Service cost for defined benefit pension and postretirement plans are reported in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. Other components of ~~long-lived assets.~~net periodic benefit cost are included in the line item Other ~~restructuring charges in 2017 principally related to work force reductions in Salt Lake City, Utah and Rochester, New Hampshire.~~

~~AEC restructuring expenses in 2016 were principally related to the consolidation of legacy programs into Boerne, Texas.~~

~~The following table summarizes charges reported~~(income)/expense, net in the Consolidated Statements of ~~Income under “Restructuring expenses, net”:~~

Three months ended September 30,
Nine months ended
September 30,
(in thousands) 2017 2016 2017 2016
Machine Clothing $96 ($212 ) $1,012 $5,921
Albany Engineered Composites 5,407 640 9,208 1,787
Corporate Expenses - (102 ) - (55 )
Total $5,503 $326 $10,220 $7,653

Nine months ended September 30, 2017 Total restructuring costs incurred Termination and other costs Impairment of plant and equipment Impairment of intangible asset
(in thousands)
Machine Clothing $1,012 $1,012 $- $-
Albany Engineered Composites 9,208 4,173 886 4,149
Corporate Expenses - - - -
Total $10,220 $5,185 $886 $4,149

Nine months ended September 30, 2016 Total restructuring costs incurred Termination and other costs Impairment of plant and equipment Benefit plan curtailment/
settlement
(in thousands)
Machine Clothing $5,921 $5,751 $300 ($130 )
Albany Engineered Composites 1,787 1,498 289 -
Corporate Expenses (55 ) (55 ) - -
Total $7,653 $7,194 $589 ($130 )

We expect that approximately $4.0 million of Accrued liabilities for restructuring at September 30, 2017 will be paid within one year and approximately $0.4 million will be paid in the following year. The table below presents the year-to-date changes in restructuring liabilities for 2017 and 2016, all of which related to termination costs:

December 31, Restructuring Currency September 30,
(in thousands) 2016 charges accrued Payments translation /other 2017

Total termination and other costs $5,559 $5,185 ($6,370) $24 $4,398

December 31, Restructuring Currency September 30,
(in thousands) 2015 charges accrued Payments translation /other 2016

Total termination and other costs $10,177 $7,194 ($9,862) $2 $7,511

Income.

4. Other ~~Expense/~~(Income),/Expense, net

The components of ~~other expense/(income),~~Other (Income)/Expense, net are:

Three months ended September 30, Nine months ended September 30,
(in thousands) 2017 2016 2017 2016
Currency transaction losses/(gains) $261 ($312 ) $2,310 ($2,361 )
Bank fees and amortization of debt issuance costs 116 106 375 652
Gain on insurance recovery (2,000 ) - (2,000 ) -
Other 468 448 295 (394 )
Total ($1,155 ) $242 $980 ($2,103 )


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2022		2021		2022		2021
Currency transaction (gains)/losses	$	(6,636)	$	472	$	(17,660)	$	813
Bank fees and amortization of debt issuance costs	76		74		252		284
Components of net periodic pension and postretirement cost other than service cost	(138)		(6)		(411)		(12)
Other	(220)		2,213		(72)		3,130
Total	$	(6,918)	$	2,753	$	(17,891)	$	4,215

Other (income)/expense, net, included foreign currency gains of $6.6 million and $17.7 million in the ~~third quarter~~three and nine month periods ended September 30, 2022, respectively, as compared to losses of ~~2017,~~$0.5 million and $0.8 million in the ~~Company recorded an insurance recovery gain of $2.0 million related~~three and nine month periods ended September 30, 2021, respectively. The weaker Euro during the three and nine month periods ended September 30, 2022 led to the ~~theft in Japan that was reported in the fourth quarter of 2016.~~

7.gains on foreign currency related transactions during such periods.

Index

5. Income Taxes

The following table presents components of income tax expense for the three and nine months ended September 30, ~~2017~~2022 and ~~2016:~~

Three months ended
September 30, Nine months ended
September 30,
(in thousands) 2017 2016 2017 2016
Income tax based on income from continuing operations, at estimated tax rates of 36.4% and 37.5%, respectively $6,935 $7,838 $14,420 $21,545
Provision for change in estimated tax rates 741 (424 ) - -
Income tax before discrete items 7,676 7,414 14,420 21,545

Discrete tax expense:
Provision for/resolution of tax audits and contingencies, net - - 961 (825 )
Adjustments to prior period tax liabilities (73 ) (11 ) 606 (254 )
Other discrete tax adjustments, net (7 ) 85 (62 ) 113
Provision for/adjustment to beginning of year valuation allowance (3,787 ) - (3,787 ) -
Enacted tax legislation - - 34
Total income tax expense $3,809 $7,488 $12,138 $20,613

~~The third~~2021:


	Three months ended September 30,				Nine months ended September 30,
(in thousands, except percentages)	2022		2021		2022		2021
Income tax based on income from continuing operations (1)	$	2,208	$	13,150	$	28,315	$	37,733
Provision for change in estimated tax rate	674		397		740		179
Income tax before discrete items	2,882		13,547		29,055		37,912
Discrete tax expense:
Exercise of U.S. stock options	(9)		(4)		(17)		(160)
Impact of amended tax returns	—		—		(98)		—
True-up of prior year estimated taxes	(1,185)		(674)		(1,693)		(2,095)
Enacted tax legislation and rate change	—		—		—		352
Provision for/resolution of tax audits and contingencies, net	24		—		(116)		278
US Pension Settlement - Release of Residual Tax Effect	(5,217)		—		(5,217)		—
Other	322		20		359		88
Total income tax expense/(benefit)	$	(3,183)	$	12,889	$	22,273	$	36,375
(1) Calculated at estimated annual tax rates of 28.9% and 30.0% for the three and nine months ended September 30, 2022 and 2021.

Income tax expense for the quarter ~~estimated~~was computed in accordance with ASC 740-270, Income Taxes – Interim Reporting. Under this method, loss jurisdictions, which cannot recognize a tax benefit with regard to their generated losses, are excluded from the annual effective tax rate ~~on continuing operations was 36.4 percent~~(AETR) calculation and their taxes will be recorded discretely in ~~2017, compared~~each quarter.

The Company's policy for releasing income tax effects from accumulated other comprehensive income is the specific identification approach, whereas these items are released to ~~37.5 percent for~~income tax expense when the ~~same period in 2016.~~

individual items are disposed of, terminated or extinguished.

The ~~Company records the residual U.S.~~Tax Cuts and ~~foreign taxes on certain amounts of foreign earnings that have been targeted for repatriation to~~Jobs Act lowered the U.S. ~~These amounts are not considered~~corporate tax rate from 35% to ~~be permanently reinvested, and the Company accrued for the~~21% as of December 31, 2017, creating residual tax cost on these earnings to the extent they cannot be repatriated in a tax-free manner. At September 30, 2017 the Company calculated a deferred tax liability of $3.7 million on $62.8 million of non-U.S. earnings that have been targeted for future repatriation to the U.S.

~~The Company conducts business globally and,~~effects as a result files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business the Company is subject to examination by taxing authorities throughout the world, including major jurisdictions such as the United States, Brazil, Canada, France, Germany, Italy, Mexico, and Switzerland. The open tax years in these jurisdictions range from 2007 to 2016. The Company is currently under audit in non-U.S. tax jurisdictions, including but not limited to Canada and Italy.

It is reasonably possible that over the next twelve months the amount of unrecognized tax benefits may decrease up to $0.2 million, from the reevaluation of uncertain tax positions arising in examinations, in appeals, or in the courts, or from the closure of tax statutes of limitations.

~~As of each reporting date, management considers new evidence, both positive and negative, that could affect its view~~ of the ~~future realization~~remeasurement of deferred tax ~~assets.~~assets and liabilities originally established in other comprehensive income. As a result of ~~September 2017, primarily as~~ the ~~Company achieved three years of cumulative pretax income in Canada~~U.S. pension liability settlement (see Note 3), and Japan, management determined that there was sufficient positive evidence to conclude that it is more likely than not that additional deferred tax assets of $3.4 million in Canada and $0.4 million in Japan are realizable. Therefore,consistent with the Company's policy, in the third quarter of ~~2017, we reversed previously~~2022, the Company recorded ~~valuation allowances which resulted in~~ a ~~discrete~~net tax benefit of ~~$3.8 million.~~

In March 2016, an accounting update was issued which simplifies several aspects related to accounting for share-based payment transactions, including the income tax consequences. The income tax consequences which relate to accounting for excess tax benefits have been adopted prospectively, resulting in recognition of excess tax benefits against income tax expense, rather than additional paid-in capital, of $0.1$5.2 million for the ~~nine months ended September 30, 2017. No adjustment was necessary~~release of the residual tax effects within other comprehensive income related to the ~~deferred tax balances. The Company adopted this update on January 1, 2017.~~

8.U.S. pension settlement.

Index

6. Earnings Per Share

The amounts used in computing earnings per share and the weighted average number of shares of potentially dilutive securities are as follows:

Three months ended
September 30, Nine months ended
September 30,
(in thousands, except market price and earnings per share) 2017 2016 2017 2016

Net income attributable to the Company $15,269 $13,069 $27,225 $36,937

Weighted average number of shares:
Weighted average number of shares used in
calculating basic net income per share 32,187 32,104 32,160 32,079
Effect of dilutive stock-based compensation plans:
Stock options 27 37 33 39

Weighted average number of shares used in
calculating diluted net income per share 32,214 32,141 32,193 32,118

Average market price of common stock used
for calculation of dilutive shares $53.49 $42.03 $49.49 $38.97

Net income per share:
Basic $0.47 $0.41 $0.85 $1.15
Diluted $0.47 $0.41 $0.85 $1.15


	Three months ended September 30,				Nine months ended September 30,
(in thousands, except market price and earnings per share)	2022		2021		2022		2021
Net income attributable to the Company	$	10,694	$	30,862	$	77,632	$	89,842

Weighted average number of shares:
Weighted average number of shares used in calculating basic net income per share	31,111		32,381		31,416		32,369
Effect of dilutive stock-based compensation plans:
Stock options	—		1		—		2
RSU and MPP shares	112		52		102		53

Weighted average number of shares used in calculating diluted net income per share	31,223		32,434		31,518		32,424

Average market price of common stock used for calculation of dilutive shares	$	86.00	$	80.33	$	84.53	$	82.41

Net income attributable to the Company per share:
Basic	$	0.34	$	0.95	$	2.47	$	2.78
Diluted	$	0.34	$	0.95	$	2.46	$	2.77

7. Accumulated Other Comprehensive Income (AOCI)

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

(in thousands)
Translation
adjustments
Pension and
postretirement
liability
adjustments
Derivative
valuation
adjustment
Total Other
Comprehensive
Income
December 31, 2021 $ (105,880) $ (38,490) $ (1,614) $ (145,984)
Other comprehensive income/(loss) before reclassifications, net of tax (79,841) — 17,569 (62,272)
Pension settlement expense, net of tax — 26,198 — 26,198
Interest expense related to swaps reclassified to the Consolidated Statements of Income, net of tax — — 2,006 2,006
Pension and postretirement liability adjustments reclassified to Consolidated Statements of Income, net of tax — (321) — (321)
Net current period other comprehensive income (79,841) 25,877 19,575 (34,389)
September 30, 2022 $ (185,721) $ (12,613) $ 17,961 $ (180,373)

Index

The table below presents changes in the components of AOCI for the period December 31, 2020 to September 30, 2021:
(in thousands)
Translation
adjustments
Pension and
postretirement
liability
adjustments
Derivative
valuation
adjustment
Total Other
Comprehensive
Income
December 31, 2020 $ (83,203) $ (39,661) $ (9,544) $ (132,408)
Other comprehensive income/(loss) before reclassifications, net of tax (17,124) 627 274 (16,223)
Interest expense related to swaps reclassified to the Consolidated Statements of Income, net of tax — — 3,745 3,745
Pension and postretirement liability adjustments reclassified to Consolidated Statements of Income, net of tax — (25) — (25)
Net current period other comprehensive income (17,124) 602 4,019 (12,503)
September 30, 2021 $ (100,327) $ (39,059) $ (5,525) $ (144,911)
The components of our Accumulated Other Comprehensive Income that are reclassified to the Statement of Income relate to our pension and postretirement plans and interest rate swaps.
The table below presents the expense/(income) amounts reclassified from AOCI, and the line items of the Statement of Income that were affected for the three and nine months ended September 30, 2022 and 2021:
Three months ended September 30, Nine months ended September 30,
(in thousands) 2022 2021 2022 2021
Pretax Derivative valuation reclassified from Accumulated Other Comprehensive Income:
Expense/(income) related to interest rate swaps included in Income before taxes (a) $ (106) $ 1,803 $ 2,758 $ 5,049
Income tax effect (27) (466) (752) (1,304)
Effect on net income due to items reclassified from Accumulated Other Comprehensive Income $ (133) $ 1,337 $ 2,006 $ 3,745
Pretax pension and postretirement liabilities reclassified from Accumulated Other Comprehensive Income:
Pension settlement expense 42,657 — 42,657 —
Amortization of prior service credit (1,123) (1,119) (3,368) (3,356)
Amortization of net actuarial loss 967 1,103 2,905 3,320
Total pretax amount reclassified (b) 42,501 (16) 42,194 (36)
Income tax effect (16,411) 5 (16,317) 11
Effect on net income due to items reclassified from Accumulated Other Comprehensive Income $ 26,090 $ (11) $ 25,877 $ (25)
(a)Included in Interest expense, net are payments related to the interest rate swap agreements and amortization of swap buyouts (see Notes 13 and 14).
(b)These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 3).

8. Noncontrolling Interest

Effective October 31, 2013, Safran S.A. (Safran) acquired a 10 percent equity interest in a new Albany subsidiary, Albany Safran Composites, LLC (ASC). The table below presents a reconciliation of income attributable to the noncontrolling interest and noncontrolling ~~equity:~~

Nine months ended
September 30,
(in thousands) 2017 2016
Net income/(loss) of Albany Safran Composites, LLC ("ASC") $2,805 ($374 )
Less: Return attributable to the Company's preferred holding 782 732
Net income/(loss) of ASC available for common ownership $2,023 ($1,106 )
Ownership percentage of noncontrolling shareholder 10 % 10 %
Net income/(loss) attributable to noncontrolling interest $202 ($111 )

Noncontrolling interest, beginning of year $3,767 $3,690
Net income/(loss) attributable to noncontrolling interest 202 (111 )
Changes in other comprehensive income attributable to noncontrolling interest 19 (1 )
Noncontrolling interest $3,988 $3,578

~~10. Accumulated Other Comprehensive Income (AOCI)~~

~~The table below presents changes~~equity in the ~~components of AOCI for the period December 31, 2016 to September 30, 2017:~~

(in thousands) Translation adjustments Pension and postretirement liability adjustments Derivative valuation adjustment Total Other Comprehensive Income
December 31, 2016 ($133,298 ) ($51,719 ) $828 ($184,189 )
Other comprehensive income/(loss) before reclassifications 40,775 (1,427 ) (679 ) 38,669
Interest expense related to swaps reclassified to the Statement of Income, net of tax - - 768 768
Pension and postretirement liability adjustments reclassified to Statement of Income, net of tax - 498 - 498
Net current period other comprehensive income 40,775 (929 ) 89 39,935
September 30, 2017 ($92,523 ) ($52,648 ) $917 ($144,254 )

~~The table below presents changes in the components of AOCI for the period December 31, 2015 to September 30, 2016:~~

(in thousands) Translation adjustments Pension and postretirement liability adjustments Derivative valuation adjustment Total Other Comprehensive Income
December 31, 2015 ($108,655 ) ($48,725 ) ($1,464 ) ($158,844 )
Other comprehensive income/(loss) before reclassifications 2,216 330 (4,300 ) (1,754 )
Interest expense related to swaps reclassified to the Statement of Income, net of tax - - 1,045 1,045
Pension and postretirement liability adjustments reclassified to Statement of Income, net of tax - 372 - 372
Net current period other comprehensive income 2,216 702 (3,255 ) (337 )
September 30, 2016 ($106,439 ) ($48,023 ) ($4,719 ) ($159,181 )

~~The table below presents the expense/(income) amounts reclassified, and the line items of the Statements of Income that were affected for the periods ended September 30, 2017 and 2016.~~

Three months ended September 30, Nine months ended September 30,
(in thousands) 2017 2016 2017 2016
Pretax Derivative valuation reclassified from Accumulated Other Comprehensive Income:
Expense related to interest rate swaps included in Income
before taxes(a) $295 $1,100 $1,238 $1,686
Income tax effect (112 ) (418 ) (470 ) (641 )
Effect on net income due to items reclassified from Accumulated Other Comprehensive Income $183 $682 $768 $1,045

Pretax pension and postretirement liabilities reclassified from Accumulated Other Comprehensive Income:
Amortization of prior service credit ($1,113 ) ($1,113 ) ($3,339 ) ($3,338 )
Amortization of net actuarial loss 1,350 1,296 4,050 3,870
Total pretax amount reclassified (b) 237 183 711 532
Income tax effect (71 ) (55 ) (213 ) (160 )
Effect on net income due to items reclassified from Accumulated Other Comprehensive Income $166 $128 $498 $372

~~(a)~~

~~Included in Interest expense are payments related to the interest rate swap agreements and amortization of swap buyouts (see Note 15).~~

~~(b)~~

~~These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 4).~~

Company’s subsidiary Albany Safran Composites, LLC:

~~11.~~

Index
Nine months ended September 30,
(in thousands, except percentages) 2022 2021
Net income of Albany Safran Composites (ASC) $ 7,320 $ 2,495
Less: Return attributable to the Company's preferred holding 974 991
Net income of ASC available for common ownership $ 6,346 $ 1,504
Ownership percentage of noncontrolling shareholder 10 % 10 %
Net income attributable to the noncontrolling interest $ 635 $ 150
Noncontrolling interest, beginning of year $ 3,638 $ 3,799
Net income attributable to noncontrolling interest 635 150
Changes in other comprehensive income attributable to the noncontrolling interest (91) (219)
Noncontrolling interest, end of interim period $ 4,182 $ 3,730

9. Accounts Receivable

Accounts receivable includes trade receivables and revenue in excess of progress billings on long-term contracts in the Albany Engineered Composites segment. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company determines the allowance based on historical write-off experience, customer-specific facts and economic conditions. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

~~As of September 30, 2017 and December 31, 2016, Accounts receivable consisted of the following:~~

(in thousands)
September 30,
2017
December 31,
2016
Trade and other accounts receivable $157,171 $146,460
Bank promissory notes 19,525 15,759
Revenue in excess of progress billings 30,957 15,926
Allowance for doubtful accounts (7,715 ) (6,952 )
Total accounts receivable $199,938 $171,193

receivables. In connection with certain sales in Asia, 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.

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


(in thousands)	September 30, 2022		December 31, 2021
Trade and other accounts receivable	$	179,734	$	168,046
Bank promissory notes	21,654		26,284
Allowance for expected credit losses	(2,541)		(2,345)
Accounts receivable, net	$	198,847	$	191,985

The Company ~~also~~ has ~~Contract~~Noncurrent receivables in the AEC segment that represent revenue earned, which has extended payment terms. The ~~Contract~~Noncurrent receivables will be invoiced to the customer ~~with 2% interest,~~ over a 10-year period, ~~starting~~which began in 2020.

