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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended:
September 30, 2021
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________

Commission file number: 1-10026
ALBANY INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

216 Airport Drive, Rochester, New Hampshire
(Address of principal executive offices)

14-0462060
(IRS Employer Identification No.)

03867
(Zip Code)

603-330-5850
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.001 par value per shareAIN
The New York Stock Exchange (NYSE)
Class B Common Stock, $0.001 par value per shareAIN
The New York Stock Exchange (NYSE)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The registrant had 32,380 thousand shares of Class A Common Stock and 1 thousand shares of Class B Common Stock outstanding as of October 15, 2021.


ALBANY INTERNATIONAL CORP.
TABLE OF CONTENTS
Page No.
Consolidated balance sheets as of September 30, 2021 and December 31, 2020

Index

ITEM 1. FINANCIAL STATEMENTS

ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2021202020212020
Net sales$232,442 $211,999 $689,322 $673,753 
Cost of goods sold140,400 124,697 407,006 393,999 
Gross profit92,042 87,302 282,316 279,754 
Selling, general, and administrative expenses37,696 39,518 116,899 118,167 
Technical and research expenses9,673 8,301 28,916 26,304 
Restructuring expenses, net187 710 230 4,189 
Operating income44,486 38,773 136,271 131,094 
Interest expense, net3,734 2,242 11,521 10,042 
Aviation Manufacturing Jobs Protection (AMJP) grant(5,832)— (5,832)— 
Other expense/(income), net2,753 (2,745)4,215 13,915 
Income before income taxes43,831 39,276 126,367 107,137 
Income tax expense12,889 9,686 36,375 37,504 
Net income30,942 29,590 89,992 69,633 
Net income/(loss) attributable to the noncontrolling interest80 1 150 (1,419)
Net income attributable to the Company$30,862 $29,589 $89,842 $71,052 
Earnings per share attributable to Company shareholders - Basic$0.95 $0.92 $2.78 $2.20 
Earnings per share attributable to Company shareholders - Diluted$0.95 $0.91 $2.77 $2.20 
Shares of the Company used in computing earnings per share:
Basic32,381 32,337 32,369 32,326 
Diluted32,434 32,344 32,424 32,333 
Dividends declared per share, Class A and Class B$0.20 $0.19 $0.60 $0.57 
The accompanying notes are an integral part of the consolidated financial statements
3
Index
ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(in thousands)
(unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2021202020212020
Net income$30,942 $29,590 $89,992 $69,633 
Other comprehensive income/(loss), before tax:
Foreign currency translation and other adjustments(14,709)19,249 (16,497)3,047 
Pension/postretirement settlements and curtailments— — — 378 
Amortization of pension liability adjustments:
Prior service cost/ (credit)(1,119)(1,114)(3,356)(3,342)
Net actuarial loss/ (gain)1,103 1,244 3,320 3,720 
Payments and amortization related to interest rate swaps included in earnings1,803 1,219 5,049 2,742 
Derivative valuation adjustment722 (385)369 (12,515)
Income taxes related to items of other comprehensive income/(loss):
Pension/postretirement settlements and curtailments— — — (113)
Amortization of prior service cost/ (credit)336 274 1,007 831 
Amortization of net actuarial loss/ (gain)(331)(306)(996)(925)
Payments and amortization related to interest rate swaps included in earnings(466)(311)(1,304)(701)
Derivative valuation adjustment(186)98 (95)3,200 
Comprehensive income/(loss)18,095 49,558 77,489 65,955 
Comprehensive income/(loss) attributable to the noncontrolling interest(112)202 (69)(957)
Comprehensive income/(loss) attributable to the Company$18,207 $49,356 $77,558 $66,912 
The accompanying notes are an integral part of the consolidated financial statements
4
Index
ALBANY INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
September 30, 2021December 31, 2020
ASSETS
Cash and cash equivalents$286,217 $241,316 
Accounts receivable, net199,124 188,423 
Contract assets, net115,924 139,289 
Inventories118,129 110,478 
Income taxes prepaid and receivable3,509 5,940 
Prepaid expenses and other current assets29,021 31,830 
Total current assets$751,924 $717,276 
Property, plant and equipment, net426,806 448,554 
Intangibles, net41,020 46,869 
Goodwill183,568 187,553 
Deferred income taxes30,538 38,757 
Noncurrent receivables, net33,471 36,265 
Other assets72,916 74,662 
Total assets$1,540,243 $1,549,936 
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable$54,397 $49,173 
Accrued liabilities112,481 125,459 
Current maturities of long-term debt— 9 
Income taxes payable14,623 16,222 
Total current liabilities181,501 190,863 
Long-term debt350,000 398,000 
Other noncurrent liabilities117,057 130,424 
Deferred taxes and other liabilities11,352 10,784 
Total liabilities659,910 730,071 
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; 40,759,527 issued in 2021 and 39,115,405 in 2020
41 39 
Class B Common Stock, par value $.001 per share; authorized 25,000,000 shares; issued and outstanding 1,154 in 2021 and 1,617,998 in 2020
— 2 
Additional paid in capital436,079 433,696 
Retained earnings841,162 770,746 
Accumulated items of other comprehensive income:
Translation adjustments(100,327)(83,203)
