4 unchanged sentences
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2020 2019 2020 2019
Net sales $ 222,362 $ 235,764
20 unchanged sentences
ALBANY INTERNATIONAL CORP.
−Removed: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
+Added: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(in thousands)
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2020 2019 2020 2019
Net income $ 27,609 $ 7,594
1 unchanged sentence
Foreign currency translation and other adjustments ( 15,439 ) ( 24,955 )
−Removed: Pension/postretirement settlements and curtailments — — 378 —
Amortization of pension liability adjustments:
4 unchanged sentences
Income taxes related to items of other comprehensive income/(loss):
−Removed: Pension/postretirement settlements and curtailments — — ( 113 ) —
−Removed: Amortization of pension liability adjustment ( 32 ) ( 4 ) ( 94 ) ( 13 )
+Added: Amortization of prior service cost 336 279
+Added: Amortization of net actuarial loss ( 333 ) ( 311 )
Payments and amortization related to interest rate swaps included in earnings ( 381 ) ( 104 )
Derivative valuation adjustment 135 2,753
−Removed: Comprehensive income 49,558 16,770 65,955 70,709
+Added: Comprehensive income/(loss) 12,915 ( 24,971 )
Comprehensive income/(loss) attributable to the noncontrolling interest ( 183 ) ( 1,406 )
4 unchanged sentences
(in thousands, except share data)
−Removed: September 30, 2020 December 31, 2019
+Added: March 31, 2021 December 31, 2020
Cash and cash equivalents $ 237,871 $ 241,316
−Removed: $ 215,304 $ 195,540
Accounts receivable, net 188,066 188,423
−Removed: 210,326 218,271
Contract assets, net 121,767 139,289
−Removed: 104,853 79,070
−Removed: 113,107 95,149
+Added: Inventories 117,022 110,478
Income taxes prepaid and receivable 7,362 5,940
Prepaid expenses and other current assets 32,306 31,830
−Removed: 30,485 24,142
Total current assets $ 704,394 $ 717,276
−Removed: $ 680,635 $ 618,334
Property, plant and equipment, net 435,976 448,554
−Removed: 442,469 466,462
Intangibles, net 44,675 46,869
−Removed: 48,281 52,892
−Removed: 184,287 180,934
+Added: Goodwill 184,374 187,553
Deferred income taxes 33,436 38,757
−Removed: 38,387 51,621
Noncurrent receivables, net 34,945 36,265
−Removed: 36,228 41,234
−Removed: 60,405 62,891
−Removed: $ 1,490,692 $ 1,474,368
+Added: Other assets 74,366 74,662
+Added: Total assets $ 1,512,166 $ 1,549,936
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 54,533 $ 49,173
−Removed: $ 46,740 $ 65,203
Accrued liabilities 104,988 125,459
−Removed: 119,221 125,885
Current maturities of long-term debt 2 9
Income taxes payable 7,439 16,222
−Removed: 12,936 11,611
Total current liabilities 166,962 190,863
−Removed: 178,909 202,719
Long-term debt 384,000 398,000
−Removed: 418,000 424,009
Other noncurrent liabilities 124,167 130,424
−Removed: 134,903 132,725
Deferred taxes and other liabilities 10,826 10,784
Total liabilities 685,955 730,071
−Removed: 740,834 771,679
SHAREHOLDERS' EQUITY
8 unchanged sentences
Additional paid in capital 433,811 433,696
−Removed: 432,823 432,518
Retained earnings 791,854 770,746
−Removed: 749,678 698,496
Accumulated items of other comprehensive income:
Translation adjustments ( 99,158 ) ( 83,203 )
−Removed: ( 119,814 ) ( 122,852 )
Pension and postretirement liability adjustments ( 39,152 ) ( 39,661 )
−Removed: ( 49,436 ) ( 49,994 )
Derivative valuation adjustment ( 8,792 ) ( 9,544 )
−Removed: ( 10,409 ) ( 3,135 )
Treasury stock (Class A), at cost;
2 unchanged sentences
Total Company shareholders' equity 822,595 816,066
−Removed: 746,809 698,683
Noncontrolling interest 3,616 3,799
−Removed: 749,858 702,689
+Added: Total equity 826,211 819,865
Total liabilities and shareholders' equity $ 1,512,166 $ 1,549,936
−Removed: $ 1,490,692 $ 1,474,368
The accompanying notes are an integral part of the consolidated financial statements
2 unchanged sentences
(in thousands)
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2020 2019 2020 2019
+Added: Three Months Ended
OPERATING ACTIVITIES
Net income $ 27,609 $ 7,594
−Removed: Adjustments to reconcile net income to net cash provided by operating activities:
+Added: Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Depreciation 16,589 15,506
1 unchanged sentence
Change in deferred taxes and other liabilities 4,442 5,817
−Removed: Provision for write-off of property, plant and equipment 303 ( 5 ) 536 1,101
−Removed: Non-cash interest (income)/expense ( 309 ) 151 ( 138 ) 454
+Added: Impairment of property, plant and equipment 185 197
+Added: Non-cash interest expense 45 151
Compensation and benefits paid or payable in Class A Common Stock ( 13 ) ( 682 )
−Removed: Fair value adjustment on foreign currency option ( 64 ) — — —
Provision for credit losses from uncollected receivables and contract assets ( 110 ) 1,655
−Removed: Foreign currency remeasurement loss/(gain) on intercompany loans 169 ( 1,049 ) 15,750 ( 2,656 )
+Added: Foreign currency remeasurement (gain)/loss on intercompany loans ( 308 ) 15,387
+Added: Fair value adjustment on foreign currency options 139 64
Changes in operating assets and liabilities that provided/(used) cash:
10 unchanged sentences
Other, net 857 ( 534 )
−Removed: Net cash provided by operating activities 39,659 43,497 83,693 126,593
+Added: Net cash provided by/(used in) operating activities 33,686 ( 6,638 )
INVESTING ACTIVITIES
9 unchanged sentences
Dividends paid ( 6,468 ) ( 6,139 )
−Removed: Net cash used in financing activities ( 23,479 ) ( 64,085 ) ( 31,703 ) ( 94,191 )
+Added: Net cash (used in)/provided by financing activities ( 21,694 ) 54,231
Effect of exchange rate changes on cash and cash equivalents ( 2,901 ) ( 7,648 )
−Removed: Increase/(decrease) in cash and cash equivalents 11,267 ( 41,494 ) 19,764 ( 24,016 )
+Added: (Decrease)/increase in cash and cash equivalents ( 3,445 ) 27,140
Cash and cash equivalents at beginning of period 241,316 195,540
13 unchanged sentences
The information included in this Quarterly Report on Form 10-Q should be read in conjunction with Albany International Corp.’s Annual Report on Form 10-K for the year ended December 31, 2020.
−Removed: Effective January 1, 2020, we adopted the provisions of ASC 326 , Current Expected Credit Losses (CECL) , using the effective date (or modified retrospective) approach for transition.
−Removed: Under this transition method, periods prior to 2020 were not restated.
−Removed: The pre-tax cumulative effect of initially applying the new standard was an increase in credit loss reserves of $ 1.8 million, primarily for Accounts receivable and Contract assets.
−Removed: Including tax effects, Retained earnings was reduced by $ 1.4 million as a result of transitioning to the new standard.
−Removed: The effect of the application of CECL during the first quarter of 2020 is further described in Notes 11 and 12.
−Removed: Reportable Segments
+Added: Reportable Segments and Revenue Recognition
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.
7 unchanged sentences
Under this program, AEC through ASC, is the exclusive supplier of advanced composite fan blades and cases under a long-term supply contract.
−Removed: 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.
−Removed: All lease expense is reimbursable by Safran to the Company due to the cost-plus nature of the supply agreement.
−Removed: In the fourth quarter of 2019, Safran leased manufacturing space from AEC for the GE9X program.
−Removed: Rent paid by Safran under this lease amounted to $ 0.7 million for the first nine months of 2020.
−Removed: AEC Net sales to Safran, substantially all of which were through ASC, were $ 73.6 million and $ 175.2 million in the first nine months of 2020 and 2019, respectively.
−Removed: The total of Accounts receivable, Contract assets and Noncurrent receivables due from Safran amounted to $ 119.8 million and $ 114.5 million as of September 30, 2020 and December 31, 2019, respectively.
+Added: AEC net sales to Safran were $ 27.7 million and $ 38.0 million in the first three months of 2021 and 2020, respectively.
+Added: The total of Accounts receivable, Contract assets and Noncurrent receivables due from Safran amounted to $ 107.7 million and $ 127.1 million as of March 31, 2021 and December 31, 2020, respectively.
Other significant programs by AEC include the F-35, Boeing 787, Sikorsky CH-53K and JASSM, as well as the fan case for the GE9X engine.