As of September 30, ~~2017~~2022 and December 31, ~~2016, Contract~~2021, Noncurrent receivables consisted of the following:

(in thousands)
September 30,
2017
December 31,
2016
Contract receivable $29,688 $14,045

~~12.~~

(in thousands) September 30,
2022 December 31,
2021
Noncurrent receivables $ 28,914 $ 32,049
Allowance for expected credit losses (144) (200)
Noncurrent receivables, net $ 28,770 $ 31,849

10. Contract Assets and 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 pay 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 Sheets.

Contract assets and Contract liabilities are reported on the Consolidated Balance Sheets in a net position on a contract-by-contract basis at the end of each reporting period.

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

Index
(in thousands) September 30,
2022 December 31,
2021
Contract assets $ 149,477 $ 113,249
Allowance for expected credit losses (748) (703)
Contract assets, net $ 148,729 $ 112,546
Contract liabilities $ 5,672 $ 6,959

Contract assets increased $36.2 million during the nine-month period ended September 30, 2022. The increase was primarily due to an increase in unbilled revenue related to the satisfaction of performance obligations, in excess of the amounts billed to customers for contracts that were in a contract asset position. There were no impairment losses related to our Contract assets during the nine month periods ended September 30, 2022 and September 30, 2021.
Contract liabilities decreased $1.3 million during the nine-month period ended September 30, 2022, primarily due to revenue recognized from satisfied performance obligations exceeding amounts invoiced to customers that were in a contract liability position. Revenue recognized for the nine-month periods ended September 30, 2022 and 2021 that was included in the Contract liability balance at the beginning of the year was $5.0 million and $5.3 million, respectively.

11. Inventories

Costs included in inventories are raw materials, labor, supplies and allocable depreciation and overhead. Raw material inventories are 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. 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. The AEC segment has long-term contracts under which we incur engineering and development costs that are allocable to parts that will be delivered over multiple years. These costs are included in Work in process in the table below.

As of September 30, ~~2017~~2022 and December 31, ~~2016, inventories~~2021, Inventories consisted of the following:

(in thousands)   September 30,
2017 December 31,
2016
Raw materials $45,142 $37,691
Work in process                  83,129                  58,715
Finished goods                  28,872                  37,500
Total inventories $157,143 $133,906

~~13.~~

(in thousands) September 30, 2022 December 31, 2021
Raw materials $ 66,911 $ 58,689
Work in process 51,756 44,839
Finished goods 15,173 14,354
Total inventories $ 133,840 $ 117,882

12. Goodwill and Other Intangible Assets

~~Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually.~~

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.

~~Determining~~ Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually. Our reportable segments are consistent with our operating segments.

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.

When a quantitative assessment is performed, 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. Goodwill and other long-lived assets are reviewed for impairment whenever events, such as significant changes in the business climate, plant closures, changes in product offerings, or other circumstances indicate that the carrying amount may not be recoverable.

Index

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 and sales 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.

In the second quarter of 2017, the Company applied the qualitative assessment approach in performing its annual evaluation of goodwill and concluded that no impairment provision was required. There were no amounts at risk due to the large spread between the fair, and carrying value, of each reporting unit.

In the third quarter, the Company decided to discontinue the Bear Claw® line of hydraulic fracturing components used in the oil and gas industry, which was part of the Harris aerostructures business acquired by AEC in 2016. This decision resulted in a non-cash write-off of intangibles for $4.1 million to restructuring expense, which is presented as other changes in the table below for intangible assets and goodwill as of September 30, 2017. The write-off represents the full carrying value of intangible assets associated with the Bear Claw® product line as, based upon anticipated cash flows and the Company’s plan to exit the business, we determined the product line to have no fair value as of September 30, 2017. Due to the decision to exit this product line, management performed an interim assessment of goodwill and concluded that no goodwill was allocable to the Bear Claw® product line, and no impairment provision was required.

We are continuing to amortize certain patents, trade names, customer relationships, customer contracts and technology assets that have finite lives. The gross carrying value, accumulated amortization and net values of intangible assets and goodwill as of December 31, 2016 to September 30, 2017, were as follows:

As of September 30, 2017
(in thousands)
Weighted average amortization life in years Gross carrying amount Accumulated amortization Net carrying amount

Amortized intangible assets:
AEC trade names 15 $43 $27 $16
AEC technology 15 228 142 86
Customer relationships 15            48,528 4,956 43,572
Customer contracts 6               18,211 5,114 13,097
Other intangibles 5                   742 516 226
Total amortized intangible assets $67,752 $10,755 $56,997

Unamortized intangible assets:
MC Goodwill $70,280 $- $70,280
AEC Goodwill            95,730                                        -                    95,730
Total unamortized intangible assets: $166,010 $- $166,010

As of December 31, 2016
(in thousands) Weighted average amortization life in years Gross carrying amount Accumulated amortization Net carrying amount

Amortized intangible assets:
AEC trade names 15 $43 $23 $20
AEC technology 15 228 124 104
Customer relationships 15            49,490 2,481                    47,009
Customer contracts 6            20,420 2,561                     17,859
Other intangibles 5                1,720 258                        1,462
Total amortized intangible assets $71,901 $5,447 $66,454

Unamortized intangible assets:
MC Goodwill $64,645 $- $64,645
AEC Goodwill            95,730                                         -                    95,730
Total unamortized intangible assets: $160,375 $- $160,375

~~The changes in intangible assets and goodwill from December 31, 2016 to September 30, 2017, were as follows:~~

(in thousands) December 31,
2016 Amortization Other
Changes Currency Translation September 30,
2017

Amortized intangible assets:
AEC trade names $20 $(4 ) $- $- $16
AEC technology 104 (18 ) 0 - 86
Customer relationships 47,009 (2,475 ) (962 ) - 43,572
Customer contracts 17,859 (2,553 ) (2,209 ) - 13,097
Other intangibles 1,462 (258 ) (978 ) - 226
Total amortized intangible assets $66,454 ($5,308 ) ($4,149 ) $- $56,997

Unamortized intangible assets:
MC Goodwill $64,645 $- $5,635 $70,280
AEC Goodwill 95,730 - - 95,730
Total unamortized intangible assets: $160,375 $- $- $5,635 $166,010

~~Estimated amortization expense of intangibles for the years ending December 31, 2017 through 2021, is as follows:~~

Annual amortization
Year (in thousands)
2017 $6,865
2018                              6,232
2019                              6,232
2020                              6,232
2021                              6,162

~~14.~~

13. Financial Instruments

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

(in thousands, except interest rates) September 30,
2017 December 31,
2016

Private placement with a fixed interest rate of 6.84%, final payment was made October 25, 2017 $50,000 $50,000
Revolving credit agreement with borrowings outstanding at an end of period interest rate of 2.74% in 2017 and 2.58% in 2016 (including the effect of interest rate hedging transactions, as described below), due in 2021 440,000 418,000

Obligation under capital lease, matures 2022 15,343 16,584

Long-term debt 505,343 484,584

Less: current portion (51,765 ) (51,666 )

Long-term debt, net of current portion $453,578 $432,918

~~A note agreement and guaranty (“Prudential Agreement”) was originally entered into in October 2005 with the Prudential Insurance Company~~


(in thousands, except interest rates)	September 30, 2022		December 31, 2021
Revolving credit agreement with borrowings outstanding at an end of period interest rate of 3.87% in 2022 and 3.74% in 2021 (including the effect of interest rate hedging transactions, as described below), due in 2024	$	447,000	$	350,000

We had no current maturities of ~~America, and certain other purchasers, with interest at 6.84%. The final principal payment under the Prudential Agreement of $50.0 million was made on October 25, 2017. As~~Long-term debt as of September 30, ~~2017, the fair value of this debt was $50.9 million.~~

2022 or December 31, 2021.

On ~~April 8, 2016,~~October 27, 2020, we entered into a ~~$550~~$700 million unsecured ~~Five-Year~~Four-Year Revolving Credit Facility Agreement (the “Credit Agreement”) which amended and restated the prior ~~$400~~amended and restated $685 million Five-Year Revolving Credit Facility Agreement, which we had entered into on ~~June 18, 2015~~November 7, 2017 (the “Prior Agreement”). Under the Credit Agreement, ~~$440~~$447 million of borrowings were outstanding as of September 30, ~~2017.~~2022. The applicable interest rate for borrowings was LIBOR plus a spread, based on our leverage ratio at the time of borrowing. At the time of the last borrowing on September ~~25, 2017,~~26, 2022, the spread was ~~1.500%~~1.625%. The spread was based on a pricing grid, which ranged from ~~1.250%~~1.500% to ~~1.750%~~2.000%, based on our leverage ratio. Based on our maximum leverage ratio and our Consolidated EBITDA, and without modification to any other credit agreements, as of September 30, ~~2017,~~2022, we would have been able to borrow an additional ~~$110~~$253 million under the Agreement.

The Credit Agreement contains customary terms, as well as affirmative covenants, negative covenants and events of default that are comparable to those in the Prior Agreement. The Borrowings are guaranteed by certain of the ~~Company's~~Company’s subsidiaries.

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

~~The Company has a long-term capital lease obligation for real property in Salt Lake City, Utah. The lease has an implied interest rate of 5.0% and matures in 2022.~~

~~The following schedule presents future minimum annual lease payments under the capital lease obligation and the present value of the minimum lease payments, as of September 30, 2017.~~

Years ending December 31, (in thousands)
2017 $606
2018 2,473
2019 2,473
2020 2,520
2021 2,520
Thereafter 7,373
Total minimum lease payments 17,965
Less: Amount representing interest (2,622 )

Present value of minimum lease payments $15,343

On May 6, 2016, we terminated our interest rate swap agreements that had effectively fixed the interest rate on up to $120 million of revolving credit borrowings, in order to enter into a new interest rate swap with a greater notional amount, and the same maturity as the Credit Agreement. We paid $5.2 million to terminate the swap agreements and that cost will be amortized into interest expense through June ~~2020.~~

~~On May 9, 2016,~~14, 2021, we entered into interest rate ~~hedges~~swap agreements for the period ~~May 16, 2016~~October 17, 2022 through ~~March 16, 2021.~~October 27, 2024. These transactions have the effect of fixing the LIBOR portion of the effective interest rate (before addition of the spread) on ~~$300~~$350 million of indebtedness drawn under the Credit Agreement at the rate of ~~1.245%~~0.838% during the period. Under the terms of these transactions, we pay the fixed rate of ~~1.245%~~0.838% and the counterparties pay a floating rate based on the one-month LIBOR rate at each monthly calculation date. The monthly calculation date ~~which~~is the 16th day of each month, and on September 16, 2022, one-month LIBOR was 2.94%.

On November 28, 2017, we entered into interest rate swap agreements for the period December 18, 2017 ~~was 1.245%, plus~~through October 17, 2022. These transactions have the ~~applicable spread,~~effect of fixing the LIBOR portion of the effective interest rate (before addition of the spread) on $350 million of indebtedness drawn under the Credit Agreement at the rate of 2.11% during the ~~swap~~ period. Under the terms of these transactions, we pay the fixed rate of 2.11% and the counterparties pay a floating rate based on the one-month LIBOR rate at each monthly calculation date. The monthly calculation date is the 16th day of each month, and on September 16, 2022, one-month LIBOR was 2.94%. On September ~~18, 2017,~~16, 2022, the all-in-rate on the ~~$300~~$350 million of debt was ~~2.745%~~3.735%.

These interest rate swaps are accounted for as a hedge of future cash flows, as further described in Note ~~15 of the Notes to Consolidated Financial Statements.~~14. No cash collateral was received or pledged in relation to the swap agreements.

Under the Credit ~~Agreement and Prudential~~ Agreement, we are currently required to maintain a leverage ratio (as defined in the ~~agreements)~~agreement) of not greater than 3.50 to 1.00 and minimum interest coverage (as defined) of 3.00 to 1.00.

As of September 30, ~~2017,~~2022, our leverage ratio was ~~2.55~~1.22 to 1.00 and our interest coverage ratio was ~~9.38~~15.79 to 1.00. We may purchase our Common Stock or pay dividends to the extent our leverage ratio remains at or below 3.50 to 1.00, and may make acquisitions with cash, provided our leverage ratio ~~would~~does not exceed ~~3.50 to 1.00 after giving pro forma effect to any such acquisition.~~

the limits noted above.

Index

Indebtedness under ~~each of the Prudential Agreement and~~ the Credit Agreement is ranked equally in right of payment to all unsecured senior debt.

We were in compliance with all debt covenants as of September 30, ~~2017.~~

~~15.~~2022.

Currently, our Credit Agreement and certain of our derivative instruments reference one-month USD LIBOR-based rates, which are set to discontinue after June 30, 2023. Regulators in the U.S. and other jurisdictions have been working to replace these rates with alternative reference interest rates that are supported by transactions in liquid and observable markets, such as the Secured Overnight Financing Rate (SOFR) for USD LIBOR. Our Credit Agreement contains provisions specifying alternative interest rate calculations to be employed when LIBOR ceases to be available as a benchmark and we have adhered to the ISDA IBOR Fallbacks Protocol, which will govern our derivatives upon the final cessation of USD LIBOR. ASU 2020-04, Reference Rate Reform, helps limit the accounting impact from contract modifications, including hedging relationships, due to the transition from LIBOR to alternative reference rates that are completed by December 31, 2022. We adopted certain provisions of ASU 2020-04 during 2021. While we currently do not expect a significant impact to our operating results, financial position or cash flows from the transition from LIBOR to alternative reference interest rates, we will continue to monitor the impact of this transition until it is completed.

14. Fair-Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting principles establish a hierarchy for inputs used in measuring fair value that maximizes the use of observable

inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Level 3 inputs are unobservable data points for the asset or liability, and include situations in which there is little, if any, market activity for the asset or liability. We had no Level 3 financial assets or liabilities at September 30, 2022, or at December 31, ~~2016 or September 30, 2017.~~

2021.

The following table presents the fair-value hierarchy for our Level 1 and Level 2 financial and non-financial assets and liabilities, which are measured at fair value on a recurring basis:

September 30, 2017 December 31, 2016
Quoted prices in active markets Significant other observable inputs Quoted prices in active markets Significant other observable inputs

(in thousands) (Level 1) (Level 2) (Level 1) (Level 2)
Fair Value
Assets:
   Cash equivalents $18,246 $- $8,468 $-
   Other Assets:
      Common stock of unaffiliated foreign public company 880 ^(a) - 762 ^(a) -
      Interest rate swaps - 5,293 ^(b) - 5,784 ^(c)

~~(a)~~

~~Original cost basis $0.5 million~~

~~(b)~~

~~Net of $18.2 million receivable floating leg and $12.9 million liability fixed leg~~

~~(c)~~

~~Net of $21.4 million receivable floating leg and $15.6 million liability fixed leg~~


	September 30, 2022				December 31, 2021
	Quoted prices in active markets		Significant other observable inputs		Quoted prices in active markets		Significant other observable inputs
(in thousands)	(Level 1)		(Level 2)		(Level 1)		(Level 2)
Fair Value
Assets:
Cash equivalents	$	28,819	$	—	$	20,665	$	—
Other Assets:
Common stock of unaffiliated foreign public company (a)	558		—		702		—
Interest rate swaps			23,987		—		3,328
Liabilities:
Interest rate swaps	—		—		—		(5,176)

(a)Original cost basis $0.5 million.

Cash equivalents include short-term securities that are considered to be highly liquid and easily tradable. These securities are valued using inputs observable in active markets for identical securities.

The ~~common stock~~interest rate swaps are accounted for as hedges of future cash flows. The fair value of our interest rate swaps are derived from a discounted cash flow analysis based on the terms of the ~~unaffiliated foreign public company~~contract and the interest rate curve, and is ~~traded~~included in ~~an active market exchange. The shares are measured at fair value using closing stock prices and are recorded~~Other assets and/or Other noncurrent liabilities in the Consolidated Balance ~~Sheets as~~Sheets. Amounts determined to be due within one year are reclassified to Other ~~assets. The securities are classified as available for sale,~~current assets and/or Accrued liabilities in the Consolidated Balance Sheets. Unrealized gains and ~~as a result any unrealized gain or loss is recorded~~losses on the swaps flow through the caption Derivative valuation adjustment in the Shareholders’ ~~Equity~~equity section of the Consolidated Balance ~~Sheets rather than in the Consolidated Statements~~Sheets. As of ~~Income. When the security is sold or impaired, gains and losses are reported on the Consolidated Statements of Income. Investments are considered~~September 30, 2022, these interest rate swaps were determined to be ~~impaired~~highly effective hedges of interest rate cash flow risk. Amounts accumulated in Other comprehensive income are reclassified as Interest expense, net when ~~a decline in fair value~~the related interest payments (that is, ~~judged~~the hedged forecasted transactions), and amortization related to ~~be other than temporary.~~

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

Index

September 30, 2022, and $5.3 million for the nine month period ended September 30, 2021. Additionally, non-cash interest income related to the amortization of swap buyouts totaled $0.0 million for the nine month period ended September 30, 2022 and $0.3 million for the nine month period ended September 30, 2021.

We operate our business in many regions of the world, and currency rate movements can have a significant effect on operating results. Foreign currency instruments are entered into periodically, and consist of foreign currency option contracts and forward contracts that are valued using quoted prices in active markets obtained from independent pricing sources. These instruments are measured using market foreign exchange prices and are recorded in the Consolidated Balance Sheets as Other current assets and Accounts payable, as applicable. Changes in fair value of these instruments are recorded as gains or losses within Other ~~expense/~~(income)/expense, net.

When exercised, the foreign currency instruments are net settled with the same financial institution that bought or sold them. For all positions, whether options or forward contracts, there is risk from the possible inability of the financial institution to meet the terms of the contracts and the risk of

unfavorable changes in interest and currency rates, which may reduce the value of the instruments. We seek to ~~control~~mitigate risk by evaluating the creditworthiness of counterparties and by monitoring the currency exchange and interest rate markets while reviewing the hedging risks and contracts to ensure compliance with our internal guidelines and policies.

Changes in exchange rates can result in revaluation gains and losses that are recorded in Selling, General and Administrative expenses or Other expense/(income), net. Revaluation gains and losses occur when our business units have cash, intercompany (recorded in Other expense/(income), net) or third-party trade (recorded in Selling, General and Administrative expenses) receivable or payable balances in a currency other than their local reporting (or functional) currency.

Operating results can also be affected by the translation of sales and costs, for each non-U.S. subsidiary, from the local functional currency to the U.S. dollar. The translation effect on the Consolidated Statements of Income is dependent on our net income or expense position in each non-U.S. currency in which we do business. A net income position exists when sales realized in a particular currency exceed expenses paid in that currency; a net expense position exists if the opposite is true.

The interest rate swaps are accounted for as hedges of future cash flows. The fair value of our interest rate swaps are derived from a discounted cash flow analysis based on the terms of the contract and the interest rate curve, and is included in Other assets and/or Other noncurrent liabilities in the Consolidated Balance Sheets. Unrealized gains and losses on the swaps flow through the caption Derivative valuation adjustment in the Shareholders’ equity section of the Consolidated Balance Sheets, to the extent that the hedges are highly effective. As of September 30, 2017, these interest rate swaps were determined to be highly effective hedges of interest rate cash flow risk. Any gains and losses related to the ineffective portion of the hedges will be recognized in the current period in earnings. Amounts accumulated in Other comprehensive income are reclassified as Interest expense, net when the related interest payments (that is, the hedged forecasted transactions), and amortization related to the swap buyouts, affect earnings. Interest expense related to the current swaps totaled $0.6 million for the nine month period ended September 30, 2017 and $1.2 million for the nine month period ended September 30, 2016. Additionally, interest expense related to the swap buyouts totaled $0.6 million for the nine month period ended September 30, 2017 and $0.5 million of the nine month period ended September 30, 2016.

