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, 2004
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, 2004 and 2003
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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, 2004 and 2003, 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
Company Accounting Oversight Board (United States). Those 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, 2004 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
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June 10, 2005
1
Albany International Corp.
Prosperity Plus Savings Plan
Statements of Net Assets Available for Benefits
December 31, 2004 and 2003
- --------------------------------------------------------------------------------
2004 2003
Assets
Investments, at fair value
Registered investment companies $157,692,113 $140,840,257
Albany International Class A common stock 40,415,508 41,818,127
Participant loans 6,900,030 7,662,849
Common/collective trust 45,934,001 43,998,440
------------ ------------
Total investments 250,941,652 234,319,673
Employer contribution receivable 1,481,418 1,765,142
------------ ------------
Net assets available for benefits $252,423,070 $236,084,815
============ ============
The accompanying notes are an integral part of the financial statements.
2
Albany International Corp.
Prosperity Plus Savings Plan
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 2004 and 2003
- --------------------------------------------------------------------------------
2004 2003
Additions
Investment income
Interest and dividend income from
investments $ 5,392,034 $ 4,493,733
Interest income, participant loans 515,904 525,243
Net appreciation in fair value of
investments 14,110,726 43,839,218
------------ ------------
20,018,664 48,858,194
------------ ------------
Contributions
Employer 5,693,146 6,193,647
Participant 9,650,871 9,292,241
------------ ------------
15,344,017 15,485,888
Other additions 2,719 --
------------ ------------
Total additions 35,365,400 64,344,082
------------ ------------
Deductions
Payment of benefits 19,011,558 12,584,652
Other deductions 15,587 15,174
------------ ------------
Total deductions 19,027,145 12,599,826
------------ ------------
Net increase 16,338,255 51,744,256
Net assets available for benefits
Beginning of year 236,084,815 184,340,559
------------ ------------
End of year $252,423,070 $236,084,815
============ ============
The accompanying notes are an integral part of the financial statements.
3
Albany International Corp.
Prosperity Plus Savings Plan
Notes to Financial Statements
December 31, 2004 and 2003
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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 ten 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.
The Company's matching contributions of $4,211,728 and $4,109,005 included
$3,869,896 (125,578 shares) and $3,748,372 (138,244 shares) of Albany
International Class A common stock during the 2004 and 2003 plan years,
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 contribution for profit-sharing may
be made in either cash or common stock (or both) following the end of the
year.
The profit sharing contributions were $1,481,418 and $1,765,142 for the
years ended 2004 and 2003, respectively. Profit sharing contributions made
during the year ended 2004 and 2003 included $1,624,315 (51,526 shares)
and $1,640,789 (70,402 shares), respectively, of Albany International
Class A common stock.
4
Albany International Corp.
Prosperity Plus Savings Plan
Notes to Financial Statements
December 31, 2004 and 2003
- --------------------------------------------------------------------------------
During 2003, the Company made an additional profit sharing contribution of
$319,500 to Plan participants not eligible for benefits under the Albany
International Corp. Pension Plus Plan.
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
approximately $29,832 and $52,737 during 2004 and 2003, respectively.
5
Albany International Corp.
Prosperity Plus Savings Plan
Notes to Financial Statements
December 31, 2004 and 2003
- --------------------------------------------------------------------------------
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, fixed income securities, 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.
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 $288,196 and $274,363
for the years ended December 31, 2004 and 2003, respectively. Interest
income is recorded as earned.
6
Albany International Corp.
Prosperity Plus Savings Plan
Notes to Financial Statements
December 31, 2004 and 2003
- --------------------------------------------------------------------------------
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) 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 for December 31 are as follows:
2004 2003
Investments at fair value as determined
by quoted market price
Registered investment companies $157,692,113 $140,840,257
Albany International Class A
common stock 40,415,508 41,818,127
------------ ------------
198,107,621 182,658,384
------------ ------------
Investments at estimated value
Common/collective trust 45,934,001 43,998,440
Participant loans 6,900,030 7,662,849
------------ ------------
52,834,031 51,661,289
------------ ------------
Total investments $250,941,652 $234,319,673
============ ============
The following investments represent 5% or more of net assets available for
benefits:
2004 2003
Vanguard 500 Index Fund $ 51,431,349 $ 47,642,027
Vanguard Windsor Fund 42,880,092 37,222,125
Vanguard Wellesley Inv 19,083,165 17,674,213
Albany International Class A common
stock 40,415,508 41,818,127
Vanguard Retirement Savings Trust 45,934,001 43,998,440
Vanguard Star Fund 13,393,150 --
During 2004 and 2003, 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:
2004 2003
Common stock $ 1,406,022 $ 19,161,687
Registered investment companies 12,704,704 24,677,531
------------ -------------
$ 14,110,726 $ 43,839,218
============ =============
7
Albany International Corp.
