ALBANY INTERNATIONAL CORP /DE/

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Significant Accounting Policies

Basis of Presentation

In the opinion of management, the accompanying consolidated financial information reflects all adjustments necessary for a fair presentation of Albany International Corp.'s ("Albany", the "Registrant", the "Company", "we", "us", or "our") financial position, results of operations and cash flows for the interim periods presented, but does not include all disclosures normally required for the annual financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). All such adjustments are of a normal recurring nature, unless otherwise disclosed in this report. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used in the accounting for, among others, revenue recognition, contract profitability, allowances for credit losses, rebates and sales allowances, inventory allowances, financial instruments, including derivatives, pension and other postretirement benefits, stock-based compensation, assets and liabilities held for sale, goodwill and intangible assets, contingencies, income taxes, and other accruals. Our estimates are based on historical experience and on various other assumptions, which are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of any revisions are reflected in the consolidated financial statements in the period they are determined to be necessary.

Recent Accounting Pronouncements Not Yet Adopted

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow Scope Improvements. The ASU clarifies the applicability of Topic 270 and the form and content of interim financial statements. In addition, it requires entities to disclose material events occurring since the last annual reporting period. The guidance will be effective for interim periods beginning January 1, 2028 and can be applied on a prospective or retrospective basis. We are evaluating the disclosure impact of this guidance; however, the standard is not expected to have an impact on the Company’s consolidated financial position, results of operations or cash flows.

In November 2025, the FASB issued ASU No. 2025‑09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. The ASU makes targeted amendments to hedge accounting guidance intended to better align hedge accounting results with an entity’s risk management activities, including changes related to cash flow hedges, forecasted transactions, and certain debt‑related hedging strategies. The guidance is effective for the Company for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU No. 2025-06 to improve the accounting for costs related to internal-use software. The new guidance eliminates project stages and requires capitalizing software costs to begin when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. Additionally, disclosures for property, plant and equipment will be required for all capitalized software costs. The guidance is effective in the first quarter of 2028 with early adoption permitted as of the beginning of an annual reporting period. Upon adoption, the guidance may be applied prospectively, retrospectively or using a modified transition approach. The Company is currently evaluating the impact of this guidance on our consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03 to improve the disclosure of expenses in commonly presented expense captions. The new guidance requires a public entity to provide tabular disclosure, on an annual and interim basis, of amounts for the following expense categories: (1) purchases of inventory, (2) employee compensation, (3) depreciation and (4) intangible asset amortization, as included in each relevant expense caption. Additionally, on an annual and interim basis, a qualitative description is required for amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. A relevant expense caption is an expense caption presented on the

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face of the income statement that contains any of the expense categories noted. The guidance also requires certain amounts that are currently required to be disclosed to be included in the same tabular disclosure as these disaggregation requirements. Furthermore, on an annual and interim basis, a public entity is required to separately disclose selling expenses and annually, disclose a description of the selling expenses. The guidance is effective for 2027 annual reporting, and in the first quarter of 2028 for interim reporting, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted. We are evaluating the impact of this guidance on our consolidated financial statements.

2. Reportable Segments

The Company is organized based on the nature of its products and is composed oftwo reportable segments, Machine Clothing ("MC") and Albany Engineered Composites ("AEC"), each overseen by a segment president. These segments are reflective of how the Company's Chief Executive Officer, who is its Chief Operating Decision Maker ("CODM"), reviews operating results for the purpose of allocating resources and assessing performance. Our CODM evaluates each segment's performance based on metrics such as net revenues, gross profit, and other key financial data, to assess performance and allocate resources that align with company-wide goals. The Company has not aggregated operating segments for purposes of identifying reportable segments.

Machine Clothing:

The Machine Clothing segment supplies permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel products, nonwovens, fiber cement and for several other industrial applications. We sell our MC products directly to customer end-users in countries across the globe. Our products, manufacturing processes, and distribution channels are substantially the same in each region of the world in which we operate.

We design, manufacture, and market paper machine clothing (used in the manufacture of paper, paperboard, tissue and towel) for each section of the paper machine and for every grade of paper. Paper machine clothing products are customized, consumable products of technologically sophisticated design that utilize polymeric materials in a complex structure.

