Notes to the Consolidated Financial Statements). 96 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 18. 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, 2025 December 31, 2024 (in thousands) Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Fair Value Assets: Cash equivalents $ 10,584 $ — $ 11,273 $ — Foreign currency option contracts — — Foreign currency forward contracts — — Other Assets: Common stock of unaffiliated foreign public company (a) 1,098 — 631 — Interest rate swaps — 768 — 149 Liabilities: Other Non-Current Liabilities Interest rate swaps — — — ( 218 ) (a) Original cost basis $ 0.5 million Cash equivalents include short-term securities that are considered to be highly liquid and easily tradable. These securities are valued using inputs observable in active markets for identical securities. The interest rate swaps are accounted for as hedges of future cash flows. 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. Unrealized gains and losses on the interest rate swaps flow through the caption Derivative valuation adjustment in the Shareholders’ equity section of the Consolidated Balance Sheets. In November, 2024, the Company entered into a USD and EUR interest rate swap agreements (see Note 17, Financial Instruments, of the Notes to the Consolidated Financial Statements for additional information). As of December 31, 2025, these interest rate swaps were determined to be highly effective hedges of interest rate cash flow risk. Amounts accumulated in Other comprehensive income are reclassified as Interest expense/(income), net when the related interest payments (that is, the hedged forecasted transactions), affect earnings. Interest (income)/expense related to payments under the active swap agreements totaled $ 0.3 million in 2025, $ 13.4 million in 2024 and $( 15.0 ) million in 2023. We operate our business in many regions of the world, and currency rate movements can have a significant effect on operating results. From time to time, we enter into 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. 97 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 18. 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) 2025 2024 2023 Derivatives not designated as hedging instruments: Foreign currency hedging (gains)/losses $ ( 3,735 ) $ 3,459 $ ( 351 ) 19. Other Noncurrent Liabilities As of December 31, 2025 and 2024, Other noncurrent liabilities consisted of the following: (in thousands) 2025 2024 Operating leases $ 7,423 $ 61,062 Postretirement benefits other than pensions 24,151 23,943 Pension liabilities 47,782 46,041 Incentive and deferred compensation 2,951 1,908 Other 4,543 5,876 Total other noncurrent liabilities $ 86,850 $ 138,830 20. Leases We are generally the lessee in our lease transactions. 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. Operating lease ROU assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term, using the rate implicit in the lease. If that rate is not readily determinable, the rate is based on the Company’s incremental borrowing rate. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease. Our ROU assets include the values associated with the additional periods when it is reasonably certain that we will exercise the option. 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 entered into operating leases for offices, manufacturing facilities, warehouses, vehicles, and certain equipment. Our leases have remaining lease terms of one year to 14 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 one year . 98 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 20. Leases — (continued) The components of lease expense were as follows: For the years ended (in thousands) December 31, 2025 December 31, 2024 December 31, 2023 Operating lease: Fixed lease cost 11,576 10,776 9,591 Variable lease cost 1,906 516 108 Short-term lease cost 776 2,170 2,060 Total lease expense $ 14,258 $ 13,462 $ 11,759 The Company was not party to any leases classified as finance leases for the periods ending December 31, 2025, 2024, or 2023. Supplemental cash flow information related to leases was as follows: For the years ended (in thousands) December 31, 2025 December 31, 2024 December 31, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 11,809 $ 11,204 $ 10,105 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 9,746 $ 17,698 $ 9,114 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. Supplemental balance sheet information related to leases was as follows: (in thousands) December 31, 2025 December 31, 2024 