Reportable Segments and Geographic Data

12 Months Ended

Dec. 31, 2015

Reportable Segments and Geographic Data [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. 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 segment (AEC), including Albany Safran Composites, LLC (ASC), in which our customer SAFRAN Group owns a 10 percent noncontrolling interest, provides highly engineered, advanced composite structures based on proprietary technology to customers in the aerospace and defense industries. AEC's largest program relates to CFM International's LEAP engine, which is scheduled to enter into service in 2016. Under this program, AEC through ASC, is the exclusive supplier of advanced composite fan blades and cases under a long-term supply contract. In 2015, approximately 15 percent of AEC sales were related to U.S. government contracts or programs.

In February 2016, our customer on the BR 725 contract notified us that they disagreed with our calculation of pricing for the parts to be sold in 2016, which could, potentially, have an adverse effect on the profitability of this contract in the future. While the Company believes that its position is supported by the contract, as well as by the prior course of dealing between the parties, if the customer's position were to prevail it could have a material effect on operating results in future periods.

The following tables show data by reportable segment, reconciled to consolidated totals included in the financial statements: 

(in thousands)	2015	2014	2013
Net Sales
Machine Clothing	$608,581	$655,026	$674,747
Albany Engineered Composites	101,287	90,319	82,667
Consolidated total	$709,868	$745,345	$757,414
Depreciation and amortization
Machine Clothing	39,503	45,066	46,521
Albany Engineered Composites	12,140	10,880	8,460
Corporate expenses	8,471	8,346	8,808
Consolidated total	$60,114	$64,292	$63,789
Operating income/(loss)
Machine Clothing	141,311	136,450	114,370
Albany Engineered Composites	(28,478)	(10,483)	(14,404)
Corporate expenses	(48,938)	(54,607)	(47,875)
Operating income	$63,895	$71,360	$52,091
Reconciling items:
Interest income	(1,857)	(1,541)	(1,468)
Interest expense	11,841	12,254	15,227
Other expense/(income),net	2,433	(6,853)	7,256
Income before income taxes	$51,478	$67,500	$31,076

The table below presents pension settlement and restructuring costs by reportable segment (also see Note 5):

(in thousands)	2015	2014	2013
Pension settlement expense
Corporate expenses	$-	$ 8,190	$-
Restructuring expenses, net
Machine Clothing	$22,211	$4,828	$24,568
Albany Engineered Composites	-	931	540
Corporate expenses	1,635	-	-
Consolidated total	$23,846	$5,759	$25,108

In the measurement of assets utilized by each reportable segment, we include accounts receivable, 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)	2015	2014	2013
Segment assets
Machine Clothing	$494,347	$565,853	$624,388
Albany Engineered Composites	181,825	175,338	147,104
Reconciling items:
Cash	185,113	179,802	222,666
Asset held for sale	4,988	-	-
Income taxes prepaid, receivable and deferred	111,872	76,283	92,754
Other assets	31,417	32,028	39,245
Consolidated total assets	$1,009,562	$1,029,304	$1,126,157
Capital expenditures and purchased software
Machine Clothing	$16,010	$23,202	$22,892
Albany Engineered Composites	30,378	32,141	36,928
Corporate expenses	4,207	3,530	4,637
Consolidated total	$50,595	$58,873	$64,457

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)	2015	2014	2013
Net sales
United States	$323,399	$324,750	$338,729
Switzerland	159,804	184,022	190,035
Brazil	58,846	59,332	62,076
China	48,490	52,822	43,265
Mexico	30,581	27,431	24,938
France	26,081	26,654	21,557
Other countries	62,667	70,334	76,814
Consolidated total	$709,868	$745,345	$757,414
Property, plant and equipment, at cost, net
United States	$172,372	$168,848	$162,380
China	80,786	93,182	103,109
France	28,539	25,091	15,893
Korea	19,095	23,473	35,542
United Kingdom	19,029	22,222	25,246
Canada	12,861	18,236	22,434
Other countries	24,788	44,061	54,226
Consolidated total	$357,470	$395,113	$418,830