Albany Engineered Composites:

The Albany Engineered Composites segment provides highly engineered, advanced composite solutions to customers in the commercial and defense aerospace industries. The segment includes Albany Safran Composites, LLC (“ASC”), in which our customer, the SAFRAN Group (“SAFRAN”) owns a 10 percent noncontrolling interest. AEC, through ASC, is the exclusive supplier to the LEAP program of advanced composite fan blades and fan cases under a long-term supply contract, where revenue is determined by a cost-plus-fee agreement.

Other significant programs for AEC include the Sikorsky CH-53K, F-35, JASSM, and Boeing 787 programs. AEC also supplies vacuum waste tanks for the Boeing commercial programs, and specialty components for the Rolls Royce lift fan on the F-35, as well as the fan case for the GE9X engine. For the year ended December 31, 2025, approximately 35% of AEC's revenues were related to U.S. government contracts or programs.

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

Reconciliation of Net Revenues to Operating Income(loss):

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Schedule of Depreciation and Amortization Expenses:

As a result of the Amelia Earhart Drive facility meeting the held-for-sale accounting criteria, the facility's assets and liabilities were classified as held-for-sale in the consolidated balance sheets as of December 31, 2025. Upon classification as held for sale, the Company ceased depreciation and amortization of the related long-lived assets in accordance with applicable accounting guidance. As of September 30, 2026, the Company concluded the net assets at the site no longer met the criteria to be classified as held for sale and therefore, resumed depreciation and amortization of the long-lived assets including catch-up on unrecognized expense from earlier in the year. See Note 19, Held for Sale, of the Notes to the Consolidated Financial Statements for further details.

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Reconciliation of Operating Income/(loss) to Income before income taxes:

The following table presents assets by reportable segment:

The following table presents capital expenditures by reportable segment:

3. Revenue Recognition:

Products and services provided under long-term contracts represent a significant portion of revenues in the Albany Engineered Composites segment and we account for these contracts over time, primarily using the percentage of completion (actual cost to estimated cost) method. That method requires significant judgment and estimation, which could be materially different if the underlying circumstances were to change. When adjustments in estimated contract revenues or costs are required, any changes from prior estimates are included in earnings in the period the change occurs.

The LEAP engine is used on the Airbus A320neo, A321neo, Boeing 737 MAX, and COMAC C919 aircraft. AEC's largest aerospace customer is the SAFRAN Group and sales to SAFRAN (consisting primarily of fan blades and cases for CFM International's LEAP engine) were $53.8 million and $46.4 million for the three months ended September 30, 2026 and 2025, respectively and $155.9 million and $130.2 million for the nine months ended September 30, 2026 and 2025. The total of Accounts receivable and Contract assets due from SAFRAN amounted to $53.4 million and $60.8 million as of September 30, 2026 and December 31, 2025, respectively.

Changes in the estimated profitability of long-term contracts could be caused by increases or decreases in the contract value, revisions to customer delivery requirements, updated labor or overhead projections, material costs, factors affecting the supply chain, changes in the evaluation of contract risks and opportunities, or other factors. The

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cumulative changes in the estimated profitability of long-term contracts increased revenue by $3.5 million during the third quarter of 2026 and $2.0 million for the first nine months of 2026. The cumulative changes in the estimated profitability of long-term contracts increased operating income by $37.9 million which includes a cumulative catch up of depreciation and amortization of assets previously held for sale of $11.0 million during the third quarter of 2026, and increased operating income by $36.3 million which includes a cumulative catch up of depreciation and amortization of assets previously held for sale of $11.0 million for the nine months ended September 30, 2026. The increases in profitability during the three and nine months ended September 30, 2026 were primarily driven by a few large complex programs, including adjustments of $46.7 million and $44.5 million, respectively, for various CH-53K programs, primarily based on increases to the contract value partially offset by changes to future overhead rates over the remainder of the contract.

We disaggregate revenue earned from contracts with customers for each of our business segments and product groups based on the timing of revenue recognition, and groupings used for internal review purposes.

The following table disaggregates revenue for each product group by timing of revenue recognition for the three months ended September 30, 2026:

The following table disaggregates revenue for each product group by timing of revenue recognition for the three months ended September 30, 2025:

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The following table disaggregates MC segment revenue by significant product groupings (paper machine clothing ("PMC") and engineered fabrics); and for PMC, the geographical region to which the paper machine clothing was sold:

We do not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Contracts in the MC segment are generally for periods of less than a year and certain contracts in the AEC segment are relatively short duration firm-fixed-price orders. Remaining performance obligations on contracts that had an original duration of greater than one year totaled $877.4 million and $1.1 billion as of September 30, 2026 and 2025 related primarily to firm fixed price contracts in the AEC segment. Of the remaining performance obligations as of September 30, 2026, we expect to recognize as revenue approximately $64.3 million during 2026, $196.3 million during 2027, $176.9 million during 2028, and the remainder thereafter.

