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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________________________________

FORM 10-K


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, ~~2022~~2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________.

Commission file number: 1-10026

______________________________________________________________

ALBANY INTERNATIONAL CORP.

____________________________________________________________________

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

216 Airport Drive, Rochester, New Hampshire

(Address of principal executive offices)

14-0462060

(IRS Employer

Identification No.)

03867

(Zip Code)

Registrant’s telephone number, including area code 603-330-~~5850~~5800

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.001 par value per share	AIN	The New York Stock Exchange (NYSE)
Class B Common Stock, $0.001 par value per share	AIN	The New York Stock Exchange (NYSE)
Securities registered pursuant to Section 12(g) of the Act:		None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the Common Stock held by non-affiliates of the registrant on June 30, ~~2022~~2023, the last business day of the registrant’s most recently completed second quarter, computed by reference to the price at which Common Stock was last sold on such a date, was $2.49 billion.

The registrant had 31.12 million shares of Class A Common Stock ~~and no shares of Class B Common Stock~~ outstanding as of February 1716, ~~2023~~2024.

DOCUMENTS INCORPORATED BY REFERENCE			PART
Portions of the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on May 12, 2023.			III
Portions of the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on May 10, 2024.			III

TABLE OF CONTENTS

	PART I
Item 1.	Business	45
Item 1A.	Risk Factors	1013
Item 1B.	Unresolved Staff Comments	2227
Item 2.	Properties	22
Item 1C.	Cybersecurity	27
Item 3.	Legal Proceedings	22
Item 2.	Properties	29
Item 4.	Mine Safety Disclosures	22
Item 3.	Legal Proceedings	30
Item 4.	Mine Safety Disclosures	30
	PART II
Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	2331
Item 6.	~~Selected Financial Data~~[Reserved]	2633
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2833
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	4449
Item 8.	Financial Statements and Supplementary Data	4551
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	~~102~~114
Item 9A.	Controls and Procedures	~~102~~114
Item 9B.	Other Information	~~103~~115
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	~~104~~116
Item 11.	Executive Compensation	~~104~~116
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~105~~117
Item 13.	Certain Relationships, Related Transactions and Director Independence	~~106~~118
Item 14.	Principal Accountant Fees and Services	~~106~~118
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	~~107~~119

Index

Forward-Looking Statements

This annual report and the documents incorporated or deemed to be incorporated by reference intherein ~~this annual report~~ contain statements concerning our future results and performance and other matters that are “forward-looking” ~~statements~~ within the meaning of Section 27A of the Securities Act of 1933, ~~as amended (the “Securities Act”),~~ and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are intended to provide management's current expectations or plans for our future operating and financial performance, asbased ~~amended~~on ~~(the~~assumptions ~~“Exchange~~currently ~~Act”)~~believed to be valid. ~~The~~Forward-looking ~~words~~statements may be identified by the use of terminology such as “believe,” “expect,” “anticipate,” “intend,” "seek," "target," "approximately," “estimate,” “plan,” “project,” “may,” “will,” "would," “should,” ~~and~~"could," ~~variations~~or the negative of such words or ~~similar~~other ~~expressions~~comparable ~~are~~terminology ~~intended,~~in ~~but~~connection ~~are~~with ~~not~~a ~~the~~discussion ~~exclusive~~of ~~means~~future operating or financial performance. The discussion of financial outlook, totrends, ~~identify~~strategy, plans, assumptions, or intentions may also include forward-looking statements. Readers should not place undue reliance on forward-looking statements, such as financial performance forecasts, which speak only as of the date they are first made. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements.

There are a number of risks, uncertainties, and other important factors that could cause actual results to differ materially from ~~the~~those ~~forward-looking~~projected, ~~statements~~anticipated, or implied, including, but not limited to:

•Conditions in the industries in which our Machine Clothing and Albany Engineered Composites segments compete, along with the general risks associated with macroeconomic conditions, including ~~continuation~~the lingering effects of the COVID-19 pandemic ~~effects for an extended period of time~~;

•Across the entire Company, increasing labor, raw material, energy, and logistic costs due to supply chain constraints and inflationary pressures; these challenges have only increased as a result of the ongoing Russia-Ukraine war and the conflict in the Middle East;

•Harm caused by changes in our relationships or contracts with suppliers and customers;

•In the Machine Clothing segment, greater than anticipated declines in the demand for publication grades of paper, or lower than anticipated growth in other paper grades;

•In the Albany Engineered Composites segment, longer-than-expected timeframe for the aerospace industry to utilize existing inventories, and unanticipated reductions in demand, delays, technical difficulties or cancellations in aerospace programs that are expected to generate revenue and drive long-term growth;

•~~Failure~~Inability toof ~~achieve~~our Machine Clothing or ~~maintain~~Albany ~~anticipated~~Engineered ~~profitable~~Composite ~~growth~~segments to create additional production capacity in ~~our~~a ~~Albany~~timely ~~Engineered~~manner ~~Composites~~or ~~segment;~~the occurrence of other manufacturing or supply difficulties (including as a result of geopolitical crises, natural disaster, public health crises and epidemics/pandemics, regulatory or otherwise);

•~~Other~~Changes ~~risks~~in ~~and~~geopolitical ~~uncertainties~~conditions ~~detailed~~impacting incountries ~~this~~where ~~report~~the ~~and~~Company ~~other~~does ~~periodic~~or ~~reports.~~intends to do business;

~~Further~~•Failure ~~information concerning important factors that could cause actual events or results~~ to beachieve materially different from the forward-looking statements can be found in “Business Environment Overview and Trends” as well as in Item 1A - “Risk Factors.” Although we believe the expectations reflected in our other forward-looking statements are based on reasonable assumptions, it is not possible to foresee or ~~identify~~maintain ~~all~~anticipated ~~factors~~profitable that could have a material and negative impact on our future performance. The forward-looking statements included or incorporated by reference in this annual report are made on the basis of our assumptions and analyses, as of the time the statements are made, in light of our experience and perception of historical conditions, expected future developments, and other factors believed to be appropriate under the circumstances.growth;

~~Except~~•Failure ~~as otherwise required by the federal securities laws, we disclaim any obligations or undertaking~~ to ~~publicly~~achieve ~~release any updates or revisions to any forward-looking statement contained or incorporated by reference in this annual report to reflect any change in~~ our ~~expectations~~strategic ~~with~~initiatives ~~regard~~and ~~thereto~~other ~~or any change in events~~goals, ~~conditions~~including, orbut ~~circumstances~~not onlimited ~~which~~to, ~~any~~our ~~such~~sustainability ~~statement is based.~~goals;

•In the Albany Engineered Composites segment, the estimates and expectations based on aircraft production rates provided by Airbus, Boeing and others;

•In the Albany Engineered Composites segment, risks and uncertainties associated with the successful implementation and ramp up of significant new programs, including the ability to manufacture the products to the detailed specifications required and recover start-up costs and other investments in the programs;

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•Adverse impacts from inflation, an economic slowdown or recession and by disruption in capital and credit markets that might impede our access to credit, increase our borrowing costs and impair the financial soundness of our customers and suppliers;

•Risks and uncertainties associated with the successful integration of our Heimbach Group acquisition;

•Expectations regarding our ability to attract, motivate, and retain the workforce necessary to execute our business strategy;

•Adverse impacts from fluctuations in foreign currency exchange rates;

•Harm caused by large customer purchase reductions, payment defaults or contract non-renewal;

•In the Albany Engineered Composites segment, our contracts with government entities involve future funding and compliance risks;

•Costly and disruptive legal disputes and settlements;

•Future levels of indebtedness and capital expenditures;

•Adverse impacts from changes in tax legislation or challenges to our tax positions;

•Cybersecurity incidents or significant computer system compromises or data breaches;

•Significant problems with information systems or networks; and

•Other risks and uncertainties detailed in this report and other periodic reports.

Further information concerning important factors that could cause actual events or results to be materially different from the forward-looking statements can be found in “Business Environment Overview and Trends” in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, as well as in Item 1A, Risk Factors. Although we believe the expectations reflected in our forward-looking statements are based on reasonable assumptions, it is not possible to foresee or identify all factors that could have a material and negative impact on our future performance. The forward-looking statements included or incorporated by reference in this annual report are made on the basis of our assumptions and analyses, as of the time the statements are made, in light of our experience and perception of historical conditions, expected future developments, and other factors believed to be appropriate under the circumstances, except as otherwise required by law.

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PART I

Item 1. Business

Albany International Corp. (the Registrant, the Company, Albany, we, us, or our) and its subsidiaries are engaged in two business segments.

The Machine Clothing (“MC”) segment supplies consumable permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel, pulp, nonwovens, fiber cement and several other industrial applications. Within the pulp and paper industry these belts are referred to as “machine clothing” or “paper machine clothing.” In other industries we serve the products we produce are generally referred to as “processing belts.”

We design, manufacture, and market paper machine clothing for each section of the paper machine and for every grade of paper. We manufacture and sell approximately twice as much paper machine clothing worldwide than any other company. Paper machine clothing products are customized, consumable products of technologically sophisticated design that utilize polymeric materials in a complex structure. The design and material composition of paper machine clothing can have a considerable effect on the quality of paper products produced and a meaningful effect on the energy and resource efficiency of the paper machines on which it is used. Principal paper machine clothing products include forming, pressing, and drying fabrics, and process belts. A forming fabric assists in paper sheet formation and conveys the very wet sheet through the forming section. Pressing fabrics are designed to carry the sheet through the press section, where water is pressed from the sheet as it passes through the press nip. In the drying section, drying fabrics manage air movement and hold the sheet against heated cylinders to enhance drying to a final moisture content between 4% percent to 9% percent, depending on the grade.

Process belts are used in the press section to increase dryness and enhance sheet properties, as well as in other sections of the machine to improve runnability and enhance sheet qualities.

The MC segment also supplies engineered processing belts used in the manufacturing process in the pulp, corrugator, nonwovens, fiber cement, building products, and textile industries.

The MC segment sells its products directly to customer end-users in countries across the globe. MC products, manufacturing processes, and distribution channels are substantially the same in each region of the world in which we operate. The sales of paper machine clothing forming, pressing, and drying fabrics, individually and in the aggregate, accounted for more than 10 percent of our consolidated Net ~~sales~~revenues during one or more of the last three years. No individual customer accounted for as much as 10 percent of MC segment Net ~~sales~~revenues in any of the periods presented. A majority of MC segment Net ~~sales~~revenues in the year ended December 31, ~~2022~~2023 were for use in the production of the growing grades of tissue, containerboard, other paper categories, and other engineered fabrics, while less than 20% percent of MC segment Net ~~sales~~revenues were for the production of the declining newsprint and printing and writing papers categories.

~~The~~On ~~Albany~~August ~~Engineered Composites (“AEC”) segment~~31, ~~provides highly engineered~~2023, ~~advanced~~the ~~composite~~Company ~~structures~~completed ~~to customers in~~ the ~~commercial~~acquisition ~~and~~of ~~defense~~Heimbach ~~aerospace~~GmbH ~~industries. The segment includes Albany Safran Composites, LLC~~ (~~“ASC”), in which our customer, SAFRAN Group (~~"~~SAFRAN~~Heimbach"), ~~owns~~ a 10privately-held ~~percent~~manufacturer ~~noncontrolling interest. AEC, through ASC, is the exclusive supplier to the LEAP program~~ of ~~advanced~~paper ~~composite~~machine ~~fan~~clothing ~~blades~~ and ~~fan~~technical ~~cases~~textiles, ~~under~~as afurther ~~long-term~~described ~~supply~~in ~~contract.~~Note ~~The LEAP engine is used on the Airbus A320neo~~24, ~~Boeing~~Business ~~737 MAX~~Combination, ~~and~~of ~~COMAC~~the ~~919~~Notes ~~aircrafts. AEC’s largest aerospace customer is SAFRAN and sales~~ to ~~SAFRAN (consisting primarily of fan blades and cases for CFM’s LEAP engine) accounted for approximately 16 percent of~~ the ~~Company’s~~Consolidated ~~consolidated~~Financial ~~Net~~Statements ~~sales~~ in ~~2022.~~Item ~~Other~~8, ~~significant~~Financial ~~AEC~~Statements ~~programs include the production of structures~~ and ~~parts~~Supplementary ~~for the Sikorsky CH-53K helicopter~~Data, ~~F-35~~of ~~fighter~~this ~~jet,~~Annual ~~Joint~~Report ~~Air-to-Surface~~on ~~Standoff~~Form ~~Missile ("JASSM"), and Boeing 787 platforms~~10-K. ~~AEC~~The ~~also~~financial ~~supplies~~results ~~vacuum waste tanks for most~~ of the ~~Boeing~~acquired ~~7X7~~company ~~aircraft,~~are asincluded ~~well~~in as the ~~fan~~MC ~~case~~reportable ~~for the GE9X engine. In 2022, approximately 46% of the AEC~~ segment~~’s sales were related to U~~.~~S. government contracts or programs.~~

~~See~~The Albany Engineered Composites (“~~Business~~AEC”) ~~Environment~~segment, ~~Overview~~provides highly engineered, advanced composite structures to customers in the commercial and ~~Trends~~defense aerospace industries. The segment includes Albany Safran Composites, LLC (“ASC”), in which our customer, SAFRAN Group ("SAFRAN"), owns a 10 percent noncontrolling interest. AEC, through ASC, is the exclusive supplier to the LEAP program of advanced composite fan blades and fan cases under ~~Item~~a 7long-term supply contract. The LEAP engine is used on the Airbus A320neo, ~~Management~~Boeing 737 MAX, and COMAC 919 aircrafts. AEC’s ~~Discussion~~largest aerospace customer is SAFRAN and ~~Analysis~~sales to SAFRAN (consisting primarily of ~~Financial~~fan ~~Condition~~blades and ~~Results~~cases for CFM’s LEAP engine) accounted for approximately 16 percent of ~~Operations~~the Company’s consolidated Net revenues in 2023. Other significant AEC programs include the production of structures, parts and sub-assemblies for athe ~~discussion~~Sikorsky CH-53K helicopter, F-35 fighter jet, Joint Air-to-Surface Standoff Missile ("JASSM"), and Boeing 787 aircraft. AEC also supplies vacuum waste tanks for most Boeing commercial aircraft, as well as the fan case for the GE9X engine. In 2023, approximately 39 percent of ~~general~~the AEC segment’s ~~developments~~revenues inwere ~~recent~~related ~~years~~to U.S. government contracts or programs.

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~~Following~~See is“Business aEnvironment ~~table~~Overview and Trends” under Item 7, Management’s Discussion and Analysis of ~~Net~~Financial ~~sales~~Condition byand ~~segment~~Results ~~for~~of ~~2022~~Operations, ~~2021,~~for ~~and~~a ~~2020~~discussion of general segment developments in recent years.

(in thousands)	2022		2021		2020
Machine Clothing	$	609,461	$	619,015	$	572,955
Albany Engineered Composites	425,426		310,225		327,655
Consolidated total	$	1,034,887	$	929,240	$	900,610

Following is a table of Net revenues by segment for years ended December 31, 2023, 2022, and 2021.

The table setting forth certain sales, operating income, and balance sheet data that appears in Note 3, is included in “Reportable Segments and Geographic Data,” of the Consolidated Financial Statements, included under Item 8 of this Form 10-K.


(in thousands)	2023		2022		2021
Machine Clothing	$	670,768	$	609,461	$	619,015
Albany Engineered Composites	477,141		425,426		310,225
Total net revenues	$	1,147,909	$	1,034,887	$	929,240

The table that sets forth certain Net revenues, operating income, and balance sheet data appears in Note 3, Reportable Segments and Geographic Data, of the Notes to the Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

International Operations

Our ~~Machine~~MC ~~Clothing~~ business segment maintains manufacturing facilities in Belgium, Brazil, Canada, China, France, Germany, Italy, Mexico, South Korea, Spain, Sweden, Switzerland, the United Kingdom, and the United States. MC's global manufacturing footprint is designed to most efficiently meet regional customer requirements. Our AEC business segment maintains manufacturing facilities in the United States, France, Mexico, and Germany to meet customer demand in those regions.

Our global presence subjects us to certain risks, including tariffs and other restrictions on trade, and controls on foreign exchange and the repatriation of funds. While the direct impact of recent developments in global trade and tariff policy has not been significant, there is risk that the impact of such developments on companies in our supply chain will be reflected in higher costs from affected suppliers. We have a cash repatriation strategy that targets a certain amount of foreign current year earnings that are not indefinitely reinvested. Changes in the trade or regulatory compliance in any country that we have significant cash balances could make it difficult to repatriate foreign earnings cost-effectively in the future.

Effect of Global Macroeconomic and Political Climate

The war between Russia and Ukraine is affecting the economic and global financial markets and exacerbating ongoing economic challenges caused by impacts of the ongoing COVID-19 pandemic, including rising inflation and global supply chain disruptions.

Our MC segment has historically generated approximately 2% of its annual net sales from customers in Russia and Ukraine. In addition, a subsidiary within our Machine Clothing segment has been a partner in a joint venture (“JV”) that supplies paper machine clothing products to local papermakers in Russia. In March 2022, we made the decision to cease doing business in Russia, including giving notice to our JV partner of our intent to exit the venture. As a result, we recognized $1.5 million expense in cost of goods sold and in Selling, General, and Administrative expense, representing reserves against the risk of obsolescence of certain inventory destined for Russian customers and uncollectible receivables from Russian customers, respectively. In the first quarter of 2022, we also wrote down the net book value of our investment in the aforementioned JV to reflect our intent to exit such venture, resulting in $0.8 million impairment loss included in Other (income)/expense, net.

Our cessation of doing business in Russia resulted in a reduction of approximately $10 million in annual net sales in the MC segment during 2022.

During 2022, our segments saw higher input costs due to increased energy costs, tight supply market, and global logistics challenges. Our MC segment experienced higher energy prices, higher labor costs, and increased raw material prices. We continued to identify alternatives to secure materials in the face of intense supply constraints. Logistics costs have begun to stabilize compared to the same period last year, though they remained higher than pre-pandemic levels.

We anticipate inflationary pressure and energy cost escalation to be a primary input cost pressure in the near term.

The ultimate financial impact due to the aforementioned global macroeconomic conditions and political climate is difficult to predict. During 2022, MC segment input costs increased approximately $10 million as a result of these factors, or an unfavorable impact to the segment gross margin of approximately 140 basis points for the year.

Our Albany Engineered Composites segment does not have significant direct exposure in Russia. However, it has not been immune from supply chain disruptions. Increasing fuel prices coupled with higher demand has resulted in increased freight costs during the quarter, along with ongoing logistic constraints, higher labor costs, and increases in raw material prices. Due to the nature of AEC’s contracts with its customers, we currently anticipate passing through a portion of such cost increases to the customers.

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Until the effects of the macroeconomic conditions and political climate on global markets subside, there can be no assurance that our input costs will not continue to rise beyond our current estimate, thus unfavorably impacting our future results of operations, financial position and liquidity.

Research and Development and Technology

We invest in research, new product development, and technical analysis with the objective of maintaining our technological leadership in each business segment. While much of our research activity supports existing products, we also engage in significant research and development activities for new technology platforms, products and product enhancements.

Our MC segment products are custom-designed for each user, depending on the type, size, and speed of the machine, and the products being produced. ~~Product~~Products ~~design~~are isspecifically ~~also~~designed afor ~~function~~each ofsection ~~the~~and ~~machine~~position ~~section~~on a machine, the grade of product being produced, and the quality of the stock used. Technical expertise, judgment, and experience are critical in designing the appropriate clothing for each machine, position, and application. As a result, many employees in sales and technical functions have engineering degrees, paper mill experience, or other manufacturing experience in the markets in which ~~they~~we operate. Our market leadership position reflects our commitment to ~~technological~~technology innovation. This innovation has resulted in new MC products and~~/or~~ enhancements across all of our product lines.

~~Albany~~AEC ~~Engineered Composites~~ designs, develops and manufactures advanced composite parts and sub-assemblies for complex aerospace applications, using a range of core technologies, including its proprietary 3D-woven reinforced composites technology, traditional 2D laminated composite structures, automated ~~material~~fiber placement, ~~filament~~for ~~winding,~~both thermoplastics and thermoset composites as well as rigid installation for through-thickness ~~reinforcement~~reinforcements, ~~braiding,~~ and ~~thermoplastic~~braided ~~pultrusion~~structures.

In addition to continuous significant investment in core research and development activities in pursuit of new proprietary products and manufacturing processes, experienced research and development employees in each business segment also work collaboratively with customers, OEMs and suppliers on targeted development efforts to introduce new products and applications in their respective markets.

~~Company-funded~~Technical and research expenses totaled $3140.46 million in ~~2022~~2023, $2939.69 million in ~~2021~~2022, and $2538.89 million in ~~2020~~2021. In ~~2022~~2023, these costs were 3.05 percent of total Company Net ~~sales~~revenues, including $1516.40 million, or 3.63 percent of Net ~~sales~~revenues, in our AEC segment. Research and development in the AEC segment ~~includes~~include both Company-sponsored and customer-funded activities. Some customer funded research and development may be on a cost sharing basis, in which case, amounts charged to the collaborating entity are credited against research and development costs. For customer-funded research and development in which we anticipate funding to exceed expenses, we include amounts charged to the customer in Net sales. Cost of sales associated with customer-funded research was $5.2 million in 2022, $5.2 million in 2021, and $5.1 million in 2020.

We have developed, and continue to develop, proprietary intellectual property germane to the industries we serve. Our intellectual property takes many forms, including patents, trademarks, trade names and domains, and trade secrets. Our trade secrets include, among other things, manufacturing know-how and unique processes and equipment. Because intellectual property in the form of patents is published, we often forgo patent protection and preserve the intellectual property as trade secrets. We aggressively protect our proprietary intellectual property, pursuing patent protection when appropriate. Our active portfolio currently contains over 2,300 patents, and approximately 160 new patents are typically granted each year. While we consider our total portfolio of intellectual property, including our patents, to be an important competitive advantage, we do not believe that any single patent is critical to the continuation of our business. All brand names and product names are trade names of Albany International Corp. or its subsidiaries. We have from time to time licensed some of our patents and/or know-how to one or more competitors, and have been licensed under some competitors’ patents, in each case mainly to enhance customer acceptance of new products. The revenue from such licenses is less than 1 percent of consolidated net sales.

Raw Materials

Primary raw materials for our MC products are polymer monofilaments and fibers, which have generally been available from a number of suppliers. In addition, we manufacture polymer monofilaments, a basic raw material for all types of machine clothing, at our facility in Homer, New York, which supplies approximately 24 percent of our worldwide monofilament requirements. In the AEC segment, the primary raw materials are carbon fiber and resin. While there are a number of potential suppliers of carbon fiber and other raw materials used by AEC, the use of certain suppliers may be mandated by customer agreements, and alternative suppliers would be subject to material

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~~qualification~~which orcase, ~~other~~amounts ~~requirements~~charged ~~that~~to ~~may~~the ~~preclude~~collaborating orentity ~~delay~~are ~~their~~credited ~~availability.~~against Inresearch ~~the~~and ~~case~~development ofcosts. ~~mandated~~For ~~suppliers,~~customer-funded ~~AEC~~research ~~endeavors~~and todevelopment ~~enter~~in ~~into~~which ~~long-term~~we ~~supply~~anticipate ~~agreements~~funding to ~~help~~exceed ~~mitigate~~expenses, ~~price~~we ~~and~~include ~~availability~~amounts ~~risks.~~charged ~~Currently,~~to the ~~primary~~customer ~~raw materials used~~ in ~~each~~Net ~~segment~~revenues. ~~are~~Cost ~~derived~~of ~~from~~goods ~~petroleum,~~sold ~~and~~associated ~~are~~with ~~therefore~~customer-funded ~~sensitive~~research towas ~~changes~~$6.4 million in ~~the~~2023, ~~price~~$5.2 ofmillion ~~petroleum~~in 2022, and ~~petroleum~~$5.2 ~~intermediates~~million in 2021.

We have developed, and continue to develop, proprietary intellectual property germane to the industries we serve. Our intellectual property takes many forms, including patents, trademarks, trade names and domains, and trade secrets. Our trade secrets include, among other things, manufacturing know-how and unique processes and equipment. Because intellectual property in the form of patents is published, we often forgo patent protection and preserve the intellectual property as trade secrets. We aggressively protect our proprietary intellectual property, pursuing patent protection when appropriate. Our active portfolio currently contains over 2,300 patents, and approximately 100 new patents are typically granted each year. While we consider our total portfolio of intellectual property, including our patents, to be an important competitive advantage, we do not believe that any single patent is critical to the continuation of our business. All brand names and product names are trade names of Albany International Corp. or its subsidiaries.

Raw Materials

In our AEC segment, the primary raw materials are carbon fiber and resin. While there are a number of potential suppliers of carbon fiber and other raw materials used by AEC, the use of certain suppliers may be mandated by customer agreements, and alternative suppliers would be subject to material qualification or other requirements that may preclude or delay their availability. In the case of mandated suppliers, AEC endeavors to enter into long-term supply agreements to help mitigate price and availability risks.

Currently, the primary raw materials used in each segment are derived from petroleum, and are therefore sensitive to changes in the price of petroleum and petroleum intermediates.

Competition

InPrice and technology are the ~~paper~~primary means of competitive differentiation in the industry. Our MC product portfolio is broad and deep, with products for every part of the machine ~~clothing~~and ~~market~~a wide range of machine types and paper grades. The Company’s research and development team works closely with the sales and technical organization to develop new products to meet changes in customer needs, weand ~~believe~~also pursues targeted joint development activities with customers and equipment manufacturers to create new products. Albany’s experienced sales and technical team members – many of whom have worked in the industries that we ~~had~~serve – work closely with each customer to acquire deep understanding of the customer’s combination of raw materials, manufacturing equipment, manufacturing processes, and paper, pulp, nonwovens or other product being produced – a ~~worldwide~~combination ~~market~~that ~~share~~is unique to each customer, plant and machine. This experience and knowledge, combined with knowledge of ~~approximately~~and 30experience ~~percent~~with the Company’s own extensive product portfolio, allows the sales and technical teams to ensure that the appropriate machine clothing products are being supplied for each part of the machine, to customize those products as needed for best performance, and to continuously propose new products that offer each customer the possibility of even better performance and increased savings. Our paper machine clothing solutions enable our customers to reduce energy consumption, improve resource efficiency, and help maintain and improve water quality. These efforts – which effectively integrate the Company’s experience and technological expertise into each product we sell – are reflected in ~~2022~~the Company’s strong competitive position in the marketplace. Some of the Company’s paper machine clothing competitors also supply paper machines, papermaking equipment, and aftermarket parts and services, and often bundle machine clothing products with original or rebuilt machines and/or aftermarket services.

~~Price~~The ~~and technology are the~~ primary ~~means of~~ competitive ~~differentiation~~factors in the ~~industry. Albany’s~~markets ~~Machine~~in ~~Clothing~~which ~~product~~our ~~portfolio~~AEC issegment ~~broad~~competes ~~and~~are ~~deep~~product performance, ~~with~~delivery ~~products~~performance, ~~for~~quality, ~~every part of the machine~~ and ~~a wide range of machine types and paper grades~~price. ~~The~~Achieving ~~Company’s~~lower ~~research~~weight ~~and~~without ~~development~~sacrificing ~~team~~strength ~~works~~is ~~closely with~~ the ~~sales~~key ~~and technical organization~~ to ~~develop~~improving ~~new~~fuel ~~products to meet changes in customer needs~~efficiency, ~~and~~which ~~also~~helps ~~pursues~~reduce ~~targeted joint development activities with customers and equipment manufacturers to create new products. Albany’s experienced sales and technical team members – many of whom have worked in~~ the ~~industries~~carbon ~~that~~emissions wefootprint ~~serve - work closely with each customer to acquire deep understanding~~ of ~~the~~global ~~customer’s combination of raw materials~~aviation, ~~manufacturing equipment, manufacturing processes,~~ and ~~paper,~~is ~~pulp, nonwovens or other product being produced –~~ a ~~combination~~critical ~~that~~performance isrequirement ~~unique~~in tothe ~~each~~aerospace ~~customer, plant and machine~~industry. ~~This~~Our ~~experience~~broad ~~and~~array ~~knowledge, combined with knowledge~~ of ~~and~~capabilities ~~experience~~in ~~with~~composites ~~the~~enables ~~Company’s~~us ~~own~~to ~~extensive~~offer ~~product~~customers ~~portfolio, allows~~ the ~~sales~~opportunity ~~and technical teams~~ to ~~ensure~~displace ~~that~~metal ~~the~~components ~~appropriate machine clothing products are being supplied for each part of the machine~~and, toin ~~customize~~some ~~those products as needed for best performance~~cases, ~~and~~conventional tocomposites ~~continuously~~with ~~propose new products that offer each customer the possibility of even better performance and increased savings. Our paper machine clothing solutions enable our customers to reduce energy consumption~~lower-weight, ~~improve resource efficiency~~high-strength, and ~~help~~potentially ~~maintain~~high-temperature ~~and~~resistant ~~improve water quality~~composites. ~~These~~The ~~efforts~~dominant ~~– which effectively integrate the Company’s experience and technological expertise into each product we sell – are reflected in the Company’s strong~~ competitive ~~position~~factor inis the ~~marketplace.~~relative Some of the Company’s paper machine clothing competitors also supply paper machines, papermaking equipment, and aftermarket parts and services, and often bundle clothing with original or rebuilt machines and/or aftermarket services.

The primary competitive factors in the markets in which our Albany Engineered Composites segment competes are product performance, delivery performance, quality, and price. Achieving lower weight without sacrificing strength is the key to improving fuel efficiency, which helps reduce the carbon footprint of global aviation, and is a critical performance requirement in the aerospace industry. Our broad array of capabilities in composites enables us to offer customers the opportunity to displace metal components and, in some cases, conventional composites with lower-weight, high-strength, and potentially high-temperature resistant composites. The dominant competitive factor is the relative importance the customer places on these performance benefits, which include fuel savings/ emissions reductions due to lower weight, against the possible cost advantage of more traditional metal and composite components.

Human Capital Resources

Albany International recognizes that its long, successful history and future opportunities are directly linked to dedicated, engaged and diverse employees that serve the Company in all business operations. Albany currently employs approximately 4,100 people, with significant operations in North America, South America, Europe and Asia. Wages and benefits are competitive with those of other manufacturers in the geographic areas in which our facilities are located. A number of hourly employees outside of the United States are members of various unions. In general, we consider our relations with employees to be excellent. Employees participate in regular training programs appropriate for their responsibility and extensive optional training programs have been developed for those who seek professional and personal growth opportunities. All employees are required to participate in safety training on a regular basis. We have systematically and continuously reduced our Total Recordable Incident Rate (TRIR) by approximately 65% since 2019 to 0.48 in 2022.

The Company’s Executive Vice President- Human Resources and Chief Human Resources Officer meets regularly with the Chief Executive Officer to align Human Capital strategy, plan and initiatives with business strategy and goals. Albany’s Human Capital Resources plan ensures that we provide a rewarding employee experience across the company. We continuously review our Human Capital Resources metrics, including safety metrics and action plans, to promote an emotionally and physically safe and inclusive working environment.

Our Diversity, Equity and Inclusion (DE&I) Council develops a holistic and actionable DE&I strategy that seeks diversity, nurtures inclusion, amplifies innovation and empowers champions. Our hiring strategy recruits candidates from a broad range of hiring sources that target people with diverse backgrounds and skills to fill open positions within

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importance the ~~Company. Approximately~~customer ~~26%~~places ofon ~~our~~these ~~global~~performance ~~workforce~~benefits, ~~were~~which ~~women~~include infuel ~~2022.~~savings/emissions ~~Our~~reductions ~~Empowering~~due ~~Women~~to ~~Leaders~~lower ~~Network~~weight, ~~aims~~against tothe ~~continue~~possible ~~increasing~~cost ~~representation~~advantage of ~~women~~more attraditional ~~all~~metal ~~levels to contribute to the Company’s business success through relationships,~~ and ~~partnerships~~composite components.

~~Executive~~Human ~~Officers~~Capital ~~of the Registrant~~Resources

The ~~following~~health ~~table~~and ~~sets~~safety ~~forth~~of ~~certain~~our ~~information~~employees ~~with~~is ~~respect~~our tohighest priority, and drives the ~~executive~~successful ~~officers~~execution of ~~the~~our ~~Company~~business. asOur objective is always zero injuries at work, and our entire workforce from the Board of ~~February 24~~Directors to our teams on the shop floor work together towards this goal. We track and review safety metrics throughout the year, ~~2023:~~including Total Recordable Incident Rate ("TRIR") and proactive safety actions taken.

A.Our ~~William~~Board ~~Higgins, 64, President and Chief Executive Officer, joined the Company in 2020. He has served the Company as President and Chief Executive Officer since January 2020. He has been a director~~ of ~~the~~Directors ~~Company~~further ~~since~~reinforces ~~2016~~our ~~and~~culture ~~served as Chairman~~ of ~~the~~safety ~~Board~~by ~~from~~tying ~~February 2019 until January 2020. From 2005 to 2012 he served CIRCOR International, Inc. in~~ a ~~variety~~portion of ~~senior~~each ~~organizational positions, including Chief~~ Executive Officer's ~~and~~compensation ~~Chairman. Prior~~ to ~~joining~~the ~~CIRCOR,~~achievement ~~he held a variety~~ of ~~senior~~TRIR ~~management~~goals ~~positions~~across ~~with~~the ~~Honeywell~~entire ~~International and AlliedSignal~~company.

~~Stephen~~Our M.talented ~~Nolan,~~and ~~53,~~innovative ~~Chief~~people ~~Financial~~are ~~Officer~~truly ~~and~~our ~~Treasurer, joined~~greatest ~~the Company in 2019~~advantage. HeWe ~~has~~are ~~served~~unwavering ~~the~~in ~~Company~~our ascommitment ~~Chief Financial Officer and Treasurer since April 2019. Prior~~ to ~~joining~~nurture ~~the Company, he served as Chief Financial Officer of Esterline and previously held the same role at Vista Outdoor, Inc. He previously worked in~~ a ~~number~~thriving ofpeople-first ~~strategic~~ and ~~operational~~high-engagement ~~management~~workplace ~~roles~~culture atdefined ~~ATK,~~by ~~including~~mutual ~~Senior Vice President for Strategy and Business Development and several business unit leadership positions~~respect. ~~Earlier in his career, Mr. Nolan served in corporate development and strategy roles at Raytheon Company and as a strategy consultant at McKinsey & Company.~~

~~Daniel~~We A.strive ~~Halftermeyer,~~to ~~61,~~foster ~~President – Machine~~an ~~Clothing, joined~~inclusive ~~the~~and ~~Company~~equitable inculture ~~1987.~~where Hediversity ~~has~~of ~~served~~experiences, ~~the~~backgrounds, ~~Company~~and asskills ~~President~~are –valued, ~~Machine~~respected, ~~Clothing~~and ~~since February 2012~~celebrated. HeWe ~~previously~~believe ~~served~~that ~~the~~an ~~Company~~inclusion-based asculture ~~President~~has –the ~~Paper~~power ~~Machine Clothing and Engineered Fabrics from August 2011~~ to ~~February~~enhance ~~2012~~innovation, asnurture ~~President –~~an ~~Paper~~environment ~~Machine~~where ~~Clothing~~our ~~from~~people ~~January~~can ~~2010~~reach ~~until~~their ~~August~~highest ~~2011~~potential, ~~Group~~and ~~Vice~~deliver ~~President~~the –best ~~Paper~~solutions ~~Machine~~to ~~Clothing~~our ~~Europe~~customers. ~~from~~We ~~2005~~believe toin ~~August~~the ~~2008,~~power ~~Vice~~of ~~President~~open and ~~General~~transparent ~~Manager~~communication –throughout ~~North~~the ~~American~~organization ~~Dryer Fabrics from 1997 to March 2005,~~ and ~~Technical~~endeavor ~~Director – Dryer Fabrics from 1993~~ to ~~1997.~~ensure Heour ~~held~~employees’ ~~various~~voices ~~technical~~are ~~and management positions in St~~heard. ~~Stephen, South Carolina, and Sélestat, France, from 1987 to 1993.~~

~~Greg~~We ~~Harwell,~~currently ~~59,~~employ ~~President – Albany~~approximately ~~Engineered~~5,600 ~~Composites~~people, ~~joined~~ ~~the~~with ~~Company~~significant inglobal ~~2019.~~operations Hein ~~has~~North ~~served~~America, ~~the~~South ~~Company~~America, asEurope ~~President~~and -Asia. ~~Albany~~Our ~~Engineered~~Employee ~~Composites~~Value ~~since~~Proposition ~~November~~enables ~~2019.~~us ~~Prior~~ to ~~joining~~provide ~~the~~an ~~company,~~outstanding heAlbany ~~served~~employee asexperience ~~President~~and ofstrengthen ~~Aerostructures~~our ~~for~~high-performance ~~Precision~~organization. ~~Castparts~~We ~~(PCC)~~ensure ~~managing~~that ~~all~~our ~~aspects~~global ofemployees ~~the~~receive ~~organization~~inclusive ~~for~~and ~~the~~competitive ~~Aerostructures~~compensation, ~~division.~~benefits, Heand ~~also~~total ~~served~~rewards asfor ~~Vice~~their ~~President~~critical ~~and~~contributions ~~General~~at ~~Manager~~Albany. inFor ~~charge~~employees ofin ~~Global~~the ~~Operations~~U.S. ~~Strategy~~this atincludes ~~Alcoa~~401(k) ~~Fastening~~match ~~Systems~~ and ~~Rings,~~profit ~~and~~sharing ~~before~~contribution, ~~November~~paid ~~2014~~time ~~was~~off, ~~responsible~~personal ~~for~~days ~~multiple~~off, ~~operations~~health ~~within~~and ~~Alcoa~~dental ~~Fastening~~insurance, ~~Systems.~~pet ~~From~~insurance, ~~June~~reward ~~2019~~and ~~until~~recognition ~~he joined Albany International~~programs, ~~Mr.~~and ~~Harwell~~strong ~~was~~commitment ~~a consultant~~ to ~~Arlington~~employee ~~Capital~~well-being ~~Partners,~~and ~~providing~~work/life ~~M&A advisory services~~balance.