Pension and postretirement liability adjustments(39,059)(39,661)
Derivative valuation adjustment(5,525)(9,544)
Treasury stock (Class A), at cost; 8,379,804 shares in 2021 and 8,391,011 shares in 2020
(255,768)(256,009)
Total Company shareholders' equity876,603 816,066 
Noncontrolling interest3,730 3,799 
Total equity880,333 819,865 
Total liabilities and shareholders' equity$1,540,243 $1,549,936 
The accompanying notes are an integral part of the consolidated financial statements
5
Index
ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
September 30,		Nine Months Ended September 30,
2021202020212020
OPERATING ACTIVITIES
Net income$30,942 $29,590 $89,992 $69,633 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation15,925 16,285 48,485 47,289 
Amortization2,289 1,997 6,862 7,017 
Change in deferred taxes and other liabilities1,606 3,074 7,022 12,434 
Impairment of property, plant and equipment25 303 563 536 
Non-cash interest expense283 (309)593 (138)
Compensation and benefits paid or payable in Class A Common Stock606 80 2,232 596 
Provision for credit losses from uncollected receivables and contract assets(1,075)(105)(1,158)1,664 
Foreign currency remeasurement loss/(gain) on intercompany loans480 169 (551)15,750 
Fair value adjustment on foreign currency options29 (64)169 — 
Changes in operating assets and liabilities that provided/(used) cash:
Accounts receivable(10,927)(2,048)(14,292)6,069 
Contract assets(3,473)(7,923)22,170 (27,932)
Inventories546 4,585 (9,838)(20,043)
Prepaid expenses and other current assets3,949 (4,532)2,444 (6,989)
Income taxes prepaid and receivable2,717 (454)2,408 (662)
Accounts payable(296)(5,108)4,312 (15,491)
Accrued liabilities5,112 2,838 (12,311)(8,063)
Income taxes payable2,871 1,786 (1,085)3,741 
Noncurrent receivables1,245 (228)2,832 169 
Other noncurrent liabilities(1,319)111 (5,582)(413)
Other, net1,324 (388)3,232 (1,474)
Net cash provided by operating activities52,859 39,659 148,499 83,693 
INVESTING ACTIVITIES
Purchases of property, plant and equipment(8,918)(9,349)(31,754)(31,320)
Purchased software(106)(109)(394)(155)
Net cash used in investing activities(9,024)(9,458)(32,148)(31,475)
FINANCING ACTIVITIES
Proceeds from borrowings— — 8,000 70,000 
Principal payments on debt— (17,005)(56,009)(76,016)
Principal payments on finance lease liabilities(363)(335)(1,067)(6,798)
Taxes paid in lieu of share issuance— — (998)(490)
Proceeds from options exercised4 5 153 25 
Dividends paid(6,476)(6,144)(19,418)(18,424)
Net cash used in financing activities(6,835)(23,479)(69,339)(31,703)
Effect of exchange rate changes on cash and cash equivalents(4,113)4,545 (2,111)(751)
Increase in cash and cash equivalents32,887 11,267 44,901 19,764 
Cash and cash equivalents at beginning of period253,330 204,037 241,316 195,540 
Cash and cash equivalents at end of period$286,217 $215,304 $286,217 $215,304 
The accompanying notes are an integral part of the consolidated financial statements
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ALBANY INTERNATIONAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Significant Accounting Policies
Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary for a fair presentation of results for such periods. Albany International Corp. (Albany, the Registrant, the Company, we, us, or our) consolidates the financial results of its subsidiaries for all periods presented. The results for any interim period are not necessarily indicative of results for the full year.
The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in Albany International Corp.’s Consolidated Financial Statements and accompanying Notes. Actual results could differ materially from those estimates.
The information included in this Quarterly Report on Form 10-Q should be read in conjunction with Albany International Corp.’s Annual Report on Form 10-K for the year ended December 31, 2020.
The Company recognizes government grants only when there is reasonable assurance that we will comply with the conditions attached to them and the grants will be received. Government grants are recognized in the Consolidated Statements of Income on a systematic basis over the periods in which we recognize as expenses the related costs for which the grants are intended to compensate. A government grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support with no future related costs is recognized in the Consolidated Statements of Income of the period in which it becomes receivable.
During the third quarter of 2021, the Company was awarded an Aviation Manufacturing Jobs Protection Program ("AMJP") grant of $5.8 million, under the American Rescue Plan of the U.S. Department of Transportation. The AMJP grant is an income related grant, the purpose of which is to provide payroll assistance to eligible U.S. aircraft manufacturing/repair businesses who were impacted due to the COVID-19 downturn during 2020. The Company received $2.9 million in cash in September 2021, and anticipates receiving the remaining balance in 2022. Accordingly, the Company recognized $5.8 million in its Consolidated Statements of Income for the quarter and year-to-date ended September 30, 2021, and reflected cash received to date as an operating activity within the Consolidated Statements of Cash Flows.


