10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended March 31, 2015

or

¨ Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the transition period from                      to                    

Commission File Number 1-8472

Hexcel Corporation

(Exact name of registrant as specified in its charter)

Delaware	94-1109521
(State of Incorporation)	(I.R.S. Employer Identification No.)

Two Stamford Plaza

281 Tresser Boulevard

Stamford, Connecticut 06901-3238

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (203) 969-0666

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).    Yes  ¨    No   x

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Class	Outstanding at April 15, 2015
COMMON STOCK	96,366,147

HEXCEL CORPORATION AND SUBSIDIARIES

INDEX

			Page
PART I.	FINANCIAL INFORMATION
ITEM 1.	Condensed Consolidated Financial Statements (Unaudited)
	●	Condensed Consolidated Balance Sheets — March 31, 2015 and December 31, 2014	3
	●	Condensed Consolidated Statements of Operations — The Quarters Ended March 31, 2015 and 2014	4
	●	Condensed Consolidated Statements of Comprehensive Income — The Quarters Ended March 31, 2015 and 2014	4
	●	Condensed Consolidated Statements of Cash Flows — The Three Months Ended March 31, 2015 and 2014	5
	●	Notes to Condensed Consolidated Financial Statements	6
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		20
ITEM 4.	Controls and Procedures		20
PART II.	OTHER INFORMATION		21
ITEM 1.	Legal Proceedings		21
ITEM 1A.	Risk Factors		21
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		22
ITEM 6.	Exhibits and Reports on Form 8-K		22
SIGNATURE			23

2

PART I. FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements (Unaudited)

Hexcel Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

	(Unaudited)
(In millions, except per share data)	March 31, 2015			December 31, 2014
Assets
Current assets:
Cash and cash equivalents	$	22.7		$	70.9
Accounts receivable, net		289.8			233.5
Inventories		314.4			290.1
Prepaid expenses and other current assets		84.3			87.2
Total current assets		711.2			681.7
Property, plant and equipment		1,891.9			1,868.7
Less accumulated depreciation		(630.7	)		(630.5	)
Property, plant and equipment, net		1,261.2			1,238.2
Goodwill and intangible assets		59.1			59.8
Investments in affiliated companies		32.0			34.2
Other assets		23.7			22.5
Total assets	$	2,087.2		$	2,036.4
Liabilities and Stockholders’ Equity
Current liabilities:
Short-term borrowings	$	0.2		$	1.3
Accounts payable		140.1			175.0
Accrued liabilities		139.2			134.3
Total current liabilities		279.5			310.6
Long-term debt		480.0			415.0
Other non-current liabilities		162.2			160.9
Total liabilities		921.7			886.5
Stockholders’ equity:
Common stock, $0.01 par value, 200.0 shares authorized, 105.8 and 104.8 shares issued at March 31, 2015 and December 31, 2014, respectively		1.1			1.0
Additional paid-in capital		706.8			678.5
Retained earnings		904.0			845.5
Accumulated other comprehensive loss		(135.0	)		(69.7	)
		1,476.9			1,455.3
Less — Treasury stock, at cost, 9.5 shares at March 31, 2015 and 9.3 shares at December 31, 2014		(311.4	)		(305.4	)
Total stockholders’ equity		1,165.5			1,149.9
Total liabilities and stockholders’ equity	$	2,087.2		$	2,036.4

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Hexcel Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

	(Unaudited)
	Quarter Ended March 31,
(In millions, except per share data)	2015		2014
Net sales	$	471.8	$	461.7
Cost of sales		330.0		332.5
Gross margin		141.8		129.2
Selling, general and administrative expenses		46.7		41.0
Research and technology expenses		12.5		13.6
Operating income		82.6		74.6
Interest expense, net		1.9		1.8
Income before income taxes and equity in earnings of affiliated companies		80.7		72.8
Provision for income taxes		12.9		22.8
Income before equity in earnings of affiliated companies		67.8		50.0
Equity in earnings of affiliated companies		0.3		0.1
Net income	$	68.1	$	50.1
Basic net income per common share:	$	0.71	$	0.51
Diluted net income per common share:	$	0.70	$	0.50
Weighted average common shares outstanding:
Basic		96.2		98.5
Diluted		97.9		100.6

Hexcel Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

	(Unaudited)
	Quarter Ended March 31,
(In millions)		2015			2014
Net income	$	68.1		$		50.1
Currency translation adjustments		(50.6	)			0.4
Net unrealized pension and other benefit actuarial gains and prior service costs		1.3				—
Net unrealized losses on financial instruments, net of tax		(16.0	)			(1.3	)
Total other comprehensive loss		(65.3	)			(0.9	)
Comprehensive income	$	2.8		$		49.2

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Hexcel Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

	(Unaudited)
	Three Months Ended March 31,
(In millions)	2015			2014
Cash flows from operating activities
Net income	$	68.1		$	50.1
Reconciliation to net cash provided by operating activities:
Depreciation and amortization		18.3			17.1
Amortization of deferred financing costs		0.3			0.3
Deferred income taxes		11.3			19.3
Equity in earnings from affiliated companies		(0.3	)		(0.1	)
Stock-based compensation		12.0			8.8
Excess tax benefits on stock-based compensation		(8.5	)		(3.5	)
Changes in assets and liabilities:
Increase in accounts receivable		(70.3	)		(48.3	)
Increase in inventories		(37.9	)		(18.3	)
Decrease (increase) in prepaid expenses and other current assets		0.9			(6.4	)
(Decrease) increase in accounts payable and accrued liabilities		(5.3	)		11.9
Other-net		(3.2	)		2.5
Net cash (used in) provided by operating activities		(14.6	)		33.4
Cash flows from investing activities
Capital expenditures		(95.0	)		(55.0	)
Net cash used in investing activities		(95.0	)		(55.0	)
Cash flows from financing activities
Proceeds from senior unsecured credit facility		65.0			—
Proceeds from previous senior secured credit facility		—			60.0
Repayment of other debt, net		(1.1	)		(0.2	)
Dividends paid on common stock		(9.6	)		—
Repurchase of stock		—			(48.3	)
Activity under stock plans		10.4			(5.2	)
Net cash provided by financing activities		64.7			6.3
Effect of exchange rate changes on cash and cash equivalents		(3.3	)		(0.2	)
Net decrease in cash and cash equivalents		(48.2	)		(15.5	)
Cash and cash equivalents at beginning of period		70.9			65.5
Cash and cash equivalents at end of period	$	22.7		$	50.0
Supplemental data:
Accrual basis additions to property, plant and equipment	$	66.5		$	40.0

The accompanying notes are an integral part of these condensed consolidated financial statements.

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HEXCEL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Significant Accounting Policies

In these notes, the terms “Hexcel,” “the Company,” “we,” “us,” or “our” mean Hexcel Corporation and subsidiary companies. The accompanying condensed consolidated financial statements are those of Hexcel Corporation. Refer to Note 1 to the consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2014 for a discussion of our significant accounting policies.

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements have been prepared from the unaudited accounting records of Hexcel pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Certain information and footnote disclosures normally included in financial statements have been omitted pursuant to rules and regulations of the SEC.

In the opinion of management, the Condensed Consolidated Financial Statements include all normal recurring adjustments as well as any non-recurring adjustments necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods presented. The Condensed Consolidated Balance Sheet as of December 31, 2014 was derived from the audited 2014 consolidated balance sheet. Interim results are not necessarily indicative of results expected for any other interim period or for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2014 Annual Report on Form 10-K filed with the SEC on February 5, 2015.

Investments in Affiliated Companies

We have 50% equity ownership investments in an Asian joint venture Aerospace Composites Malaysia Sdn. Bhd. (“ACM”) and in Formax UK Limited (“Formax”).  These investments are accounted for using the equity method of accounting.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board issued Update No. 2014-09, Revenue from Contracts with Customers. The update clarifies the principles for recognizing revenue and develops a common revenue standard for all industries. The guidance is effective for the first quarter of 2017. Early application is not permitted. We are currently evaluating the impact of adopting this prospective guidance on our consolidated results of operations and financial condition.

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Note 2 — Net Income per Common Share

	Quarter Ended March 31,
(In millions, except per share data)	2015		2014
Basic net income per common share:
Net income	$	68.1	$	50.1
Weighted average common shares outstanding		96.2		98.5
Basic net income per common share	$	0.71	$	0.51
Diluted net income per common share:
Net income	$	68.1	$	50.1
Weighted average common shares outstanding — Basic		96.2		98.5
Plus incremental shares from assumed conversions:
Restricted stock units		0.6		0.7
Stock options		1.1		1.4
Weighted average common shares outstanding — Dilutive		97.9		100.6
Diluted net income per common share	$	0.70	$	0.50

Total shares underlying stock options of 0.2 million were excluded from the computation of diluted net income per share for the quarter ended March 31, 2015, as they were anti-dilutive.   

