Revenue Recognition (Tables)

9 Months Ended

Sep. 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 Nine Months Ended
	September 30, 2018
(in thousands)	Point in Time Revenue Recognition	Over Time Revenue Recognition	Total
Machine Clothing	$467,358	$2,400	$469,758
Albany Engineered Composites
ASC	-	134,972	134,972
Other AEC	15,909	118,820	134,729
Total Albany Engineered Composites	15,909	253,792	269,701
Total revenue	$483,267	$256,192	$739,459

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 Nine Months Ended
(in thousands)	September 30, 2018
Americas PMC	$232,358
Eurasia PMC	176,300
Engineered Fabrics	61,100
Total Machine Clothing Net sales	$469,758

Schedule of Consolidated Statement of Income

The following tables show the balances as reported for the period ended September 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 September 30, 2018	Adjustments to reverse effects of ASC 606	As adjusted for the Three Months Ended September 30, 2018 to exclude adoption of ASC 606		As reported for the Nine Months Ended September 30, 2018	Adjustments to reverse effects of ASC 606	As adjusted for the Nine Months Ended September 30, 2018 to exclude adoption of ASC 606
$253,253	$1,692	$254,945	Net sales	$739,459	($6,342)	$733,117
160,227	2,902	163,129	Cost of goods sold	472,604	(1,320)	471,284
93,026	(1,210)	91,816	Gross profit	266,855	(5,022)	261,833
39,071	(12)	39,059	Selling, general, and administrative expenses	117,708	(67)	117,641
9,958	-	9,958	Technical and research expenses	30,473	-	30,473
2,552	-	2,552	Restructuring expenses, net	13,714	-	13,714
41,445	(1,198)	40,247	Operating income	104,960	(4,955)	100,005
4,621	-	4,621	Interest expense, net	13,530	-	13,530
(3,151)	-	(3,151)	Other (income)/expense, net	(973)	-	(973)
39,975	(1,198)	38,777	Income before income taxes	92,403	(4,955)	87,448
11,491	(431)	11,060	Income tax expense	23,131	(1,539)	21,592
28,484	(767)	27,717	Net income	69,272	(3,416)	65,856
269	(27)	242	Net income/(loss) attributable to the noncontrolling interest	447	(111)	336
$28,215	($740)	$27,475	Net income attributable to the Company	$68,825	($3,305)	$65,520
$0.87	($0.02)	$0.85	Earnings per share attributable to Company shareholders - Basic	$2.13	($0.10)	$2.03
$0.87	($0.02)	$0.85	Earnings per share attributable to Company shareholders - Diluted	$2.13	($0.10)	$2.03

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 September 30, 2018	Adjustments to reverse effects of ASC 606	As adjusted for the Three Months Ended September 30, 2018 to exclude adoption of ASC 606		As reported for the Nine Months Ended September 30, 2018	Adjustments to reverse effects of ASC 606	As adjusted for the Nine Months Ended September 30, 2018 to exclude adoption of ASC 606
$28,484	($767)	$27,717	Net income	$69,272	($3,416)	$65,856
			Other comprehensive income/(loss), before tax:
(7,847)	157	(7,690)	Foreign currency translation adjustments	(21,193)	688	(20,505)
(232)	-	(232)	Pension/postretirement curtailment gain	(750)	-	(750)
			Amortization of pension liability adjustments:
(1,114)	-	(1,114)	Prior service credit	(3,341)	-	(3,341)
1,294	-	1,294	Net actuarial loss	3,882	-	3,882
(96)	-	(96)	Payments and amortization related to interest rate swaps included in earnings	138	-	138
1,777	-	1,777	Derivative valuation adjustment	9,703	-	9,703
			Income taxes related to items of other comprehensive income/(loss):
70	-	70	Pension/postretirement curtailment gain	225	-	225
(54)	-	(54)	Amortization of pension liability adjustment	(162)	-	(162)
23	-	23	Payments and amortization related to interest rate swaps included in earnings	(33)	-	(33)
(427)	-	(427)	Derivative valuation adjustment	(2,329)	-	(2,329)
21,878	(610)	21,268	Comprehensive income	55,412	(2,728)	52,684
264	(27)	237	Comprehensive income/(loss) attributable to the noncontrolling interest	446	(111)	335
$21,614	($583)	$21,031	Comprehensive income attributable to the Company	$54,966	($2,617)	$52,349

Schedule of Consolidated Balance Sheets

ALBANY INTERNATIONAL CORP.
CONSOLIDATED BALANCE SHEET
(in thousands, except share data)
(unaudited)