Operating leases Right of use assets $ 11,387 $ 61,671 Lease liabilities included in Accrued liabilities $ 4,274 $ 7,607 Other noncurrent liabilities 7,423 61,062 Total operating lease liabilities $ 11,697 $ 68,669 Additional information for leases existing at December 31, 2025 and 2024 was as follows: December 31, 2025 December 31, 2024 Weighted average remaining lease term Operating leases 13 years 13 years Weighted average discount rate Operating leases 5.8 % 5.8 % 99 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 20. Leases — (continued) Maturities of lease liabilities as of December 31, 2025 were as follows: (in thousands) Operating leases Year ending December 31, 2026 $ 4,809 2027 3,600 2028 1,692 2029 860 2030 408 Thereafter 2,548 Total lease payments 13,917 Less imputed interest ( 2,220 ) Total $ 11,697 The above table excludes leases held by the disposal group for which the Company is the obligor. Payments for these leases are expected to be $ 6.2 million in 2026, $ 6.3 million in 2027, $ 5.3 million in 2028, $ 5.4 million in 2029, $ 5.5 million in 2030, and $ 57.1 million thereafter. Of these payments, $ 27.7 million is imputed interest at December 31, 2025. 21. Commitments and Contingencies Asbestos Litigation Albany International Corp. is a defendant in suits brought in various courts in the United States by plaintiffs who allege that they have suffered personal injury as a result of exposure to asbestos-containing paper machine clothing synthetic dryer fabrics marketed during the period from 1967 to 1976 and used in certain paper mills. We were defending 3,677 claims as of December 31, 2025. The following table sets forth the number of claims filed, the number of claims settled, dismissed or otherwise resolved, and the aggregate settlement amount during the periods presented: Year ended December 31, Opening Number of Claims Claims Dismissed, Settled, or Resolved New Claims Closing Number of Claims Amounts Paid (thousands) to Settle or Resolve 2023 3,598 19 27 3,606 $ 74 2024 3,606 10 50 3,646 13 2025 3,646 28 59 3,677 173 We anticipate that additional claims will be filed against the Company and related companies in the future, but are unable to predict the number and timing of such future claims. Due to the fact that information sufficient to meaningfully estimate a range of possible loss of a particular claim is typically not available until late in the discovery process, we do not believe a meaningful estimate can be made regarding the range of possible loss with respect to pending or future claims and therefore we are unable to estimate a range of reasonably possible loss in excess of amounts already accrued for pending or future claims. While we believe we have meritorious defenses to these claims, we have settled certain claims for amounts we consider reasonable given the facts and circumstances of each case. Our insurance carrier has defended each case and funded settlements under a standard reservation of rights. As of December 31, 2025 we had resolved, by means of settlement or dismissal, 38,079 claims. The total cost of resolving all claims was $ 10.9 million. Of this amount, almost 100 % was paid by our insurance carrier, who has confirmed that we have approximately $ 140 million of 100 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 21. Commitments and Contingencies — (continued) remaining coverage under primary and excess policies that should be available with respect to current and future asbestos claims. The Company’s subsidiary, Brandon Drying Fabrics, Inc. (“Brandon”), is also a separate defendant in many of the asbestos cases in which Albany is named as a defendant, despite never having manufactured any fabrics containing asbestos. While Brandon was defending against 7,675 claims as of December 31, 2025, only twelve claims have been filed against Brandon since January 1, 2012, and only $ 15,000 in settlement costs have been incurred since 2001. Brandon was acquired by the Company in 1999 and has its own insurance policies covering periods prior to 1999. Since 2004, Brandon’s insurance carriers have covered 100 % of indemnification and defense costs, subject to policy limits and a standard reservation of rights. In some of these asbestos cases, the Company is named both as a direct defendant and as the “successor in interest” to Mount Vernon Mills (“Mount Vernon”). We acquired certain assets from Mount Vernon in 1993. Certain plaintiffs allege injury caused by asbestos-containing products alleged to have been sold by Mount Vernon