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Reportable Segments and Geographic Data | 12 Months Ended
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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) |  | 2022 |  | 2021 |  | 2020
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 expense |  | 49,128 |  |  | — |  |  | — |
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) |  | 2022 |  | 2021 |  | 2020
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) |  | 2022 |  | 2021 |  | 2020
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 expenses |  | 2,641 |  |  | 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) |  | 2022 |  | 2021 |  | 2020
Net sales |  |  |  |  |  |
United States |  | $ | 586,779 |  |  | $ | 497,231 |  |  | $ | 503,473 |
Switzerland |  | 119,069 |  |  | 128,698 |  |  | 128,328 |
France |  | 76,826 |  |  | 68,929 |  |  | 55,914 |
Brazil |  | 66,175 |  |  | 62,925 |  |  | 60,259 |
China |  | 63,914 |  |  | 67,098 |  |  | 57,007 |
Mexico |  | 58,519 |  |  | 37,547 |  |  | 39,859 |
Italy |  | 20,074 |  |  | 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 |
Mexico |  | 42,320 |  |  | 40,699 |  |  | 41,738 |
China |  | 33,432 |  |  | 41,039 |  |  | 40,898 |
France |  | 31,382 |  |  | 33,802 |  |  | 41,107 |
Canada |  | 14,264 |  |  | 14,139 |  |  | 9,672 |
Sweden |  | 11,388 |  |  | 12,355 |  |  | 12,109 |
United Kingdom |  | 9,699 |  |  | 10,156 |  |  | 10,731 |
Germany |  | 9,562 |  |  | 9,652 |  |  | 10,808 |
Other countries |  | 15,111 |  |  | 16,122 |  |  | 18,290 |
Consolidated total |  | $ | 445,658 |  |  | $ | 436,417 |  |  | $ | 448,554 |

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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