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Reportable Segments and Geographic Data | 12 Months Ended
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Dec. 31, 2017
Segment Reporting [Abstract] |
Reportable Segments and Geographic Data | 3. 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 segment supplies permeable and impermeable belts used in the manufacture of paper, paperboard, nonwovens, fiber cement and several other industrial applications. The Machine Clothing segment also supplies customized, consumable fabrics used in the manufacturing process in the pulp, corrugator, nonwovens, fiber cement, building products, and tannery and textile industries. We sell our Machine Clothing products directly to customer end-users in countries across the globe. Our products, manufacturing processes, and distribution channels for Machine Clothing are substantially the same in each region of the world in which we operate. We design, manufacture, and market paper machine clothing 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 aerospace and defense 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. AEC net sales to Safran were $119.2 million in 2017, $88.9 million in 2016, and $58.1 million in 2015. The total of invoiced receivables, unbilled receivables and contract receivables due from Safran amounted to $58.6 million and $37.1 million as of December 31, 2017 and 2016, respectively. Other significant AEC programs include components for the F-35 Joint Strike Fighter, fuselage frame components for the Boeing 787, and the fan case for the GE9X engine. In 2017, approximately 30 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) |  | 2017 |  |  | 2016 |  |  | 2015 |
Net Sales |  |  |  |  |  |  |  |  |
Machine Clothing |  | $590,357 |  |  | $582,190 |  |  | $608,581 |
Albany Engineered Composites |  | 273,360 |  |  | 197,649 |  |  | 101,287 |
Consolidated total |  | $863,717 |  |  | $779,839 |  |  | $709,868 |
Depreciation and amortization |  |  |  |  |  |  |  |  |
Machine Clothing |  | 33,527 |  |  | 36,428 |  |  | 39,503 |
Albany Engineered Composites |  | 33,533 |  |  | 24,211 |  |  | 12,140 |
Corporate expenses |  | 4,896 |  |  | 6,822 |  |  | 8,471 |
Consolidated total |  | $71,956 |  |  | $67,461 |  |  | $60,114 |
Operating income/(loss) |  |  |  |  |  |  |  |  |
Machine Clothing |  | 153,936 |  |  | 152,529 |  |  | 141,311 |
Albany Engineered Composites |  | (31,657 | ) |  | (15,363 | ) |  | (28,478 | )
Corporate expenses |  | (46,128 | ) |  | (45,390 | ) |  | (48,938 | )
Operating income |  | $76,151 |  |  | $91,776 |  |  | $63,895 |
Reconciling items: |  |  |  |  |  |  |  |  |
Interest income |  | (1,511 | ) |  | (2,077 | ) |  | (1,857 | )
Interest expense |  | 18,602 |  |  | 15,541 |  |  | 11,841 |
Other expense, net |  | 4,352 |  |  | 46 |  |  | 2,433 |
Income before income taxes |  | $54,708 |  |  | $78,266 |  |  | $51,478 |
The table below presents restructuring costs by reportable segment (also see Note 5):
(in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Restructuring expenses, net |  |  |  |  |  |  |  |  |
Machine Clothing |  | $3,429 |  |  | $6,069 |  |  | $22,211 |
Albany Engineered Composites |  | 10,062 |  |  | 2,314 |  |  | - |
Corporate expenses |  | - |  |  | (7 | ) |  | 1,635 |
Consolidated total |  | $13,491 |  |  | $8,376 |  |  | $23,846 |
In the measurement of assets utilized by each reportable segment, we include accounts and contract receivables, inventories, net property, plant and equipment, intangibles and goodwill. Excluded from segment assets are cash, tax related assets, prepaid and other current assets, and certain other assets not directly associated with segment operations. The following table presents assets and capital expenditures by reportable segment:
(in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Segment assets |  |  |  |  |  |  |  |  |
Machine Clothing |  | $464,468 |  |  | $454,010 |  |  | $494,347 |
Albany Engineered Composites |  | 584,076 |  |  | 514,527 |  |  | 181,825 |
Reconciling items: |  |  |  |  |  |  |  |  |
Cash |  | 183,727 |  |  | 181,742 |  |  | 185,113 |
Asset held for sale |  | - |  |  | - |  |  | 4,988 |
Income taxes prepaid, receivable and deferred |  | 74,914 |  |  | 74,078 |  |  | 111,872 |
Other assets |  | 54,013 |  |  | 39,076 |  |  | 31,417 |
Consolidated total assets |  | $1,361,198 |  |  | $1,263,433 |  |  | $1,009,562 |
Capital expenditures and purchased software |  |  |  |  |  |  |  |  |
Machine Clothing |  | $20,522 |  |  | $15,651 |  |  | $16,010 |
Albany Engineered Composites |  | 63,865 |  |  | 54,678 |  |  | 30,378 |
Corporate expenses |  | 3,250 |  |  | 3,163 |  |  | 4,207 |
Consolidated total |  | $87,637 |  |  | $73,492 |  |  | $50,595 |
In 2016, the Company recorded expense of $5.4 million for cost directly related to the acquisition. These costs are included in Selling, general and administrative expenses of the AEC segment. 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) |  | 2017 |  |  | 2016 |  |  | 2015 |
Net sales |  |  |  |  |  |  |  |  |
United States |  | $459,525 |  |  | $396,238 |  |  | $323,399 |
Switzerland |  | 147,601 |  |  | 145,479 |  |  | 159,804 |
Brazil |  | 60,535 |  |  | 60,287 |  |  | 58,846 |
China |  | 48,920 |  |  | 48,043 |  |  | 48,490 |
France |  | 57,195 |  |  | 42,862 |  |  | 26,081 |
Mexico |  | 31,902 |  |  | 27,526 |  |  | 30,581 |
Other countries |  | 58,039 |  |  | 59,404 |  |  | 62,667 |
Consolidated total |  | $863,717 |  |  | $779,839 |  |  | $709,868 |
Property, plant and equipment, at cost, net |  |  |  |  |  |  |  |  |
United States |  | $252,639 |  |  | $245,626 |  |  | $172,372 |
China |  | 61,840 |  |  | 65,987 |  |  | 80,786 |
France |  | 58,196 |  |  | 42,272 |  |  | 28,539 |
Mexico |  | 22,981 |  |  | 7,781 |  |  | 5,264 |
Korea |  | 14,558 |  |  | 15,585 |  |  | 19,095 |
United Kingdom |  | 14,256 |  |  | 14,591 |  |  | 19,029 |
Canada |  | 10,230 |  |  | 11,455 |  |  | 12,861 |
Other countries |  | 19,602 |  |  | $19,267 |  |  | 19,524 |
Consolidated total |  | $454,302 |  |  | $422,564 |  |  | $357,470 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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