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4. Pensions and Other Postretirement Benefit Plans

The Company has defined benefit pension plans covering certain U.S. and non-U.S. employees. The Company also provides certain postretirement benefits to retired employees in the U.S. and Canada. The Company accrues the cost of providing these benefits during the active service period of the employees.

The composition of the net periodic benefit cost/(income) for the nine months ended September 30, 2026 and 2025, was as follows:

The amount of net periodic benefit cost/(credit) is determined at the beginning of each year and generally only varies from quarter to quarter when a significant event occurs, such as a curtailment or a settlement. There wereno material curtailments or settlements during the nine months ended September 30, 2026. In the first nine months of 2025, we took action to settle certain pension plan liabilities related to an MC pension plan in Switzerland, resulting in a net gain totaling $1.6 million.

Service cost for defined benefit pension and postretirement plans is reported in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. Other components of net periodic benefit cost are included in the line item Other (income)/expense, net in the Consolidated Statements of Income.

5. Restructuring

At MC, restructuring actions were taken in 2026 and 2025 to consolidate production activities across multiple facilities. For the three and nine months ended September 30, 2026, Restructuring expenses, net were related to transfers of fixed assets to other locations including overseas, workforce reductions, and manufacturing expenses related to ceased production. For the three months ended September 30, 2025, these actions were related to workforce reductions of $2.0 million. For the nine months ended September 30, 2025, restructuring charges were related to workforce reductions, fixed asset impairments and related costs and inventory write-off costs of $8.1 million offset by a $1.8 million pension curtailment gain.

At AEC, restructuring activities in the prior year were related to reorganizational and workforce reduction costs, which resulted in Restructuring expenses, net of $0.1 million and $1.8 million for the three and nine months ended September 30, 2025, respectively. AEC didnot incur any restructuring costs for the three and nine months ended September 30, 2026.

At Corporate, for the three and nine months ended September 30, 2026, Restructuring expenses, net were primarily related to workforce reductions and legal structure optimization.

The following table summarizes charges reported in the Consolidated Statements of Income under "Restructuring expenses, net" and "Cost of goods sold":

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The following tables summarize charges by type of expense reported in the Consolidated Statements of Income under "Restructuring expenses, net" and "Cost of goods sold":

The table below presents the year-to-date changes in restructuring liabilities for 2026 and 2025:

6. Other (Income)/Expense, net

The components of Other (income)/expense, net are:

Currency transaction losses/(gains), included within other (income)/expense, net were primarily the result of both realized and unrealized losses/(gains) on intercompany loans. In addition, changes in the fair value of derivative instruments included gains driven by currency rate movements, most notably the Brazilian Real and British Pound Sterling.

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7. Income Taxes

The Company's effective income tax rate for the three and nine months ended September 30, 2026 and 2025, is as follows:

Income tax expense for the quarter was computed in accordance with ASC 740-270, Income Taxes – Interim Reporting. Under this method, loss jurisdictions subject to valuation allowances cannot recognize a tax benefit with regard to their generated losses and are excluded from the annual effective tax rate calculation as their taxes will be recorded discretely in each quarter.

Our 2026 estimated annual effective tax rate primarily reflects the 21% federal tax rate, the impact of state and local taxation, the impact of taxation upon foreign operations, and forecasted permanent differences. Our actual effective tax rates were 28.5% and 16.4% for the nine months ended September 30, 2026 and 2025, respectively.

The effective tax rate for thenine months ended September 30, 2026 was higher than the effective tax rate for thenine months ended September 30, 2025, primarily due to the Company being in a loss position in prior year. Discrete tax items increased the effective tax rate by 0.2% and 0.5% for thethree and nine months ended September 30, 2026, respectively, compared to increases of 0.6% and 2.7% for thethree and nine months ended September 30, 2025, respectively.

Company is subject to audit in the U.S. and various foreign jurisdictions. Our open tax years for major jurisdictions generally range from 2020-2025. We believe appropriate provisions for all outstanding tax issues have been made for all jurisdictions and all open years. Audit outcomes and the timing of audit settlements are subject to significant uncertainty.

