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Reportable Segments
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Reportable Segments Reportable Segments
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. The manufacturing spaces used for the production of parts under the long-term supply agreement are owned by Safran, and leased to the Company at either a market rent or a minimal cost. All lease expense is reimbursable by Safran to the Company due to the cost-plus nature of the supply agreement. In the fourth quarter of 2019, Safran leased manufacturing space from AEC for the GE9X program. Rent paid by Safran under this lease amounted to $0.5 million for the first six months of 2020. AEC net sales to Safran, substantially all of which were through ASC, were $57.0 million and $116.3 million in the first six months of 2020 and 2019, respectively.
The total of Accounts receivable, Contract assets and Noncurrent receivables due from Safran amounted to $105.4 million and $114.5 million as of June 30, 2020 and December 31, 2019, 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 2019, approximately 25 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 June 30,Six months ended June 30,
(in thousands)
2020201920202019
Net sales
Machine Clothing
$153,433  $155,016  $290,035  $299,349  
Albany Engineered Composites
72,557  118,933  171,719  225,972  
Consolidated total
$225,990  $273,949  $461,754  $525,321  
Operating income/(loss)
Machine Clothing
$56,543  $49,538  $103,718  $93,781  
Albany Engineered Composites
8,299  17,732  15,922  27,254  
Corporate expenses
(12,115) (13,045) (27,319) (26,717) 
Operating income
$52,727  $54,225  $92,321  $94,318  
Reconciling items:
Interest income
(348) (587) (795) (1,186) 
Interest expense
4,171  5,218  8,595  10,234  
Other expense/(income), net
1,091  930  16,660  (278) 
Income before income taxes
$47,813  $48,664  $67,861  $85,548  

There were no material changes in the total assets of the reportable segments in the first six months of 2020.
The table below presents restructuring costs by reportable segment (also see Note 5):
Three months ended June 30, Six months ended June 30,
(in thousands)2020201920202019
Machine Clothing$388  $935  $1,030  $1,336  
Albany Engineered Composites2,248  (32) 2,248  51  
Corporate expenses201  (4) 201  (4) 
Total$2,837  $899  $3,479  $1,383  

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. In 2020, net adjustments to the estimated profitability of long-term contracts increased gross profit by $7.4 million and $6.4 million for the three and six month periods,respectively, ended June 30, 2020. In 2019, net adjustments to the estimated profitability of long-term contracts increased gross profit by $5.0 million and $5.6 million for the three and six month periods, respectively, ended June 30, 2019.
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 June 30, 2020
(in thousands)Point in Time Revenue
Recognition		Over Time Revenue
Recognition		Total
Machine Clothing$152,585  $848  $153,433  
Albany Engineered Composites
ASC—  17,576  17,576  
Other AEC4,143  50,838  54,981  
Total Albany Engineered Composites4,143  68,414  72,557  
Total revenue$156,728  $69,262  $225,990  

Six months ended June 30, 2020
(in thousands)Point in Time Revenue
Recognition		Over Time Revenue
Recognition		Total
Machine Clothing$288,339  $1,696  $290,035  
Albany Engineered Composites
ASC—  55,470  55,470  
Other AEC10,463  105,786  116,249  
Total Albany Engineered Composites10,463  161,256  171,719  
Total revenue$298,802  $162,952  $461,754  

Three months ended June 30, 2019
(in thousands)Point in Time Revenue
Recognition		Over Time Revenue
Recognition		Total
Machine Clothing$154,216  $800  $155,016  
Albany Engineered Composites
ASC—  58,694  58,694  
Other AEC9,897  50,342  60,239  
Total Albany Engineered Composites9,897  109,036  118,933  
Total revenue$164,113  $109,836  $273,949  
Six months ended June 30, 2019
(in thousands)Point in Time Revenue
Recognition		Over Time Revenue
Recognition		Total
Machine Clothing$297,749  $1,600  $299,349  
Albany Engineered Composites
ASC—  114,137  114,137  
Other AEC16,142  95,693  111,835  
Total Albany Engineered Composites16,142  209,830  225,972  
Total revenue$313,891  $211,430  $525,321  

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 June 30,Six months ended June 30,
(in thousands)2020201920202019
Americas PMC$81,225  $81,583  $154,902  $156,923  
Eurasia PMC54,166  54,081  99,297  105,519  
Engineered Fabrics18,042  19,352  35,836  36,907  
Total Machine Clothing Net sales$153,433  $155,016  $290,035  $299,349  

In accordance with ASC 606, 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. 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 $85 million and $112 million as of June 30, 2020 and 2019, respectively, and related primarily to firm contracts in the AEC segment. Of the remaining performance obligations as of June 30, 2020, we expect to recognize as revenue approximately $52 million during 2020 and the remainder during 2021.