UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One)
(X) Annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934 (No Fee Required)
For the fiscal year ended December 31, 2005
OR
( ) Transition report pursuant to Section 15(d) of the Securities Exchange Act
of 1934 (No Fee Required)
For the transition period from to
Commission file number 0-16214
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
Albany International Corp. Prosperity Plus Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
Albany International Corp.
1373 Broadway, Albany, New York 12204
Albany International Corp.
Prosperity Plus Savings Plan
Index
December 31, 2005 and 2004
--------------------------------------------------------------------------------
Page(s)
Report of Independent Registered Public Accounting Firm........................1
Financial Statements
Statements of Net Assets Available for Benefits................................2
Statements of Changes in Net Assets Available for Benefits.....................3
Notes to Financial Statements................................................4-9
Supplemental Schedule*
Schedule of Assets (Held at End of Year) .....................................10
* Other schedules required by 29 CFR 2520.103-800 of the Department of
Labor Rules and Regulations for Reporting and Disclosure under the
Retirement Income Security Act of 1974 (ERISA) have been omitted
because they are not applicable.
Signature.....................................................................11
Exhibits
23. Consent of Independent Registered Public Accounting Firm..................12
Report of Independent Registered Public Accounting Firm
To the Participants and Administrator of the
Albany International Corp. Prosperity Plus Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of Albany International Corp. Prosperity Plus Savings Plan (the "Plan") at
December 31, 2005 and 2004, and the changes in net assets available for benefits
for the years then ended in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with the standards of the Public
Accounting Oversight Board (United States). These standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) as of December 31, 2005 is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ PricewaterhouseCoopers
--------------------------
June 2, 2006
Albany International Corp.
Prosperity Plus Savings Plan
Statements of Net Assets Available for Benefits
December 31, 2005 and 2004
--------------------------------------------------------------------------------
2005 2004
Assets
Investments, at fair value
Registered investment companies $167,732,530 $157,692,113
Albany International Class A common stock 39,595,904 40,415,508
Participant loans 7,216,682 6,900,030
Common/collective trust 48,012,076 45,934,001
Cash - interest bearing 13,418 --
------------ ------------
Total investments 262,570,610 250,941,652
Employer contribution receivable 2,256,903 1,481,418
------------ ------------
Net assets available for benefits $264,827,513 $252,423,070
============ ============
The accompanying notes are an integral part of the financial statements.
Albany International Corp.
Prosperity Plus Savings Plan
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 2005 and 2004
--------------------------------------------------------------------------------
2005 2004
Additions
Investment income
Interest and dividend income from investments $ 9,785,820 $ 5,392,034
Interest income, participant loans 471,813 515,904
Net appreciation in fair value of investments 3,344,381 14,110,726
------------ ------------
13,602,014 20,018,664
------------ ------------
Contributions
Employer 6,517,896 5,693,146
Participant 9,855,828 9,650,871
------------ ------------
16,373,724 15,344,017
Other additions 10,591 2,719
------------ ------------
Total additions 29,986,329 35,365,400
------------ ------------
Deductions
Payment of benefits 17,567,476 19,011,558
Other deductions 14,410 15,587
------------ ------------
Total deductions 17,581,886 19,027,145
------------ ------------
Net increase 12,404,443 16,338,255
Net assets available for benefits
Beginning of year 252,423,070 236,084,815
------------ ------------
End of year $264,827,513 $252,423,070
============ ============
The accompanying notes are an integral part of the financial statements.
Albany International Corp.
Prosperity Plus Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------
1. Description of Plan
The following description of the Albany International Corp. (the
"Company") Prosperity Plus Savings Plan (the "Plan") provides only general
information. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
General
The Plan is a defined contribution plan and is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA). The Plan
covers all full time domestic employees of the Company and its
subsidiaries who are 21 years of age or older.
Contributions
Employees may make voluntary contributions to the Plan of 1% to 15% of
eligible compensation, subject to certain limitations, on a before-and/or
after-tax basis as defined in the Plan. Participants may also contribute
amounts representing distributions from other qualified defined benefit or
defined contribution plans. Participants direct the investment of their
contributions into various investment options offered by the Plan. The
Plan currently offers thirteen registered investment companies, a
common/collective trust and Albany International Class A common stock. The
Company makes a matching contribution to the Plan in varying percentages
up to 5% of the participant's eligible compensation (which may be in a
combination of both shares of Company Class A stock and cash). Employees
may convert any of the Albany International Class A common stock in their
match and profit sharing accounts into the other available investment fund
options.