8. Earnings Per Share

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

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9. Accumulated Other Comprehensive Income ("AOCI")

The table below presents changes in the components of AOCI for the period from December 31, 2025 to September 30, 2026:

The table below presents changes in the components of AOCI for the period from December 31, 2024 to September 30, 2025:

The components of AOCI that are reclassified to the Consolidated Statements of Income/(Loss) 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 Consolidated Statements of Income/(Loss) that were affected for the three and nine months ended September 30, 2026, and the Consolidated Statements of Income/(Loss) for the three and nine months ended September 30, 2025:

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(a)Reported as Interest expense, net in our Consolidated Statements of Income, are payments related to the interest rate swap agreements and amortization of swap buyouts (see Note 15, Financial Instruments, and Note 16, Fair-Value Measurements, of the Notes to the Consolidated Financial Statements).

(b)Reported as Other (income)/expense, net in our Consolidated Statements of Income, the accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 4, Pension, Postretirement, and Other Benefit Plans, of the Notes to the Consolidated Financial Statements).

10. Noncontrolling Interest

Effective October 31, 2013, Safran S.A. (Safran) acquired a 10 percent equity interest in Albany Safran Composites, LLC ("ASC").

On August 31, 2023, the Company acquired all the outstanding shares of Heimbach, a privately held manufacturer of paper machine clothing with headquarters in Düren, Germany. In July 2021, Heimbach acquired 85% of Arcari, SRL (“Arcari”). Arcari is a manufacturer of textile and plastic industrial technical products and conveyor belts.

On April 1, 2025, Heimbach sold its 85% controlling interest in Arcari to the minority shareholder and recorded a gain of $1.6 million included in Other (income) expense on the sale. In connection with the sale, the corresponding value of the noncontrolling interest was reduced tozero. The Company did not retain any ownership in Arcari as a result of the sale and accordingly there was no impact on operating results during the three and nine months ended September 30, 2026.

The table below presents a reconciliation of income attributable to the noncontrolling interest and noncontrolling equity in the Company’s subsidiaries:

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11. Accounts Receivable

Accounts receivable, net includes trade and other accounts receivable and bank promissory notes, net of allowance for expected credit losses. In connection with certain revenues 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, 2026 and December 31, 2025, Accounts receivable consisted of the following:

12. Contract Assets and Liabilities

Contract assets include unbilled amounts typically resulting from revenues under contracts when the over time method of revenue recognition is utilized, and revenue recognized exceeds the amount billed to the customer. Contract assets are transferred to Accounts receivable, net when the entitlement to payment becomes unconditional and the customer is invoiced. 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, 2026 and December 31, 2025, Contract assets and Contract liabilities consisted of the following:

Contract assets, net increased $77.3 million during the nine months ended September 30, 2026, primarily due to the conclusion of the Amelia Earhart Drive strategic review upon which $68.6 million was reclassified from Assets held for sale back into Contract assets, net. The remaining increase in unbilled revenue is related to commercial and defense programs. There wereno impairment losses related to our Contract assets during the nine months ended September 30, 2026 and September 30, 2025.

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Contract liabilities decreased $5.2 million for the period ended September 30, 2026 compared to December 31, 2025, primarily due to revenue recognized from satisfied performance obligations for contracts that were in a contract liability position partially offset by amounts reclassified from Liabilities held for sale back into Accrued liabilities upon the conclusion of the Amelia Earhart Drive strategic review. Revenue recognized for the nine months ended September 30, 2026 and 2025 that was included in the Contract liability balance at the beginning of the year was $23.8 million and $5.6 million, respectively.

13. Inventories

As of September 30, 2026 and December 31, 2025, Inventories consisted of the following:

14. Goodwill and Other Intangible Assets

The following table sets forth the gross carrying value, accumulated amortization and net values of intangible assets and goodwill as of September 30, 2026 and December 31, 2025:

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As of December 31, 2025, $13.4 million of finite-lived assets and $21.8 million of AEC goodwill related to the Amelia Earhart Drive facility were reclassified to held for sale. As of September 30, 2026, these amounts were reclassified back into their respective line items on the balance sheet.

The changes in intangible assets, net and goodwill from December 31, 2025 to September 30, 2026, were as follows:

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually.

15. Financial Instruments

The following table represents the Company's outstanding debt:

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Amended Credit Agreement

On August 16, 2023, we entered into a $800 million unsecured committed Five-Year Revolving Credit Facility Agreement, amended on June 28, 2024 (collectively, the “Amended Credit Agreement”), which matures in August of 2028.