2 unchanged sentences
The following tables show data by reportable segment, reconciled to consolidated totals included in the financial statements:
−Removed: Three months ended September 30, Nine months ended September 30,
+Added: Three months ended March 31,
(in thousands)
−Removed: 2020 2019 2020 2019
Machine Clothing
1 unchanged sentence
Albany Engineered Composites 74,156 99,162
−Removed: 73,252 119,809 244,971 345,781
Consolidated total
4 unchanged sentences
Albany Engineered Composites 2,938 7,623
−Removed: 6,828 17,345 22,749 44,598
Corporate expenses
1 unchanged sentence
Operating income $ 41,818 $ 39,594
−Removed: $ 38,773 $ 55,678 $ 131,094 $ 149,996
Reconciling items:
Interest income ( 529 ) ( 447 )
−Removed: ( 1,485 ) ( 851 ) ( 2,280 ) ( 2,037 )
Interest expense
−Removed: 3,727 4,838 12,322 15,072
Other expense/(income), net 600 15,569
−Removed: ( 2,745 ) ( 1,628 ) 13,915 ( 1,906 )
Income before income taxes
$ 37,649 $ 20,048
−Removed: There were no material changes in the total assets of the reportable segments in the first nine months of 2020.
+Added: There were no material changes to total assets of the reportable segments in the first three months of 2021.
The table below presents restructuring costs by reportable segment (also see Note 4):
−Removed: Three months ended September 30, Nine months ended September 30,
+Added: Three months ended March 31,
(in thousands) 2021 2020
6 unchanged sentences
When adjustments in estimated contract revenues or costs are required, any changes from prior estimates are included in earnings in the period the change occurs.
−Removed: In 2020, net adjustments to the estimated profitability of long-term contracts increased gross profit by $ 3.5 million and $ 9.5 million for the three and nine month periods, respectively, ended September 30, 2020.
−Removed: In 2019, net adjustments to the estimated profitability of long-term contracts increased gross profit by $ 3.2 million and $ 8.8 million for the three and nine month periods, respectively, ended September 30, 2019.
+Added: Adjustments in the estimated profitability of long-term contracts increased operating income by $ 0.9 million for the first quarter of 2020, compared to an insignificant effect for the first quarter of 2021.
We disaggregate revenue earned from contracts with customers for each of our business segments and product groups based on the timing of revenue recognition, and groupings used for internal review purposes.
−Removed: The following tables disaggregate revenue for each product group by timing of revenue recognition:
−Removed: Three months ended September 30, 2020
−Removed: (in thousands) Point in Time Revenue
−Removed: Recognition Over Time Revenue
−Removed: Recognition Total
−Removed: Machine Clothing $ 137,899 $ 848 $ 138,747
−Removed: Albany Engineered Composites
−Removed: ASC — 17,301 17,301
−Removed: Other AEC 4,479 51,472 55,951
−Removed: Total Albany Engineered Composites 4,479 68,773 73,252
−Removed: Total revenue $ 142,378 $ 69,621 $ 211,999
−Removed: Nine months ended September 30, 2020
−Removed: (in thousands) Point in Time Revenue
−Removed: Recognition Over Time Revenue
−Removed: Recognition Total
−Removed: Machine Clothing $ 426,238 $ 2,544 $ 428,782
−Removed: Albany Engineered Composites
−Removed: ASC — 72,771 72,771
−Removed: Other AEC 14,942 157,258 172,200
−Removed: Total Albany Engineered Composites 14,942 230,029 244,971
−Removed: Total revenue $ 441,180 $ 232,573 $ 673,753
−Removed: Three months ended September 30, 2019
−Removed: (in thousands) Point in Time Revenue
−Removed: Recognition Over Time Revenue
−Removed: Recognition Total
+Added: The following table disaggregates revenue for each product group by timing of revenue recognition:
+Added: Three months ended March 31, 2021
+Added: (in thousands)
+Added: Point in Time Revenue
+Added: Over Time Revenue
Machine Clothing $ 147,341 $ 865 $ 148,206
Albany Engineered Composites
−Removed: ASC — 56,414 56,414
+Added: — 27,084 27,084
Other AEC 3,880 43,192 47,072
Total Albany Engineered Composites
+Added: 3,880 70,276 74,156
Total revenue $ 151,221 $ 71,141 $ 222,362
−Removed: Nine months ended September 30, 2019
−Removed: (in thousands) Point in Time Revenue
−Removed: Recognition Over Time Revenue
−Removed: Recognition Total
+Added: Three months ended March 31, 2020
+Added: (in thousands)
+Added: Point in Time Revenue
+Added: Over Time Revenue
Machine Clothing $ 135,754 $ 848 $ 136,602
Albany Engineered Composites
−Removed: ASC — 170,551 170,551
+Added: — 37,894 37,894
Other AEC 6,320 54,948 61,268
Total Albany Engineered Composites
+Added: 6,320 92,842 99,162
Total revenue
+Added: $ 142,074 $ 93,690 $ 235,764
The following table disaggregates MC segment revenue by significant product groupings (paper machine clothing (PMC) and engineered fabrics), and, for PMC, the geographical region to which the paper machine clothing was sold:
−Removed: Three months ended September 30, Nine months ended September 30,
+Added: Three months ended March 31,
(in thousands)
Americas PMC $ 73,302 $ 73,677
−Removed: Eurasia PMC 50,923 50,330 150,220 155,849
+Added: 55,143 45,131
Engineered Fabrics 19,761 17,794
Total Machine Clothing Net sales
−Removed: In accordance with ASC 606, we do not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.
+Added: $ 148,206 $ 136,602
+Added: As permitted by ASC 606, we only disclose the value of unsatisfied performance obligations for contracts with an original expected duration of greater than one year.
Contracts in the MC segment are generally for periods of less than a year.
Most contracts in the AEC segment are short duration firm-fixed-price orders representing performance obligations with an original maturity of less than one year.
−Removed: Remaining performance obligations on contracts that had an original duration of greater than one year totaled $ 81 million as of both September 30, 2020 and 2019 and related primarily to firm contracts in the AEC segment.
−Removed: Of the remaining performance obligations as of September 30, 2020, we expect to recognize as revenue approximately $ 36 million during 2020 and the remainder during 2021.
−Removed: Business Acquisition
−Removed: On November 20, 2019, the Company acquired CirComp GmbH, a privately-held developer and manufacturer of high-performance composite components located in Kaiserslautern, Germany for $ 32.4 million.
−Removed: The Company also agreed to pay approximately $ 5.5 million that will become due as certain post-closing obligations are performed.
−Removed: Expense related to that agreement will be recognized over the five year performance period.
−Removed: The Company funded the acquisition using a combination of cash on hand and funds drawn on its revolving credit facility.
−Removed: In March 2020, the Company purchased, in cash, the primary operating facility in Germany for $ 5.8 million, which resulted in the recording of land and building assets, and the removal of the Right of use assets and associated lease liabilities included in the acquisition-date balance sheet.
−Removed: The seller provided representations, warranties and indemnities customary for acquisition transactions, including indemnities for certain customer claims identified, before closing.
−Removed: The acquired entity is part of the AEC segment.
−Removed: CirComp specializes in designing and manufacturing customized engineered composite components for aerospace and other demanding industrial applications.
−Removed: The following table summarizes the allocation of the purchase price to the fair value of the assets and liabilities acquired:
−Removed: (in thousands) November 20, 2019
−Removed: Assets acquired
−Removed: Accounts receivable 986
−Removed: Contract assets 1,992
−Removed: Inventories 525
−Removed: Prepaid expenses and other current assets 452
−Removed: Right of use assets 5,686
−Removed: Property, plant and equipment 4,884
−Removed: Amortizable intangible assets 10,302
−Removed: Goodwill 17,676
−Removed: Total assets acquired $ 44,110
−Removed: Liabilities assumed
−Removed: Accounts payable $ 65
−Removed: Accrued liabilities 2,777
−Removed: Lease liabilities 502
−Removed: Deferred income taxes 3,182
−Removed: Other noncurrent liabilities 5,184
−Removed: Total liabilities assumed $ 11,710
−Removed: Net assets acquired $ 32,400
−Removed: Purchase of business, net of cash acquired $ 30,793
−Removed: During the first six months of 2020, management identified adjustments to the provisional value of assets and liabilities acquired reported in the Form 10-K for the year ended December 31, 2019, which resulted in a decrease to Contract assets of $ 0.3 million, an increase to Accrued liabilities of $ 0.5 million, an increase to Amortizable intangible assets of $ 0.3 million, a decrease to Deferred income tax liabilities of $ 0.2 million, and an increase to Goodwill of $ 0.3 million.
−Removed: Management's review of the purchase price allocation has been completed.
−Removed: Acquired Goodwill of $ 17.7 million reflects the Company’s belief that the acquisition complements and expands Albany’s portfolio of proprietary, advanced manufacturing technologies for composite components, increases the Company’s position as a leading innovator in advanced materials processing and automation, and opens a geographic footprint in Europe to better serve our global customer base.
−Removed: The acquisition significantly increases the Company’s opportunities for future growth.
−Removed: The goodwill is non-deductible for tax purposes.
+Added: Remaining performance obligations on contracts that had an original duration of greater than one year totaled $ 76 million and $ 82 million as of March 31, 2021 and 2020, respectively, and related primarily to firm contracts in the AEC segment.
+Added: Of the remaining performance obligations as of March 31, 2021, we expect to recognize as revenue approximately $ 51 million during 2021 and the remainder during 2022.
Pensions and Other Postretirement Benefit Plans
−Removed: Pension Plans
The Company has defined benefit pension plans covering certain U.S.
−Removed: qualified defined benefit pension plan has been closed to new participants since October 1998, and benefits accrued under this plan have been frozen since February 2009.
−Removed: As a result of the freeze, employees covered by the pension plan will receive, at retirement, benefits already accrued through February 2009 but no new benefits accrue after that date.