	As reported September 30, 2018		Adjustments to reverse effects of ASC 606		As adjusted for September 30, 2018 to exclude adoption of ASC 606
ASSETS
Cash and cash equivalents	$160,593		$-		$160,593
Accounts receivable, net	252,464		(8,784	)	243,680
Contract assets	56,100		(56,100	)	-
Inventories	99,765		50,458		150,223
Income taxes prepaid and receivable	6,643		-		6,643
Prepaid expenses and other current assets	20,541		-		20,541
Total current assets	596,106		(14,426	)	581,680
Property, plant and equipment, net	462,438		-		462,438
Intangibles, net	50,765		-		50,765
Goodwill	165,103		-		165,103
Deferred income taxes	79,865		(217	)	79,648
Noncurrent receivables	41,657		-		41,657
Other assets	52,392		(1,256	)	51,136
Total assets	$1,448,326		($15,899	)	$1,432,427
LIABILITIES AND SHAREHOLDERS’ EQUITY
Notes and loans payable	$-		$-		$-
Accounts payable	51,373		-		51,373
Accrued liabilities	132,219		(19,076	)	113,143
Current maturities of long-term debt	1,231		-		1,231
Income taxes payable	20,725		-		20,725
Total current liabilities	205,548		(19,076	)	186,472
Long-term debt	529,003		-		529,003
Other noncurrent liabilities	92,218		-		92,218
Deferred taxes and other liabilities	12,915		(52	)	12,863
Total liabilities	839,684		(19,128	)	820,556
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 37,450,329 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	430,231		-		430,231
Retained earnings	581,369		$2,325		583,694
Accumulated items of other comprehensive income:
Translation adjustments	(110,900	)	688		(110,212	)
Pension and postretirement liability adjustments	(48,293	)	-		(48,293	)
Derivative valuation adjustment	9,432		-		9,432
Treasury stock (Class A), at cost 8,418,620 shares in 2018 and 8,431,335 shares in 2017	(256,603	)	-		(256,603	)
Total Company shareholders’ equity	605,276		3,013		608,289
Noncontrolling interest	3,366		216		3,582
Total equity	608,642		3,229		611,871
Total liabilities and shareholders’ equity	$1,448,326		($15,899	)	$1,432,427

Schedule of Consolidated Statement of Cash Flows

ALBANY INTERNATIONAL CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(unaudited)

As reported for the Three Months Ended September 30, 2018		Adjustments to reverse effects of ASC 606		As adjusted for the Three Months Ended September 30, 2018 to exclude adoption of ASC 606		As reported for the Nine Months Ended September 30, 2018		Adjustments to reverse effects of ASC 606		As adjusted for the Nine Months Ended September 30, 2018 to exclude adoption of ASC 606
					OPERATING ACTIVITIES
$28,484		($767)		$27,717	Net income	$69,272		($3,416)		$65,856
					Adjustments to reconcile net income to net cash provided by operating activities:
17,436		-		17,436	Depreciation	52,852		-		52,852
2,366		-		2,366	Amortization	7,571		-		7,571
(5,102)		-		(5,102)	Change in other noncurrent liabilities	(6,333)		-		(6,333)
1,331		(431)		900	Change in deferred taxes and other liabilities	(5,571)		(1,539)		(7,110)
2,131		-		2,131	Provision for write-off of property, plant and equipment	3,255		-		3,255
150		-		150	Non-cash interest expense	304		-		304
543		-		543	Compensation and benefits paid or payable in Class A Common Stock	1,879		-		1,879
(10)		-		(10)	Fair value adjustment on foreign currency option	61		-		61
-		-		-	Write-off of intangible assets in a discontinued product line	-
					Changes in operating assets and liabilities that provided/(used) cash:
(4,177)		1,348		(2,829)	Accounts receivable	(48,547)		(2,379)		(50,926)
3,040		(3,040)		-	Contract assets	(8,721)		8,721		-
(2,228)		2,902		674	Inventories	(12,843)		(1,320)		(14,163)
103		-		103	Prepaid expenses and other current assets	(5,117)		-		(5,117)
(551)		-		(551)	Income taxes prepaid and receivable	(454)		-		(454)
(2,728)		-		(2,728)	Accounts payable	6,154		-		6,154
7,565		(12)		7,553	Accrued liabilities	12,233		(67)		12,166
6,766		-		6,766	Income taxes payable	13,355		-		13,355
(4,676)		-		(4,676)	Noncurrent receivables	(8,846)		-		(8,846)
(5,728)		-		(5,728)	Other, net	(9,049)		-		(9,049)
44,715		-		44,715	Net cash provided by operating activities	61,455		-		61,455
(21,519)		-		(21,519)	Net cash used in investing activities	(60,694)		-		(60,694)
(12,904)		-		(12,904)	Net cash used in financing activities	(16,474)		-		(16,474)
(4,443)		-		(4,443)	Effect of exchange rate changes on cash and cash equivalents	(7,421)		-		(7,421)
5,849	#	-	#	5,849	(Decrease)/increase in cash and cash equivalents	(23,134)	#	-	#	(23,134)
154,744		-		154,744	Cash and cash equivalents at beginning of period	183,727		-		183,727
$160,593		$ -		$160,593	Cash and cash equivalents at end of period	$160,593		$ -		$160,593