The applicable interest rate for borrowings under the Amended Credit Agreement is based on both Term SOFR and EURIBOR plus a spread, which is based on our leverage ratio (as defined in the Amended Credit Agreement) at the time of a borrowing as follows:

As of September 30, 2026, the applicable interest rate for borrowings under the Amended Credit Agreement was based on one-month term SOFR and one-month EURIBOR plus the spread, which was 1.625%.

As of September 30, 2026, there was $422.1 million of borrowings outstanding under the Amended Credit Agreement and we had borrowings available of $377.9 million, based on our maximum leverage ratio and our Consolidated EBITDA (as defined in the Amended Credit Agreement).

As of September 30, 2026 and December 31, 2025, the USD interest rate in effect was 5.61% and 5.56%, respectively, including the effect of interest rate swaps; at the end of September 30, 2026 and December 31, 2025, the EUR interest rate in effect was 3.96% and 3.73%, respectively, including the effect of interest rate swaps.

Under the Amended Credit Agreement, we are required to maintain a leverage ratio (as defined in the Credit Agreement) of not greater than 3.75 to 1.00, or 4.25 to 1.00 after a significant acquisition. We are also required to maintain a minimum interest coverage ratio (as defined in the Credit Agreement) of greater than 3.00 to 1.00. If our leverage ratio exceeds 3.50 to 1.00, we will be restricted in paying dividends to a maximum amount of $40 million in a calendar year.

As of September 30, 2026, our leverage ratio was 1.68 to 1.00 and our interest coverage ratio was 7.68 to 1.00. As of September 30, 2026, we were in compliance with all applicable covenants. We anticipate continued compliance in each of the next four quarters while continuing to monitor future compliance based on current and future economic conditions.

The borrowings are guaranteed by certain of the Company’s subsidiaries, including all significant U.S. subsidiaries (subject to certain exceptions), as defined in the Amended Credit Agreement. Our ability to borrow additional amounts under the Amended Credit Agreement is conditional upon the absence of any defaults, as well as the absence of any material adverse change (as defined in the Amended Credit Agreement).

Interest Rate Swaps

From time to time, the Company enters into interest rate swap contracts to manage the interest rate risk associated with its outstanding variable-interest rate borrowings. Such contracts are intended to economically hedge the reference rate component of future interest payments associated with outstanding borrowings under the Company’s Amended Credit Agreement.

In the second and third quarters of 2026, the Company entered into three USD andtwo EUR forward starting interest rate swap agreements with starting dates of November 15, 2026 and November 14, 2026, respectively. These instruments are intended to replace the Company's existing interest rate swap agreements upon their maturity on those same dates and are entered into for the purpose of managing the Company's exposure to variability in cash flows attributable to changes in benchmark interest rates. Changes in fair value during the forward period, from the trade date through the respective starting dates, will be recorded in other comprehensive income (loss).

Thethree USD forward starting interest rate swap agreements have three-year tenors and mature on November 15, 2029. The swaps have the effect of fixing the SOFR portion of the interest rate on a total of $175 million of USD indebtedness drawn under the Amended Credit Facility. Under these interest rate swap agreements, the Company pays a fixed rate and the counterparty pays a floating rate based on the one-month term SOFR rate, reset monthly. Thetwo EUR forward starting interest rate swap agreements have three-year tenors and mature on November 14, 2029. The swaps have the effect of fixing the EURIBOR portion of the interest rate on a total of €45 million of EUR

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indebtedness drawn under the Amended Credit Facility. Under this agreement, the Company pays a fixed rate and the counterparty pays a floating rate based on the one-month EURIBOR rate, reset monthly.

In November, 2024, we entered intotwo interest rate swap agreements: A USD interest rate swap agreement and a EUR interest rate swap agreement. The USD interest rate swap agreement covers the period November 15, 2024 through November 15, 2026. This transaction has the effect of fixing the SOFR portion of the interest rate (before the credit spread) on $125 million of the US indebtedness drawn under the Amended Credit Facility. Under the terms of this transaction, the Company pays a fixed rate of 3.987% and our counterparty pays a floating rate based on the one-month SOFR rate at each monthly calculation date. The EUR interest rate swap agreement covers the period November 14, 2024 through November 15, 2026. This transaction has the effect of fixing the EURIBOR portion of the interest rate (before the credit spread) on EUR 45 million of the EUR indebtedness drawn under the Amended Credit Facility. Under the terms of this transaction, the Company pays a fixed rate of 2.277% and our counterparty pays a floating rate based on the one-month EURIBOR rate at each monthly calculation date.

