Exhibit 99.1

                               HEXCEL CORPORATION

ACCOUNTING FOR MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK

         On March 19, 2003, Hexcel Corporation ("Hexcel" or the "Company")
issued 125,000 shares of series A convertible preferred stock and 125,000 shares
of series B convertible preferred stock for $125.0 million in cash. The two new
series of convertible preferred stocks are convertible into an aggregate of
approximately 49.8 million shares of Hexcel common stock.

         The series A and the series B convertible preferred stocks are
mandatorily redeemable on January 22, 2010 for cash or Hexcel common stock at
the Company's discretion. Both preferred stocks are convertible, at the option
of the holder, into common stock at a conversion price of $3.00 per share, and
will automatically be converted into common stock if the closing trading price
of the common stock for any period of 60 consecutive trading days ending after
March 19, 2006 exceeds $9.00 per share. The preferred stockholders are entitled
to vote on an as converted basis with Hexcel's common stockholders.

         Commencing on the third anniversary of the original issuance, holders
of the series A convertible preferred stock will be entitled to receive
dividends at an annual rate of 6% of the "accrued value." Accrued value is
calculated as an amount equal to the sum of $1,195.618 per share and the
aggregate of all accrued but unpaid dividends. Dividends are payable quarterly
and may be paid in cash or added to the accrued value of the preferred stock, at
Hexcel's option. The series B preferred stock does not accrue dividends.

         The issuance of the series A and series B convertible preferred stock
will result in certain deductions being recognized in the Company's consolidated
statement of operations until such time as the preferred stock is converted to
Hexcel common stock or redeemed. These deductions will be reported under a
caption "Deemed preferred dividends and accretion," and represent a reduction of
net income (loss) in arriving at net income (loss) available to common
shareholders. On the Company's consolidated statement of operations, "Deemed
preferred dividends and accretion" will be reported after "Net income (loss)"
and before a new total captioned "Net income (loss) attributable to common
shareholders."

         "Deemed preferred dividends and accretion" will be composed of four
components. The accretion of these components is a non-cash event. However, cash
may be utilized to pay future dividends and/or for the redemption of the
preferred stock. In addition, in each instance the components are accrued over
the life of the convertible preferred stock using the effective interest method:

       i.     ACCRUED DIVIDENDS. Although the holders of the series A
              convertible preferred stock do not accrue dividends until the
              third anniversary of the issuance of the stock, U.S. GAAP requires
              that the dividends be accrued for accounting purposes over the
              life of the stock. Further, it has been assumed that the dividends
              payable to the holders of the series A convertible preferred stock
              will be accrued at the Company's election and not paid in cash
              when due. The accrued value of dividends over the term of the
              series A convertible preferred stock is $40.2 million.

       ii.    DISCOUNT. U.S. GAAP requires that the Company measure the
              difference between the stated value of the convertible preferred
              stock and the cash received from its issuance and accrete this
              difference over the term of the preferred stock. The stated value
              of the convertible preferred stock is $149.4 million, being the
              product of the number of shares of Hexcel common stock into which
              the two series of convertible preferred stock may be converted and
              the conversion price of $3.00 per share. The gross cash proceeds
              from the sale of the convertible preferred stock were $125.0
              million. The discount to be accreted over the term of the
              preferred stock is therefore $24.4 million.





       iii.   BENEFICIAL CONVERSION FEATURE ("BCF"). The BCF to be accreted over
              the term of the convertible preferred stock has been estimated as
              $23.4 million. The BCF is the difference between the proceeds
              received from the issuance of the series A and series B
              convertible preferred stock, net of commitment fees and the deemed
              fair market value at the closing of the Company's common stock
              into which the series A and series B convertible preferred stock
              is convertible. The deemed fair market value of the Company's
              common stock was calculated based upon the average price of the
              Company's common stock on March 19, 2003 of $2.93 per share.

       iv.    ISSUANCE COSTS. Issuance costs associated with the transaction are
              estimated to be $5.2 million. This amount will be accreted over
              the term of the convertible preferred stock.

       Based on these computations, the Company estimates that the "Deemed
preferred dividends and accretion" it will report annually will be as noted
below. The actual amount reported will depend upon the final computation of the
four components discussed above, the Company's actual payment practice with
respect to the series A convertible preferred stock dividends and whether such
preferred stock is mandatorily converted into Hexcel common stock. The amount
for 2003 reflects the period from March 19, 2003 to the end of the calendar
year.



--------------------------------- ---------- --------- ---------- ---------- ---------- ----------- ---------- ---------
(IN MILLIONS)                       2003       2004      2005       2006       2007        2008       2009       2010
--------------------------------- ---------- --------- ---------- ---------- ---------- ----------- ---------- ---------
                                                                                       
Deemed preferred dividends
  and accretion                   $     9.6  $   12.6  $    13.0  $    13.5  $    14.0  $     14.5  $    15.1  $    0.9
--------------------------------- ---------- --------- ---------- ---------- ---------- ----------- ---------- ---------


       The convertible preferred stock will be reported on Hexcel's consolidated
balance sheet as of March 19, 2003 at a value of $96.4 million, which represents
net cash proceeds of $119.8 million, after issuance costs of $5.2 million, less
the BCF of $23.4 million. The BCF will be credited to shareholders equity
(deficit) as additional paid in capital. The carrying value of the convertible
preferred stock will increase as the Company recognizes deemed preferred
dividends and accretion as reflected in the table below:



---------------------------------- ---------------------------------------------------------------------------------------
                                                                     AS OF DECEMBER 31
(IN MILLIONS)                        2003       2004       2005       2006       2007       2008       2009       2010
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
                                                                                        
Mandatorily redeemable
convertible preferred stock        $   106.0  $   118.6  $   131.6  $   145.1  $   159.1  $   173.6  $   188.7  $   189.6
---------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Stockholders' equity (deficit)
    Additional paid in capital     $    13.8  $     1.2  $  (11.8)  $  (25.3)  $  (39.3)  $  (53.8)  $  (68.9)  $  (69.8)
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