During 2005 and 2004, the Company's matching contributions of $4,260,993
and $4,211,728 included $3,985,319 (116,711 shares) and $3,869,896
(125,578 shares) of Albany International Class A common stock,
respectively.
Profit-Sharing Contribution
The Plan provides for a profit-sharing contribution. Profit-sharing
contributions are based upon a minimum 1% employee participation in the
Plan and are in addition to, and separate from, Company matching
contributions. In order to receive a profit-sharing contribution, an
employee must be an active contributing participant in the Plan during the
final quarter of the year for which the profit-sharing contribution is
made, unless the employee has been suspended from participation because of
a hardship withdrawal. If an employee is eligible, yet chooses to
participate for less than a full year, the profit-sharing contribution
will be pro-rated. An employee who retires during the year is also
eligible to receive a profit sharing contribution on a pro-rata basis. The
amount of the profit sharing contribution is based on a formula stated at
the beginning of the year. The Company's contribution for profit-sharing
may be made in either cash or Albany International Class A common stock
(or both) following the end of the year.
The profit sharing contributions were $2,256,903 and $1,481,418 for the
years ended December 31, 2005 and 2004, respectively. Profit sharing
contributions paid during the years ended December 31, 2005 and 2004
included $1,371,376 (40,087 shares) and $1,624,315 (51,526 shares),
respectively, of Albany International Class A common stock.
Albany International Corp.
Prosperity Plus Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------
Participant Accounts
Each participant's account is credited with the participant's contribution
and allocations of (a) the Company's contributions and (b) Plan earnings.
Allocations are based on participant earnings or account balances, as
defined. The benefit to which a participant is entitled is the benefit
that can be provided from the participant's vested account.
Vesting
Participants are vested immediately in their and the Company's
contributions plus actual earnings thereon.
Pension Purchase
The Plan allows retiring plan participants to purchase additional pension
benefits by transferring existing Plan account balances to the Company's
Pension Plus Plan. The decision to make a pension purchase must be made 60
days prior to retirement. Once the pension purchase option is elected, the
election is irrevocable after retirement.
Payment of Benefits
Upon termination of service, total disability, death or retirement,
participants have the option to receive an amount equal to the value of
their accounts in a lump sum payment or, in the case of total disability
or retirement, monthly installments over a period not to exceed 15 years.
Participants may also elect prior to retirement to withdraw up to 100% of
their after-tax contributions and up to 100% of before-tax contributions
if the Internal Revenue Service's criteria for "financial hardship" are
met.
Plan Termination
The Company intends to continue the Plan indefinitely but reserves the
right to modify, amend, suspend or terminate the Plan. In the event of
plan termination, distributions would be allocated based on the value of
the participant accounts.
Administrative Costs
The Plan stipulates that all costs incurred in administering the Plan
shall be borne by the Company or, if the Employee Benefits Committee so
determines, by the Plan. The Company paid Plan administrative expenses of
$23,082 and $29,832 during 2005 and 2004, respectively.
Albany International Corp.
Prosperity Plus Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------
2. Summary of Significant Accounting Policies
Estimates
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
Plan management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of changes in net assets during the reporting period. Actual
results could differ from those estimates.
Risks and Uncertainties
The Plan provides for various investment options in any combination of
stocks, bonds, mutual funds and other investment securities. Investment
securities are exposed to various risks, such as interest rate, market and
credit. Due to the level of risk associated with certain investment
securities and the level of uncertainty related to changes in the value of
investment securities, it is at least reasonably possible that changes in
risks in the near term would materially affect participants' account
balances and the amounts reported in the statements of net assets
available for benefits and the statement of changes in net assets
available for benefits.
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value.
Investments in registered investment companies are valued at the latest
quoted sales price on the last business day of the year, which represents
the net asset value of shares held by the Plan at year end.
The investment in the common/collective trust is recorded at fair value
based on the Plan's share of the fund's net asset value.
