Joint Ventures

12 Months Ended

Dec. 31, 2020

Equity Method Investments and Joint Ventures [Abstract]

The Company has two joint ventures with China National Tobacco Corporation, or CNTC. CNTC is the principal operating company under China’s State Tobacco Monopoly Administration. CNTC and the Company’s subsidiary, Schweitzer-Mauduit International China, Limited, or SM-China, each own 50% of each of the joint ventures. The paper joint venture China Tobacco Mauduit (Jiangmen) Paper Industry Co. LTD, or CTM, produces tobacco-related papers in China. The second joint venture China Tobacco Schweitzer (Yunnan) Reconstituted Tobacco Co. LTD, or CTS, produces reconstituted tobacco leaf products. The joint ventures pay to each the Company and CNTC sales-based royalties and management fees, of which SWM recognized $2.0 million, $2.1 million and $2.2 million in 2020, 2019 and 2018, respectively, in Other (expense) income, net in the consolidated statements of income.

The Company uses the equity method to account for its ownership interest in both joint ventures. At December 31, 2020 and 2019, the Company’s equity investment in joint ventures was $59.3 million and $52.4 million, respectively. The Company’s share of the net income (loss) was included in Income (loss) from equity affiliates, net of income taxes within the consolidated statements of income. We evaluate our equity method investments for impairment when events or changes in circumstances indicate, in our judgment, that the carrying value of such investment may have experienced an other than temporary decline in value. When evidence of loss in value has occurred, we compare the estimated fair value of the investment to the carrying value of the investment to determine whether impairment has occurred. We assess the fair value of our equity method investment using commonly accepted techniques, and may use more than one method, including, but not limited to, internally developed analysis and analysis of external data. If the estimated fair value is less than the carrying value and we consider the decline in value to be other than temporary, the excess of the carrying value over the estimated fair value is recognized in the consolidated financial statements as an impairment.

Below is summarized and combined balance sheet information of the China joint ventures as of December 31, 2020 and 2019 ($ in millions):


	December 31,
	2020		2019
Current assets	$	110.0	$	99.4
Noncurrent assets	166.6		168.0
Current liabilities	67.6		43.1
Long-term liabilities	60.2		88.4
Stockholder's equity	148.8		135.9

Below is summarized and combined statement of operations information of the China joint ventures for the years ended December 31, 2020, 2019 and 2018 ($ in millions):


	For the Years Ended December 31,
	2020		2019		2018
Net sales	$	101.3	$	103.5	$	109.7
Gross profit	33.0		32.2		33.4
Net income	9.7		8.3		7.4