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Reportable Segments and Geographic Data
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Reportable Segments and Geographic Data Reportable Segments and Geographic Data
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 accounting policies of the segments are the same as those described in Note 1. Corporate expenses include wages and benefits for corporate headquarters personnel, costs related to information systems development and support, and professional fees related to legal, audit, and other activities. These costs are not allocated to the reportable segments because the decision-making for these functions lies outside of the segments.
Machine Clothing:
The Machine Clothing (“MC”) segment supplies permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel, pulp, 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.
Albany Engineered Composites:
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 2020, Safran leased manufacturing space from AEC for the GE9X program. Rent paid by Safran under this lease amount to $0.9 million in 2020. AEC Net sales to Safran were $99.0 million in 2020, $226.8 million in 2019, and $186.3 million in 2018. The total of Accounts receivable, Contract assets and Noncurrent receivable due from Safran amounted to $127.1 million and $114.5 million as of December 31, 2020 and 2019, respectively. Other significant programs served 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:
(in thousands)
202020192018
Net Sales
Machine Clothing
$572,955 $601,254 $611,858 
Albany Engineered Composites
327,655 452,878 370,621 
Consolidated total
$900,610 $1,054,132 $982,479 
Depreciation and amortization
Machine Clothing
20,304 21,875 30,813 
Albany Engineered Composites
48,496 44,670 43,205 
Corporate expenses
3,905 4,250 5,018 
Consolidated total
$72,705 $70,795 $79,036 
Operating income/(loss)
Machine Clothing
190,805 191,965 169,836 
Albany Engineered Composites
31,536 55,520 16,647 
Corporate expenses
(56,261)(53,909)(49,075)
Operating income
$166,080 $193,576 $137,408 
Reconciling items:
Interest income
(2,748)(2,729)(2,118)
Interest expense
16,332 19,650 20,242 
Other expense, net
13,422 (1,557)4,037 
Income before income taxes
$139,074 $178,212 $115,247 

The table below presents restructuring costs by reportable segment (also see Note 5):
(in thousands)
202020192018
Restructuring expenses, net
Machine Clothing
$2,746 $1,129 $12,278 
Albany Engineered Composites
2,821 1,833 3,048 
Corporate expenses
169 (57)244 
Consolidated total
$5,736 $2,905 $15,570 
In the measurement of assets utilized by each reportable segment, we include Inventories, Accounts receivable, net, Contract assets, net, Noncurrent receivables, net, Property, plant and equipment, net, Intangibles, net and Goodwill. On November 20, 2019, the Company acquired CirComp GmbH, resulting in a $35.3 million increase in AEC assets.
The following table presents assets and capital expenditures by reportable segment:
(in thousands)
202020192018
Segment assets
Machine Clothing
$443,476 $441,072 $453,836 
Albany Engineered Composites
713,955 693,799 633,394 
Reconciling items:
Cash
241,316 195,540 197,755 
Income taxes prepaid, receivable and deferred
44,697 57,783 70,095 
Prepaid and Other assets
106,492 86,174 62,912 
Consolidated total assets
$1,549,936 $1,474,368 $1,417,992 
Capital expenditures and purchased software
Machine Clothing
$15,792 $16,707 $20,230 
Albany Engineered Composites
23,718 48,753 60,121 
Corporate expenses
2,880 2,495 2,535 
Consolidated total
$42,390 $67,955 $82,886 
At the January 1, 2018 date of adoption of ASC 606, MC assets increased by $22.5 million, and AEC assets decreased by $14.1 million. Excluded from segment assets are cash, tax related assets, prepaid and other current assets, and certain other assets not directly associated with segment operations.
In 2018, AEC finalized a modification to the lease of its primary manufacturing facility in Salt Lake City, Utah, which increased the manufacturing space and extended the minimum lease period until December 31, 2029. The lease modification resulted in a non-cash increase of $12.7 million to both Property, plant and equipment, net, and to Long-term debt in the Consolidated Balance Sheets in 2018. Effective January 1, 2019, we adopted the provisions of ASC 842, Leases, which resulted in changes to the amount and classification of the associated assets and liabilities, as depicted in Note 20. Due to the non-cash nature of the modification and subsequent adoption of the new Lease accounting standard, changes during both 2018 and 2019 are excluded from amounts reported in the Consolidated Statements of Cash Flows.
The following table shows data by geographic area. Net sales are based on the location of the operation recording the final sale to the customer. Net sales recorded by our entity in Switzerland are derived from products sold throughout Europe and Asia, and are invoiced in various currencies.
(in thousands)
202020192018
Net sales
United States
$503,473 $574,063 $519,349 
Switzerland
128,328 146,571 157,339 
Brazil60,259 64,666 62,093 
China
57,007 48,586 50,923 
France
55,914 91,783 85,386 
Mexico
39,859 73,039 48,534 
Other countries
55,770 55,424 58,855 
Consolidated total
$900,610 $1,054,132 $982,479 
Property, plant and equipment, at cost, net
United States
$263,201 $275,965 $272,584 
Mexico
41,738 45,640 40,343 
France
41,107 43,986 50,245 
China
40,898 41,799 48,686 
Sweden12,109 8,652 8,394 
Germany (a)
10,808 10,577 27 
United Kingdom
10,731 11,047 12,042 
South Korea
10,550 10,795 12,396 
Other countries
17,412 18,001 17,338 
Consolidated total
$448,554 $466,462 $462,055 
(a)In 2019, the Company acquired CirComp GmbH, which resulted in an increase in Property, plant and equipment of $10.6 million.