Note 3 — Inventories

(In millions)	March 31, 2015		December 31, 2014
Raw materials	$	133.0	$	111.1
Work in progress		48.2		48.5
Finished goods		133.2		130.5
Total inventories	$	314.4	$	290.1

Note 4 — Retirement and Other Postretirement Benefit Plans

We maintain qualified and nonqualified defined benefit retirement plans covering certain current and former U.S. and European employees, retirement savings plans covering eligible U.S. and U.K. employees and certain postretirement health care and life insurance benefit plans covering eligible U.S. retirees.  We also participate in a union sponsored multi-employer pension plan covering certain U.S. employees with union affiliations.

Defined Benefit Retirement Plans

Net Periodic Benefit Costs

Net periodic benefit costs of our defined benefit retirement plans for the quarters ended March 31, 2015 and 2014 were as follows:

	Quarter Ended March 31,
(In millions)	2015			2014
U.S. Nonqualified Defined Benefit Retirement Plans
Service cost	$	0.3	$	0.3
Interest cost		0.1		0.2
Net amortization and deferral		0.8		0.9
Settlement expense		—		1.3
Net periodic benefit cost	$	1.2	$	2.7

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	March 31, 2015		December 31, 2014
Amounts recognized on the balance sheet:
Accrued liabilities	$	4.5	$	4.5
Other non-current liabilities		15.5		14.6
Total accrued benefit	$	20.0	$	19.1

	Quarter Ended March 31,
(In millions)	2015			2014
European Defined Benefit Retirement Plans
Service cost	$	0.2		$	0.2
Interest cost		1.6			1.8
Expected return on plan assets		(2.2	)		(2.4	)
Net amortization and deferral		0.2			0.1
Net periodic benefit credit	$	(0.2	)	$	(0.3	)

	March 31, 2015		December 31, 2014
Amounts recognized on the balance sheet:
Non-current asset	$	5.2	$	3.3
Accrued liabilities	$	1.5	$	0.4
Other non-current liabilities		16.5		17.1
Total accrued benefit	$	18.0	$	17.5

Contributions

We generally fund our U.S. non-qualified defined benefit retirement plans when benefit payments are incurred.  Under the provisions of these non-qualified plans, we have contributed $0.1 million in the first three months of 2015 to cover unfunded benefits and expect to contribute an additional $4.5 million in 2015.  We contributed $25.7 million to our U.S. non-qualified defined benefit retirement plans during the 2014 fiscal year.

We contributed $1.3 million and $1.4 million to our European defined benefit retirement plans in the first quarters of 2015 and 2014, respectively.  We plan to contribute approximately $3.9 million during 2015 to these European plans. We contributed $6.1 million to our European plans during the 2014 fiscal year.

Postretirement Health Care and Life Insurance Benefit Plans

Net periodic benefit costs of our postretirement health care and life insurance benefit plans for the quarters ended March 31, 2015 and 2014 were immaterial.

	March 31,2015		December 31,2014
Amounts recognized on the balance sheet:
Accrued liabilities	$	0.6	$	0.6
Other non-current liabilities		5.4		5.7
Total accrued benefit	$	6.0	$	6.3

In connection with our postretirement plans, we contributed approximately $0.1 million during both of the quarters ended March 31, 2015 and 2014.  We periodically fund our postretirement plans to pay covered expenses as they are incurred.  We expect to contribute approximately $0.6 million in 2015 to cover unfunded benefits.  We contributed $0.2 million to our postretirement plans during the 2014 fiscal year.

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Note 5 — Debt

(In millions)	March 31, 2015		December 31, 2014
Working capital line of credit — China	$	0.2	$	1.3
Short-term borrowings		0.2		1.3
Senior unsecured credit facility — revolving loan due 2019		480.0		—
Senior secured credit facility — revolving loan due 2018		—		415.0
Long-term debt		480.0		415.0
Total debt	$	480.2	$	416.3

At March 31, 2015, total borrowings under our $700 million Senior Unsecured Credit Facility (the “Facility”) were $480 million. The Facility permits us to issue letters of credit up to an aggregate amount of $40.0 million.  Outstanding letters of credit reduce the amount available for borrowing under our revolving loan.  As of March 31, 2015, we had issued letters of credit under the Facility totaling $1.7 million, resulting in undrawn availability under the Facility as of March 31, 2015 of $218.3 million.  

The Facility contains financial and other covenants, including, but not limited to, restrictions on the incurrence of debt and the granting of liens, as well as the maintenance of an interest coverage ratio and a leverage ratio.  In accordance with the terms of the Facility, we are required to maintain a minimum interest coverage ratio of 3.50 (based on the ratio of EBITDA, as defined in the credit agreement, to interest expense) and may not exceed a maximum leverage ratio of 3.50 (based on the ratio of total debt to EBITDA) throughout the term of the Facility.  In addition, the Facility contains other terms and conditions such as customary representations and warranties, additional covenants and customary events of default.

Note 6 — Derivative Financial Instruments

Interest Rate Swap Agreements

As of March 31, 2015 the Company had two agreements to swap $75 million of floating rate obligations for fixed rate obligations at an average of 0.959% and 0.754% against LIBOR in U.S. dollars. Of the total of $150 million of swaps outstanding at March 31, 2015, $50 million matures in each of March 2016, September 2016, and March 2017. All of the swaps were accounted for as cash flow hedges of our floating rate bank loans. To ensure the swaps were highly effective, all the principal terms of the swaps matched the terms of the bank loans. The fair value of the interest rate swaps was a liability of $0.5 million at March 31, 2015 and an asset of $0.1 million and a liability of $0.3 million at December 31, 2014.

Foreign Currency Forward Exchange Contracts

A number of our European subsidiaries are exposed to the impact of exchange rate volatility between the U.S. dollar and the subsidiaries’ functional currencies, being either the Euro or the British Pound sterling.  We entered into contracts to exchange U.S. dollars for Euros and British Pound sterling through September 2017.  The aggregate notional amount of these contracts was $322.4 million and $255.8 million at March 31, 2015 and December 31, 2014, respectively.  The purpose of these contracts is to hedge a portion of the forecasted transactions of European subsidiaries under long-term sales contracts with certain customers.  These contracts are expected to provide us with a more balanced matching of future cash receipts and expenditures by currency, thereby reducing our exposure to fluctuations in currency exchange rates.  The effective portion of the hedges, losses of $23.7 million and gains of $0.8 million, were recorded in other comprehensive income (“OCI”) for the three months ended March 31, 2015 and 2014, respectively.  We classified the carrying amount of these contracts of $0.3 million in other assets and $32.8 million in other liabilities on the condensed consolidated balance sheets at March 31, 2015 and $0.3 million in other assets and $12.7 million classified in other liabilities at December 31, 2014.  During the three months ended March 31, 2015 and 2014, we recognized net decreases of $3.6 million and net increases of $1.6 million in gross margin, respectively.  For the quarters ended March 31, 2015 and 2014, hedge ineffectiveness was immaterial.

In addition, we enter into foreign exchange forward contracts which are not designated as hedges.  These are used to provide an offset to transactional gains or losses arising from the remeasurement of non-functional monetary assets and liabilities such as accounts receivable.  The change in the fair value of the derivatives is recorded in the statement of operations.  There are no credit contingency features in these derivatives.  During the quarters ended March 31, 2015 and 2014, we recognized net foreign exchange losses of $16.6 million and $0.2 million, respectively, in the Condensed Consolidated Statements of Operations. The net foreign exchange impact recognized from these hedges offset the translation exposure of these transactions.  The carrying amount of the contracts for asset and liability derivatives not designated as hedging instruments was $0.6 million classified in other assets and $10.0

9

million in other liabilities and $0.8 million classified in other assets and $5.5 million in other liabilities on the March 31, 2015 and December 31, 2014 Condensed Consolidated Balance Sheets, respectively.

The change in fair value of our foreign currency forward exchange contracts under hedge designations recorded net of tax within accumulated other comprehensive income for the quarters ended March 31, 2015 and 2014 was as follows:

	Quarter Ended March 31,
(In millions)	2015			2014
Unrealized (losses) gains at beginning of period, net of tax	$	(9.2	)	$	7.2
Losses (gains) reclassified to net sales		2.8			(1.1	)
(Decrease) increase in fair value		(18.8	)		0.6
Unrealized (losses) gains at end of period, net of tax	$	(25.2	)	$	6.7

We expect to reclassify $15.5 million of unrealized losses into earnings over the next twelve months as the hedged sales are recorded.

Note 7 — Income Taxes

The income tax provision for the quarter ended March 31, 2015 was $12.9 million. The effective tax rate for the first quarter of 2015 was 16.0%. The 2015 quarter included $11.6 million of benefits primarily related to the release of reserves for uncertain tax positions.  Excluding these discrete benefits, our effective tax rate for the first quarter was 30.4%. The income tax provision for the quarter ended March 31, 2014 was $22.8 million, an effective tax rate of 31.3%.

Note 8 — Fair Value Measurements

The authoritative guidance for fair value measurements establishes a hierarchy for observable and unobservable inputs used to measure fair value, into three broad levels, which are described below:

● Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

● Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

● Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value.