~~Alice~~Our ~~McCarvill,~~talent ~~58,~~management ~~Executive~~strategy ~~Vice~~focuses ~~President~~on a three-pronged ~~Human~~approach: ~~Resources~~developing and ~~Chief~~growing ~~Human~~our ~~Resources~~internal ~~Officer~~talent, ~~joined~~ hiring the ~~Company~~best intalent ~~2018.~~from ~~She has served~~ the ~~Company~~market, ~~as Executive Vice President- Human Resources~~ and ~~Chief~~leveraging ~~Human~~our ~~Resources~~internship ~~Officer~~program ~~since~~to ~~February~~identify ~~2019. She~~and ~~joined~~build the ~~Company~~next ingeneration ~~March~~of ~~2018~~talent. asTo ~~Executive~~develop ~~Vice~~internal ~~President-~~talent, ~~Human~~our ~~Resources.~~talent ~~Prior~~management toprocess ~~2018~~focuses ~~she~~on ~~was~~identifying ~~Group~~opportunities VPfor ~~Human~~career ~~Resources~~growth ~~for~~and ~~Arconic~~development ~~Engineered~~within ~~Products~~the ~~and Solutions~~organization.

~~Joseph~~We M.are ~~Gaug,~~committed 59to enhancing the employee experience, ~~Vice~~which ~~President-~~includes ~~General~~consistent ~~Counsel~~learning and ~~Secretary~~development to support our employees as they enhance their knowledge, ~~joined~~ ~~the~~unleash ~~Company~~their infull ~~2004~~potential and reach their career aspirations. HeWe ~~has~~have ~~served~~defined curriculum by disciplines and functions. We also provide a variety of continuous learning opportunities through on-the-job ~~Company~~training, asvirtual ~~Vice~~training, ~~President~~instructor-led ~~Secretary~~training, and ~~General~~external ~~Counsel~~learning ~~since~~opportunities. Our ~~May~~learning ~~2020.~~management Hesystem ~~previously~~provides ~~served~~our asemployees ~~Associate~~with ~~General~~over ~~Counsel~~8,000 courses to choose from, ~~2004~~in ~~and~~a asflexible ~~Associate~~format, ~~General~~allowing ~~Counsel~~employees to participate in regular training programs appropriate for their responsibility, and ~~Assistant~~extensive ~~Secretary~~optional ~~from~~training ~~2006~~programs tohave ~~May~~been ~~2020.~~developed ~~Prior~~for tothose ~~2004~~who heseek ~~was~~professional aand ~~principal~~personal atgrowth ~~McNamee,~~opportunities. ~~Lochner,~~All ~~Titus~~employees &are ~~Williams~~required to participate in safety, PCethics and compliance training on a regular basis.

~~Robert~~Our ~~A. Hansen, 65, Senior Vice President and~~ Chief ~~Technology~~Human Resources Officer~~, joined~~ ~~the~~meets ~~Company~~regularly inwith ~~1981. He has served~~ the ~~Company as Senior Vice President and~~ Chief ~~Technology~~Executive Officer ~~since January 2010. He previously served as Vice President – Corporate Research~~ and ~~Development~~the ~~from~~Senior ~~April~~Leadership ~~2006~~Team to ~~January~~align ~~2010~~People strategy, ~~and~~plan ~~Director of Technical~~ and ~~Marketing~~initiatives –with ~~Europe~~business ~~Press~~strategy ~~Fabrics~~and ~~from 2004 to April 2006~~goals. ~~From~~Our ~~2000~~People toResources ~~2004,~~plan heensures ~~served~~that aswe ~~Technical~~provide ~~Director~~a –rewarding ~~Press~~employee ~~Fabrics,~~experience ~~Göppingen,~~across ~~Germany. Before 2000, he served~~ the Company. inWe acontinuously ~~number~~review ofleading ~~technical management~~ and ~~research~~lagging ~~and~~People ~~development positions in Europe and the U~~metrics.S.

~~Elisabeth~~To ~~Indriani~~further our Diversity, 47Equity and Inclusion (DE&I) impact, ~~Vice~~our ~~President~~DE&I –Council ~~Controller~~develops a holistic and actionable DE&I strategy that seeks diversity, ~~joined~~nurtures ~~the~~inclusion, ~~Company~~amplifies ininnovation ~~2021~~and empowers champions. ~~Prior~~Our hiring strategy recruits candidates from a broad range of hiring sources that target diverse backgrounds, skills and competencies to ~~joining~~fill our open positions with the ~~Company~~most qualified candidate. Approximately 27 percent of our global workforce were women in 2023 and 30 percent of our U.S. workforce identified as a ‘U.S. minority’, ~~she~~as ~~was~~defined by the ~~Global~~Equal ~~Controller~~Employment Opportunity Commission. Our Empowering Women Leaders Network aims to continue increasing representation of women at ~~Century~~all ~~Aluminum~~levels to contribute to the Company,’s ~~where~~business ~~she~~success ~~oversaw~~through ~~accounting~~relationships and ~~financial~~partnerships. ~~reporting~~As part of our DE&I strategy, ~~led~~employees ~~global~~attend ~~policy~~an ~~and~~annual ~~process~~DE&I ~~transformation~~training ~~initiatives,~~session ~~and~~to ~~was~~create aawareness ~~business~~of ~~partner~~the inimportance ~~financial~~of ~~planning~~DE&I ~~and~~as ~~analysis~~part of Albany’s culture. Further, we ensure DE&I training is fully integrated into our continuous learning culture.

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~~M&A~~Our ~~due~~journey ~~diligence,~~on ~~investor~~DE&I ~~relations,~~continues ~~treasury, financing and tax structuring transactions. Earlier in her career, Ms. Indriani served as an Audit Senior Manager~~ with ~~Deloitte~~the ~~and~~establishment ~~Touche LLP – as a member~~ of ~~the~~Employee ~~Industry~~Resource ~~Professional~~Groups ~~Practice~~to ~~Director~~champion ~~group,~~DE&I ~~she authored Deloitte interpretive accounting guides~~ and ~~was~~foster a ~~frequent~~diverse ~~speaker at Deloitte accounting~~ and ~~advisory~~inclusive ~~events, in addition to advising clients on the application of accounting standards on complex transactions~~environment.

We fully support global human rights and have aligned our policies and procedures with the United Nations Global Compact and the Universal Declaration of Human Rights, among others. In 2023 we issued a standalone Human Rights Policy to further affirm our commitment to human rights throughout our value chain.

Sustainability

Product Stewardship

Our business is centered around driving success for our customers. Our products are designed for performance and consistency, while enabling our customers to improve their environmental footprint through more sustainable and efficient processes and end products.

As described above, our paper machine clothing products enable our paper-making customers to reduce their own environmental footprint by reducing their energy consumption, improving resource efficiency, and helping maintain and improve water quality. Energy is one of the top three cost components in the paper making process. Our machine clothing solutions use innovative technologies to reduce the amount of heat energy required for paper production. We continue to innovate and remain focused on developing and bringing to market proprietary products aimed at improving the energy and resource efficiency needed for our customers’ products and their production processes.

In aerospace, weight savings that drive fuel efficiency are essential for aircraft producers, if the industry is to achieve its goals for sustainable aviation. This fundamental design goal has driven the increased use of lightweight composite structures in an ever-broadening sphere of aerospace applications. We have applied learnings from our 128+ years of experience manufacturing machine clothing to pioneer 3D weaving technologies to manufacture our composite material. The process involves layering and interweaving fibers in a precise, computer-controlled process to create complex, high-strength parts that allows for the production of lightweight and strong composite parts with high-performance properties.

This technology has the ability to produce parts with complex geometries and high-performance properties, such as high strength, stiffness and resistance to impact and fatigue making it well-suited for use in aerospace, defense and industrial applications. These structurally demanding applications have historically been served by heavier, metallic structures, and traditional laminated composites do not possess the required structural characteristics that 3D woven can offer. As such, our proprietary 3D woven technology expands the role that lightweight composites can serve as the next generation of aircraft is designed and built. Our AEC business also develops solutions that champion sustainable energy. Through innovative composite technologies and advanced manufacturing processes, we contribute to the creation of energy-efficient components, reducing the environmental footprint and bolstering the renewable energy sector.

Carbon Emissions Footprint

We are committed to responsible stewardship of the environment, which includes full compliance with environmental regulation everywhere we operate. And we are committed to going beyond regulatory requirements, implementing responsible and intentional strategies to continually minimize our environmental impact.

In 2022, we completed efforts to gather, aggregate, and report comprehensive and comparable information on the energy use and emissions across the 23 Albany facilities in the 11 countries where we have historically operated, in accordance with the Greenhouse Gas ("GHG") Protocol for Scope 1 and Scope 2. In 2023, we partnered with an independent third-party enterprise climate platform to enhance measurement, reporting, and reduction of our carbon emissions. This work sets the foundation for calculating Scope 3 emissions and, importantly, developing a climate transition plan to address both our products and services as well as our company operations and manufacturing footprint.

In 2023, we signed a commitment letter with the Science Based Targets Initiative ("SBTi") that commits us to establishing near-term Science-Based Targets. Once committed to SBTi, we have a maximum of 24 months to set formal emissions reduction targets and goals aligned with the Paris Agreement’s ambition of maintaining global temperature rise to 1.5°C. This commitment has the full support of our Board of Directors and Senior Leadership Team, and we look forward to developing these science-based targets along with a comprehensive emissions

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reduction strategy, tracking and reporting progress at least annually, while continuing to accelerate progress on our energy initiatives across our global portfolio.

We continue to focus on the impact of our own operations by evaluating our risks and identifying actionable opportunities to drive meaningful improvement in our energy and GHG emissions intensity, as well as our products’ environmental impact. We are also focused on increased transparency with our first global response to CDP and our first Taskforce on Climate-related Financial Disclosures ("TCFD") Report in 2023.

Water and Waste

As a global company, Albany operates in 14 countries with varying options available for waste and recycling. We are committed to reducing waste, both from our own operations as well as our customers’, and we continue to look for opportunities to reduce waste generated across our operations and our products. As a first step we strive to separate our waste streams across our operations including general waste, hazardous waste, electronic waste, and carbon fiber/raw material waste. Waste streams are collected via appropriate third parties, with the objective of optimizing reuse and minimizing waste to landfill. For example, at one of our facilities we have achieved zero waste to landfill since 2022, primarily through recycling and converting waste to energy sources.

Innovation and partnerships are key to our core business and our sustainability objectives. In our AEC business, we work with a third party specialist carbon fiber recycling company to recycle 3D woven fibers, water jet cut off carbon fibers, and long tow carbon fibers. These materials are recycled and reused in applications such as thermoplastic (which can be recycled) and thermoset products, 3D printing, fiber reinforced concrete, textile yarn, and friction materials.

In our MC business, we work with a third party specialist that collects scrap raw materials and converts it into plastic furniture. As recycling technology advances, there are also increasing opportunities to use recycled raw materials in some of our manufacturing processes. We continue to explore and trial various options and are pleased to have identified several recycled materials that meet our rigorous requirements, and which we will be using from 2024.

Supply Chain Footprint

We recognize the importance of maintaining value and quality throughout our supply chain. We conduct our business ethically, legally, environmentally, and socially responsibly, and we expect the same from our suppliers. Accordingly, we require our global suppliers to respect human rights, employ fair labor practices, and conduct business ethically, as outlined in our Supplier Code of Conduct.

In 2023, we began evaluating climate-related risks and opportunities in our value chain, including engaging with suppliers to understand their carbon footprints and driving efficiency in our global logistics. Our procurement teams have also progressed a number of initiatives to drive efficiency and sustainability in our logistics.

Climate and Sustainability Reporting and Regulation

The past several years have seen an unprecedented increase in interest and focus on sustainability and climate change, with an associated increase in global regulation. Various jurisdictions around the world in which we operate, including the European Union, the U.S., the United Kingdom, Australia, and certain U.S. states, have proposed or adopted new regulations related to sustainability and climate reporting. These and potential future regulations and policies, which include increased mandatory reporting, disclosure and assurance, including potential changes in procurement policies and procedures, could significantly increase our operational and compliance costs. We closely monitor developments in sustainability- and climate-related regulation and their associated impacts on our operations. As described above, we have a comprehensive sustainability program that seeks to manage the risks and opportunities associated with sustainability and climate change. For more information on the risk of sustainability- and climate-related regulation, see Item 1A - Risk Factors.

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Executive Officers

The following table sets forth certain information with respect to the executive officers of the Company as of February 26, 2024:

Gunnar Kleveland, 54, President and Chief Executive Officer, joined the Company in 2023. He has served the Company as President and Chief Executive Officer since September 2023. Prior to joining the Company, Mr. Kleveland served as President and Chief Executive Officer of Textron Specialized Vehicles Inc. He also served as the President of TRU Simulation + Training Inc. and Executive Vice President of Integrated Operations for Bell Helicopter Textron Inc. Prior to joining Textron in 2004, Mr. Kleveland was a fighter pilot in the Royal Norwegian Air Force (RNoAF) and finished his 15-year career in the air force as the Chief of Flight Safety.

Robert D. Starr, 56, Executive Vice President and Chief Financial Officer, joined the Company in 2023. Prior to joining the Company, he served for 18 months as Chief Financial Officer of Fairbanks Morse Defense, a privately-held supplier of naval power and propulsion systems. He previously spent 12 years at Kaman Corporation where he served as Chief Financial Officer for 8 years and VP, Treasurer for 4 years. Before joining Kaman, Mr. Starr held increasingly senior treasury roles at large publicly listed companies including Crane Co., Aetna and Fisher Scientific International. Early in his career he worked in investment banking both domestically and internationally across a broad range of industries.

Daniel A. Halftermeyer, 62, President – Machine Clothing, joined the Company in 1987. Mr. Halftermeyer has served the Company as President – Machine Clothing since February 2012. He previously served the Company as President – Paper Machine Clothing and Engineered Fabrics from August 2011 to February 2012, as President – Paper Machine Clothing from January 2010 until August 2011, Group Vice President – Paper Machine Clothing Europe from 2005 to August 2008, Vice President and General Manager – North American Dryer Fabrics from 1997 to March 2005, and Technical Director – Dryer Fabrics from 1993 to 1997. He held various technical and management positions in St. Stephen, South Carolina, and Sélestat, France, from 1987 to 1993.

Greg Harwell, 60, President – Albany Engineered Composites, joined the Company in 2019. Mr. Harwell has served the Company as President – Albany Engineered Composites since November 2019. Prior to joining the Company, he served as President of Aerostructures for Precision Castparts (PCC) managing all aspects of the organization for the Aerostructures division. He also served as Vice President and General Manager in charge of Global Operations Strategy at Alcoa Fastening Systems and Rings, and before November 2014 was responsible for multiple operations within Alcoa Fastening Systems. From June 2019 until he joined Albany International, Mr. Harwell was a consultant to Arlington Capital Partners, providing M&A advisory services.

Alice McCarvill, 59, Executive Vice President – Human Resources and Chief Human Resources Officer, joined the Company in 2018. Ms. McCarvill has served the Company as Executive Vice President – Human Resources and Chief Human Resources Officer since February 2019. She joined the Company in March 2018 as Executive Vice President- Human Resources. Prior to 2018 she was Group VP Human Resources for Arconic Engineered Products and Solutions.

Joseph M. Gaug, 60, Vice President – General Counsel and Secretary, joined the Company in 2004. Mr. Gaug has served the Company as Vice President – General Counsel and Secretary since May 2020. He previously served as Associate General Counsel from 2004 and as Associate General Counsel and Assistant Secretary from 2006 to May 2020. Prior to 2004 he was a principal at McNamee, Lochner, Titus & Williams, PC.

Robert A. Hansen, 66, Senior Vice President and Chief Technology Officer, joined the Company in 1981. Mr. Hansen has served the Company as Senior Vice President and Chief Technology Officer since January 2010. He previously served as Vice President – Corporate Research and Development from April 2006 to January 2010, and Director of Technical and Marketing – Europe Press Fabrics from 2004 to April 2006. From 2000 to 2004, he served as Technical Director – Göppingen, Germany. Before 2000, he served the Company in a number of technical management and research and development positions in Europe and the U.S.

John J. Tedone, 59, Vice President – Controller and Chief Accounting Officer, joined the Company in 2023. Prior to joining the Company, Mr. Tedone was the Chief Accounting Officer at Eos Energy Enterprises, Inc., a developer and manufacturer of energy storage solutions, where he oversaw the accounting, SEC reporting, tax, treasury, and risk management functions. Prior to Eos Energy Enterprises, Inc., Mr. Tedone served as Vice President, Finance and Chief Accounting Officer of Lydall, Inc. He previously spent 16 years at Kaman Corporation where he served as the

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Vice President, Finance and Chief Accounting Officer from 2007 to 2020. Earlier in his career he held finance and accounting roles of increasing responsibility at Diageo NA, United Technologies Corp., and KPMG.

Governance

We are incorporated under the laws of the State of Delaware and are the successor to a New York corporation originally incorporated in 1895, which was merged into the ~~company~~Company in August 1987 solely for the purpose of changing the domicile of the corporation. References to the Company that relate to any time prior to the August 1987 merger should be understood to refer to the predecessor New York corporation.

We embrace uncompromising honesty and behave ethically and fairly. We are committed to following the laws, regulations, standards, and ethical practices everywhere we do business. Ethics and compliance play an integral part in our decision making and business operations. Our Corporate Governance Guidelines, Business Ethics Policy, and Code of Ethics for the Chief Executive Officer, Chief Financial Officer, and Controller, and the charters of the Audit, Compensation, and Governance Committees of the Board of Directors are available at the Corporate Governance section of our website (www.albint.com).

Data security is a top priority at the Company. To protect our Company and customer data, we employ industry best practices and adhere to the Center for Internet Security ("CIS") 20 and National Institute of Standards and Technology ("NIST") SP 800-171 cyber security frameworks. Our Data Security strategy is overseen by the Audit Committee of our Board of Directors, regularly reviewed at the executive level, directed by our Chief Information Officer, and managed by our Enterprise Cyber Security (ECS) team. ~~Information~~ For information on our approach, tosee ~~data~~Item ~~security~~1C, isCybersecurity ~~available~~ in this Part I and the Sustainability section of our website (at www.albint.com).

~~Our~~Regulatory current reports on Form 8-K, quarterly reports on Form 10-Q, and annual reports on Form 10-K are electronically filed with the Securities and Exchange Commission (the “SEC”), and all such reports and amendments to such reports filed subsequent to November 15, 2002, have been and will be made available, free of charge, through our website (www.albint.com) as soon as reasonably practicable after such filing. The public may read and copy any materials filed by the Company with the SEC at the SEC’s Public Reading Room at 100 F Street, N.E., Room 1580, Washington, D.C. The public may obtain information on the operation of the Public Reading Room by calling the SEC at 1-800-SEC-0330. The SEC maintains a website (www.sec.gov) that contains reports, proxy, information statements, and other information regarding issuers that file electronically with the SEC.Matters

9 Our AEC segment business is heavily regulated. We may contract with U.S. Government agencies and entities, or we are a subcontractor to an OEM who contracts directly with U.S. Government agencies and entities. We must comply with, and are affected by, laws and regulations relating to the formation, administration and performance of U.S. Government contracts and contracts with foreign governments. The U.S. Government, and other foreign governments, may terminate any government contract at their convenience or for default, if we fail to meet specified performance measurements. If such contracts were to be terminated for convenience, we would generally be entitled to receive payment for work completed and allowable termination and cancellation costs. If the U.S. Government, and other foreign governments, terminate a contract due to our default, generally, we would only be paid for work that has been accepted by our customer and our customer can require us to pay the differential between the original contract price and cost to re-procure the contract items, net of work accepted from the original contract. In addition, we can be held liable for damages resulting from our default and may be responsible to provide transition services to another supplier or the customer.

Available Information

Our principal executive offices are located at 216 Airport Drive, Rochester, New Hampshire 03867. Our telephone number is 603-330-5800 and our website address www.albint.com.

Our current reports on Form 8-K, quarterly reports on Form 10-Q, and annual reports on Form 10-K, proxy statements for our annual stockholders' meetings and amendments to those reports are electronically filed with the Securities and Exchange Commission (the “SEC”), and all such reports and amendments to such reports filed subsequent to November 15, 2002, have been and will be made available, free of charge, through our website at www.albint.com as soon as reasonably practicable after such filing. In addition, copies of our Annual Report on Form 10-K will be made available, free of charge, upon written request.

We make our website content available for information purposes only. It should not be relied upon for investment purposes, nor is it incorporated by reference into this Annual Report on Form 10-K.

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Item 1A. RISK FACTORS

The risks and uncertainties described below are those that we have identified as material, but are not the only risks and uncertainties facing the Company. This list is not all-inclusive or necessarily in order of importance. If any of the events contemplated by the following risks occur, our business, financial condition, or results of operations could be materially adversely affected. Some of these risks are described below and in the documents incorporated by reference, and investors should take these risks into account when evaluating any investment decision involving the Company.

Risks related to our business and operations

~~The~~We ~~effects~~may offail ~~COVID-19~~to ~~and~~realize ~~other~~all ~~potential~~of ~~future~~the ~~public~~anticipated ~~health~~benefits ~~crises,~~of ~~epidemics,~~the ~~pandemics~~acquisition orof ~~similar~~Heimbach ~~events~~or onthose ~~our~~benefits ~~business,~~may ~~operating~~take ~~results,~~longer ~~financial~~to ~~condition~~realize ~~and~~than ~~cash flows are uncertain~~expected.

~~The~~We ~~public~~are ~~health~~devoting ~~crisis~~significant ~~caused~~management byattention ~~the~~to ~~COVID-19~~integrating ~~pandemic and~~ the ~~measures~~business ~~being~~practices ~~taken~~and byoperations ~~governments,~~of ~~businesses,~~Heimbach. ~~and~~We ~~the~~may ~~public~~experience atdisruptions ~~large~~ to ~~limit~~our ~~COVID-19's~~business ~~spread has had~~and, ~~and~~if ~~are~~integrated ~~expected to continue to have~~ineffectively, ~~certain~~it ~~negative~~could ~~effects~~restrict on the ~~markets~~realization weof ~~serve.~~the ~~These~~full ~~effects~~expected ~~include~~benefits ~~deteriorating general economic conditions in many regions~~ of the ~~world,~~acquisition. ~~increased~~The ~~unemployment,~~failure ~~decreases~~to inmeet ~~disposable~~the ~~income,~~challenges ~~decline~~involved in ~~consumer confidence, and changes in consumer spending habits. In~~ the ~~U.S.~~integration process and ~~in several other countries these effects appear~~ to berealize on the ~~wane. Nevertheless,~~anticipated ~~the~~benefits ~~evolution~~ of the ~~pandemic,~~acquisition ~~governments’~~of ~~responses~~Heimbach tocould ~~the~~cause ~~pandemic,~~an ~~and~~interruption ~~individuals’~~or ~~behavior~~loss inof ~~response~~momentum toin ~~the~~our ~~pandemic~~operations and ~~its~~could ~~effects,~~adversely inaffect ~~aggregate,~~our ~~continue to impact~~ business, ~~conditions~~financial incondition ~~varied~~ and ~~unpredictable~~results ~~ways.~~of ~~Certain adverse impacts specific to the Company include, without limitation:~~operations.

~~• During~~Difficulties ~~2022, some employees~~ in ~~various plants contracted~~ the ~~COVID-19~~integration ~~virus, which led to workforce absences~~ of ~~employees that contracted~~ the ~~virus~~acquired ~~and~~business ~~others that~~ may ~~have~~include ~~been~~rationalizing ~~exposed.~~the ~~Highly~~operations, ~~contagious~~processes ~~diseases~~and ~~such~~systems asof ~~COVID-19 create~~ the ~~risk~~acquired ~~that~~business, weretaining ~~may~~and ~~need~~motivating tokey ~~shut~~management ~~down~~and ~~one of our facilities for an extended period of time~~employees, ~~which could increase our costs~~ and ~~affect~~integrating ~~our~~existing ~~ability~~business torelationships ~~meet~~with ~~commitments~~suppliers toand customers. In ~~2022,~~Even ~~although~~if weintegration ~~did~~is ~~not~~successful, ~~shut~~the ~~down~~financial ~~any~~and ofoperational ~~our~~results ~~plants~~may ~~due~~differ tomaterially ~~COVID-19,~~from ~~production~~our atassumptions ~~some~~and ~~plants~~forecasts ~~was~~due ~~affected~~to byunforeseen ~~government~~expenses, ~~shutdown~~delays, ~~orders~~conditions inand ~~areas adjacent to those plants~~liabilities. ~~There~~ isIn noaddition, ~~guarantee~~we ~~that~~may ~~future~~incur ~~government~~unanticipated ~~shutdown~~costs ~~orders,~~ or ~~our~~expenses ~~own~~following ~~future~~an ~~shutdowns~~acquisition, ~~should~~including ~~they~~post-closing ~~occur,~~asset ~~will~~impairment ~~not~~charges, ~~have~~expenses aassociated ~~more~~with ~~significant~~eliminating ~~impact~~duplicate onfacilities, ~~our~~and ~~production~~other liabilities.

~~• Behavioral~~Furthermore, ~~changes that have occurred during~~ the ~~pandemic~~acquisition ~~have~~of ~~impacted~~Heimbach ~~demand~~may ~~for~~result ~~various~~in ~~products~~material ~~that~~unanticipated ~~are~~problems, ~~made~~expenses, ~~with~~charges, MCliabilities, ~~fabrics.~~competitive ~~The~~responses, ~~above~~loss ~~effects~~of ~~could~~customers ~~have~~and another ~~adverse~~business ~~impact on demand for publication paper grades~~relationships, and ~~perhaps~~diversion ~~other grades~~ of ~~paper,~~management’s ~~including~~attention. ~~without~~Additional ~~limitation~~integration ~~packaging~~challenges ~~paper~~may ~~grades,~~include asdifficulty ~~well~~in asachieving onanticipated ~~demand~~cost ~~for~~savings, ~~non-woven~~synergies, ~~fabrics~~business opportunities and ~~fiber~~growth ~~cement~~prospects ~~products~~from ~~used in~~ the ~~construction industry~~acquisition; ~~such~~difficulties ~~impacts would~~ in ~~turn adversely impact demand for~~ the MCintegration ~~products~~of ~~used~~operations toand ~~manufacture~~systems, ~~such~~including ~~paper~~pricing ~~grades~~and ormarketing ~~building~~strategies; ~~products.~~and Adifficulties ~~decline~~ in ~~revenues~~conforming ~~would~~standards, ~~lead~~controls, toprocedures, ~~lower~~financial ~~gross~~reporting ~~profit~~and onaccounting ~~those products~~ and ~~the~~other ~~possibility~~policies, ofbusiness ~~unabsorbed~~cultures ~~fixed~~and ~~manufacturing~~compensation ~~costs~~structures.

•Many ~~The~~of ~~Albany~~these ~~Engineered~~factors ~~Composites~~will ~~segment~~be ~~generates~~outside ~~a significant portion~~ of ~~its~~our ~~revenue~~control ~~from commercial aerospace programs~~ and ~~contracts~~any ~~for~~one ~~the U.S. Department~~ of ~~Defense.~~them ~~The~~could ~~COVID-19~~result ~~pandemic~~in ~~has~~increased ~~significantly~~costs, ~~impacted~~including ~~passenger~~restructuring ~~air travel which~~charges, decreases in ~~turn,~~revenues ~~has impacted~~ and isdiversion ~~likely to continue to impact the commercial aerospace programs that provide a source~~ of ~~revenue~~management’s ~~for~~time ~~the Company. Such programs could be delayed or canceled which, in addition to a loss of revenue~~ and ~~gross profit~~energy, ~~could lead to write-offs for Company investments for those programs. The pandemic has resulted in significant costs for the U.S. government,~~ which could ~~lead~~adversely toaffect ~~program~~our ~~delays~~business, orfinancial ~~cancellations,~~condition and aresults ~~corresponding~~of ~~decrease in our revenues~~operations.

•Our ~~Disruptions~~acquisition inof ~~supply~~Heimbach ~~chains~~involves ~~have~~inherent ~~placed~~risks, ~~constraints~~and onpresents ~~our~~financial, ~~ability~~managerial toand ~~source~~operational ~~key~~challenges ~~raw~~that ~~materials~~may ~~and~~adversely ~~services~~affect ~~which could impact~~ our ~~ability~~operating toresults ~~deliver~~and ~~products~~financial ~~to customers as scheduled~~condition. ~~Additionally, manufacturing or delivery costs could increase.~~

•Our ~~While~~growth westrategy doincludes ~~not~~acquisitions. ~~anticipate~~Acquisitions ~~material~~involve ~~impairments~~various oninherent ~~our~~risks, ~~assets~~such as aour ~~result~~ability ofto ~~COVID-19,~~assess ~~changes~~accurately inthe ~~our~~value, ~~expectations~~strengths, ~~for~~weaknesses, ~~net~~internal ~~sales~~controls, ~~earnings~~contingent ~~potential~~ and ~~cash~~other ~~flows~~liabilities ~~associated with our intangible assets~~ and ~~goodwill~~potential ~~that~~profitability ~~fall~~of ~~below our current projections could result in such assets being impaired~~Heimbach.

10Heimbach was a privately held company that only closed its books and records annually on December 31st. Interim financial information was limited and reproducing full historical financial records may be difficult. As the Company integrates Heimbach, management could encounter material differences between the accounting policies of the two companies or the financial results of Heimbach for the periods after the fiscal year 2022 audited financial statements, including additional liabilities or other financial information that was not available during due diligence or in the initial period after the closing of the acquisition that, had we known, could have resulted in changes to financial projections, assumptions and estimates used in the fair value of assets acquired and liabilities assumed, assessments used to determine the applicability of certain SEC disclosure requirements or the expected benefit of the transaction.

While we conducted financial and other due diligence in connection with this acquisition and we generally seek some form of limited protection, such as warranties from the seller, insurance coverage, and placing a portion of the purchase price in escrow to cover potential tax liabilities, Heimbach may have liabilities that are not accurately assessed or brought to our attention at the time of the acquisition. Further, indemnities, insurance or escrow arrangements may not fully cover such matters.

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AThe ~~number~~acquisition ofmay ~~industry~~present ~~factors have had~~financial, managerial and inoperational ~~future periods could have~~challenges, ~~an adverse impact on sales~~including, ~~profitability~~ ~~and~~but ~~cash~~not ~~flow~~limited ~~in the Company’s MC and AEC segments~~to:

~~Significant~~•Increased ~~consolidation~~foreign and rationalization in the paper industry in recent years have reduced global consumption of paper machine clothing in certain markets and for certain grades. Developments in digital media have adversely affected demand for newsprint and for printing and writing grades of paperoperations, ~~which~~often ~~has~~with ~~had,~~unique ~~and~~issues isrelating ~~likely~~ to ~~continue~~corporate ~~to have~~culture, ancompliance ~~adverse~~with ~~effect~~legal on demand for paper machine clothing in those markets. At the same time, technological advances in papermaking, including in paper machine clothing, while contributing to the papermaking efficiency of customers, have in some cases lengthened the useful life of our products and ~~reduced~~regulatory ~~the~~requirements ~~number of pieces required to produce the same volume of paper. These factors have had,~~ and inother ~~the future are likely to have, an adverse effect on paper machine clothing sales.~~challenges;

~~The~~•Assumption ~~market~~of ~~for~~known ~~paper~~and ~~machine~~unknown ~~clothing~~liabilities, inincluding ~~recent~~environmental ~~years has been characterized by continuous pressure to provide more favorable commercial terms~~liabilities, ~~which~~and ~~has~~exposure ~~continued~~ to place pressure on our operating results. We expect such pressure to remain intense in all paper machine clothing markets, especially during periods of customer consolidation, plant closures, or when major contracts are being renegotiated. The emergence of Chinese competitors exacerbates this risk.litigation;

~~Similar~~•Increased ~~pressures~~levels ~~exist in the markets in which AEC competes. During 2019, Net sales under the LEAP contract exceeded $210 million. Due to the grounding~~ of ~~the~~debt ~~Boeing~~or ~~737~~dilution MAX, the destocking of the supply chain and the impact of the pandemic on air travel, Net sales generated by the LEAP contract were approximately $100 milllion in each of 2020 and 2021, before improving to ~~$165~~existing ~~million in 2022.~~ stockholders;

~~Additionally,~~•New many of AEC’s customers, as well as the companies supplied by our customers are under pressure to achieve acceptable returns on their substantial investments in recent years in new technologies, new programs and ~~new~~proposed ~~product~~regulations ~~introductions.~~limiting ~~This has contributed to a relentless focus on reducing costs, resulting in continuous pressure for cost reduction and pricing improvement throughout~~ the ~~supply~~enforcement ~~chain. The recent wave~~ of ~~consolidation~~noncompetition inand ~~the~~nonsolicitation ~~aerospace industry could continue or intensify these pressures.~~agreements;

~~The~~•Production ~~long-term~~delays ~~organic~~associated ~~growth~~with ~~prospects~~consolidating ofacquired ~~AEC~~facilities ~~are~~and ~~subject~~manufacturing tooperations; ~~a number of risks~~and

•Potential cybersecurity risks, as acquired systems may not possess the appropriate security measures.

We cannot assure that all potential risks or liabilities are adequately discovered, disclosed, or understood in each instance. In addition, internal controls over financial reporting of acquired companies may not be compliant with required standards. Issues may exist that could rise to the level of significant deficiencies or, in some cases, material weaknesses, particularly with respect to foreign companies or non-public U.S. companies. Customer dissatisfaction or performance problems with an acquired business, technology, service or product could also have a material adverse effect on our reputation and business.

The effects of the COVID-19 pandemic and other potential future public health crises, epidemics, pandemics or similar events on our business, operating results, financial condition and cash flows are uncertain.

The public health crisis caused by the COVID-19 pandemic and the measures taken by governments, businesses, and the public at large to limit the COVID-19 pandemic's spread has had, and may continue to have, certain negative effects on the markets we serve. These effects included deteriorating general economic conditions in many regions of the world, increased unemployment, decreases in disposable income, decline in consumer confidence, and changes in consumer spending habits. In the U.S. and in several other countries these effects appear to be on the wane. Nevertheless, the evolution of the pandemic, or a new pandemic, governments’ responses to such pandemic(s), and individuals’ behavior in response to pandemic and its effects, in aggregate, continue to impact business conditions in varied and unpredictable ways. Certain adverse impacts specific to the Company include, without limitation:

•During 2023, 2022 and 2021, some employees in various plants contracted the COVID-19 virus, which led to workforce absences of employees that contracted the virus and others that may have been exposed. Highly contagious diseases such as COVID-19 create the risk that we may need to shut down one or more of our facilities for an extended period of time, which could increase our costs and affect our ability to meet commitments to customers. Although we did not shut down any of our plants due to COVID-19 during the height of the pandemic, production at some plants was affected by government shutdown orders in areas adjacent to those plants. There is no guarantee that future government shutdown orders, or our own future shutdowns, should they occur, will not have a more significant impact on our production.

•Behavioral changes that have occurred during and since the pandemic have impacted demand for various products that are made with MC fabrics. The above effects could continue to have an adverse impact on demand for publication paper grades, and perhaps other grades of paper, including without limitation packaging paper grades, as well as on demand for non-woven fabrics and fiber cement products used in the construction industry; such impacts would in turn adversely impact demand for the MC products used to manufacture such paper grades or building products. A decline in revenues would lead to lower gross profit on those products and the possibility of unabsorbed fixed manufacturing costs.

•The AEC segment generates a significant portion of its revenue from commercial aerospace programs, as well as from contracts related to U.S. Department of Defense programs. The COVID-19 pandemic significantly impacted passenger air travel which, in turn, impacted, and may continue to impact, the commercial aerospace programs that provide a source of revenue for the Company. Such programs could be delayed or canceled, which, in addition to a loss of revenue and gross profit, could lead to write-offs for Company investments for those programs. The pandemic has resulted in significant costs for the U.S. government, which could lead to program delays or cancellations, and a corresponding decrease in our revenues.

•Disruptions in supply chains have placed constraints on our ability to source key raw materials and services which could impact our ability to deliver products to customers as scheduled. Additionally, manufacturing or delivery costs could increase.

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•While we do not anticipate material impairments on our assets as a result of the COVID-19 pandemic, changes in our expectations for net revenues, earnings potential and cash flows associated with our intangible assets and goodwill that fall below our current projections could result in such assets being impaired.

A number of industry factors have had, and in future periods could have, an adverse impact on net revenues, profitability and cash flow in the Company’s MC and AEC segments.

Significant consolidation and rationalization in the paper industry in recent years have reduced global consumption of paper machine clothing in certain markets and for certain grades. Developments in digital media have adversely affected demand for newsprint and for printing and writing grades of paper, which has had, and is likely to continue to have, an adverse effect on demand for paper machine clothing in those markets. At the same time, technological advances in papermaking, including in paper machine clothing, while contributing to the papermaking efficiency of customers, have in some cases lengthened the useful life of our products and reduced the number of pieces required to produce the same volume of paper. These factors have had, and in the future are likely to have, an adverse effect on paper machine clothing net revenues.

The market for paper machine clothing in recent years has been characterized by continuous pressure to provide more favorable commercial terms, which has continued to place pressure on our operating results. We expect such pressure to remain intense in all paper machine clothing markets, especially during periods of customer consolidation, plant closures, or when major contracts are being renegotiated. The emergence of Asian competitors exacerbates this risk.

Similar pressures in the markets in which AEC competes along with labor shortages could have an impact on AEC revenues. During 2019, Net revenues under the LEAP contract exceeded $210 million, only to significantly decline in the years that followed due to several factors outside of the Company's control, including the temporary Boeing 737 MAX groundings and the COVID-19 pandemic. Such events drove a reduction in demand for LEAP components and disrupted supply chains for an extended period of time. While these factors have largely subsided, and Net revenues have recovered steadily year over year and now approach 2019 levels, factors like this can recur without notice, on this or on other programs, and cause a detriment to the AEC segment.

Additionally, many of AEC’s customers, as well as the companies supplied by our customers, are under pressure to improve returns on their substantial investments in recent years in new technologies, new programs and new product introductions. This has contributed to a relentless focus on capital investments to reduce costs, resulting in continuous pressure for cost reductions and customer pricing improvement throughout the supply chain. Future consolidation in the aerospace industry could intensify these pressures.

The long-term organic growth prospects of AEC are subject to a number of risks.

The prospect of future successful organic growth in AEC depends in large part on its ability to maintain and grow a healthy pipeline of potential new products and applications for its technologies, to transform a sufficient number of those potential opportunities into commercial supply agreements, and to then execute its obligations under such agreements. In addition, existing and future supply agreements, especially for commercial and defense aerospace, are subject to the same curtailment or cancellation risks as the programs they support.