These interest rate swaps are accounted for as a hedge of future cash flows, as further described in Note 16, Fair-Value Measurements. No cash collateral was received or pledged in relation to the swap agreements.

16. Fair-Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

•Level 1 - Quoted prices in active markets for identical assets or liabilities.

•Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data.

•Level 3 - Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

We had no Level 3 financial assets or liabilities at September 30, 2026 or at December 31, 2025, other than certain pension assets as indicated in our December 31, 2025 Annual Report on Form 10-K.

Debt is carried at cost, which approximates fair value.

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:

(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.

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The interest rate swaps are accounted for as hedges of future cash flows. The fair value of our interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the interest rate curve, and is included in Other assets and/or Other noncurrent liabilities in the Consolidated Balance Sheets. Unrealized gains and losses on the interest rate swaps are recorded as a component of Derivative valuation adjustment in the Shareholders’ equity section of the Consolidated Balance Sheets. As of September 30, 2026, these interest rate swaps were determined to be highly effective hedges of interest rate cashflow risk. Amounts accumulated in Other comprehensive income are reclassified as interest expense/(income), net when the related interest payments (that is, the hedged forecasted transactions), affect earnings. Interest expense/(income) related to payments under the active swap agreements totaled $(0.4) million for the nine months ended September 30, 2026 and $(0.3) million for the nine months ended September 30, 2025.

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

When exercised, the foreign currency instruments are net-settled with the same financial institution that bought or sold them. For all positions, whether options or forward contracts, there is a risk from the possible inability of the financial institution to meet the terms of the contracts and the risk of unfavorable changes in interest and currency rates, which may reduce the value of the instruments. We seek to mitigate risk by evaluating the creditworthiness of counterparties and by monitoring the currency exchange and interest rate markets while reviewing the hedging risks and contracts to ensure compliance with our internal guidelines and policies.

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

17. 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 3,662 claims as of September 30, 2026.

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:

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, 2026, we had resolved, by means of settlement or dismissal,38,126 claims at a total cost of $11 million. Of this amount, 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 7,676 claims as of September 30, 2026, only twelve claims have been filed against Brandon since January 1, 2012, and only $15,000 in settlement costs have been incurred since 2001. Brandon was acquired by the Company in 1999 and has its own insurance policies covering periods prior to 1999. Since 2004, Brandon’s insurance carriers have covered 100% of indemnification and defense costs, subject to policy limits and a standard reservation of rights.

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

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

18. Changes in Shareholders’ Equity

The following tables summarize changes in Shareholders’ Equity for the three and nine month periods ended September 30, 2026:

The following tables summarize changes in Shareholders’ Equity for the three month and nine month periods ended September 30, 2025:

(a)On February 21, 2025, the Company's Board of Directors authorized the Company to repurchase shares up to $250 million (excluding any fees, commissions, taxes or other expenses related to such purchases), which replaces the 2021 authorization.

19. Held for Sale

During the fourth quarter of 2025, we announced plans to commence a strategic review of the Amelia Earhart Drive facility in Salt Lake City. As of December 31, 2025, the Company determined that the Amelia Earhart Drive facility met held-for-sale accounting criteria, and the facility's assets and liabilities were classified as held-for-sale in the consolidated balance sheet. Upon classification as held for sale, the Company ceased depreciation and amortization of the related long-lived assets in accordance with applicable accounting guidance. At the time of the decision, fair value exceeded carrying value and thereforeno impairment loss was recorded.

In the third quarter of 2026, we determined that we would no longer pursue the previously planned sale of the facility following the conclusion of the strategic review. This decision was made following new business wins, a renegotiated contract for the Boeing 787 program, and amended contract terms with Sikorsky, a Lockheed Martin Company, on the CH-53K program. Upon making this decision, the Company reclassified the assets and liabilities held-for-sale back into their respective line items on the balance sheet. Additionally, the Company resumed depreciation and amortization of the long-lived assets including catch-up on unrecognized expense from earlier in the year. As fair value continues to exceed carrying value, no impairment loss was recorded, and the reclassification was made using carrying value with this catch-up depreciation and amortization.

The following table presents the assets and liabilities classified as held-for-sale at September 30, 2026 and December 31, 2025:

20. Subsequent Events

We evaluated subsequent events through the issuance date of these financial statements in Form 10-Q. No material subsequent events were identified that require disclosure.