We do not have any significant assets or liabilities that utilize Level 3 inputs. In addition, we have no assets or liabilities that utilize Level 1 inputs. For derivative assets and liabilities that utilize Level 2 inputs, we prepare estimates of future cash flows of our derivatives, which are discounted to a net present value. The estimated cash flows and the discount factors used in the valuation model are based on observable inputs, and incorporate non-performance risk (the credit standing of the counterparty when the derivative is in a net asset position, and the credit standing of Hexcel when the derivative is in a net liability position). The fair value of these assets and liabilities was approximately $0.9 million and $43.4 million, respectively at March 31, 2015. In addition, the fair value of these derivative contracts, which are subject to a master netting arrangement under certain circumstances, is presented on a gross basis in the consolidated balance sheet.

Below is a summary of valuation techniques for all Level 2 financial assets and liabilities:

● Interest rate swaps — valued using LIBOR yield curves at the reporting date. Fair value was a liability of $0.5 million at March 31, 2015.

● Foreign exchange derivative assets and liabilities — valued using quoted forward foreign exchange prices at the reporting date. Fair value of assets and liabilities at March 31, 2015 was $0.9 million and $42.9 million, respectively.

Counterparties to the above contracts are highly rated financial institutions, none of which experienced any significant downgrades in the three months ended March 31, 2015 that would reduce the receivable amount owed, if any, to the Company.

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Note 9 — Segment Information

The financial results for our operating segments are prepared using a management approach, which is consistent with the basis and manner in which we internally segregate financial information for the purpose of assisting in making internal operating decisions. We evaluate the performance of our operating segments based on operating income, and generally account for intersegment sales based on arm’s length prices. Corporate and certain other expenses are not allocated to the operating segments, except to the extent that the expense can be directly attributable to the business segment.

Financial information for our operating segments for the quarters ended March 31, 2015 and 2014 is as follows:

	(Unaudited)
(In millions)	Composite Materials		Engineered Products		Corporate & Other (a)			Total
First Quarter 2015
Net sales to external customers	$	367.4	$	104.4	$	—		$	471.8
Intersegment sales		20.4		0.1		(20.5	)		—
Total sales		387.8		104.5		(20.5	)		471.8
Operating income (a)		89.2		14.7		(21.3	)		82.6
Depreciation and amortization		16.7		1.5		0.1			18.3
Stock-based compensation expense		3.6		0.5		7.9			12.0
Accrual basis additions to capital expenditures		62.1		4.4		—			66.5
First Quarter 2014
Net sales to external customers	$	356.3	$	105.4	$	—		$	461.7
Intersegment sales		18.5		0.1		(18.6	)		—
Total sales		374.8		105.5		(18.6	)		461.7
Operating income (a)		75.9		16.4		(17.7	)		74.6
Depreciation and amortization		15.6		1.4		0.1			17.1
Stock-based compensation expense		3.3		0.7		4.8			8.8
Accrual basis additions to capital expenditures		38.4		1.6		—			40.0

(a) We do not allocate corporate expenses to the operating segments.     

Goodwill and Intangible Assets

The carrying amount of gross goodwill and intangible assets by segment is as follows:

(In millions)	March 31, 2015		December 31, 2014
Composite Materials	$	43.0	$	43.7
Engineered Products		16.1		16.1
Goodwill and intangible assets	$	59.1	$	59.8

No impairments have been recorded against these amounts.

Note 10 — Commitments and Contingencies

We are involved in litigation, investigations and claims arising out of the normal conduct of our business, including those relating to commercial transactions, environmental, employment, and health and safety matters. We estimate and accrue our liabilities when a loss becomes probable and estimable. These judgments take into consideration a variety of factors, including the stage of the proceeding; potential settlement value; assessments by internal and external counsel; and assessments by environmental engineers and consultants of potential environmental liabilities and remediation costs. Such estimates are not discounted to reflect the time value of money due to the uncertainty in estimating the timing of the expenditures, which may extend over several years.

While it is impossible to ascertain the ultimate legal and financial liability with respect to certain contingent liabilities and claims, we believe, based upon our examination of currently available information, our experience to date, and advice from legal counsel, that the individual and aggregate liabilities resulting from the ultimate resolution of these contingent matters, after taking into consideration our existing insurance coverage and amounts already provided for, will not have a material adverse impact on our consolidated results of operations, financial position or cash flows.

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Environmental Matters

We are subject to various U.S. and international federal, state and local environmental, and health and safety laws and regulations. We are also subject to liabilities arising under the Federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or “Superfund”), the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, and similar state and international laws and regulations that impose responsibility for the control, remediation and abatement of air, water and soil pollutants and the manufacturing, storage, handling and disposal of hazardous substances and waste.

We have been named as a potentially responsible party (“PRP”) with respect to several hazardous waste disposal sites that we do not own or possess, which are included on, or proposed to be included on, the Superfund National Priority List of the U.S. Environmental Protection Agency (“EPA”) or on equivalent lists of various state governments. Because CERCLA allows for joint and several liability in certain circumstances, we could be responsible for all remediation costs at such sites, even if we are one of many PRPs. We believe, based on the amount and nature of our waste, our existing insurance coverage, the amounts already provided for and the number of other financially viable PRPs, that our liability in connection with such matters will not be material.

Lodi, New Jersey Site

Pursuant to the New Jersey Industrial Site Recovery Act, Hexcel entered into an Administrative Consent Order for the environmental remediation of a manufacturing facility we own and formerly operated in Lodi, New Jersey. We have been remediating this site in accordance with a State approved plan and continue to do so under the New Jersey Licensed Site Remediation Professional program.  Hexcel has completed all active investigation and remediation activities and is in the final phase of clean-up including restoration of the river embankment and installation of a barrier to prevent contaminant migration. Hexcel is in the process of monitoring contaminant levels to support a Monitored Natural Attenuation program. The accrual balance is $0.6 million as of March 31, 2015 and was $1.7 million at December 31, 2014.

Lower Passaic River

Hexcel and a group of approximately 72 other PRPs comprise the Lower Passaic Cooperating Parties Group (the “CPG”). Hexcel and the CPG are subject to a May 2007 Administrative Order on Consent (“AOC”) to perform a Remedial Investigation/Feasibility Study (“RI/FS”) of environmental conditions in the Lower Passaic River watershed. We were included in the CPG based on our operations at our former manufacturing site in Lodi, New Jersey.

In June 2007, the EPA issued a draft Focused Feasibility Study (“FFS”) that considers interim remedial options for the lower eight miles of the river, in addition to a “no action” option. On April 11, 2014, the EPA issued a revised FFS, which proposes several alternatives, including the bank to bank dredging of the lower eight miles of the river at an expected cost ranging from $0.8 billion to $3.25 billion, according to the EPA, but also includes a “no action” option.  The comment period for the revised FFS closed on August 20, 2014 and a final decision is not expected for several months.  Hexcel is not currently subject to any obligation to undertake the work contemplated by the FFS, nor have we determined our allocable share of any remediation alternatives. However, based on a review of the Company’s position, and as no point within the range is a more probable outcome than any other point, the Company recorded the lower end of the expected range. The accrual balance was $2.0 million as of March 31, 2015 and $2.1 million at December 31, 2014. Despite the issuance of the revised FFS, there are many uncertainties associated with the final agreed upon remediation and the Company’s allocable share of the remediation. Given those uncertainties, the amounts accrued may not be indicative of the amounts for which the Company is ultimately responsible and will be refined as events in the remediation process develop.

Kent, Washington Site

We were party to a cost-sharing agreement regarding the operation of certain environmental remediation systems necessary to satisfy a post-closure care permit issued to a previous owner of our Kent, Washington site by the EPA.  Under the terms of the cost-sharing agreement, we were obligated to reimburse the previous owner for a portion of the cost of the required remediation activities.  The previous owner, who also continues to own an adjacent site, has installed certain remediation and isolation technologies on its upgradient site and is operating those pursuant to an order agreed with the State of Washington.  We and the Washington Department of Ecology have reached an agreed order to perform certain cleanup activities on our site by certain deadlines, and we are in full compliance with the order. The Department of Ecology has recently approved a reduced number of wells and a reduced pumping volume for Hexcel’s wells on its property and agreed with a plan for more active remediation going forward.  The total accrued liability related to this matter was $0.6 million at March 31, 2015 and $0.5 million at December 31, 2014.

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Omega Chemical Corporation Superfund Site, Whittier, California

We are a PRP at a former chemical waste site in Whittier, California. The PRPs at Omega have established a PRP Group, the “Omega PRP Group”, and are currently investigating and remediating soil and groundwater at the site pursuant to a Consent Decree with the EPA.  The Omega PRP Group has attributed approximately 1.07% of the waste tonnage sent to the site to Hexcel.  In addition to the Omega site specifically, the EPA is investigating the scope of regional groundwater contamination in the vicinity of the Omega site and issued a Record of Decision; the Omega PRP Group members have been noticed by the EPA as PRPs who will be required to be involved in the remediation of the regional groundwater contamination in that vicinity as well.  As a member of the Omega PRP group, Hexcel will incur costs associated with the investigation and remediation of the Omega site and the regional groundwater remedy, although our ultimate liability, if any, in connection with this matter cannot be determined at this time. The total accrued liability relating to potential liability for both the Omega site and regional groundwater remedies was $0.5 million at March 31, 2015 and $0.6 million at December 31, 2014.