−Removed: Benefit accruals under the U.S.
−Removed: Supplemental Executive Retirement Plan ("SERP") were similarly frozen.
−Removed: The eligibility, benefit formulas, and contribution requirements for plans outside of the U.S.
−Removed: vary by location.
−Removed: Other Postretirement Benefits
The Company also provides certain postretirement benefits to retired employees in the U.S.
−Removed: The Company accrues the cost of providing postretirement benefits during the active service period of the employees.
−Removed: The Company currently funds the plans as claims are paid.
−Removed: The composition of the net periodic benefit cost for the nine months ended September 30, 2020 and 2019, was as follows:
−Removed: Pension plans Other postretirement benefits
+Added: The Company accrues the cost of providing these benefits during the active service period of the employees.
+Added: The composition of the net periodic benefit cost for the three months ended March 31, 2021 and 2020, was as follows:
+Added: Pension plans
+Added: Other postretirement benefits
(in thousands)
+Added: 2021 2020 2021 2020
Components of net periodic benefit cost:
−Removed: Service cost $ 1,728 $ 1,892 $ 150 $ 142
+Added: $ 545 $ 580 $ 33 $ 50
Interest cost 1,338 1,550 276 428
Expected return on assets
−Removed: Settlement cost 145 — — —
−Removed: Curtailment cost 233 — — —
+Added: ( 1,606 ) ( 1,723 ) — —
Amortization of prior service cost/(credit) 3 8 ( 1,122 ) ( 1,122 )
Amortization of net actuarial loss
+Added: 544 596 565 648
Net periodic benefit cost $ 824 $ 1,011 $ ( 248 ) $ 4
−Removed: The amount of net periodic pension cost is determined at the beginning of each year and generally only varies from quarter to quarter when a significant event occurs, such as a curtailment or a settlement.
−Removed: In the second quarter of 2020, the Company recorded expense of $ 0.4 million related to curtailments and settlements.
−Removed: There were no curtailments or settlements in other quarters.
−Removed: Service cost for defined benefit pension and postretirement plans are reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period.
−Removed: Other components of net periodic benefit cost are presented in the income statement separately from the service cost component and outside a subtotal of income from operations, in the line item Other (income)/expense, net in the Consolidated Statements of Income.
+Added: The amount of net periodic benefit cost is determined at the beginning of each year and generally only varies from quarter to quarter when a significant event occurs, such as a curtailment or a settlement.
+Added: There were no such events in the first three months of 2021 or 2020.
+Added: Service cost for defined benefit pension and postretirement plans are reported in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period.
+Added: Other components of net periodic benefit cost are included in the line item Other (income)/expense, net in the Consolidated Statements of Income.
Restructuring
−Removed: In 2020, AEC reduced its workforce at various locations, principally in the United States, leading to restructuring charges of $ 2.6 million for the first nine months of 2020.
−Removed: Machine Clothing restructuring charges for the first nine months of 2020 and 2019 were principally related to the plant closure of its MC production facility in Sélestat, France that was announced in 2017.
+Added: Restructuring costs in the first quarter of 2021 were not significant while Machine Clothing restructuring charges for the first three months of 2020 principally related to discontinued operations at its MC production facility in Sélestat, France.
Since 2017, we have recorded $ 13.9 million of restructuring charges related to this action.
+Added: There were no charges related to the impairment of assets for the periods presented.
The following table summarizes charges reported in the Consolidated Statements of Income under “Restructuring expenses, net”:
−Removed: Three months ended September 30, Nine months ended September 30,
−Removed: (in thousands)
−Removed: 2020 2019 2020 2019
−Removed: Machine Clothing
−Removed: $ 384 $ ( 211 ) $ 1,414 $ 1,125
−Removed: Albany Engineered Composites
−Removed: 358 ( 33 ) 2,606 18
−Removed: Corporate expenses
−Removed: ( 32 ) — 169 ( 4 )
−Removed: $ 710 $ ( 244 ) $ 4,189 $ 1,139
−Removed: Nine Months Ended September 30, 2020 Total
−Removed: restructuring
−Removed: costs incurred
−Removed: Impairment of assets
−Removed: (in thousands)
−Removed: Machine Clothing
−Removed: $ 1,414 $ 1,414 $ —
−Removed: Albany Engineered Composites
−Removed: 2,606 2,606 —
−Removed: Corporate expenses
−Removed: $ 4,189 $ 4,189 $ —
−Removed: Nine Months Ended September 30, 2019 Total
−Removed: restructuring
−Removed: costs incurred
−Removed: Impairment of assets
+Added: Three months ended March 31,
(in thousands) 2021 2020
3 unchanged sentences
Total $ 52 $ 642
−Removed: We expect that approximately $ 2.8 million of Accrued liabilities for restructuring at September 30, 2020 will be paid within one year and approximately $ 0.3 million will be paid the following year.
−Removed: The table below presents the year-to-date changes in restructuring liabilities for 2020 and 2019, all of which are related to termination costs:
+Added: The table below presents the year-to-date changes in restructuring liabilities for 2021 and 2020, all of which are related to termination and other costs:
(in thousands)
2 unchanged sentences
translation /other
−Removed: September 30,
Total termination and other costs $ 2,195 $ 52 $ ( 1,216 ) $ ( 15 ) $ 1,016
−Removed: $ 2,042 $ 4,189 $ ( 3,186 ) $ 46 $ 3,091
(in thousands)
2 unchanged sentences
translation /other
−Removed: September 30,
Total termination and other costs $ 2,042 $ 642 $ ( 731 ) $ ( 92 ) $ 1,861
−Removed: $ 5,570 $ 1,095 $ ( 4,195 ) $ ( 360 ) $ 2,110
+Added: We expect that approximately $ 0.8 million of Accrued liabilities for restructuring at March 31, 2021 will be paid within one year and approximately $ 0.2 million will be paid the following year.
Other (Income)/Expense, net
The components of Other (Income)/Expense, net are:
−Removed: Three months ended September 30, Nine months ended September 30,
+Added: Three months ended March 31,
(in thousands)
2 unchanged sentences
Components of net periodic pension and postretirement cost other than service ( 2 ) 385
−Removed: Other ( 3,077 ) 41 ( 2,574 ) 716
Total $ 600 $ 15,569
−Removed: Other (Income)/Expense, net for the first three months of 2020 included losses related to the revaluation of nonfunctional-currency balances of $ 14.8 million, which principally resulted from intercompany demand loans payable by Mexican subsidiaries combined with the effects of a much weaker peso in 2020.
−Removed: As a result of changes in business
−Removed: conditions that occurred in the first quarter of 2020, certain loan repayments are no longer expected in the foreseeable future and, beginning April 1, 2020, the revaluation effects for those loans are being recorded in Other comprehensive income.
−Removed: This resulted in a gain of $ 0.6 million, and a loss of $ 0.6 million being recorded in Other comprehensive income in the second and third quarters of 2020, respectively.
−Removed: Other (income)/expense, net, for the first nine months of 2019 included gains related to the revaluation of nonfunctional-currency balances of $ 3.7 million.
−Removed: In the third quarter 2020 Other income/expense, net we recorded other income of $ 2.6 million related to a successful claim for a rebate of foreign sales tax paid in previous years.
−Removed: The following table presents components of income tax expense for the three and nine months ended September 30, 2020 and 2019:
−Removed: Three months ended September 30, Nine months ended September 30,
+Added: Other (income)/expense, net includes losses related to the revaluation of nonfunctional-currency balances of $ 0.2 million for the first three months of 2021, compared to losses of $ 14.8 million for the first three months of 2020, which principally resulted from an intercompany demand loan payable by a Mexican subsidiary.
+Added: As a result of changes in business conditions that occurred in the first quarter of 2020, loan repayments on that intercompany loan are not expected in the foreseeable future and, beginning April 1, 2020, revaluation effects are recorded in Other comprehensive income.
+Added: The following table presents components of income tax expense for the three months ended March 31, 2021 and 2020:
+Added: Three months ended March 31,
(in thousands, except percentages)
Income tax based on income from continuing operations, at estimated tax rates of 30.1 % and 36.5 %, respectively
−Removed: Provision for change in estimated tax rate ( 1,196 ) ( 692 ) — —
+Added: $ 11,332 $ 7,309
Income tax before discrete items
4 unchanged sentences
Provision for/resolution of tax audits and contingencies, net
−Removed: Out-of-period adjustments to deferred tax assets — — 1,830 ( 1,366 )
+Added: Out-of-period adjustments — 1,830
Tax effect of non-deductible foreign exchange loss on intercompany loan
−Removed: Changes in valuation allowance 8 ( 11 ) 230 830
−Removed: Other 8 8 5 64
Total income tax expense
−Removed: The third quarter estimated annual effective tax rate on continuing operations was 32.2 percent in 2020, compared to 27.5 percent for the same period in 2019.
−Removed: Income tax expense for the quarter was determined in accordance with ASC 740-270, Income Taxes – Interim Reporting.
+Added: $ 10,040 $ 12,454
+Added: The first-quarter estimated annual effective tax rate on continuing operations was 30.1 percent in 2021, compared to 36.5 percent for the same period in 2020.
+Added: Income tax expense for the quarter was computed in accordance with ASC 740-270, Income Taxes – Interim Reporting.