AEC is currently working on a broad portfolio of potential new product applications in the aerospace industry. These development projects may or may not result in commercial supply opportunities. In the event that AEC succeeds in developing products and securing contracts to manufacture and supply them, it will face the same industrialization and manufacturing ramp-up risks that it currently faces in its existing contracts, and AEC may or may not be successful in meeting its obligations under these contracts. Failure to manage these development, commercialization and execution risks could have a material adverse impact on AEC’s prospects for revenue growth.

In addition to dealing with these development and manufacturing execution risks, future AEC growth will likely require increasingly larger amounts of cash to fund the investments in equipment, capital, and development efforts needed to achieve this growth. Until AEC is able to consistently generate cash flows sufficient to fund its existing operations and any future ~~investment~~investments needed to support its growth, it will remain dependent on the MC segment’s ability to generate cash. A significant decline in MC ~~sales~~net revenues, operating income or cash flows could therefore have a material adverse impact on AEC’s growth.

~~The U.S. Government’s Department of Defense (“DoD”) Cybersecurity Maturity Model Certification (“CMMC”) program introduces new and unique risks for DoD contractors~~ 15

Under the applicable federal regulations for DoD contractors, AEC is required to comply with the agencies current cybersecurity regulations. In addition to these current regulations, AEC will be required to comply with the new CMMC program requirements on future contracts as they are flowed down from our DoD prime customers in the coming years. Given the current and planned future portfolio of U.S. Government-related business, AEC expects to be required to comply fully with the highest levels of the planned CMMC framework and will potentially be subject to third-party or U.S. Government audit to certify our compliance. The CMMC compliance requirements are complex and the costs are significant. To the extent that AEC is unable to comply with the CMMC or other related cybersecurity

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~~requirements,~~The ~~AEC~~U.S. ~~may~~Government’s beDepartment ~~unable~~of toDefense ~~maintain~~(“DoD”) orCybersecurity ~~grow~~Maturity ~~its~~Model ~~business~~Certification on(“CMMC”) ~~programs~~program ~~with~~introduces ~~the~~new ~~DoD~~ and ~~its~~unique ~~prime~~risks ~~customers~~for DoD contractors.

Under the applicable federal regulations for DoD contractors, AEC is ~~subject~~required to ~~significant~~comply ~~risks~~with ~~related~~the agency's current cybersecurity regulations. In addition to these current regulations, AEC will be required to comply with the ~~potential~~new ~~manufacture~~CMMC program requirements on future contracts as they are flowed down from our DoD prime customers in the coming years. Given the current and ~~sale~~planned future portfolio of ~~defective~~U.S. ~~or non~~Government-~~conforming~~related ~~products~~business and based on the CMMC Proposed Rule released by the DoD in December 2023, AEC expects to be required to comply fully with CMMC Level 2 once the rule is finalized, and eventually CMMC Level 3 for certain programs as those requirements are further defined. This will require a CMMC Third-Party Assessment Organization (C3PAO) assessment for Level 2 certification, as well as a DCMA Defense Industrial Base Cybersecurity Assessment Center (DIBCAC) assessment for any required Level 3 certification. The CMMC compliance requirements are complex, the costs are significant, and the DoD timelines for certifications are aggressive. To the extent that AEC is unable to achieve the required CMMC certifications within the timeframes required by the DoD, AEC may be unable to maintain or grow its business with the DoD and its prime customers.

AEC ~~manufactures~~is ~~and~~subject ~~sells products that are incorporated into commercial and military aircraft. If AEC were~~ to ~~supply~~significant ~~products~~risks ~~with~~related ~~manufacturing defects, or products that failed~~ to ~~conform~~the topotential ~~contractual~~manufacture ~~requirements, we could be required to recall~~ and~~/or~~ ~~replace~~sale them, and could also be subject to substantial contractual damages or warranty claims from our customers. AEC could also be subject to product liability claims if such failures were to cause death, injury or losses to third parties, or damage claims resulting from the grounding of ~~aircraft into which such~~ defective or non-conforming products ~~had been incorporated~~. We are required to meet, and maintain continuous independent certification, to certain international industry standards including AS/EN9100 quality management system standards and Nadcap Special Processes certifications that are designed to assure rigorous quality standards are maintained throughout the aerospace industry supply chain. Additionally, we maintain product liability insurance and other insurance at levels we believe to be prudent and consistent with industry practice to help mitigate these risks, these coverages may not be sufficient to fully cover AEC’s exposure for such risks, which could have a material adverse effect on AEC’s results of operations and cash flows.

~~Deterioration~~AEC manufactures and sells products that are incorporated into commercial and military aircraft. If AEC were to supply products with manufacturing defects, or products that failed to conform to contractual requirements, we could be required to recall and/or replace them, and could also be subject to substantial contractual damages or warranty claims from our customers. AEC could also be subject to product liability claims if such failures were to cause death, injury or losses to third parties, or damage claims resulting from the grounding of ~~global~~aircraft ~~economic~~into ~~conditions~~which such defective or non-conforming products had been incorporated. We are required to meet, and maintain continuous independent certification, to certain international industry standards including AS/EN9100 quality management system standards and Nadcap Special Processes certifications that are designed to assure rigorous quality standards are maintained throughout the aerospace industry supply chain. Additionally, although we maintain product liability insurance and other insurance at levels we believe to be prudent and consistent with industry practice to help mitigate these risks, these coverages may not be sufficient to fully cover AEC’s exposure for such risks, which could have ana material adverse ~~impact~~effect on ~~the Company~~AEC’s ~~business~~ ~~and~~ results of operations and cash flows.

Deterioration of global economic conditions could have an adverse impact on the Company’s business and results of operations.

The Company identifies in this section a number of risks, the effects of which may be exacerbated by an unfavorable economic climate. For example, a recession could lead to lower consumption in all paper grades including tissue and packaging, which would not only reduce consumption of paper machine clothing but could also increase the risk of greater price competition in the machine clothing industry.

Similarly, in the Company’s AEC segment, a decline in global or regional economic conditions could result in lower orders for aircraft or aircraft engines, or the cancellation of existing orders, which would in turn result in reduced demand for the AEC components utilized on such aircraft or engines. ~~Demand~~Customer demand for AEC’s ~~light-weight~~lightweight composite aircraft components is driven by market demand for the lighter, more fuel-efficient aircraft engine and other applications into which they are incorporated, such as the CFM International LEAP engine. Fuel costs are a significant part of operating costs for airlines and, in many cases, may constitute a carrier’s single largest operating expense. A sustained drop in oil prices, and related decline in the price of jet fuel, could prompt airlines to defer orders or delivery dates for such newer, more fuel-efficient airframes and aircraft engines, as the urgency to reduce fuel consumption may be lessened. In addition, any economic conditions that led to sustained high interest rates could affect the airline’s ability to finance new aircraft and engine orders.

Weak or unstable economic conditions also increase the risk that one or more of our customers ~~could~~might be unable to pay outstanding accounts receivable, whether as the result of bankruptcy or an inability to obtain working capital financing from banks or other lenders. Furthermore, both the MC and AEC business segments manufacture products that are custom-designed for a specific customer application. In the event of a customer liquidity issue, the Company could also be required to write off amounts that are included in Contract assets~~,net~~ or Inventories. In the case of AEC, such write-offs could also include investments in equipment, tooling, and non-recurring engineering costs, some of which could be significant depending on the program.

~~The Company continues to experience increasing labor, raw material, energy, and logistic costs due to supply chain constraints and inflationary pressures~~16

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The Company continues to experience increasing labor, raw material, energy, and logistics costs due to supply chain constraints and inflationary pressures.

The Company is a significant user of raw materials that are based on petroleum or petroleum derivatives. Increases in the prices of petroleum or petroleum derivatives, particularly in regions that are experiencing higher levels of inflation, could increase our costs, and we may not be able to fully offset the effects through price increases, productivity improvements, and cost-reduction programs.

There is a limited number of suppliers of polymer fiber and monofilaments, key raw materials used in the manufacture of machine clothing, and of carbon fiber and carbon resin, key raw materials used by AEC. In addition, there are a limited number of suppliers of some of the equipment used in each of the MC and AEC segments. The risks associated with limited suppliers increased as a result of the COVID-19 pandemic, which has put pressure on the supply chain in general, and on transportation companies that deliver raw materials to us and our products to customers, in particular. While we have been able to meet our raw material and equipment needs, the limited number of suppliers of these items creates the potential for disruptions in supply. AEC currently relies on single suppliers under contracts we have with SAFRAN to meet the carbon fiber and carbon resin requirements for the LEAP program. Lack of supply, delivery delays, or quality issues relating to supplied raw materials or for our key manufacturing equipment could harm our production capacity. Such issues could require the Company to attempt to qualify one or more additional suppliers, which could be a lengthy, expensive and uncertain process. These disruptions could make it difficult to supply our customers with products on time, which could have a negative impact on our business, financial condition, and results of operations.

12The Company also relies on the labor market in many regions of the world to meet our operational requirements, advance our technology and differentiate our products. Low rates of unemployment in key geographic areas in which the Company operates can lead to high rates of turnover and loss of critical talent, which could in turn lead to higher labor costs.

Our ability to attract and retain business and employees may depend on our reputation in the marketplace.

We believe our brand names and our reputation are important corporate assets that help distinguish our products and services from those of our competitors and also contribute to our efforts to recruit and retain talented employees. However, our reputation is susceptible to material damage by events such as disputes with customers or competitors, cybersecurity incidents or service outages, internal control deficiencies, delivery failures, regulatory compliance violations, government investigations or legal proceedings. We may also experience reputational damage from employees, advocacy groups, regulators, investors and other stakeholders that disagree with the way we conduct our business. Similarly, our reputation could be damaged by actions or statements by current or former customers, suppliers, employees, competitors, joint venture partners, adversaries in legal proceedings, legislators or government regulators, as well as members of the investment community or the media, including social media influencers.

Our brand and reputation are also associated with our sustainability strategy, including our public commitments related to climate and the environment and DE&I. Our failure to achieve our commitments could harm our reputation and adversely affect our relationships with customers and suppliers or our talent recruitment and retention efforts. In addition, positions we take or do not take on environmental or social issues may be unpopular with some of our employees, suppliers, customers or potential customers, which may in the future impact our ability to attract or retain employees, suppliers or customers. We also may choose not to conduct business with potential customers or suppliers or discontinue or not expand business with existing customers due to these positions.

There is a risk that negative or inaccurate information about the Company, even if based on rumor or misunderstanding, could adversely affect our business. Damage to our reputation could be difficult, expensive and time-consuming to repair, could make potential or existing customers reluctant to select us for new opportunities or could negatively impact our relationships with existing customers and suppliers, resulting in a loss of business, and could adversely affect our talent recruitment and retention efforts. Damage to our reputation could also reduce investor confidence in the Company, materially adversely affecting our share price.

Some of the Company’s competitors in the MC segment have the capability to make and sell paper machines and papermaking equipment as well as other engineered fabrics.

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oftechnological ~~suppliers~~competitiveness ~~of these items creates the potential for disruptions in supply. AEC currently relies on single suppliers under contracts they have with SAFRAN to meet the carbon fiber~~ and ~~carbon~~value ~~resin requirements for the LEAP program. Lack~~ of ~~supply, delivery delays, or quality issues relating to supplied raw materials or for~~ our ~~key manufacturing equipment could harm our production capacity. Such could require the Company to attempt to qualify one or more additional suppliers~~products, ~~which~~and ~~could be~~ a ~~lengthy,~~failure ~~expensive and uncertain process. These disruptions could make it difficult~~ to ~~supply~~do ~~our~~so ~~customers with products on time, which~~ could have a ~~negative~~material ~~impact~~adverse effect on our business, financial condition, and results of operations.

The Company also relies on the labor market in many regions of the world to meet our operational requirements, advance our technology and differentiate products. Low rates of unemployment in key geographic areas in which the Company operates can lead to high rates of turnover and loss of critical talent, which could in turn lead to higher labor costs.

Our ability to attract and retain business and employees may depend on our reputation in the marketplace

We believe our brand names and our reputation are important corporate assets that help distinguish our products and services from those of our competitors and also contribute to our efforts to recruit and retain talented employees. However, our reputation is susceptible to material damage by events such as disputes with customers or competitors, cybersecurity incidents or service outages, internal control deficiencies, delivery failures, compliance violations, government investigations or legal proceedings. We may also experience reputational damage from employees, advocacy groups, regulators, investors and other stakeholders that disagree with the way we conduct our business. Similarly, our reputation could be damaged by actions or statements by current or former customers, suppliers, employees, competitors, joint venture partners, adversaries in legal proceedings, legislators or government regulators, as well as members of the investment community or the media, including social media influencers.

Our brand and reputation are also associated with our public commitments to various corporate environmental, social and governance (“ESG”) initiatives, including our goals for sustainability and inclusion and diversity. Our failure to achieve our commitments could harm our reputation and adversely affect our relationships with customers and suppliers or our talent recruitment and retention efforts. In addition, positions we take or do not take on social issues may be unpopular with some of our employees or with our customers or potential customers, which may in the future impact our ability to attract or retain employees or customers. We also may choose not to conduct business with potential customers or suppliers or discontinue or not expand business with existing customers due to these positions.

There is a risk that negative or inaccurate information about the Company, even if based on rumor or misunderstanding, could adversely affect our business. Damage to our reputation could be difficult, expensive and time-consuming to repair, could make potential or existing customers reluctant to select us for new opportunities or could negatively impact our relationships with existing customers and suppliers, resulting in a loss of business, and could adversely affect our talent recruitment and retention efforts. Damage to our reputation could also reduce investor confidence in us, materially adversely affecting our share price.

Some of the Company’s competitors in the MC segment have the capability to make and sell paper machines and papermaking equipment as well as other engineered fabrics

Although customers historically have tended to view the purchase of paper machine clothing and the purchase of paper machines as separate purchasing decisions, the ability to bundle fabrics with new machines and after-market services could provide an advantage to our competitors. This underscores the importance of our ability to maintain the technological competitiveness and value of our products, and a failure to do so could have a material adverse effect on our business, financial condition, and results of operations.

Moreover, we cannot predict how the nature of competition in this segment may continue to evolve as a result of future consolidation among our competitors, or consolidation involving our competitors and other suppliers to our customers.

Conditions in the paper industry have required, and could further require, the Company to reorganize its operations, which could result in significant expense and could pose risks to the Company’s operations.

In the recent past, we engaged in significant restructuring that included the closing of manufacturing operations. These restructuring activities were intended to match manufacturing capacity to shifting global demand, and also to improve the efficiency of manufacturing and administrative processes. Future shifting of customer demand, the need to reduce costs, or other factors could cause us to determine in the future that additional restructuring steps are required. Restructuring involves risks such as employee work stoppages, slowdowns, or strikes, which can threaten uninterrupted production, maintenance of high product quality, meeting of customers’ delivery deadlines, and maintenance of administrative processes. Increases in output in remaining manufacturing operations can likewise impose stress on these remaining facilities as they undertake the manufacture of greater volume and, in some cases, a greater variety of products. Competitors can be quick to attempt to exploit these situations. Although we plan each step of the process carefully, and work to reassure customers who could be affected that their requirements will continue to be met, we could lose customers and associated revenues if we fail to execute properly on any restructuring.

13Natural disasters at one or more of our facilities could make it difficult for us to meet our supply obligations to our customers.

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uninterrupted production, maintenance of high product quality, meeting of customers’ delivery deadlines, and maintenance of administrative processes. Increases in output in remaining manufacturing operations can likewise impose stress on these remaining facilities as they undertake the manufacture of greater volume and, in some cases, a greater variety of products. Competitors can be quick to attempt to exploit these situations. Although we plan each step of the process carefully, and work to reassure customers who could be affected that their requirements will continue to be met, we could lose customers and associated revenues if we fail to execute properly.

Natural disasters at one or more of our facilities could make it difficult for us to meet our supply obligations to our customers

AEC’s production of LEAP engine components is currently located in three facilities. A natural disaster at any of these locations could have a significant adverse effect on AEC’s ability to timely satisfy orders for LEAP components. Production of almost all of AEC’s other legacy and growth programs – including components for the F-35, fuselage components for the Boeing 787, components for the CH-53K helicopter, and missile bodies for Lockheed Martin’s JASSM air-to-surface missiles – is located primarily in facilities in Salt Lake City, Utah or Boerne, Texas.

Significant consolidation of manufacturing operations in our MC segment over the past decade has reduced the number of facilities available to produce our products, and increased utilization significantly at remaining facilities. Not all product lines are produced at, or are capable of being produced at, all facilities. We have ~~Machine~~certain ~~Clothing~~MC facilities ~~located~~that ~~near~~are ~~Mexico~~located ~~City,~~in ~~which~~or ~~has~~near ~~been~~higher ~~identified~~risk asflood anzones ~~area~~in ~~vulnerable~~Mexico, toChina, ~~flood~~Italy, ~~storm surge and earthquake risks~~Germany, and ~~in the Pearl River Delta area of China~~Switzerland, ~~which~~that ~~has~~may ~~been~~be ~~identified as~~ vulnerable to flood, storm ~~and~~surge ~~storm~~or ~~surge~~earthquake risks.

A significant interruption in the operation of any one or more of our plants, whether as the result of a natural disaster or other causes, could significantly impair our ability to timely meet our supply obligations to customers being supplied from an affected facility. While the occurrence of a natural disaster or other business interruption event in an area where we have a facility may not result in any direct damage to the facility itself, it may cause disruptions in local transportation and public utilities on which such locations are reliant, and may also hinder the ability of affected employees to report for work. Although we carry property and business interruption insurance to help mitigate the risk of property loss or business interruption that could result from the occurrence of such events, such coverage may not be adequate to compensate us for all loss or damage that we may incur.

The Company’s insurance coverage may be inadequate to cover other significant risk exposures.

~~See "~~The Company ~~is subject to legal proceedings and legal compliance risks, and~~ has been named as defendant in a large number of suits relating to the actual or alleged exposure to "asbestos-containing products." In addition to asbestos-related claims, the Company may be exposed to other liabilities related to cyber incidents and the products and services we provide. AEC is engaged in designing, developing, and manufacturing components for commercial jet aircraft and defense and technology systems and products. We expect this portion of the business to grow in future periods. Although we maintain insurance for the risks associated with ~~this~~our ~~business~~businesses, there can be no assurance that the amount of our insurance coverage will be adequate to cover all claims or liabilities. In addition, there can be no assurance that insurance coverage will continue to be available to us in the future at a cost that is acceptable. Any material liability not covered by insurance could have a material adverse effect on our business, financial condition, and results of operations. Also see "The Company is subject to legal proceedings and legal compliance risks".

~~The Company has significant manufacturing operations outside of the U.S., which could involve many uncertainties~~18

We currently have manufacturing facilities outside the U.S. In 2022, 43% percent of consolidated Net sales were generated by our non-U.S. subsidiaries. Operations outside of the U.S. are subject to a number of risks and uncertainties, including: governments may impose limitations on our ability to repatriate funds; governments may impose withholding or other taxes on remittances and other payments from our non-U.S. operations, or the amount of any such taxes may increase; an outbreak or escalation of any insurrection or armed conflict may occur; governments may seek to nationalize our assets; or governments may impose or increase investment barriers or other restrictions affecting our business. In addition, emerging markets pose other uncertainties, including the protection of our intellectual property, pressure on the pricing of our products, and risks of political instability. The occurrence of any of these conditions could disrupt our business or prevent us from conducting business in particular countries or regions of the world.

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The Company has significant manufacturing operations outside of the U.S., which could involve many uncertainties.

We currently have manufacturing facilities outside the U.S. In 2023, 43 percent of consolidated Net revenues were generated by our non-U.S. subsidiaries. Operations outside of the U.S. are subject to a number of risks and uncertainties, including: governments may impose limitations on our ability to repatriate funds; governments may impose withholding or other taxes on remittances and other payments from our non-U.S. operations, or the amount of any such taxes may increase; an outbreak or escalation of any insurrection or armed conflict may occur; governments may seek to nationalize our assets; or governments may impose or increase investment barriers or other restrictions affecting our business. In addition, emerging markets pose other uncertainties, including the protection of our intellectual property, pressure on the pricing of our products, and risks of political instability. The occurrence of any of these conditions could disrupt our business or prevent us from conducting business in particular countries or regions of the world.

The military invasion of Ukraine by Russia, and the ensuing sanctions are likely to continue to have an impact on our business. We have already stopped shipping our products to Russia and are in the process of winding down a small joint venture in that country which supplied dryer fabrics to local papermakers, resulting in lost sales and possible future write-offs. However, we also expect that there could be further indirect impacts. For instance, the conflict has already caused disruption in the availability of shipping options between Asia and Europe. Supply chain disruptions could make it more difficult to find favorable pricing and reliable sources for the raw materials we need, putting upward pressure on our costs and increasing the risk that we may be unable to acquire the materials or services we need to continue to make and deliver certain products. Moreover, these same pressures could hinder our customers’ ability to source materials needed for their own manufacturing efforts, thereby reducing or slowing their demand for our products. There can be no assurance that we will be able to pass through input cost increases to our customers or to fully offset them via operational efficiencies. If we are unsuccessful in managing such cost increases, they could have a material adverse effect on our business, financial position, results of operations, and liquidity.

Geopolitical tensions have heightened elsewhere as well, including between China and Taiwan. MC has significant manufacturing operations in China and vendors that support AEC import significant materials from China, and any escalation in this region could also disrupt our business.

These ongoing conflicts, along with other geopolitical uncertainties such as the current conflict in the Middle East, could have broader adverse impacts on macroeconomic factors that impact our business, cash flows, financial condition and results of operations.

Changes in U.S. trade policy with foreign countries, or other changes in U.S. laws and policies governing foreign trade, as well as any responsive or retaliatory changes in regulations or policies by such countries, could have an adverse impact on our business, either directly or in the form of increased costs due to their impacts on our supply chain. While the direct impact to date of recent developments in global trade and tariff policy has not been significant, there is a risk that the impact of such developments on companies in our supply chain will be reflected in higher costs from affected suppliers.

In addition, our global presence subjects us to certain risks, including controls on foreign exchange and the repatriation of funds. While we have been able to repatriate current earnings in excess of working capital requirements from certain countries in which we operate without substantial governmental restrictions, there can be no assurance that we will be able to cost effectively repatriate foreign earnings in the future.

We might not be successful at acquiring, investing in or integrating businesses, entering into joint ventures or divesting businesses.

We have a history of making acquisitions and we expect to opportunistically seek to make acquisitions in the future. We are subject to numerous risks as a result of our acquisition strategy, including, but not limited to, the following:

•We may invest time and capital pursuing acquisitions that do not materialize;

•We may incur costs and expenses associated with any unidentified or potential liabilities of the acquired companies;

•We may not achieve anticipated revenue and cost benefits from the acquisitions;

~~•We may encounter unforeseen difficulties in integrating the acquired operations into our existing operations~~ 19

~~Our past or future acquisitions might not ultimately improve our competitive position and business.~~Index

•We may encounter unforeseen difficulties in integrating the acquired operations into our existing operations; and

•Our past or future acquisitions might not ultimately improve our competitive position and business.

We also periodically evaluate, and have engaged in, the disposition of assets and businesses. Divestitures could involve difficulties in the separation of operations, services, products and personnel, the diversion of management’s attention, the disruption of our business and the potential loss of key employees. After reaching an agreement with a buyer for the disposition of a business, the transaction may be subject to the satisfaction of pre-closing conditions, including obtaining necessary regulatory and government approvals, which, if not satisfied or obtained, may prevent us from completing the transaction. Divestitures may also involve continued financial involvement in or liability with respect to the divested assets and businesses, such as indemnities or other financial obligations, in which the performance of the divested assets or businesses could impact our results of operations. Any divestiture we undertake could adversely affect our results of operations.

Risks related to our contracts

AEC is subject to significant financial risk related to potential quality escapes that could cause customer recalls, or production shortfalls that could cause delays in customer deliveries.

AEC manufactures critical aerospace parts and must meet increasingly demanding quality, delivery, and cost targets across a broad spectrum of programs and facilities. AEC’s ability to realize its full financial objectives will depend on how effectively it meets these challenges. Failure to accomplish these customer quality, delivery, and cost targets on any key program could result in material losses to the Company and have a material adverse impact on the amount and timing of anticipated AEC revenues, segment operating income, and cash flows, which could in turn have a material adverse impact on our consolidated financial results.

15Long-term supply contracts in our AEC segment pose certain risks.

~~Index~~AEC has a number of long-term contracts with fixed pricing, and is likely to enter into similar contracts in the future. While long-term contracts provide an opportunity to realize steady and reliable revenues for extended periods, they pose a number of risks, such as program cancellations, reductions or delays in orders by AEC’s customers under these contracts, the termination of such contracts or orders, changes in the customers’ requirements that may not entitle AEC to additional compensation or payment, or the occurrence of similar events over which AEC has no or limited control.

targets on any key program could result in material losses to the Company and have a material adverse impact on the amount and timing of anticipated AEC revenues, segment operating income, and cash flows, which could in turn have a material adverse impact on our consolidated financial results.

Long-term supply contracts in our Albany Engineered Composites segment pose certain risks

AEC has a number of long-term contracts with fixed pricing, and is likely to enter into similar contracts in the future. While long-term contracts provide an opportunity to realize steady and reliable revenues for extended periods, they pose a number of risks, such as program cancellations, reductions or delays in orders by AEC’s customers under these contracts, the termination of such contracts or orders, or the occurrence of similar events over which AEC has no or limited control.

Accounting for long-term contracts and related assets requires estimates and judgments related to our progress toward completion and the long-term performance on the contract. Significant judgments include potential risks associated with the ability and cost to achieve program schedule, including customer-directed delays or reductions in scheduled deliveries, and technical and other specific contract requirements including customer activity levels and variable consideration based upon that activity. Due to the size and long-term nature of many of AEC contracts, the estimation of total revenues and cost at completion is complicated and subject to many variables. Management must make assumptions and estimates regarding contract revenue and cost (which may include estimates of variable consideration, including award fees and penalties), including, but not limited to, labor productivity and availability, complexity and scope of the work to be performed, availability and cost of materials, length of time to complete the performance obligation, availability and timing of funding from our customers, as well as overhead cost rates. Because of the significance of management’s judgments and estimation processes, it is likely that materially different amounts could be recorded if we used different assumptions or if the underlying circumstances were to change. Changes in underlying assumptions, circumstances or estimates may adversely affect our future results of operations and financial condition.

Sales of components for a number of programs that are currently considered to be important to the future revenue-growth of AEC are pursuant to short-term purchase orders for a finite period or number of parts, or short-term supply agreements with terms of one to four years. Such programs include airframe components for the F-35, forward fuselage frames for the Boeing 787, and aft transition assembly including skins and longerons for the CH-53K helicopter. As a result, while AEC reasonably expects to continue as a supplier on these programs as long as it meets its obligations, there can be no assurance that this will be the case, or that, in programs where it is currently a sole supplier, this sole supplier status will continue. Even if AEC’s status as a supplier is extended or renewed, there can be no assurance that such extension or renewal will be on the same or similar commercial or other terms. Any failure by AEC to maintain its current supplier status under these programs, or any material change in their commercial or other terms, could have a material adverse effect on AEC’s future revenues and segment operating income.

~~AEC derives a significant portion of its revenue from contracts with the U.S. Government's Department of Defense, which are subject to unique risks~~20

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by AEC to maintain its current supplier status under these programs, or any material change in their commercial or other terms, could have a material adverse effect on AEC’s future revenues and segment operating income.

AEC derives a significant portion of its revenue from contracts related to U.S. Government Department of Defense, which are subject to unique risks.

The funding of DoD programs is subject to congressional appropriations. Many of the DoD programs in which we participate may last several years, but they are normally funded annually. Changes in military strategy and priorities may affect future opportunities and/or existing programs. Long-term DoD contracts and related orders are subject to cancellation, delay or restructure, if appropriations for subsequent performance periods are not made. The termination or reduction of funding for existing or new DoD programs could result in a material adverse effect on our earnings, cash flow and financial position.

Additionally, our business funded by the U.S. Government is subject to extensive federal and DoD agency acquisition regulations. As a result, specific business systems and processes, as well as our proposed contract costs, are subject to audits by U.S. Government agencies. U.S. Government representatives may audit our compliance with these required federal regulations, and such audits could result in adjustments to allowable contract costs. Any costs found to be improperly allocated to a specific contract will not be reimbursed, and such costs already reimbursed must be refunded. Certain business systems or processes found to be non-compliant to federal and agency regulations could result in a suspension of work until such compliance issues are corrected. If any audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from doing business with the U.S. Government. Realization of any of these risks could result in a material adverse effect on our earnings, cash flow and financial position.

16See also “The U.S. Government’s Department of Defense Cybersecurity Maturity Model Certification (“CMMC”) program introduces new and unique risks for DoD contractors.”

The loss of one or more major customers could have a material adverse effect on Net revenues and profitability.

Our customer Safran accounted for approximately 39 percent of Net revenues in the AEC segment in 2023, substantially all of which was under an exclusive long-term supply agreement relating to parts for the LEAP engine. Although we are an exclusive supplier of such parts, and although this is a cost-plus-fee arrangement, our customer is not obligated to purchase any minimum quantity of parts, and cancellation or significant reduction in demand for the LEAP program would have a material adverse impact on AEC’s Net revenues and profitability.

LEAP engines are currently used on the Boeing 737 MAX, Airbus A320neo and COMAC 919 aircraft. The LEAP long-term supply agreement contains certain events of default that, if triggered, could result in termination of the agreement by the customer, which would also have a material adverse impact on segment Net revenues and profitability.

A substantial portion of AEC’s non-LEAP revenue in the near term, and revenue growth opportunity in the longer term, is dependent upon a small number of customers and programs. Unlike the 3D-woven composite components supplied by ASC, parts supplied for such non-LEAP programs are capable of being made by a number of other suppliers. Such programs include airframe components for the F-35, forward fuselage frames for the Boeing 787, and sponsons, tail-rotor pylons, horizontal stabilizers and struts for the CH-53K helicopter. Any failure by AEC to maintain its current supplier status under these programs, or any material change in their commercial or other terms, could have a material adverse effect on AEC’s future Net revenues and operating income.

Our top ten customers in the MC segment accounted for a significant portion of our Net revenues in 2023. The loss of one or more of these customers, or a significant decrease in the amount of machine clothing they purchase from us, could have a material adverse impact on MC's Net revenues and profitability. We could also be subject to similar impacts if one or more such customers were to suffer financial difficulties and be unable to pay us for products they have purchased. While we normally enter into long-term supply agreements with significant MC customers, the agreements generally do not obligate the customer to purchase any products from us, and may be terminated by the customer at any time with appropriate notice.

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See also “The U.S. Government’s Department of Defense Cybersecurity Maturity Model Certification (“CMMC”) program introduces new and unique risks for DoD contractors”

The loss of one or more major customers could have a material adverse effect on sales and profitability

One customer (SAFRAN) accounted for approximately 40 percent of Net sales in the AEC segment in 2022, substantially all of which was under an exclusive long-term supply agreement relating to parts for the LEAP engine. Although we are an exclusive supplier of such parts, our customer is not obligated to purchase any minimum quantity of parts, and cancellation or significant reduction in demand for the LEAP program would have a material adverse impact on AEC’s Net sales and profitability. LEAP engines are currently used on the Boeing 737 MAX, Airbus A320neo and COMAC 919 aircraft. The grounding of the Boeing 737 MAX led to lower deliveries of parts, resulting in lower revenues during 2021 and 2022. While the grounding has now been lifted, the Boeing 737 MAX orders and deliveries have yet to return to pre-grounding levels, which could result in longer than expected return to such levels in the future and in lower LEAP revenues for a longer period.

The LEAP long-term supply agreement contains certain events of default that, if triggered, could result in termination of the agreement by the customer, which would also have a material adverse impact on segment sales and profitability.

Our top ten customers in the MC segment accounted for a significant portion of our Net sales in 2022. The loss of one or more of these customers, or a significant decrease in the amount of machine clothing they purchase from us, could have a material adverse impact on MC's net sales and profitability. We could also be subject to similar impacts if one or more such customers were to suffer financial difficulties and be unable to pay us for products they have purchased. While we normally enter into long-term supply agreements with significant MC customers, the agreements generally do not obligate the customer to purchase any products from us, and may be terminated by the customer at any time with appropriate notice.

Risks related to information technology and cybersecurity

We are dependent on information technology networks, systems and ~~systems~~cloud-based services to securely process, transmit and store electronic information and to communicate among our locations around the world and with our employees, customers and suppliers. The failure to prevent attacks on our operational systems and/or infrastructure or our cloud-based providers could result in disruptions to our businesses, loss or disclosure of regulated data, or the loss or disclosure of confidential and proprietary intellectual property or other assets.

As the breadth and complexity of this infrastructure continues to grow, including the increasing reliance on, and use of, mobile technologies and cloud-based services, and as many of our employees continue to work remotely following the coronavirus pandemic, the risk of security incidents and cyberattacks has increased. Cybersecurity threats are constantly expanding and evolving, becoming increasingly sophisticated and complex, increasing the difficulty of detecting and defending against them and maintaining effective security measures and protocols. The use of emerging technologies by organized cyber criminals, such as artificial intelligence and quantum computing, has increased the range of security threats faced by the Company. As AEC continues to perform aerospace and defense work, attacks from threat actors could become more persistent, including attacks from highly organized adversaries such as nation state actors, which target the defense industrial base and other critical infrastructure sectors. The improper conduct of our employees or others working on our behalf who have access to export controlled or other sensitive information could also adversely affect our business and reputation.

Our customers, suppliers, and subcontractors experience similar security threats and an incident at one of these entities could adversely impact our business. These entities are typically outside our control and may have access to our information ~~technology~~with ~~systems~~varying levels of security and cybersecurity resources, ~~processes~~expertise, safeguards and ~~sites~~capabilities. ~~may~~Breaches ~~suffer~~in ~~interruptions~~our orsupply ~~failures~~chain could compromise our data and adversely affect customer deliverables. We also rely on our supply chain to adequately detect and report cyber incidents, which ~~may~~could affect our ability to ~~conduct~~report ~~our~~or ~~business~~respond to cybersecurity incidents effectively or in a timely manner.

Our information technology systems, processes, sites and cloud-based providers may suffer interruptions or failures which may affect our ability to conduct our business.

Our information technology systems may be damaged or cease to function properly due to any number of causes, such as catastrophic events, power outages and security breaches (including destructive malware such as ransomware) resulting in unauthorized access or cyber-attacks. If our business continuity plans, incident response capabilities, and security controls do not function effectively, we may experience partial or complete interruptions in our operations, which may adversely impact our business, financial condition, results of operations and cash flows.

17We face legal, reputational and financial risks from any failure to protect customer and/or Company data from security incidents or cyberattacks.

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We face legal, reputational and financial risks from any failure to protect customer and/or Company data from security incidents or cyberattacks

Such incidents could lead to shutdowns or disruptions of or damage to our systems and those of our customers and suppliers, and unauthorized disclosure of sensitive or confidential information, potentially including personal data and proprietary business information. Unauthorized disclosure of, denial of access to, or other incidents involving sensitive or confidential Company, employee, customer or supplier data, whether through systems failure, employee negligence, fraud, misappropriation, or cybersecurity, ransomware or malware attacks, or other intentional or unintentional acts, could damage our reputation and our competitive positioning in the marketplace, disrupt our or our customer’s business, cause us to lose customers and result in significant financial exposure and legal liability.

We are subject to numerous laws and regulations designed to protect this information, such as the European Union’s General Data Protection Regulation (“GDPR”) and the United Kingdom’s GDPR, the Cybersecurity Law of the People's Republic of China, as well as various other U.S. federal and state laws governing the protection of privacy, health or other personally identifiable information and data privacy and cybersecurity laws in other regions. We are subject to U.S. federal procurement regulations such as the DFARS clause 252.204-7012, based on the NIST 800-171 framework whose goal is protecting controlled unclassified information in non-federal systems and organizations. In ~~2022~~2023, we continued efforts to comply with the forthcoming U.S. Department of Defense Cybersecurity Maturity Model Certification ("CMMC") program, which will impact us in the coming years as it is ~~incorporated~~formalized ~~into~~through the DFARS ~~252.204-7012~~and ~~clauses~~those inregulations are incorporated into our contracts for government programs.

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These laws and regulations continue to evolve, are increasing in complexity and number and increasingly conflict among the various countries in which we operate, which has resulted in greater compliance risk and cost for us. Various privacy laws impose compliance obligations regarding the handling of personal data, including the cross-border transfer of data, and significant financial penalties for noncompliance. If any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to Company, employee, customer or supplier data, or otherwise mismanages or misappropriates that data, we could be subject to significant litigation, monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions. These monetary damages might not be subject to a contractual limit of liability or an exclusion of consequential or indirect damages and could be significant. In addition, our liability insurance, which includes cyber insurance, might not be sufficient in type or amount to cover us against claims related to security incidents, cyberattacks and other related incidents.

Risks related to our financial matters

Fluctuations in currency exchange rates could adversely affect the Company’s business, financial condition, and results of operations.

We operate our business in many regions of the world, and currency rate movements can have a significant effect on operating results. The effect of currency rate changes on gross profit in the MC segment can be difficult to anticipate because we use a global sourcing and manufacturing model. Under this model, while some non-U.S. ~~sales~~Net revenues and associated costs are in the same currency, other non-U.S. ~~sales~~Net revenues are denominated in currencies other than the currency in which most costs of such sales are incurred. At the same time, the geographic sources of materials purchased (and the currencies in which these purchases are denominated) can vary depending on market forces, and the Company may also shift production of its products between manufacturing locations, which can result in a change in the currency in which certain costs to produce such products are incurred.

Changes in exchange rates can result in revaluation gains and losses that are reflected in our Consolidated Statements of Income. Revaluation gains and losses occur when our business units hold financial assets or liabilities denominated in a currency other than their functional currency. Operating results can also be affected by the translation of ~~sales~~Net revenues and costs from each non-U.S. subsidiary’s functional currency to the U.S. dollar.

Changes in the value of foreign currencies relative to the U.S. dollar could impact the reported level, in U.S. dollars, of Net ~~Sales~~revenues and operating expenses which are denominated in those currencies.

Changes in currency exchange rates could adversely affect the Company’s business, financial condition or results of operations.

18We have a substantial amount of indebtedness. At December 31, 2023, the Company had outstanding long-term debt of $453 million.