many years prior to this acquisition. Mount Vernon is contractually obligated to indemnify the Company against any liability arising out of such products. We deny any liability for products sold by Mount Vernon prior to the acquisition of the Mount Vernon assets. Pursuant to its contractual indemnification obligations, Mount Vernon has assumed the defense of these claims. On this basis, we have successfully moved for dismissal in a number of actions. We currently do not anticipate, based on currently available information, that the ultimate resolution of the aforementioned proceedings will have a material adverse effect on the financial position, results of operations, or cash flows of the Company. Although we cannot predict the number and timing of future claims, based on the foregoing factors, the trends in claims filed against us, and available insurance, we also do not currently anticipate that potential future claims will have a material adverse effect on our financial position, results of operations, or cash flows. 22. Stock-Based Compensation We have cash-based and stock-based incentive compensation plans that can be awarded for key employees, which are designed to reward short and long-term contributions and used as retention incentives for key senior management. We grant stock-based awards in the form of restricted stock units that are generally settled with the issuance of Class A shares. We grant performance phantom stock units that are treated as liability-based awards and are generally settled in cash. The vesting periods generally range between one and five years from the grant date. Expenses associated with these awards are recognized over each respective vesting period. Performance and Retention Awards The Albany International 2017 and 2023 Long-term Incentive Plans provide senior executive members of management with incentive compensation based on achieving certain performance or service measures. Awards can be settled in cash or shares of Class A Common Stock. If the settlement is in the form of Class A Common Stock, participants may elect to receive shares net of applicable income taxes. Multi-Year Performance Plan Awards Long-term performance incentives were granted to executives as multi-year performance plan ("MPP") awards in each of 2023, 2024. Beginning in 2025, long-term performance incentive awards took the form of restricted stock unit award. Each of the MPP awards vests three years after the grant date, and the extent of payout is dependent upon the achievement of certain performance metrics during the three-year performance period, as defined by the Compensation Committee of the Board of Directors. Settlement of the awards are scheduled to occur no later than 90 days after the end of the performance period. If a participant terminates employment prior to the award becoming fully vested, the participant forfeits either their entire award or a pro rata portion of the MPP award. The grant date share price is determined when the awards are approved by the Compensation Committee of the Board of Directors each year and that price is used to measure the cost for the share-based portion of an award. MPP awards are generally settled in shares. Expense associated with these awards is recognized over the vesting period. and is adjusted quarterly based on estimated achievement of performance metrics. In connection with these awards, we recognized (income)/expense of ($ 2.1 ) million in 2025, $ 1.6 million in 2024 and $ 5.1 million in 2023. Based on current estimates of achievement of certain performance metrics, we anticipate recognizing $ 0.1 million of expense in 2026 and 2027. 101 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 22. Stock-Based Compensation — (continued) Restricted Stock Unit Awards Long-term restricted stock unit awards (“RSU”) were granted to executives and other eligible employees which vest annually and settle in shares no later than 90 days after the vesting period ends. The grant date share price is the date when the award is approved by the Compensation Committee of the Board of Directors and is used to measure the cost of the award. We recognized $ 6.5 million of expense in 2025 associated with RSU’s, $ 2.6 million in 2024, and $ 4.2 million in 2023. Based on RSU’s outstanding at December 31, 2025, we expect to record approximately $ 3.4 million of expense in 2026 and $ 1.4 million of expense in 2027. As of December 31, 2025, there were 1,341,905 shares of Company stock authorized for the payment of awards under these