2. Reportable Segments and Revenue Recognition
In accordance with applicable disclosure guidance for enterprise segments and related information, the internal organization that is used by management for making operating decisions and assessing performance is used as the basis for our reportable segments.
The Machine Clothing (“MC”) segment supplies permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel, nonwovens, fiber cement and several other industrial applications. We sell our MC products directly to customer end-users in countries across the globe. Our products, manufacturing processes, and distribution channels for MC are substantially the same in each region of the world in which we operate.
We design, manufacture, and market paper machine clothing (used in the manufacturing of paper, paperboard, tissue and towel) for each section of the paper machine and for every grade of paper. Paper machine clothing products are customized, consumable products of technologically sophisticated design that utilize polymeric materials in a complex structure.
The Albany Engineered Composites (“AEC”) segment, including Albany Safran Composites, LLC (“ASC”), in which our customer SAFRAN Group (“Safran”) owns a 10 percent noncontrolling interest, provides highly engineered, advanced composite structures to customers in the commercial and defense aerospace industries. AEC’s largest program relates to CFM International’s LEAP engine. Under this program, AEC through ASC, is the exclusive supplier of advanced composite fan blades and cases under a long-term supply contract. AEC net sales to Safran were $81.6 million and $73.6 million in the first nine months of 2021 and 2020, respectively. The total of Accounts receivable, Contract assets and Noncurrent receivables due from Safran amounted to $103.4 million and $127.1 million as of
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September 30, 2021 and December 31, 2020, respectively. Other significant programs by AEC include the F-35, Boeing 787, Sikorsky CH-53K and JASSM, as well as the fan case for the GE9X engine. In 2020, approximately 46 percent of AEC sales were related to U.S. government contracts or programs.
The following tables show data by reportable segment, reconciled to consolidated totals included in the financial statements:
Three months ended September 30,Nine months ended September 30,
(in thousands)
2021202020212020
Net sales
Machine Clothing
$154,171 $138,747 $462,298 $428,782 
Albany Engineered Composites78,271 73,252 227,024 244,971 
Consolidated total
$232,442 $211,999 $689,322 $673,753 
Operating income/(loss)
Machine Clothing
$55,467 $45,699 $161,731 $149,418 
Albany Engineered Composites2,917 6,828 13,019 22,749 
Corporate expenses
(13,898)(13,754)(38,479)(41,073)
Operating income$44,486 $38,773 $136,271 $131,094 
Reconciling items:
Interest income(654)(1,485)(1,584)(2,280)
Interest expense
4,388 3,727 13,105 12,322 
AMJP grant(5,832)— (5,832)— 
Other expense/(income), net2,753 (2,745)4,215 13,915 
Income before income taxes$43,831 $39,276 $126,367 $107,137 

There were no material changes to total assets of the reportable segments in the first nine months of 2021.
The table below presents restructuring costs by reportable segment:
Three months ended September 30,Nine months ended September 30,
(in thousands)2021202020212020
Machine Clothing$251 $384 $193 $1,414 
Albany Engineered Composites(81)358 (40)2,606 
Corporate expenses17 (32)77 169 
Total$187 $710 $230 $4,189 

Restructuring costs in the first nine months of 2021 were not significant. Restructuring liabilities at quarter-end were less than $1 million, related to termination and other costs, which are expected to be substantially paid within one year.