~~Gains and~~

(Gains)/losses related to changes in fair value of derivative instruments that were recognized in Other ~~expense/~~(income),/expense, net in the Consolidated Statements of Income were as follows:

Three months ended
September 30, Nine months ended
September 30,
(in thousands) 2017 2016 2017 2016

Derivatives not designated as hedging instruments
Foreign currency options (losses)/gains ($2) ($218) ($131) $237

~~16.~~

Three months ended September 30, Nine months ended September 30,
(in thousands) 2022 2021 2022 2021
Derivatives not designated as hedging instruments
Foreign currency options (gains)/losses $ (28) $ 30 $ (409) $ 169

15. Contingencies

Asbestos Litigation

Albany International Corp. is a defendant in suits brought in various courts in the United States by plaintiffs who allege that they have suffered personal injury as a result of exposure to

asbestos-containing paper machine clothing synthetic dryer fabrics marketed during the period from 1967 to 1976 and used in certain paper mills.

We were defending ~~3,727~~3,603 claims as of September 30, ~~2017.~~

2022.

The following table sets forth the number of claims filed, the number of claims settled, dismissed or otherwise resolved, and the aggregate settlement amount during the periods presented:

Year ended December 31, Opening Number of Claims Claims Dismissed,Settled, or Resolved New Claims Closing Number of Claims Amounts Paid (thousands) to Settle or Resolve
2012           4,446              90              107           4,463 $530
2013           4,463             230               66           4,299               78
2014           4,299             625              147           3,821              437
2015           3,821             116               86           3,791              164
2016           3,791             148              102           3,745              758
2017 (as of September 30)           3,745              75               57           3,727 $10


Year ended December 31,	Opening Number of Claims	Claims Dismissed, Settled, or Resolved	New Claims	Closing Number of Claims	Amounts Paid (thousands) to Settle or Resolve
2021	3,615	32	26	3,609	93
2022 (As of September 30)	3,609	27	21	3,603	$	5

We anticipate that additional claims will be filed against the Company and related companies in the future but are unable to predict the number and timing of such future claims. Due to the fact that information sufficient to meaningfully estimate a range of possible loss of a particular claim is typically not available until late in the discovery process, we do not believe a meaningful estimate can be made regarding the range of possible loss with respect to pending or future claims and therefore are unable to estimate a range of reasonably possible loss in excess of amounts already accrued for pending or future claims.

While we believe we have meritorious defenses to these claims, we have settled certain claims for amounts we consider reasonable given the facts and circumstances of each case. Our insurance carrier has defended each case and funded settlements under a standard reservation of rights. As of September 30, ~~2017~~2022, we had resolved, by means of settlement or dismissal, ~~37,564~~38,007 claims. The total cost of resolving all claims was ~~$10.2~~$10.5 million. Of this amount,

Index

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

The Company’s subsidiary, Brandon Drying Fabrics, Inc. (“Brandon”), is also a separate defendant in many of the asbestos cases in which Albany is named as a defendant, despite never having manufactured any fabrics containing asbestos. While Brandon was defending against ~~7,706~~7,709 claims as of September 30, ~~2017,~~2022, only ~~eight~~twelve claims have been filed against Brandon since January 1, 2012, and noonly $15,000 in settlement costs have been incurred since 2001. Brandon was acquired by the Company in 1999 and has its own insurance policies covering periods prior to 1999. Since 2004, Brandon’s insurance carriers have covered 100% of indemnification and defense costs, subject to policy limits and a standard reservation of rights.

In some of these asbestos cases, the Company is named both as a direct defendant and as the “successor in interest” to Mount Vernon Mills (“Mount Vernon”). We acquired certain assets from Mount Vernon in 1993. Certain plaintiffs allege injury caused by asbestos-containing products alleged to have been sold by Mount Vernon many years prior to this acquisition. Mount Vernon is contractually obligated to indemnify the Company against any liability arising out of such products. We deny any liability for products sold by Mount Vernon prior to the acquisition of the Mount Vernon assets. Pursuant to its contractual indemnification obligations, Mount Vernon has assumed the defense of these claims. On this basis, we have successfully moved for dismissal in a number of actions.

We currently do not anticipate, based on currently available information, that the ultimate resolution of the aforementioned proceedings will have a material adverse effect on the financial position, results of operations, or cash flows of the Company. Although we cannot predict the number and timing of future claims, based on the foregoing factors, the trends in claims filed against us, and available insurance, we also do not currently anticipate that potential future claims will have a material adverse effect on our financial position, results of operations, or cash flows.

~~17.~~

16. Changes in Shareholders’ Equity

The following table summarizes changes in Shareholders’ ~~Equity:~~

(in thousands)
Common Stock Class A and B
Additional paid in capital Retained earnings Accumulated items of other comprehensive income/(loss) Treasury stock Noncontrolling Interest Total Equity
December 31, 2016 $40 $425,953 $522,855 ($184,189 ) ($257,136 ) $3,767 $511,290
Net income - - 27,225 - - 202 27,427
Compensation and benefits paid or payable in shares - 1,604 - - 260 - 1,864
Options exercised - 531 - - - - 531
Dividends declared - - (16,410 ) - - - (16,410 )
Cumulative translation adjustments - - - 40,775 - 19 40,794
Pension and postretirement liability adjustments - - - (929 ) - - (929 )
Derivative valuation adjustment - - - 89 - - 89
September 30, 2017 $40 $428,088 $533,670 ($144,254 ) ($256,876 ) $3,988 $564,656

~~18. Recent Accounting Pronouncements~~

In May 2014, an accounting update was issued that replaces the existing revenue recognition framework regarding contracts with customers. We will adopt the standard on January 1, 2018 using the cumulative effect method for transitioning to the new standard. In our Machine Clothing segment, we currently record revenueEquity for the ~~sale~~period December 31, 2021 to September 30, 2022:

Index


	Class A Common Stock			Class B Common Stock			Additional paid-in capital		Retained earnings		Accumulated items of other comprehensive income		Class A Treasury Stock			Noncontrolling Interest		Total Equity
(in thousands)	Shares	Amount		Shares	Amount								Shares	Amount
December 31, 2021	40,760	$	41	—	$	—	$	436,996	$	863,057	$	(145,984)	8,665	$	(280,143)	$	3,638	$	877,605
Net income	—	—		—	—		—		27,737		—		—	—		338		28,075
Compensation and benefits paid or payable in shares	21	—		—	—		745		—		—		—	—		—		745
Options exercised	—	—		—	—		7		—		—		—	—		—		7
Shares issued to Directors'	—	—		—	—		—		—		—		—	—		—		—
Purchase of Treasury shares (a)	—	—		—	—		—		—		—		515	(43,937)		—		(43,937)
Dividends declared
Class A Common Stock, $0.21 per share	—	—		—	—		—		(6,661)		—		—	—		—		(6,661)
Class B Common Stock, $0.21 per share	—	—		—	—		—		—		—		—	—		—		—
Cumulative translation adjustments	—	—		—	—		—		—		(1,730)		—	—		56		(1,674)
Pension and postretirement liability adjustments	—	—		—	—		—		—		74		—	—		—		74
Derivative valuation adjustment	—	—		—	—		—		—		10,018		—	—		—		10,018
March 31, 2022	40,781	$	41	—	$	—	$	437,748	$	884,133	$	(137,622)	9,180	$	(324,080)	$	4,032	$	864,252
Net income	—	—		—	—		—		39,201		—		—	—		168		39,369
Compensation and benefits paid or payable in shares	4	—		—	—		902		—		—		—	—		—		902
Options exercised	—	—		—	—		—		—		—		—	—		—		—
Shares issued to Directors'	—	—		—	—		800		—		—		(13)	285		—		1,085
Purchase of Treasury shares (a)	—	—		—	—		—		—		—		508	(41,128)		—		(41,128)
Dividends declared
Class A Common Stock, $0.21 per share	—	—		—	—		—		(6,529)		—		—	—		—		(6,529)
Class B Common Stock, $0.21 per share	—	—		—	—		—		—		—		—	—		—		—
Cumulative translation adjustments	—	—		—	—		—		—		(39,661)		—	—		(91)		(39,752)
Pension and postretirement liability adjustments	—	—		—	—		—		—		234		—	—		—		234
Derivative valuation adjustment	—	—		—	—		—		—		3,349		—	—		—		3,349
June 30, 2022	40,785	$	41	—	$	—	$	439,450	$	916,805	$	(173,700)	9,675	$	(364,923)	$	4,109	$	821,782
Net income	—	—		—	—		—		10,694		—		—	—		129		10,823
Compensation and benefits paid or payable in shares	—	—		—	—		835		—		—		—	—		—		835
Options exercised	—	—		—	—		10		—		—		—	—		—		10
Shares issued to Directors'	—	—		—	—		—		—		—		—	—		—		—
Purchase of Treasury shares (a)	—	—		—	—		—		—		—		—	—		—		—
Dividends declared
Class A Common Stock, $0.21 per share	—	—		—	—		—		(6,533)		—		—	—		—		(6,533)
Class B Common Stock, $0.21 per share	—	—		—	—		—		—		—		—	—		—		—
Cumulative translation adjustments	—	—		—	—		—		—		(38,450)		—	—		(56)		(38,506)
Pension and postretirement liability adjustments	—	—		—	—		—		—		(629)		—	—		—		(629)
Settlement of certain pension liabilities	—	—		—	—		—		—		26,198		—	—		—		26,198
Derivative valuation adjustment	—	—		—	—		—		—		6,208		—	—		—		6,208
September 30, 2022	40,785	$	41	—	$	—	$	440,295	$	920,966	$	(180,373)	9,675	$	(364,923)	$	4,182	$	820,188

Index

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


	Class A Common Stock			Class B Common Stock			Additional paid-in capital		Retained earnings		Accumulated items of other comprehensive income		Class A Treasury Stock			Noncontrolling Interest		Total Equity
(in thousands)	Shares	Amount		Shares	Amount								Shares	Amount
December 31, 2020	39,115	$	39	1,618	$	2	$	433,696	$	770,746	$	(132,408)	8,391	$	(256,009)	$	3,799	$	819,865
Net income	—	—		—	—		—		27,582		—		—	—		27		27,609
Compensation and benefits paid or payable in shares	20	—		—	—		(13)		—		—		—	—		—		(13)
Options exercised	6	—		—	—		128		—		—		—	—		—		128

Dividends declared
Class A Common Stock, $0.20 per share	—	—		—	—		—		(6,150)		—		—	—		—		(6,150)
Class B Common Stock, $0.20 per share	—	—		—	—		—		(324)		—		—	—		—		(324)
Cumulative translation adjustments	—	—		—	—		—		—		(15,955)		—	—		(210)		(16,165)
Pension and postretirement liability adjustments	—	—		—	—		—		—		509		—	—		—		509
Derivative valuation adjustment	—	—		—	—		—		—		752		—	—		—		752
March 31, 2021	39,141	39		1,618	2		433,811		791,854		(147,102)		8,391	(256,009)		3,616		826,211
Net income	—	—		—	—		—		31,397		—		—	—		43		31,440
Compensation and benefits paid or payable in shares	—	—		—	—		692		—		—		—	—		—		692
Options exercised	1	—		—	—		21		—		—		—	—		—		21
Shares issued to Directors'	—	—		—	—		706		—		—		(11)	241		—		947
Dividends declared
Class A Common Stock, $0.20 per share	—	—		—	—		—		(6,150)		—		—	—		—		(6,150)
Class B Common Stock, $0.20 per share	—	—		—	—		—		(323)		—		—	—		—		(323)
Cumulative translation adjustments	—	—		—	—		—		—		13,774		—	—		183		13,957
Pension and postretirement liability adjustments	—	—		—	—		—		—		(130)		—	—		—		(130)
Derivative valuation adjustment	—	—		—	—		—		—		1,394		—	—		—		1,394
June 30, 2021	39,142	$	39	1,618	$	2	$	435,230	$	816,778	$	(132,064)	8,380	$	(255,768)	$	3,842	$	868,059
Net income	—	—		—	—		—		30,862		—		—	—		80		30,942
Compensation and benefits paid or payable in shares	—	—		—	—		845		—		—		—	—		—		845
Options exercised	1	—		—	—		4		—		—		—	—		—		4
Shares issued to Directors'	—	—		—	—		—		—		—		—	—		—		—
Dividends declared
Class A Common Stock, $0.20 per share	—	—		—	—		—		(6,478)		—		—	—		—		(6,478)
Class B Common Stock, $0.20 per share	—	—		—	—		—		—		—		—	—		—		—
Conversion of Class B shares to Class A shares (b)	1,617	2		(1,617)	(2)		—		—		—		—	—		—		—
Cumulative translation adjustments	—	—		—	—		—		—		(14,943)		—	—		(192)		(15,135)
Pension and postretirement liability adjustments	—	—		—	—		—		—		223		—	—		—		223
Derivative valuation adjustment	—	—		—	—		—		—		1,873		—	—		—		1,873
September 30, 2021	40,760	$	41	1	$	0	$	436,079	$	841,162	$	(144,911)	8,380	$	(255,768)	$	3,730	$	880,333

(a)In October 2021, the Company's Board of a product when persuasive evidence of an arrangement exists, delivery has occurred, title has been transferred, the selling price is fixed, and collectability is reasonably assured. In this segment, we often have contracts with customers wherebyDirectors authorized the Company ~~satisfies its performance obligation related~~ to ~~the manufacture~~repurchase shares of up to $200 million through open market purchases, privately negotiated transactions or otherwise, and delivery of a product before title has transferred to the customer. Under the new accounting standard, this will result in earlier recognition of revenue associated with these contracts. The selling price of products may include a performance obligation to provide certain support services for no additional cost. When we adopt the new standard, it is probable that, for some of these arrangements, we will need to allocate a portion of the associated revenue to such services. We currently estimate less than 5% of revenue will be allocated to such services. While we currently expect that the timing of revenue recognition and the line-item description of Machine Clothing revenue will be affected by the new standard, we do not expect a significant effect in total annual Machine Clothing revenue. We are continuing to assess the effect that the new revenue recognition will have on the Albany Engineered Composites (AEC) segment. One change that we anticipate is that we currently use the units-of-delivery method for some long-term contracts, which is considered an output method. Under the new standard, we expect that revenue for these contracts will be recognized over time using an input method as the measure of progress, which is expected to result in earlier recognition of revenue. We are currently unable to determine the ~~full effect that~~prices, times and amounts. In 2021, the ~~new standard will have on our financial statements. We are also currently unable~~Company repurchased 285,286 shares totaling $24.4 million. During the nine month period ending September 30, 2022, the Company repurchased 1,022,717 shares totaling $85.1 million.

(b)In the third quarter of 2021, Standish Family Holdings, LLC and J.S. Standish Company (the "Selling Stockholders") agreed to quantify the cumulative effect of adopting the new standard. The new standard will also require some additional footnote disclosures, including footnote disclosure of 2018 results under the current standard.

~~In January 2016, an accounting update was issued which requires entities~~sell to ~~present separately in Other comprehensive income the portion~~J.P. Morgan Securities LLC 1,566,644 shares of the ~~total change~~Company’s Class A Common Stock, par value $0.001 per share, to be issued upon conversion of an equal number of shares of the Company’s Class B common stock, par value $0.001 per share, at a price per share of $75.9656 (the "Transaction"). Immediately following the Transaction, the Selling Stockholders and related persons (including Christine L. Standish and John C. Standish) hold in the ~~fair value~~aggregate shares of ~~a liability resulting from a change in~~ the ~~instrument-specific credit risk if~~Company’s common stock

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entitling them to cast less than one percent of the ~~entity has elected~~combined votes entitled to ~~measure~~be cast by all stockholders of the ~~liability at fair value in accordance~~Company. Costs associated with the ~~fair value option for financial instruments. This accounting~~

~~update is effective for reporting periods beginning after December 15, 2017. We have not determined the impact of this update on our financial statements.~~

In February 2016, an accounting update was issued which requires lessees to recognize most leases on the balance sheet. The update may significantly increase reported assets and liabilities. This accounting update is effective for reporting periods beginning after December 15, 2018. We have not determined the impact of this update on our financial statements.

In March 2016, an accounting update was issued which simplifies several aspects related to the accounting for share-based payment transactions, including the income tax consequences, statutory tax withholding requirements, and classification of excess tax benefits and cash paid to a tax authority in lieu of share issuances to employees on the statements of cash flows. The update also affects presentation in the Statements of Cash Flows of income tax effects of shares withheld for incentive compensation, and the exercise of stock options. We adopted this accounting update on January 1, 2017 and it had an insignificant effect on income tax expense. The updates affecting the Statements of Cash Flows have been applied retrospectively as follows:

As a result of the change affecting cash payments of taxes in lieu of share issuance, operating cash flows for the nine month period ending September 30, 2016 were increased $1.3 million and financing cash flows were decreased by the same amount.

As a result of the change affecting classification of excess tax benefits, operating cash flows for the nine month period ending September 30, 2016 cash flows were increased $0.1 million and financing cash flows were decreased by the same amount.

In October 2016, an accounting update was issued which modifies the recognition of income tax effects on intracompany transfers of assets, other than inventory. This accounting update is effective for reporting periods beginning after December 15, 2017. We have not determined the effect of this update on our financial statements.

In November 2016, an accounting update was issued which provides clarification of how changes in restricted cash should be reported in the statement of cash flows. This accounting update is effective for reporting periods beginning after December 15, 2017. We do not expect this update to have a material impact on our financial statements.

In January 2017, an accounting update was issued which provides the definition of a business for the purposes of business combination accounting. This accounting update is effective for reporting periods beginning after December 15, 2017 and is to be applied prospectively. Accordingly, there will be no effect on prior business combinations. We have not determined the impact of the update due to the absence of transactions that would be impacted.

In January 2017, an accounting update was issued which simplifies the process for determining the amount of goodwill impairment. We adopted this standard as of January 1, 2017 and it did not have any effect on the conclusions reached in our periodic goodwill impairment assessment.

In March 2017, an accounting update was issued which requires that service cost for defined benefit pension and postretirement plans be reported in the same line item or items as other compensation costs arising from services renderedTransaction were borne directly by the pertinent employees during the period. Additionally, the other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. This accounting update is effective for reporting periods beginning after December 15, 2017. We expect that the principal effect of adopting this standard will be to reclassify a portion of our pension and postretirement costs to Other expense/(income).

Selling Stockholders.

In May 2017, an accounting update was issued to provide clarity as to when a company must account for changes to stock-based compensation programs as award modifications. Award modifications require an update to the value of the award, resulting in an adjustment to compensation expense. We have not made changes to awards in recent years that would be affected by this update, but such changes are possible in future periods. We are currently evaluating the potential impact of this update. The update is effective for periods beginning after December 15, 2017.

In August 2017, an accounting update was issued which simplifies the application of hedge accounting to better align the financial reporting of hedging relationships with a company’s risk management activities. We are currently evaluating the potential impact of this update, which must be adopted by January 1, 2019, but may be adopted early.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis (“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.

