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Reportable Segments and Geographic Data
 12 Months Ended
Dec. 31, 2022
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, provides highly engineered, advanced composite structures to customers in the commercial and defense aerospace industries. The segment includes Albany Safran Composites, LLC (“ASC”), in which our customer, SAFRAN Group, owns a 10 percent noncontrolling interest, AEC, through ASC, is the exclusive supplier to the LEAP program of advanced composite fan blades and fan cases under a long-term supply contract.
The LEAP engine is used on the Airbus A320neo, Boeing 737 MAX, and COMAC 919 aircrafts. AEC’s largest aerospace customer is SAFRAN and sales to SAFRAN (consisting primarily of fan blades and cases for CFM’s LEAP engine) accounted for approximately 16 percent of the Company’s consolidated Net sales in 2022. In 2022, SAFRAN leased manufacturing space from AEC for the GE9X program. Rent paid by SAFRAN under this lease amounted to $0.9 million in both 2022 and 2021. AEC Net sales to SAFRAN were $169.3 million in 2022, $111.6 million in 2021, and $99.0 million in 2020. The total of Accounts receivable, Contract assets and Noncurrent receivable due from SAFRAN amounted to $80.8 million and $79.6 million as of December 31, 2022 and 2021, respectively.
Other significant programs by AEC include the Sikorsky CH-53K, F-35, JASSM, and Boeing 787 programs. AEC also supplies vacuum waste tanks for the Boeing 7-Series programs, and specialty components for the Rolls Royce lift fan on the F-35. In 2022, 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)
202220212020
Net Sales
Machine Clothing
$609,461 $619,015 $572,955 
Albany Engineered Composites
425,426 310,225 327,655 
Consolidated total
$1,034,887 $929,240 $900,610 
Depreciation and amortization
Machine Clothing
19,483 20,191 20,304 
Albany Engineered Composites
46,202 50,402 48,496 
Corporate expenses
3,364 3,662 3,905 
Consolidated total
$69,049 $74,255 $72,705 
Operating income/(loss)
Machine Clothing
206,214 215,654 190,805 
Albany Engineered Composites
31,579 16,160 31,536 
Corporate expenses
(56,771)(53,803)(56,261)
Operating income
$181,022 $178,011 $166,080 
Reconciling items:
Interest income
(3,835)(2,500)(2,748)
Interest expense
17,835 17,391 16,332 
Pension settlement expense49,128 — — 
AMJP grant— (5,832)— 
Other expense, net
(14,086)3,021 13,422 
Income before income taxes
$131,980 $165,931 $139,074 
A subsidiary within our Machine Clothing segment has been a partner in a joint venture (“JV”) that supplies paper machine clothing products to local papermakers in Russia. In March 2022, we made the decision to cease doing business in Russia, including giving notice to our JV partner of our intent to exit the venture. As a result, we recognized $1.5 million expense in the consolidated statement of operations, representing reserves against the risk of uncollectible customer receivables and obsolescence of certain inventory destined for Russian customers. We also wrote down the net book value of our investment in the aforementioned JV to reflect our intent to exit such venture, resulting in $0.8 million impairment loss during the first quarter of 2022.
In the third quarter, we took actions to settle certain pension plan liabilities in the U.S., leading to charges totaling $49.1 million, which were included as Corporate expenses and other. This led to a reduction of unfunded pension liabilities of $6.2 million.
The table below presents restructuring costs by reportable segment (also see Note 5):
(in thousands)
202220212020
Restructuring expenses, net
Machine Clothing
$92 $1,202 $2,746 
Albany Engineered Composites
— 32 2,821 
Corporate expenses
14 97 169 
Consolidated total
$106 $1,331 $5,736 
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.
The following table presents assets and capital expenditures by reportable segment:
(in thousands)
202220212020
Segment assets
Machine Clothing
$455,390 $459,182 $443,476 
Albany Engineered Composites
717,972 652,702 713,955 
Reconciling items:
Cash
291,776 302,036 241,316 
Income taxes prepaid, receivable and deferred
23,134 28,334 44,697 
Prepaid and Other assets
153,983 113,810 106,492 
Consolidated total assets
$1,642,255 $1,556,064 $1,549,936 
Capital expenditures and purchased software
Machine Clothing
$20,093 $20,177 $15,792 
Albany Engineered Composites
73,614 31,012 23,718 
Corporate expenses2,641 2,510 2,880 
Consolidated total
$96,348 $53,699 $42,390 
In 2022, the Company extended the lease of its primary manufacturing facility in Salt Lake City, Utah, which resulted in a lease classification change from Finance to Operating and included a non-cash increase of $37.1 million to both Other assets and to Other noncurrent liabilities in the Consolidated Balance Sheets. Due to the non-cash nature of the transaction, those increases 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)
202220212020
Net sales
United States
$586,779 $497,231 $503,473 
Switzerland119,069 128,698 128,328 
France76,826 68,929 55,914 
Brazil66,175 62,925 60,259 
China63,914 67,098 57,007 
Mexico58,519 37,547 39,859 
Italy20,074 21,523 12,424 
Other countries
43,531 45,289 43,346 
Consolidated total
$1,034,887 $929,240 $900,610 
Property, plant and equipment, at cost, net
United States
$278,500 $258,453 $263,201 
Mexico42,320 40,699 41,738 
China33,432 41,039 40,898 
France31,382 33,802 41,107 
Canada14,264 14,139 9,672 
Sweden11,388 12,355 12,109 
United Kingdom9,699 10,156 10,731 
Germany9,562 9,652 10,808 
Other countries
15,111 16,122 18,290 
Consolidated total
$445,658 $436,417 $448,554