In 2020, AEC reduced its workforce at various locations, principally in the U.S., leading to restructuring charges of $2.6 million for the first nine months of 2020. Machine Clothing restructuring charges for the first nine months of 2020 were principally related to the plant closure of its MC production facility in Sélestat, France that was announced in 2017.

Products and services provided under long-term contracts represent a significant portion of sales in the Albany Engineered Composites segment and we account for these contracts using the percentage of completion (actual cost to estimated cost) method. That method requires significant judgment and estimation, which could be considerably different if the underlying circumstances were to change. When adjustments in estimated contract revenues or costs are required, any changes from prior estimates are included in earnings in the period the change occurs. 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 rates, factors affecting the supply chain, changes in the evaluation of contract risks and opportunities, or other factors. Changes in the estimated profitability of long-term contracts increased operating income by $2.1 million and $2.4 million for the three and nine month periods
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ended September 30, 2021, respectively. Adjustments in the estimated profitability of long-term contracts increased operating income by $3.5 million and $9.5 million for the three and nine month periods ended September 30, 2020, respectively.
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:
Three months ended September 30, 2021
(in thousands)
Point in Time Revenue
Recognition
Over Time Revenue
Recognition
Total
Machine Clothing$153,306 $865 $154,171 
Albany Engineered Composites
ASC
— 26,904 26,904 
Other AEC3,589 47,778 51,367 
Total Albany Engineered Composites
3,589 74,682 78,271 
                                         
Total revenue$156,895 $75,547 $232,442 
Nine months ended September 30, 2021
(in thousands)Point in Time Revenue
Recognition		Over Time Revenue
Recognition		Total
Machine Clothing$459,703 $2,595 $462,298 
Albany Engineered Composites
ASC— 80,158 80,158 
Other AEC11,901 134,965 146,866 
Total Albany Engineered Composites11,901 215,123 227,024 
Total revenue$471,604 $217,718 $689,322 

Three months ended September 30, 2020
(in thousands)
Point in Time Revenue
Recognition
Over Time Revenue
Recognition
Total
Machine Clothing$137,899 $848 $138,747 
Albany Engineered Composites
ASC
— 17,301 17,301 
Other AEC4,479 51,472 55,951 
Total Albany Engineered Composites
4,479 68,773 73,252 
Total revenue
$142,378 $69,621 $211,999 

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Nine months ended September 30, 2020
(in thousands)Point in Time Revenue
Recognition		Over Time Revenue
Recognition		Total
Machine Clothing$426,238 $2,544 $428,782 
Albany Engineered Composites
ASC— 72,771 72,771 
Other AEC14,942 157,258 172,200 
Total Albany Engineered Composites14,942 230,029 244,971 
Total revenue$441,180 $232,573 $673,753 
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:
Three months ended September 30,Nine months ended September 30,
(in thousands)
2021202020212020
Americas PMC$81,780 $70,663 $237,425 $225,565 
Eurasia PMC
53,277 50,923 164,320 150,220 
Engineered Fabrics19,114 17,161 60,553 52,997 
Total Machine Clothing Net sales
$154,171 $138,747 $462,298 $428,782 

Contracts in the MC segment are generally for periods of less than a year. Most contracts in the AEC segment are short duration firm-fixed-price orders representing performance obligations with an original maturity of less than one year. Remaining performance obligations on contracts that had an original duration of greater than one year totaled $155 million and $81 million as of September 30, 2021 and 2020, respectively, and related primarily to firm contracts in the AEC segment. Of the remaining performance obligations as of September 30, 2021, we expect to recognize as revenue approximately $29 million during 2021, $66 million during 2022, $37 million during 2023, and the remainder during 2024.


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3. 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 for the nine months ended September 30, 2021 and 2020, was as follows:
Pension plans
Other postretirement benefits
(in thousands)
2021202020212020
Components of net periodic benefit cost:
Service cost
$1,630 $1,728 $99 $150 
Interest cost3,999 4,621 827 1,285 
Expected return on assets(4,802)(5,139)— — 
Settlement— 145 — — 
Curtailment— 233 — — 
Amortization of prior service cost/(credit)10 24 (3,366)(3,366)
Amortization of net actuarial loss1,625 1,776 1,695 1,944 
Net periodic benefit cost$2,462 $3,388 $(745)$13 

The amount of net periodic benefit cost 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 were no such events in the first nine months of 2021.