Forward-looking statements

This quarterly report and the documents incorporated or deemed to be incorporated by reference in this quarterly 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 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” ~~“anticipate,~~“project,” ~~”may,” “plan,” “project,~~”look for,” “will,” ~~“should”~~“should,” “guidance,” “guide” and ~~variations of such words or~~ similar expressions ~~are intended, but~~identify forward-looking statements, which generally are not ~~the exclusive means, to identify forward-looking statements.~~historical in nature. Because forward-looking statements are subject to certain risks and uncertainties, (including, without limitation, those set forth in the Company’s most recent Annual Report on Form 10-K or prior Quarterly Reports on Form 10-Q) actual results may differ materially from those expressed or implied by ~~the~~such forward-looking statements.

There are a number of risks, uncertainties, and other important factors that could cause actual results to differ materially from the forward-looking statements, 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;~~

In the Machine Clothing segment, declines in demand for paper in certain regions and market segments that continues at a rate that is greater than anticipated, and growth in demand in other segments or regions that is lower or slower than anticipated;

~~In the Albany Engineered Composites segment, unanticipated reductions in demand, delays, technical difficulties or cancellations in aerospace programs that are expected to drive growth;~~

~~Failure to achieve or maintain anticipated profitable growth in our Albany Engineered Composites segment;~~

~~Other risks and conditions in the industries in which our Machine Clothing and Albany Engineered Composites segments compete, along with general risks associated with macroeconomic conditions; and~~

~~Other risks and uncertainties detailed in this report.~~

•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 of 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

•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 to achieve or maintain anticipated profitable growth in our Albany Engineered Composites segment; and

•Other risks and uncertainties detailed in this report.

General risks associated with macroeconomic conditions, as noted above, have changed during the first nine months of 2022. The Russia-Ukraine war has had and may continue to have profound effects on macroeconomic business conditions around the world, including in our Machine Clothing and Albany Engineered Composites segments. Certain COVID-19 related disruptions and risks have persisted during the current year, causing inflationary pressure connected to global supply chain bottlenecks and elevated energy price pressures. These challenges have only increased as a result of the Russia-Ukraine war, which also has quickly prompted a global imposition of stringent sanctions that have resulted in a sharp decline in trade with Russia. Correspondingly, and in union with the global community, we voluntarily decided to dissolve business relationships in Russia during the first quarter of 2022, despite the associated cost to our investment and the loss of future revenue in the region. While our Albany Engineered Composites segment does not have significant direct exposure in this region of the world, and our Machine Clothing segment has now significantly reduced its exposure, the broader economic ramifications of this war will indirectly affect all sectors of the economy. This conflict, including imposed sanctions, has amplified inflationary pressures, driving higher prices for global oil, natural gas, agricultural and metal prices, as well as causing additional supply-chain disruptions.

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” sections of this quarterly report, as well as in ~~the “Risk~~Item 1A-“Risk Factors” section of our most recent Annual Report on Form 10-K. Statements expressing our assessments of the growth potential of the Albany Engineered Composites segment are not intended as forecasts of actual future growth, and should not be relied on as such. While we believe such assessments to have a reasonable basis, such assessments are, by their nature, inherently uncertain. This report sets forth a number of assumptions regarding these assessments, including projected timing and volume of demand for

~~aircraft and for LEAP aircraft engines. Such assumptions could prove incorrect.~~ 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 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 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

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perception of historical conditions, expected future developments, and other factors believed to be appropriate under the circumstances.

Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained or incorporated by reference in this report to reflect any change in our expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based.

Business Environment Overview and Trends

Our reportable segments, Machine Clothing ~~(MC)~~(“MC”) and Albany Engineered Composites ~~(AEC)~~(“AEC”), draw on the same advanced textiles and materials processing capabilities, and compete on the basis of ~~proprietary,~~ 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 ~~the paper and paperboard industry in our traditional geographic markets~~it has ~~suffered from~~been negatively impacted by well-documented declines in publication grades in the ~~industry is still expected~~Company’s traditional markets, there has been some offsetting effect due to ~~grow slightly on a global basis, driven by~~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 we are ~~now~~ well-positioned in ~~these~~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, ~~field services,~~technical product support, and manufacturing technology. ~~Because~~Some of the markets in which our products are sold are expected to have low levels of growth and we face pricing pressures ~~and industry overcapacity,~~in all markets. Despite these market pressures on revenue, the ~~machine clothing and paper industries will continue to face top line pressure. Nonetheless~~MC business retains the ~~business has~~ potential ~~to generate consistent~~for maintaining stable earnings ~~and cash flow~~ in the future. ~~The business~~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 ~~restructuring,~~continuous focus on cost-reduction initiatives, and competing vigorously by using our differentiated ~~products~~ and ~~services~~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 our ~~Company both near and long term.~~Company. Our strategy is to grow by focusing our proprietary 3D-woven technology, as well as our ~~conventional~~ non-3D technology capabilities, on high-value aerospace (both commercial and ~~defense~~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 and sales to SAFRAN, through ASC, (consisting primarily of fan blades and cases for CFM’s LEAP engine) accounted for approximately ~~11%~~12 percent of the Company’s consolidated ~~net~~Net sales in ~~2016. Through~~2021. AEC, through ASC, AEC develops and sells 3D-woven composite aerospace components to SAFRAN, with the most significant program at present being the production of fan blades and other components for the LEAP engine. AEC (through ASC) also supplies 3D-woven composite fan cases for the GE9X engine. AEC’s current portfolio of ~~non-3D-woven~~non-3D programs includes components for the ~~F-35 Joint Strike Fighter, fuselage~~CH-53K helicopter, components for the ~~Boeing 787, components for the CH-53K helicopter, vacuum waste tanks for Boeing 7-Series aircraft, and~~F-35, missile bodies for Lockheed Martin’s JASSM air-to-surface ~~missiles.~~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 ~~the~~both commercial and defense aircraft engine ~~airframes,~~ and ~~automotive~~airframe markets.

In 2021, approximately 47 percent of AEC sales were related to U.S. government contracts or programs.

~~Consolidated Results~~Effect of ~~Operations~~

~~On April 8, 2016,~~Russia-Military Conflict

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

Our MC segment generates approximately 2% of ~~Harris Corporation’s composite aerostructures~~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 ~~for cash~~in Russia, including giving notice to our JV partner of ~~$187~~our intent to exit the venture. As a result, we recognized $1.6 million ~~plus~~expense in cost of goods sold and in Selling, Administrative, and General expense, representing reserves against the ~~assumption~~risk of obsolescence of certain ~~liabilities. The acquired entity is part~~inventory destined for Russian customers and uncollectible receivables from Russian customers, respectively. We also wrote down the net book value of ~~the AEC segment.~~

~~Since the acquisition occurred early~~our investment in the ~~second quarter of 2016, the Statement of Income for first nine months of 2016 does not include any operational results of the acquired entity for~~aforementioned JV to reflect our intent to exit such venture, resulting in $0.8 million impairment loss included in Other (income)/expense, net during the first quarter of ~~2016. In order~~2022.

We anticipate approximately $10.0 million reduction in future annual net sales in the MC segment, due to ~~assist~~our cessation of doing business in Russia.

For the year-to-date ended September 30, 2022, our segments saw higher input costs due to increased energy costs, tight supply market, and global logistics challenges.

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During the quarter ended September 30, 2022, our MC segment experienced higher energy prices, driven by energy surcharges supporting increased raw material prices. Such was due to capacity constraints, due to limited opportunity to move supply globally from Europe. 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 those pre-pandemic.

We anticipate inflationary pressure to remain for the balance of this fiscal year and energy cost escalation to be a primary input cost pressure in the near term.

The ultimate financial impact due to the war between Russia and Ukraine, the ongoing COVID-19 pandemic, and inflationary environment is difficult to predict. After consideration of possible offsets through corresponding price increases to our customers and productivity improvements, we estimate a net increase to the MC segment input costs of between $8.0 million and $10.0 million for the year ending December 31, 2022, or an unfavorable impact to the segment gross margin of up to 140 basis points for the year ending December 31, 2022.

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 ~~comparison~~higher demand has resulted in increased freight costs during the quarter, along with ongoing logistic constraints. Due to the nature of ~~year~~AEC’s contracts with its customers, we currently anticipate passing through a majority of such cost increases to ~~date results,~~ the ~~following table presents operational~~customers.

Until the effects of the war between Russia and Ukraine, as well as the COVID-19 pandemic, on the economic and global financial 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 ~~the acquired business for the first quarter~~operations, financial position and liquidity.

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Consolidated Results of ~~2017:~~

~~(in thousands)~~	~~Three months ended~~ ~~March 31, 2017~~
~~Net sales~~	~~$20,200~~
~~Gross profit~~	~~2,245~~
~~Selling, technical, general and research expenses~~	~~3,172~~
~~Restructuring expense~~	~~1,699~~
~~Operating loss~~	~~(2,626~~	)
~~Interest expense, net~~	~~(332~~	)
~~Loss before income taxes~~	~~(2,958~~	)

Operations

Net sales

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

Three months ended
September 30, Nine months ended
September 30,
(in thousands, except percentages) 2017 2016 % Change 2017 2016 % Change
Machine Clothing $150,694 $143,248 5.2% $440,093 $437,445 0.6%
Albany Engineered Composites 71,447 48,024 48.8% 196,896 129,348 52.2%
Total $222,141 $191,272 16.1% $636,989 $566,793 12.4%


	Three months ended September 30,				Nine months ended September 30,
(in thousands, except percentages)	2022	2021	% Change		2022	2021	% Change
Machine Clothing	$153,389	$154,171	-0.5	%	$459,121	$462,298	-0.7	%
Albany Engineered Composites	107,174	78,271	36.9	%	306,980	227,024	35.2	%
Total	$260,563	$232,442	12.1	%	$766,101	$689,322	11.1	%

The following tables provide a comparison of 2022 Net sales, excluding the impact of currency translation effects, to 2021 Net sales:


(in thousands, except percentages)	Net sales as reported, Q3 2022		Decrease due to changes in currency translation rates		Q3 2022 sales on same basis as Q3 2021 currency translation rates		Net sales as reported, Q3 2021		% Change compared to Q3 2021, excluding currency rate effects
Machine Clothing	$	153,389	$	(6,570)	$	159,959	$	154,171	3.8	%
Albany Engineered Composites	107,174		(3,637)		110,811		78,271		41.6	%
Total	$	260,563	$	(10,207)	$	270,770	$	232,442	16.5	%


(in thousands, except percentages)	Net sales as reported, YTD 2022		Decrease due to changes in currency translation rates		YTD 2022 sales on same basis as 2021 currency translation rates		Net sales as reported, YTD 2021		% Change compared to 2021, excluding currency rate effects
Machine Clothing	$	459,121	$	(14,545)	$	473,666	$	462,298	2.5	%
Albany Engineered Composites	306,980		(5,631)		312,611		227,024		37.7	%
Total	$	766,101	$	(20,176)	$	786,277	$	689,322	14.1	%

Three month comparison

~~Changes in currency translation rates had the effect of increasing net sales by $2.3 million during the third quarter of 2017 as compared to 2016.~~

~~Excluding the effect of changes in currency translation rates:~~

~~Net sales increased 15.0% compared to the same period in 2016.~~

~~Net sales in MC increased 4.0%.~~

~~Net sales in AEC increased 47.8%.~~

•Changes in currency translation rates had the effect of decreasing Net sales by $10.2 million during the third quarter of 2022, as compared to 2021, principally due to a weaker Euro in 2022.

~~The increase in MC net sales was principally due to strong performance in the tissue, packaging and pulp grades, which more than offset continuing declines in the publication grades.~~

~~AEC sales increased $23.4 million, principally due to growth in the LEAP, 787 fuselage frames and CH-53K programs~~.

•Excluding the effect of changes in currency translation rates:

•Net sales increased 16.5% compared to the same period in 2021.

•Net sales in MC increased 3.8% compared to the third quarter of 2021, driven by increased sales of packaging, pulp and engineered fabrics.

•Net sales in AEC increased 41.6%, mainly due to growth on CH-53K and LEAP programs.

Nine month comparison

~~Changes in currency translation rates had the effect of decreasing net sales by $1.6 million during the first nine months of 2017 as compared to 2016.~~

~~Excluding the effect of changes in currency translation rates:~~

~~Net sales increased 12.7% compared to the same period in 2016.~~

~~Net sales in MC increased 0.9%.~~

~~Net sales in AEC increased 52.4%.~~

~~MC net sales grew in the tissue, packaging and pulp grades, which more than offset continuing declines in the publication grades.~~

~~AEC sales increased $67.5 million, principally due to the inclusion of nine months of results of the SLC business, and growth in the LEAP, 787 fuselage frames and CH-53K programs~~.

•Changes in currency translation rates had the effect of decreasing Net sales by $20.2 million during the first nine months of 2022, as compared to 2021, principally due to a weaker Euro in 2022.

•Excluding the effect of changes in currency translation rates:

•Net sales increased 14.1% compared to the same period in 2021.

•Net sales in MC increased 2.5% compared to the first nine months of 2021, driven by increased sales of packaging, pulp and engineered fabrics.

•Net sales in AEC increased 37.7%, primarily due to growth on CH-53K and LEAP programs.

Gross Profit

The following table summarizes ~~gross~~Gross profit by business segment:

Three months ended
September 30, Nine months ended
September 30,
(in thousands, except percentages) 2017 2016 2017 2016
Machine Clothing $73,028 $68,104 $213,081 $208,628
Albany Engineered Composites 6,638 4,556 5,872 15,329
Corporate expenses (231 ) (240 ) (559 ) (721 )
Total $79,435 $72,420 $218,394 $223,236
% of Net sales 35.8 % 37.9 % 34.3 % 39.4 %

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	Three months ended September 30,						Nine months ended September 30,
(in thousands, except percentages)	2022			2021			2022			2021
Machine Clothing	$	79,232		$	79,437		$	237,434		$	240,427
Albany Engineered Composites	21,261			12,605			55,256			41,889
Total	$	100,493		$	92,042		$	292,690		$	282,316
% of Net sales	38.6		%	39.6		%	38.2		%	41.0		%

Three month comparison

~~During the~~

The increase in third quarter of 2017, the Company decided to discontinue the Bear Claw® line of hydraulic fracking components used in the oil and gas industry, which was part of the Harris aerostructures business acquired by AEC in 2016. This decision resulted in a $3.2 million charge to Cost of goods sold for the write-off of inventory.

~~The overall increase in 2017 gross~~2022 Gross profit, as compared to the same period in ~~2016,~~2021, was due to increased Net sales at AEC. Gross profit as a percentage of sales:

•Remained consistent year over year in MC, increasing from 51.5% in 2021 to 51.7% in 2022.

•Increased from 16.1% in 2021 to 19.8% in 2022 in AEC, principally due to a favorable mix of program revenue and improved productivity, driven by CH-53K and LEAP programs. Changes in the ~~net effect~~estimated profitability of long-term contracts increased Gross profit by $2.6 million for the ~~following individually significant items:~~

~~An increase in MC gross profit, principally due to higher sales and strong productivity.~~

third quarter of 2022, compared to an increase of $2.1 million for the third quarter of 2021.

~~AEC gross profit increased $2.1 million due to the net effect of the following:~~

~~The 2017 write-off of Bear Claw® inventory which reduced gross profit by $3.2 million.~~

~~An increase in net sales, as described above, and higher productivity.~~

Nine month comparison

The ~~decrease~~increase in ~~2017 gross~~Gross profit during the first nine months of 2022, as compared to the same period in ~~2016,~~2021, was ~~principally~~ due to increased Net sales at AEC. Gross profit as a percentage of sales:

•Remained consistent year over year in MC, decreasing from 52.0% in 2021 to 51.7% in 2022 in MC, due to an increase in input costs.

•Decreased from 18.5% in 2021 to 18.0% in 2022 in AEC, primarily driven by reserves recorded on inventory that was damaged at an off-site storage facility in the ~~net effect~~first quarter, reducing gross profit as a percent of sales. Changes in the ~~following individually significant items:~~

~~A $4.5 million increase in MC gross profit, principally due to higher sales and strong productivity.~~

~~AEC gross profit decreased $9.5 million due to the net effect of the following:~~

In the second quarter of 2017, the Company recorded a charge to Cost of goods sold of $15.8 million associated with revisions in the estimated profitability of two AEC contracts. The charge was principally due to second-quarter 2017 downward revisions of estimated customer demand for the components manufactured by AEC related to the two contracts.

~~The write-off of Bear Claw® inventory in the third quarter of 2017 for $3.2 million.~~

~~Inclusion of nine months of results for the acquired SLC business (compared to six months for 2016), which generated $2.2 million of gross profit in the first quarter of 2017.~~

~~An increase in net sales, as described above, and higher productivity.~~

estimated profitability of long-term contracts were also less favorable, increasing Gross profit by $2.0 million in the first nine months of 2022, as compared to an increase of $2.4 million for the same period last year.

Selling, Technical, General, and Research ~~(STG&R)~~

("STG&R")

The following table summarizes STG&R expenses by business segment:

Three months ended
September 30, Nine months ended
September 30,
(in thousands, except percentages) 2017 2016 2017 2016
Machine Clothing $30,258 $28,276 $92,716 $90,125
Albany Engineered Composites 10,532 8,445 28,907 27,624
Corporate expenses 10,839 10,553 32,964 32,888
Total $51,629 $47,274 $154,587 $150,637
% of Net sales 23.2 % 24.7 % 24.3 % 26.6 %


	Three months ended September 30,						Nine months ended September 30,
(in thousands, except percentages)	2022			2021			2022			2021
Machine Clothing	$	21,941		$	23,717		$	75,427		$	78,501
Albany Engineered Composites	11,302			9,769			34,568			28,909
Corporate expenses	13,564			13,883			39,314			38,405
Total	$	46,807		$	47,369		$	149,309		$	145,815
% of Net sales	18.0		%	20.4		%	19.5		%	21.2		%

Three month comparison

The ~~increase~~overall decrease in STG&R expenses in ~~2017,~~the third quarter of 2022, compared to the same period in ~~2016,~~2021, was ~~principally~~ due to the net effect of the ~~following individually significant items:~~

~~In MC, revaluation of nonfunctional currency assets and liabilities resulted in third-quarter losses of $1.1 million in 2017, and $0.1 million in 2016.~~

~~Changes in currency translation rates increased 2017 MC STG&R expenses by approximately $0.7 million.~~

~~Research and development expenses in AEC increased third quarter 2017 STG&R expenses by $1.2 million.~~

~~Adjustments to the SLC acquisition accounting that occurred in the fourth quarter of 2016 resulted in an increase in 2017 STG&R expenses of $0.5 million.~~

following:

•In MC, changes in currency translation rates had the effect of decreasing STG&R by $1.5 million during 2022, driven by the weaker Euro.

•In AEC, selling and general expenses increased $0.7 million due to investment in business development activities, and research expense increased $0.8 million over the prior year.

Nine month comparison

Index

The overall increase in STG&R expenses in ~~2017,~~the first nine months of 2022, compared to the same period in ~~2016,~~2021, was ~~principally~~ due to the net effect of the ~~following individually significant items:~~

~~In MC, revaluation of nonfunctional currency assets~~following:

•In MC, changes in currency translation rates had the effect of decreasing STG&R by $3.1 million during 2022, driven by the weaker Euro. This favorability was partially offset by customer credit loss reserve increases related to our dissolution of business relationships in Russia.

•In AEC, selling and general expenses increased $3.0 million, and research expense increased $2.7 million over the prior year.