~~Index~~At December 31, 2023, our leverage ratio (as defined in our primary borrowing agreement) was 1.25 to 1.00, and we had borrowed $446 million under our $800 million revolving credit facility. While we feel that we generate sufficient cash from operations and have sufficient borrowing capacity to make required capital expenditures to maintain and grow our business, any decrease in our cash generation could result in higher leverage. Higher leverage could hinder our ability to make acquisitions, capital expenditures, or other investments in our businesses, pay dividends, or withstand business and economic downturns. Our primary borrowing agreement contains a number of covenants and financial ratios that the Company is required to satisfy. The most restrictive of these covenants pertain to prescribed leverage and interest coverage ratios and asset dispositions. Any breach of any such covenants or restrictions would result in a default under such agreement that would permit the lenders to declare all borrowings under such agreement to be immediately due and payable and, through cross-default provisions, could entitle other lenders to accelerate their loans. In such an event, the Company would need to modify or restructure all or a portion of such indebtedness. Depending on prevailing economic conditions at the time, the Company might find it difficult to modify or restructure the debt on attractive terms, or at all.

We have a substantial amount of indebtedness. At December 31, 2022, the Company had outstanding long-term debt of $439 million

At December 31, 2022, our leverage ratio (as defined in our primary borrowing agreement) was 1.25, and we had borrowed $439 million under our $700 million revolving credit facility. While we feel that we generate sufficient cash from operations and have sufficient borrowing capacity to make required capital expenditures to maintain and grow our business, any decrease in our cash generation could result in higher leverage. Higher leverage could hinder our ability to make acquisitions, capital expenditures, or other investments in our businesses, pay dividends, or withstand business and economic downturns. Our primary borrowing agreement contains a number of covenants and financial ratios that the Company is required to satisfy. The most restrictive of these covenants pertain to prescribed leverage and interest coverage ratios and asset dispositions. Any breach of any such covenants or restrictions would result in a default under such agreement that would permit the lenders to declare all borrowings under such agreement to be immediately due and payable and, through cross-default provisions, could entitle other lenders to accelerate their loans. In such an event, the Company would need to modify or restructure all or a portion of such indebtedness. Depending on prevailing economic conditions at the time, the Company might find it difficult to modify or restructure the debt on attractive terms, or at all.

We use interest rate swaps to manage the interest cost associated with our borrowings. Borrowings under the revolving credit facility and the interest rate swaps are currently based on LIBOR, which is expected to be phased out and replaced starting in 2024. Future changes in the interest rate benchmark could affect the Company’s cost of borrowing and its cash flows, or the effectiveness of the hedges, which could have an effect on net income.

As of December 31, 2022, we had approximately $261 million of additional borrowing capacity under our $700 million revolving credit facility. Incurrence of additional indebtedness could increase the above-described risks associated with higher leverage. In addition, any such indebtedness could contain terms that are more restrictive than our current facilities.23

Significant changes in critical estimates and assumptions related to pension and other postretirement benefit (“OPEB”) costs and liabilities could affect our earnings and pension contributions in future periods

The determination of our pension and other postretirement benefit plans’ expense or income involves significant judgments, specifically related to our discount rate, long-term return on assets, and other actuarial assumptions. We establish our discount rate assumption annually and review whether to change our long-term return on assets assumption annually. These estimates and actuarial assumptions could change significantly as a result to changes in economic, legislative, and/or demographic profiles. Such changes could result in unfavorable changes to our pension and OPEB expense and funded status, and our cash contributions thereof, which could have a negative impact on our results of operations. Further, the difference between actual investment returns and our long-term return on asset assumptions would result in a change to our pension and OPEB expense, funded status, as well as our required contributions to the plans. We manage our plan assets in accordance with our investment management objectives, and they are subject to market volatility and other conditions. Differences may also arise due to changes in regulatory, accounting and other requirements applicable to pension plans.

The Company is exposed to the risk of increased expense in health-care related costs

We are largely self-insured for some employee and business risks, including health care programs in the United States. Losses under all of these programs are accrued based upon estimates of the ultimate liability for claims reported and an estimate of claims incurred but not reported, with assistance from third-party actuaries and service providers. However, these liabilities are difficult to assess and estimate due to unknown factors, including the severity of an illness and the number of incidents not reported. The accruals are based upon known facts and historical trends, and management believes such accruals to be adequate. The Company also maintains stop-loss insurance policies to protect against catastrophic claims above certain limits. If actual results significantly differ from estimates, our financial condition, results of operations, and cash flows could be materially impacted by losses under these programs, as well as higher stop-loss premiums in future periods.

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~~Unanticipated~~As ~~changes~~of inDecember 31, ~~tax~~2023, ~~laws~~we orhad ~~exposure~~approximately to$354 million of additional ~~tax~~borrowing ~~liabilities~~capacity under our $800 million revolving credit facility. The incurrence of additional indebtedness could ~~affect~~increase the above-described risks associated with higher leverage. In addition, any such indebtedness could contain terms that are more restrictive than our ~~future~~current ~~profitability~~facilities.

WeSignificant ~~are~~changes ~~subject to income taxes~~ in ~~both~~critical ~~the~~estimates ~~United States~~ and ~~various~~assumptions ~~non-U.S.~~related ~~jurisdictions. Unanticipated~~to ~~changes~~pension ~~in foreign~~ and ~~domestic~~other ~~tax~~postretirement ~~laws,~~benefit ~~regulations,~~(“OPEB”) orcosts ~~policies, or their interpretation~~ and ~~application by regulatory bodies, or exposure to additional tax~~ liabilities could affect our ~~future~~earnings ~~profitability~~ and ~~cash~~pension ~~flows.~~contributions ~~Our~~in ~~domestic and international tax liabilities are dependent upon the distribution of income among these jurisdictions. Our~~ future results of operations could be adversely affected by changes in the effective tax rate as a result of a change in the mix of earnings in countries with differing statutory tax rates, as well as changes in the overall profitability of the Company, tax legislation, and generally accepted accounting principlesperiods.

AsThe determination of ~~December~~our 31pension and other postretirement benefit plans’ expense or income involves significant judgments, ~~2022~~specifically related to our discount rate, welong-term ~~have~~return ~~approximately~~on ~~$50~~assets, and other actuarial assumptions.1 ~~million~~We ~~net~~establish ~~operating~~our ~~loss~~discount ~~(“NOL”)~~rate ~~carryforward~~assumption annually and review whether to change our long-term return on assets assumption annually. These estimates and actuarial assumptions could change significantly as a result to changes in ~~various~~economic, ~~taxing~~legislative, ~~jurisdictions~~and/or demographic profiles. ~~Our~~ ~~ability~~Such changes could result in unfavorable changes to ~~utilize~~our ~~the~~pension ~~NOL~~and ~~carryforward~~OPEB expense and funded status, and our cash contributions thereof, which could behave ~~adversely~~a ~~impacted~~negative byimpact ~~several~~on ~~factors~~our results of operations. Further, ~~including~~the ~~but~~difference ~~not~~between ~~limited~~actual toinvestment ~~significant~~returns ~~changes~~and our long-term return on asset assumptions would result in a change to ~~tax~~our ~~legislation~~pension and ~~lower~~OPEB ~~than~~expense, ~~expected~~funded ~~future~~status, ~~earnings~~as ofwell as our required contributions to the ~~Company~~plans. We manage our plan assets in accordance with our investment management objectives, and they are subject to market volatility and other conditions. Differences may also arise due to changes in regulatory, accounting and other requirements applicable to pension plans.

~~We are subject to tax audits by various tax authorities in many jurisdictions.~~ The ~~open~~Company ~~tax~~is ~~years~~exposed ~~in these jurisdictions range from approximately 2014~~ to ~~2022. We regularly assess~~ the ~~potential~~risk ~~outcomes~~ of ~~examinations~~increased byexpense ~~tax authorities~~ in ~~determining~~health-care ~~the adequacy of our provision for income taxes. The results of tax audits and examinations of previously filed tax returns or~~ related ~~litigation and continuing assessments of our tax exposures could materially affect our financial results~~costs.

We are largely self-insured for some employee and business risks, including health care programs in the U.S. Losses under all of these programs are accrued based upon estimates of the ultimate liability for claims reported and an estimate of claims incurred but not reported, with assistance from third-party actuaries and service providers. However, these liabilities are difficult to assess and estimate due to unknown factors, including the severity of an illness and the number of incidents not reported. The accruals are based upon known facts and historical trends, and management believes such accruals to be adequate. The Company also maintains stop-loss insurance policies to protect against catastrophic claims above certain limits. If actual results significantly differ from estimates, our financial condition, results of operations, and cash flows could be materially impacted by losses under these programs, as well as higher stop-loss premiums in future periods.

Unanticipated changes in tax laws or exposure to additional tax liabilities could affect our future profitability.

We are subject to income taxes in both the U.S. and various non-U.S. jurisdictions. Unanticipated changes in foreign and domestic tax laws, regulations, or policies, or their interpretation and application by regulatory bodies, or exposure to additional tax liabilities could affect our future profitability and cash flows. Our domestic and international tax liabilities are dependent upon the distribution of income among these jurisdictions. Our future results of operations could be adversely affected by changes in the effective tax rate as a result of a change in the mix of earnings in countries with differing statutory tax rates, as well as changes in the overall profitability of the Company, tax legislation, and generally accepted accounting principles.

As of December 31, 2023, we have approximately $130.7 million of net operating loss (“NOL”) carryforwards in various taxing jurisdictions. Our ability to utilize the NOL carryforward could be adversely impacted by several factors, including but not limited to significant changes to tax legislation and lower than expected future earnings of the Company.

We are subject to tax audits by various tax authorities in many jurisdictions. Following the acquisition of Heimbach, the open tax years in these jurisdictions range from approximately 2009 to 2023. We regularly assess the potential outcomes of examinations by tax authorities in determining the adequacy of our provision for income taxes. The results of tax audits and examinations of previously filed tax returns or related litigation and continuing assessments of our tax exposures could materially affect our financial results.

Risks related to our legal and regulatory environment

The Company may fail to adequately protect its proprietary technology, which would allow competitors or others to take advantage of its research and development efforts.

Proprietary trade secrets are a source of competitive advantage in each of our segments. If our trade secrets were to become available to competitors, it could have a negative impact on our competitive strength. We employ measures to maintain the confidential nature of these secrets, including maintaining employment and confidentiality agreements; maintaining clear policies intended to protect such trade secrets; educating our employees about such policies; clearly identifying proprietary information subject to such agreements and policies; and vigorously enforcing such agreements and policies. Despite such measures, our employees, consultants, and third parties to whom such information may be disclosed in the ordinary course of our business may breach their obligations not to reveal such information, and any legal remedies available to us may be insufficient to compensate our damages.24

~~The Company is subject to legal proceedings and legal compliance risks~~Index

WeProprietary trade secrets are ~~subject~~a source of competitive advantage in each of our segments. If our trade secrets were to become available to competitors, it could have a ~~variety~~negative ofimpact ~~legal~~on ~~proceedings~~our competitive strength. ~~Litigation~~We isemploy anmeasures ~~inherently~~to ~~unpredictable~~maintain ~~process~~the confidential nature of these secrets, including maintaining employment and ~~unanticipated~~confidentiality ~~negative~~agreements, ~~outcomes~~maintaining ~~are~~clear ~~always~~policies ~~possible~~intended to protect such trade secrets, educating our employees about such policies, clearly identifying proprietary information subject to such agreements and policies, and vigorously enforcing such agreements and policies. AnDespite ~~adverse~~such ~~outcome~~measures, inour ~~any~~employees, ~~period~~consultants, ~~could~~and ~~have~~third anparties ~~adverse~~to ~~impact~~whom onsuch information may be disclosed in the ~~Company’s~~ordinary ~~operating~~course ~~results~~of ~~for~~our ~~that~~business ~~period~~may breach their obligations not to reveal such information, and any legal remedies available to us may be insufficient to compensate our damages.

The Company is subject to legal proceedings and legal compliance risks.

We are subject to a variety of legal proceedings in multiple jurisdictions where we conduct business. Litigation is an inherently unpredictable process and unanticipated negative outcomes are always possible. An adverse outcome in any period could have an adverse impact on the Company’s operating results for that period.

We are also subject to a variety of legal compliance risks. While we believe that we have adopted appropriate risk management and compliance programs, the global and diverse nature of our operations means that legal compliance risks will continue to exist and related legal proceedings and other contingencies, the outcome of which cannot be predicted with certainty, are likely to arise from time to time. Failure to resolve successfully any legal proceedings related to compliance matters could have an adverse impact on our results in any period.

Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and violation of these regulations could harm our business.

We are subject to numerous, and sometimes conflicting, legal regimes on matters as diverse as anti corruption, import/export controls, content requirements, trade restrictions, tariffs, taxation, sanctions, immigration, internal and disclosure control obligations, securities regulation, ~~ESG~~sustainability and climate initiatives, human capital requirements, anti-competition, anti-money-laundering, data privacy and protection, government compliance, wage-and-hour standards, employment and labor relations and human rights. The global nature of our operations further increases the difficulty of compliance.

Compliance with diverse legal requirements is costly, time-consuming and requires significant resources. Violations of one or more of these regulations in the conduct of our business could result in significant fines, enforcement actions or criminal sanctions against us and/or our employees, prohibitions on doing business and damage to our reputation. Violations of these regulations in connection with the performance of our obligations to our customers also could result in liability for significant monetary damages, fines, enforcement actions and/or criminal prosecution or sanctions, unfavorable publicity and other reputational damage and restrictions on our ability to effectively carry out our contractual obligations and thereby expose us to potential claims from our customers. Due to the varying degrees of development of the legal systems of the countries in which we operate, local laws may not be well developed or provide sufficiently clear guidance and may be insufficient to protect our rights.

20In particular, in many parts of the world, including countries in which we operate and/or seek to expand, practices in the local business community might not conform to international business standards and could violate anti corruption laws, or regulations, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010. The Company provides, and all employees must participate in, regular training activities with respect to the Company's business ethics standards and expectations. Our employees, subcontractors, suppliers, and agents, any companies we may acquire and their employees, subcontractors, suppliers and agents, and other third parties with which we associate, could take actions that violate policies or procedures designed to promote legal and regulatory compliance or applicable anti corruption laws or regulations. Violations of these laws or regulations by us, our employees or any of these third parties could subject us to criminal or civil enforcement actions (whether or not we participated or knew about the actions leading to the violations), including fines or penalties, disgorgement of profits and suspension or disqualification from work, including U.S. federal contracting, any of which could materially adversely affect our business, including our results of operations and our reputation.

Our global operations are subject to increasing environmental, social and governance regulatory requirements, increasing operational and compliance costs, as well as the risk of noncompliance.

Increasing stakeholder environmental, social and governance expectations, physical and transition risks associated with climate change, emerging sustainability and social regulation, contractual requirements, and policy requirements may pose risk to our market outlook, brand and reputation, financial outlook, cost of capital, global

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~~customers~~supply ~~also~~chain ~~could~~and ~~result~~production incontinuity, ~~liability~~which ~~for~~may ~~significant~~impact ~~monetary~~our ~~damages,~~ability ~~fines,~~to ~~enforcement~~achieve ~~actions~~long-term business objectives. Changes in environmental and~~/or~~ ~~criminal~~climate ~~prosecution~~change laws or ~~sanctions,~~regulations ~~unfavorable~~could ~~publicity~~lead ~~and~~to ~~other~~additional ~~reputational~~operational ~~damage~~restrictions and ~~restrictions~~compliance onrequirements upon us or our ~~ability~~products, torequire ~~effectively~~new ~~carry~~or ~~out~~additional ~~our~~investment ~~contractual~~in ~~obligations~~product ~~and~~designs, ~~thereby~~result ~~expose~~in uscarbon tooffset ~~potential~~investments ~~claims~~or ~~from~~otherwise could negatively impact our ~~customers~~business and/or competitive position. ~~Due~~Increasing toindustry ~~the~~performance ~~varying~~standards, ~~degrees~~increasing ofsustainability ~~development~~disclosure ofrequirements in the ~~legal~~U.S. ~~systems~~and ofglobally, ~~the~~and ~~countries~~requirements inon ~~which~~manufacturing weand ~~operate~~product air pollutant emissions, ~~local~~especially ~~laws~~GHG emissions, may ~~not~~result bein ~~well~~increased ~~developed~~costs or ~~provide~~reputational ~~sufficiently~~risks ~~clear~~and ~~guidance~~could limit our ability to manufacture and/or market certain of our products at acceptable costs, or at all. Physical impacts of climate change, increasing global chemical restrictions and bans, and water and waste requirements may bedrive ~~insufficient~~increased costs to ~~protect~~us and our ~~rights~~suppliers and impact our production continuity and data facilities.

InChanges ~~particular,~~ in ~~many~~laws ~~parts~~and ofregulations ~~the~~could ~~world,~~also ~~including~~mandate ~~countries~~significant inand ~~which~~costly wechanges ~~operate~~to ~~and/or~~the ~~seek~~way towe ~~expand~~conduct our business, ~~practices~~including inincreasing the ~~local~~cost ~~business~~of ~~community~~compliance, ~~might~~or ~~not~~could ~~conform~~impose toadditional ~~international~~taxes. ~~business~~Such ~~standards~~changes ~~and~~may ~~could~~result ~~violate~~in ~~anti~~contracts ~~corruption~~being ~~laws~~terminated, orgreater ~~regulations~~costs to us, ~~including~~or ~~the~~could ~~U.S.~~have ~~Foreign~~a ~~Corrupt~~negative ~~Practices~~impact ~~Act~~on ~~and~~our ~~the~~ability ~~U.K.~~to ~~Bribery~~obtain ~~Act~~future ~~2010~~work from government customers. ~~The~~ ~~Company~~Changes ~~provides~~in ~~and~~sustainability ~~all~~reporting ~~employees~~requirements ~~must~~may ~~participate~~impact inour ~~regular~~global ~~training~~operations ~~activities~~as ~~with~~we ~~respect~~begin collecting information for reports to ~~the~~be ~~Company's~~published ~~business~~according ~~ethics~~to new standards. ~~and~~We ~~expectations. Our~~will ~~employees,~~face ~~subcontractors,~~significant ~~suppliers,~~challenges ~~and~~in ~~agents~~being able to implement separate but overlapping standard-setting initiatives, ~~any~~which ~~companies~~may contain inconsistencies. As we ~~may~~devote ~~acquire~~increasing ~~and~~amounts ~~their~~of ~~employees,~~resources ~~subcontractors~~to sustainability reporting, ~~suppliers~~there ~~and~~remains ~~agents~~uncertainty about how to address various sustainability issues, ~~and~~including ~~other~~enforcement ~~third~~in ~~parties~~voluntary frameworks. Intensive work will need to be done in short timetables to comply with ~~which~~newly-introduced wesustainability ~~associate~~standards, ~~could~~with ~~take~~resultant ~~actions~~transition ~~that~~costs. ~~violate~~Non-compliance ~~policies~~could orresult ~~procedures~~in ~~designed~~various topenalties, ~~promote~~including ~~legal~~liability ~~and~~for ~~regulatory~~significant ~~compliance~~monetary ordamages, ~~applicable~~fines, ~~anti~~enforcement ~~corruption~~actions ~~laws~~and/or criminal prosecution or ~~regulations~~sanctions. ~~Violations~~ Given the reach of ~~these~~new ~~laws~~and orproposed regulations byin ~~us,~~the ~~our~~jurisdictions ~~employees~~where orwe ~~any~~operate, ofthere ~~these~~is ~~third~~the ~~parties~~possibility ~~could~~that ~~subject~~we usmay not be able to ~~criminal~~comply, or ~~civil~~may ~~enforcement~~not ~~actions~~be ~~(whether~~able orto ~~not~~comply wein ~~participated~~time. orWe ~~knew~~also ~~about~~may ~~the~~not ~~actions~~be ~~leading~~able to ~~the~~ensure ~~violations),~~that ~~including~~relevant ~~fines~~companies orwithin ~~penalties,~~our ~~disgorgement~~supply ofchain ~~profits~~are ~~and~~compliant ~~suspension~~with orapplicable ~~disqualification~~supply ~~from~~chain ~~work~~due diligence acts, ~~including~~which ~~U.S.~~may ~~federal~~require ~~contracting,~~us ~~any~~to ofembark ~~which~~on ~~could~~new ~~materially~~due ~~adversely~~diligence ~~affect~~processes ~~our~~with ~~business,~~other ~~including~~companies ~~our~~and ~~results~~in ofsome ~~operations~~cases ~~and~~parting ~~our~~ways ~~reputation.~~with suppliers.

~~Increasing~~We ~~stakeholder~~closely ~~environmental,~~monitor ~~social~~developments ~~and~~in ~~governance~~sustainability- ~~(ESG) expectations, physical~~ and ~~transition risks associated with~~ climate change,-related ~~emerging ESG regulation~~laws, ~~contractual~~regulations ~~requirements,~~ and ~~policy~~policies ~~requirements~~for ~~may~~their ~~pose~~potential ~~risk~~effect toon our ~~market outlook~~business, ~~brand and reputation~~however, ~~financial~~we ~~outlook,~~are ~~cost~~currently ofnot ~~capital,~~able ~~global~~to ~~supply~~accurately ~~chain~~predict ~~and~~the ~~production~~materiality ~~continuity,~~of ~~which~~any ~~may~~potential ~~impact~~costs ~~our~~associated ~~ability~~with tosuch ~~achieve long-term business objectives~~developments. ~~Changes~~In inaddition, ~~environmental and~~ climate change-related ~~laws~~litigation ~~or regulations could lead to additional operational restrictions~~ and ~~compliance~~investigations ~~requirements~~have ~~upon~~increased ~~us or our products, require new or additional investment~~ in ~~product~~recent ~~designs,~~years ~~result in carbon offset investments or otherwise could negatively impact our business~~ and~~/or~~ ~~competitive~~any ~~position.~~claims Increasing industry performance standards, increasing sustainability disclosure requirements in the U.S. and globally, and requirements on manufacturing and product air pollutant emissions, especially greenhouse gas (GHG) emissions, may result in increased costs or ~~reputational~~investigations ~~risks~~against ~~and~~us could ~~limit~~be ~~our~~costly ~~ability~~ to ~~manufacture and/or market certain of our products at acceptable costs~~defend, ~~or at all. Physical impacts of climate change, increasing global chemical restrictions~~ and ~~bans, and water and waste requirements may drive increased costs to us and~~ our ~~suppliers~~business ~~and~~could ~~impact~~be ~~our~~adversely ~~production~~affected ~~continuity~~by ~~and~~the ~~data facilities~~outcome.

~~Changes~~Certain inprovisions ~~laws~~of ~~and~~our ~~regulations~~Certificate ~~could~~of ~~also~~Incorporation, ~~mandate~~our ~~significant~~Bylaws and ~~costly~~Delaware ~~changes~~law tocould ~~the~~hinder, ~~way~~delay ~~we conduct our business~~ or prevent ~~could~~a ~~impose~~change ~~additional~~in ~~taxes.~~control ~~Such~~of ~~changes~~us ~~may~~that ~~result~~you inmight ~~contracts~~consider ~~being terminated~~favorable, ~~greater~~which ~~costs to us, or~~ could ~~have~~also aadversely ~~negative~~affect ~~impact~~the price onof our ~~ability~~Class toA ~~obtain~~Common ~~future work from government customers~~Stock.

Certain provisions of our Certificate of Incorporation, our Bylaws and Delaware law could hinder, delay or prevent a change in control of us that you might consider favorable, which could also adversely affect the price of our Class A Common Stock

Certain provisions under our Certificate of Incorporation, our Bylaws and Delaware law could discourage, delay or prevent a transaction involving a change in control of the Company, even if doing so would benefit our stockholders. These provisions could delay or prevent a change in control and could limit the price that investors might be willing to pay in the future for shares of our Class A Common Stock.

Our Certificate of Incorporation authorizes our ~~board~~Board of ~~directors~~Directors to issue new series of preferred stock without stockholder approval. Depending on the rights and terms of any new series created, and the reaction of the market to the series, the rights or value of our Class A Common Stock could be negatively affected. For example, subject to applicable law, our ~~board~~Board of ~~directors~~Directors could create a series of preferred stock with superior voting rights to our existing common stock. The ability of our ~~board~~Board of ~~directors~~Directors to issue this new series of preferred stock could also prevent or delay a third party from acquiring us, even if doing so would be beneficial to our stockholders.

We may not pay cash dividends on our Common Stock.

It is our current practice to pay cash dividends on our common stock. There can be no assurance, however, that we will pay dividends in the future in the amounts that we have in the past, or at all. Our ~~board~~Board of ~~directors~~Directors may change the timing and amount of any future dividend payments or eliminate the payment of future dividends in its sole discretion, without any prior notice to our stockholders. Our ability to pay dividends will depend upon many factors, including our financial position and liquidity, results of operations, legal requirements, restrictions that may be imposed by the terms of our current and future credit facilities and other debt obligations and other factors deemed relevant by our Board of Directors. For example, we have a substantial amount of indebtedness and while we feel that we generate sufficient cash from operations and have sufficient borrowing capacity to make required capital expenditures

2126

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~~our board of directors. For example, we have a substantial amount of indebtedness and while we feel that we generate sufficient cash from operations and have sufficient borrowing capacity~~ to ~~make required capital expenditures to~~ maintain and grow our business, any decrease in our cash generation could result in higher leverage. Higher leverage could hinder our ability to make acquisitions, capital expenditures, or other investments in our businesses, pay dividends, or withstand business and economic downturns.

In the future, we may also enter into other credit agreements or other borrowing arrangements or issue debt securities that, in each case, restrict or limit our ability to pay cash dividends on our ~~Common~~common ~~Stock~~stock. In addition, since a significant portion of our cash is generated from operations of our subsidiaries, our ability to pay dividends is in part dependent on the ability of our subsidiaries – some of which are located outside of the ~~United~~U.S. ~~States~~ – to make distributions to us. Such distributions will be subject to their operating results, cash requirements and financial condition, as well as our ability to repatriate cash held by non-U.S. subsidiaries. Any change in the level of our dividends or the suspension of the payment thereof could adversely affect the market price of our ~~Common~~common ~~Stock~~stock.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our Class A Common Stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who covers us downgrades our Class A Common Stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our Class A Common Stock could decrease, which could cause our stock price and trading volume to decline.

Future sales of shares by us or our existing stockholders could cause our stock price to decline.

Sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could cause the market price of our common stock to decline or might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

As of February 1716, ~~2023~~2024, we had 31.12 million shares of Class A Common Stock outstanding ~~and no shares of Class B Common Stock outstanding~~. In addition, shares of Class A Common Stock are issuable upon the ~~exercise of outstanding stock options or the~~ vesting of outstanding equity awards, and certain shares are reserved for future issuance under our equity compensation plans.

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Item 1C. CYBERSECURITY

Risk Management and Strategy

Albany International Corp. views cybersecurity risk management as a cornerstone of our Enterprise Risk Management ("ERM") strategy, and we are committed to protecting our digital assets and sustaining investor confidence. Cybersecurity risks we face include data breaches, operational disruptions, reputational harm, and regulatory fines. Such incidents could lead to shutdowns or disruptions of or damage to our systems and those of our customers and suppliers, and unauthorized disclosure of sensitive or confidential information, potentially including personal data and proprietary business information. Unauthorized disclosure of, denial of access to, or other incidents involving sensitive or confidential Company, employee, customer or supplier data, whether through systems failure, employee negligence, fraud, misappropriation, or cybersecurity, ransomware or malware attacks, or other intentional or unintentional acts, could damage our reputation and our competitive positioning in the marketplace, disrupt our or our customer’s business, cause us to lose customers and result in significant financial exposure and legal liability.

These risks are identified, assessed and managed within the broader context of our ERM strategy, ensuring a comprehensive approach to organizational risk. We incorporate cybersecurity risk assessments into our overall enterprise risk assessment process. This integration ensures that cyber risks are evaluated and managed alongside other operational, financial, and strategic risks, offering a holistic view of our risk landscape. Our ERM strategy is overseen by an Enterprise Risk Management Committee, which is made up of representatives from our finance, legal, accounting, internal audit and global information systems functions, our business leaders and members of the Senior Leadership Team. It is led by our Chief Financial Officer and its actions are reported to our Board of Directors on a quarterly basis.

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Our Chief Information Officer and Director of Information Security, along with members of their respective teams, are responsible for identifying and managing cybersecurity risk. The Senior Leadership Team, the Board of Directors and the Board’s Audit Committee receive regular updates and engage in regular strategic discussions relating to cybersecurity risk management as part of their overall oversight of risk management.

Our cybersecurity framework leverages internationally recognized standards, including the CIS 20 and the NIST SP 800-171 frameworks, and is required to comply with the Department of Defense CMMC. We have policies and procedures in place designed to maintain compliance with relevant cybersecurity and data privacy laws and regulations in the jurisdictions in which we operate, such as the European Union GDPR and the California Consumer Privacy Act.

Our cybersecurity strategy includes policies, procedures, and technology that proactively safeguard our operations against cybersecurity threats. Internal teams and external experts regularly conduct risk assessments and audits to identify cybersecurity threats, ensure regulatory compliance, and adhere to control process best practices. Continuous monitoring of our networks and systems for threats and vulnerabilities is a key component of our strategy, supported by the analysis of threat intelligence from external sources. This multi-layered approach enables early detection and facilitates prompt response to potential cybersecurity threats. We regularly review and update our cybersecurity strategies, policies and procedures, taking into consideration the latest advancements in cybersecurity practices and changes to the threat landscape.

We have a cybersecurity incident response and crisis management plan in place, which incorporates regular training and simulation exercises, including with senior management, to ensure readiness and efficacy in responding to cybersecurity incidents. Our incident response and crisis management plan coordinates the activities we will take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate, and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate reputational damage.

In addition, we provide regular security awareness education and training for all employees and consultants, conduct internal “phishing” testing and training for “clickers,” require mandatory security training for all new hires and publish periodic cybersecurity newsletters to highlight any emerging or urgent security threats. We also carry insurance that provides protection against the potential losses arising from a cybersecurity incident.

We engage qualified third-party cybersecurity experts for in-depth cyber risk assessments, penetration tests, and compliance audits, which provide impartial perspective and insight into our cybersecurity posture and we engage consultants for the development and refinement of our cybersecurity strategy and maturity, drawing upon industry best practices and regulatory knowledge. These collaborations also include the refinement of our incident response and crisis management plan and employee training, emphasizing the transfer of knowledge for sustainable in-house capabilities.

Our cybersecurity risk management processes extend to the oversight and identification of threats associated with our use of third-party service providers. We set clear objectives for third-party service providers, and we assess cybersecurity practices and any history of security incidents before engaging any potential service providers. Our contracts explicitly include requirements relating to cybersecurity, including adherence to certain standards, to ensure compliance with our security protocols. Once engaged, we regularly monitor the cybersecurity posture of these providers through surveys and reports, audits, and performance reviews.

Our business strategy, results of operations and financial condition have not been materially affected by risks from cybersecurity threats, including as a result of previous cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks and any future material incidents. Based on our review of past cybersecurity incidents, we believe that all such incidents were addressed promptly and effectively. In the last fiscal three years, we have not experienced any material information cybersecurity incidents and the expenses we have incurred from any cybersecurity incidents were immaterial. See Item 1A, “Risk Factors” of this Annual Report on Form 10-K for more information on our cybersecurity-related risks.

Governance

Board of Directors

The Board of Directors oversees our risk management processes, including with respect to cybersecurity risk, and the Board considers cybersecurity risk management an enterprise priority. The Board has delegated primary

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responsibility for reviewing and discussing with management our strategies, initiatives and policies relating to cybersecurity to the Audit Committee, which regularly reports to the full Board regarding such review and discussions. In addition, in connection with its oversight of cybersecurity risks in relation to financial reporting and internal controls, the Audit Committee plays a crucial role in the Board’s understanding and management of the financial and operational impacts of cybersecurity risks.

As part of their oversight of cybersecurity risk, the Board and Audit Committee regularly review detailed cybersecurity reports, which include analyses of the threat landscape, recent incidents, and the efficacy of our cybersecurity strategy. In addition, the Chief Information Officer provides bi-annual updates to the Audit Committee and annual briefings to the full Board on our cybersecurity posture, strategy, and risk management. These reviews and updates are complemented by ongoing cybersecurity training for board members to enhance their decision-making and oversight effectiveness.

Regular active engagement in strategic discussions by the Board and Audit Committee ensures that cybersecurity considerations are effectively integrated into our overall business strategy and align with Company objectives and demonstrates the Board’s commitment to proactive cybersecurity oversight.

Management

Although the Board oversees our overall risk management, day-to-day management of cybersecurity risk is the responsibility of management. Management’s critical role involves assessing and managing these risks through regular evaluations, deploying advanced security measures, and developing policies. Management integrates these strategies across all our operations, fostering a culture of cybersecurity awareness within the Company. This proactive stance is essential to safeguarding digital assets and ensuring operational resilience against evolving cyber threats.

Quarterly, the Chief Information Officer presents detailed cybersecurity reports to the Enterprise Risk Committee, focusing on strategic initiatives and evolving threats. The Enterprise Risk Committee, meeting quarterly, evaluates cybersecurity within the broader organizational risk context, ensuring consistent assessment and management.

The Chief Financial Officer chairs quarterly Enterprise Risk Management Committee meetings to review and evaluate various risk factors, including cybersecurity. The Chief Financial Officer's expertise in financial risk management, strategic planning, and organizational leadership is instrumental in guiding the committee's discussions and decisions. The Chief Financial Officer ensures that appropriate financial and operational implications of cybersecurity risk are considered and integrated into our Enterprise Risk Management Strategy.

The Chief Information Officer oversees our broader IT strategy, including cybersecurity, and presents quarterly to the Enterprise Risk Management Committee, bi-annually to the Audit Committee, and annually to the Board. The Chief Information Officer's expertise in information technology, cybersecurity, and strategic planning, forged over 24 years, 20 of which has been spent in leadership at global publicly traded companies, is integral to our approach to cybersecurity risk management. This expertise is crucial in aligning our cybersecurity initiatives with business objectives, ensuring that our strategies effectively support the Company's overall goals.

The Director of Information Security, reporting to and collaborating with the Vice President of Information Technology & the Chief Information Officer, manages our Enterprise Cybersecurity team. Day-to-day responsibilities include the implementation of cybersecurity strategies, cybersecurity risk management, and enhancing defenses against evolving threats. Our Director of Information Security has over 30 years of IT experience, 10 of which have been spent leading the Company’s cybersecurity efforts. The Information Security Director plays a key role in shaping our cybersecurity strategy, ensuring alignment with industry standards and integration into our broader IT strategy.

Regular reporting channels between the Director of Information Security, the Chief Information Officer, and the Chief Financial Officer facilitate a cohesive, well-informed approach to managing cybersecurity risks. These reports include detailed analyses of potential threats, incident response readiness, and the effectiveness of existing cybersecurity measures.

Item 2. PROPERTIES

Our principal manufacturing facilities are located in Belgium, Brazil, Canada, China, France, Germany, Italy, Mexico, South Korea, Spain, Sweden, Switzerland, the United Kingdom, and the United States. The aggregate square footage of our operating facilities in the United States is approximately 2.01 million square feet, of which 1.12 million square feet are owned and 0.9 million square feet are leased. Our facilities located outside the United States comprise approximately 3.5 million square feet, of which 3.0 million square feet are owned and 0.5 million square feet are leased. We consider these facilities to be in good condition and suitable for our purpose. The capacity associated with these facilities is adequate to meet production levels required and anticipated through 2023.

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comprise approximately 5.6 million square feet, of which 4.8 million square feet are owned and 0.8 million square feet are leased. We consider these facilities to be in good condition and suitable for our purpose. The capacity associated with these facilities is adequate to meet production levels required and anticipated through 2024.

Item 3. LEGAL PROCEEDINGS

The information set forth above is described in Note 21, Commitments and Contingencies, of the Notes to the Consolidated Financial Statements, ~~included~~in ~~under~~ Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

Item 4. MINE SAFETY DISCLOSURES

~~None~~Not applicable.

2230

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PART II

Item 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

We have ~~two classes of Common Stock,~~ Class A Common Stock ~~and Class B Common Stock, each~~ with a par value of $0.001 ~~and equal liquidation rights~~. Our Class A Common Stock is principally traded on the New York Stock Exchange under the ticker symbol AIN. According to Broadridge, as of December 31, ~~2022~~2023, there were over 2050,000 beneficial owners of our Class A Common Stock, including employees owning shares through our 401(k) defined contribution plan. ~~Our Class B Common Stock does not trade publicly. As of December 31, 2022, there were no outstanding Class B shares.~~ Dividends are paid ~~equally~~ on ~~shares~~our ofClass ~~each~~A ~~class~~Common Stock. Our cash dividends, and the high and low prices per share of our Class A Common Stock, were as follows for the periods presented:

Quarter Ended	March 31		June 30		September 30		December 31
2023
Cash dividends per share	$	0.25	$	0.25	$	0.25	$	0.26
Class A Common Stock prices:
High	$	113.72	$	93.28	$	96.89	$	98.96
Low	$	85.28	$	84.92	$	83.53	$	78.48
2022
Cash dividends per share	$	0.21	$	0.21	$	0.21	$	0.25
Class A Common Stock prices:
High	$	91.25	$	87.91	$	97.20	$	104.34
Low	$	80.84	$	75.94	$	77.50	$	81.62
2021
Cash dividends per share	$	0.20	$	0.20	$	0.20	$	0.21
Class A Common Stock prices:
High	$	88.01	$	92.26	$	88.88	$	89.92
Low	$	69.52	$	81.80	$	75.13	$	79.31

2331

Index

The graph below ~~matches~~compares the cumulative 5-Year total return of holders of Albany International Corp.’s common stock with the cumulative total returns of the Russell 2000 index and a customized peer group of ~~eighteen~~nineteen companies included in the customized peer group which are: Astronics Corp, Idex Corp, Barnes Group Inc, ~~Bwx~~Enpro ~~Technologies~~ Inc, ~~Curtiss-Wright~~Tredegar Corp, ~~Enpro~~Ducommun ~~Industries~~ Inc, ~~Esco~~Curtiss-Wright ~~Technologies Inc~~Corp, ~~Franklin~~Watts ~~Electric~~Water CoTechnologies Inc, ~~Graco~~Hexcel ~~Inc~~Corp, ~~Heico~~Nordson Corp, ~~Hexcel~~Glatfelter Corp, ~~Kadant~~Heico ~~Inc, Kaman~~ Corp, ~~Mercury~~Esco ~~Systems~~Technologies Inc, ~~Nordson~~Enerpac ~~Corp,~~Tool ~~Spx~~Group ~~Technologies Inc~~Corp, ~~Teledyne~~Rogers ~~Technologies Inc~~Corp, Trimas Corp, ~~Triumph~~Kadant ~~Group~~Inc, National Presto Industries Inc, and ~~Woodward~~Mativ Holdings Inc. The graph assumes that the value of the investment in our common stock, in each index, and in the peer group (including reinvestment of dividends) was $100 on December 31, ~~2017~~2018 and tracks it through December 31, ~~2022~~2023.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

*$100 invested on 12/31/1718 in stock or index, including reinvestment of dividends.

