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Noncontrolling Interest
12 Months Ended
Dec. 31, 2019
Noncontrolling Interest [Abstract]  
Noncontrolling Interest

10. Noncontrolling Interest

Effective October 31, 2013, Safran S.A. (Safran) acquired a 10 percent equity interest in a new Albany subsidiary, Albany Safran Composites, LLC (ASC). Under the terms of the transaction agreements, ASC will be the exclusive supplier to Safran of advanced 3D-woven composite parts for use in aircraft and rocket engines, thrust reversers and nacelles, and aircraft landing and braking systems (the “Safran Applications”). AEC may develop and supply parts other than advanced 3D-woven composite parts for all aerospace applications, as well as advanced 3D-woven composite parts for any aerospace applications that are not Safran Applications (such as airframe applications) and any non-aerospace applications.

The agreement provides Safran an option to purchase Albany’s remaining 90 percent interest upon the occurrence of certain bankruptcy or performance default events, or if Albany’s Engineered Composites business is sold to a direct competitor of Safran. The purchase price is based initially on the same valuation of ASC used to determine Safran’s 10 percent equity interest, and increases over time as LEAP production increases.

In accordance with the operating agreement, Albany received a $28 million preferred holding in ASC which includes a preferred return based on the Company’s revolving credit agreement. The common shares of ASC are owned 90 percent by Albany and 10 percent by Safran.

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ALBANY INTERNATIONAL CORP.

Notes to Consolidated Financial Statements

10. Noncontrolling Interest — (continued)

The table below presents a reconciliation of income attributable to the noncontrolling interest and noncontrolling equity in the Company’s subsidiary Albany Safran Composites, LLC, and the impact of transitioning to ASC 606:

(in thousands, except percentages)

 

2019

 

2018

Net income of Albany Safran Composites (ASC)

 

$11,140

 

$2,578

Less: Return attributable to the Company's preferred holding

 

1,291

 

1,299

Net income of ASC available for common ownership

 

$9,849

 

$1,279

Ownership percentage of noncontrolling shareholder

 

10%

 

10%

Net income attributable to noncontrolling interest

 

$985

 

$128

 

 

 

 

 

Noncontrolling interest, beginning of year

 

$3,031

 

$3,247

Decrease attributable to 2018 adoption of ASC 606

 

 

(327)

Net income/(loss) attributable to noncontrolling interest

 

985

 

128

Changes in other comprehensive income attributable to noncontrolling interest

 

(10)

 

(17)

Noncontrolling interest, end of year

 

$4,006

 

$3,031