Under this method, loss jurisdictions, which cannot recognize a tax benefit with regard to their generated losses, are excluded from the annual effective tax rate (AETR) calculation and their taxes will be recorded discretely in each quarter.
2 unchanged sentences
jurisdictions and the mix of income earned in those jurisdictions, including changes in losses and income from excluded loss jurisdictions, and the impact of discrete items in the respective quarter.
−Removed: The higher estimated income tax rate is primarily driven by an increase in losses in a foreign jurisdiction that is excluded in calculating the quarterly income tax provision.
+Added: The decrease in the estimated Q1 2021 income tax rate was primarily driven by a decrease in losses in a foreign jurisdiction that were excluded in calculating the quarterly income tax provision.
The Company records the residual U.S.
1 unchanged sentence
These amounts are not considered to be indefinitely reinvested, and the Company accrued for the tax cost on these earnings to the extent they cannot be repatriated in a tax-free manner.
−Removed: The Company has targeted for repatriation $ 156.4 million of current year and prior year earnings of the Company’s foreign operations.
−Removed: If these earnings were repatriated, the Company would be subject to foreign withholding taxes of $ 2.8 million and state income taxes of $ 2.6 million which have already been recorded.
+Added: The Company has targeted for repatriation $ 203 million of current year and prior year earnings of the Company’s foreign
+Added: If these earnings were distributed, the Company would be subject to foreign withholding taxes of $ 3.4 million and state income taxes of $ 2.0 million, which have already been recorded.
The Company conducts business globally and, as a result, files income tax returns in the U.S.
2 unchanged sentences
The open tax years in these jurisdictions range from 2015 to 2021 .
−Removed: The Company is currently under audit in U.S and non-U.S.
−Removed: tax jurisdictions, including but not limited to Canada and
−Removed: the state of Utah.
−Removed: In the first quarter of 2020, the Company recorded a $ 1.8 million out-of-period immaterial charge related to developments in ongoing tax audits, which resulted in a corresponding decrease in deferred tax assets.
−Removed: In the second quarter of 2020, a U.S.
−Removed: state tax audit was settled, resulting in a net tax benefit of $ 1.5 million in that quarter.
−Removed: In 2020, the Company recorded a net tax benefit of $ 1.0 million related to the adjustment of prior period liabilities.
−Removed: In the third and second quarter of 2020, respectively, the Company recorded a net tax benefit of $ 1.8 million related to U.S.
−Removed: adjustments of prior period liabilities, and deferred tax expense of $ 1.0 million due to an adjustment of net operating losses related to settled audits.
−Removed: Additionally, the Company recorded a $ 0.2 million valuation allowance on the net deferred tax assets of one of its foreign subsidiaries in the second quarter of 2020.
−Removed: One of the Company’s subsidiaries in Mexico has an intercompany loan payable in U.S.
−Removed: As a result of the weaker Mexican peso, the Company recorded a revaluation loss of $ 12.7 million in the first quarter of 2020.
−Removed: That foreign currency loss is not deductible under Mexican tax law, which had a $ 3.7 million discrete tax impact in the first quarter of 2020.
−Removed: This intercompany loan was designated as a long-term loan as of April 1, 2020 and, as such, the subsequent foreign currency impacts are not recorded in the income statement.
+Added: The Company is currently under audit in U.S and certain non-U.S.
+Added: tax jurisdictions.
+Added: In the first quarter of 2021, the Company recorded a net tax benefit of $ 1.4 million related to a U.S.
+Added: adjustment of prior period liabilities and, additionally, the Company recorded an expense of $ 0.3 million related to the establishment of a foreign uncertain tax position.
+Added: In the first quarter of 2020, the Company recorded a $ 1.8 million out-of-period charge related to developments in ongoing tax audits, which resulted in a corresponding decrease in deferred tax assets.
Earnings Per Share
The amounts used in computing earnings per share and the weighted average number of shares of potentially dilutive securities are as follows:
−Removed: Three months ended September 30, Nine months ended September 30,
+Added: Three months ended March 31,
(in thousands, except market price and earnings per share)
2 unchanged sentences
Weighted average number of shares used in calculating basic net income per share
+Added: 32,352 32,312
Effect of dilutive stock-based compensation plans:
Stock options 3 8
+Added: RSU shares 46 —
Weighted average number of shares used in calculating diluted net income per share 32,401 32,320
4 unchanged sentences
Accumulated Other Comprehensive Income (AOCI)
−Removed: The table below presents changes in the components of AOCI for the period December 31, 2019 to September 30, 2020:
−Removed: (in thousands) Translation
−Removed: adjustments Pension and
+Added: The table below presents changes in the components of AOCI for the period December 31, 2020 to March 31, 2021:
+Added: (in thousands)
postretirement
−Removed: adjustments Derivative
−Removed: adjustment Total Accumulated Other
Comprehensive
1 unchanged sentence
Other comprehensive income/(loss) before reclassifications, net of tax
−Removed: Pension/postretirement curtailment loss, net of tax — 265 — 265
+Added: ( 15,955 ) 516 ( 343 ) ( 15,782 )
Interest expense related to swaps reclassified to the Consolidated Statements of Income, net of tax — — 1,095 1,095
Pension and postretirement liability adjustments reclassified to Consolidated Statements of Income, net of tax
+Added: — ( 7 ) — ( 7 )
Net current period other comprehensive income ( 15,955 ) 509 752 ( 14,694 )
−Removed: September 30, 2020 $ ( 119,814 ) $ ( 49,436 ) $ ( 10,409 ) $ ( 179,659 )
−Removed: The table below presents changes in the components of AOCI for the period December 31, 2018 to September 30, 2019:
+Added: March 31, 2021 $ ( 99,158 ) $ ( 39,152 ) $ ( 8,792 ) $ ( 147,102 )
+Added: The table below presents changes in the components of AOCI for the period December 31, 2019 to March 31, 2020:
(in thousands) Translation
−Removed: adjustments Pension and
postretirement
−Removed: adjustments Derivative
−Removed: adjustment Total Accumulated Other
Comprehensive
3 unchanged sentences
Pension and postretirement liability adjustments reclassified to Consolidated Statements of Income, net of tax — 98 — 98
−Removed: Adjustment related to prior period change in opening valuation allowance — ( 1,346 ) — ( 1,346 )
Net current period other comprehensive income ( 25,747 ) 890 ( 7,708 ) ( 32,565 )
−Removed: September 30, 2019 $ ( 139,153 ) $ ( 48,146 ) $ ( 4,172 ) $ ( 191,471 )
+Added: March 31, 2020 $ ( 148,599 ) $ ( 49,104 ) $ ( 10,843 ) $ ( 208,546 )
The components of our Accumulated Other Comprehensive Income that are reclassified to the Statement of Income relate to our pension and postretirement plans and interest rate swaps.
−Removed: The table below presents the expense/(income) amounts reclassified, and the line items of the Statement of Income that were affected for the three and nine months ended September 30, 2020 and 2019:
−Removed: Three months ended September 30, Nine months ended September 30,
+Added: The table below presents the expense/(income) amounts reclassified from AOCI, and the line items of the Statement of Income that were affected for the three months ended March 31, 2021 and 2020:
+Added: Three months ended March 31,
(in thousands)
1 unchanged sentence
Expense/(income) related to interest rate swaps included in Income before taxes (a)
+Added: $ 1,476 $ 407
Income tax effect ( 381 ) ( 104 )
Effect on net income due to items reclassified from Accumulated Other Comprehensive Income
+Added: $ 1,095 $ 303
Pretax pension and postretirement liabilities reclassified from Accumulated Other Comprehensive Income:
−Removed: Pension/postretirement curtailment $ — $ — $ 378 $ —
Amortization of prior service credit ( 1,119 ) ( 1,114 )
6 unchanged sentences
Noncontrolling Interest
+Added: Effective October 31, 2013, Safran S.A.
+Added: (Safran) acquired a 10 percent equity interest in a new Albany subsidiary, Albany Safran Composites, LLC (ASC).
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:
−Removed: Nine months ended September 30,
+Added: Three months ended March 31,
(in thousands, except percentages) 2021 2020
−Removed: Net (loss)/income of Albany Safran Composites (ASC) $ ( 13,310 ) $ 6,368
+Added: Net income/(loss) of Albany Safran Composites (ASC) $ 585 $ ( 14,849 )
Return attributable to the Company's preferred holding 318 302
−Removed: Net (loss)/income of ASC available for common ownership $ ( 14,194 ) $ 5,394
+Added: Net /income/(loss) of ASC available for common ownership $ 267 $ ( 15,151 )
Ownership percentage of noncontrolling shareholder 10 % 10 %
−Removed: Net (loss)/income attributable to noncontrolling interest $ ( 1,419 ) $ 539
+Added: Net /income/(loss) attributable to the noncontrolling interest $ 27 $ ( 1,515 )
Noncontrolling interest, beginning of year $ 3,799 $ 4,006
−Removed: Net (loss)/income attributable to noncontrolling interest ( 1,419 ) 539
−Removed: Changes in other comprehensive income attributable to noncontrolling interest 462 ( 19 )
+Added: Net income/(loss) attributable to noncontrolling interest 27 ( 1,515 )
+Added: Changes in other comprehensive income attributable to the noncontrolling interest ( 210 ) 109
Noncontrolling interest, end of interim period $ 3,616 $ 2,600
3 unchanged sentences
The notes may be presented for payment at maturity, which is less than one year.