Fiscal year ending December 31.

December 31,

~~2017~~2018

~~2018~~2019

~~2019~~2020

~~2020~~2021

~~2021~~2022

~~2022~~2023

Albany International Corp.

100.00

~~102~~122.6679

~~126~~120.0544

~~123~~146.6448

~~150~~164.3888

~~169~~166.2707

Russell 2000

100.00

88125.9952

~~111~~150.7058

~~134~~172.0090

~~153~~137.8556

~~122~~160.4185

Peer Group

100.00

91136.2504

~~124~~145.7875

~~133~~173.7593

~~158~~164.9196

~~150~~190.6656

The stock price performance included in this graph is not necessarily indicative of future stock price performance.

Restrictions on dividends and other distributions are described in Note 17, Financial Instruments of the Notes to the Consolidated Financial Statements, ~~included~~in ~~under~~ Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

Disclosures of securities authorized for issuance under equity compensation plans are included under Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, of this Annual Report on Form 10-K.

2432

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~~Issuer~~In ~~Purchases~~2021, the Company's Board of ~~Equity~~Directors ~~Securities~~authorized ~~during~~the Company to repurchase shares of up to $200 million through open market purchases, privately negotiated transactions or otherwise, and to determine the ~~year~~prices, ~~ended~~times ~~December~~and 31amounts. 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. In total, the Company has repurchased 1,308,003 shares for a total cost of $109.4M, of which 1,022,717 shares were repurchased in 2022 for $85.1 million and 285,286 shares were repurchased in 2021 for $24.3 million. The Company made no share repurchases during 2023.

Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced program	Approx. dollar value of shares that may yet be purchased under the program (in thousands)
January 1 to January 31, 2022	140,879	$	85.24	140,879	$	163,722
February 1 to February 28, 2022	145,164	86.29		145,164	151,244
March 1 to March 31, 2022	228,643	85.51		228,643	131,688
April 1 to April 30, 2022	236,091	82.21		236,091	112,418
May 1 to May 31, 2022	271,940	80.98		271,940	90,561
June 1 to June 30, 2022	—	—		—	90,561
July 1 to July 31, 2022	—	—		—	90,561
August 1 to August 31, 2022	—	—		—	90,561
September 1 to September 30, 2022	—	—		—	90,561
October 1 to October 31, 2022	—	—		—	90,561
November 1 to November 30, 2022	—	—		—	90,561
December 1 to December 31, 2022	—	—		—	90,561
Total	1,022,717			1,022,717	90,561

Issuer Purchases of Equity Securities during the three months ended December 31, 2023

In 2021, the Company's Board of Directors authorized the Company to repurchase shares of up to $200 million through open market purchases, privately negotiated transactions or otherwise, and to determine the prices, times and amounts. 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. In total the Company has repurchased 1,308,003 shares for a total cost of $109.4M, of which 1,022,717 shares were repurchased in 2022 for $85.1 million and 285,286 shares were repurchased in 2021 for $24.3 million.


Period	Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of publicly announced program	Approx. dollar value of shares that may yet be purchased under the program (in thousands)
October 1 to October 31, 2023	—	—	—	90,561
November 1 to November 30, 2023	—	—	—	90,561
December 1 to December 31, 2023	—	—	—	90,561
Total	—		—	90,561

25Item 6. [RESERVED]

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Item 6. SELECTED FINANCIAL DATA

The following selected historical financial data have been derived from our Consolidated Financial Statements in Item 8. The data should be read in conjunction with those financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7.

(in thousands, except per share amounts)	2022		2021		2020		2019		2018
Summary of Operations
Net sales (3) (4)	$	1,034,887	$	929,240	$	900,610	$	1,054,132	$	982,479
Cost of goods sold (3) (4) (5)	645,105		550,849		529,538		656,431		632,730
Restructuring and other (6)	106		1,331		5,736		2,905		15,570
Operating income/(loss) (1) (3) (5)	181,022		178,011		166,080		193,576		137,408
Interest expense, net	14,000		14,891		13,584		16,921		18,124
Income from continuing operations	96,508		118,768		97,243		133,383		83,019
Net income attributable to the Company	95,762		118,478		98,589		132,398		82,891
Earnings per share attributable to Company Shareholders- Basic	3.06		3.66		3.05		4.10		2.57
Earnings per share attributable to Company Shareholders- Diluted	3.04		3.65		3.05		4.10		2.57
Dividends declared per share	0.88		0.81		0.77		0.73		0.69
Weighted average number of shares outstanding - basic	31,339		32,348		32,329		32,296		32,252
Capital expenditures, including software	96,348		53,699		42,390		67,955		82,886
Financial position
Cash	$	291,776	$	302,036	$	241,316	$	195,540	$	197,755
Property, plant and equipment, net (2) (3)	445,658		436,417		448,554		466,462		462,055
Total assets (1) (2) (3) (4)	1,642,255		1,556,064		1,549,936		1,474,368		1,417,992
Current liabilities (2) (3)	211,316		208,166		190,863		202,719		189,306
Long-term debt (2)	439,000		350,000		398,000		424,009		523,707
Total noncurrent liabilities (2) (3)	563,396		470,293		539,208		568,960		620,406
Total liabilities (2) (3) (4)	774,712		678,459		730,071		771,679		809,712
Total equity (1) (2) (4)	867,543		877,605		819,865		702,689		608,280

(1) In 2020, we adopted the provisions of ASC 326, Current Expected Credit Losses (CECL), using the

modified retrospective (or cumulative effect) method for transition. Under this transition method, periods prior to 2020 were not restated and the cumulative effect of initially applying the new standard was recorded as an adjustment to Retained earnings at January 1, 2020.

(2) In 2019, we adopted the provisions of ASC 842, “Leases”, using the modified retrospective (or cumulative

effect) method for transition. Under this transition method, periods prior to 2019 have not been restated and

the cumulative effect of initially applying the new standard was recorded as an adjustment to Retained

earnings at January 1, 2019.

(3) In 2019, we acquired the outstanding shares of CirComp GmbH for net cash of $36.3 million, which includes

approximately $5.5 million of deferred payments.

(4) In 2018, we adopted the provisions of ASC 606, “Revenue from contracts with customers”, using the modified

retrospective (or cumulative effect) method for transition. Under this transition method, periods prior to 2018

have not been restated and the cumulative effect of initially applying the new standard was recorded as an

adjustment to Retained earnings at January 1, 2018.

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(5) In 2018, we adopted the provisions of ASU 2017-07, “Compensation – Retirement Benefits: improving the

presentation of net periodic pension cost and net periodic postretirement benefit cost”. This update resulted in

some pension costs being presented on different line items in the Consolidated Statement of Income. As

required by that update, we have reclassified pension costs for periods prior to 2018.

(6) During the period 2018 through 2022, we recorded restructuring charges related to organizational changes

and cost reduction initiatives.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the results of operations and financial condition of the Company. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying Notes included under Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

The MD&A generally discusses ~~2022~~2023 and ~~2021~~2022 items and year-to-year comparisons between ~~2022~~2023 and ~~2021~~2022. Discussions of ~~2020~~2021 items and year-to-year comparisons between ~~2021~~2022 and ~~2020~~2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results or Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022, filed with the SEC on February 2524, ~~2022~~2023, incorporated herein by reference.

Business Environment Overview and Trends

Our reportable segments, Machine Clothing (“MC”) and Albany Engineered Composites (“AEC”) draw on the same advanced textiles and materials processing capabilities, and compete on the basis of product-based advantage that is grounded in those core capabilities.

The MC segment is the Company’s long-established core business and primary generator of cash. While it has been negatively impacted by ~~well-documented~~ declines in publication grades in the Company’s traditional markets, there has been some offsetting effect due to growth in demand for packaging and tissue grades, as well as the expansion of paper consumption and production in Asia and South America. We ~~feel~~believe we are well-positioned in key markets, with high-quality, low-cost production in growth markets, substantially lower fixed costs in mature markets, and continued strength in new product development, technical product support, and manufacturing technology. Some of the markets in which our products are sold are expected to have low levels of growth and we face pricing pressures in all markets. Despite these market pressures on revenue, the MC business retains the potential for maintaining stable earnings in the future. MC has been a significant generator of cash, and we seek to maintain the cash-generating potential of this business by maintaining the low costs that we have achieved through continuous focus on cost-reduction initiatives, and competing vigorously by using our differentiated and technically superior products to reduce our customers’ total cost of operation and improve their paper quality.

The AEC segment provides significant longer term growth potential for the Company. Our strategy is to grow by focusing our proprietary 3D-woven technology, as well as our non-3D technology capabilities, on high-value aerospace (both commercial and defense) applications, while at the same time performing successfully on our portfolio of growth programs. AEC (including Albany Safran Composites, LLC (“ASC”), in which our customer SAFRAN Group owns a 10 percent noncontrolling interest) supplies a number of customers in the aerospace industry. AEC’s largest aerospace customer is the SAFRAN Group ("SAFRAN") and sales to SAFRAN, through ASC, (consisting primarily of fan blades and cases for CFM’s LEAP engine) accounted for approximately 16 percent of the Company’s consolidated Net sales in 2022. AEC, through ASC, also supplies 3D-woven composite fan cases for the GE9X engine. AEC’s current portfolio of non-3D programs includes components for the CH-53K helicopter, components for the F-35, missile bodies for Lockheed Martin’s JASSM air-to-surface missiles, fuselage components for the Boeing 787, and vacuum waste tanks for Boeing 7-Series aircraft. AEC is actively engaged in research to develop new applications in both commercial and defense aircraft engine and airframe markets. In 2022, approximately 46 percent of AEC sales were related to U.S. government contracts or programs.33

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in which our products are sold are expected to have low levels of growth and we face pricing pressures in all markets. Despite these market pressures on revenue, the MC business retains the potential for maintaining stable earnings in the future. MC has been a significant generator of cash, and we seek to maintain the cash-generating potential of this business by maintaining the low costs that we have achieved through continuous focus on cost-reduction initiatives, and competing vigorously by using our differentiated and technically superior products to reduce our customers’ total cost of operation and improve their paper quality. On August 31, 2023, we acquired Heimbach, a privately-held manufacturer of paper machine clothing headquartered in Düren, Germany, which provides MC with an increase in scale and complementary technology that further drives MC's differentiated manufacturing sales and service network. See Note 24, Business Combination, of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for additional information.

The AEC segment provides significant longer term growth potential for the Company. Our strategy is to grow by focusing our proprietary 3D-woven technology, as well as our non-3D technology capabilities, on high-value aerospace (both commercial and defense) applications, while at the same time performing successfully on our portfolio of growth programs. AEC (including Albany Safran Composites, LLC (“ASC”), in which our customer SAFRAN Group owns a 10 percent noncontrolling interest) supplies a number of customers in the aerospace industry. AEC’s largest aerospace customer is the SAFRAN Group ("SAFRAN") and sales to SAFRAN, through ASC, (consisting primarily of fan blades and cases for CFM International’s LEAP engine) accounted for approximately 16 percent of the Company’s consolidated Net revenues in 2023. AEC, through ASC, also supplies 3D-woven composite fan cases for the GE9X engine. AEC’s current portfolio of non-3D programs includes components for the CH-53K helicopter, components for the F-35, missile bodies for Lockheed Martin’s JASSM air-to-surface missiles, fuselage components for the Boeing 787 aircraft, and vacuum waste tanks for Boeing commercial aircraft. AEC is actively engaged in research to develop new applications in both commercial and defense aircraft engine and airframe markets. In 2023, approximately 39 percent of AEC net revenues were related to U.S. government contracts or programs.

Consolidated Results of Operations

Net ~~sales~~Revenues

The following table summarizes our Net ~~sales~~revenues by business segment:

	(in thousands, except percentages)
Years ended December 31,	~~2022~~2023			~~2021~~2022			~~2020~~2021
Machine Clothing	$	~~609~~670,~~461~~768		$	~~619~~609,~~015~~461		$	~~572~~619,~~955~~015
Albany Engineered Composites	~~425~~477,~~426~~141			~~310~~425,~~225~~426			~~327~~310,~~655~~225
Total	$	1,034,887		$	929,240		$	900,610
Total net revenues	$	1,147,909		$	1,034,887		$	929,240
% change	1110.49		%	311.24		%	~~-14~~3.62		%

Changes in currency translation rates had the effect of decreasing ~~2022~~2023 Net ~~sales~~revenues by $280.58 million, ~~(3%~~driven ofby ~~Net~~the ~~sales)~~weaker ~~driven~~Renminbi, which was partially offset by the ~~weaker~~stronger Euro, as compared to ~~2021~~2022. Excluding the effect of changes in currency translation rates, consolidated Net revenues increased 11 percent.

~~Excluding~~Net revenues in MC increased 10.5 percent, excluding the effect of changes in currency translation rates:, ~~consolidated~~compared ~~Net~~to ~~sales~~2022, ~~increased~~driven ~~14.4%,~~by ~~Net~~the ~~sales~~acquisition inof MCthe ~~increased~~Heimbach ~~1.8%~~business ~~compared~~in toAugust ~~2021~~2023, ~~driven~~which bycontributed ~~increased~~Net ~~sales~~revenues of ~~packaging,~~$51.2 ~~pulp~~million. MC ~~and~~net ~~tissue~~revenues ~~grades,~~also ~~and~~improved ~~AEC~~due ~~experienced~~to ~~significant~~better ~~growth~~performance ~~during~~in ~~2022,~~tissue ~~with~~and ~~Net~~packaging ~~sales~~grades, ~~increasing~~which ~~39.6%,~~was ~~primarily~~partially ~~driven~~offset by ~~CH-53K~~lower ~~and~~revenues ~~LEAP~~from ~~programs~~engineered fabrics.

AEC's Net revenues increased 11.7 percent, excluding the effect of changes in currency translation rates, primarily due to revenue growth across AEC's portfolio of commercial programs including LEAP, Boeing 787 Frames, GE9X and other commercial programs. Recurring production revenues for defense programs grew year-over-year, however, the defense growth was more than offset by lower non-recurring revenues associated with the start-up of the CH-53K aft transition program.

Backlog

Backlog inrepresents the MCsummation ~~segment~~of ~~was~~the ~~$172~~value ~~million~~of atall ~~December 31~~firm, ~~2022~~open ~~and~~orders ~~$190~~from ~~million~~customers ~~December,~~at 31both ~~2021~~segments. Backlog in the ~~AEC~~MC segment ~~increased~~was to $~~414~~256 million at December 31, ~~2022~~2023, ~~compared~~which toincluded $~~347~~72 million atrelated ~~December~~to 31Heimbach, ~~2021.~~and ~~The~~$172 ~~increase~~million inat ~~AEC’s~~December, ~~backlog~~31 ~~was primarily due to increased demand on the CH-53K program~~2022. ~~All~~Backlog ~~of the backlog~~ in ~~MC and approximately 65% of~~ the AEC ~~backlog~~segment isincreased ~~expected~~ to be$494 ~~invoiced~~million ~~during~~at ~~the~~December ~~next~~31, ~~12 months.~~

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2023, compared to $414 million at December 31, 2022. The increase in AEC’s backlog was primarily due to growth on the LEAP and CH-53K programs. All of the backlog in MC and approximately 75 percent of the AEC backlog is expected to be invoiced during the next 12 months.

Gross Profit

The following table summarizes Gross profit by business segment:

	(in thousands, except percentages)
Years ended December 31,	~~2022~~2023			~~2021~~2022			~~2020~~2021
Machine Clothing	$	~~312~~331,~~285~~558		$	~~322~~312,~~457~~285		$	~~301~~322,~~144~~457
Albany Engineered Composites	7792,~~497~~160			5577,~~934~~497			6955,~~928~~934
Total	$	~~389~~423,~~782~~718		$	~~378~~389,~~391~~782		$	~~371~~378,~~072~~391
% of Net Sales	37.7		%	40.7		%	41.2		%
% of net revenues	36.9		%	37.7		%	40.7		%

The increase in ~~2022~~2023 Gross profit, as compared to ~~2021~~2022, was principally due to increased Net ~~sales~~revenues atin ~~AEC~~both segments and the acquisition of Heimbach. ~~Gross~~The change in gross profit as a percentage of ~~sales~~revenues for each segment is as follows:

•At MC, gross profit margin decreased from 5251.1%2 percent in ~~2021~~2022 to 5149.2%4 percent in ~~2022~~2023 in MC. This margin decrease was partially driven by increased cost of goods sold at Heimbach, ~~due~~which toincluded anthe ~~increase~~non-recurring inamortization of the fair value step-up of acquired inventory of $5.5 million. In addition, gross profit margin decreased as a result of increased input costs, mainly due to the inflationary environment, and lower overhead absorption.

•At AEC, ~~was~~gross ~~largely~~profit inmargin ~~line~~increased ~~with~~from ~~the~~18.2 ~~prior~~percent ~~year,~~in ~~increasing~~2022 ~~from~~to 1819.0%3 percent in ~~2021~~2023. Growth in LEAP and other commercial programs contributed to ~~18.2%~~improved inoverhead ~~2022~~absorption, which improved gross profit margins.

29Selling, General, and Administrative ("SG&A")

Selling, general and administrative ("SG&A") expenses include segment selling, general and administrative expenses and corporate expenses. The following table summarizes SG&A by business segment:


	(in thousands, except percentages)
Years ended December 31,	2023			2022			2021
Machine Clothing	$	107,246		$	81,391		$	79,570
Albany Engineered Composites	34,597			30,565			26,852
Corporate	73,072			56,757			53,705
Total	$	214,915		$	168,713		$	160,127
% of net revenues	18.7		%	16.3		%	17.2		%

Consolidated SG&A expenses increased 27.4 percent as compared to 2022. SG&A expenses also increased as a percentage of Net Revenues from 16.3 percent in 2022 to 18.7 percent in 2023. The change in SG&A by segment is driven by the following:

•MC SG&A expenses increased $25.9 million as compared to 2022, of which $20.5 million of the increase relates to the acquisition of Heimbach and $4.6 million was due to changes in currency translation rates. Excluding Heimbach and changes in currency translation rates, MC's SG&A increase was modest at $0.8 million driven primarily by higher wages.

•AEC SG&A expenses increased $4.0 million as compared to 2022, of which $1.7 million was due to increased incentive compensation and personnel-related costs and $0.9 was related to investments in business development, including increases in marketing and trade show activities.

•Corporate SG&A expenses increased $16.3 million principally due to non-recurring acquisition-related costs and other non-recurring strategic costs of $4.6 million, $2.7 million of vesting of retirement compensation

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~~Selling,~~costs ~~Technical,~~for ~~General~~the former CEO, $4.3 million in higher employee-related compensation and ~~Research~~$3.1 ~~(STG&R)~~million of IT-related costs.

~~Selling,~~Technical ~~technical, general~~ and ~~research (STG&R) expenses include selling, general, administrative, technical, product engineering and research expenses.~~Research

	(in thousands, except percentages)
Years ended December 31,	2022			2021			2020
Machine Clothing	$	105,979		$	105,602		$	107,594
Albany Engineered Composites	45,918			39,742			35,571
Corporate expenses	56,757			53,705			56,091
Total	$	208,654		$	199,049		$	199,256
% of Net Sales	20.2		%	21.4		%	22.1		%

Technical and research expenses include technical, product engineering, internally funded research and development expenses.

~~Consolidated~~The ~~STG&R~~following ~~expenses~~table ~~increased~~summarizes 5%technical asand ~~compared~~research toexpenses ~~2021,~~by ~~but~~business ~~represented a smaller percentage of Net Sales.~~ segment:

•At MC, STG&R remained largely in line with the prior year.


	(in thousands, except percentages)
Years ended December 31,	2023			2022			2021
Machine Clothing	$	24,651		$	24,588		$	26,032
Albany Engineered Composites	15,976			15,353			12,890
Total technical and research expenses	$	40,627		$	39,941		$	38,922
% of net revenues	3.5		%	3.9		%	4.2		%

~~•At~~Consolidated ~~AEC,~~Technical ~~Selling~~ and ~~general~~research expenses increased $31.7 ~~million~~percent ~~related~~as compared to ~~investments~~2022, inhowever, ~~business~~as ~~development~~a ~~activities,~~percentage ~~and~~of ~~Research~~Net ~~expense~~revenues, ~~increased~~it $2decreased from 3.59 ~~million~~percent ~~related~~in 2022 to ~~investments~~3.5 percent in ~~new~~2023. ~~technologies~~The change in Technical and ~~enhanced~~research ~~capabilities.~~expenses by segment is driven by the following:

~~Research~~•MC Technical and ~~Development~~research expenses remained largely consistent with the prior year, increasing only marginally.

	(in thousands)
Years ended December 31,	2022		2021		2020
Machine Clothing	$	16,060	$	16,710	$	15,922
Albany Engineered Composites	15,353		12,891		9,828
Total	$	31,413	$	29,601	$	25,750

•AEC Technical and research expenses increased $0.6 million as compared to 2022, due to increases in research material and labor costs.

Restructuring

In addition to the items discussed above affecting Gross profit, SG&A and ~~STG&R~~Technical and research expenses, operating income was affected by ~~restructuring~~Restructuring ~~expense~~expenses, net, which was insignificant in both the current and prior year, and was related primarily to the winding down of restructuring actions taken in prior periods. For more information on our restructuring charges, see Note 5, Restructuring, of the Notes to the Consolidated Financial Statements, ~~included~~in ~~under~~ Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

Index

Operating Income

The following table summarizes operating income/(loss) by business segment:

	(in thousands)
	(in thousands, except percentages)
Years ended December 31,	~~2022~~2023			~~2021~~2022			~~2020~~2021
Machine Clothing	$	~~206~~199,~~214~~378		$	~~215~~206,~~654~~214		$	~~190~~215,~~805~~654
Albany Engineered Composites	3141,~~579~~587			1631,~~160~~579			3116,~~536~~160
Corporate expenses	(56,771)			(53,803)			(56,261)
Corporate	(73,071)			(56,771)			(53,803)
Total	$	181,022		$	178,011		$	166,080
Total operating income	$	167,894		$	181,022		$	178,011
% of net revenues	14.6		%	17.5		%	19.2		%

30 See the Segment Results of Operations section of this Management Discussion and Analysis of Financial Condition and Results of Operations for significant drivers of Operating income/(loss) for each business segment.

~~Index~~Other Earnings Items

	(in thousands)
Years ended December 31,	2022		2021		2020
Interest expense, net	$	14,000	$	14,891	$	13,584
Pension settlement expense	49,128		—		—
AMJP grant	—		(5,832)		—
Other (income)/expense, net	(14,086)		3,021		13,422
Income tax expense	35,472		47,163		41,831
Net income/(loss) attributable to the noncontrolling interest	746		290		(1,346)

The following table summarizes other earnings items that are presented below Operating income:

Interest Expense


	(in thousands)
Years ended December 31,	2023		2022		2021
Interest expense, net	$	13,601	$	14,000	$	14,891
Pension settlement expense	—		49,128		—
AMJP grant	—		—		(5,832)
Other (income)/expense, net	(6,163)		(14,086)		3,021
Income tax expense	48,846		35,472		47,163
Net income/(loss) attributable to the noncontrolling interest	490		746		290

Interest ~~expense~~Expense/(income), net, decreased over the prior year as a result of higher interest earned on Cash and cash equivalents, in addition to decreased interest expense on Finance leases during the fourth quarter. See the Working Capital, Liquidity and Capital Structure section for further discussion of borrowings and interest rates.

Interest expense/(income), net, decreased over the prior year as a result of higher interest earned on Cash and cash equivalents, in addition to lower interest expense on finance leases. See the Working Capital, Liquidity and Capital Structure section for further discussion of borrowings and interest rates.

Pension settlement expense

InDuring ~~the third quarter of~~ 2022, the Company took actions to settle certain pension plan liabilities in the U.S., leading to charges totaling $49.1 million. No similar charges were incurred induring ~~the prior year~~2023. See Note 4, Pension, Postretirement, and Other Benefit Plans, of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for additional information.

AMJP grant

During ~~the third quarter of~~ 2021, the Company was awarded an Aviation Manufacturing Jobs Protection Program ("AMJP") grant of $5.8 million, under the American Rescue Plan of the U.S. Department of Transportation. No such award was granted during 2022 or 2023. See Government Grants under Note 1, Accounting Policies, of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for additional information.

Other (income)/expense, net

~~In 2022,~~ Other (income)/expense, net included ~~gains~~foreign currency related totransactions ~~the~~that ~~revaluation~~resulted ofin ~~nonfunctional-currency~~gains ~~balances~~ of $102.0 9 million, during as2023 ~~compared~~and togains ~~a gain~~ of $110.2 0 million during ~~2021, principally resulting from a weaker Euro throughout the course of~~ 2022. ~~Also~~ inDuring ~~2022~~2023, the ~~Company~~stronger ~~recorded~~Mexican aPeso ~~gain~~primarily ofdrove ~~$3.4~~transaction ~~million~~gains on ~~the~~nonfunctional ~~sale~~currency ofmonetary IPliabilities, ~~addresses~~while ~~that~~during 2022, the ~~Company~~weaker ~~had~~Euro noprimarily ~~future~~drove ~~critical~~transaction ~~need to retain. There were no similar~~ gains ofrelated ~~this~~to ~~nature~~nonfunctional incurrency ~~the~~monetary ~~previous two years~~assets.

31During 2022, the Company recorded a gain of $3.4 million on the sale of IP addresses that the Company had no future critical need to retain. There were no similar gains of this nature during 2023.

Index

Income Taxes

Significant items that impacted the effective tax rate in the years 2022, 2021 and 2020, included the following (percentages reflect the effect of each item as a percentage of income before income taxes):


Years ended December 31,	2023	2022	2021

Effective tax rate	30.4%	26.9%	28.4%

	Year Ended December 31,
	2022			2021			2020
(in thousands, except percentages)	Tax Amount		%	Tax Amount		%	Tax Amount		%
Continuing Operations (Excluding Discrete Items)	$	40,497	30.7%	$	50,045	30.2%	$	39,544	28.4%
Changes in uncertain tax positions	(780)		(0.6)	232		0.1	252		0.2
Impact of amended tax returns	(98)		(0.1)	(2,098)		(1.2)	500		0.3
Tax effect of non-deductible foreign exchange loss on intercompany loan	—		—	—		—	3,801		2.7
Changes in opening valuation allowance	—		—	—		—	—		—
Provision for/adjustment to beginning of year valuation allowances	(802)		(0.6)	957		0.6	168		0.1
True-up of prior year estimated taxes	(1,436)		(1.1)	(1,584)		(1.0)	(2,420)		(1.8)
Enacted tax legislation and rate change	(587)		(0.4)	352		0.2	—		—
US Pension Plan and interest rate swap settlements - Release of Residual Tax Effect	(4,926)		(3.8)	—		—	—		—
Foreign withholding on incremental earnings repatriation	1,518		1.2	—		—	—		—
Impact of non-election of high tax exclusion under GILTI *	1,723		1.3	—		—	—		—
Other tax adjustments	363		0.3	(741)		(0.5)	(14)		0.2
Effective Tax Rate	$	35,472	26.9%	$	47,163	28.4%	$	41,831	30.1%
* Global Intangible Low-Taxed Income

The effective tax rate represents the combined federal, state and foreign tax effects attributable to pretax earnings.

~~Our~~The ~~tax~~Organization ~~planning~~for ~~initiatives~~Economic ~~included~~Co-operation ~~repatriating~~and ~~additional~~Development ~~earnings~~has issued Pillar Two model rules introducing a new global minimum tax of 15 percent intended to be effective on January 1, 2024. While the U.S. ~~and~~has ~~managing~~not ~~overall~~yet ~~cash~~adopted ~~taxes~~the inPillar Two rules, various other governments around the ~~short~~world ~~term~~are enacting legislation. ~~Such~~ ~~initiatives~~As ~~resulted~~currently indesigned, ~~discrete~~Pillar ~~adjustments~~Two ~~that~~will ~~increased~~ultimately apply to our ~~2022~~worldwide ~~effective~~operations. ~~tax~~Although ~~rate,~~we ~~partially~~do ~~offset~~not byexpect ~~true~~these ~~ups~~rules ofto ~~prior~~materially ~~year~~increase ~~estimated~~our ~~taxes~~global ~~and~~tax ~~the~~costs ~~release~~in of2024, ~~residual~~there ~~tax~~remains ~~effects~~uncertainty ~~due~~as to ~~termination~~the offinal ~~our~~Pillar Two model rules. We will continue to monitor U.S. ~~Pension~~and ~~Plan~~global ~~and~~legislative ~~settlements~~action ofrelated ~~interest~~to ~~rate~~Pillar ~~swaps.~~Two for potential impacts.

~~For~~On ~~more~~January ~~information~~17, on2024, ~~income~~the ~~tax~~House Ways and Means Committee announced a draft legislation called "The Tax Relief for American Families and Workers Act of 2024". This act would restore 100% bonus depreciation for property placed in service after December 31, ~~see~~2022 ~~Note~~and 7before toJanuary 1, 2026; and retroactively restore the ~~Consolidated~~ability ~~Statements~~to deduct domestic research and experimentation costs that were required to be capitalized beginning in ~~item~~2022 8under Section 174. On January 31, 2024, the United States House of Representatives voted to approve this bill, which will now go to the United States Senate. We will continue to monitor the status of this legislation and assess the potential impact, if passed.

For more information on income tax, see Note 7, Income Taxes, of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

Index

Segment Results of Operations

Machine Clothing Segment

~~Machine~~The ~~Clothing~~MC ~~is our primary business~~ segment ~~and~~ accounted for 5958 percent of our consolidated revenues during ~~2022~~2023. MCA ~~products~~summary ~~are purchased primarily by manufacturers~~ of ~~paper~~MC's ~~and~~selected ~~paperboard.~~financial Weresults ~~believe~~is weas are well-positioned in these markets, with high-quality, low-cost production in growth markets, substantially lower fixed costs in mature markets, and continued strength in new product development, technical product support, and manufacturing technology. Recent technological advances in paper machine clothing, while contributing to the papermaking efficiency of customers, have lengthened the useful life of many of our products and had an adverse impact on overall paper machine clothing demand. Additionally, we face pricing pressures in all of our markets.follows:

The Company’s manufacturing and product platforms position us well to meet these shifting demands across product grades and geographic regions. Our strategy for meeting these challenges continues to be to grow share in

Index

all markets, with new products and technology, and to maintain our manufacturing footprint to align with global demand, while we offset the effects of inflation through continuous productivity improvement.

Review of Operations

	(in thousands, except percentages)
Years ended December 31,	~~2022~~2023			~~2021~~2022			~~2020~~2021
Net sales	$	609,461		$	619,015		$	572,955
Net revenues	$	670,768		$	609,461		$	619,015
% change from prior year	-1.5		%	8.0		%	-4.7		%
% change	10.1		%	-1.5		%	8.0		%
Gross profit	~~312~~331,~~285~~558			~~322~~312,~~457~~285			~~301~~322,~~144~~457
% of net sales	51.2		%	52.1		%	52.6		%
% of net revenues	49.4		%	51.2		%	52.1		%
STG&R expenses	105,979			105,602			107,594
SG&A expenses	107,246			81,391			79,570
Operating income	206,214			215,654			190,805
Technical and research expenses	24,651			24,588			26,032
Operating income	199,378			206,214			215,654

Net ~~Sales~~revenues

MC's Net ~~sales~~revenues ~~decreased~~increased 110.~~5%.~~1 ~~Changes~~percent in ~~currency translation rates~~2023, driven by athe ~~weaker~~acquisition ~~Euro,~~of ~~had~~ the ~~effect~~Heimbach ofbusiness ~~decreasing~~in ~~2022~~August, ~~sales~~which bycontributed Net revenues of $2051.8 2 million. Net ~~compared~~revenues also increased due to ~~2021.~~better ~~Excluding~~performance ~~the~~in ~~effect~~tissue ofand ~~changes~~packaging grades, which was partially offset by lower revenues in engineered fabrics. Changes in currency translation rates, ~~Net~~had ~~sales~~the ineffect MCof ~~increased~~decreasing ~~1.8%~~2023 ~~compared~~Net torevenues ~~2021~~by $2.6 million, driven by ~~growth~~the inweaker ~~sales~~Renminbi, ofwhich ~~packaging~~was partially offset by the stronger Euro, ~~pulp~~as ~~and~~compared ~~tissue~~to ~~grades~~2022.

Gross Profit

~~The~~MC ~~decrease~~gross inprofit MCincreased $19.3 million, driven by the additional gross profit from Heimbach's revenues and organic revenue growth. Gross profit margin decreased from 51.2 percent in 2022 to 49.4 percent in 2023. This margin decrease was ~~primarily~~partially driven by ~~changes~~increased incost ~~currency~~of ~~translation~~goods ~~rates~~sold at Heimbach, ~~principally~~which included the ~~weaker~~non-recurring ~~Euro,~~amortization asof ~~well~~the asfair ~~increases~~value instep-up ~~input~~of ~~costs,~~acquired ~~causing~~inventory aof ~~decrease~~$5.5 inmillion. ~~Gross~~In addition, gross profit margin ~~from~~decreased ~~52.1%~~as ina ~~2021~~result of increased input costs, mainly due to ~~51.2%~~the ininflationary ~~2022~~environment, and lower overhead absorption.

Operating Income

The decrease in Operating income as compared to 2022 was principally due to ~~the~~Heimbach's ~~decrease~~operating inloss ~~Gross profit~~of $6.3 million ~~STG&R~~and ~~expenses~~increases ~~remained largely~~ in ~~line~~SG&A ~~with~~expenses ~~the~~as ~~prior~~discussed ~~year~~above.

Albany Engineered Composites Segment

The ~~Albany Engineered Composites (“~~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, owns a 10 percent noncontrolling interest, AEC, through ASC, is the exclusive supplier to the LEAP program of advanced composite fan blades and fan cases under a long-term supply contract. The LEAP engine is used on the Airbus A320neo, 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~~42 16 percent of ~~the~~our ~~Company’s~~ consolidated ~~Net~~net ~~sales~~revenues induring ~~2022~~2023. ~~Other~~A ~~significant~~summary ~~programs~~of by AEC's ~~include~~selected ~~the~~financial ~~Sikorsky~~results ~~CH-53K,~~is ~~F-35, JASSM, and Boeing 787 programs. AEC also supplies vacuum waste tanks for the Boeing 7-Series programs, and specialty components for the Rolls Royce lift fan on the F-35,~~ as ~~well as the fan case for the GE9X engine. In 2022, approximately 46 percent of AEC sales were related to U.S. government contracts or programs.~~follows:

Review of Operations

	(in thousands, except percentages)
Years ended December 31,	~~2022~~2023			~~2021~~2022			~~2020~~2021
Net sales	$	425,426		$	310,225		$	327,655
Net revenues	$	477,141		$	425,426		$	310,225
% change from prior year	37.1		%	-5.3		%	-27.7		%
% change	12.2		%	37.1		%	-5.3		%
Gross profit	7792,~~497~~160			5577,~~934~~497			6955,~~928~~934
% of net sales	18.2		%	18.0		%	21.3		%
% of net revenues	19.3		%	18.2		%	18.0		%
STG&R expenses	45,918			39,742			35,571
SG&A expenses	34,597			30,565			26,852
Operating income/(loss)	31,579			16,160			31,536
Technical and research expenses	15,976			15,353			12,890
Operating income/(loss)	41,587			31,579			16,160

33Net revenues

Index

AEC's Net ~~Sales~~revenues increased 12.2 percent primarily due to revenue growth across AEC's portfolio of commercial programs including LEAP, Boeing 787 Frames, GE9x and other commercial programs. These increases amounted to approximately $63.0 million. Recurring production revenues for defense programs grew year-over-year, however, the growth was more than offset by lower non-recurring revenues associated with the start-up of the CH-53K aft transition program. These net decreases amounted to approximately $11.0 million. Excluding the effect of changes in currency translation rates, the increase in Net revenues was 11.7 percent.

AEC ~~experienced~~has ~~significant~~contracts ~~growth~~with ~~during~~certain ~~2022~~customers, ~~with~~including ~~Net~~its ~~sales~~contract ~~increasing~~for ~~approximately~~the ~~$115~~LEAP ~~million~~program, ~~primarily~~where ~~due~~revenue tois ~~CH-53K~~determined ~~and~~by ~~LEAP~~a ~~programs~~cost-plus-fee agreement. ~~Excluding~~Revenue ~~the~~earned ~~effect~~under these arrangements accounted for approximately 40 percent of ~~changes~~segment inrevenue ~~currency~~for ~~translation~~2023 ~~rates,~~and 2022. LEAP engines are currently used on the ~~increase~~Airbus inA320neo, ~~Net~~Boeing ~~sales~~737 ~~was~~MAX, 39and COMAC 919 aircraft.~~6%.~~

In addition, AEC has long-term contracts ~~with~~in ~~certain~~which ~~customers,~~the ~~including~~selling ~~its~~price ~~contract~~is fixed. In accounting for these contracts, we estimate the ~~LEAP~~profit ~~program,~~margin ~~where~~expected ~~revenue~~at isthe ~~determined~~completion byof the contract and recognize a pro-rata share of that profit during the course of the contract using a cost-~~plus~~to-~~fee~~cost ~~agreement~~approach. ~~Revenue~~Changes ~~earned~~in ~~under~~estimated ~~these~~contract ~~arrangements~~profitability ~~accounted~~will ~~for~~affect ~~approximately~~revenue 40and ~~percent~~gross ofprofit ~~segment~~when the change occurs, which could have a significant favorable or unfavorable effect on revenue and gross profit in any reporting period. For contracts with anticipated losses, a provision for ~~2022~~the ~~and~~entire ~~2021~~amount of the estimated remaining loss is charged against income in the period in which the loss becomes known. ~~LEAP~~Contract ~~engines~~losses are ~~currently~~determined ~~used~~considering onall ~~the Airbus~~direct ~~A320neo~~and indirect contract costs, ~~Boeing~~exclusive ~~737~~of ~~MAX~~any selling, ~~and~~general ~~COMAC~~or ~~919~~administrative ~~aircraft~~cost allocations, which are treated as period expenses. Expected losses on projects include losses on contract options that are probable of exercise, excluding profitable options that often follow.