Restructuring Expense, net

In addition to the items discussed above affecting Gross profit and ~~liabilities resulted in losses of $4.4 million in 2017, and $1.6 million in 2016.~~

~~STG&R expenses of the SLC business were $3.2 million in the first quarter of 2017. There were no STG&R expenses in the comparable period of 2016 due to the timing of the acquisition.~~

~~AEC research and development expenses increased $1.4 million in 2017.~~

~~2016 acquisition expenses were $5.4 million.~~

~~Research and Development~~

~~The following table is a subset of the~~ STG&R expenses, ~~table above and summarizes expenses associated with internally funded research and development~~operating income was affected by ~~business segment:~~

Three months ended
September 30, Nine months ended
September 30,
(in thousands) 2017 2016 2017 2016
Machine Clothing $4,229 $3,937 $13,273 $12,695
Albany Engineered Composites 3,828 2,656 9,683 8,247
Total $8,057 $6,593 $22,956 $20,942

~~Restructuring Expense~~

~~The following table summarizes~~ restructuring expenses, ~~by business segment:~~

Three months ended
September 30, Nine months ended
September 30,
(in thousands) 2017 2016 2017 2016
Machine Clothing $96 ($212 ) $1,012 $5,921
Albany Engineered Composites 5,407 640 9,208 1,787
Corporate expenses - (102 ) - (55 )
Total $5,503 $326 $10,220 $7,653

~~AEC incurred restructuring charges of $9.2 million~~as summarized in the ~~first nine months of 2017. In~~following table:


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2022		2021		2022		2021
Machine Clothing	$	42	$	251	$	255	$	193
Albany Engineered Composites	—		(81)		—		(40)
Corporate expenses	—		17		13		77
Total	$	42	$	187	$	268	$	230

Restructuring expense, net was insignificant in both the ~~third quarter of 2017, the Company decided to discontinue the Bear Claw® line of hydraulic fracturing components used in the oil~~current and ~~gas industry, which led to non-cash restructuring charges totaling $4.5~~

~~million relating~~prior year, and was related primarily to the ~~impairment~~winding down of ~~long-lived assets. Other restructuring charges in 2017 principally related to work force reductions in Salt Lake City, Utah and Rochester, New Hampshire.~~

~~AEC restructuring expenses in 2016 were principally related to the consolidation of legacy programs into Boerne, Texas.~~

~~Machine Clothing restructuring costs for the first nine months of 2017 were principally related to additional costs for~~ restructuring actions taken in 2016. Machine Clothing restructuring costs in 2016 were principally related to plant closure costs in Göppingen, Germany and the cessation of research and development activities at the production facility in Sélestat, France.

In October 2017, the Company announced the initiation of discussions with the local works council regarding a proposal to discontinue operations at its Machine Clothing production facility in Sélestat, France. The consultations are subject to applicable law and are ongoing. At this time, the Company has not recorded any restructuring charge related to this proposal.

~~For more information on our restructuring charges, see Note 5 to the Consolidated Financial Statements in Item 1, which is incorporated herein by reference.~~

prior periods.

Operating Income

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

Three months ended
September 30,
Nine months ended
September 30,
(in thousands) 2017 2016 2017 2016
Machine Clothing $42,674 $40,039 $119,352 $112,583
Albany Engineered Composites (9,301 ) (4,529 ) (32,242 ) (14,083 )
Corporate expenses (11,070 ) (10,690 ) (33,523 ) (33,554 )
Total $22,303 $24,820 $53,587 $64,946


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2022		2021		2022		2021
Machine Clothing	$	57,247	$	55,467	$	161,752	$	161,731
Albany Engineered Composites	9,958		2,917		20,688		13,019
Corporate expenses	(13,561)		(13,898)		(39,327)		(38,479)
Total	$	53,644	$	44,486	$	143,113	$	136,271

Other Earnings Items

Three months ended September 30, Nine months ended September 30,
(in thousands) 2017 2016 2017 2016
Interest expense, net $4,429 $3,681 $13,042 $9,610
Other expense/(income), net (1,155 ) 242 980 (2,103 )
Income tax expense 3,809 7,488 12,138 20,613
Net income/(loss) attributable to the noncontrolling interest (49 ) 340 202 (111 )


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2022		2021		2022		2021
Interest expense, net	$	3,794	$	3,734	$	11,336	$	11,521
Pension settlement expense	49,128		—		49,128		—
AMJP grant	—		(5,832)		—		(5,832)
Other (income)/expense, net	(6,918)		2,753		(17,891)		4,215
Income tax expense/(benefit)	(3,183)		12,889		22,273		36,375
Net income/(loss) attributable to the noncontrolling interest	129		80		635		150

Interest Expense, net

Interest expense, net, ~~increased $3.4 million~~was largely in ~~the first nine months of 2017 principally due to borrowings to fund the 2016 acquisition, and the interest associated~~line with the ~~capital lease obligation assumed in the acquisition.~~prior year. See the Working Capital, ~~Resources~~Liquidity and Capital Structure section for further discussion of borrowings and interest rates.

Index

Pension settlement expense

In the third quarter, 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 in the prior year.

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.

Other ~~Expense/Income,~~(income)/expense, net

Other (income)/expense, net, was primarily driven by foreign currency gains of $6.6 million and $17.7 million in the three and nine month periods ended September 30, 2022, respectively, as compared to losses of $0.5 million and $0.8 million in the three and nine month periods ended September 30, 2021, respectively. The ~~change in Other expense/(income), net included~~weaker Euro during the ~~following individually significant items:~~

~~Three~~three and nine month ~~comparison~~

~~For the third quarter of each year, foreign currency revaluations of cash and intercompany balances resulted in losses of $0.3 million in 2017, and gains of $0.3 million in 2016.~~

~~In the third quarter of 2017, the Company recorded an insurance recovery gain of $2.0 million related to the theft in Japan that was reported in the fourth quarter of 2016.~~

~~Nine month comparison~~

~~For the first nine months of each year, foreign currency revaluations of cash and intercompany balances resulted in losses of $2.3 million in 2017, and gains of $2.4 million in 2016.~~

~~In the third quarter of 2017, the Company recorded an insurance recovery gain of $2.0 million related to the theft in Japan that was reported in the fourth quarter of 2016.~~

periods ended September 30, 2022 led to the gains on foreign currency during such periods.

Income Tax

expense/(benefit)

The Company has operations which constitute a taxable presence in 18 countries outside of the United States. ~~All~~The majority of these countries had income tax rates that ~~were below~~are above the United ~~States’~~States federal tax rate of ~~35%~~21 percent during the periods reported. The jurisdictional location of earnings is a significant component of our effective tax rate each year. The rate impact of this component is influenced by the specific location of non-U.S. earnings and the level of our total earnings. From period to period, the jurisdictional mix of earnings can vary as a result of operating fluctuations in the normal course of business, as well as the extent and location of other income and expense items, such as pension settlement and restructuring charges.

~~Three month comparison~~

~~The Company’s effective tax rate for the third quarter of 2017 and 2016 were 20.0% and 35.8%, respectively.~~

The tax rate is affected by recurring items, such as the income tax rate in the U.S. and in non-U.S. jurisdictions and the mix of income earned in those jurisdictions. The tax rate is also affected by U.S. tax costs on foreign earnings, ~~that have been or will be repatriated to the U.S.,~~ and by discrete items that may occur in any given year but are not consistent from year to year.

~~Significant items that impacted the tax rate in the third quarter of 2017 included the following (percentages reflect the effect of each item as a percentage of Income before income taxes):~~

~~The income tax rate on continuing operations, excluding discrete items, was 36.4%.~~

~~A $0.1 million [-0.4%] tax benefit due to changes of uncertain tax positions.~~

~~A $3.8 million [-19.9%] tax benefit related to the release of valuation allowances.~~

~~A $0.8 million [3.9%] net tax expense related to a change in the estimated tax rate for the year.~~

~~Significant items that impacted the tax rate in the third quarter of 2016 included the following:~~

~~The income tax rate on continuing operations, excluding discrete items, was 37.5%.~~

~~A $0.4 million [-2.0%] net tax benefit related to a change in the estimated tax rate for the year.~~

~~A $0.1 million [0.3%] net tax expense related to other discrete items.~~

~~Nine month comparison~~

The Company’s effective tax rates for the third quarter of 2022 was (41.6%), lower compared to 29.4% for the same period in 2021, mainly due to favorable discrete tax adjustments in the current period. For the first ~~nine-month periods~~nine months of ~~2017 and 2016 were 30.7% and 35.9% respectively. The~~2022, the Company’s effective tax rate ~~is affected by recurring items, such as~~was 22.2%, lower compared to 28.8% for the same period in 2021, mainly due to favorable discrete tax adjustments in the current year.

For more information on income tax, rate in the U.S. and in non-U.S. jurisdictions and the mix of income earned in those jurisdictions. The tax rate is also affected by U.S. tax costs on foreign earnings that have been or will be repatriatedsee Note 5 to the ~~U.S., and discrete items that may occur in any year but are not consistent from year to year.~~

~~Significant items that impacted the 2017 tax rate included the following (percentages reflect the effect of each item as a percentage of income before income taxes):~~

~~The income tax rate on continuing operations, excluding discrete items, was 36.4%.~~

~~A $0.4 million [1.1%] tax expense due to changes of uncertain tax positions.~~

~~A $0.2 million [0.5%] tax expense related to the true-up of prior years’ estimated taxes.~~

~~A $1.0 million [2.4%] tax expense related to provisions for and settlements of income tax audits.~~

~~A $3.8 million [-9.5%] tax benefit related to the release of valuation allowances.~~

~~A $0.1 million [-0.2%] tax benefit related to the exercise of stock options.~~

Significant items that impacted the 2016 tax rate included the following (percentages reflect the effect of each item as a percentage of income excluding the building insurance gain and before income taxes):

~~The income tax rate on continuing operations, excluding discrete items, was 37.5%.~~

~~A $0.8 million [-1.4%] discrete income tax benefit related to provisions for and settlements of income tax audits.~~

~~A $0.3 million [-0.4%] net tax benefit due to changes in/establishment of uncertain tax positions.~~

~~A $0.1 million [0.2%] net tax expense related to other discrete items.~~

Consolidated Financial Statements.

Index

Segment Results of Operations

Machine Clothing Segment

~~Business Environment and Trends~~

Machine Clothing is our primary business segment and accounted for ~~77%~~60% of our consolidated revenues during the first nine months of ~~2017.~~2022. MC products are purchased primarily by manufacturers of paper and paperboard.

~~According to RISI, Inc., global~~ We feel we are well-positioned in these markets, with high-quality, low-cost production ~~of paper and paperboard is expected to grow at an annual rate of approximately 2% over the next five years, driven primarily by secular demand increases~~ in ~~Asia and South America, with stabilization~~growth markets, substantially lower fixed costs in ~~the~~ mature markets, ~~of Europe~~ and ~~North America.~~

~~Shifting demand for paper, across different paper grades as well as across geographical regions, continues to drive the elimination of papermaking capacity~~continued strength in ~~areas with significant established capacity, primarily in publication grades in the mature markets of Europe~~new product development, technical product support, and ~~North America. At the same time, the newest, most efficient machines are being installed in areas of growing demand,~~

~~including Asia and South America generally, as well as tissue and towel paper grades in all regions.~~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.

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 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.

~~We have incurred significant restructuring charges in recent periods as we reduced MC manufacturing capacity in the United States, Germany, France, Canada, and Sweden.~~

Review of Operations

Three months ended
September 30, Nine months ended
September 30,
(in thousands, except percentages) 2017 2016 2017 2016
Net sales $150,694 $143,248 $440,093 437,445
Gross profit 73,028 68,104 213,081 208,628
% of net sales 48.5 % 47.5 % 48.4 % 47.7 %
STG&R expenses 30,258 28,276 92,716 90,125
Operating income 42,674 40,039 119,352 112,583


	Three months ended September 30,						Nine months ended September 30,
(in thousands, except percentages)	2022			2021			2022			2021
Net sales	$	153,389		$	154,171		$	459,121		$	462,298
Gross profit	79,232			79,437			237,434			240,427
% of Net sales	51.7		%	51.5		%	51.7		%	52.0		%
STG&R expenses	21,941			23,717			75,427			78,501
Operating income	57,247			55,467			161,752			161,731

Net Sales

Three month comparison

~~Net sales increased by 5.2%.~~

~~Changes in currency translation rates had the effect of increasing 2017 sales by $1.8 million. Excluding that effect, net sales increased 4.0%.~~

~~The increase in MC net sales was principally due to strong performance in the tissue, packaging and pulp grades, which more than offset continuing declines in the publication grades.~~

•Net sales decreased by 0.5%.

•Changes in currency translation rates, driven by a weaker Euro, had the effect of decreasing third-quarter 2022 sales by $6.6 million.

•Excluding the effect of changes in currency translation rates, Net sales in MC increased 3.8% compared to the third quarter of 2021, driven by increased sales of packaging, pulp and engineered fabrics.

Nine month comparison

~~Net sales increased by 0.6%.~~

~~Changes in currency translation rates had the effect of decreasing 2017 sales by $1.3 million. Excluding that effect, net sales increased 0.9%.~~

~~The increase in MC net sales was principally due to strong performance in the tissue, packaging and pulp grades, which more than offset continuing declines in the publication grades.~~

•Net sales decreased by 0.7%.

•Changes in currency translation rates, driven by a weaker Euro, had the effect of decreasing 2022 sales by $14.5 million compared to the same period in 2021.

•Excluding the effect of changes in currency translation rates, Net sales in MC increased 2.5% compared to 2021, driven by growth in sales of packaging, pulp and engineered fabrics.

Gross Profit

~~Three~~

For the three and nine month ~~comparison~~

~~The increase in MC gross profit was principally due to higher sales and strong productivity.~~

~~Nine month comparison~~

~~The increase in MC gross profit was principally due to higher sales and strong productivity.~~

periods ended September 30, 2022, the decrease in MC Gross profit was primarily driven by changes in currency translation rates, principally the weaker Euro, as well as increases in input costs.

Operating Income

~~Three month comparison~~

~~The increase in operating income was principally due to higher gross profit, as described above.~~

~~Nine month comparison~~

~~The increase in operating income was principally due to higher gross profit in 2017, and a $4.9 million reduction in restructuring expenses in 2017.~~

The increase in Operating income was driven by lower STG&R expenses over the prior year.

Index

Albany Engineered Composites Segment

~~Business Environment and Trends~~

The Albany Engineered Composites ~~(AEC)~~ segment, including Albany Safran Composites, LLC, ~~(ASC),~~ in which our customer SAFRAN Group owns a 10 percent noncontrolling interest, provides highly engineered advanced composite structures to customers primarily in the aerospace (both commercial and ~~defense industries.~~defense) industry. AEC’s largest program relates to CFM International’s LEAP engine. AEC, through ASC, is the exclusive supplier of advanced composite fan blades and cases for this program under a long-term supply contract. The LEAP engine is used on the Airbus A320neo, Boeing 737 MAX, and COMAC 919 aircraft. Other significant AEC programs include ~~components for the~~CH-53K, F-35, ~~Joint Strike Fighter, fuselage frame components for the~~JASSM, and Boeing 787 and the fan case for the GE9X engine. The AEC segment also includes the Company’s April 2016 acquisition of Harris Corporation’s composite aerostructures business for cash of $187 million, plus the assumption of certain liabilities.

~~AEC~~ programs.

Review of Operations

Three months ended
September 30, Nine months ended
September 30,
(in thousands, except percentages) 2017 2016 2017 2016
Net sales $71,447 $48,024 $196,896 $129,348
Gross profit/(loss) 6,638 4,556 5,872 15,329
% of net sales 9.3 % 9.5 % 3.0 % 11.9 %
STG&R expenses 10,532 8,445 28,907 27,624
Operating loss (9,301 ) (4,529 ) (32,242 ) (14,083 )


	Three months ended September 30,						Nine months ended September 30,
(in thousands, except percentages)	2022			2021			2022			2021
Net sales	$	107,174		$	78,271		$	306,980		$	227,024
Gross profit	21,261			12,605			55,256			41,889
% of Net sales	19.8		%	16.1		%	18.0		%	18.5		%
STG&R expenses	11,302			9,769			34,568			28,909
Operating income	9,958			2,917			20,688			13,019

Net Sales

~~Three~~

For the three and nine month ~~comparison~~

~~AEC sales increased $23.4 million, principally due to growth~~periods ended September 30, 2022, the increase in ~~the LEAP, 787 fuselage frames and CH-53K programs.~~

~~Nine month comparison~~

Net sales ~~increased $67.5 million in 2017, principally~~was mainly due to ~~the effect of the following individually significant items:~~

~~The acquired business in Salt Lake City had sales of $20.2 million in the first quarter of 2017.~~

~~The remainder of the increase was principally due to growth in the LEAP, 787 fuselage frames and CH-53K programs.~~

~~Gross Profit~~

~~Three month comparison~~

~~AEC gross profit increased $2.1 million due to the net effect of the following:~~

~~The 2017 write-off of Bear Claw® inventory which reduced gross profit by $3.2 million.~~

~~An increase in net sales, as described above, and higher productivity.~~

~~Nine month comparison~~

~~AEC gross profit decreased $9.5 million due to the net effect of the following:~~

~~The write-off of Bear Claw ® inventory in the third quarter of 2017 for $3.2 million.~~

~~Inclusion of nine months of results for the acquired SLC business (compared to six months for 2016), which generated $2.2 million of gross profit in the first quarter of 2017.~~

~~An increase in net sales, as described above, and higher productivity.~~

~~Long-term contracts~~

growth on CH-53K and LEAP programs.

AEC has contracts with certain customers, including its contract for the LEAP program, where revenue is determined by ~~cost, plus~~ a ~~defined profit margin.~~cost-plus-fee agreement. Revenue earned under these arrangements accounted for approximately ~~43 and 41~~40 percent of segment revenue for each of the first nine months of ~~2017~~2022 and ~~2016, respectively.~~

2021. LEAP engines are currently used on the Airbus A320neo, Boeing 737 MAX, and COMAC 919 aircraft.

In addition, AEC has long-term contracts in which the ~~total contract~~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 ~~or units of delivery~~ 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

For the ~~second quarter~~three and nine month periods ended September 30, 2022, the increase in Gross profit was primarily due to a favorable mix of ~~2017,~~program revenue and improved productivity, driven by CH-53K and LEAP programs. Gross profit during the ~~Company~~nine month period ended September 30, 2022, was reduced by a $2 million reserve recorded ~~a charge of approximately $15.8 million associated with revisions~~on inventory that was damaged at an off-site storage facility. Changes in the estimated profitability of ~~two AEC contracts.~~ long-term contract had an insignificant effect on Gross profit year over year.

Operating Income

The ~~charge~~increase in Operating income was ~~principally due to second-quarter 2017 downward revisions of estimated customer demand for the components manufactured by AEC related to the two contracts.~~

AEC has a contract for the manufacture of composite components for the Rolls-Royce BR 725 engine, which powers Gulfstream’s G-650 business jet. The contract obligates AEC to supply these components for the life of the BR 725 program. During the second quarter of 2017, the Company revised its estimate of the profitability of this contract and determined that a charge of $10.2 million should be recorded as a provision for anticipated losses through the end of the program. The charge is driven primarily by a reduction in the estimated future demand for these components. The Company previously recorded a charge of $14 million in the second quarter of 2015 for this program, including $11 million for the write-off of development costs for nonrecurring engineering and tooling, and $3 million for anticipated future losses.