−Removed: As of September 30, 2020 and December 31, 2019, Accounts receivable consisted of the following:
+Added: As of March 31, 2021 and December 31, 2020, Accounts receivable consisted of the following:
(in thousands)
−Removed: September 30,
2021 December 31,
Trade and other accounts receivable $ 165,005 $ 167,370
−Removed: $ 191,035 $ 201,427
Bank promissory notes
1 unchanged sentence
Allowance for expected credit losses ( 3,776 ) ( 3,807 )
−Removed: ( 3,878 ) ( 1,719 )
Accounts receivable, net
1 unchanged sentence
The Company has Noncurrent receivables in the AEC segment that represent revenue earned, which has extended payment terms.
−Removed: The Noncurrent receivables are invoiced to the customer, with 2 % interest, over a 10-year period that began in 2020.
−Removed: As of September 30, 2020 and December 31, 2019, Noncurrent receivables consisted of the following:
+Added: The Noncurrent receivables will be invoiced to the customer over a 10-year period, which began in 2020.
+Added: As of March 31, 2021 and December 31, 2020, Noncurrent receivables consisted of the following:
(in thousands)
−Removed: September 30,
2021 December 31,
Noncurrent receivables $ 35,209 $ 36,539
−Removed: $ 36,611 $ 41,234
Allowance for expected credit losses
−Removed: Noncurrent receivables, net
( 264 ) ( 274 )
−Removed: As described in Note 1, effective January 1, 2020, the Company adopted the provisions of ASC 326 , Current Expected Credit Losses (CECL).
−Removed: The overarching purpose of the new standard is to provide greater transparency and understanding of the Company’s credit risk.
−Removed: The CECL accounting update replaces the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
−Removed: Under the new standard, the Company recognizes an allowance for expected credit losses on financial assets measured at amortized cost, such as Accounts receivable, Contract assets and Noncurrent receivables.
−Removed: The allowance is determined using a CECL model that is based on an historical average three-year loss rate and is measured by financial asset type on a collective (pool) basis when similar risk characteristics exist, at an amount equal to lifetime expected credit losses.
−Removed: The estimate reflects the risk of loss due to credit default, even when the risk is remote, and considers available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable expected future economic conditions.
−Removed: While an expected credit loss allowance is recorded at the same time the financial asset is recorded, the Company monitors financial assets for credit impairment events to assess whether there has been a significant increase in credit risk since initial recognition, and considers both quantitative and qualitative information.
−Removed: The risk of loss due to credit default increases when one or more events occur that can have a detrimental impact on estimated future cash flows of that financial asset.
−Removed: Evidence that a financial asset is subject to greater credit risk include observable data about significant financial difficulty of the customer, a breach of contract, such as a default or past due event, or it becomes probable that the customer will enter bankruptcy or other financial reorganization, among other factors.
−Removed: It may not be possible to identify a single discrete event, but rather, the combined effect of several events may cause an increase in risk of loss.
−Removed: The probability of default is driven by the relative financial health of our customer base and that of the industries in which we do business, as well as the broader macro-economic environment.
−Removed: A changing economic environment or forecasted economic scenario can lead to a different probability of default and can suggest that credit risk has changed.
−Removed: Such is the case with the global COVID-19 pandemic, which has increased uncertainty and poses a significant challenge to the macro-economic environment.
−Removed: Management believes this has increased the probability of credit default, causing the Company to increase the allowance for expected credit losses during the current year.
−Removed: At each reporting period, the Company will recognize the amount of change in current expected credit losses as an allowance gain or loss in Selling, general, and administrative expenses in the Consolidated Statements of Income.
−Removed: Financial assets are written-off when the Company has no reasonable expectation of recovering the financial asset, either in its entirety, or a portion thereof.
−Removed: This is the case when the Company determines that the customer does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off.
−Removed: The following table presents the year-to-date (increases)/decreases in the allowance for credit losses for Accounts receivable:
−Removed: (in thousands)
−Removed: September 30,
−Removed: Specific customer reserves
−Removed: $ ( 1,719 ) $ ( 44 ) $ 12 $ 42 $ 74 $ ( 1,635 )
−Removed: Incremental expected credit losses
−Removed: — ( 1,139 ) ( 1,109 ) 8 ( 3 ) ( 2,243 )
−Removed: Accounts receivable expected credit losses
−Removed: $ ( 1,719 ) $ ( 1,183 ) $ ( 1,097 ) $ 50 $ 71 $ ( 3,878 )
−Removed: The following table presents the year-to-date (increases)/decreases in the allowance for credit losses for Noncurrent receivables:
−Removed: (in thousands) December 31,
−Removed: September 30,
−Removed: Noncurrent receivables expected credit losses
−Removed: $ — $ ( 206 ) $ ( 185 ) $ 8 $ — $ ( 383 )
+Added: Noncurrent receivables, net $ 34,945 $ 36,265
Contract Assets and Liabilities
4 unchanged sentences
Contract assets and Contract liabilities are reported on the Consolidated Balance Sheets in a net position on a contract-by-contract basis at the end of each reporting period.
−Removed: As of September 30, 2020 and December 31, 2019, Contract assets and Contract liabilities consisted of the following:
+Added: As of March 31, 2021 and December 31, 2020, Contract assets and Contract liabilities consisted of the following:
(in thousands)
−Removed: September 30,
2021 December 31,
Contract assets $ 122,688 $ 140,348
−Removed: $ 105,626 $ 79,070
Allowance for expected credit losses
−Removed: Contract assets, net
( 921 ) ( 1,059 )
+Added: Contract assets, net $ 121,767 $ 139,289
Contract liabilities $ 7,899 $ 8,206
−Removed: $ 7,913 $ 5,656
−Removed: Contract assets increased $ 25.8 million during the nine-month period ended September 30, 2020.
−Removed: The increase was primarily due to an increase in unbilled revenue related to the satisfaction of performance obligations, in excess of the amounts billed to customers for contracts that were in a contract asset position.
−Removed: There were no impairment losses related to our Contract assets during the nine month periods ended September 30, 2020 and 2019.
−Removed: As described in Notes 1 and 11, effective January 1, 2020, the Company adopted the provisions of ASC 326, Current Expected Credit Losses (CECL).
−Removed: The following table presents the year-to-date (increases)/ decreases in the allowance for credit losses for Contract assets:
−Removed: (in thousands)
−Removed: September 30,
−Removed: Contract assets expected credit losses $ — $ ( 403 ) $ ( 382 ) $ 4 $ 8 $ ( 773 )
−Removed: Contract liabilities increased $ 2.3 million during the nine-month period ended September 30, 2020, primarily due to increased billings in excess of revenue recognized from satisfied performance obligations for contracts that were in a contract liability position.
−Removed: Revenue recognized for the nine-month periods ended September 30, 2020 and 2019 that was included in the Contract liability balance at the beginning of the year was $ 3.5 million and $ 6.1 million, respectively.
+Added: Contract assets decreased $ 17.5 million during the three-month period ended March 31, 2021.
+Added: The decrease was primarily due to invoicing to customers exceeding revenue recognized for satisfied performance obligations for contracts that were in a contract asset position.
+Added: There were no impairment losses related to our Contract assets during the three month periods ended March 31, 2021 and March 31, 2020.
+Added: Contract liabilities decreased $ 0.3 million during the three-month period ended March 31, 2021, primarily due to revenue recognized from satisfied performance obligations exceeding amounts invoiced to customers that were in a contract liability position.
+Added: Revenue recognized for the three-month periods ended March 31, 2021 and 2020 that was included in the Contract liability balance at the beginning of the year was $ 4.3 million and $ 1.9 million, respectively.
Costs included in inventories are raw materials, labor, supplies and allocable depreciation and overhead.
4 unchanged sentences
Once established, the original cost of the inventory less the related write-down represents the new cost basis of such inventories.
−Removed: As of September 30, 2020 and December 31, 2019, Inventories consisted of the following:
+Added: As of March 31, 2021 and December 31, 2020, Inventories consisted of the following:
(in thousands)
−Removed: September 30, 2020 December 31, 2019
+Added: March 31, 2021 December 31, 2020
Raw materials $ 60,391 $ 57,789
−Removed: $ 65,117 $ 52,960
Work in process
1 unchanged sentence
Finished goods 15,038 12,273
−Removed: 12,783 10,445
Total inventories
1 unchanged sentence
Goodwill and Other Intangible Assets
+Added: Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually.
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination.
−Removed: Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested for impairment at least annually at the reporting unit level.
−Removed: Impairment is the condition that exists when the carrying amount of a reporting unit, including goodwill, exceeds its fair value.
Our reportable segments are consistent with our operating segments.
1 unchanged sentence
Goodwill and other long-lived assets are reviewed for impairment whenever events, such as significant changes in the business climate, plant closures, changes in product offerings, or other circumstances indicate that the carrying amount may not be recoverable.
−Removed: To determine fair value, we utilize market-based approaches and an income approach.
+Added: To determine fair value, we utilize two market-based approaches and an income approach.
Under the market-based approaches, we utilize information regarding the Company, as well as publicly available industry information, to determine earnings multiples and sales multiples.
−Removed: Under the income approach, we determine fair value based on estimated future cash flows of each reporting unit, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn.