plans. Information with respect to these plans is presented below: (in thousands, except number of shares and weighted average grant date value per share) Number of shares Weighted average grant date value per share Year-end intrinsic value Shares potentially payable at January 1, 2023 135,941 $ 79.11 $ 10,754 Forfeitures ( 9,035 ) $ 92.02 Payments ( 112,279 ) $ 86.35 Shares accrued based on 2023 performance 124,181 $ 92.52 Shares potentially payable at December 31, 2023 138,808 $ 84.41 $ 11,717 Forfeitures ( 14,689 ) $ 92.02 Payments ( 77,782 ) $ 89.44 Shares accrued based on 2024 performance 81,468 $ 91.80 Shares potentially payable at December 31, 2024 127,805 $ 85.69 $ 10,952 Forfeitures ( 39,057 ) $ 87.50 Vesting ( 59,180 ) $ 87.62 Grants 195,506 $ 72.45 Shares accrued based on 2025 performance 21,226 $ 88.33 Shares potentially payable at December 31, 2025 246,300 $ 79.34 $ 19,541 Performance Phantom Stock Long-term cash retention incentives with a performance component were granted to members of management as Phantom Stock Plan ("PSP") awards. Awards under this plan vest over a 3 to 5 year period and are paid annually in cash based on current market prices of the Company’s stock. Under this program, employees may earn more or less than the target award based on the Company’s results in the year of the award. Expense recognized for this plan amounted to $ 3.3 million in 2025, $ 5.4 million in 2024, and $ 7.8 million in 2023. Based on awards outstanding at December 31, 2025, we expect to record approximately $ 2.3 million of compensation cost from 2026 to 2028. The weighted average period for recognition of that cost is approximately 1.4 years. Non-employee Director stock compensation The Company’s independent Directors are paid an annual retainer, of which a certain amount is required to be paid in shares. The total number of shares paid to each independent Director is determined by the share closing price on the day of the Annual Meeting at which the election of Directors occurs. This resulted in compensation expense of $ 0.8 million in 2025, $ 1.2 million in 2024, and $ 1.1 million in 2023 in the form of shares. 102 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 23. Shareholders’ Equity We currently have one class of Common Stock, Class A Common Stock, with a par value of $ 0.001 . Each share is entitled to one vote on all matters submitted to shareholders, and will receive dividends as approved by the Board of Directors. The Company's Board of Directors authorized the Company to repurchase shares of up to $ 250 million through open market purchases, privately negotiated transactions or otherwise, and to determine the prices, times and amounts. The program does not obligate the Company to acquire any particular amount of common stock, and it may be suspended or terminated at any time at the Company's discretion. The share repurchase program does not have an expiration date. 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. As of December 31, 2025, the Company has repurchased in total 2,682,859 shares under the current plan for a total cost of $ 173.3 million. We are currently authorized to repurchase shares up to $ 76.7 million under the current program. Further, shares were purchased in 2025 for $ 12.6 million under a now expired authorization. Repurchases made during 2025 are subject to excise taxes of $ 1.9 million, payable in 2026. Activity in Shareholders’ equity for 2023, 2024, and 2025 is presented below: (in thousands) Class A Common Stock Additional paid-in capital Retained earnings Accumulated items of other comprehensive income Class A Treasury Stock Noncontrolling Interest Total Equity Shares Amount Shares Amount January 1, 2023 40,785 $ 41 $ 441,540 $ 931,318 $ ( 144,927 ) 9,675 $ ( 364,923 ) $ 4,494 $ 867,543 Net income — — — 111,120 — — — 490 111,610 Compensation and benefits paid or payable in shares 71 — 5,851 — — — — — 5,851 Shares issued to Directors' — — 827 — — ( 13 ) 258 — 1,085 Dividends declared on Class A Common Stock, $ 1.01 per share — — — ( 31,496 ) — — — — ( 31,496 ) Initial equity related to Noncontrolling Interest in Arcari — — — — — — — 509 509 Cumulative translation adjustments — — — — 21,950 — — 459 22,409 Pension and postretirement liability adjustments — — — — ( 1,563 ) — — — ( 1,563 ) Derivative valuation adjustment — — — — ( 8,628 ) — — — ( 8,628 ) December 31, 2023 40,856 $ 41 $ 448,218 $ 1,010,942 $ ( 133,168 ) 9,662 $ ( 364,665 ) $ 5,952 $ 967,320 103 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 