Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2018

Revenue Recognition [Abstract]

Schedule of Consolidated Balance Sheet

The table below presents the cumulative effect of changes made to our December 31, 2017 Consolidated Balance Sheet as the result of adoption of ASC 606:

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEET

(in thousands, except share data)

(unaudited)

	As previously reported at December 31, 2017		Adjustments Increase/(decrease)		Opening balance, as adjusted, January 1, 2018
ASSETS
Cash and cash equivalents	$183,727		$-		$183,727
Accounts receivable, net	202,675		7,667		210,342
Contract assets	-		47,415		47,415
Inventories	136,519		(47,054	)	89,465
Income taxes prepaid and receivable	6,266		-		6,266
Prepaid expenses and other current assets	14,520		-		14,520
Total current assets	543,707		8,028		551,735
Property, plant and equipment, net	454,302		-		454,302
Intangibles, net	55,441		-		55,441
Goodwill	166,796		-		166,796
Deferred income taxes	68,648		1,756		70,404
Noncurrent receivables	32,811		-		32,811
Other assets	39,493		1,119		40,612
Total assets	$1,361,198		$10,903		$1,372,101
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes and loans payable	$262		$-		$262
Accounts payable	44,899		-		44,899
Accrued liabilities	105,914		16,808		122,722
Current maturities of long-term debt	1,799		-		1,799
Income taxes payable	8,643		-		8,643
Total current liabilities	161,517		16,808		178,325
Long-term debt	514,120		-		514,120
Other noncurrent liabilities	101,555		-		101,555
Deferred taxes and other liabilities	10,991		52		11,043
Total liabilities	788,183		16,860		805,043
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; issued 37,395,753 in 2017
and 37,319,266 in 2016	37		-		37
Class B Common Stock, par value $.001 per share;
authorized 25,000,000 shares; issued and
outstanding 3,233,998 in 2017 and 2016	3		-		3
Additional paid in capital	428,423		-		428,423
Retained earnings	534,082		(5,630	)	528,452
Accumulated items of other comprehensive income:
Translation adjustments	(87,318	)	-		(87,318	)
Pension and postretirement liability adjustments	(50,536	)	-		(50,536	)
Derivative valuation adjustment	1,953		-		1,953
Treasury stock (Class A), at cost 8,431,335 shares in 2017
and 8,443,444 shares in 2016	(256,876	)	-		(256,876	)
Total Company shareholders' equity	569,768		(5,630	)	564,138
Noncontrolling interest	3,247		(327	)	2,920
Total equity	573,015		(5,957	)	567,058
Total liabilities and shareholders' equity	$1,361,198		$10,903		$1,372,101

Schedule of Summary of Composition of Each Business Segment

The following table provides a summary of the composition of each business segment:

Segment	Reporting Unit	Principal Product or Service	Principal Locations
Machine Clothing (MC)	Machine Clothing	Paper machine clothing: Permeable and impermeable belts used in the manufacture of paper, paperboard, tissue and towel, and pulp Engineered fabrics: Belts used in the manufacture of nonwovens, fiber cement and several other industrial applications	World-wide
Albany Engineered Composites (AEC)	Albany Safran Composites (ASC)	3D-woven, injected composite components for aircraft engines	Rochester, NH Commercy, France Queretaro, Mexico
	Airframe and engine Components (Other AEC)	Composite airframe and engine components for military and commercial aircraft	Salt Lake City, UT Boerne, TX Queretaro, Mexico

Schedule of Disaggregate Revenue for Each Business Segment

The following table disaggregates revenue for each reporting unit by timing of revenue recognition:

		For the Six Months Ended
		June 30, 2018
(in thousands)		Point in Time Revenue Recognition	Over Time Revenue Recognition	Total
Machine Clothing		$309,186	$1,600	$310,786
Albany Engineered Composites
	ASC	-	87,806	87,806
	Other AEC	11,744	75,870	87,614
Total Albany Engineered Composites		11,744	163,676	175,420
Total Revenue		$320,930	$165,276	$486,206

Schedule of Disaggregate MC Segment Revenue by Significant Product or Service

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:

	For the Six Months Ended
(in thousands)	June 30, 2018
Americas PMC	$152,686
Eurasia PMC	116,500
Engineered Fabrics	41,600
Total Machine Clothing Net sales	$310,786

Schedule of Consolidated Statement of Income

The following tables show the balances as reported for the period ended June 30, 2018, and how the consolidated financial statements would have appeared if we had not adopted ASC 606.

ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share amounts)
(unaudited)
As reported for the Three Months Ended June 30, 2018	Adjustments to reverse effects of ASC 606	As adjusted for the Three Months Ended June 30, 2018 to exclude adoption of ASC 606		As reported for the Six Months Ended June 30, 2018	Adjustments to reverse effects of ASC 606	As adjusted for the Six Months Ended June 30, 2018 to exclude adoption of ASC 606
$256,225	$400	$256,625	Net sales	$486,206	($8,034)	$478,172
164,047	2,304	166,351	Cost of goods sold	312,377	(4,222)	308,155
92,178	(1,904)	90,274	Gross profit	173,829	(3,812)	170,017
36,707	5	36,712	Selling, general, and administrative expenses	78,637	(55)	78,582
10,198	-	10,198	Technical and research expenses	20,515	-	20,515
2,589	-	2,589	Restructuring expenses, net	11,162	-	11,162
42,684	(1,909)	40,775	Operating income	63,515	(3,757)	59,758
4,621	-	4,621	Interest expense, net	8,909	-	8,909
726	-	726	Other expense, net	2,178	-	2,178
37,337	(1,909)	35,428	Income before income taxes	52,428	(3,757)	48,671
7,031	(507)	6,524	Income tax expense	11,640	(1,108)	10,532
30,306	(1,402)	28,904	Net income	40,788	(2,649)	38,139
(59)	(27)	(86)	Net income/(loss) attributable to the noncontrolling interest	178	(84)	94
$30,365	($1,375)	$28,990	Net income attributable to the Company	$40,610	($2,565)	$38,045
$0.94	($0.04)	$0.90	Earnings per share attributable to Company shareholders - Basic	$1.26	($0.08)	$1.18
$0.94	($0.04)	$0.90	Earnings per share attributable to Company shareholders - Diluted	$1.26	($0.08)	$1.18

Schedule of Consolidated Statement of Comprehensive Income (Loss)

ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/(LOSS)
(in thousands)
(unaudited)
As reported for the Three Months Ended June 30, 2018	Adjustments to reverse effects of ASC 606	As adjusted for the Three Months Ended June 30, 2018 to exclude adoption of ASC 606		As reported for the Six Months Ended June 30, 2018	Adjustments to reverse effects of ASC 606	As adjusted for the Six Months Ended June 30, 2018 to exclude adoption of ASC 606
$30,306	($1,402)	$28,904	Net income	$40,788	($2,649)	$38,139
			Other comprehensive income/(loss), before tax:
(30,851)	839	(30,012)	Foreign currency translation adjustments	(13,346)	531	(12,815)
(518)	-	(518)	Pension/postretirement curtailment	(518)	-	(518)
			Amortization of pension liability adjustments:
(1,113)	-	(1,113)	Prior service credit	(2,227)	-	(2,227)
1,291	-	1,291	Net actuarial loss	2,588	-	2,588
54	-	54	Payments and amortization related to interest rate swaps included in earnings	234	-	234
2,211	-	2,211	Derivative valuation adjustment	7,926	-	7,926
			Income taxes related to items of other comprehensive income/(loss):
155	-	155	Pension/postretirement curtailment	155	-	155
(53)	-	(53)	Amortization of pension liability adjustment	(108)	-	(108)
(13)	-	(13)	Payments related to interest rate swaps included in earnings	(56)	-	(56)
(530)	-	(530)	Derivative valuation adjustment	(1,902)	-	(1,902)
939	(563)	376	Comprehensive income	33,534	(2,118)	31,416
(48)	(27)	(75)	Comprehensive income attributable to the noncontrolling interest	182	(84)	98
$987	($536)	$451	Comprehensive income attributable to the Company	$33,352	($2,034)	$31,318

Schedule of Consolidated Balance Sheets

ALBANY INTERNATIONAL CORP.

CONSOLIDATED BALANCE SHEET

(in thousands, except share data)

(unaudited)