Summary of Environmental Reserves

Our estimate of liability as a PRP and our remaining costs associated with our responsibility to remediate the Lower Passaic River in New Jersey; Lodi, New Jersey; Kent, Washington; and other sites are accrued in the consolidated balance sheets. As of March 31, 2015, our aggregate environmental related accruals were $3.9 million, of which $2.1 million was included in accrued liabilities with the remainder included in non-current liabilities.  As of December 31, 2014, our aggregate environmental related accruals were $5.0 million, of which $3.2 million was included in accrued liabilities with the remainder included in non-current liabilities. As related to certain environmental matters, except for the Lodi site, the accrual was estimated at the low end of a range of possible outcomes since no amount within the range is a better estimate than any other amount. If we had accrued at the high end of the range of possible outcomes for those sites where we are able to estimate our liability, our accrual would have been $28 million higher. These accruals can change significantly from period to period due to such factors as additional information on the nature or extent of contamination, the methods of remediation required, changes in the apportionment of costs among responsible parties and other actions by governmental agencies or private parties, or the impact, if any, of being named in a new matter.

Environmental remediation spending charged to our reserve balance for the quarter ended March 31, 2015 and 2014 was $1.3 million and $1.0 million, respectively.  In addition, our operating costs relating to environmental compliance charged to expense were $3.1 million and $3.5 for the quarters ended March 31, 2015 and 2014, respectively.  Capital expenditures for environmental matters were $0.9 million and $1.1 million for the quarters ended March 31, 2015 and 2014, respectively.

Product Warranty

We provide for an estimated amount of product warranty expense at the time revenue is recognized. This estimated amount is provided by product and based on historical warranty experience. In addition, we periodically review our warranty accrual and record any adjustments as deemed appropriate. Accrued warranty cost, included in “accrued liabilities” in the condensed consolidated balance sheets at March 31, 2015 and December 31, 2014, was as follows:

(In millions)	Product Warranties
Balance as of December 31, 2014	$	11.3
Deductions and other		( 3.3	)
Balance as of March 31, 2015	$	8.0

Note 11 — Stock Repurchase Plan

In June 2014, our Board authorized a plan to repurchase $150 million of our outstanding common stock (“2014 Repurchase Plan”). At March 31, 2015, there is $100 million remaining authorized under the 2014 Repurchase Plan.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Business Overview

We develop, manufacture, and market lightweight, high-performance structural materials, including carbon fibers, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, honeycomb, adhesives, engineered honeycomb and composite structures, for use in Commercial Aerospace, Space & Defense and Industrial markets. Our products are used in a wide variety of end applications, such as commercial and military aircraft, space launch vehicles and satellites, wind turbine blades, automotive, a wide variety of recreational products and other industrial applications.

We serve international markets through manufacturing facilities, sales offices and representatives located in the Americas, Asia Pacific, Europe and Russia. We are also a partner in a joint venture in Malaysia, which manufactures composite structures for Commercial Aerospace applications and a joint venture in the UK which specializes in lightweight multi-axial fabrics.

Hexcel has two segments, Composite Materials and Engineered Products. The Composite Materials segment is comprised of our carbon fiber, specialty reinforcements, resins, prepregs and other fiber-reinforced matrix materials, and honeycomb core product lines. The Engineered Products segment is comprised of lightweight high strength composite structures, molded components and specialty machined honeycomb product lines.

Net sales for the quarter were $471.8 million, 2.2% higher (6.1% in constant currency) than the $461.7 million reported for the first quarter of 2014, with the Commercial Aerospace market and Industrial markets leading the growth in constant currency sales.

Commercial Aerospace sales of $320.3 million increased 5.6% (8.3% in constant currency) for the quarter as compared to the first quarter of 2014.  Revenues attributed to new aircraft programs (B787, A350, A320neo and B737 MAX) increased over 25% versus the same period last year, with the A350 shipments leading the growth.  Airbus and Boeing legacy aircraft related sales for the quarter were down slightly compared to a strong first quarter of 2014 but just above the second half 2014 run rate.    

Sales to “Other Commercial Aerospace,” which include regional and business aircraft customers, were about 5% higher compared to the first quarter of 2014.

Space & Defense sales of $88.9 million were 7% lower (3.6% lower in constant currency) than the first quarter of 2014, following the record sales in the fourth quarter of 2014 due to the timing of shipments. Sales to the C-17 program essentially ended this quarter, as expected, and accounted for most of the decline in constant currency sales.

Total Industrial sales of $62.6 million for the first quarter of 2015 were flat compared with the first quarter of 2014, but 10.6% higher in constant currency. The constant currency sales increase was driven by about a 15% increase in wind energy sales as compared to the first quarter of 2014.    

Sales volume, continued improvement in operating performance, product mix and the impact of exchange rates resulted in gross margin of 30.1% of net sales for the quarter, as compared to 28.0% in the first quarter of 2014. Exchange rates contributed about 100 basis points to the gross margin percentage increase.Selling, general and administrative (“SG&A”) expenses were $5.7 million higher than the first quarter of 2014 with over half of the increase due to the timing of recording stock compensation expense.  Research and technology (“R&T”) expenses in the first quarter of 2015 of $12.5 million were $1.1 million lower than the comparable 2014 period primarily due to the impact of exchange rates.  

Free cash flow (defined as cash provided by operating activities less capital expenditures) for the first quarter of 2015 was a use of $110 million versus a use of $22 million in 2014, as seasonal effects typically cause cash usage in the first quarter. Working capital usage was particularly high this quarter due primarily to timing. Our cash expenditures primarily related to capacity expansions were $95 million in the first quarter of 2015 ($66.5 million on an accrued basis) as compared to $55 million in 2014.We continue to expect 2015 accrual basis capital expenditures to be in the range of $260 million to $290 million.  

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Financial Overview

Results of Operations

	Quarter Ended March 31,
(In millions, except per share data)	2015		2014		% Change
Net sale…………………………………………………………………….	$	471.8	$	461.7	2.2	%
Net sales change in constant currency…………………………………...					6.1	%
Operating income………………………………………………………….	82.6		74.6		10.7	%
As a percentage of net sales……………………………………………………..	17.5%		16.2%
Net income………………………………………………………………...	68.1		50.1		35.9	%
Diluted net income per common share……………………………………	$	0.70	$	0.50

The Company uses non-GAAP financial measures, including sales measured in constant dollars, adjusted net income and the effective tax rate adjusted for certain out of period tax items and free cash flow.  Management believes these non-GAAP measurements are meaningful to investors because they provide a view of Hexcel with respect to ongoing operating results and comparisons to prior periods. These adjustments represent significant charges or credits that are important to an understanding of Hexcel’s overall operating results in the periods presented.  Such non-GAAP measurements are not determined in accordance with generally accepted accounting principles and should not be viewed as an alternative to GAAP measures of performance.  Reconciliations to adjusted net income and free cash flow are provided below:

(In millions, except per share data)	Quarter Ended March 31,
	2015			2014
Net income	$	68.1		$	50.1
Discrete tax items (a)		(11.6	)		—
Adjusted net income (Non-GAAP)	$	56.5		$	50.1

(a) The current quarter included benefits of $11.6 million primarily related to the release of reserves for uncertain tax positions.

In millions)	Three Months Ended March 31,
	2015			2014
Net cash (used in) provided by operating activities	$	(14.6	)	$	33.4
Less: Capital expenditures		(95.0	)		(55.0	)
Free cash flow (Non-GAAP)	$	(109.6	)	$	(21.6	)

Net Sales

The following table summarizes net sales to third-party customers by segment and end market for the quarters ended March 31, 2015 and 2014:

	Quarter Ended March 31,
(In millions)	2015		2014				% Change
Consolidated Net Sales…………………………………………………	$	471.8		$	461.7	2.2		%
Commercial Aerospace……………………………………….	320.3			303.2		5.6		%
Space & Defense……………………………………………………...	88.9			95.6		(7.0		) %
Industrial……………………………………………………………...	62.6			62.9		(0.5		) %
Composite Materials…………………………………………………...	$	367.4		$	356.3	3.1		%
Commercial Aerospace……………………………………………….	237.8			224.8		5.8		%
Space & Defense…………………………………………….……..…	69.7			68.6		1.6		%
Industrial…………………………………………………...…………	59.9			62.9		(4.8		) %
Engineered Products…………………………………………………...	$	104.4		$	105.4	(0.9		) %
Commercial Aerospace…………………………………….…………	82.5			78.4		5.2		%
Space & Defense…………………………………………………...…	19.2			27.0		(28.9		) %
Industrial……………………………………………………………...	2.7			—		NA

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Sales by Segment

       Composite Materials: Net sales of $367.4 million in the first quarter 2015 increased $11.1 million over the $356.3 million in the prior year. Commercial Aerospace sales increased 5.8%, Space and Defense sales increased 1.6% and Industrial sales decreased 4.8% compared to the first quarter in 2014. Exchange rates had a significant impact on sales as on a constant currency basis all markets had sales increases resulting in a total segment sales increase of 8.1%. A350 shipments drove the Commercial Aerospace sales increase and wind energy drove the Industrial sales increase.