On July 29, 2021, the Company notified the participants of the U.S. Pension Plus Plan (the "Plan") of its intent to terminate the Plan. In order to facilitate such termination, the Company has amended the Plan to, among other things, establish the termination date and set forth the procedures for termination. The Company also filed the necessary application with the Internal Revenue Service requesting the issuance of a determination letter regarding the Plan’s qualification status at termination. The Plan was terminated on September 30, 2021. This has not resulted in a curtailment or settlement charge during the nine month period ended September 30, 2021.
In the second quarter of 2020, the Company recorded expense of $0.4 million related to curtailments and settlements.
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 net periodic benefit cost are included in the line item Other (income)/expense, net in the Consolidated Statements of Income.



4. Other (Income)/Expense, net
The components of Other (Income)/Expense, net are:
Three months ended September 30,Nine months ended September 30,
(in thousands)
2021202020212020
Currency transaction (gains)/losses$472 $(149)$813 $14,702 
Bank fees and amortization of debt issuance costs
74 96 284 264 
Components of net periodic pension and postretirement cost other than service(6)384 (12)1,523 
Other
2,213 (3,076)3,130 (2,574)
Total$2,753 $(2,745)$4,215 $13,915 
Other (income)/expense, net included losses related to the revaluation of nonfunctional-currency balances of $0.8 million for the first nine months of 2021, compared to losses of $14.7 million for the first nine months of 2020, which principally resulted from an intercompany demand loan payable by a Mexican subsidiary. As a result of changes in
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business conditions that occurred in the first quarter of 2020, loan repayments on that intercompany loan are not expected in the foreseeable future and, beginning April 1, 2020, the revaluation effects are recorded in Other comprehensive income.
5. Income Taxes
The following table presents components of income tax expense for the three and nine months ended September 30, 2021 and 2020:
Three months ended September 30,Nine months ended
September 30,
(in thousands, except percentages)
2021202020212020
Income tax based on income from continuing operations (1)$13,150 $12,666 $37,733 $36,237 
Provision for change in estimated tax rate397 (1,196)179 (1,687)
Income tax before discrete items13,547 11,470 37,912 34,550 
Discrete tax expense:
Exercise of U.S. stock options(4)(7)(160)(7)
Adjustments to prior period tax liabilities(674)(1,750)(2,095)(983)
Revaluation of deferred tax assets due to tax rate change— — 352 — 
Provision for/resolution of tax audits and contingencies, net— (46)278 (1,779)
Write-off of net operating losses related to tax audit— — — 1,830 
Tax effect of non-deductible foreign exchange loss on intercompany loan— 3 — 3,658 
Creation of valuation allowance— 8 — 230 
Other20 8 88 5 
Total income tax expense$12,889 $9,686 $36,375 $37,504 
(1) Calculated at estimated tax rates of 30.0% and 32.2%, respectively
Income tax expense for the quarter 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 ("AETR") calculation and their taxes will be recorded discretely in each quarter.
In the third quarter of 2021, the Company recorded a net tax benefit of $0.7 million related to U.S. adjustments of prior period liabilities. In the first quarter of 2021, the Company recorded a net tax benefit of $1.4 million related to a U.S. adjustment of prior period liabilities and, additionally, the Company recorded an expense of $0.3 million related to the establishment of a foreign uncertain tax position.
In the third quarter of 2020, the Company recorded a net tax benefit of $1.8 million related to U.S. adjustments of prior period liabilities. In the second quarter of 2020, the Company recorded a net tax benefit of $1.5 million as a result of a U.S. state tax audit settlement; the Company also recorded a net deferred tax expense of $1.0 million due to an adjustment of net operating losses related to settled audits. In the first quarter of 2020, the Company recorded a $1.8 million out-of-period charge related to developments in ongoing tax audits, which resulted in a corresponding decrease in deferred tax assets.

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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)
2021202020212020
Net income attributable to the Company$30,862 $29,589 $89,842 $71,052 
Weighted average number of shares:
Weighted average number of shares used in calculating basic net income per share
32,381 32,337 32,369 32,326 
Effect of dilutive stock-based compensation plans53 7 55 7 
Weighted average number of shares used in calculating diluted net income per share32,434 32,344 32,424 32,333 
Average market price of common stock used for calculation of dilutive shares$