In addition, AEC has long-term contracts in which the selling price is fixed. In accounting for those contracts, we estimate the profit margin expected at the completion of the contract and recognize a pro-rata share of that profit during the course of the contract using a cost-to-cost approach. Changes in estimated contract profitability will affect revenue and gross profit when the change occurs, which could have a significant favorable or unfavorable effect on revenue and gross profit in any reporting period. For contracts with anticipated losses, a provision for the entire amount of the estimated remaining loss is charged against income in the period in which the loss becomes known. Contract losses are determined considering all direct and indirect contract costs, exclusive of any selling, general or administrative cost allocations, which are treated as period expenses. Expected losses on projects include losses on contract options that are probable of exercise, excluding profitable options that often follow.

Gross Profit

~~The~~Net ~~increase~~revenues ingrowth ~~Gross~~on ~~profit~~key ~~was~~programs, ~~primarily~~as ~~due~~noted above, contributed to ~~increased~~improved ~~Net~~overhead ~~Sales~~absorption, ~~due~~driving toa ~~growth~~Gross onprofit ~~CH-53K~~increase ~~and~~of ~~LEAP~~$14.7 million ~~programs~~as compared to 2022. Gross profit margin ~~remained~~increased ~~largely~~from 18.2 percent in ~~line~~2022 ~~with~~to ~~the~~19.3 ~~prior~~percent ~~year~~in 2023.

Operating Income/(Loss)

Operating income ~~nearly~~increased ~~doubled year over year, increasing~~ $1510.4 0 million in ~~2022~~2023, principally due to an increase in Gross profit, as described above, partially offset by ana $4.0 million increase in ~~Selling~~SG&A ~~and general~~ expenses ofrelated ~~$3.7~~to ~~million~~incentive compensation, personnel-related tocosts, and investments in business development activities,. ~~and~~The ansum ~~increase~~of innet ~~Research~~adjustments ~~expense~~to the estimated profitability of long-term contracts decreased AEC operating income by $24.51 million ~~related~~in 2023, compared to ~~investments~~an increase in ~~new~~AEC ~~technologies~~operating ~~and~~income ~~enhanced~~of ~~capabilities~~$0.5 million in 2022.

Working Capital, Liquidity and Capital Structure

Working Capital

Payment terms granted to paper industry and other machine clothing customers reflect general competitive practices. Terms vary with product, competitive conditions, and the country of operation. In some markets, customer agreements require us to maintain significant amounts of finished goods inventory to assure continuous availability of our products.

In addition to supplying paper, paperboard, and tissue companies, the MC segment is a leading supplier to the nonwovens (which includes the manufacture of products such as diapers, personal care, and household wipes), building products, and tannery and textile industries. These non-paper industries have a wide range of customers, with markets that vary from industrial applications to consumer use products. The AEC segment primarily serves customers in the commercial and defense aerospace market through both engine and airframe applications. AEC's working capital levels rose sharply in the last few years in line with the segment's growth.

In the MC segment, the Chinese New Year, summer months, and the end of the year are often periods of lower production for some of our customers, which, in the past contributed to seasonal variation in sales and orders. In recent years, shorter order cycles and lower inventory levels throughout the supply chain have become a more significant factor in quarterly sales. The impact of these combined factors on any quarter can be difficult to predict, and can make quarterly comparisons less meaningful than annual comparisons. While seasonality is generally not a significant factor in the Albany Engineered Composites segment, the commercial terms of the supply agreement governing the LEAP program resulted in fourth quarter sales volatility in recent years.

3440

Index

Cash Flow Summary

(in thousands)

For the years ended December 31,

~~2022~~2023

~~2021~~2022

~~2020~~2021

Net income

96111,~~508~~610

~~118~~96,~~768~~508

97118,~~243~~768

Depreciation and amortization

6976,~~049~~733

7469,~~255~~049

7274,~~705~~255

Changes in working capital(a)

(6344,~~478~~214)

16(63,~~488~~478)

~~(60~~16,~~727)~~488

Changes in long-term liabilities, deferred taxes and other credits

(1811,~~629~~829)

(118,~~532~~629)

8(1,~~664~~532)

Non-cash portion of pension settlement expense

~~42,657~~—

—42,657

~~411~~—

Other operating items

215,~~107~~756

92,~~496~~107

219,~~957~~496

Net cash provided by operating activities

~~128~~148,~~214~~056

~~217~~128,~~475~~214

~~140~~217,~~253~~475

Net cash used in investing activities

(96217,~~348~~899)

(5396,~~699~~348)

(4253,~~390~~699)

Net cash used in financing activities

(2352,~~652~~641)

(9923,~~635~~652)

(6099,~~669~~635)

Effect of exchange rate changes on cash flows

~~(18~~4,~~474)~~128

(318,~~421~~474)

8(3,~~582~~421)

Increase/(decrease) in cash and cash equivalents

(10118,~~260~~356)

60(10,~~720~~260)

4560,~~776~~720

Cash and cash equivalents at beginning of year

~~302~~291,~~036~~776

~~241~~302,~~316~~036

~~195~~241,~~540~~316

Cash and cash equivalents at end of year

~~291~~173,~~776~~420

~~302~~291,~~036~~776

~~241~~302,~~316~~036

_________________________

(a) Includes Accounts receivable, Contract assets, Inventories, Accounts payable and Accrued liabilities.

Net cash provided by operating activities was $~~128~~148.21 million in ~~2022~~2023, compared to $~~217~~128.52 million in the same period last year. The ~~decrease~~increase ~~in net cash provided by operating activities~~ was driven ~~primarily~~ by ~~the~~higher ~~following.~~Net ~~AEC~~income, ~~generated~~improved levels of working capital ~~cash~~at ~~inflows~~MC, ~~in Accounts receivable~~ and ~~Contract~~lower ~~assets~~cash ~~during~~outflows ~~2021~~related ~~(due~~ to ~~significant~~other ~~deliveries~~liabilities. In ~~of LEAP components throughout~~ the previous year), ~~while~~the ~~during 2022, AEC invested in working capital as it prepared to execute on its expanded CH-53K scope of work. The~~ Company made contributions of approximately $12.6 million to the U.S. ~~pension~~Pension plan ~~during 2022~~, in ~~connection~~line with the ~~termination~~Company's ~~of such~~ plan ~~(see~~to ~~discussion~~reduce inpension ~~Note~~obligations 4over totime. ~~the~~No ~~Consolidated~~similar ~~Financial~~payment ~~Statements). In~~was ~~addition,~~made during the ~~timing~~current ofyear ~~customer~~(see ~~and~~discussion ~~vendor~~in ~~invoice~~Note ~~payments~~4, asPension, ~~well~~Postretirement, asand ~~higher~~Other ~~incentive~~Benefit ~~compensation~~Plans, ~~payouts~~of ~~during~~the ~~2022~~Notes ~~compared~~ to the ~~same~~Consolidated ~~period~~Financial Statements in ~~2021~~Item 8, ~~contributed~~Financial toStatements ~~reduced~~and ~~net~~Supplementary ~~cash~~Data, ~~provided~~of bythis ~~operating~~Annual ~~activities~~Report on Form 10-K).

We strategically deploy our cash with a focus on investing in our business and new technologies to provide our customers with enhanced capabilities, increase shareholder value, and position ourselves to take advantage of new business opportunities as they arise. Based on such strategy, we have continued to invest in our business and technologies through capital expenditures, research and development, and when appropriate, selective business acquisitions. ~~Our~~ ~~capital~~In ~~expenditures~~the ~~totaled~~third ~~$96.3~~quarter ~~million~~of ~~and~~2023, ~~$53.7~~the ~~million~~Company ~~for~~acquired ~~2022~~Heimbach, ~~and~~a ~~2021~~privately-held manufacturer of paper machine clothing with headquarters in Düren, ~~respectively~~Germany, ~~comprised~~for net cash of ~~both~~$133.5 ~~sustaining~~million, ~~and~~funded ~~return~~using ~~seeking~~cash ~~projects~~on hand. In ~~the~~Net ~~recent~~cash ~~past,~~used ain ~~portion~~investing ofactivities ~~our~~also included capital expenditures ~~consisted~~totaling of$84.4 ~~investments~~million in 2023, compared to ~~improve~~$96.3 ~~operational~~million ~~productivity~~in the same period last year, inincluding ~~addition~~investments to ~~producing~~improve productivity and produce a meaningful impact on energy and resource efficiency.

Net cash used in financing activities during ~~2022~~2023 was $2352.76 million compared to $9923.67 million in ~~2021~~2022, driven by increased ~~borrowings~~principal ~~during~~payments ~~the~~on ~~current~~debt ~~year~~and ~~that~~increased ~~were~~dividends ~~partially~~paid ~~used~~ to ~~fund~~shareholders ~~repurchases~~during ~~of shares~~2023.

Liquidity and Capital Structure

We finance our business activities primarily with cash generated from operations and borrowings, largely through our revolving credit agreement as discussed below. Our subsidiaries outside of the United States may also maintain working capital lines with local banks~~, but borrowings under such local facilities tend to be insignificant~~.

Under our $~~700~~800 million unsecured credit agreement, $~~439~~ 446 million of borrowings were outstanding as of December 31, ~~2022~~2023. We believe cash flows from operations and the availability of funds under our Amended Credit Agreement will be adequate to ~~cover~~fund our operations and business needs over the next twelve months. As of December 31, 2022, we had cash and cash equivalents of $292 million and availability under our Credit Agreement of $261 million, for a total liquidity of approximately $553 million. For more information on the revolving credit agreement, see Note 13 to the Consolidated Financial Statements.

As of December 31, ~~2022~~2023, we had cash and cash equivalents of $~~273~~173.2 4 million ofand availability under our ~~total~~Credit ~~cash~~Agreement ~~and~~of ~~cash~~$354 ~~equivalents~~million, ~~was~~for ~~held~~a bytotal ~~non-U.S.~~liquidity ~~subsidiaries~~of approximately $527 million. ~~The~~For ~~accumulated~~more ~~undistributed~~information ~~earnings~~on the revolving credit agreement, see Note 17, Financial Instruments, of the ~~Company’s~~Notes ~~foreign~~to ~~operations~~the ~~not~~Consolidated ~~targeted~~Financial ~~for~~Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

3541

Index

~~repatriation~~As toof ~~the~~December 31, 2023, $133 million of our total cash and cash equivalents was held by non-U.S. ~~were~~subsidiaries. The inCompany ~~excess~~has oftargeted for repatriation $~~201~~160.8 million atof ~~December~~current ~~31,~~year ~~2022~~and prior year earnings of the Company’s foreign operations. The accumulated undistributed earnings of the Company’s foreign operations not targeted for repatriation to the U.S. were approximately $154.8 million, and are intended to remain indefinitely invested in foreign operations. Our cash planning strategy includes repatriating current earnings in excess of working capital requirements from certain countries in which our subsidiaries operate. While we have been successful in such endeavor to date, there can be no assurance that we will be able to cost effectively repatriate funds in the future. Repatriating such cash from certain jurisdictions, that is currently considered to be indefinitely reinvested in foreign operations, may also result in additional ~~withholding~~ taxes.

WeBank ~~have~~debt ~~also~~at ~~returned~~the ~~cash~~Company's toHeimbach ~~shareholders~~subsidiary, ~~through~~of ~~dividends~~which ~~and~~$32.7 ~~share~~million ~~repurchases~~was assumed in the acquisition, is held by several European financial institutions. ~~During~~ ~~2022~~Since August 31, we2023 the Company paid down approximately $~~26.5~~22 million inof ~~dividends~~this ~~and~~debt ~~repurchased~~($18.6 1 million ~~shares~~during the fourth quarter of ~~our~~2023), ~~Class~~reducing Aoutstanding ~~Common~~debt ~~shares~~borrowings at athe ~~cost~~Company's ofHeimbach subsidiary to approximately $8511 million ~~under~~as ~~the~~of December 31, 2023, of which $~~200~~4.2 million ~~share~~is ~~repurchase~~classified ~~program~~as ~~that~~Current ~~our~~maturity ~~Board~~on ~~approved~~long-term debt (see Note 24, Business Combination and Note 17, Financial Instruments, of the Notes to the Consolidated Financial Statements in ~~October~~Item ~~2021~~8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for additional information).

~~At December 31, 2022, we had no off-balance sheet arrangements.~~ We have ~~contractual~~also ~~commitments~~returned tocash ~~repay debt, make payments under leases, contribute~~ to ~~our~~shareholders ~~pension~~through ~~and~~dividends ~~postretirement plans,~~ and ~~settle~~share ~~obligations~~repurchases. ~~related~~We topaid ~~agreements~~dividends toof ~~purchase~~$31 ~~goods~~million and ~~services, income taxes, compensation plans, and as applicable, interest rate swaps. We estimate these contractual commitments amount to approximately~~ $~~588~~26 million asduring of2023 ~~December 31,~~and 2022, ~~of which we expect to pay $44 million within the next year~~respectively. ~~Such~~ ~~commitments~~There ~~are~~were ~~not~~no ~~representative~~share ofrepurchases ~~all~~in ~~our future cash requirements, which will vary based on future needs~~2023.

The Company is party to certain off-balance sheet arrangements, including certain guarantees. The Company provides financial assurance, such as payment guarantee and letters of credit and surety bonds, primarily to support workers’ compensation programs and customs clearance, of less than $7 million. There were no material changes in the Company’s off-balance sheet arrangements during 2023.

Other Sources/Uses of Capital

We have contractual commitments to repay debt, make payments under leases, contribute to our pension and postretirement plans, and settle obligations related to agreements to purchase goods and services, income taxes, compensation plans, and as applicable, interest rate swaps. We estimate these contractual commitments amount to approximately $716 million as of December 31, 2023, of which we expect to pay $58 million within the next year. Such commitments are not representative of all our future cash requirements, which will vary based on future needs.

Critical Accounting Policies and Estimates

For the discussion of our accounting policies, see Note 1, Accounting Policies, of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make assumptions and estimates that directly affect the amounts reported in the Consolidated Financial Statements. Each of these assumptions is subject to uncertainties and changes in those assumptions or judgments which can affect our results of operations. In addition to the accounting policies stated in Note 1, Accounting Policies, of the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, the financial statement amounts and disclosures are significantly influenced by market factors, judgments and estimates as described below.

Revenue Recognition

Contracts with customers in the ~~Machine~~MC ~~Clothing~~ segment have various terms that can affect the point in time when revenue is recognized. The contractual terms are closely monitored in order to ensure revenue is recognized in the proper period.

Products and services provided under long-term contracts represent a significant portion of ~~sales~~net revenues in the ~~Albany~~AEC ~~Engineered Composites~~ segment. AEC’s largest source of revenue is derived from the LEAP contract under a cost-plus-fee agreement. The fee ismay ~~variable~~vary within a narrow range based on our success in achieving certain cost targets. Revenue is recognized over time as costs are incurred. Under this contract, there is ~~significant~~ judgment involved in determining applicable contract costs and the amount of revenue to be recognized.

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.42

AEC has long-term aerospace contracts under which there are two phases: a phase during which the production part is designed and tested, and a phase of supplying production parts. During the design and testing phases, we perform pre-production or nonrecurring engineering services, which 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 in Other assets. The capitalized costs are amortized into Cost of goods sold over the period which the asset is expected to contribute to future cash flows, including anticipated renewal periods. Accumulated capitalized costs are written-off when those costs are determined to be unrecoverable.

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 loss provisions include contract options that are probable of exercise, excluding any profitable options that might be expected to follow. Contract losses are determined considering all direct and indirect contract costs, exclusive of any selling, general or administrative costs, which are treated as period expenses. 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. In some cases, the contract period may result in a loss contract provision at the inception of the contract.

Index

We also have fixed price long-term contracts, for which revenue is generally recognized over time using an input method as the measure of progress. This 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.

AEC has long-term aerospace contracts under which there are two phases: a phase during which the production part is designed and tested, and a phase of supplying production parts. During the design and testing phases, we perform pre-production or nonrecurring engineering services, which 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 in Other assets. The capitalized costs are amortized into cost of goods sold over the period which the asset is expected to contribute to future cash flows, including anticipated renewal periods. Accumulated capitalized costs are written-off when those costs are determined to be unrecoverable.

Pension and Postretirement Liabilities

We sponsor several pension and postretirement benefit plans. Our liabilities under these defined benefit plans are determined using methodologies that involve several actuarial assumptions, the most significant of which are the discount rate, health care cost inflation rate and the long-term rate of return on plan assets. We review our actuarial assumptions on an annual basis and make modifications to the assumptions when appropriate.

Discount Rate Selection

We select a discount rate for purposes of measuring obligations under defined benefit plans by matching cash flows separately for each plan to the yields on high-quality zero coupon bonds. We use the RATE: Link 60-90 model (the "RATE Link"). We believe the projected cash flows used to determine RATE Link provide a good approximation of the timing and amounts of our defined benefit payments under our plans and no adjustments to RATE Link has been made.

Measurement of our postretirement benefit obligations requires the use of several assumptions about factors that will affect the amount and timing of future benefit payments. The assumed health care cost trend rates are the most critical estimates for measurement of the postretirement benefit obligation. Changes in the health care cost trend rates have a significant effect on the amounts reported for the health care benefit obligation.

Long-term Rate of Return on Plan Assets Assumption

Our expected long-term rate of return on plan assets is derived from our asset allocation strategies and anticipated future long-term performance of individual asset classes. Our analysis gives consideration to recent plan performance and historical returns; however, the assumptions are primarily based on long-term, prospective rates of return. The weighted average long-term rate of return on plan assets for our defined benefit pension plans is 35.2% percent for ~~2022~~2023.

Based on information provided by actuaries and other relevant sources, the Company believes that the assumptions used to estimate expenses, assets and liabilities of pensions and postretirement benefits are reasonable; however, changes in these assumptions could impact the Company’s financial position, results of operations or cash flows.

Income Taxes

We regularly assess the likelihood that deferred tax assets are expected to be realized through the reversal of existing temporary differences and/or future taxable income. To the extent we believe that it is more likely than not that a deferred tax asset will not be realized, a valuation allowance is established. The amount of a valuation allowance is based upon our best estimate of our ability to realize the deferred tax assets. 43

Index

We regularly assess the likelihood that deferred tax assets will be realized through the reversal of existing temporary differences and/or future taxable income. To the extent we believe that it is more likely than not that a deferred tax asset will not be realized, a valuation allowance is established. The amount of a valuation allowance is based upon our best estimate of our ability to realize the deferred tax assets.

Business Combinations

As we enter into business combinations, we perform acquisition accounting requirements including the following:

•Identifying the acquirer,

•Determining the acquisition date,

•Recognizing and measuring the identifiable assets acquired and the liabilities assumed, and

•Recognizing and measuring goodwill, as applicable

We complete valuation procedures and record the resulting fair value of the acquired assets and assumed liabilities in accordance with the acquisition method under ASC 805, Business Combinations. The acquisition methodology requires management to make assumptions and apply judgment to determine the fair value of assets acquired and liabilities assumed. If estimates or assumptions used to complete the enterprise valuation and estimates of the fair value of the acquired assets and assumed liabilities significantly differed from assumptions made, the resulting difference could materially affect the fair value of net assets.

In determining the fair value of the tangible assets, including property, plant and equipment, we consider the cost-approach and the market-approach, which estimates the cost to replace the asset, less accrued depreciation resulting from physical deterioration, functional obsolescence and external obsolescence. In the determination of the fair value of the identified intangible assets, we use cash flow models following the income approach, specifically, a relief from royalty method methodology. Inputs include estimated revenue growth rates, gross margins, operating expenses, and estimated attrition, royalty and discount rates. Goodwill is recorded as the difference in the fair value of the acquired assets and assumed liabilities and the purchase price, as applicable. The Heimbach acquisition did not result in any goodwill.

Goodwill and Intangible assets

Goodwill is not amortized, but is tested for impairment at least annually. Estimating the fair value of reporting units requires the use of estimates and significant judgments, including but not limited to revenue growth rates, operating margins, discount rates, and future market conditions. It is possible that these judgments and estimates could change in future periods.

The determination of the fair value of intangible assets acquired in a business acquisition is subject to many estimates and assumptions. Among such estimates and assumptions are royalties, discount rate and useful life. We review amortizable intangible asset groups for impairment whenever events and changes in circumstances indicate that the related carrying amounts may not be recoverable.

Recent Accounting Pronouncements

InSee ~~March~~Note ~~2022~~1, ~~the~~Accounting ~~SEC issued a proposed rule to enhance and standardize disclosures regarding cybersecurity risk management~~Policies, ~~strategy,~~of ~~governance,~~the ~~and~~Notes ~~incident reporting by public companies. The proposed rules are intended~~ to ~~provide~~the ~~more~~Consolidated ~~consistent,~~Financial ~~comparable~~Statements ~~and~~for ~~decision-useful~~Recent ~~information~~Accounting soPronouncements ~~that~~in ~~investors~~Item ~~can better evaluate the Company’s exposure to cybersecurity risks~~8, ~~incidents,~~Financial ~~and~~Statements ~~strategies to mitigate risks~~ and ~~incidents.~~Supplementary WeData, ~~will~~of ~~continue~~this toAnnual ~~monitor~~Report ~~developments~~on ~~around~~Form ~~this proposed rule~~10-K.

Also in March 2022, the SEC issued a proposed rule that would enhance and standardize the climate-related disclosures provided by public companies. Under the proposed rule, we would be required to provide quantitative and qualitative disclosures in registration statements and annual reports that include climate-related financial impact and expenditure metrics as well as a discussion of climate-related impacts on financial estimates and assumptions, all of

Index

which would be presented in a footnote to the financial statements. Such disclosures would also be subject to management's internal control over financial reporting ("ICFR") and external audit. As a Company, we have long been committed to sustainable practices and corporate social responsibility and have more recently taken steps to articulate our values and goals, some of which are summarized in our published sustainability report that is included at our website www.albint.com. In 2020, we began establishing more formalized and scalable approaches to our sustainability practices, reporting and systems, in order to ensure we prioritize efforts that are impactful to our business and stakeholders. We have begun to incorporate certain climate-related disclosures and risk factors in our existing disclosures to this point. We will continue to monitor developments around this proposed rule, which once finalized, is expected to allow for a multi-year phased transition to achieving compliance.

In October 2022, the SEC adopted final rules regarding the recovery of erroneously awarded incentive-based

executive compensation. The rules direct US securities exchanges to establish standards to require listed

issuers to develop and implement a written policy providing for the recovery of incentive-based compensation

received by current and former executive officers in the event of a required accounting restatement when that

compensation was based on an erroneously reported financial reporting measure. The new rule and related amendments include a number of new disclosure requirements, including requiring issuers to file their recovery policy as an exhibit to their annual reports and establishing new cover page disclosures on Forms 10-K indicating whether the financial statements included in the filing reflect the correction of an error and whether the error correction required an incentive-based compensation recovery analysis. The exchanges must file proposed listing standards to implement the SEC’s directive no later than February 26, 2023 (which is 90 days after the final rules were published in the Federal Register), and those listing standards must be effective no later than November 28, 2023. We will be required to adopt a recovery policy no later than 60 days after the listing standards become effective.

In November 2022, the Federal Acquisition Regulatory Council proposed new rules that would require many federal contractors to provide certain climate-related disclosures. The proposed rule has a stated intent of prompting

suppliers to take action on measuring and managing greenhouse gas (GHG) emissions reductions via public

transparency. The proposal would require “major” federal contractors, as defined, to provide public disclosure of:

• scope 1, scope 2, and relevant scope 3 GHG emissions;

• climate-related financial risk factors based on the Task Force on Climate-Related Financial Disclosures (TCFD)

framework; and

• GHG reduction targets established in line with the Science Based Targets initiative (SBTi). Major contractors

without existing targets would be required to establish them.

Smaller contractors, defined as “significant,” would be required to provide disclosure of scope 1 and scope 2

GHG emissions. “Major” contractors are those receiving more than $50 million in federal contracts, while

“significant” contractors are those receiving from $7.5 to $50 million in federal contracts. These thresholds are

based on the size of contracts awarded and not on related revenue in any given year. There are also limited

exceptions. Based on our business with the federal government, we are highly likely to be considered a "significant" or "major" federal contractor in a given year and would be subject to the requirements in this proposal, if passed. We will continue to monitor developments around this proposed rule, which if finalized, is expected to allow for a multi-year phased transition to achieving compliance.

Non-GAAP Measures

This Form 10-K contains certain non-GAAP measures that should not be considered in isolation or as a substitute for the related GAAP measures. Such non-GAAP measures include net ~~sales~~revenues and percent change in net ~~sales~~revenues, excluding the impact of currency translation effects; EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin; Net debt; Net leverage ratio; and Adjusted Diluted earnings per share (or Adjusted EPS). Management believes that these non-GAAP measures provide additional useful information to investors regarding the Company’s operational performance.

Presenting Net ~~sales~~revenues and change in Net ~~sales~~revenues, after currency effects are excluded, provides management and investors insight into underlying sales trends. Net ~~sales~~revenues, or percent changes in net ~~sales~~revenues, excluding currency rate effects, are calculated by converting amounts reported in local currencies into U.S. dollars at the exchange rate of a prior period. These amounts are then compared to the U.S. dollar amount as reported in the current period.

EBITDA (calculated as net income excluding interest, income taxes, depreciation and amortization), Adjusted EBITDA, and Adjusted EPS are performance measures that relate to the Company’s continuing operations. The Company defines Adjusted EBITDA as EBITDA excluding costs or benefits that are not reflective of the Company’s ongoing or expected future operational performance. Such excluded costs or benefits do not consist of normal, 44

Index

~~recurring~~excluding ~~cash~~currency ~~items~~rate ~~necessary~~effects, toare ~~generate~~calculated ~~revenues~~by orconverting ~~operate~~amounts ~~our~~reported ~~business~~in local currencies into U. ~~Adjusted~~S. ~~EBITDA~~dollars ~~margin~~at ~~represents~~the ~~Adjusted~~exchange ~~EBITDA~~rate ~~expressed~~of a prior period. These amounts are then compared to the U.S. dollar amount as areported ~~percentage~~in ofthe ~~net~~current ~~sales~~period.

~~The~~EBITDA ~~Company~~(calculated ~~defines~~as ~~Adjusted~~net ~~EPS~~income asexcluding ~~basic~~interest, ~~earnings~~income ~~per~~taxes, ~~share~~depreciation ~~(GAAP~~and amortization), ~~adjusted~~Adjusted byEBITDA, and Adjusted EPS are performance measures that relate to the ~~after~~Company’s ~~tax~~continuing ~~per~~operations. ~~share~~The ~~amount~~Company ofdefines Adjusted EBITDA as EBITDA excluding costs or benefits that are not reflective of the Company’s ongoing or expected future operational performance. ~~The~~ ~~income~~Such ~~tax~~excluded ~~effects~~costs ~~are~~or ~~calculated~~benefits ~~using~~do ~~the~~not ~~applicable~~consist ~~statutory~~of ~~income~~normal, ~~tax~~recurring ~~rate~~cash ofitems ~~the~~necessary ~~jurisdictions~~to ~~where~~generate ~~such~~revenues ~~costs~~ or ~~benefits~~operate ~~were~~our ~~incurred~~business. orAdjusted ~~the~~EBITDA ~~effective~~margin ~~tax~~represents ~~rate~~Adjusted ~~applicable~~EBITDA toexpressed ~~total~~as ~~company~~a ~~results~~percentage of net revenues.

The Company defines Adjusted EPS as diluted earnings per share (GAAP), adjusted by the after tax per share amount of costs or benefits not reflective of the Company’s ongoing or expected future operational performance. The income tax effects are calculated using the applicable statutory income tax rate of the jurisdictions where such costs or benefits were incurred or the effective tax rate applicable to total Company results.

The Company’s Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted EPS may not be comparable to similarly titled measures of other companies.

Net debt aids investors in understanding the Company’s debt position if all available cash were applied to pay down indebtedness.

Net leverage ratio informs the investors of the Company's financial leverage at the end of the reporting period, providing an indicator of the Company's ability to repay its debt.

We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

The following tables show the calculation of consolidated EBITDA and consolidated Adjusted EBITDA:

Consolidated results	(in thousands)
	(in thousands)
Years ended December 31,	~~2022~~2023		~~2021~~2022		~~2020~~2021
Net income (GAAP)	$	96111,~~508~~610	$	~~118~~96,~~768~~508	$	97118,~~243~~768
Interest expense, net	1413,~~000~~601		14,~~891~~000		1314,~~584~~891
Income tax expense	3548,~~472~~846		4735,~~163~~472		4147,~~831~~163
Depreciation and amortization expense	6976,~~049~~733		7469,~~255~~049		7274,~~705~~255
EBITDA (non-GAAP)	~~215~~250,~~029~~790		~~255~~215,~~077~~029		~~225~~255,~~363~~077
Restructuring expenses, net	~~106~~282		~~1,331~~106		51,~~736~~331
Foreign currency revaluation (gains)/losses	(91,~~829)~~296		(19,~~442~~829)		15(1,~~444~~442)
Dissolution of business relationships in Russia	2,275		—		—
CEO transition expenses	2,719		—		—
Pension settlement expense	49,128		—		—
Inventory step-up impacting Cost of goods sold	5,480		—		—
IP address sales	(3,420)		—		—
Dissolution of business relationships in Russia	—		2,275		—
Aviation Manufacturing Jobs Protection (AMJP) grant	—		(4,731)		—
Pension settlement expense	—		49,128		—
Former CEO termination costs	—		—		2,742
IP address sales	—		(3,420)		—
Acquisition/integration costs	1,057		1,166		1,272
Aviation Manufacturing Jobs Protection (AMJP) grant	—		—		(4,731)
Pre-tax (income)/loss attributable to noncontrolling interest	(817)		(510)		1,348
Acquisition/integration costs	5,194		1,057		1,166
Adjusted EBITDA (non-GAAP)	$	253,529	$	250,891	$	251,905
Pre-tax (income)/loss attributable to noncontrolling interest	(665)		(817)		(510)
Adjusted EBITDA (non-GAAP)	$	265,096	$	253,529	$	250,891

3945

Index

	(in thousands)
Year ended December 31, 2022	Machine Clothing		Albany Engineered Composites		Corporate expenses and other		Total Company
Year ended December 31, 2023	Machine Clothing		Albany Engineered Composites		Corporate expenses and other		Total Company
Net income/(loss) (GAAP)	~~206,214~~$	199,378	~~31,579~~$	41,587	~~(141,285)~~$	(129,355)	~~96,508~~$	111,610
Interest expense, net	—		—		1413,~~000~~601		1413,~~000~~601
Income tax expense	—		—		3548,~~472~~846		3548,~~472~~846
Depreciation and amortization expense	1923,~~483~~891		4649,~~202~~030		3,~~364~~812		6976,~~049~~733
EBITDA (non-GAAP)	~~225~~223,~~697~~269		7790,~~781~~617		(8863,~~449~~096)		~~215~~250,~~029~~790
Restructuring expenses, net	92282		—		14—		~~106~~282
Foreign currency revaluation (gains)/losses (a)	~~(520)~~4,117		~~672~~63		(92,~~981~~884)		(91,~~829)~~296
Dissolution of business relationships in Russia	1,494		—		781		2,275
CEO transition expenses	—		—		2,719		2,719
Pension settlement expense	—		—		49,128		49,128
Inventory step-up impacting Cost of goods sold	5,480		—		—		5,480
IP address sales	—		—		(3,420)		(3,420)
Acquisition/integration costs	984		1,081		3,129		5,194
Acquisition/integration costs	—		1,057		—		1,057
Pre-tax (income) attributable to noncontrolling interest	(24)		(641)		—		(665)
Pre-tax (income) attributable to noncontrolling interest	—		(817)		—		(817)
Adjusted EBITDA (non-GAAP)	$	234,108	$	91,120	$	(60,132)	$	265,096
Adjusted EBITDA (non-GAAP)	$	226,763	$	78,693	$	(51,927)	$	253,529

	(in thousands)
Year ended December 31, 2021	Machine Clothing		Albany Engineered Composites		Corporate expenses and other		Total Company
Year ended December 31, 2022	Machine Clothing		Albany Engineered Composites		Corporate expenses and other		Total Company
Net income/(loss) (GAAP)	$	~~215~~206,~~654~~214	$	1631,~~160~~579	$	(~~113~~141,~~046~~285)	$	~~118~~96,~~768~~508
Interest expense, net	—		—		14,~~891~~000		14,~~891~~000
Income tax expense	—		—		4735,~~163~~472		4735,~~163~~472
Depreciation and amortization expense	2019,~~191~~483		5046,~~402~~202		3,~~662~~364		7469,~~255~~049
EBITDA (non-GAAP)	~~235~~225,~~845~~697		6677,~~562~~781		(4788,~~330~~449)		~~255~~215,~~077~~029
Restructuring expenses, net	~~1,202~~92		32—		9714		~~1,331~~106
Foreign currency revaluation (gains)/losses (a)	(~~307~~520)		50672		(19,~~185~~981)		(19,~~442~~829)
AMJP grant	—		1,101		(5,832)		(4,731)
Dissolution of business relationships in Russia	1,494		—		781		2,275
Acquisition/integration costs	—		1,166		—		1,166
Pension settlement expense	—		—		49,128		49,128
Pre-tax (income) attributable to noncontrolling interest	—		(510)		—		(510)
IP address sales	—		—		(3,420)		(3,420)
Adjusted EBITDA (non-GAAP)	$	236,740	$	68,401	$	(54,250)	$	250,891
Acquisition/integration costs	—		1,057		—		1,057
Pre-tax (income) attributable to noncontrolling interest	—		(817)		—		(817)
Adjusted EBITDA (non-GAAP)	$	226,763	$	78,693	$	(51,927)	$	253,529

(in thousands)

Year ended December 31, 2020

Machine Clothing

Albany Engineered Composites

Corporate expenses and other

Total Company

Year ended December 31, 2021

Machine Clothing

Albany Engineered Composites

Corporate expenses and other

Total Company

Net income/(loss) (GAAP)

~~190~~215,~~805~~654

3116,~~536~~160

(~~125~~113,~~098~~046)

97118,~~243~~768

Interest expense, net

—

1314,~~584~~891

Income tax expense

—

4147,~~831~~163

Depreciation and amortization expense

20,~~304~~191

4850,~~496~~402

3,~~905~~662

7274,~~705~~255

EBITDA (non-GAAP)

~~211~~235,~~109~~845

8066,~~032~~562

(6547,~~778~~330)

~~225~~255,~~363~~077

Restructuring expenses, net

21,~~746~~202

~~2,821~~32

~~169~~97

51,~~736~~331

Foreign currency revaluation (gains)/losses (a)

~~1,743~~(307)

~~130~~50

13(1,~~571~~185)

15(1,~~444~~442)

Former CEO termination costs

—

—1,101

2(5,~~742~~832)

2(4,~~742~~731)

Acquisition/integration costs

—

1,~~272~~166

—

1,~~272~~166

Pre-tax loss attributable to noncontrolling interest

—

~~1,348~~(510)

—

~~1,348~~(510)

Adjusted EBITDA (non-GAAP)

~~215~~236,~~598~~740

8568,~~603~~401

(4954,~~296~~250)

~~251~~250,~~905~~891

4046

Index

The Company discloses certain income and expense items on a per-share basis. The Company believes that such disclosures provide important insight into the underlying earnings and are financial performance metrics commonly used by investors. The Company calculates the per-share amount for items included in continuing operations by using the income tax rate based on either the tax rates in specific countries or the estimated tax rate applied to total ~~company~~Company results. The after-tax amount is then divided by the weighted-average number of shares outstanding for each period. Year-to-date earnings per-share effects are determined by adding the amounts calculated at each reporting period.

The following tables show the diluted earnings per share effect of certain income and expense items:


	(in thousands, except per share amounts)
Year ended December 31, 2023	Pre tax Amounts		Tax Effect		After tax Effect		Per Share Effect
Restructuring expenses, net	$	282	$	70	$	212	$	0.01
Foreign currency revaluation (gains)/losses (a)	1,296		416		880		0.03
CEO transition expenses	2,719		—		2,719		0.09
Inventory step-up impacting Cost of goods sold	5,480		1,211		4,269		0.14
Withholding tax related to internal restructuring	—		(3,026)		3,026		0.10

Acquisition/integration costs	5,194		951		4,243		0.14


	(in thousands, except per share amounts)
Year ended December 31, 2022	Pre tax Amounts		Tax Effect		After tax Effect		Per Share Effect
Restructuring expenses, net	$	106	$	34	$	72	$	0.01
Foreign currency revaluation (gains)/losses (a)	(9,829)		(2,582)		(7,247)		(0.23)
Dissolution of business relationships in Russia	2,275		305		1,970		0.06
Pension settlement expense	49,128		11,947		37,181		1.20
Tax impact of stranded OCI benefit from Tax Cuts and Job Act (TCJA) for pension liability	—		5,217		(5,217)		(0.17)
IP address sales	(3,420)		(872)		(2,548)		(0.08)
Acquisition/integration costs	1,057		316		741		0.04


	(in thousands, except per share amounts)
Year ended December 31, 2021	Pre tax Amounts		Tax Effect		After tax Effect		Per Share Effect
Restructuring expenses, net	$	1,331	$	399	$	932	$	0.02
Foreign currency revaluation (gains)/losses (a)	(1,442)		(323)		(1,119)		(0.04)
AMJP grant	(4,731)		(1,404)		(3,327)		(0.11)
Acquisition/integration costs	1,166		349		817		0.04

	(in thousands, except per share amounts)
Year ended December 31, 2020	Pre taxAmounts		TaxEffect		After taxEffect		Per ShareEffect
Restructuring expenses, net	$	5,736	$	1,862	$	3,874	$	0.11
Foreign currency revaluation (gains)/losses (a) (c)	15,444		896		14,548		0.46
Former CEO termination costs	2,742		713		2,029		0.06
Acquisition/integration costs	1,272		380		892		0.04

Index

The following table contains the calculation of full-year consolidated Adjusted EPS, excluding adjustments:

	Per share amounts (Basic)
	Per share amounts
Years ended December 31,	~~2022~~2023		~~2021~~2022		~~2020~~2021
Earnings per share (GAAP)	$	3.06	$	3.66	$	3.05
Earnings per share attributable to Company shareholders - Basic (GAAP)	$	3.56	$	3.06	$	3.66
Adjustments, after tax (c):
Effect of dilutive stock-based compensation plans	(0.01)		(0.02)		(0.01)
Restructuring expenses, net	0.01		0.02		0.11
Earnings per share attributable to Company shareholders - Diluted (GAAP)	$	3.55	$	3.04	$	3.65
Foreign currency revaluation (gains)/losses (a)	(0.23)		(0.04)		0.46
Adjustments, after tax:
Dissolution of business relationships in Russia	0.06		—		—
Restructuring expenses, net	0.01		0.01		0.02
Pension settlement expense	1.20		—		—
Foreign currency revaluation (gains)/losses (a)	0.03		(0.23)		(0.04)
IP address sales	(0.08)		—		—
CEO transition expenses	0.09		—		—
Tax impact of stranded OCI benefit from TCJA for pension liability (b)	(0.17)		—		—
Inventory step-up impacting Cost of goods sold	0.14		—		—
AMJP grant	—		(0.11)		—
Dissolution of business relationships in Russia	—		0.06		—
Former CEO termination costs	—		—		0.06
Pension settlement expense	—		1.20		—
Acquisition/integration costs	0.04		0.04		0.04
IP address sales	—		(0.08)		—
Adjusted earnings per share (non-GAAP)	$	3.89	$	3.57	$	3.72
Tax impact of stranded OCI benefit from TCJA for pension liability (b)	—		(0.17)		—
AMJP grant	—		—		(0.11)
Withholding tax related to internal restructuring	0.10		—
Acquisition/integration costs	0.14		0.04		0.04
Adjusted Diluted earnings per share (non-GAAP)	$	4.06	$	3.87	$	3.56

(a) Foreign currency revaluation (gains)/losses represent unrealized gains and losses arising from the remeasurement of monetary assets and liabilities denominated in non-functional currencies on the balance sheet date.