Prosperity Plus Savings Plan
Notes to Financial Statements
December 31, 2004 and 2003
- --------------------------------------------------------------------------------
4. Albany International Common Stock
Information about the net assets and the significant components of the
changes in net assets relating to Albany International Class A common
stock is as follows:
December 31,
----------------------------
2004 2003
Net assets
Albany International Class A
common stock $40,415,508 $ 41,818,127
Employer profit sharing
contribution receivable 1,371,369 1,624,315
----------- ------------
$41,786,877 $ 43,442,442
=========== ============
Changes in net assets
Investment income $ 1,406,022 $ 19,161,687
Dividend income 354,933 355,710
Employer matching contribution 3,869,896 3,748,372
Employer profit sharing contribution 1,371,369 1,624,315
Employee contributions 20,137 9,174
Payment of benefits (2,279,040) (1,996,752)
Other deductions (5,127) (5,804)
Net transfers to/from participant
directed investments (6,393,755) (12,978,021)
----------- ------------
$(1,655,565) $ 9,918,681
=========== ============
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%). 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
$6,365,343 and sold $9,173,984 of Albany International Class A common
stock during the year ended December 31, 2004. Transactions in such
investments qualify as party-in-interest transactions which are exempt
from the prohibited transaction rules.
8
Albany International Corp.
Prosperity Plus Savings Plan
Notes to Financial Statements
December 31, 2004 and 2003
- --------------------------------------------------------------------------------
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, they believe that the Plan was
qualified and the related trust was tax-exempt as of the financial
statement date.
9
Albany International Corp.
Prosperity Plus Savings Plan
Schedule of Assets (Held at End of Year)
December 31, 2004
- --------------------------------------------------------------------------------
EIN 14-0462060
Attachment to Form 5500, Schedule H, Line 4(i) - "Schedule of Assets (Held at End of Year)"
Identity of Issue Investment Type Cost Current Value
*Vanguard 500 Index Fund Registered Investment Company $ 48,537,477 $ 51,431,349
*Vanguard Explorer Fund Registered Investment Company 489,767 635,917
*Vanguard Extend Market
Index Inv Registered Investment Company 9,863,420 11,200,253
*Vanguard IT Bond Index Registered Investment Company 4,474,219 4,517,812
*Vanguard Int'l Growth Fund Registered Investment Company 7,869,235 8,707,702
*Vanguard LT Corporate Inv Registered Investment Company 198,687 206,537
*Vanguard Prime Money Market Registered Investment Company 5,636,136 5,636,136
*Vanguard STAR Fund Registered Investment Company 12,305,977 13,393,150
*Vanguard Wellesley Inv Registered Investment Company 18,375,299 19,083,165
*Vanguard Windsor Fund Registered Investment Company 38,127,718 42,880,092
*Vanguard Retirement Savings Trust Common/Collective Trust 45,934,001 45,934,001
*Albany International Stock Class A
Common Stock Common Stock 24,278,403 40,415,508
*Loan Fund 4.94% - 10.08% 6,900,030 6,900,030
------------ ------------
Total assets held for investment purposes $222,990,369 $250,941,652
============ ============
* Party-in-interest as defined by ERISA
10
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, 2005 /s/ Thomas R. Beecher, Jr.
--------------------------------
Thomas R. Beecher, Jr.
Chairman, Compensation Committee
Exhibit 23
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-76078) of Albany International Corp. of our
report dated June 10, 2005 relating to the financial statements of Albany
International Corp. Prosperity Plus Savings Plan, which appears in this Form
11-K.
/s/ PricewaterhouseCoopers
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Albany, New York
June 28, 2005