+Added: Under the income approach, we determine fair value based on estimated future cash flows of each reporting unit, discounted by an estimated weighted-average cost of capital,
+Added: which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn.
In the second quarter of 2020, management applied the quantitative assessment approach in performing its annual evaluation of goodwill and concluded that no impairment provision was required.
As part of this evaluation, the Company considered projected cash flows and market multiples for the Company’s Machine Clothing reporting unit and three AEC reporting units.
−Removed: Management performed assessments as to whether the fair value of each reporting unit was less than its carrying value as of June 30, 2020 and concluded that it was more likely than not that each reporting unit’s fair value continued to exceed its carrying value.
+Added: Management performed these quantitative assessments and concluded that each reporting unit’s fair value continued to exceed its carrying value.
In addition, there were no amounts at risk due to the estimated spread between the fair and carrying values.
Accordingly, no impairment charges were recorded.
−Removed: We are continuing to amortize certain patents, trade names, customer relationships, customer contracts and technology assets that have finite lives.
−Removed: The gross carrying value, accumulated amortization and net values of intangible assets and goodwill as of September 30, 2020 and December 31, 2019, were as follows:
−Removed: As of September 30, 2020 Weighted average amortization life
−Removed: Gross carrying amount
−Removed: Accumulated amortization
−Removed: Net carrying amount
−Removed: (in thousands)
−Removed: Amortized intangible assets:
−Removed: AEC Trademarks and trade names
−Removed: 6-15 $ 208 $ ( 148 ) $ 60
−Removed: AEC Technology
−Removed: 10-15 6,522 ( 871 ) 5,651
−Removed: AEC Intellectual property
−Removed: 15 1,250 ( 68 ) 1,182
−Removed: AEC Customer contracts
−Removed: 6 17,471 ( 13,110 ) 4,361
−Removed: AEC Customer relationships
−Removed: 8-15 51,763 ( 14,768 ) 36,995
−Removed: AEC Other intangibles
−Removed: 5 322 ( 290 ) 32
−Removed: Total amortized intangible assets
−Removed: $ 77,536 $ ( 29,255 ) $ 48,281
−Removed: Unamortized intangible assets:
−Removed: $ 69,884 $ — $ 69,884
−Removed: 114,403 — 114,403
−Removed: Total unamortized intangible assets:
−Removed: $ 184,287 $ — $ 184,287
−Removed: As of December 31, 2019 Weighted average amortization life
−Removed: Gross carrying amount
−Removed: Accumulated amortization
−Removed: Net carrying amount
−Removed: (in thousands)
−Removed: Amortized intangible assets:
−Removed: AEC Trademarks and trade names
−Removed: 6-15 $ 208 $ ( 135 ) $ 73
−Removed: AEC Technology
−Removed: 10-15 6,191 ( 387 ) 5,804
−Removed: AEC Intellectual property
−Removed: 15 1,250 ( 7 ) 1,243
−Removed: AEC Customer contracts
−Removed: 6 17,471 ( 10,927 ) 6,544
−Removed: AEC Customer relationships
−Removed: 8-15 51,255 ( 12,108 ) 39,147
−Removed: AEC Other intangibles
−Removed: 5 322 ( 241 ) 81
−Removed: Total amortized intangible assets
−Removed: $ 76,697 $ ( 23,805 ) $ 52,892
−Removed: Unamortized intangible assets:
−Removed: $ 67,672 $ — $ 67,672
−Removed: 113,262 — 113,262
−Removed: Total unamortized intangible assets:
−Removed: $ 180,934 $ — $ 180,934
−Removed: The changes in intangible assets, net and goodwill from December 31, 2019 to September 30, 2020, were as follows:
−Removed: (in thousands)
−Removed: September 30,
−Removed: Amortized intangible assets:
−Removed: AEC Trademarks and trade names
−Removed: $ 73 $ — $ ( 13 ) $ — $ 60
−Removed: AEC Technology
−Removed: 5,804 — ( 480 ) 327 5,651
−Removed: AEC Intellectual property
−Removed: 1,243 — ( 61 ) — 1,182
−Removed: AEC Customer contracts
−Removed: 6,544 — ( 2,183 ) — 4,361
−Removed: AEC Customer relationships
−Removed: 39,147 329 ( 2,626 ) 145 36,995
−Removed: AEC Other intangibles
−Removed: 81 — ( 49 ) — 32
−Removed: Total amortized intangible assets
−Removed: $ 52,892 $ 329 $ ( 5,412 ) $ 472 $ 48,281
−Removed: Unamortized intangible assets:
−Removed: $ 67,672 $ — $ — $ 2,212 $ 69,884
−Removed: 113,262 335 — 806 114,403
−Removed: Total unamortized intangible assets:
−Removed: $ 180,934 $ 335 $ — $ 3,018 $ 184,287
−Removed: Estimated amortization expense of intangibles for the years ending December 31, 2020 through 2024, is as follows:
−Removed: Year Annual amortization
−Removed: (in thousands)
+Added: Management is scheduled to perform the 2021 annual goodwill impairment test during the second quarter.
Financial Instruments
1 unchanged sentence
(in thousands, except interest rates)
−Removed: September 30, 2020 December 31, 2019
+Added: March 31, 2021 December 31, 2020
Revolving credit agreement with borrowings outstanding at an end of period interest rate of 3.56 % in 2021 and 3.50 % in 2020 (including the effect of interest rate hedging transactions, as described below), due in 2024
+Added: $ 384,000 $ 398,000
Other debt, at an average end of period rate of 5.50 % in both 2021 and 2020, due in varying amounts through 2021
Long-term debt 384,002 398,009
−Removed: 418,012 424,029
current portion
−Removed: ( 12 ) ( 20 )
Long-term debt, net of current portion $ 384,000 $ 398,000
−Removed: $ 418,000 $ 424,009
On October 27, 2020, we entered into a $ 700 million unsecured Four-Year Revolving Credit Facility Agreement (the “Credit Agreement”) which amended and restated the prior amended and restated $ 685 million Five-Year Revolving Credit Facility Agreement, which we had entered into on November 7, 2017 (the “Prior Agreement”).
−Removed: The Credit Agreement matures on October 27, 2024.
−Removed: Under the Prior Agreement, $ 418 million of borrowings were outstanding as of September 30, 2020.
−Removed: The applicable interest rate for borrowings was LIBOR plus a spread, based on our leverage ratio at the time of borrowing, with an option to borrow at base rate.
−Removed: At the time of the last borrowing on September 28, 2020, the spread was 1.375 %.
−Removed: Under the Prior Agreement, the spread was based on a pricing grid, which ranged from 1.250 % to 1.750 % and, after giving effect to the amendments, the applicable spread under the Credit Agreement increased by 25 basis points, now ranging from 1.50 % to 2.00 %, in each case, based on our leverage ratio.
−Removed: Under the Prior Agreement, we were required to maintain a leverage ratio (as defined in the agreement) of not greater than 3.50 to 1.00 and minimum interest coverage (as defined) of 3.00 to 1.00.
−Removed: Under the prior agreement, our leverage ratio was 1.50 to 1.00 and our interest coverage ratio was 14.62 to 1.00 as of September 30, 2020 and, at that date, we would have been able to borrow an additional $ 267 million.
+Added: Under the Credit Agreement, $ 384 million of borrowings were outstanding as of March 31, 2021.
+Added: The applicable interest rate for borrowings was LIBOR plus a spread, based on our leverage ratio at the time of borrowing.
+Added: At the time of the last borrowing on March 31, 2021, the spread was 1.625 %.
+Added: The spread was based on a pricing grid, which ranged from 1.500 % to 2.000 %, based on our leverage ratio.
+Added: Based on our maximum leverage ratio and our Consolidated EBITDA, and without modification to any other credit agreements, as of March 31, 2021, we would have been able to borrow an additional $ 316 million under the Agreement.
The Credit Agreement contains customary terms, as well as affirmative covenants, negative covenants and events of default that are comparable to those in the Prior Agreement.
2 unchanged sentences
On November 27, 2017, we terminated our interest rate swap agreements, originally entered into on May 9, 2016, that had effectively fixed the interest rate on $ 300 million of revolving credit borrowings, in order to enter into a new interest rate swap with a greater notional amount, and the same maturity as the Credit Agreement.
−Removed: We received $ 6.3 million when the swap agreements were terminated and that payment will be amortized into interest expense through March 2021.
−Removed: On May 6, 2016, we terminated other interest rate swap agreements that had effectively fixed the interest rate on $ 120 million of revolving credit borrowings, in order to enter into a new interest rate swap with a greater notional amount, and the same maturity as the Credit Agreement.
−Removed: We paid $ 5.2 million to terminate the swap agreements, which were fully amortized into interest expense through June 2020.
+Added: We received $ 6.3 million when the swap agreements were terminated, which has been fully amortized into interest expense through March 2021.
On November 28, 2017, we entered into interest rate swap agreements for the period December 18, 2017 through October 17, 2022.
These transactions have the effect of fixing the LIBOR portion of the effective interest rate (before addition of the spread) on $ 350 million of indebtedness drawn under the Credit Agreement at the rate of 2.11 % during the period.
−Removed: Under the terms of these transactions, we pay the fixed rate of 2.11% and the counterparties pay a floating rate based on the one-month LIBOR rate at each monthly calculation date, which on September 16, 2020 was 0.