(b) Our Adjusted EPS excluded the benefit from the reclassification of stranded income tax effects caused by the TCJA associated with the USU.S. pension plan liability that was eliminated in September 2022, a one-time event that would not recur in the future. Such stranded income tax effect represented a one-time benefit that distorted the effective tax rate for the quarter and year-to-date ended September 30, 2022 , and would not be indicative of ongoing or expected future income tax rate at the Company. Management believes excluding pension settlement expense and its income tax impact, including the stranded income tax effects, from its Adjusted EBITDA and Adjusted EPS for the quarter and year-to-date ended September 30, 2022 would provide investors a transparent view and enhanced ability to better assess the Company’s ongoing operational and financial performance.

(c) In 2020, the company recorded losses of approximately $14 million in jurisdictions where it cannot record a tax benefit from the losses, which results in an unusual relationship between the pre-tax and after-tax amounts.

Net debt is, in the opinion of the Company, helpful to investors wishing to understand what the Company’s debt position would be if all available cash were applied to pay down indebtedness. The Company calculates Net debt by subtracting Cash and cash equivalents from Total debt. Total debt is calculated by adding Long-term debt, Current maturities of long-term debt, and Notes and loans payable, if any.

The following table contains the calculation of consolidated net debt:

	(in thousands)
As of December 31,	2022		2021		2020
Current maturities of long-term debt	$	—	$	—	$	9
Long-term debt	439,000		350,000		398,000
Total debt	439,000		350,000		398,009
Cash and cash equivalents	291,776		302,036		241,316
Net debt	$	147,224	$	47,964	$	156,693

Index

Net leverage ratio informs the investors of the Company's financial leverage at the end of the reporting period, providing an indicator of the Company's ability to repay its debt. The Company calculates net leverage ratio by subtracting cash and cash equivalents from total debt, and then dividing by trailing twelve months Adjusted EBITDA.


	(in thousands)
As of December 31,	2023		2022		2021
Current maturities of long-term debt	$	4,218	$	—	$	—
Long-term debt	452,667		439,000		350,000
Total debt	456,885		439,000		350,000
Cash and cash equivalents	173,420		291,776		302,036
Net debt	$	283,465	$	147,224	$	47,964

~~The~~Consolidated ~~calculation~~net leverage ratio informs the investors of the Company's financial leverage at the end of the reporting period, providing an indicator of the Company's ability to repay its debt. The Company calculates consolidated net leverage ratio isby assubtracting ~~follows:~~Cash and cash equivalents from total debt, and then dividing by trailing twelve months Adjusted EBITDA.

Total Company
	Year ended
(in thousands)	December 31, 2022
Net income/(loss) (GAAP)	96,508
Interest expense, net	14,000
Income tax expense	35,472
Depreciation and amortization expense	69,049
EBITDA (non-GAAP)	215,029
Restructuring expenses, net	106
Foreign currency revaluation (gains)/losses (a)	(9,829)
Dissolution of business relationships in Russia	2,275
Pension settlement expense	49,128
IP address sales	(3,420)
Acquisition/integration costs	1,057
Pre-tax (income) attributable to noncontrolling interest	(817)
Adjusted EBITDA (non-GAAP)	$	253,529

The calculation of the consolidated net leverage ratio is as follows:

(in thousands, except for net leverage ratio)	December 31, 2022
	Year ended
Net debt (non-GAAP)	$	147,224
(in thousands)	December 31, 2023
Adjusted EBITDA (non-GAAP)	253,529
Net income/(loss) (GAAP)	$	111,610
Net leverage ratio (non-GAAP)	0.58
Interest expense, net	13,601
Income tax expense	48,846
Depreciation and amortization expense	76,733
EBITDA (non-GAAP)	250,790
Restructuring expenses, net	282
Foreign currency revaluation (gains)/losses (a)	1,296
CEO transition expenses	2,719
Inventory step-up impacting Cost of goods sold	5,480
Acquisition/integration costs	5,194
Pre-tax (income) attributable to noncontrolling interest	(665)
Adjusted EBITDA (non-GAAP)	$	265,096


(in thousands, except for net leverage ratio)	December 31, 2023
Net debt (non-GAAP)	$	283,465
Adjusted EBITDA (non-GAAP)	265,096
Net leverage ratio (non-GAAP)	1.07

Index

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have market risk with respect to foreign currency exchange rates and interest rates. The market risk is the potential loss arising from adverse changes in these rates as discussed below.

Foreign Currency Exchange Rate Risk

We have manufacturing plants and sales transactions worldwide and therefore are subject to foreign currency risk. This risk is composed of both potential losses from the translation of foreign currency financial statements and the remeasurement of foreign currency transactions. To manage this risk, we periodically enter into forward exchange contracts either to hedge the net assets of a foreign investment or to provide an economic hedge against future cash flows. The total net assets of non-U.S. operations and long-term intercompany loans denominated in nonfunctional currencies subject to potential loss amount to approximately $~~683~~716.35 million. The potential loss in fair value resulting from a hypothetical 10 percent adverse change in quoted foreign currency exchange rates amounts to $68.3 million. Furthermore, related to foreign currency transactions, we have exposure to various nonfunctional currency balances totaling $194.1 million. This amount includes, on an absolute basis, exposures to assets and liabilities held in currencies other than our local entity’s functional currency. On a net basis, we had $161.2 million of foreign currency assets as of December 31, 2022. As currency rates change, these nonfunctional currency balances are revalued, and the corresponding adjustment is recorded in the income statement. A hypothetical change of 10 percent in currency rates could result in an adjustment to the income statement of approximately $16.1 million. Actual results may differ.

Index

from a hypothetical 10 percent adverse change in quoted foreign currency exchange rates amounts to $71.7 million. Furthermore, related to foreign currency transactions, we have exposure to various nonfunctional currency balances totaling $117.3 million. This amount includes, on an absolute basis, exposures to assets and liabilities held in currencies other than our local entities' functional currency. On a net basis, we had $29.4 million of foreign currency assets as of December 31, 2023. As currency rates change, these nonfunctional currency balances are revalued, and the corresponding adjustment is recorded in the income statement. A hypothetical change of 10 percent in currency rates could result in an adjustment to the income statement of approximately $2.9 million. Actual results may differ.

Interest Rate Risk

We are exposed to interest rate fluctuations with respect to our variable rate debt, depending on general economic conditions.

On December 31, ~~2022~~2023, we had the following variable rate debt:

(in thousands, except interest rates)
Long-term debt
Current maturities of long-term debt:
Credit agreement with borrowings outstanding, net of fixed rate portion, at an end of period interest rate of 5.88% in 2022, due in 2024	$89,000
Foreign bank debt (at an end of period rate ranging from 5.22% to 5.52% in 2023)	$	43
Total	$89,000
Long-term debt:
Credit agreement with borrowings outstanding, net of fixed rate portion, at an end of period interest rate of 7.08% in 2023, due in 2028	96,000
Foreign bank debt (at an end of period rate ranging from 5.22% to 5.52% in 2023)	49
Total	$	96,092

Assuming borrowings were outstanding for an entire year, an increase of one percentage point in weighted average interest rates would increase interest expense by $01.90 million. To manage interest rate risk, we may periodically enter into interest rate swap agreements to effectively fix the interest rates on variable rate debt to a specific rate for a period of time. (See Note 18, Fair-Value Measurements, of the Notes to the Consolidated Financial Statements, ~~included~~in ~~under~~ Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K).

4450

Index

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm			46
Report of Independent Registered Public Accounting Firm			52
Consolidated Statements of Income for the years ended December 31, 2022, 2021, and 2020			49
Consolidated Statements of Income for the years ended December 31, 2023, 2022, and 2021			56
Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021, and 2020			50
Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022, and 2021			57
Consolidated Balance Sheets as of December 31, 2022 and 2021			51
Consolidated Balance Sheets as of December 31, 2023 and 2022			58
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021, and 2020			52
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021			59
Notes to Consolidated Financial Statements			5360

4551

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, ~~2022~~2023 and ~~2021~~2022, the related consolidated statements of income, comprehensive income, and cash flows for each of the years in the three-year period ended December 31, ~~2022~~2023, and the related notes and financial statement Schedule II - 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, ~~2022~~2023 and ~~2021~~2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, ~~2022~~2023, 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, ~~2022~~2023, 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 2426, ~~2023~~2024 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 2 to the consolidated financial statements, a portion of the Albany Engineered Composites (AEC) segment revenue is earned under ~~short duration,~~ 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.

4652

Index

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 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.

Albany, New York

February 2426, ~~2023~~2024

4753

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, ~~2022~~2023, 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, ~~2022~~2023, 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, ~~2022~~2023 and ~~2021~~2022, the related consolidated statements of income, comprehensive income, and cash flows for each of the years in the three-year period ended December 31, ~~2022~~2023, and the related notes and financial statement Schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements), and our report dated February 2426, ~~2023~~2024 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired Heimbach during 2023, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023, Heimbach’s internal control over financial reporting associated with 14 percent of total consolidated assets (of which 8 percent related to property, plant, and equipment, net, and intangible assets included within the scope of the assessment) and 4 percent of total consolidated revenues included in the consolidated financial statements of the Company as of and for the year ended December 31, 2023. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Heimbach.

Basis for Opinion

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

Index

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

Albany, New York

February 2426, ~~2023~~2024

4855

Index

Albany International Corp.

CONSOLIDATED STATEMENTS OF INCOME

For the years ended December 31,

(in thousands, except per share amounts)

	2022		2021		2020
	2023		2022		2021
Net sales	$	1,034,887	$	929,240	$	900,610
Net revenues	$	1,147,909	$	1,034,887	$	929,240
Cost of goods sold	~~645~~724,~~105~~191		~~550~~645,~~849~~105		~~529~~550,~~538~~849
Gross profit	~~389~~423,~~782~~718		~~378~~389,~~391~~782		~~371~~378,~~072~~391
Selling, general and administrative expenses	~~168~~214,~~713~~915		~~160~~168,~~127~~713		~~163~~160,~~909~~127
Technical and research expenses	3940,~~941~~627		3839,~~922~~941		3538,~~347~~922
Restructuring expenses, net	~~106~~282		~~1,331~~106		51,~~736~~331
Operating income	~~181~~167,~~022~~894		~~178~~181,~~011~~022		~~166~~178,~~080~~011
Interest income	(36,~~835~~566)		(23,~~500~~835)		(2,~~748~~500)
Interest expense	1720,~~835~~167		17,~~391~~835		1617,~~332~~391
Pension settlement expense	~~49,128~~—		—49,128		—
Aviation Manufacturing Jobs Protection (AMJP) grant	—		~~(5,832)~~—		—(5,832)
Other expense/(income), net	(14,086)		3,021		13,422
Other (income)/expense, net	(6,163)		(14,086)		3,021
Income before income taxes	~~131~~160,~~980~~456		~~165~~131,~~931~~980		~~139~~165,~~074~~931
Income tax expense	3548,~~472~~846		4735,~~163~~472		4147,~~831~~163
Net income	96111,~~508~~610		~~118~~96,~~768~~508		97118,~~243~~768
Net income/(loss) attributable to the noncontrolling interest	746		290		(1,346)
Net income attributable to the noncontrolling interest	490		746		290
Net income attributable to the Company	$	95111,~~762~~120	$	~~118~~95,~~478~~762	$	98118,~~589~~478
Earnings per share attributable to Company shareholders — Basic	$	3.06	$	3.66	$	3.05
Earnings per share:
Earnings per share attributable to Company shareholders — Diluted	$	3.04	$	3.65	$	3.05
Basic earnings per share attributable to Company shareholders	$	3.56	$	3.06	$	3.66
Dividends declared per share, Class A and Class B	$	0.88	$	0.81	$	0.77
Diluted earnings per share attributable to Company shareholders	$	3.55	$	3.04	$	3.65
Dividends declared per share	$	1.01	$	0.88	$	0.81
Weighted average shares outstanding:
Basic	31,171		31,339		32,348
Diluted	31,276		31,455		32,463

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

4956

Index

Albany International Corp.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31,

(in thousands)

2022

2021

2020

2023

2022

2021

Net income

96111,~~508~~610

~~118~~96,~~768~~508

97118,~~243~~768

Other comprehensive income, before tax:

Foreign currency translation and other adjustments

~~(40~~18,~~971)~~593

(2040,~~808~~971)

38(20,~~927~~808)

Reclassification of loss on pension settlement

~~42,657~~—

—42,657

~~411~~—

Pension/postretirement plan remeasurement

(24,~~292)~~302

(2,~~259~~292)

13(2,~~407~~259)

Amortization of pension and postretirement liability adjustments:

Prior service credit

(4,~~497~~122)

(4,~~475~~497)

(4,~~474~~475)

Net actuarial loss

31,~~260~~383

43,~~625~~260

54,~~004~~625

Payments and amortization related to interest rate swaps included in earnings

~~468~~(15,062)

~~6,852~~468

36,~~982~~852

Derivative valuation adjustment

253,~~396~~512

325,~~764~~396

~~(12~~3,~~622)~~764

Income taxes related to items of other comprehensive income:

Reclassification of loss on pension settlement

~~(16,459)~~—

—(16,459)

~~(128)~~—

Pension/postretirement plan remeasurement

(~~370~~673)

~~1,463~~(370)

(31,~~017)~~463

Amortization of pension and postretirement liability adjustments

~~408~~904

~~(52)~~408

(~~148~~52)

Payments and amortization related to interest rate swaps included in earnings

~~(118)~~3,811

(~~1,734~~118)

(1,~~028~~734)

Derivative valuation adjustment

(~~6,425~~889)

(~~952~~6,425)

~~3,259~~(952)

Comprehensive income

97123,~~565~~369

~~105~~97,~~192~~565

~~140~~105,~~816~~192

Comprehensive income/(loss) attributable to the noncontrolling interest

~~856~~949

~~(161)~~856

(~~207~~161)

Comprehensive income attributable to the Company

96122,~~709~~420

~~105~~96,~~353~~709

~~141~~105,~~023~~353

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

5057

Index

Albany International Corp.

CONSOLIDATED BALANCE SHEETS

At December 31,

(in thousands, except share data)

	2022		2021
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	~~291~~173,~~776~~420	$	~~302~~291,~~036~~776
Accounts receivable, net	~~200~~287,~~018~~781		~~191~~200,~~985~~018
Contract assets, net	~~148~~182,~~695~~281		~~112~~148,~~546~~695
Inventories	~~139~~169,~~050~~567		~~117~~139,~~882~~050
Income taxes prepaid and receivable	711,~~938~~043		17,~~958~~938
Prepaid expenses and other current assets	5053,~~962~~872		3250,~~394~~962
Total current assets	~~838~~877,~~439~~964		~~758~~838,~~801~~439
Property, plant and equipment, net	~~445~~601,~~658~~989		~~436~~445,~~417~~658
Intangibles, net	3344,~~811~~646		3933,~~081~~811
Goodwill	~~178~~180,~~217~~181		~~182~~178,~~124~~217
Deferred income taxes	1522,~~196~~941		2615,~~376~~196
Noncurrent receivables, net	274,~~913~~392		3127,~~849~~913
Other assets	~~103~~102,~~021~~901		81103,~~416~~021
Total assets	$	1,~~642~~835,~~255~~014	$	1,~~556~~642,~~064~~255
Liabilities
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	6987,~~707~~104	$	6869,~~954~~707
Accrued liabilities	~~126~~142,~~385~~988		~~124~~126,~~325~~385
Current maturities of long-term debt	—4,218		—
Income taxes payable	1514,~~224~~369		1415,~~887~~224
Total current liabilities	~~211~~248,~~316~~679		~~208~~211,~~166~~316
Long-term debt	~~439~~452,~~000~~667		~~350~~439,000
Other noncurrent liabilities	~~108~~139,~~758~~385		~~107~~108,~~794~~758
Deferred taxes and other liabilities	1526,~~638~~963		1215,~~499~~638
Total liabilities	~~774~~867,~~712~~694		~~678~~774,~~459~~712
Commitments and Contingencies
Commitments and Contingencies (Note 21)
Shareholders’ Equity
Shareholders’ Equity:
Preferred stock, par value $5.00 per share; authorized 2,000,000 shares; none issued	—		—
Class A Common Stock, par value $.001 per share; authorized 100,000,000 shares; issued 40,785,434 in 2022 and 40,760,577 in 2021	41		41
Class A Common Stock, par value $0.001 per share; authorized 100,000,000 shares; issued 40,856,910 in 2023 and 40,785,434 in 2022	41		41
Class B Common Stock, par value $.001 per share; authorized 25,000,000 shares; issued and outstanding 0 in 2022 and 104 in 2021	—		—
Additional paid-in capital	448,218		441,540
Additional paid-in capital	441,540		436,996
Retained earnings	1,010,942		931,318
Retained earnings	931,318		863,057
Accumulated items of other comprehensive income:
Translation adjustments	(~~146~~124,~~851~~901)		(~~105~~146,~~880~~851)
Pension and postretirement liability adjustments	(1517,~~783~~346)		(3815,~~490~~783)
Derivative valuation adjustment	179,~~707~~079		(117,~~614)~~707
Treasury stock (Class A), at cost; 9,674,542 shares in 2022 and 8,665,090 shares in 2021	(364,923)		(280,143)
Treasury stock (Class A), at cost; 9,661,845 shares in 2023 and 9,674,542 in 2022	(364,665)		(364,923)
Total Company shareholders’ equity	~~863~~961,~~049~~368		~~873~~863,~~967~~049
Noncontrolling interest	45,~~494~~952		34,~~638~~494
Total equity	867,543		877,605
Total shareholders' equity	967,320		867,543
Total liabilities and shareholders’ equity	$	1,~~642~~835,~~255~~014	$	1,~~556~~642,~~064~~255

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

5158

Index

Albany International Corp.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31,

(in thousands)

2022

2021

2020

2023

2022

2021

OPERATING ACTIVITIES

Net income

96111,~~508~~610

~~118~~96,~~768~~508

97118,~~243~~768

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

Depreciation

6270,~~480~~374

6562,~~130~~480

6365,~~328~~130

Amortization

6,~~569~~359

96,~~125~~569

9,~~377~~125

Change in deferred taxes and other liabilities

(82,~~496~~046)

12(8,~~181~~496)

1112,~~101~~181

Impairment of property, plant, equipment, and inventory

1,~~808~~773

~~856~~1,808

~~1,173~~856

Non-cash interest expense

1,~~118~~404

~~875~~1,118

~~(290)~~875

Non-cash portion of pension settlement expense

~~42,657~~—

—42,657

~~411~~—

Compensation and benefits paid or payable in Class A Common Stock

46,~~527~~936

34,~~146~~527

13,~~505~~146

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

~~1,408~~640

(1,~~299)~~408

(1,~~628~~299)

Foreign currency remeasurement (gain)/loss on intercompany loans

(42,~~434~~831)

(34,~~150~~434)

14(3,~~246~~150)

Fair value adjustment on foreign currency options

(~~509~~139)

~~169~~(509)

—169

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

Changes in operating assets and liabilities that provided/(used) cash, net of impact of business acquisition:

Accounts receivable

(1411,~~301~~038)

(714,~~734~~301)

31(7,~~522~~734)

Contract assets

(3632,~~434~~156)

25(36,~~446~~434)

~~(59~~25,~~122)~~446

Inventories

~~(24~~15,~~541)~~093

(924,~~942~~541)

(139,~~685~~942)

Prepaid expenses and other current assets

(41,~~134)~~530

(~~998~~4,134)

(~~7,811~~998)

Income taxes prepaid and receivable

(62,~~005~~897)

3(6,~~944~~005)

~~113~~3,944

Accounts payable

8(5,~~572~~672)

98,~~492~~572

~~(15~~9,~~586)~~492

Accrued liabilities

3(10,~~226~~441)

~~(774)~~3,226

(~~3,856~~774)

Income taxes payable

~~183~~(1,988)

~~(477)~~183

~~5,939~~(477)

Noncurrent receivables

3,~~911~~723

43,~~355~~911

4,~~158~~355

Other noncurrent liabilities

(109,~~133~~783)

(1310,~~713~~133)

(213,~~437~~713)

Other, net

47,~~234~~605

24,~~075~~234

12,~~296~~075

Net cash provided by operating activities

~~128~~148,~~214~~056

~~217~~128,~~475~~214

~~140~~217,~~253~~475

INVESTING ACTIVITIES

Purchases of property, plant and equipment

(93,675)

(52,793)

(41,463)

Purchase of business, net of cash acquired

(133,470)

—

Purchased software

(2,673)

(906)

(927)

Purchases of property, plant and equipment

(83,560)

(93,675)

(52,793)

Net cash used in investing activities

(96,348)

(53,699)

(42,390)

Purchased software

(869)

(2,673)

(906)

Net cash used in investing activities

(217,899)

(96,348)

(53,699)

FINANCING ACTIVITIES

Proceeds from borrowings

~~162~~78,~~000~~040

8162,000

758,000

Principal payments on debt

(7392,~~000~~274)

(5673,~~009~~000)

(~~101~~56,~~020~~009)

Principal payments on finance lease liabilities

~~(654)~~—

(~~1,438~~654)

(71,~~214~~438)

Debt acquisition costs

—(4,108)

—

~~(2,432)~~—

Purchase of Treasury shares

~~(84,780)~~—

(2384,~~449~~780)

—(23,449)

Taxes paid in lieu of share issuance

(~~770~~3,136)

(~~998~~770)

(~~490~~998)

Proceeds from options exercised

17—

~~153~~17

55153

Dividends paid

(2631,~~465~~163)

(2526,~~894~~465)

(2425,~~568~~894)

Net cash used in financing activities

(2352,~~652~~641)

(9923,~~635~~652)

(6099,~~669~~635)

Effect of exchange rate changes on cash and cash equivalents

~~(18~~4,~~474)~~128

(318,~~421~~474)

8(3,~~582~~421)

Increase/(decrease) in cash and cash equivalents

(10118,~~260~~356)

60(10,~~720~~260)

4560,~~776~~720

Cash and cash equivalents at beginning of period

~~302~~291,~~036~~776

~~241~~302,~~316~~036

~~195~~241,~~540~~316

Cash and cash equivalents at end of period

~~291~~173,~~776~~420

~~302~~291,~~036~~776

~~241~~302,~~316~~036

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

5259

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

1. Accounting Policies

Basis of Consolidation

The consolidated financial statements include the accounts of Albany International Corp. and its subsidiaries (the Company, Albany, we, us, or our) after elimination of intercompany transactions.

AOn ~~subsidiary~~August ~~within~~31, ~~our~~2023, ~~Machine~~the ~~Clothing~~Company ~~segment~~completed ~~has~~the ~~held~~acquisition aof 50Heimbach ~~percent~~GmbH ~~interest~~("Heimbach"), ~~as partner in~~ a ~~joint~~privately-held ~~venture~~manufacturer ~~(“JV”)~~of ~~that supplies~~ paper machine clothing ~~products~~and totechnical ~~local~~textiles, ~~papermakers~~as infurther ~~Russia.~~described ~~Our consolidated financial statements include our original investment~~ in ~~the~~Note ~~entity~~24, ~~plus~~Business ~~our~~Combination, ~~share~~ of ~~undistributed~~the ~~earnings~~Notes orto ~~losses, in~~ the ~~account~~Consolidated ~~“Other~~Financial ~~Assets~~Statements.~~” In~~ ~~March~~The ~~2022,~~financial weresults ~~made~~of the ~~decision~~acquired tocompany ~~cease~~are ~~doing~~included ~~business~~ in ~~Russia,~~the ~~including~~Machine ~~giving~~Clothing ~~notice~~reportable tosegment ~~our~~since ~~JV partner of our intent to exit~~ the ~~venture,~~date ~~resulting in our full write-off~~ of the ~~net book value of our investment~~acquisition.

The Company owns 90 percent of the common equity of Albany Safran Composites, LLC ("ASC") which is reported within the ~~Albany~~AEC ~~Engineered~~segment. ~~Composites~~The Company also owns 85 percent of Arcari, SRL (~~AEC~~"Arcari"), a manufacturer of textile and plastic industrial technical products and conveyor belts, which is a subsidiary of Heimbach GmbH, the paper machine clothing manufacturer recently acquired by the Company and reported within the MC segment. Additional information regarding ~~that~~noncontrolling ~~entity~~interest is included in Note 10, Noncontrolling Interest, of the Notes to the Consolidated Financial Statements.

A subsidiary within our Machine Clothing segment has held a 50 percent interest as partner in a joint venture (“JV”) that supplies paper machine clothing products to local papermakers in Russia. Our consolidated financial statements included our original investment in the entity, plus our share of undistributed earnings or losses, in the account “Other Assets.” In March 2022, we ceased doing business in Russia, including providing notice to our JV partner of our intent to exit the venture, resulting in the full write-off of the net book value of our investment.

Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States ~~of America~~ requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used in the accounting for, among others, revenue recognition, contract profitability, allowances for doubtful accounts, rebates and sales allowances, inventory allowances, financial instruments, including derivatives, pension and other postretirement benefits, goodwill and intangible assets, contingencies, income taxes, and other accruals. Our estimates are based on historical experience and on various other assumptions, which are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may 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 classification of revenue in excess of progress billings on long-term contracts is included in Contract assets, net, which are rights to consideration that are conditional on something other than the passage of time, such as completion of remaining performance obligations.

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 often follow. For contracts with anticipated losses, a provision for the entire amount of the estimated remaining loss is charged against income in the period in which the loss becomes known. Contract losses are determined considering all direct and indirect contract costs, exclusive of any selling, general or administrative cost allocations, which are treated as period expenses.

Products and services provided under long-term contracts represent a significant portion of sales in the Albany Engineered Composites segment. We have a contract with a major customer for which revenue is recognized under a 60

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

1. Accounting Policies — (continued)

~~cost-plus-fee~~options ~~agreement.~~that Weoften ~~also~~follow. ~~have~~For ~~fixed~~contracts ~~price~~with ~~long-term~~anticipated ~~contracts~~losses, ~~for~~a ~~which~~provision wefor ~~use~~ the ~~percentage~~entire amount 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~~remaining ~~revenues~~loss oris ~~costs~~charged ~~are~~against ~~required,~~income ~~any changes from prior estimates are included~~ in ~~earnings in~~ the period ~~the~~in ~~change~~which ~~occurs. The sum of net adjustments to~~ the ~~estimated~~loss ~~profitability~~becomes ofknown. ~~long-term~~Contract ~~contracts~~losses ~~increased~~are ~~AEC~~determined ~~operating~~considering ~~income~~all bydirect ~~$0.5 million, $6.2 million~~ and ~~$9.9~~indirect ~~million~~contract ~~in 2022~~costs, ~~2021~~exclusive ~~and~~of ~~2020,~~any ~~respectively. The favorable effects in 2021 and 2020 were largely due to changes in customer demand and to a lesser extent~~selling, ~~efficiency~~general ~~improvements~~or ~~during~~administrative ~~the~~cost ~~ramp-up of several programs~~allocations, ~~and~~which ~~the~~are ~~effects~~treated inas ~~2022~~period ~~were more muted~~expenses.

~~Additional~~Products ~~accounting~~and ~~policies~~services ~~related~~provided tounder long-term contracts represent a significant portion of Net revenues in the AEC segment. We have a contract with a major customer for which revenue ~~from~~is recognized under a cost-plus-fee agreement. We also have fixed price long-term contracts, ~~with~~for ~~customers~~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 ~~set~~required, ~~forth~~any changes from prior estimates are included in ~~Note~~earnings in the period the change occurs. The sum of net adjustments to the estimated profitability of long-term contracts decreased AEC Operating income by $4.1 million in 2023, and increased AEC Operating income by $0.5 million and $6.2 million in 2022 and 2021, respectively. The unfavorable effects in 2023 related to additional reserves taken on certain contracts and inflationary factors decreasing anticipated margins. The favorable effects in 2022 and 2021 were largely due to changes in customer demand and to a lesser extent, efficiency improvements during the ramp-up of several programs.

WeAdditional ~~limit~~accounting ~~the concentration of credit risk in receivables by closely monitoring credit and collection~~ policies. Werelated ~~record~~to ~~allowances~~revenue ~~for~~from ~~sales~~contracts ~~returns as a deduction in the computation of net sales. Such provisions are recorded on the basis of written communication~~ with customers ~~and/or~~are ~~historical~~set ~~experience.~~forth ~~Any~~in ~~value~~Note ~~added~~2, ~~taxes~~Revenue ~~that~~Recognition, ~~are~~of ~~imposed~~the onNotes ~~sales~~to ~~transactions~~the ~~are~~Consolidated ~~excluded~~Financial ~~from net sales~~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, ~~Administrative, Technical,~~ and ~~Research~~Administrative (SG&A) Expenses

Selling, general, ~~administrative,~~ and ~~technical~~administrative expenses are primarily comprised of wages, incentive compensation, benefits, travel, professional fees, revaluation of trade foreign currency balances, 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. ~~Research~~General ~~expenses~~and ~~are~~administrative ~~charged~~expenses toinclude ~~operations~~corporate asexpenses ~~incurred~~of ~~and~~$73.1 million ~~consist~~in ~~primarily~~2023, of$56.8 million ~~compensation,~~in ~~supplies,~~2022 and ~~professional~~$53.7 million ~~fees incurred~~ in ~~connection~~2021. ~~with~~Corporate ~~intellectual~~expenses ~~property.~~include ~~Total~~global ~~company~~information ~~research~~system ~~expense~~costs ~~was~~of $3127.4 3 million in ~~2022~~2023, $2922.6 7 million in ~~2021,~~2022 and $2521.8 2 million in ~~2020~~2021.

~~The~~Technical ~~Albany Engineered Composites segment participates in both company-sponsored,~~ and ~~customer-funded~~Research 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 sales, while expenses are included in Cost of goods sold.Expenses

~~Restructuring~~Technical ~~Expense~~and research expenses are charged to operations as incurred and consist primarily of compensation, supplies, and professional fees incurred in connection with intellectual property. Total company technical and research expense was $40.6 million in 2023, $39.9 million in 2022, and $38.9 million in 2021.

WeThe ~~may~~AEC ~~incur~~segment ~~expenses~~participates ~~related~~in toboth ~~exiting~~company-sponsored, aand ~~line~~customer-funded ofresearch ~~business~~and ordevelopment. ~~restructuring~~Some ofcustomer-funded ~~our~~research ~~operations,~~and ~~which~~development ~~could~~may ~~include~~be ~~employee~~on ~~termination~~a ~~costs,~~cost-sharing ~~costs~~basis toand ~~consolidate~~considered ~~or close facilities, or costs~~ to ~~terminate~~be ~~contractual~~a ~~relationships.~~collaborative ~~Restructuring expenses may also include impairment of Property~~arrangement, ~~plant~~in ~~and~~which ~~equipment,~~case asboth ~~described~~parties ~~below~~are ~~under~~active ~~“Property,~~participants ~~Plant~~ and ~~Equipment”.~~are ~~Employee~~exposed ~~termination~~to ~~costs~~the ~~include~~risks ~~severance pay~~ and ~~social~~rewards ~~costs~~dependent ~~for~~on ~~periods~~the ~~after~~success ~~employee~~of ~~service~~the ~~is completed~~activity. ~~Termination~~In ~~costs~~such ~~related~~cases, toamounts ancharged ~~ongoing~~to ~~benefit~~the ~~arrangement~~collaborating entity are ~~recognized~~credited ~~when~~against ~~the~~research ~~amount becomes probable~~ and ~~estimable~~development expense. ~~Termination~~For ~~costs~~customer-funded ~~related~~research toand adevelopment ~~one-time~~in ~~benefit~~which ~~arrangement~~we ~~are~~anticipate ~~recognized~~funding atto ~~the~~exceed ~~communication~~expenses, ~~date~~we toinclude ~~employees.~~amounts ~~Costs~~charged ~~related~~ to ~~contract~~the ~~termination,~~customer ~~relocation~~in ofNet ~~employees~~revenues, ~~outplacement~~while ~~and~~expenses ~~the~~are ~~consolidation~~included orin ~~the~~Cost ~~closure~~ of ~~facilities,~~goods ~~are recognized when incurred~~sold.

~~Income Taxes~~61

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

1. Accounting Policies — (continued)

~~the~~Restructuring 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.Expense

InWe ~~the~~may ~~ordinary~~incur ~~course~~expenses ofrelated ~~business~~to ~~there~~exiting isa ~~inherent~~line ~~uncertainty~~of inbusiness ~~quantifying~~or ~~our~~restructuring ~~income~~of ~~tax positions. We assess~~ our ~~income~~operations ~~tax~~or ~~positions~~organizational ~~and~~structure, ~~record~~which ~~tax~~could ~~benefits~~include ~~for~~employee ~~all~~termination ~~years~~costs, ~~subject~~costs to ~~examination~~consolidate ~~based~~or ~~upon~~close ~~management’s evaluation of the facts~~facilities, ~~circumstances,~~or ~~and~~costs ~~information~~to ~~available~~terminate atcontractual ~~the reporting date~~relationships. ~~For~~Restructuring ~~those~~expenses ~~tax~~may ~~positions~~also ~~where~~include itimpairment isof ~~more~~Property, ~~likely~~plant ~~than~~and ~~not~~equipment, ~~that~~as adescribed ~~tax~~below ~~benefit~~under ~~will be sustained~~“Property, wePlant ~~have~~and ~~determined~~Equipment”. ~~the~~Employee ~~amount~~termination ofcosts ~~the~~include ~~tax~~severance ~~benefit~~pay toand besocial ~~recognized~~costs byfor ~~estimating~~periods ~~the~~after ~~largest~~employee ~~amount~~service ofis ~~tax~~completed. ~~benefit~~Termination ~~that~~costs ~~has~~related ato ~~greater~~an ~~than~~ongoing 50benefit ~~percent~~arrangement ~~likelihood~~are ofrecognized ~~being~~when ~~realized~~the ~~upon~~amount ~~ultimate~~becomes ~~settlement~~probable ~~with~~and ~~a taxing authority that has full knowledge of all relevant information~~estimable. ~~For~~Termination ~~those~~costs ~~income~~related ~~tax~~to ~~positions~~a ~~where it is not more~~one-~~likely-than-not~~time ~~that a tax~~ benefit ~~will~~arrangement beare ~~sustained, no tax benefit has been~~ recognized inat the ~~financial~~communication ~~statements.~~date ~~Where~~to ~~applicable,~~employees. ~~associated~~Costs ~~interest~~related ~~and~~to ~~penalties~~contract ~~have~~termination, ~~also~~relocation ~~been~~of ~~recognized.~~employees, Weoutplacement ~~recognize accrued interest~~ and ~~penalties~~the ~~related~~consolidation toor ~~unrecognized~~the ~~tax~~closure ~~benefits~~of asfacilities, aare ~~component~~recognized ofwhen ~~income tax expense~~incurred.

WeIncome ~~have not elected to reclassify stranded tax effects from AOCI to retained earnings.~~ 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 percent 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 income or loss per share is computed using the weighted average number of shares of Class A Common Stock ~~and Class B 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 in the foreseeable future are recorded in other comprehensive income.

~~The following table summarizes foreign currency transaction gains and losses recognized in the income statement:~~62

(in thousands)	2022		2021		2020
(Gains)/losses included in:
Selling, general, and administrative expenses	$	(554)	$	(263)	$	1,875
Other (income)/expense, net	(9,996)		(1,179)		13,569
Total transaction (gains)/losses	$	(10,550)	$	(1,442)	$	15,444

The following table presents foreign currency gains on long-term intercompany loans that were recognized in Other comprehensive income:

(in thousands)						2022						2021						2020
Loss/(gain), before tax, on long-term intercompany loan						$	—					$	(66)					$	(4,985)

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

1. Accounting Policies — (continued)

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


	Years ended December 31,
(in thousands)	2023		2022		2021
(Gains)/losses included in:
Selling, general, and administrative expenses	$	4,181	$	(554)	$	(263)
Other (income)/expense, net	(2,916)		(9,996)		(1,179)
Total transaction (gains)/losses	$	1,265	$	(10,550)	$	(1,442)

The following table presents foreign currency gains on long-term intercompany loans that were recognized in Other comprehensive income:


(in thousands)	2023		2022		2021
Loss/(gain), before tax, on long-term intercompany loan	$	—	$	—	$	(66)

Cash and Cash Equivalents

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

Accounts Receivable

Accounts receivable includes trade receivables and bank promissory notes. 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.