       Engineered Products: Net sales of $104.4 million in the first quarter of 2015 were down slightly from the $105.4 million for 2014. On a constant currency basis, sales were flat with the prior year as increases in Commercial Aerospace sales were offset by declines in Space & Defense sales. The decrease in Space & Defense sales came after particularly strong sales in the fourth quarter of 2014 and the end of the C-17 program.  There are not significant sales to the Industrial market from this segment.

Sales by Market

Commercial Aerospace: Net sales of $320.3 million increased 5.6% (8.3% in constant currency) for the quarter as compared to the first quarter of 2014.  Revenues attributed to new aircraft programs (B787, A350, A320neo and B737 MAX) increased over 25% versus the same period last year, with A350 shipments leading the growth.  Airbus and Boeing legacy aircraft related sales for the quarter were down slightly compared to a strong first quarter of 2014 but just above the second half 2014 run rate. Sales to other commercial aerospace, which includes regional and business aircraft customers, were about 5% higher compared to the first quarter of 2014.

Space & Defense: Net sales of $88.9 million were 7% lower (3.6% lower in constant currency) than the first quarter of 2014, following the record sales in the fourth quarter of 2014 due to the timing of shipments.

Industrial: Total Industrial sales of $62.6 million for the first quarter of 2015 were flat compared with the first quarter of 2014, but 10.6% higher in constant currency. The constant currency sales increase was driven by about a 15% increase in wind energy sales as compared to the first quarter of 2014.   

Gross Margin

	Quarter Ended March 31,
(In millions)	2015			2014			% Change
Gross margin……………………………………………………………	$	141.8		$	129.2		9.8	%
Percentage of sales………………………………………………………	30.1		%	28.0		%

We achieved a gross margin percentage of 30.1% in the first quarter of 2015 benefitting from higher volume, continued improvement in operating performance and favorable product mix. Foreign exchange rates contributed about 100 basis points to the gross margin percentage increase.

Operating Expenses

	Quarter Ended March 31,
(In millions)	2015			2014			% Change
SG&A expense………………………………………………………….	$	46.7		$	41.0		13.9	%
Percentage of sales………………………………………………………	9.9		%	8.9		%
R&T expense……………………………………………………………	$	12.5		$	13.6		(8.1	)%
Percentage of sales………………………………………………………	2.6		%	2.9		%

SG&A expenses were up $5.7 million as compared to the first quarter of 2014 with over half of the increase due to the timing of recording stock compensation expense.  Research and technology expenses in the first quarter of 2015 of $12.5 million were $1.1 million lower than the comparable 2014 period primarily due to the impact of exchange rates.

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Operating Income

	Quarter Ended March 31,
(In millions)	2015			2014			% Change
Consolidated operating income………………………………………….	$	82.6		$	74.6		10.7	%
Operating margin………………………………………….…………	17.5		%	16.2		%
Composite Materials…………………………………………………….	89.2			75.9			17.5	%
Operating margin…………………………………………………….	23.0		%	20.3		%
Engineered Products…………………………………………………….	14.7			16.4			(10.4	) %
Operating margin…………………………………………………….	14.1		%	15.5		%
Corporate & Other…………………………………………………...….	(21.3		)	(17.7		)	(20.3	) %

Operating margin increased 130 basis points as compared to first quarter of 2014 driven by higher sales volume and continued improvements in operating performance.  Exchange rates contributed about 90 basis points to the percentage increase.  

Interest Expense, Net

	Quarter Ended March 31,
(In millions)	2015		2014		% Change
Interest expense, net…………………………………………………….	$	1.9	$	1.8	5.6	%

The modest increase in interest expense for the first quarter of 2015 was primarily due to higher average borrowings in 2015 partially offset by lower average borrowing costs as a result of the refinancing in September 2014.

Provision for Income Taxes

	Quarter Ended March 31,
(In millions)	2015			2014
Income tax expense…………………………………………………...………………	$	12.9		$	22.8
Effective tax rate…………………………………………………...…………………	16.0		%	31.3		%

Our effective tax rate for the quarter was 16.0% as compared to 31.3% in 2014.  The current quarter included benefits of $11.6 million primarily related to the release of reserves for uncertain tax positions. Excluding these discrete benefits, our effective rate for the first quarter was 30.4%.

Financial Condition

Liquidity: As of March 31, 2015, our total debt, net of cash, was $457.5 million, as compared to $345.4 million at December 31, 2014. The increase in debt in the first quarter of 2015 primarily reflects the seasonal working capital usage and higher capital expenditures. At March 31, 2015, total borrowings under our $700 million Senior Unsecured Credit Facility (the “Facility”) were $480 million. The Facility permits us to issue letters of credit up to an aggregate amount of $40.0 million. Outstanding letters of credit reduce the amount available for borrowing under our revolving loan. As of March 31, 2015, we had issued letters of credit under the Facility totaling $1.7 million, resulting in undrawn availability under the Facility as of March 31, 2015 of $218.3 million.

The Facility contains financial and other covenants, including, but not limited to, restrictions on the incurrence of debt and the granting of liens, as well as the maintenance of an interest coverage ratio and a leverage ratio. In accordance with the terms of the Facility, we are required to maintain a minimum interest coverage ratio of 3.50 (based on the ratio of EBITDA, as defined in the credit agreement, to interest expense) and may not exceed a maximum leverage ratio of 3.50 (based on the ratio of total debt to EBITDA) throughout the term of the Facility.  In addition, the Facility contains other terms and conditions such as customary representations and warranties, additional covenants and customary events of default. As of March 31, 2015, we were in compliance with all debt covenants and expect to remain in compliance.

We expect to meet our short-term liquidity requirements (including capital expenditures) through net cash from operating activities, cash on hand and the Facility. As of March 31, 2015, long-term liquidity requirements consist primarily of obligations under our long-term debt obligations. We do not have any significant required debt repayments until September 2019 when the Facility expires.

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Operating Activities: Net cash used by operating activities was $14.6 million in the first three months of 2015, as compared to net cash provided by operating activities of $33.4 million in the first three months of 2014. The increased usage was due to higher working capital usage primarily due to timing.

Investing Activities: Net cash used for investing activities of $95.0 million and $55.0 million in the first quarter of 2015 and 2014, respectively, was for capital expenditures. We continue to invest in capacity expansions for anticipated growth.

Financing Activities: Financing activities generated $64.7 million and $6.3 million of net cash in the first quarter of 2014 and 2015 as result of increased borrowings. The borrowings in 2015 were used to fund our cash needs, including capital expenditures. The increases in borrowings in 2014 were used for stock repurchases as described below:

In June 2014, our Board authorized an additional plan to repurchase $150 million of our outstanding common stock (“2014 Repurchase Plan”).  At March 31, 2015, there is $100 million remaining authorized under the 2014 Repurchase Plan. Under a previously authorized plan, the Company invested $48.3 million to buy back shares in the first quarter of 2014.

Financial Obligations and Commitments: As of March 31, 2015, current maturities of notes payable (our foreign credit line) were not significant. The next significant scheduled debt maturity will not occur until 2019, the year the senior unsecured credit facility matures. Certain sales and administrative offices, data processing equipment and manufacturing facilities are leased under operating leases.

Critical Accounting Estimates

Our Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP. In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events, and apply judgments that affect reported amounts of assets, liabilities, revenues, expenses and related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors management believes to be relevant at the time our condensed consolidated financial statements are prepared. On a regular basis, management reviews accounting policies, assumptions, estimates and judgments to ensure our financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results may differ from our assumptions and estimates, and such differences could be material.

We describe our significant accounting policies and critical accounting estimates in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

Commitments and Contingencies

We are involved in litigation, investigations and claims arising out of the normal conduct of our business, including those relating to commercial transactions, environmental, employment and health and safety matters. We estimate and accrue our liabilities resulting from such matters based upon a variety of factors, including the stage of the proceeding; potential settlement value; assessments by internal and external counsel; and assessments by environmental engineers and consultants of potential environmental liabilities and remediation costs. We believe we have adequately accrued for these potential liabilities; however, facts and circumstances may change, such as new developments, or a change in approach, including a change in settlement strategy or in an environmental remediation plan, that could cause the actual liability to exceed the estimates, or may require adjustments to the recorded liability balances in the future.