On December 29, 2005, The Financial Accounting Standards Board (FASB)
released FASB Staff Position Nos. AAG INV-1 and SOP 94-4-1, Reporting of
Fully Benefit-Responsive Investment Contracts Held by Certain Investment
Companies Subject to the AICPA Investment Company Guide and
Defined-Contribution Health and Welfare and Pension Plans (FSP). The FSP
clarifies the definition of fully benefit-responsive investment contracts
for contracts held by defined contribution plans. The FSP also establishes
enhanced financial statement presentation and disclosure requirements for
defined contribution plans subject to the FSP effective for financial
statements for issued for periods ending after December 15, 2006.
Management intends to adopt the FSP in the Plan's financial statements for
the year ended December 31, 2006. The effect of the FSP on the Plan's
financial statements is expected to be enhanced financial statement
presentation and disclosure requirements.
Common collective investment funds will be presented at fair value on the
statement of net assets available for benefits. The amount will represent
the difference between fair value and contract value of the collective
investment fund shall be presented on the face of the statement of net
assets available for benefits as a single amount. This will be calculated
as the sum of the amounts necessary to adjust the portion of net assets
attributable to each fully collective investment contract from fair value
to contract value. The statement of changes in net assets available for
benefits shall be prepared on a basis that reflects income credited to
participants in the Plan. This statement will include net appreciation or
depreciation in the fair value of only those investment contracts that are
not deemed to be fully benefit responsive.
The common stock of Albany International Corp. is valued at the latest
quoted price on the last business day of the year.
Participant loans are valued at cost which approximates fair value.
Security transactions are recorded on a trade-date basis. Gains or losses
on sales of securities are based on average cost.
Dividend income is recorded on the ex-dividend date. Dividends declared by
the Board of Directors of the Company on Albany International Corp. Class
A common stock may be reinvested in the Plan or received as a cash
distribution as elected by the participant. Total cash dividends received
by participants included in payment of benefits is $311,145 and $288,196
for the years ended December 31, 2005 and 2004, respectively. Interest
income is recorded as earned.
Albany International Corp.
Prosperity Plus Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation in the fair value of its investments, which
consists of realized gains and losses and unrealized
appreciation/depreciation on those investments.
Payment of Benefits
Benefit payments are recorded when paid.
3. Investments
Plan investments as of December 31 are as follows:
2005 2004
Investments at fair value as determined
by quoted market price
Registered investment companies $167,732,530 $157,692,113
Albany International Class A
common stock 39,595,904 40,415,508
Cash - interest bearing 13,418 --
------------ ------------
207,341,852 198,107,621
------------ ------------
Investments at estimated fair value
Common/collective trust 48,012,076 45,934,001
Participant loans 7,216,682 6,900,030
------------ ------------
55,228,758 52,834,031
------------ ------------
Total investments $262,570,610 $250,941,652
============ ============
The following investments represent 5% or more of net assets available for
benefits at December 31:
2005 2004
Vanguard Institutional Index Fund $ 46,176,648 $ --
Vanguard Mid-Cap Index Fund 13,578,572 --
Vanguard Target Retirement 2015 Fund 15,370,080 --
Vanguard Target Retirement 2025 Fund 16,630,638 --
Vanguard Windsor Fund 41,982,704 42,880,092
Vanguard Retirement Savings Trust 48,012,076 45,934,001
Albany International Class A common stock 39,595,904 40,415,508
Vanguard 500 Index Fund -- 51,431,349
Vanguard Wellesley Inv -- 19,083,165
Vanguard Star Fund -- 13,393,150
Albany International Corp.
Prosperity Plus Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------
During 2005 and 2004, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
appreciated in value as follows:
2005 2004
Albany International Class A common stock $ 1,361,459 $ 1,406,022
Registered investment companies 1,982,922 12,704,704
----------- -----------
$ 3,344,381 $14,110,726
=========== ===========
4. Albany International Class A Common Stock Fund
Information about the net assets and the significant components of the
changes in net assets relating to Albany International Class A common
stock fund is as follows:
December 31,
----------------------------
2005 2004
Net assets
Albany International Class A
common stock $ 39,595,904 $ 40,415,508
Cash - interest bearing 13,418 --
Employer profit sharing
contribution receivable 2,114,301 1,371,369
------------ ------------
$ 41,723,623 $ 41,786,877
============ ============
Changes in net assets
Investment income $ 1,361,459 $ 1,406,022
Dividend income 386,282 354,933
Employer matching contribution 3,985,319 3,869,896
Employer profit sharing contribution 2,114,301 1,371,369
Employee contributions 47,080 20,137
Payment of benefits (1,606,613) (2,279,040)
Other deductions (4,935) (5,127)
Net transfers to/from participant
directed investments (6,346,147) (6,393,755)
------------ ------------
$ (63,254) $ (1,655,565)
============ ============
Albany International Corp.