+Added: Under the terms of these transactions, we pay the fixed rate of 2.11 % and the counterparties pay a floating rate based on the one-month LIBOR rate at each monthly calculation date, which on March 16, 2021 was 0.
11 %, during the swap period.
−Removed: On September 16, 2020, the all-in-rate on the $ 350 million of debt was 3.485 %.
+Added: On March 16, 2021, the all-in-rate on the $ 350 million of debt was 3.735 %.
These interest rate swaps are accounted for as a hedge of future cash flows, as further described in Note 15.
No cash collateral was received or pledged in relation to the swap agreements.
+Added: Under the Credit Agreement, we are currently required to maintain a leverage ratio (as defined in the agreement) of not greater than 3.50 to 1.00 and minimum interest coverage (as defined) of 3.00 to 1.00.
+Added: As of March 31, 2021, our leverage ratio was 1.20 to 1.00 and our interest coverage ratio was 15.72 to 1.00.
+Added: We may purchase our Common Stock or pay dividends to the extent our leverage ratio remains at or below 3.50 to 1.00, and may make acquisitions with cash, provided our leverage ratio does not exceed the limits noted above.
Indebtedness under the Credit Agreement is ranked equally in right of payment to all unsecured senior debt.
−Removed: We were in compliance with all debt covenants as of September 30, 2020.
+Added: We were in compliance with all debt covenants as of March 31, 2021.
Fair-Value Measurements
2 unchanged sentences
Level 3 inputs are unobservable data points for the asset or liability, and include situations in which there is little, if any, market activity for the asset or liability.
−Removed: We had no Level 3 financial assets or liabilities at September 30, 2020, or at December 31, 2019.
+Added: We had no Level 3 financial assets or liabilities at March 31, 2021, or at December 31, 2020.
The following table presents the fair-value hierarchy for our Level 1 and Level 2 financial and non-financial assets and liabilities, which are measured at fair value on a recurring basis:
−Removed: September 30, 2020 December 31, 2019
−Removed: markets Significant
−Removed: inputs Quoted
−Removed: markets Significant
−Removed: (in thousands) (Level 1) (Level 2) (Level 1) (Level 2)
+Added: March 31, 2021 December 31, 2020
+Added: (in thousands)
Cash equivalents $ 14,390 $ — $ 17,508 $ —
4 unchanged sentences
(a) Original cost basis $ 0.5 million.
−Removed: (b) Net of $ 1.2 million receivable floating leg and $ 15.6 million liability fixed leg.
−Removed: (c) Net of $ 15.2 million receivable floating leg and $ 20.7 million liability fixed leg.
Cash equivalents include short-term securities that are considered to be highly liquid and easily tradable.
These securities are valued using inputs observable in active markets for identical securities.
−Removed: The common stock of the unaffiliated foreign public company is traded in an active market exchange.
−Removed: The shares are measured at fair value using closing stock prices and are recorded in the Consolidated Balance Sheets as Other assets.
−Removed: Changes in the fair value of the investment are reported in the Consolidated Statements of Income.
−Removed: We operate our business in many regions of the world, and currency rate movements can have a significant effect on operating results.
−Removed: Foreign currency instruments are entered into periodically, and consist of foreign currency option contracts and forward contracts that are valued using quoted prices in active markets obtained from independent pricing sources.
−Removed: These instruments are measured using market foreign exchange prices and are recorded in the Consolidated Balance Sheets as Other current assets and Accounts payable, as applicable.
−Removed: Changes in fair value of these instruments are recorded as gains or losses within Other (income)/expense, net.
−Removed: When exercised, the foreign currency instruments are net settled with the same financial institution that bought or sold them.
−Removed: For all positions, whether options or forward contracts, there is risk from the possible inability of the financial institution to meet the terms of the contracts and the risk of unfavorable changes in interest and currency rates, which may reduce the value of the instruments.
−Removed: We seek to mitigate risk by evaluating the creditworthiness of counterparties and by monitoring the currency exchange and interest rate markets while reviewing the hedging risks and contracts to ensure compliance with our internal guidelines and policies.
−Removed: Changes in exchange rates can result in revaluation gains and losses that are recorded in Selling, general and administrative expenses or Other (income)/expense, net.
−Removed: Revaluation gains and losses occur when our business units have cash, intercompany (recorded in Other (income)/expense, net) or third-party trade (recorded in selling, general and administrative expenses) receivable or payable balances in a currency other than their local reporting (or functional) currency.
−Removed: Operating results can also be affected by the translation of sales and costs, for each non-U.S.
−Removed: subsidiary, from the local functional currency to the U.S.
−Removed: The translation effect on the Consolidated Statements of Income is dependent on our net income or expense position in each non-U.S.
−Removed: currency in which we do business.
−Removed: A net income position exists when sales realized in a particular currency exceed expenses paid in that currency;
−Removed: a net expense position exists if the opposite is true.
The interest rate swaps are accounted for as hedges of future cash flows.
1 unchanged sentence
Unrealized gains and losses on the swaps flow through the caption Derivative valuation adjustment in the Shareholders’ equity section of the Consolidated Balance Sheets.
−Removed: As of September 30, 2020, these interest rate swaps were determined to be highly effective hedges of interest rate cash flow risk.
+Added: As of March 31, 2021, these interest rate swaps were determined to be highly effective hedges of interest rate cash flow risk.
Amounts accumulated in Other comprehensive income are reclassified as Interest expense, net when the related interest payments (that is, the hedged forecasted transactions), and amortization related to the swap buyouts, affect earnings.
−Removed: Interest (income)/expense related to payments under the active swap agreements totaled $ 3.7 million for the nine month period ended September 30, 2020, and $( 0.8 ) million for the nine month period ended September 30, 2019.
−Removed: Additionally, non-cash interest income related to the amortization of swap buyouts totaled $ 0.9 million for the nine month period ended September 30, 2020 and $ 0.3 million for the nine month period ended September 30, 2019.
−Removed: Gains/(losses) related to changes in fair value of derivative instruments that were recognized in Other (income)/expense, net in the Consolidated Statements of Income were as follows:
−Removed: Three months ended September 30, Nine months ended September 30,
−Removed: (in thousands) 2020 2019 2020 2019
−Removed: Derivatives not designated as hedging instruments
−Removed: Foreign currency options gains/(losses) $ — $ — $ ( 64 ) $ —
+Added: Interest (income)/expense related to payments under the active swap agreements totaled $ 1.7 million for the three month period ended March 31, 2021, and $ 0.5 million for the three month period ended March 31, 2020.
+Added: Additionally, non-cash interest income related to the amortization of swap buyouts totaled $ 0.3 million for the three month period ended March 31, 2021 and $ 0.1 million for the three month period ended March 31, 2020.
Contingencies
2 unchanged sentences
is a defendant in suits brought in various courts in the United States by plaintiffs who allege that they have suffered personal injury as a result of exposure to asbestos-containing paper machine clothing synthetic dryer fabrics marketed during the period from 1967 to 1976 and used in certain paper mills.
−Removed: We were defending 3,616 claims as of September 30, 2020.
+Added: We were defending 3,617 claims as of March 31, 2021.
The following table sets forth the number of claims filed, the number of claims settled, dismissed or otherwise resolved, and the aggregate settlement amount during the periods presented:
7 unchanged sentences
2020 3,708 152 59 3,615 57
−Removed: 2020 (As of September 30) 3,708 133 41 3,616 $ 57
+Added: 2021 (As of March 31) 3,615 5 7 3,617 $ —
We anticipate that additional claims will be filed against the Company and related companies in the future, but are unable to predict the number and timing of such future claims.
2 unchanged sentences
Our insurance carrier has defended each case and funded settlements under a standard reservation of rights.
−Removed: As of September 30, 2020, we had resolved, by means of settlement or dismissal, 37,930 claims.
+Added: As of March 31, 2021, we had resolved, by means of settlement or dismissal, 37,954 claims.
The total cost of resolving all claims was $ 10.4 million.
2 unchanged sentences
(“Brandon”), is also a separate defendant in many of the asbestos cases in which Albany is named as a defendant, despite never having manufactured any fabrics containing asbestos.
−Removed: While Brandon was defending against 7,710 claims as of September 30, 2020, only twelve claims have been filed against Brandon since January 1, 2012, and no settlement costs have been incurred since 2001.
+Added: While Brandon was defending against 7,709 claims as of March 31, 2021, only twelve claims have been filed against Brandon since January 1, 2012, and a negligible amount of settlement costs have been incurred since 2001.
Brandon was acquired by the Company in 1999, and has its own insurance policies covering periods prior to 1999.