Our estimate of liability as a PRP and our remaining costs associated with our responsibility to remediate the Lower Passaic River in New Jersey; Lodi, New Jersey; Kent, Washington; and other sites are accrued in the consolidated balance sheets. As of March 31, 2015, our aggregate environmental related accruals were $3.9 million, of which $2.1 million was included in accrued liabilities, with the remainder included in non-current liabilities. As related to certain environmental matters, except for the Lodi site, the accrual was estimated at the low end of a range of possible outcomes since no amount within the range is a better estimate than any other amount. If we had accrued, for those sites where we are able to estimate our liability, at the high end of the range of possible outcomes, our accrual would have been $28 million higher. These accruals can change significantly from period to period due to such factors as additional information on the nature or extent of contamination, the methods of remediation required, changes in the apportionment of costs among responsible parties and other actions by governmental agencies or private parties, or the impact, if any, of being named in a new matter.

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Forward-Looking Statements

Certain statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to future prospects, developments and business strategies. These forward-looking statements are identified by their use of terms and phrases such as “anticipate”, “believe”, “could”, “would”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “should”, “will”, and similar terms and phrases, including references to assumptions. Such statements are based on current expectations, are inherently uncertain, and are subject to changing assumptions.

Such forward-looking statements include, but are not limited to: (a) the estimates and expectations based on aircraft production rates made publicly available by Airbus and Boeing; (b) the revenues we may generate from an aircraft model or program; (c) the impact of the possible push-out in deliveries of the Airbus and Boeing backlog and the impact of delays in the startup or ramp-up of new aircraft programs or the final Hexcel composite material content once the design and material selection has been completed; (d) expectations of composite content on new commercial aircraft programs and our share of those requirements; (e) expectations of growth in revenues from space and defense applications, including whether certain programs might be curtailed or discontinued; (f) expectations regarding growth in sales for wind energy, recreation and other industrial applications; (g) expectations regarding working capital trends and expenditures; (h) expectations as to the level of capital expenditures and when we will complete the construction and qualification of capacity expansions; (i) our ability to maintain and improve margins in light of the ramp-up of capacity and new facilities and the current economic environment; (j) the outcome of legal matters; (k) income tax adjustments for prior audit years and changes in tax regulations; and (l) the impact of various market risks, including fluctuations in interest rates, currency exchange rates, environmental regulations, fluctuations in commodity prices, and fluctuations in the market price of our common stock, the impact of work stoppages or other labor disruptions and the impact of the above factors on our expectations of 2015 financial results. In addition, actual results may differ materially from the results anticipated in the forward looking statements due to a variety of factors, including but not limited to changing market conditions, increased competition, product mix, inability to achieve planned manufacturing improvements, cost reductions and capacity additions, and conditions in the financial markets.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different. Such factors include, but are not limited to, the following: changes in general economic and business conditions; changes in current pricing and cost levels; changes in political, social and economic conditions and local regulations; foreign currency fluctuations; changes in aerospace delivery rates; reductions in sales to any significant customers, particularly Airbus, Boeing or Vestas; changes in sales mix; changes in government defense procurement budgets; changes in military aerospace programs technology; industry capacity; competition; disruptions of established supply channels, particularly where raw materials are obtained from a single or limited number of sources and cannot be substituted by unqualified alternatives; manufacturing capacity constraints; unforeseen vulnerability of our network and systems to interruptions or failures; and the availability, terms and deployment of capital.

If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected. In addition to other factors that affect our operating results and financial position, neither past financial performance nor our expectations should be considered reliable indicators of future performance. Investors should not use historical trends to anticipate results or trends in future periods. Further, our stock price is subject to volatility. Any of the factors discussed above could have an adverse impact on our stock price. In addition, failure of sales or income in any quarter to meet the investment community’s expectations, as well as broader market trends, can have an adverse impact on our stock price. We do not undertake an obligation to update our forward-looking statements or risk factors to reflect future events or circumstances.

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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

There are no material changes in market risk from the information provided in the Company’s 2014 Annual Report on Form 10-K.

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have evaluated our disclosure controls and procedures as of March 31, 2015 and have concluded that these disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Our Chief Executive Officer and Chief Financial Officer have concluded that there have not been any changes in our internal control over financial reporting during the first quarter of 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

The information required by Item 1 is contained within Note 10 on pages 11 through 13 of this Form 10-Q and is incorporated herein by reference.

ITEM 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014, which could materially affect our business, financial condition or future results. In addition, future uncertainties may increase the magnitude of these adverse effects or give rise to additional material risks not now contemplated.

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ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c)

Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly  Announced Plans or Programs			(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units)  that May Yet Be Purchased Under the Plans or Programs
January 1 — January 31, 2015		0	$	N/A		0		$	100,000,028
February 1 — February 28, 2015		0		N/A		0			100,000,028
March 1 — March 31, 2015		0		N/A		0		$	100,000,028
Total		0	$	N/A		0	(1)	$	100,000,028

(1) In June 2014, our Board authorized us to repurchase $150 million of our outstanding common stock. At March 31, 2015, the Company has $100 million authorization remaining to purchase our common stock.

ITEM 5. Other Information

Not applicable

ITEM 6. Exhibits

Exhibit No.	Description
31.1	Certification of Chief Executive Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from the Hexcel Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Cash Flows, and (v) related notes.

22

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Hexcel Corporation
April 20, 2015	/s/ Kimberly Hendricks
(Date)	Kimberly Hendricks
	Vice President, Corporate Controller and
	Chief Accounting Officer

23

EXHIBIT INDEX

Exhibit No.	Description
31.1	Certification of Chief Executive Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from the Hexcel Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Cash Flows, and (v) related notes.

24

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Nick L. Stanage, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hexcel Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

5. The issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

April 20, 2015	/s/ Nick L. Stanage
(Date)	Nick L. Stanage
	Chairman of the Board of Directors,
	Chief Executive Officer and President

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Wayne Pensky, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hexcel Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

5. The issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

April 20, 2015	/s/ Wayne Pensky
(Date)	Wayne Pensky
	Senior Vice President and
	Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATIONS OF

CHIEF EXECUTIVE OFFICER

AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT

TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Hexcel Corporation (the “Company”) on Form 10-Q for the period ending March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nick L. Stanage, Chairman of the Board of Directors, Chief Executive Officer and President of the Company, and Wayne Pensky, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

April 20, 2015	/s/ Nick L. Stanage
(Date)	Nick L. Stanage
	Chairman of the Board of Directors,
	Chief Executive Officer and President
April 20, 2015	/s/ Wayne Pensky
(Date)	Wayne Pensky
	Senior Vice President and
	Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Hexcel Corporation and will be retained by Hexcel Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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Stock Repurchase Plan

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Stock Repurchase Plan

Note 11 — Stock Repurchase Plan

In June 2014, our Board authorized a plan to repurchase $150 million of our outstanding common stock (“2014 Repurchase Plan”). At March 31, 2015, there is $100 million remaining authorized under the 2014 Repurchase Plan.

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Condensed Consolidated Statements of Operations (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
Net sales	$ 471.8	$ 461.7
Cost of sales	330.0	332.5
Gross margin	141.8	129.2
Selling, general and administrative expenses	46.7	41.0
Research and technology expenses	12.5	13.6
Operating income	82.6	74.6
Interest expense, net	1.9	1.8
Income before income taxes and equity in earnings of affiliated companies	80.7	72.8
Provision for income taxes	12.9	22.8
Income before equity in earnings of affiliated companies	67.8	50.0
Equity in earnings of affiliated companies	0.3	0.1
Net income	$ 68.1	$ 50.1
Basic net income per common share:	$ 0.71	$ 0.51
Diluted net income per common share:	$ 0.70	$ 0.50
Weighted average common shares outstanding:
Basic	96.2	98.5
Diluted	97.9	100.6

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Retirement and Other Postretirement Benefit Plans

3 Months Ended

Mar. 31, 2015

Defined Benefit Pension Plans And Defined Benefit Postretirement Plans Disclosure [Abstract]

Retirement and Other Postretirement Benefit Plans

Note 4 — Retirement and Other Postretirement Benefit Plans

We maintain qualified and nonqualified defined benefit retirement plans covering certain current and former U.S. and European employees, retirement savings plans covering eligible U.S. and U.K. employees and certain postretirement health care and life insurance benefit plans covering eligible U.S. retirees.  We also participate in a union sponsored multi-employer pension plan covering certain U.S. employees with union affiliations.