AEC’s subsidiary, Albany Aerospace Composites LLC, has a contract for the manufacture of composite struts for the Airbus A380, under which it is obligated to supply composite wing box struts through 2020 and floor beam struts through 2023. During the second quarter of 2017, the Company revised its estimate of the profitability of this contract and determined that a charge of $5.6 million should be recorded as a provision for anticipated losses through contract completion. The revision is driven by ~~a decrease in estimated demand for these components during the contract term, as well as by program inefficiencies.~~

~~Other than the charges noted above, changes in contract estimates increased~~higher gross profit, partially offset by ~~$0.3~~higher research and selling expense.

Index

Working Capital, Liquidity and Capital Structure

Cash Flow Summary


	Nine months ended September 30,
(in thousands)	2022		2021
Net income	$	78,267	$	89,992
Depreciation and amortization	51,908		55,347
Changes in working capital (a)	(89,899)		(9,959)
Changes in other noncurrent liabilities and deferred taxes	(21,542)		1,440
Other operating items	48,573		11,679
Net cash provided by operating activities	67,307		148,499
Net cash used in investing activities	(52,832)		(32,148)
Net cash used in financing activities	(9,119)		(69,339)
Effect of exchange rate changes on cash and cash equivalents	(30,910)		(2,111)
(Decrease)/increase in cash and cash equivalents	(25,554)		44,901
Cash and cash equivalents at beginning of year	302,036		241,316
Cash and cash equivalents at end of period	$	276,482	$	286,217

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

Cash provided in operating activities was $67.3 million in the first nine months of ~~2017, and decreased gross profit by $1.2~~2022, compared to $148.5 million ~~for~~in the same period last year. AEC experienced particularly strong working capital cash flows in Accounts receivable and Contract assets during 2021, driven by significant deliveries of ~~2016.~~

~~The value~~LEAP components throughout the year. In addition, during 2022, the Company made necessary investments in working capital as it prepared to execute on its recently expanded CH-53K scope of ~~fixed price contracts increased significantly due~~work. Customer payment is expected to be collected in a later period. In the third quarter of 2022, we made contributions of approximately $12.6 million to the ~~acquisition. The table below provides~~U.S. pension plan, in line with the Company's plan to reduce pension obligations over time. In addition, the timing of customer and vendor invoice payments, as well as higher incentive compensation payouts during the first nine months in 2022 compared to the same period in 2021, contributed to reduced net cash provided by operating activities.

We strategically deploy our cash with a ~~summary~~focus on investing in our business and new technologies to provide our customers with enhanced capabilities, to increase shareholder value, and to position ourselves to take advantage of ~~long-term fixed price contracts that were~~new business opportunities as they arise. Based on such strategy, we have continued to invest in ~~process at the end of each period.~~

(in thousands)
September 30,
2017

December 31,
2016
Revenue earned year-to-date on incomplete long-term contracts $76,671 $77,190

Contracts in process as of period end:
Total value of contracts                            562,487                        351,779
Revenue recognized to date                            131,707                          55,091
Revenue to be recognized in future periods                            430,780                        296,688

~~Operating Loss~~

~~Three month comparison~~

The operating loss increased by $4.8 million, compared to the third quarter of 2016, principally due to a $4.8 million increase in restructuring charges, and the Bear Claw® inventory write-off of $3.2 million.

~~The effect of those charges was partially offset by higher sales and strong productivity, as described above.~~

~~Nine month comparison~~

~~The operating loss increased by $18.2 million, compared to the first nine months of 2016, principally due to the net effect of the following:~~

~~The $67.5 million increase in net sales in 2017.~~

~~The $15.8 million charge associated with the revision of contract estimates.~~

~~An increase of $7.4 million in restructuring charges.~~

~~The inventory write-off of $3.2 million for Bear Claw®.~~

~~Operating expenses in 2016 included $5.4 million of acquisition expenses.~~

~~Liquidity~~our business and ~~Capital Resources~~

~~Cash Flow Summary~~

Nine months ended
September 30,
(in thousands) 2017 2016
Net income $27,427 $36,826
Depreciation and amortization 53,256 51,224
Changes in working capital (54,390 ) (32,476 )
Changes in other noncurrent liabilities and deferred taxes (13,142 ) (5,650 )
Other operating items 8,564 3,291
Net cash provided by operating activities 21,715 53,215
Net cash used in investing activities (62,262 ) (231,869 )
Net cash provided by financing activities 3,395 184,982
Effect of exchange rate changes on cash and cash equivalents 8,875 4,729
(Decrease)/increase in cash and cash equivalents (28,277 ) 11,057
Cash and cash equivalents at beginning of year 181,742 185,113
Cash and cash equivalents at end of period $153,465 $196,170

~~Operating activities~~

~~Cash flow from operating activities was $21.7~~technologies through capital expenditures, research and development, and when appropriate, selective business acquisitions. Our capital expenditures totaled $52.8 million and $32.1 million for the first nine months ended September 30, 2022 and 2021, respectively, comprised of ~~2017,~~both sustaining and return seeking projects. In the recent past, a portion of our capital expenditures consist of investments which improve operational productivity, in addition to producing a meaningful impact on energy and resource efficiency.

Net cash used in financing activities during 2022 was $9.1 million compared to ~~$53.2~~net cash used in financing activities of $69.3 million ~~of cash provided~~in 2021, driven by ~~operating activities for~~increased borrowings during the same period of 2016. The decrease in 2017 was principally due to higher levels of Accounts receivable and Inventories in the AEC segment, reflecting growth in key programs. Cash paid for income taxes was $21.7 million and $18.2 million for the first nine months of 2017 and 2016, respectively.

At September 30, 2017, we had $153.5 million of cash and cash equivalents, of which $140.8 million was held by subsidiaries outside of the United States. The Company records the residual U.S. and foreign taxes on certain amounts of foreign earningscurrent year that have been targeted for repatriation to the U.S. These amounts are not considered to be permanently reinvested, and the Company accrued for the tax cost on these earnings to the extent they cannot be repatriated in a tax-free manner. At September 30, 2017, the Company calculated a deferred tax liability of $3.7 million on $62.8 million of non-U.S. earnings that have been targeted for future repatriation to the U.S. Our current plans do not anticipate that we will need funds generated from foreign operationswere partially used to fund ~~our domestic operations or satisfy debt obligations in the United States. In the event that such funds were to be needed to fund~~

repurchases of shares.

~~operations in the U.S., and if associated accruals for U.S. tax have not already been provided, we would be required to accrue and pay additional U.S. taxes to repatriate these funds.~~

~~Investing and Financing Activities~~

~~Capital expenditures for the first nine months were $62.3 million in 2017 and $51.3 million in 2016. The increase in 2017 was primarily related to the ramp in AEC programs.~~

On April 8, 2016, the Company acquired the outstanding shares of Harris Corporation’s composite aerostructures business for cash of $187 million, plus the assumption of certain liabilities. The Company funded the cash payable at closing by utilizing proceeds from a $550 million, unsecured credit facility agreement that was completed April 8, 2016.

Dividends have been declared each quarter since the fourth quarter of 2001. Decisions with respect to whether a dividend will be paid, and the amount of the dividend, are made by the Board of Directors each quarter. To the extent the Board declares cash dividends in the future, we expect to pay such dividends out of operating cash flows. Future cash dividends will also depend on debt covenants and on the Board’s assessment of our ability to generate sufficient cash flows.

~~Capital Resources~~

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 not to be significant. Substantially all of our cash balance at September 30, 2017 was held by non-U.S. subsidiaries. Based on cash on hand and credit facilities, we anticipate that the Company has sufficient capital resources to operate for the foreseeable future. We were in compliance with all debt covenants as of September 30, 2017.

On ~~April 8, 2016,~~October 27, 2020, we entered into a ~~$550~~$700 million unsecured ~~Five-Year~~Four-Year Revolving Credit Facility Agreement (the “Credit Agreement”) which amended and restated the ~~Prior $400~~prior amended and restated $685 million Five-Year Revolving Credit Facility Agreement, which we had entered into on ~~June 18, 2015~~November 7, 2017 (the “Prior Agreement”). Under the Credit Agreement, ~~$440~~$447 million of borrowings were outstanding as of September 30, ~~2017.~~2022. The applicable interest rate for borrowings was LIBOR plus a spread, based on our leverage ratio at the time of borrowing. At the time of the last borrowing on September ~~25, 2017,~~26, 2022, the spread was ~~1.500%~~1.625%. The spread was based on a pricing grid, which ranged from ~~1.250%~~1.500% to ~~1.750%~~2.000%, based on our leverage ratio. Based on our maximum leverage ratio and our Consolidated Adjusted EBITDA (as defined in the Credit Agreement), and without modification to any other credit agreements, as of September 30, ~~2017,~~2022, we would have been able to borrow an additional ~~$110~~$253 million under the Agreement.

~~On May 6, 2016, we terminated our interest rate swap agreements that had effectively fixed the interest rate on up to $120 million of revolving credit borrowings,~~ We were in ~~order to enter into a new interest rate swap~~compliance with ~~a greater notional amount, and the same maturity~~all debt covenants as ~~the Credit Agreement. We paid $5.2 million to terminate the swap agreements and that cost will be amortized into interest expense through June 2020.~~

On May 9, 2016, we entered into interest rate hedges for the period May 16, 2016 through March 16, 2021. These transactions have the effect of fixing the LIBOR portion of the effective interest rate (before addition of the spread) on $300 million of indebtedness drawn under the Credit Agreement at the rate of 1.245% during the period. Under the terms of these transactions, we pay the fixed rate of 1.245% and the counterparties pay a floating rate based on the one-month LIBOR rate at each monthly

~~calculation date, which on September 18, 2017 was 1.245%, plus the applicable spread, during the swap period. On September 18, 2017, the all-in-rate on the $300 million of debt was 2.745%.~~

As of September 30, 2017, our leverage ratio was 2.55 to 1.00 and our interest coverage ratio was 9.38 to 1.00. We may purchase our Common Stock or pay dividends to the extent our leverage ratio remains at or below 3.50 to 1.00, and may make acquisitions with cash provided our leverage ratio would not exceed 3.50 to 1.00 after giving pro forma effect to any such acquisition.

2022.

For more information, see Note 1413 to the Consolidated Financial ~~Statements in Item 1, which is incorporated herein by reference.~~

Statements.

Index

~~Off-Balance Sheet Arrangements~~

We believe cash flows from operations and availability under our Credit Agreement will be adequate to cover our operations and business needs over the next twelve months. As of September 30, ~~2017,~~2022, we had cash and cash equivalents of approximately $276 million and availability under our Credit Agreement of $253 million, for a total liquidity of approximately $529 million.

As of September 30, 2022, $245.6 million of our total cash and cash equivalents was held by non-U.S. subsidiaries. The accumulated undistributed earnings of the Company’s foreign operations not targeted for repatriation to the U.S. were approximately $190.2 million at September 30, 2022, 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 may also result in additional withholding taxes.

We have also returned cash to shareholders through dividends and share repurchases. During the first nine months of 2022, we paid $20 million in dividends and repurchased 1 million shares of our Class A Common shares at a cost of $85 million under the $200 million share repurchase program that our Board approved in October 2021.

Off-Balance Sheet Arrangements

As of September 30, 2022, we have no off-balance sheet arrangements required to be disclosed pursuant to Item 303(a)(4) of Regulation S-K.

Recent ~~Accounting~~ Pronouncements

On March 9, 2022, the SEC issued a proposed rule to enhance and standardize disclosures regarding cybersecurity risk management, strategy, governance, and incident reporting by public companies. The proposed rules are intended to provide more consistent, comparable and decision-useful information ~~set forth under Note 18 contained~~so that investors can better evaluate the Company’s exposure to cybersecurity risks, incidents, and strategies to mitigate risks and incidents. We will continue to monitor developments around this proposed rule.

On March 21, 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 ~~Item 1, “Notes~~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 which would be presented in a footnote to ~~Consolidated Financial Statements”,~~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 ~~incorporated herein by reference.~~

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.

Non-GAAP Measures

This Form 10-Q contains certain non-GAAP ~~metrics, including:~~measures, that should not be considered in isolation or as a substitute for the related GAAP measures. Such non-GAAP measures include net sales and percent change in net sales, excluding the impact of currency ~~rate~~translation effects ~~(for each segment and the Company as a whole)~~; EBITDA, Adjusted EBITDA, and Adjusted EBITDA ~~(for each segment~~margin; Net debt; Net leverage ratio; and ~~the Company as a whole); net debt; and net income~~Adjusted earnings per share ~~attributable to the Company, excluding adjustments. Such items are provided because management~~(or Adjusted EPS). Management believes that ~~when reconciled from the GAAP items to which they relate, they~~these non-GAAP measures provide additional useful information to investors regarding the Company’s operational performance.

Presenting ~~increases or decreases~~Net sales and change in Net sales, after currency effects are excluded, ~~can give~~provides management and investors insight into underlying sales trends. ~~EBITDA,~~Net sales, or net income with interest, taxes, depreciation, and amortization added back, is a common indicator of financial performance used, among other things, to analyze and compare core profitability between companies and industries because it eliminates effects due to differences in financing, asset bases and taxes. An understanding of the impact in a particular quarter of specific restructuring costs, acquisition expenses, currency revaluation, or other gains and losses, on net income (absolute as well as on a per-share basis), operating income or EBITDA can give management and investors additional insight into core financial performance, especially when compared to quarters in which such items had a greater or lesser effect, or no effect. Restructuring expenses in the MC segment, while frequent in recent years, are reflective of significant reductions in manufacturing capacity and associated headcount in response to shifting markets, and not of the profitability of the business going forward as restructured. 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. EBITDA, Adjusted EBITDA and net income per share, excluding adjustments, are performance measures that relate to the Company’s continuing operations.

~~Percent~~percent changes in net sales, 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. ~~That amount is~~These amounts are then compared to the U.S. dollar amount as reported in the current period. ~~The Company calculates~~

EBITDA ~~by removing the following from Net income: Interest expense~~(calculated as net ~~Income tax~~

~~expense, Depreciation~~income excluding interest, income taxes, depreciation and ~~amortization.~~amortization), Adjusted EBITDA, ~~is calculated by: adding to EBITDA costs associated with restructuring, inventory write-offs associated with discontinued businesses~~ and pension settlement charges; adding (or subtracting) revaluation losses (or gains); subtracting (or adding) gains (or losses) from the sale of buildings or investments; subtracting insurance recovery gains in excess of previously recorded losses; subtracting (or adding) Income (or loss) attributable to the non-controlling interest in Albany Safran Composites (ASC); and adding expenses relatedAdjusted EPS are performance measures that relate to the Company’s ~~acquisition of Harris Corporation’s composite aerostructures division.~~continuing operations. The

Index

Company defines Adjusted EBITDA ~~may also be presented~~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, recurring cash items necessary to generate revenues or operate our business. Adjusted EBITDA margin represents Adjusted EBITDA expressed as a percentage of net ~~sales by dividing it by net~~ sales. ~~Net income~~

The Company defines Adjusted EPS as basic earnings per share ~~attributable to~~(GAAP), adjusted by the ~~Company, excluding adjustments, is calculated by adding to (or subtracting from) net income attributable to the Company~~after tax per share ~~on an after-tax basis: restructuring charges; inventory write-offs associated with discontinued businesses; discrete tax charges (or gains) and~~amount of costs or benefits not reflective of the ~~effect of changes in the~~Company’s ongoing or expected future operational performance. The income tax ~~rate; foreign currency revaluation losses (or gains); acquisition expenses; and losses (or gains) from~~effects are calculated using the ~~sale~~applicable statutory income tax rate of ~~investments.~~

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 ~~net income per share attributable to the Company, excluding adjustments, as defined by the Company,~~Adjusted EPS may not be ~~similar~~comparable to similarly ~~named~~titled measures of other companies. ~~Such measures are not considered measurements under GAAP, and should be considered~~

Net debt aids investors in ~~addition to, but not as substitutes for, the information contained 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 ~~of income.~~

and publicly-filed reports in their entirety and not to rely on any single financial measure.

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

Three months ended September 30, 2017
(in thousands) Machine Clothing Albany Engineered Composites Corporate expenses and other Total Company
Operating income/(loss) (GAAP) $42,674 ($9,301 ) ($11,070 ) $22,303
Interest, taxes, other income/expense - - (7,083 ) (7,083 )
Net income/(loss) (GAAP) 42,674 (9,301 ) (18,153 ) 15,220
Interest expense, net - - 4,429 4,429
Income tax expense - - 3,809 3,809
Depreciation and amortization 8,380 8,591 1,159 18,130
EBITDA (non-GAAP) 51,054 (710 ) (8,756 ) 41,588
Restructuring expenses, net 96 5,407 - 5,503
Foreign currency revaluation losses 1,114 137 266 1,517
Write-off of inventory in a discontinued product line - 3,155 - 3,155
Pretax loss attributable to the noncontrolling interest in ASC - 136 - 136
Adjusted EBITDA (non-GAAP) $52,264 $8,125 ($8,490 ) $51,899

Three months ended September 30, 2016
(in thousands) Machine Clothing Albany Engineered Composites Corporate expenses and other Total Company
Operating income/(loss) (GAAP) $40,039 ($4,529 ) ($10,690 ) $24,820
Interest, taxes, other income/expense - - (11,411 ) (11,411 )
Net income/(loss) (GAAP) 40,039 (4,529 ) (22,101 ) 13,409
Interest expense, net - - 3,681 3,681
Income tax expense - - 7,488 7,488
Depreciation and amortization 9,032 8,027 1,386 18,445
EBITDA (non-GAAP) 49,071 3,498 (9,546 ) 43,023
Restructuring expenses, net (212 ) 640 (102 ) 326
Foreign currency revaluation (gains)/losses 86 - (308 ) (222 )
Pretax income attributable to the noncontrolling interest in ASC - (428 ) - (428 )
Adjusted EBITDA (non-GAAP) $48,945 $3,710 ($9,956 ) $42,699

Nine months ended September 30, 2017
(in thousands) Machine Clothing Albany Engineered Composites* Corporate expenses and other Total Company
Operating income/(loss) (GAAP) $119,352 ($32,242 ) ($33,523 ) $53,587
Interest, taxes, other income/expense - - (26,160 ) (26,160 )
Net income/(loss) (GAAP) 119,352 (32,242 ) (59,683 ) 27,427
Interest expense, net - - 13,042 13,042
Income tax expense - - 12,138 12,138
Depreciation and amortization 25,098 24,613 3,545 53,256
EBITDA (non-GAAP) 144,450 (7,629 ) (30,958 ) 105,863
Restructuring expenses, net 1,012 9,208 - 10,220
Foreign currency revaluation losses 4,427 171 2,318 6,916
Write-off of inventory in a discontinued product line - 3,155 - 3,155
Pretax income attributable to the noncontrolling interest in ASC - (178 ) - (178 )
Adjusted EBITDA(non-GAAP) $149,889 $4,727 ($28,640 ) $125,976

* Includes charge of $15.8 million related to revisions in the estimated profitability of two long-term contracts.