10 unchanged sentences
Changes in Shareholders’ Equity
−Removed: The following table summarizes changes in Shareholders’ Equity for the period December 31, 2019 to September 30, 2020:
−Removed: Common Stock Class B
−Removed: Common Stock Additional paid-in capital Retained earnings Accumulated items of other
−Removed: comprehensive income Class A
−Removed: Treasury Stock Noncontrolling Interest Total Equity
−Removed: (in thousands) Shares Amount Shares Amount Shares Amount
+Added: The following table summarizes changes in Shareholders’ Equity for the period December 31, 2020 to March 31, 2021:
+Added: Additional paid-in capital
+Added: Retained earnings
+Added: Accumulated items of other comprehensive income
+Added: Treasury Stock
+Added: Noncontrolling Interest
+Added: (in thousands)
December 31, 2020 39,115 $ 39 1,618 $ 2 $ 433,696 $ 770,746 $ ( 132,408 ) 8,391 $ ( 256,009 ) $ 3,799 $ 819,865
−Removed: Adoption of accounting standards (a) — — — — — ( 1,443 ) — — — — ( 1,443 )
Net income — — — — — 27,582 — — — 27 27,609
4 unchanged sentences
Class A Common Stock, $ 0.20 per share
+Added: — — — — — ( 6,150 ) — — — — ( 6,150 )
Class B Common Stock, $ 0.20 per share
+Added: — — — — — ( 324 ) — — — — ( 324 )
Cumulative translation adjustments — — — — — — ( 15,955 ) — — ( 210 ) ( 16,165 )
2 unchanged sentences
March 31, 2021 39,141 $ 39 1,618 $ 2 $ 433,811 $ 791,854 $ ( 147,102 ) 8,391 $ ( 256,009 ) $ 3,616 $ 826,211
−Removed: Net income — — — — — 32,354 — — — 95 32,449
−Removed: Compensation and benefits paid or payable in shares — — — — 466 — — ( 15 ) 317 — 783
−Removed: Options exercised 1 — — — 20 — — — — — 20
−Removed: Shares issued to Directors — — — — 416 — — — — — 416
−Removed: Dividends declared
−Removed: Class A Common Stock, $0.19 per share — — — — — ( 5,835 ) — — — — ( 5,835 )
−Removed: Class B Common Stock, $0.19 per share — — — — — ( 307 ) — — — — ( 307 )
−Removed: Cumulative translation adjustments — — — — — — 8,964 — — 152 9,116
−Removed: Pension and postretirement liability adjustments — — — — — — 142 — — — 142
−Removed: Derivative valuation adjustment — — — — — — ( 187 ) — — — ( 187 )
−Removed: June 30, 2020 39,113 $ 39 1,618 $ 2 $ 432,738 $ 726,233 $ ( 199,627 ) 8,394 $ ( 256,074 ) $ 2,847 $ 706,158
−Removed: Net income — — — — — 29,589 — — — 1 29,590
−Removed: Compensation and benefits paid or payable in shares — — — — 80 — — — — — 80
−Removed: Options exercised — — — — 5 — — — — — 5
−Removed: Shares issued to Directors — — — — — — — — — — —
−Removed: Dividends declared
−Removed: Class A Common Stock, $0.19 per share — — — — — ( 5,837 ) — — — — ( 5,837 )
−Removed: Class B Common Stock, $0.19 per share — — — — — ( 307 ) — — — — ( 307 )
−Removed: Cumulative translation adjustments — — — — — — 19,821 — — 201 20,022
−Removed: Pension and postretirement liability adjustments — — — — — — ( 474 ) — — — ( 474 )
−Removed: Derivative valuation adjustment — — — — — — 621 — — — 621
−Removed: September 30, 2020 39,113 $ 39 1,618 $ 2 $ 432,823 $ 749,678 $ ( 179,659 ) 8,394 $ ( 256,074 ) $ 3,049 $ 749,858
−Removed: The following table summarizes changes in Shareholders’ Equity for the period December 31, 2018 to September 30, 2019:
−Removed: Common Stock Class B
−Removed: Common Stock Additional paid-in capital Retained earnings Accumulated items of other
−Removed: comprehensive income Class A
−Removed: Treasury Stock Noncontrolling Interest Total Equity
−Removed: (in thousands) Shares Amount Shares Amount Shares Amount
+Added: The following table summarizes changes in Shareholders’ Equity for the period December 31, 2019 to March 31, 2020:
+Added: Additional paid-in capital
+Added: Retained earnings
+Added: items of other comprehensive income
+Added: Treasury Stock
+Added: Noncontrolling Interest
+Added: (in thousands)
December 31, 2019 39,099 $ 39 1,618 $ 2 $ 432,518 $ 698,496 $ ( 175,981 ) 8,409 $ ( 256,391 ) $ 4,006 $ 702,689
−Removed: Adoption of accounting standards (b) — — — — — 35 — — — — 35
+Added: Adoption of accounting standards (a) — — — — — ( 1,443 ) — — — — ( 1,443 )
Net income — — — — — 9,109 — — — ( 1,515 ) 7,594
Compensation and benefits paid or payable in shares
+Added: 13 — — — ( 682 ) — — — — — ( 682 )
Options exercised — — — — — — — — —
2 unchanged sentences
Class A Common Stock, $ 0.19 per share
+Added: — — — — — ( 5,834 ) — — — — ( 5,834 )
Class B Common Stock, $ 0.19 per share
+Added: — — — — — ( 307 ) — — — — ( 307 )
Cumulative translation adjustments
+Added: — — — — — — ( 25,747 ) — — 109 ( 25,638 )
Pension and postretirement liability adjustments — — — — — — 890 — — — 890
Derivative valuation adjustment
+Added: — — — — — — ( 7,708 ) — — — ( 7,708 )
March 31, 2020 39,112 $ 39 1,618 $ 2 $ 431,836 $ 700,021 $ ( 208,546 ) 8,409 $ ( 256,391 ) $ 2,600 $ 669,561
−Removed: Net income — — — — — 34,054 — — — 205 34,259
−Removed: Compensation and benefits paid or payable in shares — — — — 958 — — ( 10 ) 212 — 1,170
−Removed: Options exercised 2 — — — 28 — — — — — 28
−Removed: Shares issued to Directors — — — — — — — — — — —
−Removed: Dividends declared
−Removed: Class A Common Stock, $0.18 per share — — — — — ( 5,523 ) — — — — ( 5,523 )
−Removed: Class B Common Stock, $0.18 per share — — — — — ( 291 ) — — — — ( 291 )
−Removed: Conversion of Class B shares to Class A shares, rounding 1,616 2 ( 1,616 ) ( 1 ) ( 1 ) — — — — — —
−Removed: Cumulative translation adjustments — — — — — — ( 1 ) — — 2 1
−Removed: Pension and postretirement liability adjustments — — — — — — ( 40 ) — — — ( 40 )
−Removed: Derivative valuation adjustment — — — — — — ( 4,695 ) — — — ( 4,695 )
−Removed: June 30, 2019 39,096 $ 39 1,618 $ 2 $ 431,037 $ 641,297 $ ( 168,116 ) 8,409 $ ( 256,391 ) $ 3,448 $ 651,316
−Removed: Net income — — — — — 40,009 — — — 116 40,125
−Removed: Compensation and benefits paid or payable in shares — — — — 790 — — — — — 790
−Removed: Options exercised 2 — — — 33 — — — — — 33
−Removed: Shares issued to Directors — — — — — — — — — — —
−Removed: Dividends declared
−Removed: Class A Common Stock, $0.18 per share — — — — — ( 5,524 ) — — — — ( 5,524 )
−Removed: Class B Common Stock, $0.18 per share — — — — — ( 291 ) — — — — ( 291 )
−Removed: Conversion of Class B shares to Class A shares, rounding — — — — — — — — — — —
−Removed: Cumulative translation adjustments — — — — — — ( 22,522 ) — — ( 13 ) ( 22,535 )
−Removed: Pension and postretirement liability adjustments — — — — — — 490 — — — 490
−Removed: Derivative valuation adjustment — — — — — — ( 1,323 ) — — — ( 1,323 )
−Removed: September 30, 2019 39,098 $ 39 1,618 $ 2 $ 431,860 $ 675,491 $ ( 191,471 ) 8,409 $ ( 256,391 ) $ 3,551 $ 663,081
−Removed: (a) As described in Note 1, the Company adopted the provisions of ASC 326, Current Expected Credit Losses (CECL) effective January 1, 2020, which resulted in a decrease to Retained earnings of $ 1.4 million.
−Removed: (b) The Company adopted ASC 842, Leases effective January 1, 2019, which resulted in an increase to Retained earnings of less than $ 0.1 million.
+Added: (a) The Company adopted the provisions of ASC 326, Current Expected Credit Losses (CECL) effective January 1, 2020, which resulted in a decrease to Retained earnings of $ 1.4 million.
Recent Accounting Pronouncements
−Removed: In August 2018, an accounting update was issued which aims to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies when preparing defined benefit plan disclosures.
−Removed: We are required to adopt this update for our 2020 annual filing which will result in minor changes to footnote disclosures in future filings.
−Removed: In December 2019, an accounting update was issued which removes certain exceptions for recognizing deferred taxes for investments and performing intra-period tax allocations.
−Removed: The update also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group.
−Removed: We plan to adopt the new standard as of January 1, 2021 and we are assessing the potential impact on our financial statements.
In March 2020, an accounting update was issued which provides optional guidance for a limited time to ease the potential accounting burden associated with transitioning away from reference rates such as LIBOR.
−Removed: The expedients and exceptions provided by this update will not be available after December 31, 2022, other than for certain hedging relationships entered into prior.
+Added: In January 2021, an additional accounting update was issued to extend certain optional expedients to derivative contracts modified as a result of rate reform, including certain derivatives that do not reference LIBOR or other reference rates that are expected to be discontinued.
+Added: The expedients and exceptions provided by this update will not be available after December 31, 2022.
We are currently assessing the potential impact on our financial statements.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.