	As reported June 30, 2018		Adjustments to reverse effects of ASC 606		As adjusted for June 30, 2018 to exclude adoption of ASC 606
ASSETS
Cash and cash equivalents	$154,744		$-		$154,744
Accounts receivable, net	249,482		(4,286	)	245,196
Contract assets	59,244		(59,244	)	-
Inventories	97,659		51,736		149,395
Income taxes prepaid and receivable	6,087		-		6,087
Prepaid expenses and other current assets	19,559		-		19,559
Total current assets	586,775		(11,794	)	574,981
Property, plant and equipment, net	450,694		-		450,694
Intangibles, net	52,322		-		52,322
Goodwill	165,474		-		165,474
Deferred income taxes	81,237		(648	)	80,589
Noncurrent receivables	36,981		-		36,981
Other assets	48,978		(1,256	)	47,722
Total assets	$1,422,461		($13,698	)	$1,408,763
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes and loans payable	$26		$-		$26
Accounts payable	54,752		-		54,752
Accrued liabilities	125,255		(17,485	)	107,770
Current maturities of long-term debt	1,844		-		1,844
Income taxes payable	14,620		-		14,620
Total current liabilities	196,497		(17,485	)	179,012
Long-term debt	523,186		-		523,186
Other noncurrent liabilities	97,563		-		97,563
Deferred taxes and other liabilities	13,556		(52	)	13,504
Total liabilities	830,802		(17,537	)	813,265
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; issued 37,447,819 in     2018 and 37,395,753 in 2017	37		-		37
Class B Common Stock, par value $.001 per share;
authorized 25,000,000 shares; issued and
outstanding 3,233,998 in 2018 and 2017	3		-		3
Additional paid in capital	429,635		-		429,635
Retained earnings	558,639		$3,065		561,704
Accumulated items of other comprehensive income:
Translation adjustments	(102,888	)	531		(102,357	)
Pension and postretirement liability adjustments	(48,422	)	-		(48,422	)
Derivative valuation adjustment	8,155		-		8,155
Treasury stock (Class A), at cost 8,418,620 shares in 2018
and 8,431,335 shares in 2017	(256,602	)	-		(256,602	)
Total Company shareholders' equity	588,557		3,596		592,153
Noncontrolling interest	3,102		243		3,345
Total equity	591,659		3,839		595,498
Total liabilities and shareholders' equity	$1,422,461		($13,698	)	$1,408,763

Schedule of Consolidated Statement of Cash Flows

ALBANY INTERNATIONAL CORP.

CONSOLIDATED STATEMENT OF CASH FLOW

(in thousands)

(unaudited)

As reported for the Three Months Ended June 30, 2018	Adjustments to reverse effects of ASC 606	As adjusted for the Three Months Ended June 30, 2018 to exclude adoption of ASC 606			As reported for the Six Months Ended June 30, 2018	Adjustments to reverse effects of ASC 606	As adjusted for the Six Months Ended June 30, 2018 to exclude adoption of ASC 606
			OPERATING ACTIVITIES
$30,306	($1,402)	$28,904	Net income		$40,788	($2,649)	$38,139
			Adjustments to reconcile net income to net cash provided by operating activities:
17,114	-	17,114		Depreciation	35,416	-	35,416
2,559	-	2,559		Amortization	5,205	-	5,205
(854)	-	(854)		Change in other noncurrent liabilities	(1,231)	-	(1,231)
(6,118)	(507)	(6,625)		Change in deferred taxes and other liabilities	(6,902)	(1,108)	(8,010)
853	-	853		Provision for write-off of property, plant and equipment	1,124	-	1,124
154	-	154		Non-cash interest expense	154	-	154
1,047	-	1,047		Compensation and benefits paid or payable in Class A Common Stock	1,336	-	1,336
34	-	34		Fair valule adjustment on foreign currency option	71	-	71
			Changes in operating assets and liabilities that (used)/provided cash:
(12,903)	(14,277)	(27,180)		Accounts receivable	(44,370)	(3,727)	(48,097)
(13,877)	13,877	-		Contract assets	(11,761)	11,761	-
(1,371)	2,304	933		Inventories	(10,615)	(4,222)	(14,837)
(1,157)	-	(1,157)		Prepaid expenses and other current assets	(5,220)	-	(5,220)
(5)	-	(5)		Income taxes prepaid and receivable	97	-	97
11,420	-	11,420		Accounts payable	8,882	-	8,882
5,853	5	5,858		Accrued liabilities	4,668	(55)	4,613
10,020	-	10,020		Income taxes payable	6,589	-	6,589
(1,643)	-	(1,643)		Noncurrent receivables	(4,170)	-	(4,170)
(5,745)	-	(5,745)		Other, net	(3,321)	-	(3,321)
35,687	-	35,687		Net cash provided by operating activities	16,740	-	16,740
(23,375)	-	(23,375)		Net cash used in investing activities	(39,175)	-	(39,175)
(1,112)	-	(1,112)		Net cash used in financing activities	(3,570)	-	(3,570)
(7,882)	-	(7,882)	Effect of exchange rate changes on cash and cash equivalents		(2,978)	-	(2,978)
3,318	-	3,318	(Decrease)/increase in cash and cash equivalents		(28,983)	-	(28,983)
151,426	-	151,426	Cash and cash equivalents at beginning of period		183,727	-	183,727
$154,744	$   -	$154,744	Cash and cash equivalents at end of period		$154,744	$   -	$154,744