Three months ended September 30, 2022
(in thousands)	Machine Clothing		Albany Engineered Composites		Corporate expenses and other		Total Company


Net income/(loss) (GAAP)	$	57,247	$	9,958	$	(56,382)	$	10,823
Interest expense, net	—		—		3,794		3,794
Income tax expense/(benefit)	—		—		(3,183)		(3,183)
Depreciation and amortization expense	4,913		11,303		818		17,034
EBITDA (non-GAAP)	62,160		21,261		(54,953)		28,468
Restructuring expenses, net	42		—		—		42
Foreign currency revaluation (gains)/losses (a)	(2,931)		122		(6,633)		(9,442)
Dissolution of business relationships in Russia	(214)		—		—		(214)
Pension settlement expense	—		—		49,128		49,128
Acquisition/integration costs	—		255		—		255
Pre-tax (income) attributable to noncontrolling interest	—		(176)		—		(176)
Adjusted EBITDA (non-GAAP)	$	59,057	$	21,462	$	(12,458)	$	68,061

Nine months ended September 30, 2016
(in thousands) Machine Clothing Albany Engineered Composites Corporate expenses
and other Total Company
Operating income/(loss) (GAAP) $112,583 ($14,083 ) ($33,554 ) $64,946
Interest, taxes, other income/expense - - (28,120 ) (28,120 )
Net income/(loss) (GAAP) 112,583 (14,083 ) (61,674 ) 36,826
Interest expense, net - - 9,610 9,610
Income tax expense - - 20,613 20,613
Depreciation and amortization 27,845 17,778 5,601 51,224
EBITDA (non-GAAP) 140,428 3,695 (25,850 ) 118,273
Restructuring expenses, net 5,921 1,787 (55 ) 7,653
Foreign currency revaluation (gains)/losses 1,646 5 (2,355 ) (704 )
Acquisition expenses - 5,367 - 5,367
Pretax loss attributable to the noncontrolling interest in ASC - 36 - 36
Adjusted EBITDA (non-GAAP) $147,995 $10,890 ($28,260 ) $130,625

Index


Three months ended September 30, 2021
(in thousands)	Machine Clothing		Albany Engineered Composites		Corporate expenses and other		Total Company


Net income/(loss) (GAAP)	$	55,467	$	2,917	$	(27,442)	$	30,942
Interest expense, net	—		—		3,734		3,734
Income tax expense	—		—		12,889		12,889
Depreciation and amortization expense	5,014		12,265		935		18,214
EBITDA (non-GAAP)	60,481		15,182		(9,884)		65,779
Restructuring expenses, net	251		(81)		17		187
Foreign currency revaluation (gains)/losses (a)	(1,571)		31		472		(1,068)
AMJP grant	—		963		(5,832)		(4,869)
Acquisition/integration costs	—		297		—		297
Pre-tax (income) attributable to noncontrolling interest	—		(95)		—		(95)
Adjusted EBITDA (non-GAAP)	$	59,161	$	16,297	$	(15,227)	$	60,231


Nine months ended September 30, 2022
(in thousands)	Machine Clothing		Albany Engineered Composites		Corporate expenses and other		Total Company


Net income/(loss) (GAAP)	$	161,752	$	20,688	$	(104,173)	$	78,267
Interest expense, net	—		—		11,336		11,336
Income tax expense	—		—		22,273		22,273
Depreciation and amortization expense	14,716		34,792		2,400		51,908
EBITDA (non-GAAP)	176,468		55,480		(68,164)		163,784
Restructuring expenses, net	255		—		13		268
Foreign currency revaluation (gains)/losses (a)	(3,690)		755		(17,644)		(20,579)
Dissolution of business relationships in Russia	1,573		—		781		2,354
Pension settlement expense	—		—		49,128		49,128
Acquisition/integration costs	—		806		—		806
Pre-tax (income) attributable to noncontrolling interest	—		(633)		—		(633)
Adjusted EBITDA (non-GAAP)	$	174,606	$	56,408	$	(35,886)	$	195,128


Nine months ended September 30, 2021
(in thousands)	Machine Clothing		Albany Engineered Composites		Corporate expenses and other		Total Company


Net income/(loss) (GAAP)	$	161,731	$	13,019	$	(84,758)	$	89,992
Interest expense, net	—		—		11,521		11,521
Income tax expense	—		—		36,375		36,375
Depreciation and amortization expense	15,272		37,326		2,749		55,347
EBITDA (non-GAAP)	177,003		50,345		(34,113)		193,235
Restructuring expenses, net	193		(40)		77		230
Foreign currency revaluation (gains)/losses (a)	(156)		363		813		1,020
AMJP grant	—		963		(5,832)		(4,869)
Acquisition/integration costs	—		911		—		911
Pre-tax (income) attributable to noncontrolling interest	—		(206)		—		(206)
Adjusted EBITDA (non-GAAP)	$	177,040	$	52,336	$	(39,055)	$	190,321

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 quarterly earnings and are financial performance metrics commonly used by investors. The Company calculates the quarterly per-share amount for items included in continuing operations by using the income tax rate based on ~~income from continuing operations and~~either the tax rates in specific countries or the estimated tax rate applied to total 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 earnings per share effect of certain income and expense items:


Three months ended September 30, 2022 (in thousands, except per share amounts)	Pre tax Amounts		Tax Effect		After tax Effect		Per share Effect
Restructuring expenses, net	$	42	$	6	$	36	$	0.00
Foreign currency revaluation (gains)/losses (a)	(9,442)		(2,694)		(6,748)		(0.22)
Dissolution of business relationships in Russia	(214)		(18)		(196)		(0.01)
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 (b)	—		5,217		(5,217)		(0.17)
Acquisition/integration costs	255		77		178		0.01


Three months ended September 30, 2021 (in thousands, except per share amounts)	Pre tax Amounts		Tax Effect		After tax Effect		Per share Effect
Restructuring expenses, net	$	187	$	55	$	132	$	0.00
Foreign currency revaluation (gains)/losses (a)	(1,068)		(314)		(754)		(0.02)
AMJP grant	(4,869)		(1,446)		(3,423)		(0.11)
Acquisition/integration costs	297		89		208		0.01


Nine months ended September 30, 2022 (in thousands, except per share amounts)	Pre tax Amounts		Tax Effect		After tax Effect		Per share Effect
Restructuring expenses, net	$	268	$	75	$	193	$	0.01
Foreign currency revaluation (gains)/losses (a)	(20,579)		(5,829)		(14,750)		(0.47)
Dissolution of business relationships in Russia	2,354		314		2,040		0.06
Pension settlement expense	49,128		11,947		37,181		1.20
Tax impact of stranded OCI benefit from TCJA for pension liability (b)	—		5,217		(5,217)		(0.17)
Acquisition/integration costs	806		241		565		0.03


Nine months ended September 30, 2021 (in thousands, except per share amounts)	Pre tax Amounts		Tax Effect		After tax Effect		Per share Effect
Restructuring expenses, net	$	230	$	67	$	163	$	0.00
Foreign currency revaluation (gains)/losses (a)	1,020		332		688		0.02
AMJP grant	(4,869)		(1,446)		(3,423)		(0.11)
Acquisition/integration costs	911		273		638		0.03

Index

Three months ended September 30, 2017 Pre tax Tax After tax Per Share
(in thousands, except per share amounts) Amounts Effect Effect Effect
Restructuring expenses, net $5,503 $2,003 $3,500 $0.11
Foreign currency revaluation losses             1,517                552            965               0.03
Write-off of inventory in a discontinued product line             3,155             1,167         1,988               0.06
Unfavorable effect of change in income tax rate                      -                741            741               0.02
Net discrete income tax benefit                      -             3,866         3,866               0.12

Three months ended September 30, 2016 Pre tax Tax After tax Per Share
(in thousands, except per share amounts) Amounts Effect Effect Effect
Restructuring expenses, net $326 $122 $204 $0.01
Foreign currency revaluation gains                222                  83           139 0.00
Favorable effect of change in income tax rate                      -                425           425               0.01
Net discrete income tax charge                      -                  74              74 0.00

Nine months ended September 30, 2017 Pre tax Tax After tax Per Share
(in thousands, except per share amounts) Amounts Effect Effect Effect
Restructuring expenses, net $10,220 $3,721 $6,499 $0.20
Foreign currency revaluation losses             6,916             2,516        4,400               0.14
Write-off of inventory in a discontinued product line             3,155             1,167        1,988               0.06
Net discrete income tax benefit                     -             2,281        2,281               0.07
Charge for revision to estimated profitability of AEC contracts          15,821             5,854        9,967               0.31

Nine months ended September 30, 2016 Pre tax Tax After tax Per Share
(in thousands, except per share amounts) Amounts Effect Effect Effect
Restructuring expenses, net $7,653 $2,965 $4,688 $0.15
Foreign currency revaluation gains                704                256            448               0.01
Acquisition expenses             5,367             1,933         3,434               0.11
Net discrete income tax benefit                     -                932            932               0.03

The following table contains the calculation of ~~net~~Adjusted EPS:


	Three months ended September 30,				Nine months ended September 30,
Per share amounts (Basic)	2022		2021		2022		2021
Earnings per share (GAAP)	$	0.34	$	0.95	$	2.47	$	2.78
Adjustments, after tax:
Restructuring expenses, net	—		—		0.01		—
Foreign currency revaluation (gains)/losses (a)	(0.22)		(0.02)		(0.47)		0.02
Dissolution of business relationships in Russia	(0.01)		—		0.06		—
Pension settlement charge	1.20		—		1.20		—
Tax impact of stranded OCI benefit from Tax Cuts and Job Act (TCJA) for pension liability (b)	(0.17)		—		(0.17)		—
AMJP grant	—		(0.11)		—		(0.11)
Acquisition/ integration costs	0.01		0.01		0.03		0.03
Adjusted Earnings per share (non-GAAP)	$	1.15	$	0.83	$	3.13	$	2.72

(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 ~~per share attributable~~tax effects caused by the TCJA associated with the US 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.

Net debt is, in the opinion of the Company, ~~excluding adjustments:~~

Three months ended
September 30, Nine months ended
September 30,
Per share amounts (Basic) 2017 2016 2017* 2016
Net income attributable to the Company (GAAP) $0.47 $0.41 $0.85 $1.15
Adjustments:
Restructuring expenses, net 0.11 0.01 0.20 0.15
Discrete tax adjustments and effect of change in income tax rate (0.10 ) (0.01 ) (0.07 ) (0.03 )
Foreign currency revaluation losses/(gains) 0.03 - 0.14 (0.01 )
Write-off of inventory in a discontinued product line 0.06 - 0.06 -
Acquisition expenses - - - 0.11
Net income attributable to the Company, excluding adjustments (non-GAAP) $0.57 $0.41 $1.18 $1.37

* Includes chargehelpful 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 ~~$0.31 per share for revisions in estimated profitability of two AEC contracts.~~

~~The following table contains the calculation of AEC Adjusted EBITDA margin:~~

For the three month periods ending:
(in thousands, except percentages)
September 30,
2017
June 30,
2017*
March 31,
2017
September 30,
2016
AEC Adjusted EBITDA (non-GAAP) $8,125 ($8,586 ) $5,188 $3,710
AEC Net sales (GAAP) 71,447 68,999 56,450 48,024
AEC Adjusted EBITDA margin (non-GAAP) 11.4 % -12.4 % 9.2 % 7.7 %

* Includes charge of $15.8 million in Q2 2017 for revisions in estimated profitability of two AEC contracts.

long-term debt, and Notes and loans payable, if any.

The following table contains the calculation of net debt:

(in thousands) September 30,
2017 June 30,
2017 March 31,
2017 December 31,
2016
Notes and loans payable $186 $249 $274 $312
Current maturities of long-term debt              51,765         51,732           51,699            51,666
Long-term debt            453,578       444,030         428,477          432,918
Total debt            505,529       496,011 $480,450          484,896
Cash and cash equivalents            153,465       138,792         143,333          181,742
Net debt $352,064 $357,219 $337,117 $303,154


(in thousands)	September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021
Current maturities of long-term debt	$	—	$	—	$	—	$	—
Long-term debt	447,000		485,000		427,000		350,000
Total debt	447,000		485,000		427,000		350,000
Cash and cash equivalents	276,482		320,870		307,415		302,036
Net debt (non GAAP)	$	170,518	$	164,130	$	119,585	$	47,964

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.

Index

The calculation of net leverage ratio as of September 30, 2022 is as follows:


Total Company
	Twelve months ended		Nine months ended				Trailing twelve months ended
(in thousands)	December 31, 2021		September 30, 2021		September 30, 2022		September 30, 2022 (non-GAAP) (c)


Net income/(loss) (GAAP)	$	118,768	$	89,992	$	78,267	$	107,043
Interest expense, net	14,891		11,521		11,336		14,706
Income tax expense	47,163		36,375		22,273		33,061
Depreciation and amortization expense	74,255		55,347		51,908		70,816
EBITDA (non-GAAP)	255,077		193,235		163,784		225,626
Restructuring expenses, net	1,331		230		268		1,369
Foreign currency revaluation (gains)/losses (a)	(1,442)		1,020		(20,579)		(23,041)
Aviation Manufacturing Job Protection (AMJP) grant	(4,731)		(4,869)		—		138
Dissolution of business relationships in Russia	—		—		2,354		2,354
Pension settlement expense	—		—		49,128		49,128
Acquisition/integration costs	1,166		911		806		1,061
Pre-tax (income) attributable to noncontrolling interest	(510)		(206)		(633)		(937)
Adjusted EBITDA (non-GAAP)	$	250,891	$	190,321	$	195,128	$	255,698


(in thousands, except for net leverage ratio)			September 30, 2022
Net debt (non-GAAP)			170,518
Trailing twelve months Adjusted EBITDA (non-GAAP)			255,698
Net leverage ratio (non-GAAP)			0.67

(c) Calculated as amounts incurred during the twelve months ended December 31, 2021, less those incurred during the nine months ended September 30, 2021, plus those incurred during the nine months ended September 30, 2022.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For discussion of our exposure to market risk, refer to “Quantitative and Qualitative Disclosures about Market Risk”, which is included as an exhibit to this Form 10-Q.

Item 4. Controls and Procedures

~~Disclosure controls and procedures.~~

a) Disclosure controls and procedures.

The principal executive officer and principal financial officer, based on their evaluation of disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q, have concluded that the Company’s disclosure controls and procedures ~~were not~~are effective for ensuring that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in filed or submitted reports is accumulated

Index

and communicated to the Company’s management, including its principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.

~~Remediation Plans for Material Weaknesses~~

(b) Changes in ~~Internal Control over Financial Reporting~~

~~In the fourth quarter of 2016, and as previously reported in our Annual Report on Form 10-K for the year ended December 31, 2016, we identified material weaknesses in our~~ internal control over financial ~~reporting as described below:~~

The Company did not establish effective reporting lines, appropriate authorities, responsibilities and monitoring activities for financial reporting processes and internal controls, as well as the assignment of banking signatory authorities, limits and responsibilities, at its subsidiary in Japan and certain other foreign locations. As a result, the Company lacked effective written entity and process level controls over initiation, authorization, processing and recording of transactions and safeguarding of assets managed by a third party service provider at the Japan location. In addition, the Company did not have effective management review controls over the assessment of a potential reserve for a loss contract due to a failure to understand and document the design requirements and operation of an effective management review control.

reporting.

~~Beginning in the fourth quarter of 2016, we immediately commenced active steps towards remediating the material weaknesses. These efforts include:~~

~~(a)~~

~~a review of financial reporting processes relating to the subsidiary in Japan, and enhancements and additions to the internal controls for that entity;~~

~~(b)~~

increasing senior financial and accounting management monitoring of financial reporting at smaller Company locations, establishing effective reporting lines, and appropriate authorities, and responsibilities and monitoring for financial reporting activities, and assignment of banking signatory authorities, limits and responsibilities at such locations;

~~(c)~~

Enhancing management review controls and procedures for the assessment of potential reserves for loss contracts and additional training regarding the required documentation of design and operating effectiveness of internal control over financial reporting.

We are working to remediate the material weaknesses as quickly and efficiently as possible and believe that such efforts will effectively remediate the reported material weaknesses by the end of 2017. However, the material weaknesses will not be considered remediated until the remediated controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Notwithstanding the material weaknesses described above, our management has concluded that the financial statements included elsewhere in this quarterly report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows in conformity with generally accepted accounting principles.

~~(b)~~

~~Changes in internal control over financial reporting.~~

There ~~were~~was no ~~changes~~change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during the last fiscal quarter ~~ended September 30, 2017~~ that has materially affected, or ~~are~~is reasonably likely to materially affect, ~~our~~the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

The information set forth above under Note 1615 in Item 1, “Notes to Consolidated Financial Statements” is incorporated herein by reference.

Item 1A. Risk Factors

There have been no material changes in risks since December 31, ~~2016.~~ 2021, except as discussed below.

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 these 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.

For discussion of risk factors, refer to Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2021.

Index

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~We made no share purchases~~

Issuer Purchases of Equity Securities during the ~~third quarter of 2017. We remain authorized by~~nine months ended September 30, 2022


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 (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 September 30, 2022	—	—		—	—



Total	1,022,717			1,022,717	$	90,587

On October 25, 2021, the Company's Board of Directors authorized the Company to ~~purchase~~repurchase shares of up to 2$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. We purchased 1,308,003 shares of our Class A Common ~~Stock.~~

Stock since the Board repurchase authorization in 2021, 1,022,717 of which were purchased during the first nine months of 2022.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Index

Item 6. Exhibits


Exhibit No.			Description
31.1			~~Description~~

~~31.1~~

Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.

31.2

Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.

32.1

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).

99.1		Quantitative and qualitative disclosures about market risks as reported at September 30, ~~2017.~~ 2022.
101.INS	XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover page formatted as Inline XBRL and contained in Exhibit 101

~~101~~

The following financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in extensible Business Reporting Language (XBRL), filed herewith:

~~(i)~~

~~Consolidated Statements of Income for the three and nine months ended September 30, 2017 and 2016.~~

~~(ii)~~

~~Consolidated Statements of Comprehensive Income/(Loss) for the three and nine months ended September 30, 2017 and 2016.~~

~~(iii)~~

~~Consolidated Balance Sheets at September 30, 2017 and December 31, 2016.~~

~~(iv)~~

~~Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2017 and 2016.~~

~~(v)~~

~~Notes to Consolidated Financial Statements.~~

As provided in Rule 406T of Regulation S-T, this information shall not be deemed “filed” for purposes of Sections 11 and 12 of the Securities Act and Section 18 of the Securities Exchange Act or otherwise subject to liability under those sections.