23. Shareholders’ Equity — (continued) (in thousands) Class A Common Stock Additional paid-in capital Retained earnings Accumulated items of other comprehensive income Class A Treasury Stock Noncontrolling Interest Total Equity Shares Amount Shares Amount January 1, 2024 40,856 $ 41 $ 448,218 $ 1,010,942 $ ( 133,168 ) 9,662 $ ( 364,665 ) $ 5,952 $ 967,320 Net income — — — 87,623 — — — 432 88,055 Compensation and benefits paid or payable in shares 51 — 3,812 — — — — — 3,812 Shares issued to Directors' 10 — 903 — — — — — 903 Purchase of Treasury shares — — — — — 183 ( 14,545 ) — ( 14,545 ) Dividends declared on Class A Common Stock, $ 1.05 per share — — — ( 32,802 ) — — — — ( 32,802 ) Dividends paid to noncontrolling interests — — — — — — — ( 166 ) ( 166 ) Cumulative translation adjustments — — — — ( 56,654 ) — — ( 809 ) ( 57,463 ) Pension and postretirement liability adjustments — — — — 3,018 — — — 3,018 Derivative valuation adjustment — — — — ( 9,185 ) — — — ( 9,185 ) December 31, 2024 40,917 $ 41 $ 452,933 $ 1,065,763 $ ( 195,989 ) 9,845 $ ( 379,210 ) $ 5,409 $ 948,947 (in thousands) Class A Common Stock Additional paid-in capital Retained earnings Accumulated items of other comprehensive income Class A Treasury Stock Noncontrolling Interest Total Equity Shares Amount Shares Amount January 1, 2025 40,917 $ 41 $ 452,933 $ 1,065,763 $ ( 195,989 ) 9,845 $ ( 379,210 ) $ 5,409 $ 948,947 Net income — — — ( 57,342 ) — — — 383 ( 56,959 ) Stock- based compensation 61 — 9,300 — — — — — 9,300 Stock issued under incentive compensation plans — — ( 1,067 ) — — — — — ( 1,067 ) Taxes paid in lieu of share issuance — — ( 1,454 ) — — — — — ( 1,454 ) Shares issued to Directors' 11 — 760 — — — — — 760 Purchase of Treasury shares — — — — — 2,841 ( 187,929 ) — ( 187,929 ) Dividends declared on Class A Common Stock, $ 1.09 per share — — — ( 31,953 ) — — — — ( 31,953 ) Dividends paid to noncontrolling interests — — — — — — — ( 88 ) ( 88 ) Cumulative translation adjustments — — — — 62,547 — — 101 62,648 Pension and postretirement liability adjustments — — — — ( 9,583 ) — — — ( 9,583 ) Derivative valuation adjustment — — — ( 95 ) ( 513 ) — — 88 ( 520 ) December 31, 2025 40,989 $ 41 $ 460,472 $ 976,373 $ ( 143,538 ) 12,686 $ ( 567,139 ) $ 5,893 $ 732,102 104 24. Held for Sale During the fourth quarter of 2025, the Company announced that it is exploring strategic alternatives for its structures assembly business as it is not aligned with our long-term strategy. Exiting this business will enable the AEC business segment to focus on higher-margin, advanced technology component opportunities where we have a strong record of execution, and differentiated material science, including our 3D woven technology. The structure assembly program operates within the AEC segment out of the Amelia Earhart Drive facility in Salt Lake City, and is part of Albany Aerostructures Composites, LLC, a wholly-owned subsidiary. In addition to the structure assembly work for the program, the site also manufactures advanced composite parts for the CH-53K and other commercial and defense programs. The Company has assessed the held-for-sale accounting criteria and classified the assets and liabilities associated with Amelia Earhart Drive facility as held-for-sale at December 31, 2025. Management has also performed a quantitative assessment of the fair value of the disposal group less costs of disposal based on income-based valuation techniques, utilizing projected discounted cash flows. The result was that fair value exceeds the net carrying value, and no impairment charge has been recorded. The carrying amounts of the assets and liabilities of the facility classified as held-for-sale in our Consolidated Balance Sheet were as follows: (in thousands) December 31, 2025 Accounts receivable, net $ 27,159 Contract assets, net 68,550 Inventories 16,422 Prepaid expenses and other current assets 697 Property, plant and equipment, net 93,525 Intangibles, net 13,384 Goodwill 21,829 Other assets 52,217 Total assets held for sale $ 293,783 Accounts payable $ 16,408 Accrued liabilities 115,448 Other noncurrent liabilities 59,724 Deferred taxes and other liabilities 11,743 Total liabilities held for sale $ 203,323 25. Subsequent Events The Company evaluated subsequent events occurring after the balance sheet date through the date these financial statements were issued and determined that no events occurred that would require adjustment to, or disclosure in, the financial statements. 105 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.