~~Effective~~In ~~January~~accordance 1,with ~~2020, the Company adopted the provisions of~~ ASC 326, Current Expected Credit Losses ("CECL"), ~~using~~ the ~~effective~~Company ~~date~~recognizes ~~(or~~an ~~modified~~allowance ~~retrospective)~~for ~~approach~~expected ~~for~~credit ~~transition.~~losses ~~Under~~on ~~this~~financial ~~transition~~assets ~~method~~measured at amortized cost, ~~periods~~such ~~prior~~as toAccounts ~~2020~~receivable, ~~were~~Contract ~~not~~assets ~~restated~~and Noncurrent receivables. The ~~pre-tax~~allowance ~~cumulative~~is ~~effect~~determined ofusing ~~initially~~a ~~applying~~CECL ~~the~~model ~~new~~that ~~standard~~is ~~was~~based on an ~~increase~~historical inaverage ~~credit~~three-year loss ~~reserves~~rate ofand ~~$1.8 million,~~is ~~primarily~~measured ~~for~~by ~~Accounts~~financial ~~receivable~~asset ~~and~~type ~~Contract~~on ~~assets.~~a ~~Including~~collective ~~tax~~(pool) ~~effects~~basis when similar risk characteristics exist, ~~Retained~~at ~~earnings~~an ~~was~~amount ~~reduced~~equal byto $1lifetime expected credit losses.~~4 million~~ asThe aestimate ~~result~~reflects the risk of ~~transitioning~~loss due to credit default, even when the ~~CECL~~risk ~~standard.~~is remote, and considers available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable expected future economic conditions.

The ~~overarching purpose of the CECL standard is to provide greater transparency and understanding of the~~ Company’s ~~credit~~also ~~risk.~~has This accounting update replaces the incurred loss impairment methodology under previous GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Under this standard, the Company recognizes an allowance for expected credit losses on financial assets measured at amortized cost, such as Accounts receivable, Contract assets and Noncurrent receivables. ~~The~~in ~~allowance~~the isAEC ~~determined~~segment ~~using a CECL model~~ that isrepresent ~~based~~revenue onearned anwhich ~~historical~~have ~~average~~extended ~~three-year~~payment ~~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~~terms. The estimate reflects the risk of loss due to credit default, even when the risk is remote, and considers available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable expected future economic conditions.

~~The~~See ~~Company~~additional ~~also~~information ~~has~~set ~~Noncurrent~~forth ~~receivables~~ in ~~the~~Note ~~AEC~~11, ~~segment~~Accounts ~~that~~Receivable, ~~represent~~of ~~revenue~~the ~~earned~~Notes ~~which have extended payment terms. The Noncurrent receivables are invoiced~~ to the ~~customer,~~Consolidated ~~with 2%~~Financial ~~interest, over a 10-year period that started in 2020~~Statements.

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

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, ~~including~~set ~~accounting~~forth ~~policies~~in ~~related~~Note to12, ~~our~~Contract ~~adoption~~Assets ofand ~~the CECL update~~Liabilities, ~~set~~of ~~forth~~the in Notes 11to ~~and~~the 12Consolidated Financial Statements.

~~Inventories~~63

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 Notes 2 and 13.

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

1. Accounting Policies — (continued)

Inventories

See additional information set forth in Note 2, 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,

•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.

~~Property, Plant and Equipment~~Debt

~~Property,~~The ~~plant~~Company ~~and~~relies ~~equipment~~on ~~are~~bank ~~recorded~~financing atas ~~cost,~~an orimportant ifsource ~~acquired as part~~ of aliquidity for business ~~combination, at fair value~~activities. Outstanding ~~Depreciation~~debt is ~~recorded~~classified ~~using~~as ~~the~~current ~~straight~~or long-~~line~~term ~~method~~based ~~over~~on the ~~estimated~~maturity ~~useful~~of ~~lives~~the of the ~~assets~~Company's ~~for~~financing ~~financial reporting purposes~~arrangements. See Inadditional ~~some~~information ~~cases,~~set ~~accelerated~~forth ~~methods~~in ~~are~~Note ~~used~~17, ~~for~~Financial ~~income~~Instruments, ~~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~~the ~~depreciated~~Notes ~~assets~~to ~~remaining in use is included in~~ the ~~respective~~Consolidated ~~asset~~Financial ~~and accumulated depreciation accounts~~Statements. ~~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 were immaterial in 2022 and 2021.64

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.

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

1. Accounting Policies — (continued)

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 were not material in 2023 and 2022.

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. 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.

Goodwill, Intangibles, and Other Assets

~~The assets and liabilities of acquired businesses are recorded under the acquisition method of accounting at their estimated fair values at the date of acquisition.~~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 requires the use of significant estimates and assumptions, including revenue growth rates, operating margins, discount rates, and future market conditions, among others. To determine fair value, we utilize two market-based approaches and an income approach. Under the market-based approaches, we utilize information regarding the Company, as well as publicly available industry information, to determine earnings multiples. 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.65

In the second quarter of 2022, management applied the qualitative assessment approach in performing its annual evaluation of goodwill for the Company's Machine Clothing reporting unit and two AEC reporting units and concluded that each reporting unit’s fair value continued to exceed its carrying value. In addition, there were no amounts at risk due to the estimated excess between the fair and carrying values. Accordingly, no impairment charges were recorded.

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 18.

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.

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

1. Accounting Policies — (continued)

~~Included~~Otherwise, inwe ~~Other~~perform ~~assets~~a isquantitative ~~$16~~impairment test.2 ~~million~~To inperform ~~2022~~the ~~and~~quantitative ~~$32.5~~impairment ~~million~~test, inwe ~~2021~~compare ~~for~~the ~~defined~~fair ~~benefit~~value ~~pension~~of ~~plans~~a ~~where~~reporting ~~plan~~unit ~~assets~~to ~~exceed~~its ~~the~~carrying ~~projected~~value, ~~benefit~~including ~~obligations~~goodwill. ~~Other~~If ~~assets~~the ~~also~~fair ~~includes~~value ~~financial~~of ~~assets~~a reporting unit exceeds its carrying value, goodwill of ~~$0.6~~the ~~million~~reporting inunit ~~2022~~is ~~and~~not $0impaired.7 ~~million~~If inthe ~~2021.~~carrying ~~See~~value ~~additional~~of ~~information~~the ~~set~~reporting ~~forth~~unit, including goodwill, exceeds its fair value, a goodwill impairment loss is recognized in ~~Note~~an 18amount equal to that excess.

In the second quarter of 2023, management applied the qualitative assessment approach in performing its annual evaluation of goodwill for the Company's MC reporting unit and two AEC reporting units and concluded that each reporting unit’s fair value continued to exceed its carrying value by a significant margin. In addition, there were no amounts at risk due to the estimated excess between the fair and carrying values. Accordingly, no impairment charges were recorded.

Included in Other assets is $19.3 million in 2023 and $16.2 million in 2022 for defined benefit pension plans where plan assets exceed the projected benefit obligations. Other assets also include financial assets of $0.7 million in 2023 and $0.6 million in 2022. 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.

Unexercised options generally terminate twenty years after the date of grant for all plans, and must be exercised within ten years of retirement. We recognized no stock option expense during 2022, 2021, or 2020 and there are currently no remaining unvested options for which stock-option compensation costs will be recognized in future periods. No stock options have been granted since 2002.

Derivatives

WeFrom ~~use derivatives from~~ time to time, we use derivatives to ~~reduce~~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 into ~~the~~manage ~~management of~~ foreign currency exposure related to assets and liabilities (including net investments in subsidiaries located outside the U.S.) denominated in foreign currencies. When we enter into a derivative contract, we make a determination whether the transaction is deemed to be a hedge for accounting purposes. 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. Changes in the fair value of the hedge are recorded, net of tax, in other comprehensive income. For transactions that are designated as hedges, we perform an evaluation of the effectiveness of the hedge. We measure the effectiveness of hedging relationships both at 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.66

For derivatives that are designated and qualify as hedges of net investments in subsidiaries located outside the United States, changes in the fair value of derivatives are reported in other comprehensive income as part of Translation adjustments.

Pension and Postretirement Benefit Plans

As described in Note 4, we have pension and postretirement benefit plans covering substantially all employees. Our Pension Plus Plan in the United States was settled during the third quarter of 2022.This was a qualified defined benefit pension plan that was previously terminated in the third quarter of 2021, and prior to that point was closed to new participants and had frozen accrual of benefits.

We have liabilities for postretirement benefits in the U.S. and Canada. A majority of the liability relates to the U.S. plan. Effective January 2005, our postretirement benefit plan in the U.S. was closed to new participants, except for certain life insurance benefits. In September 2008, we changed the cost sharing arrangement under this program

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

1. Accounting Policies — (continued)

~~such~~outside ~~that~~the ~~increases~~U.S.) denominated in ~~health~~foreign ~~care~~currencies. ~~costs~~When ~~are~~we enter into a derivative contract, we make a determination whether the ~~responsibility~~transaction ofis ~~plan~~deemed ~~participants~~to ~~and,~~be ina ~~August~~hedge ~~2013~~for accounting purposes. For those contracts deemed to be a hedge, we ~~reduced~~formally document the ~~life~~relationship ~~insurance~~between ~~benefit~~the ~~for~~derivative ~~retirees~~instrument and ~~eliminated~~the risk being hedged. In this documentation, we specifically identify the asset, liability, forecasted transaction, cash flow, or net investment that ~~benefit~~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 ~~active~~the ~~employees~~derivative.

~~The~~All ~~pension~~derivative ~~plans~~contracts are ~~generally~~recorded ~~trusteed~~at orfair ~~insured~~value, ~~and~~as ~~accrued~~a ~~amounts~~net ~~are~~asset ~~funded~~or asa ~~required~~net inliability ~~accordance~~on ~~with~~the ~~governing~~Consolidated ~~laws~~Balance ~~and regulations~~Sheets. The ~~annual~~changes ~~expense~~in ~~and~~fair ~~liabilities~~values ~~recognized~~of ~~for~~derivative ~~defined~~contracts ~~benefit~~are ~~pension~~recorded ~~plans~~each ~~and~~period ~~postretirement~~in ~~benefit~~earnings ~~plans~~or ~~are~~accumulated ~~developed~~other ~~from~~comprehensive ~~actuarial~~income, ~~valuations.~~depending ~~Inherent~~on inwhether ~~these~~a ~~valuations~~derivative ~~are~~is ~~key~~effective ~~assumptions,~~as ~~including~~part ~~discount~~of ~~rates~~the ~~and~~hedged ~~expected~~transaction. ~~return~~Gains and losses on ~~plan~~derivative ~~assets,~~contracts ~~which~~reported ~~are~~in ~~updated~~accumulated onother ancomprehensive ~~annual~~income ~~basis.~~are Wesubsequently ~~consider~~included ~~current~~in ~~market~~earnings ~~conditions,~~in ~~including~~the ~~changes~~periods in ~~interest~~which ~~rates,~~earnings inare ~~making~~affected ~~these~~by ~~assumptions~~the hedged item. ~~Discount~~For ~~rate~~transactions ~~assumptions~~that are ~~based~~designated onas ~~the~~an ~~population~~effective ofhedge, ~~plan~~we ~~participants~~perform ~~and~~an aevaluation ~~mixture~~of the effectiveness of ~~high-quality~~the ~~fixed-income~~hedge ~~investments~~on ~~with~~the ~~durations~~date ~~that~~of ~~match~~inception ~~expected~~and ~~future~~on ~~payments~~an ongoing basis. The ~~assumption~~related ~~for~~gains ~~expected~~and ~~return~~losses onof ~~plan~~derivative ~~assets~~instruments, isincluding ~~based~~those ondesignated ~~historical~~in ~~and~~hedge ~~expected~~accounting ~~returns~~relationships, onare ~~various~~included ~~categories~~as operating activities in the Consolidated Statements of ~~plan~~Cash ~~assets~~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 substantially all 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.

During the third quarter of 2021, the Company was awarded an Aviation Manufacturing Jobs Protection Program ("AMJP") grant of $5.8 million, under the American Rescue Plan of the U.S. Department of Transportation. The AMJP grant is an income related grant, the purpose of which is to provide payroll assistance to eligible U.S. aircraft manufacturing/repair businesses who were impacted due to the COVID-19 pandemic downturn during 2020. In order to receive the grant, AEC was required to make several commitments, including a commitment that the ~~company~~Company would not involuntarily furlough or lay-off employees within this segment during the period the grant was intended to cover. All conditions were met and the Company recognized $5.8 million in its Consolidated Statements of Income for the year ended December 31, 2021. The Company received $2.9 million in cash during 2021 and the remainder ~~during 2022 and reflected cash received as an operating activity within the Consolidated Statements of Cash Flows over the periods cash was received.~~

~~Subsequent Events~~67

~~We review for subsequent events up through the date when our consolidated financial statements are available for issuance.~~Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

1. Accounting Policies — (continued)

during 2022 and reflected cash received as an operating activity within the Consolidated Statements of Cash Flows over the periods cash was received.

Recent Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

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 guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

2. Revenue Recognition

We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. Revenue is measured based on the consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third parties. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service, or a series of distinct goods or services, to the customer which occurs either at a point in time, or over time, depending on the performance obligation in the contract. A performance obligation is a promise in the contract to transfer a distinct good or service to the customer, and is the unit of account. “Control” refers to the ability to direct the use of, and obtain substantially all of the remaining benefits from the product. A contract’s transaction price is allocated to each material distinct performance obligation and is recognized as revenue when, or as, the performance obligation is satisfied.

In our MC segment, our primary performance obligation in most contracts is to provide solution-based, custom-designed fabrics and belts to the customer. We satisfy this performance obligation upon transferring control of the product to the customer at a specific point in time. Contracts with customers in the MC segment have various terms that can affect the point in time when revenue is recognized. Generally, the customer obtains control when the product has been received at the location specified by the customer, at which time the only remaining obligations under the contract may be fulfillment costs, in the form of shipping and handling, which are accrued when control of the product is transferred.

60In 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.

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

2. Revenue Recognition — (continued)

~~that~~In ~~can~~our ~~affect~~AEC ~~the~~segment, ~~point~~we inprimarily ~~time~~enter ~~when~~into contracts to manufacture and deliver highly engineered advanced composite products to our customers. A significant portion of AEC revenue is ~~recognized.~~earned ~~Generally~~under short duration, ~~the~~firm-fixed-price ~~customer~~orders ~~obtains~~that ~~control~~are ~~when~~placed under a master agreement containing general terms and conditions applicable to all orders placed under the ~~product~~master ~~has~~agreement. ~~been~~We ~~received~~assess each contract at ~~the~~its ~~location~~inception ~~specified~~to bydetermine ~~the~~whether ~~customer,~~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 ~~which~~or near the same time or were negotiated with an overall profit objective. If combined, we treat the ~~only~~combined ~~remaining~~contracts ~~obligations~~as ~~under~~a single contract for revenue recognition purposes. We evaluate the products or services promised in each contract ~~may~~at inception to determine whether the contract should be ~~fulfillment~~accounted ~~costs~~for as having one or more performance obligations. For most AEC contracts, inthe nature of our promise (or our performance obligation) to the ~~form~~customer is to provide a significant service of ~~shipping~~integrating a complex set of tasks and ~~handling~~components into a single project or capability, which ~~are~~will ~~accrued~~often ~~when~~result ~~control~~in the delivery of ~~the~~multiple ~~product~~highly isinterdependent ~~transferred~~and interrelated units.

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 short duration, firm-fixed-price orders that are placed under a master agreement containing general terms and conditions applicable to all orders placed under the master agreement. To determine the proper revenue recognition method, we evaluate whether two or more orders or contracts should be combined and accounted for as one single contract, and whether the combined or single contract contains single or multiple performance obligations. This evaluation requires significant judgment, and the decision to combine a group of contracts, or to allocate revenue from the combined or single contract among multiple performance obligations, could have a significant impact on the amount of revenue and profit recorded in a given period. 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 asubstantially ~~large~~all ~~portion~~ 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.

61In other AEC contracts, revenue is recognized at a point in time because the products are offered to multiple customers, or we do not have an enforceable right to payment until the product is shipped or delivered to the location specified by the customer in the contract.

AEC’s largest source of revenue is derived from the LEAP contract (see Note 10, Noncontrolling Interest, of the Notes to the Consolidated Financial Statements) under a cost-plus-fee agreement. The fee may vary within a narrow range based on our success in achieving certain cost targets. Revenue is recognized over time as costs are incurred. Under this contract, there is judgment involved in determining applicable contract costs and expected margin, and therefore, in determining the amount of revenue to be recognized.

Payment terms granted to MC and AEC customers reflect general competitive practices. Terms vary with product, competitive conditions, and the country of operation.

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

2. Revenue Recognition — (continued)

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

AEC’s largest source of revenue is derived from the LEAP contract (see Note 10) under a cost-plus-fee agreement. The fee is variable based on our success in achieving certain cost targets. Revenue is recognized over time as costs are incurred. Under this contract, there is judgment involved in determining applicable contract costs and expected margin, and therefore, in determining the amount of revenue to be recognized.

Payment terms granted to MC and AEC customers reflect general competitive practices. Terms vary with product, competitive conditions, and the country of operation.

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

Segment

Reporting Unit

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.

62The following table presents disaggregated revenue for each product group by timing of revenue recognition:


	For the year ended December 31, 2023
(in thousands)	Point in Time Revenue Recognition		Over Time Revenue Recognition		Total
Machine Clothing	$	666,990	$	3,778	$	670,768
Albany Engineered Composites
ASC	—		184,184		184,184
Other AEC	20,546		272,411		292,957
Total Albany Engineered Composites	20,546		456,595		477,141
Total net revenues	$	687,536	$	460,373	$	1,147,909


	For the year ended December 31, 2022
(in thousands)	Point in Time Revenue Recognition		Over Time Revenue Recognition		Total
Machine Clothing	$	605,863	$	3,598	$	609,461
Albany Engineered Composites
ASC	—		165,775		165,775
Other AEC	19,167		240,484		259,651
Total Albany Engineered Composites	19,167		406,259		425,426
Total net revenues	$	625,030	$	409,857	$	1,034,887

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

2. Revenue Recognition — (continued)

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


	For the year ended December 31, 2021
(in thousands)	Point in Time Revenue Recognition		Over Time Revenue Recognition		Total
Machine Clothing	$	615,556	$	3,459	$	619,015
Albany Engineered Composites
ASC	—		109,803		109,803
Other AEC	15,972		184,450		200,422
Total Albany Engineered Composites	15,972		294,253		310,225
Total net revenues	$	631,528	$	297,712	$	929,240

	For the year ended December 31, 2022
(in thousands)	Point in Time Revenue Recognition		Over Time Revenue Recognition		Total
Machine Clothing	$	605,863	$	3,598	$	609,461
Albany Engineered Composites
ASC	—		165,775		165,775
Other AEC	19,167		240,484		259,651
Total Albany Engineered Composites	19,167		406,259		425,426
Total revenue	$	625,030	$	409,857	$	1,034,887
	For the year ended December 31, 2021
(in thousands)	Point in Time Revenue Recognition		Over Time Revenue Recognition		Total
Machine Clothing	$	615,556	$	3,459	$	619,015
Albany Engineered Composites
ASC	—		109,803		109,803
Other AEC	15,972		184,450		200,422
Total Albany Engineered Composites	15,972		294,253		310,225
Total revenue	$	631,528	$	297,712	$	929,240
	For the year ended December 31, 2020
(in thousands)	Point in Time Revenue Recognition		Over Time Revenue Recognition		Total
Machine Clothing	$	569,563	$	3,392	$	572,955
Albany Engineered Composites
ASC	—		98,411		98,411
Other AEC	18,343		210,901		229,244
Total Albany Engineered Composites	18,343		309,312		327,655
Total revenue	$	587,906	$	312,704	$	900,610

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:

	For the year ended December 31,
	Years ended December 31,
(in thousands)	~~2022~~2023		~~2021~~2022		~~2020~~2021
Americas PMC	$	~~321~~349,~~170~~544	$	~~317~~321,~~907~~170	$	~~297~~317,~~490~~907
Eurasia PMC	~~207~~250,~~115~~048		~~219~~207,~~506~~115		~~202~~219,~~181~~506
Engineered Fabrics	8171,176		81,~~602~~176		7381,~~284~~602
Total Machine Clothing Net sales	$	609,461	$	619,015	$	572,955
Total Machine Clothing net revenues	$	670,768	$	609,461	$	619,015

63We 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 short duration firm-fixed-price orders representing performance obligations with an original maturity of less than one year. Remaining performance obligations on contracts that had an original duration of greater than one year totaled $1.2 billion as of December 31, 2023, $553 million as of December 31, 2022, and $278 million as of December 31, 2021, and related primarily to firm contracts in the AEC segment. Of the remaining performance obligations as of December 31, 2023 we expect to recognize as revenue approximately $179 million during 2024, $178 million during 2025, $156 million during 2026, and the remainder thereafter.

3. Reportable Segments and Geographic Data

The Company is organized based on the nature of its products and is composed of two reportable segments 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. The Company has not aggregated operating segments for purposes of identifying reportable segments. As of December 31, 2023, the operating segments were Machine Clothing (“MC”), and Albany Engineered Composites ("AEC”).

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. These costs are not allocated to the reportable segments because the decision-making for these functions lies outside of the segments.

Machine Clothing:

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

23. ~~Revenue~~Reportable ~~Recognition~~Segments and Geographic Data — (continued)

WeThe ~~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~~supplies ~~generally~~permeable ~~for~~and ~~periods~~impermeable ofbelts ~~less~~used ~~than a year. Most contracts~~ in the ~~AEC~~manufacture ~~segment~~of ~~are~~paper, ~~short~~paperboard, ~~duration~~tissue ~~firm-fixed-price~~and ~~orders~~towel, ~~representing~~pulp, ~~performance~~nonwovens, ~~obligations~~fiber ~~with~~cement anand ~~original~~several ~~maturity~~other ofindustrial ~~less than one year~~applications. ~~Remaining~~We ~~performance~~sell ~~obligations~~our onMC ~~contracts~~products ~~that~~directly ~~had~~to ancustomer ~~original~~end-users ~~duration~~in ofcountries ~~greater~~across ~~than~~the ~~one~~globe. ~~year~~Our ~~totaled $553 million as of December 31~~products, ~~2022,~~manufacturing ~~$278 million as of December 31~~processes, ~~2021,~~ and ~~$86 million~~distribution aschannels offor ~~December 31,~~MC ~~2020,~~are ~~and~~substantially ~~related~~the ~~primarily~~same ~~to firm contracts~~ in ~~the~~each ~~AEC~~region ~~segment.~~of Of the ~~remaining~~world ~~performance~~in ~~obligations~~which ~~as of December 31, 2022~~ we ~~expect to recognize as revenue approximately $131 million during 2023, $98 million during 2024, $56 million during 2025, and the remainder thereafter~~operate.

3. Reportable Segments and Geographic Data

In accordance with applicable disclosure guidance for enterprise segments and related information, the internal organization that is used by management for making operating decisions and assessing performance is used as the basis for our reportable segments.

The accounting policies of the segments are the same as those described in Note 1. 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. These costs are not allocated to the reportable segments because the decision-making for these functions lies outside of the segments.

Machine Clothing:

The Machine Clothing (“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 LEAP engine is used on the Airbus A320neo, Boeing 737 MAX, and COMAC 919 aircrafts. AEC’s largest aerospace customer is SAFRAN and sales to SAFRAN (consisting primarily of fan blades and cases for CFM’s LEAP engine) accounted for approximately 16 percent of the Company’s consolidated Net ~~sales~~revenues in ~~2022~~2023. In ~~2022~~2023, SAFRAN leased manufacturing space from AEC for the GE9X program. Rent paid by SAFRAN under this lease amounted to $01.90 million in ~~both~~2023 ~~2022~~ and ~~2021~~$0.9 million ~~AEC~~in ~~Net~~2022. AEC sales to SAFRAN were $~~169~~187.36 million in ~~2022~~2023, $~~111~~169.63 million in ~~2021~~2022, and $99111.06 million in ~~2020~~2021. The total of Accounts receivable, Contract assets and Noncurrent receivable due from SAFRAN amounted to $8093.8 million and $7980.68 million as of December 31, ~~2022~~2023 and ~~2021~~2022, respectively.

Other significant programs by AEC include the Sikorsky CH-53K, F-35, JASSM, and Boeing 787 programs. AEC also supplies vacuum waste tanks for ~~the~~ Boeing ~~7-Series~~commercial programs, and specialty components for the Rolls Royce lift fan on the F-35. In ~~2022~~2023, approximately 4639 percent of AEC ~~sales~~net revenues were related to U.S. government contracts or programs.

6472

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

3. Reportable Segments and Geographic Data — (continued)

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

(in thousands)	2022		2021		2020
	Years ended December 31,
Net Sales
(in thousands)	2023		2022		2021
Machine Clothing	$	609,461	$	619,015	$	572,955
Net revenues
Albany Engineered Composites	425,426		310,225		327,655
Machine Clothing	$	670,768	$	609,461	$	619,015
Consolidated total	$	1,034,887	$	929,240	$	900,610
Albany Engineered Composites	477,141		425,426		310,225
Consolidated total	$	1,147,909	$	1,034,887	$	929,240
Depreciation and amortization
Machine Clothing	1923,~~483~~891		2019,~~191~~483		20,~~304~~191
Albany Engineered Composites	4649,~~202~~030		5046,~~402~~202		4850,~~496~~402
Corporate expenses	3,364		3,662		3,905
Corporate	3,812		3,364		3,662
Consolidated total	$	6976,~~049~~733	$	7469,~~255~~049	$	7274,~~705~~255
Operating income/(loss)
Machine Clothing	~~206~~199,~~214~~378		~~215~~206,~~654~~214		~~190~~215,~~805~~654
Albany Engineered Composites	3141,~~579~~587		1631,~~160~~579		3116,~~536~~160
Corporate expenses	(56,771)		(53,803)		(56,261)
Corporate	(73,071)		(56,771)		(53,803)
Operating income	$	~~181~~167,~~022~~894	$	~~178~~181,~~011~~022	$	~~166~~178,~~080~~011
Reconciling items:
Interest income	(36,~~835~~566)		(23,~~500~~835)		(2,~~748~~500)
Interest expense	1720,~~835~~167		17,~~391~~835		1617,~~332~~391
Pension settlement expense	~~49,128~~—		—49,128		—
AMJP grant	—		~~(5,832)~~—		—(5,832)
Other expense, net	(14,086)		3,021		13,422
Other (income)/expense, net	(6,163)		(14,086)		3,021
Income before income taxes	$	~~131~~160,~~980~~456	$	~~165~~131,~~931~~980	$	~~139~~165,~~074~~931

Results Afor ~~subsidiary~~the ~~within~~year ~~our~~ended ~~Machine~~December ~~Clothing~~31, ~~segment~~2023 ~~has~~include ~~been~~the anewly ~~partner~~acquired inHeimbach afor ~~joint~~the ~~venture~~period ~~(“JV”)~~of ~~that supplies paper machine clothing products to local papermakers in Russia. In March 2022~~ownership, wewhich ~~made~~began ~~the~~September ~~decision to cease doing business in Russia~~1, ~~including~~2023. ~~giving~~Heimbach ~~notice~~contributed toNet ~~our~~revenues ~~JV partner~~ of ~~our intent to exit the venture~~$51.2 million Asand areduced ~~result,~~Operating weincome ~~recognized~~by $16.53 million, ~~expense~~which inincluded ~~the~~depreciation ~~consolidated~~expense ~~statement~~on ofProperty, ~~operations~~plant, ~~representing~~and ~~reserves~~equipment, ~~against~~net ~~the risk~~ of ~~uncollectible~~$4.0 million, ~~customer receivables~~ and ~~obsolescence~~amortization ofexpense ~~certain~~on ~~inventory~~Intangibles, ~~destined for Russian customers. We also wrote down the~~ net ~~book value~~ of ~~our investment in the aforementioned JV to reflect our intent to exit such venture, resulting in~~ $0.83 million ~~impairment loss during the first quarter of 2022~~.

In the third quarter of 2022, we took actions to settle certain pension plan liabilities in the U.S., leading to charges totaling $49.1 million, which were included as Corporate expenses and other. This led to a reduction of unfunded pension liabilities of $6.2 million.

~~The~~A ~~table~~subsidiary ~~below~~within ~~presents~~our ~~restructuring~~MC ~~costs~~segment byhas ~~reportable~~been ~~segment~~a ~~(also~~partner ~~see~~in ~~Note~~a JV that supplies paper machine clothing products to local papermakers in Russia. In March 2022, we decided to cease doing business in Russia, including giving notice to our JV partner of our intent to exit the venture. As a result, in 2022, we recognized $1.5): million expense in the consolidated statement of operations, representing reserves against the risk of uncollectible customer receivables and obsolescence of certain inventory destined for Russian customers. We also wrote down the net book value of our investment in the aforementioned JV to reflect our intent to exit such venture, resulting in $0.8 million impairment loss during the first quarter of 2022.

(in thousands)	2022		2021		2020
Restructuring expenses, net
Machine Clothing	$	92	$	1,202	$	2,746
Albany Engineered Composites	—		32		2,821
Corporate expenses	14		97		169
Consolidated total	$	106	$	1,331	$	5,736

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

3. Reportable Segments and Geographic Data — (continued)

The table below presents restructuring costs by reportable segment (also see Note 5, Restructuring, of the Notes to the Consolidated Financial Statements):


	Years ended December 31,
(in thousands)	2023		2022		2021
Restructuring expenses, net
Machine Clothing	$	282	$	92	$	1,202
Albany Engineered Composites	—		—		32
Corporate expenses	—		14		97
Total restructuring expenses, net	$	282	$	106	$	1,331

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

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

(in thousands)	2022		2021		2020
	As of December 31,
(in thousands)	2023		2022		2021
Segment assets
Machine Clothing	$	~~455~~669,~~390~~907	$	~~459~~455,~~182~~390	$	~~443~~459,~~476~~182
Albany Engineered Composites	~~717~~800,~~972~~931		~~652~~717,~~702~~972		~~713~~652,~~955~~702
Reconciling items:
Cash	~~291~~173,~~776~~420		~~302~~291,~~036~~776		~~241~~302,~~316~~036
Income taxes prepaid, receivable and deferred	2333,~~134~~984		2823,~~334~~134		4428,~~697~~334
Prepaid and Other assets	~~153~~156,~~983~~772		~~113~~153,~~810~~983		~~106~~113,~~492~~810
Consolidated total assets	$	1,642,255	$	1,556,064	$	1,549,936
Total assets	$	1,835,014	$	1,642,255	$	1,556,064
Capital expenditures and purchased software
Machine Clothing	$	2025,~~093~~258	$	20,~~177~~093	$	1520,~~792~~177
Albany Engineered Composites	7356,~~614~~786		3173,~~012~~614		2331,~~718~~012
Corporate expenses	2,~~641~~385		2,~~510~~641		2,~~880~~510
Consolidated total	$	96,348	$	53,699	$	42,390
Total capital expenditures and purchased software	$	84,429	$	96,348	$	53,699

In 2022, the Company extended the lease of its primary manufacturing facility in Salt Lake City, Utah, which resulted in a lease classification change from Finance to Operating and included a non-cash increase of $37.1 million to both Other assets and to Other noncurrent liabilities in the Consolidated Balance Sheets. Due to the non-cash nature of the transaction, those increases are excluded from amounts reported in the Consolidated Statements of Cash Flows.

6674

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

3. Reportable Segments and Geographic Data — (continued)

The following table shows data by geographic area. Net ~~sales~~revenues are based on the location of the operation recording the final sale to the customer. Net ~~sales~~revenues recorded by our entity in Switzerland are derived from products sold throughout Europe and Asia, and are invoiced in various currencies.

(in thousands)	2022		2021		2020
	Years ended December 31,
Net sales
(in thousands)	2023		2022		2021
United States	$	586,779	$	497,231	$	503,473
Net revenues
Switzerland	119,069		128,698		128,328
United States	$	649,500	$	586,779	$	497,231
France	76,826		68,929		55,914
Switzerland	115,207		119,069		128,698
Brazil	66,175		62,925		60,259
France	77,573		76,826		68,929
China	63,914		67,098		57,007
Brazil	69,527		66,175		62,925
Mexico	58,519		37,547		39,859
China	65,135		63,914		67,098
Italy	20,074		21,523		12,424
Mexico	58,874		58,519		37,547
Other countries	43,531		45,289		43,346
Germany	32,239		4,461		5,308
Consolidated total	$	1,034,887	$	929,240	$	900,610
Other countries	79,854		59,144		61,504
Property, plant and equipment, at cost, net
Total Net revenues	$	1,147,909	$	1,034,887	$	929,240
United States	$	278,500	$	258,453	$	263,201
Property, plant and equipment, net
Mexico	42,320		40,699		41,738
United States	$	303,578	$	278,500	$	258,453
China	3357,~~432~~070		4133,~~039~~432		4041,~~898~~039
France	31,382		33,802		41,107
Germany	52,934		9,562		9,652
Canada	14,264		14,139		9,672
Mexico	46,759		42,320		40,699
Sweden	11,388		12,355		12,109
France	31,069		31,382		33,802
United Kingdom	918,~~699~~306		109,~~156~~699		10,~~731~~156
Germany	9,562		9,652		10,808
Canada	15,318		14,264		14,139
Other countries	15,111		16,122		18,290
Spain	14,804		—		—
Consolidated total	$	445,658	$	436,417	$	448,554
Other countries	62,151		26,499		28,477
Total Property, plant and equipment, net	$	601,989	$	445,658	$	436,417

4. ~~Pensions~~Pension, Postretirement, and Other ~~Postretirement~~ Benefit Plans

~~Pension~~Voluntary ~~Plans~~Savings Plan

The Company ~~has~~maintains ~~defined~~a ~~benefit~~voluntary ~~pension~~savings ~~plans~~plan covering ~~certain~~substantially 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 percent and 100 percent ~~non~~of employee contributions up to a defined maximum. The investment of employee contributions to the plan is self-Udirected.S The Company’s cost of the plan amounted to $7.3 ~~employees~~million in 2023, $6.6 million in 2022, and $6.2 million in 2021.

InThe ~~the~~plan ~~third~~allows ~~quarter~~for ofdiscretionary ~~2022,~~matching wecontributions. ~~took~~The ~~actions~~Company touses ~~settle~~such ~~pension~~discretion ~~plan~~to ~~liabilities~~provide ~~related~~profit sharing contributions to ~~the~~eligible Uplan participants.S. ~~Pension~~Such ~~Plus~~contributions ~~Plan,~~are ~~leading~~based toon ~~charges~~Company ~~totaling~~performance ~~$49.1 million.~~and ~~This~~vary ~~led~~from year to ayear ~~reduction~~and ofcontributions ~~unfunded~~are ~~pension~~generally ~~liabilities~~made ofin ~~$6.2 million.~~the ~~This~~first ~~was~~quarter afollowing ~~qualified~~the ~~defined~~Company’s ~~benefit~~fiscal ~~pension~~year-end. The Company’s profit-sharing plan ~~that~~covers ~~was~~substantially ~~previously~~all ~~terminated~~employees in the ~~third~~United ~~quarter~~States. After the close of ~~2021~~each year, the Board of Directors reviews and ~~prior~~approves tothe ~~that~~amount ~~point~~of ~~was~~the ~~closed~~profit-sharing contribution. Company contributions to ~~new~~the ~~participants~~plan ~~and~~are ~~had~~in ~~frozen~~the ~~accrual~~form of ~~benefits~~cash. The expense recorded for this plan was $4.9 million in 2023, $4.6 million in 2022, and $4.8 million in 2021.

The December 31, 2022 benefit obligations for remaining U.S. pension and postretirement plans were calculated using the Pri-2012 mortality table with MP-2021 generational projection. For U.S. pension funding purposes, the Company uses the plan’s IRS-basis current liability as its funding target, which is determined based on mandated assumptions. Benefit accruals under the U.S. Supplemental Executive Retirement Plan (“SERP”), which is an unfunded plan, have been frozen. 75

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

Index

ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

4. ~~Pensions~~Pension, Postretirement, and Other ~~Postretirement~~ Benefit Plans — (continued)

~~Benefits~~Pension ~~under~~and ~~the~~Postretirement Company's pension plan in Switzerland utilize a cash balance interest crediting rate for determination of plan liabilities. As of December 31, 2022, the benefit obligation for that plan amounted to $2.9 million.Plans

InThe ~~addition to providing pension benefits, the~~ Company ~~provides~~has ~~various~~defined ~~medical,~~benefit ~~dental,~~pension and ~~life~~postretirement ~~insurance~~plans ~~benefits~~covering ~~for~~ certain ~~retired United States employees.~~ U.S. ~~employees~~and ~~hired prior to 2005 may become eligible for these benefits if they reach normal retirement age while working for the Company~~non-U. ~~Benefits provided under this plan are subject to change~~S. ~~Retirees share in the cost of these benefits. Any new~~ employees ~~hired after January 2005 who wish to be covered under this plan will be responsible for the full cost of such benefits~~. InThe ~~September 2008~~eligibility, webenefit ~~changed the cost-sharing arrangement under this program such that increases in health care costs are the responsibility of plan participants. In August 2013~~formulas, ~~we reduced the life insurance benefit for retirees~~ and ~~eliminated~~contribution ~~the~~requirements ~~benefit~~ for active employees. The Company also provides certain postretirement life insurance benefits to retired employees in Canada. As of December 31, 2022, the accrued postretirement liability was $34.8 million in the U.S. and $0.8 million in Canada. The Company accrues the cost of providing postretirement benefits during the active service period of the employees. The Company currently funds the plans asvary ~~claims~~by ~~are paid~~location.

~~Accounting~~As ~~guidance requires the recognition~~ of ~~the~~December ~~funded~~31, ~~status~~2023, ofU.S. ~~each defined~~ benefit ~~and~~obligations ~~other~~exist ~~postretirement~~through ~~benefit~~the ~~plan~~U.S. ~~Each~~Supplemental ~~overfunded~~Executive ~~plan~~Retirement isPlan ~~recognized~~(“SERP”), asa anfrozen ~~asset~~unfunded pension plan, and ~~each~~the ~~underfunded~~U.S. ~~plan~~postretirement iswelfare ~~recognized~~plan as("PRW"), awhich ~~liability.~~provides ~~Company~~various ~~pension~~medical, ~~plan~~dental, ~~data~~and ~~for~~life Uinsurance benefits.S. ~~and~~The ~~non-~~U.S. ~~plans~~Pension ~~has~~Plus ~~been~~Plan, ~~combined~~a ~~for~~qualified ~~both~~defined ~~2022~~benefit ~~and~~pension plan was terminated in 2021 and settled during 2022, ~~except~~leading ~~where~~to ~~indicated~~charges ~~below~~totaling $49.1 million.

Outside the U.S., the Company sponsors defined benefit pension plans covering certain employees, including employees at our newly acquired Heimbach GmbH, and certain postretirement life insurance benefits to retired employees in Canada.

Accounting guidance requires the recognition of 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 data for U.S. and non-U.S. plans has been combined for both 2023 and 2022, 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 percent of the greater of the plan’s projected benefit obligation or market-related value of plan assets. The market-re

Filing Compare · ALBANY INTERNATIONAL CORP /DE/