Index

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~ALBANY INTERNATIONAL CORP~~.
~~(Registrant)~~

~~Date: October 31, 2017~~

	By	~~/s/ John B. Cozzolino~~
				~~John B. Cozzolino~~ALBANY INTERNATIONAL CORP.
				(Registrant)

Date: October 25, 2022			By	/s/ Stephen M. Nolan
				Stephen M. Nolan Chief Financial Officer and Treasurer
		(Principal Financial Officer)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended:	September 30, 2022

~~Delaware~~		~~14-0462060~~
~~(State~~ALBANY INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)

~~incorporation or organization)~~

~~216 Airport Drive, Rochester, New Hampshire~~		~~03867~~
~~(Address of principal executive offices)~~		(Zip Code)


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)

		~~Page No.~~
						Page No.
Part I Financial information
Item 1.			Financial Statements
			~~Item 1. Financial Statements~~			3
	Consolidated statements of income – three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021	3 1
			Consolidated statements of comprehensive income/(loss) – three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021			4 2
			Consolidated balance sheets as of September 30, ~~2017~~2022 and December 31, ~~2016~~2021			5 3
			Consolidated statements of cash flows – three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021			6 4
			Notes to consolidated financial statements			7 6
			Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			29 23
			Forward-looking statements			29 23
			Item 3.	Quantitative and Qualitative Disclosures about Market Risk			49 38
			Item 4.	Controls and Procedures			49 38

Part II Other Information
Item 1.			Legal Proceedings			39
			Item ~~1. Legal Proceedings~~1A.	50 Risk Factors			39
			~~Item 1A. Risk Factors~~	50
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			50 40
			Item 3.	Defaults upon Senior Securities			51 40
			Item ~~4.Mine~~4.	Mine Safety Disclosures			51 40
			Item 5.	Other Information			51 40
			Item 6.	Exhibits			51 41


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from __________ to __________


(State or other jurisdiction of incorporation or organization)

Three Months Ended			Nine Months Ended
September 30,			September 30,

2017	2016		2017	2016

$222,141	$191,272	Net sales	$636,989	$566,793
142,706	118,852	Cost of goods sold	418,595	343,557

79,435	72,420	Gross profit	218,394	223,236
41,076	38,042	Selling, general, and administrative expenses	123,799	120,997
10,553	9,232	Technical and research expenses	30,788	29,640
5,503	326	Restructuring expenses, net	10,220	7,653

22,303	24,820	Operating income	53,587	64,946
4,429	3,681	Interest expense, net	13,042	9,610
(1,155)	242	Other expense/(income), net	980	(2,103)

19,029	20,897	Income before income taxes	39,565	57,439
3,809	7,488	Income tax expense	12,138	20,613

15,220	13,409	Net income	27,427	36,826
(49)	340	Net income/(loss) attributable to the noncontrolling interest	202	(111)
$15,269	$13,069	Net income attributable to the Company	$27,225	$36,937

$0.47	$0.41	Earnings per share attributable to Company shareholders - Basic	$0.85	$1.15

$0.47	$0.41	Earnings per share attributable to Company shareholders - Diluted	$0.85	$1.15

		Shares of the Company used in computing earnings per share:
32,187	32,104	Basic	32,160	32,079

32,214	32,141	Diluted	32,193	32,118

$0.17	$0.17	Dividends declared per share, Class A and Class B	$0.51	$0.51


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

ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(in thousands)
(unaudited)


Three Months Ended			Nine Months Ended
September 30,			September 30,

2017	2016		2017	2016

$15,220	$13,409	Net income	$27,427	$36,826

		Other comprehensive income/(loss), before tax:
11,974	36	Foreign currency translation adjustments	39,348	2,651
-	-	Pension/postretirement plan remeasurement	-	(170)
		Amortization of pension liability adjustments:
(1,113)	(1,113)	Prior service credit	(3,339)	(3,338)
1,350	1,296	Net actuarial loss	4,050	3,870
295	1,100	Expense related to interest rate swaps included in earnings	1,238	1,686
(96)	497	Derivative valuation adjustment	(1,094)	(6,936)

		Income taxes related to items of other comprehensive income/(loss):
-	-	Pension/postretirement plan remeasurement	-	65
(71)	(55)	Amortization of pension liability adjustment	(213)	(160)
(112)	(418)	Expense related to interest rate swaps included in earnings	(470)	(641)
36	(189)	Derivative valuation adjustment	415	2,636
27,483	14,563	Comprehensive income	67,362	36,489
(43)	340	Comprehensive income/(loss) attributable to the noncontrolling interest	221	(112)
$27,526	$14,223	Comprehensive income attributable to the Company	$67,141	$36,601

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

~~ALBANY INTERNATIONAL CORP.~~
~~CONSOLIDATED BALANCE SHEETS~~
~~(in thousands, except share data)~~
~~(unaudited)~~

	September 30,	December 31,
	2017	2016
ASSETS
Cash and cash equivalents	$153,465	$181,742
Accounts receivable, net	199,938	171,193
Inventories	157,143	133,906
Income taxes prepaid and receivable	8,133	5,213
Prepaid expenses and other current assets	12,690	9,251
Total current assets	531,369	501,305

Property, plant and equipment, net	451,966	422,564
Intangibles, net	56,997	66,454
Goodwill	166,010	160,375
Income taxes receivable and deferred	81,244	68,865
Contract receivables	29,688	14,045
Other assets	32,343	29,825
Total assets	$1,349,617	$1,263,433

LIABILITIES AND SHAREHOLDERS' EQUITY
Notes and loans payable	$186	$312
Accounts payable	45,121	43,305
Accrued liabilities	103,498	95,195
Current maturities of long-term debt	51,765	51,666
Income taxes payable	12,493	9,531
Total current liabilities	213,063	200,009

Long-term debt	453,578	432,918
Other noncurrent liabilities	105,318	106,827
Deferred taxes and other liabilities	13,002	12,389
Total liabilities	784,961	752,143

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 37,392,353 in 2017
and 37,319,266 in 2016	37	37
Class B Common Stock, par value $.001 per share;
authorized 25,000,000 shares; issued and
outstanding 3,233,998 in 2017 and 2016	3	3
Additional paid in capital	428,088	425,953
Retained earnings	533,670	522,855
Accumulated items of other comprehensive income:
Translation adjustments	(92,523)	(133,298)
Pension and postretirement liability adjustments	(52,648)	(51,719)
Derivative valuation adjustment	917	828
Treasury stock (Class A), at cost 8,431,335 shares in 2017
and 8,443,444 shares in 2016	(256,876)	(257,136)
Total Company shareholders' equity	560,668	507,523
Noncontrolling interest	3,988	3,767
Total equity	564,656	511,290
Total liabilities and shareholders' equity	$1,349,617	$1,263,433

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

~~ALBANY INTERNATIONAL CORP.~~
~~CONSOLIDATED STATEMENTS OF CASH FLOW~~
~~(in thousands)~~
~~(unaudited)~~


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net sales	$	260,563	$	232,442	$	766,101	$	689,322
Cost of goods sold	160,070		140,400		473,411		407,006

Gross profit	100,493		92,042		292,690		282,316
Selling, general, and administrative expenses	36,873		37,696		119,325		116,899
Technical and research expenses	9,934		9,673		29,984		28,916
Restructuring expenses, net	42		187		268		230

Operating income	53,644		44,486		143,113		136,271
Interest expense, net	3,794		3,734		11,336		11,521
Pension settlement expense	49,128		—		49,128		—
Aviation Manufacturing Jobs Protection (AMJP) grant	—		(5,832)		—		(5,832)
Other (income)/expense, net	(6,918)		2,753		(17,891)		4,215

Income before income taxes	7,640		43,831		100,540		126,367
Income tax expense/(benefit)	(3,183)		12,889		22,273		36,375

Net income	10,823		30,942		78,267		89,992
Net income attributable to the noncontrolling interest	129		80		635		150
Net income attributable to the Company	$	10,694	$	30,862	$	77,632	$	89,842

Earnings per share attributable to Company shareholders - Basic	$	0.34	$	0.95	$	2.47	$	2.78

Earnings per share attributable to Company shareholders - Diluted	$	0.34	$	0.95	$	2.46	$	2.77

Shares of the Company used in computing earnings per share:
Basic	31,111		32,381		31,416		32,369

Diluted	31,223		32,434		31,518		32,424

Dividends declared per share, Class A and Class B	$	0.21	$	0.20	$	0.63	$	0.60

~~(in thousands, except per share amounts)~~	~~Unaudited - Pro forma~~ ~~Nine months ended~~ ~~September 30, 2016~~

~~Combined Net sales~~	~~$588,978~~

~~Combined Income before income taxes~~	~~$59,812~~

~~Pro forma increase/(decrease) to income before income taxes:~~
~~Acquisition expenses~~	~~5,367~~
~~Interest expense related to purchase price~~	~~(1,133~~	)

~~Acquisition accounting adjustments:~~
~~Depreciation and amortization on property, plant and equipment, and intangible assets~~	~~(1,696~~	)
~~Valuation of contract inventories~~	~~2,036~~
~~Interest expense on capital lease obligation~~	~~323~~
~~Interest expense on other obligations~~	~~(143~~	)
~~Pro forma Income before income taxes~~	~~$64,566~~
~~Pro forma Net Income~~	~~$41,286~~

		~~(IRS~~
(Address of principal executive offices)


(IRS Employer Identification No.)


(Registrant’s telephone number, including area code)


	Three months ended September 30, 2022
(in thousands)	Point in Time Revenue Recognition		Over Time Revenue Recognition		Total
Machine Clothing	$	152,490	$	899	$	153,389

Albany Engineered Composites
ASC	—		41,463		41,463
Other AEC	5,819		59,892		65,711
Total Albany Engineered Composites	5,819		101,355		107,174

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

	Pension plans				Other postretirement benefits
(in thousands)	2017		2016		2017		2016
Components of net periodic benefit cost:
Service cost	$1,960		$1,991		$183		$190
Interest cost	5,507		6,110		1,660		1,832
Expected return on assets	(6,004	)	(6,763	)	-		-
Curtailment gain	-		(130	)	-		-
Amortization of prior service cost/(credit)	27		28		(3,366	)	(3,366	)
Amortization of net actuarial loss	1,943		1,756		2,107		2,114
Net periodic benefit cost	$3,433		$2,992		$584		$770

Nine months ended September 30, 2017	Total restructuring costs incurred	Termination and other costs	Impairment of plant and equipment	Impairment of intangible asset
(in thousands)
Machine Clothing	$1,012	$1,012	$-	$-
Albany Engineered Composites	9,208	4,173	886	4,149
Corporate Expenses	-	-	-	-
Total	$10,220	$5,185	$886	$4,149

	December 31,	Restructuring		Currency	September 30,
(in thousands)	2016	charges accrued	Payments	translation /other	2017

Total termination and other costs	$5,559	$5,185	($6,370)	$24	$4,398


(in thousands)	Translation adjustments		Pension and postretirement liability adjustments		Derivative valuation adjustment		Total Other Comprehensive Income
December 31, 2021	$	(105,880)	$	(38,490)	$	(1,614)	$	(145,984)
Other comprehensive income/(loss) before reclassifications, net of tax	(79,841)		—		17,569		(62,272)
Pension settlement expense, net of tax	—		26,198		—		26,198
Interest expense related to swaps reclassified to the Consolidated Statements of Income, net of tax	—		—		2,006		2,006
Pension and postretirement liability adjustments reclassified to Consolidated Statements of Income, net of tax	—		(321)		—		(321)
Net current period other comprehensive income	(79,841)		25,877		19,575		(34,389)
September 30, 2022	$	(185,721)	$	(12,613)	$	17,961	$	(180,373)

(in thousands)	September 30, 2017		December 31, 2016
Trade and other accounts receivable	$157,171		$146,460
Bank promissory notes	19,525		15,759
Revenue in excess of progress billings	30,957		15,926
Allowance for doubtful accounts	(7,715	)	(6,952	)
Total accounts receivable	$199,938		$171,193

As of September 30, 2017 (in thousands)	Weighted average amortization life in years	Gross carrying amount	Accumulated amortization	Net carrying amount

Amortized intangible assets:
AEC trade names	15	$43	$27	$16
AEC technology	15	228	142	86
Customer relationships	15	48,528	4,956	43,572
Customer contracts	6	18,211	5,114	13,097
Other intangibles	5	742	516	226
Total amortized intangible assets		$67,752	$10,755	$56,997

Unamortized intangible assets:
MC Goodwill		$70,280	$-	$70,280
AEC Goodwill		95,730	-	95,730
Total unamortized intangible assets:		$166,010	$-	$166,010

As of December 31, 2016 (in thousands)	Weighted average amortization life in years	Gross carrying amount	Accumulated amortization	Net carrying amount

Amortized intangible assets:
AEC trade names	15	$43	$23	$20
AEC technology	15	228	124	104
Customer relationships	15	49,490	2,481	47,009
Customer contracts	6	20,420	2,561	17,859
Other intangibles	5	1,720	258	1,462
Total amortized intangible assets		$71,901	$5,447	$66,454

Unamortized intangible assets:
MC Goodwill		$64,645	$-	$64,645
AEC Goodwill		95,730	-	95,730
Total unamortized intangible assets:		$160,375	$-	$160,375

(in thousands)	December 31, 2016	Amortization		Other Changes		Currency Translation	September 30, 2017

Amortized intangible assets:
AEC trade names	$20	$(4	)	$-		$-	$16
AEC technology	104	(18	)	0		-	86
Customer relationships	47,009	(2,475	)	(962	)	-	43,572
Customer contracts	17,859	(2,553	)	(2,209	)	-	13,097
Other intangibles	1,462	(258	)	(978	)	-	226
Total amortized intangible assets	$66,454	($5,308	)	($4,149	)	$-	$56,997

Unamortized intangible assets:
MC Goodwill	$64,645	$-				$5,635	$70,280
AEC Goodwill	95,730	-				-	95,730
Total unamortized intangible assets:	$160,375	$-		$-		$5,635	$166,010

	Annual amortization
Year	(in thousands)
2017	$6,865
2018	6,232
2019	6,232
2020	6,232
2021	6,162

Years ending December 31,	(in thousands)
2017	$606
2018	2,473
2019	2,473
2020	2,520
2021	2,520
Thereafter	7,373
Total minimum lease payments	17,965
Less: Amount representing interest	(2,622	)

Present value of minimum lease payments	$15,343

	September 30, 2017				December 31, 2016
	Quoted prices in active markets		Significant other observable inputs		Quoted prices in active markets		Significant other observable inputs

(in thousands)	(Level 1)		(Level 2)		(Level 1)		(Level 2)
Fair Value
Assets:
Cash equivalents	$18,246		$-		$8,468		$-
Other Assets:
Common stock of unaffiliated foreign public company	880	^(a)	-		762	^(a)	-
Interest rate swaps	-		5,293	^(b)	-		5,784	^(c)

Year ended December 31,	Opening Number of Claims	Claims Dismissed,Settled, or Resolved	New Claims	Closing Number of Claims	Amounts Paid (thousands) to Settle or Resolve
2012	4,446	90	107	4,463	$530
2013	4,463	230	66	4,299	78
2014	4,299	625	147	3,821	437
2015	3,821	116	86	3,791	164
2016	3,791	148	102	3,745	758
2017 (as of September 30)	3,745	75	57	3,727	$10

(in thousands)	Common Stock Class A and B	Additional paid in capital	Retained earnings		Accumulated items of other comprehensive income/(loss)		Treasury stock		Noncontrolling Interest	Total Equity
December 31, 2016	$40	$425,953	$522,855		($184,189	)	($257,136	)	$3,767	$511,290
Net income	-	-	27,225		-		-		202	27,427
Compensation and benefits paid or payable in shares	-	1,604	-		-		260		-	1,864
Options exercised	-	531	-		-		-		-	531
Dividends declared	-	-	(16,410	)	-		-		-	(16,410	)
Cumulative translation adjustments	-	-	-		40,775		-		19	40,794
Pension and postretirement liability adjustments	-	-	-		(929	)	-		-	(929	)
Derivative valuation adjustment	-	-	-		89		-		-	89
September 30, 2017	$40	$428,088	$533,670		($144,254	)	($256,876	)	$3,988	$564,656

Three months ended September 30, 2017
(in thousands)	Machine Clothing	Albany Engineered Composites		Corporate expenses and other		Total Company
Operating income/(loss) (GAAP)	$42,674	($9,301	)	($11,070	)	$22,303
Interest, taxes, other income/expense	-	-		(7,083	)	(7,083	)
Net income/(loss) (GAAP)	42,674	(9,301	)	(18,153	)	15,220
Interest expense, net	-	-		4,429		4,429
Income tax expense	-	-		3,809		3,809
Depreciation and amortization	8,380	8,591		1,159		18,130
EBITDA (non-GAAP)	51,054	(710	)	(8,756	)	41,588
Restructuring expenses, net	96	5,407		-		5,503
Foreign currency revaluation losses	1,114	137		266		1,517
Write-off of inventory in a discontinued product line	-	3,155		-		3,155
Pretax loss attributable to the noncontrolling interest in ASC	-	136		-		136
Adjusted EBITDA (non-GAAP)	$52,264	$8,125		($8,490	)	$51,899

Three months ended September 30, 2016
(in thousands)	Machine Clothing		Albany Engineered Composites		Corporate expenses and other		Total Company
Operating income/(loss) (GAAP)	$40,039		($4,529	)	($10,690	)	$24,820
Interest, taxes, other income/expense	-		-		(11,411	)	(11,411	)
Net income/(loss) (GAAP)	40,039		(4,529	)	(22,101	)	13,409
Interest expense, net	-		-		3,681		3,681
Income tax expense	-		-		7,488		7,488
Depreciation and amortization	9,032		8,027		1,386		18,445
EBITDA (non-GAAP)	49,071		3,498		(9,546	)	43,023
Restructuring expenses, net	(212	)	640		(102	)	326
Foreign currency revaluation (gains)/losses	86		-		(308	)	(222	)
Pretax income attributable to the noncontrolling interest in ASC	-		(428	)	-		(428	)
Adjusted EBITDA (non-GAAP)	$48,945		$3,710		($9,956	)	$42,699

Nine months ended September 30, 2016
(in thousands)	Machine Clothing	Albany Engineered Composites		Corporate expenses and other		Total Company
Operating income/(loss) (GAAP)	$112,583	($14,083	)	($33,554	)	$64,946
Interest, taxes, other income/expense	-	-		(28,120	)	(28,120	)
Net income/(loss) (GAAP)	112,583	(14,083	)	(61,674	)	36,826
Interest expense, net	-	-		9,610		9,610
Income tax expense	-	-		20,613		20,613
Depreciation and amortization	27,845	17,778		5,601		51,224
EBITDA (non-GAAP)	140,428	3,695		(25,850	)	118,273
Restructuring expenses, net	5,921	1,787		(55	)	7,653
Foreign currency revaluation (gains)/losses	1,646	5		(2,355	)	(704	)
Acquisition expenses	-	5,367		-		5,367
Pretax loss attributable to the noncontrolling interest in ASC	-	36		-		36
Adjusted EBITDA (non-GAAP)	$147,995	$10,890		($28,260	)	$130,625

Three months ended September 30, 2017	Pre tax	Tax	After tax	Per Share
(in thousands, except per share amounts)	Amounts	Effect	Effect	Effect
Restructuring expenses, net	$5,503	$2,003	$3,500	$0.11
Foreign currency revaluation losses	1,517	552	965	0.03
Write-off of inventory in a discontinued product line	3,155	1,167	1,988	0.06
Unfavorable effect of change in income tax rate	-	741	741	0.02
Net discrete income tax benefit	-	3,866	3,866	0.12

	For the three month periods ending:
(in thousands, except percentages)	September 30, 2017		June 30, 2017*		March 31, 2017		September 30, 2016
AEC Adjusted EBITDA (non-GAAP)	$8,125		($8,586	)	$5,188		$3,710
AEC Net sales (GAAP)	71,447		68,999		56,450		48,024
AEC Adjusted EBITDA margin (non-GAAP)	11.4	%	-12.4	%	9.2	%	7.7	%

(in thousands)	September 30, 2017	June 30, 2017	March 31, 2017	December 31, 2016
Notes and loans payable	$186	$249	$274	$312
Current maturities of long-term debt	51,765	51,732	51,699	51,666
Long-term debt	453,578	444,030	428,477	432,918
Total debt	505,529	496,011	$480,450	484,896
Cash and cash equivalents	153,465	138,792	143,333	181,742
Net debt	$352,064	$357,219	$337,117	$303,154

~~ALBANY INTERNATIONAL CORP.~~

~~CONSOLIDATED STATEMENTS OF INCOME~~

~~(in thousands, except per share amounts)~~

~~(unaudited)~~