Prosperity Plus Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
--------------------------------------------------------------------------------
5. Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 and
additional amounts in multiples of $500 up to a maximum equal to the
lesser of $50,000 or 50% of their account balance. Interest rates on loans
are determined by the Employee Benefits Committee from time to time with
the rate remaining constant throughout the life of the loan (rates range
between 4.94% and 10.08% at December 31, 2005). Loans are to be repaid
through payroll deductions, although they may be repaid in a lump sum
amount, generally over a period from 1 to 5 years except for loans for the
purchase of a primary residence. Home purchase loan repayments range from
5 to 20 years.
6. Related Party Transactions
The Plan invests in shares of mutual funds managed by an affiliate of
Vanguard Fiduciary Trust Company ("VFTC"). VFTC acts as trustee for the
investments held by the Plan. The Plan also invests in shares of the Plan
Sponsor's Albany International Class A common stock. The Plan purchased
$7,837,853 and $6,365,343 and sold $10,005,497 and $9,173,984 of Albany
International Class A common stock during the years ended December 31,
2005 and 2004, respectively. Transactions in such investments qualify as
party-in-interest transactions which are exempt from the prohibited
transaction rules.
7. Tax Status
The Internal Revenue Service has determined and informed the Company by a
letter dated January 31, 2004, that the Plan is qualified and the trust
established under the Plan is tax-exempt, under the appropriate sections
of the Code. The Plan has been amended since receiving the determination
letter. However, the Plan administrator believes that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Code. Therefore, the Plan administrator believes that
the Plan was qualified and the related trust was tax-exempt as of the
financial statement date.
Albany International Corp.
Prosperity Plus Savings Plan
Schedule of Assets (Held at End of Year)
December 31, 2005
--------------------------------------------------------------------------------
EIN 14-0462060
Attachment to Form 5500, Schedule H,
Line 4(i) - "Schedule of Assets (Held at End of Year)"
Current
Identity of Issuer Investment Type Cost Value
PIMCO Total Return Registered Investment Company $ 6,097,641 $ 6,080,712
Royce Premier Fund Registered Investment Company 3,186,264 3,286,498
* Vanguard Inst Index Fund Registered Investment Company 44,715,517 46,176,648
* Vanguard Int'l Growth Fund Registered Investment Company 9,829,642 11,557,121
* Vanguard Mid-Cap Index Fund Registered Investment Company 12,911,286 13,578,572
* Vanguard Morgan Growth Inv Registered Investment Company 1,033,024 1,080,953
* Vanguard Tgt Retirement 2005 Registered Investment Company 3,557,685 3,532,643
* Vanguard Tgt Retirement 2015 Registered Investment Company 15,272,949 15,370,080
* Vanguard Tgt Retirement 2025 Registered Investment Company 16,432,472 16,630,638
* Vanguard Tgt Retirement 2035 Registered Investment Company 5,604,655 5,727,634
* Vanguard Tgt Retirement 2045 Registered Investment Company 905,111 929,679
* Vanguard Target Retirement Inc. Registered Investment Company 1,803,029 1,798,648
* Vanguard Windsor Fund Registered Investment Company 40,134,588 41,982,704
* Vanguard Retire Savings Trust Common/Collective Trust 48,012,076 48,012,076
* Albany International Class A Common Stock 25,346,054 39,595,904
* Vanguard cash account -
interest bearing Cash 13,418 13,418
* Loan Fund 4.94% - 10.08% 7,216,682 7,216,682
------------ ------------
Total assets held for investment
purposes $242,072,093 $262,570,610
============ ============
* Party-in-interest as defined by ERISA
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Albany International Prosperity Plus
Savings Plan
(Name of Plan)
Date: June 28, 2006 /s/ Charles J. Silva, Jr.
--------------------------
Charles J. Silva, Jr.
Vice President-General Counsel