Defined Benefit Retirement Plans

Net Periodic Benefit Costs

Net periodic benefit costs of our defined benefit retirement plans for the quarters ended March 31, 2015 and 2014 were as follows:

	Quarter Ended March 31,
(In millions)	2015			2014
U.S. Nonqualified Defined Benefit Retirement Plans
Service cost	$	0.3	$	0.3
Interest cost		0.1		0.2
Net amortization and deferral		0.8		0.9
Settlement expense		—		1.3
Net periodic benefit cost	$	1.2	$	2.7

	March 31, 2015		December 31, 2014
Amounts recognized on the balance sheet:
Accrued liabilities	$	4.5	$	4.5
Other non-current liabilities		15.5		14.6
Total accrued benefit	$	20.0	$	19.1

	Quarter Ended March 31,
(In millions)	2015			2014
European Defined Benefit Retirement Plans
Service cost	$	0.2		$	0.2
Interest cost		1.6			1.8
Expected return on plan assets		(2.2	)		(2.4	)
Net amortization and deferral		0.2			0.1
Net periodic benefit credit	$	(0.2	)	$	(0.3	)

	March 31, 2015		December 31, 2014
Amounts recognized on the balance sheet:
Non-current asset	$	5.2	$	3.3
Accrued liabilities	$	1.5	$	0.4
Other non-current liabilities		16.5		17.1
Total accrued benefit	$	18.0	$	17.5

Contributions

We generally fund our U.S. non-qualified defined benefit retirement plans when benefit payments are incurred.  Under the provisions of these non-qualified plans, we have contributed $0.1 million in the first three months of 2015 to cover unfunded benefits and expect to contribute an additional $4.5 million in 2015.  We contributed $25.7 million to our U.S. non-qualified defined benefit retirement plans during the 2014 fiscal year.

We contributed $1.3 million and $1.4 million to our European defined benefit retirement plans in the first quarters of 2015 and 2014, respectively.  We plan to contribute approximately $3.9 million during 2015 to these European plans. We contributed $6.1 million to our European plans during the 2014 fiscal year.

Postretirement Health Care and Life Insurance Benefit Plans

Net periodic benefit costs of our postretirement health care and life insurance benefit plans for the quarters ended March 31, 2015 and 2014 were immaterial.

	March 31,2015		December 31,2014
Amounts recognized on the balance sheet:
Accrued liabilities	$	0.6	$	0.6
Other non-current liabilities		5.4		5.7
Total accrued benefit	$	6.0	$	6.3

In connection with our postretirement plans, we contributed approximately $0.1 million during both of the quarters ended March 31, 2015 and 2014.  We periodically fund our postretirement plans to pay covered expenses as they are incurred.  We expect to contribute approximately $0.6 million in 2015 to cover unfunded benefits.  We contributed $0.2 million to our postretirement plans during the 2014 fiscal year.

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Schedule of Operating Segment Reporting Information

Financial information for our operating segments for the quarters ended March 31, 2015 and 2014 is as follows:

	(Unaudited)
(In millions)	Composite Materials		Engineered Products		Corporate & Other (a)			Total
First Quarter 2015
Net sales to external customers	$	367.4	$	104.4	$	—		$	471.8
Intersegment sales		20.4		0.1		(20.5	)		—
Total sales		387.8		104.5		(20.5	)		471.8
Operating income (a)		89.2		14.7		(21.3	)		82.6
Depreciation and amortization		16.7		1.5		0.1			18.3
Stock-based compensation expense		3.6		0.5		7.9			12.0
Accrual basis additions to capital expenditures		62.1		4.4		—			66.5
First Quarter 2014
Net sales to external customers	$	356.3	$	105.4	$	—		$	461.7
Intersegment sales		18.5		0.1		(18.6	)		—
Total sales		374.8		105.5		(18.6	)		461.7
Operating income (a)		75.9		16.4		(17.7	)		74.6
Depreciation and amortization		15.6		1.4		0.1			17.1
Stock-based compensation expense		3.3		0.7		4.8			8.8
Accrual basis additions to capital expenditures		38.4		1.6		—			40.0

(a) We do not allocate corporate expenses to the operating segments.     

Schedule of Goodwill and Intangible Assets by Segment

The carrying amount of gross goodwill and intangible assets by segment is as follows:

(In millions)	March 31, 2015		December 31, 2014
Composite Materials	$	43.0	$	43.7
Engineered Products		16.1		16.1
Goodwill and intangible assets	$	59.1	$	59.8

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements have been prepared from the unaudited accounting records of Hexcel pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Certain information and footnote disclosures normally included in financial statements have been omitted pursuant to rules and regulations of the SEC.

In the opinion of management, the Condensed Consolidated Financial Statements include all normal recurring adjustments as well as any non-recurring adjustments necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods presented. The Condensed Consolidated Balance Sheet as of December 31, 2014 was derived from the audited 2014 consolidated balance sheet. Interim results are not necessarily indicative of results expected for any other interim period or for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2014 Annual Report on Form 10-K filed with the SEC on February 5, 2015.

Investments in Affiliated Companies

Investments in Affiliated Companies

We have 50% equity ownership investments in an Asian joint venture Aerospace Composites Malaysia Sdn. Bhd. (“ACM”) and in Formax UK Limited (“Formax”).  These investments are accounted for using the equity method of accounting.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board issued Update No. 2014-09, Revenue from Contracts with Customers. The update clarifies the principles for recognizing revenue and develops a common revenue standard for all industries. The guidance is effective for the first quarter of 2017. Early application is not permitted. We are currently evaluating the impact of adopting this prospective guidance on our consolidated results of operations and financial condition.

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Fair Value Measurements (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 item
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Number of counterparties, which experienced significant downgrades	0
Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	0
Liabilities	0
Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets	0
Liabilities	0
Fair Value Measured on Recurring Basis | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	0.9
Derivative liabilities	43.4
Fair Value Measured on Recurring Basis | Level 2 | Interest Rate Swap Agreements
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative liabilities	0.5
Fair Value Measured on Recurring Basis | Level 2 | Foreign Currency Forward Exchange Contracts
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative assets	0.9
Derivative liabilities	42.9

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Net Income per Common Share (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Basic net income per common share:
Net income	$ 68.1	$ 50.1
Weighted average common shares outstanding (in shares)	96.2	98.5
Basic net income per common share ( in dollars per share)	$ 0.71	$ 0.51
Diluted net income per common share:
Net income	$ 68.1	$ 50.1
Weighted average common shares outstanding (in shares)	96.2	98.5
Plus incremental shares from assumed conversions:
Restricted stock units (in shares)	0.6	0.7
Stock options (in shares)	1.1	1.4
Weighted average common shares outstanding - Dilutive (in shares)	97.9	100.6
Diluted net income per common share (in dollars per share)	$ 0.70	$ 0.50

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Significant Accounting Policies - Additional Information (Details)	Mar. 31, 2015
Accounting Policies [Abstract]
Interest in affiliated company, accounted for using equity method of accounting (as a percent)	50.00%

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Debt - Additional Information (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Borrowings under the credit facility	$ 480,000,000	$ 415,000,000
Senior unsecured credit facility - revolving loan due 2019
Debt Instrument [Line Items]
Face value	700,000,000
Borrowings under the credit facility	480,000,000
Maximum amount available under credit facility to issue letters of credit	40,000,000
Letters of credit outstanding under credit facility	1,700,000
Undrawn availability under credit facility	$ 218,300,000
Debt instrument, covenant terms	In accordance with the terms of the Facility, we are required to maintain a minimum interest coverage ratio of 3.50 (based on the ratio of EBITDA, as defined in the credit agreement, to interest expense) and may not exceed a maximum leverage ratio of 3.50 (based on the ratio of total debt to EBITDA) throughout the term of the Facility.
Senior unsecured credit facility - revolving loan due 2019 | Maximum
Debt Instrument [Line Items]
Interest coverage ratio required to be maintained	3.50

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Segment Information - Schedule of Goodwill and Intangible Assets by Segment (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Goodwill and intangible assets	$ 59.1	$ 59.8
Goodwill And Intangible Asset Impairment	0
Composite Materials
Segment Reporting Information [Line Items]
Goodwill and intangible assets	43.0	43.7
Engineered Products
Segment Reporting Information [Line Items]
Goodwill and intangible assets	$ 16.1	$ 16.1

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Retirement and Other Postretirement Benefit Plans - Schedule of Amounts Recognized on Balance Sheet (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
U.S. Non-qualified Defined Benefit Retirement Plans
Amounts recognized on the balance sheet:
Accrued liabilities	$ 4.5	$ 4.5
Other non-current liabilities	15.5	14.6
Total accrued benefit	20.0	19.1
European Defined Benefit Retirement Plans
Amounts recognized on the balance sheet:
Non-current asset	5.2	3.3
Accrued liabilities	1.5	0.4
Other non-current liabilities	16.5	17.1
Total accrued benefit	18.0	17.5
Postretirement Health Care and Life Insurance Benefit Plans
Amounts recognized on the balance sheet:
Accrued liabilities	0.6	0.6
Other non-current liabilities	5.4	5.7
Total accrued benefit	$ 6.0	$ 6.3

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Stock Repurchase Plan - Additional Information (Details) (2014 Repurchase Plan, USD $)	Mar. 31, 2015	Jun. 30, 2014
2014 Repurchase Plan
Equity Class Of Treasury Stock [Line Items]
Authorized amount to repurchase outstanding common stock		$ 150,000,000
Remaining amount of authorized under 2014 Repurchase Plan	$ 100,000,000

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2015

Commitments And Contingencies Disclosure [Abstract]

Schedule of Product Warranty

Accrued warranty cost, included in “accrued liabilities” in the condensed consolidated balance sheets at March 31, 2015 and December 31, 2014, was as follows:

(In millions)	Product Warranties
Balance as of December 31, 2014	$	11.3
Deductions and other		( 3.3	)
Balance as of March 31, 2015	$	8.0

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Condensed Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities
Net income	$ 68.1	$ 50.1
Reconciliation to net cash provided by operating activities:
Depreciation and amortization	18.3	17.1
Amortization of deferred financing costs	0.3	0.3
Deferred income taxes	11.3	19.3
Equity in earnings from affiliated companies	(0.3)	(0.1)
Stock-based compensation	12.0	8.8
Excess tax benefits on stock-based compensation	(8.5)	(3.5)
Changes in assets and liabilities:
Increase in accounts receivable	(70.3)	(48.3)
Increase in inventories	(37.9)	(18.3)
Decrease (increase) in prepaid expenses and other current assets	0.9	(6.4)
(Decrease) increase in accounts payable and accrued liabilities	(5.3)	11.9
Other-net	(3.2)	2.5
Net cash (used in) provided by operating activities	(14.6)	33.4
Cash flows from investing activities
Capital expenditures	(95.0)	(55.0)
Net cash used in investing activities	(95.0)	(55.0)
Cash flows from financing activities
Proceeds from senior unsecured credit facility	65.0
Proceeds from previous senior secured credit facility		60.0
Repayment of other debt, net	(1.1)	(0.2)
Dividends paid on common stock	(9.6)
Repurchase of stock		(48.3)
Activity under stock plans	10.4	(5.2)
Net cash provided by financing activities	64.7	6.3
Effect of exchange rate changes on cash and cash equivalents	(3.3)	(0.2)
Net decrease in cash and cash equivalents	(48.2)	(15.5)
Cash and cash equivalents at beginning of period	70.9	65.5
Cash and cash equivalents at end of period	22.7	50.0
Supplemental data:
Accrual basis additions to property, plant and equipment	$ 66.5	$ 40.0

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Net Income per Common Share

3 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

Net Income Per Common Share

Note 2 — Net Income per Common Share

	Quarter Ended March 31,
(In millions, except per share data)	2015		2014
Basic net income per common share:
Net income	$	68.1	$	50.1
Weighted average common shares outstanding		96.2		98.5
Basic net income per common share	$	0.71	$	0.51
Diluted net income per common share:
Net income	$	68.1	$	50.1
Weighted average common shares outstanding — Basic		96.2		98.5
Plus incremental shares from assumed conversions:
Restricted stock units		0.6		0.7
Stock options		1.1		1.4
Weighted average common shares outstanding — Dilutive		97.9		100.6
Diluted net income per common share	$	0.70	$	0.50

Total shares underlying stock options of 0.2 million were excluded from the computation of diluted net income per share for the quarter ended March 31, 2015, as they were anti-dilutive.   

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Debt

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Debt

Note 5 — Debt

(In millions)	March 31, 2015		December 31, 2014
Working capital line of credit — China	$	0.2	$	1.3
Short-term borrowings		0.2		1.3
Senior unsecured credit facility — revolving loan due 2019		480.0		—
Senior secured credit facility — revolving loan due 2018		—		415.0
Long-term debt		480.0		415.0
Total debt	$	480.2	$	416.3

At March 31, 2015, total borrowings under our $700 million Senior Unsecured Credit Facility (the “Facility”) were $480 million. The Facility permits us to issue letters of credit up to an aggregate amount of $40.0 million.  Outstanding letters of credit reduce the amount available for borrowing under our revolving loan.  As of March 31, 2015, we had issued letters of credit under the Facility totaling $1.7 million, resulting in undrawn availability under the Facility as of March 31, 2015 of $218.3 million.  

The Facility contains financial and other covenants, including, but not limited to, restrictions on the incurrence of debt and the granting of liens, as well as the maintenance of an interest coverage ratio and a leverage ratio.  In accordance with the terms of the Facility, we are required to maintain a minimum interest coverage ratio of 3.50 (based on the ratio of EBITDA, as defined in the credit agreement, to interest expense) and may not exceed a maximum leverage ratio of 3.50 (based on the ratio of total debt to EBITDA) throughout the term of the Facility.  In addition, the Facility contains other terms and conditions such as customary representations and warranties, additional covenants and customary events of default.

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Inventories

3 Months Ended

Mar. 31, 2015

Inventory Disclosure [Abstract]

Inventories

Note 3 — Inventories

(In millions)	March 31, 2015		December 31, 2014
Raw materials	$	133.0	$	111.1
Work in progress		48.2		48.5
Finished goods		133.2		130.5
Total inventories	$	314.4	$	290.1

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Commitments and Contingencies - Additional Information (Details) (USD $)	3 Months Ended		0 Months Ended	1 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Apr. 11, 2014 mi	Jun. 30, 2007 mi	Dec. 31, 2014
Environmental Cost [Line Items]
Accrual for Environmental Loss Contingencies	$ 3,900,000				$ 5,000,000
Aggregate environmental accruals included in current other accrued liabilities	2,100,000				3,200,000
Remediation accrual balance if accrued at high end of the range of possible outcomes	28,000,000
Amount which is better estimate within range	0				0
Environmental remediation spending charged to reserve balance	1,300,000	1,000,000
Operating costs relating to environmental compliance	3,100,000	3,500,000
Capital expenditure for environmental matters	900,000	1,100,000
Lower Passaic River
Environmental Cost [Line Items]
Number of entities, in addition to Hexcel, who received a directive from the New Jersey Department of Environmental Protection	72
Portion of the river for which interim remedial options are considered (in miles)			8	8
Remediation accrual balance if accrued at lower end of the range of possible outcomes	2,000,000				2,100,000
Lower Passaic River | Minimum
Environmental Cost [Line Items]
Expected cost of dredging of the lower eight miles of the river by EPA			800,000,000
Lower Passaic River | Maximum
Environmental Cost [Line Items]
Expected cost of dredging of the lower eight miles of the river by EPA			3,250,000,000
Lodi, New Jersey Site
Environmental Cost [Line Items]
Accrual for Environmental Loss Contingencies	600,000				1,700,000
Kent, Washington Site
Environmental Cost [Line Items]
Accrual for Environmental Loss Contingencies	600,000				500,000
Omega Chemical Corporation Superfund Site, Whittier, California
Environmental Cost [Line Items]
Accrual for Environmental Loss Contingencies	$ 500,000				$ 600,000
Approximate contribution to waste tonnage (as a percent)	1.07%

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Net Income per Common Share - Additional Information (Details) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Earnings Per Share [Abstract]
Anti-dilutive securities excluded from computation of earnings per share amount (in shares)	0.2

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Retirement and Other Postretirement Benefit Plans - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
U.S. Non-qualified Defined Benefit Retirement Plans
Amounts recognized on the balance sheet:
Employer contribution to defined benefit retirement plans	$ 0.1		$ 25.7
Expected employer contribution in 2015	4.5
European Defined Benefit Retirement Plans
Amounts recognized on the balance sheet:
Employer contribution to defined benefit retirement plans	1.3	1.4	6.1
Expected employer contribution in next fiscal year	3.9
Postretirement Health Care and Life Insurance Benefit Plans
Amounts recognized on the balance sheet:
Employer contribution to defined benefit retirement plans	0.1	0.1	0.2
Expected employer contribution in next fiscal year	$ 0.6

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Income Taxes - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 12.9	$ 22.8
Effective tax rate (as a percent)	16.00%	31.30%
Effective tax rate excluding discrete benefits (as a percent)	30.40%
Benefits primarily related to the release of reserves for uncertain tax positions	$ 11.6

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	105,800,000	104,800,000
Treasury stock, shares	9,500,000	9,300,000

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Fair Value Measurements

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 8 — Fair Value Measurements

The authoritative guidance for fair value measurements establishes a hierarchy for observable and unobservable inputs used to measure fair value, into three broad levels, which are described below:

— Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

— Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

— Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value.

We do not have any significant assets or liabilities that utilize Level 3 inputs. In addition, we have no assets or liabilities that utilize Level 1 inputs. For derivative assets and liabilities that utilize Level 2 inputs, we prepare estimates of future cash flows of our derivatives, which are discounted to a net present value. The estimated cash flows and the discount factors used in the valuation model are based on observable inputs, and incorporate non-performance risk (the credit standing of the counterparty when the derivative is in a net asset position, and the credit standing of Hexcel when the derivative is in a net liability position). The fair value of these assets and liabilities was approximately $0.9 million and $43.4 million, respectively at March 31, 2015. In addition, the fair value of these derivative contracts, which are subject to a master netting arrangement under certain circumstances, is presented on a gross basis in the consolidated balance sheet.

Below is a summary of valuation techniques for all Level 2 financial assets and liabilities:

— Interest rate swaps — valued using LIBOR yield curves at the reporting date. Fair value was a liability of $0.5 million at March 31, 2015.

— Foreign exchange derivative assets and liabilities — valued using quoted forward foreign exchange prices at the reporting date. Fair value of assets and liabilities at March 31, 2015 was $0.9 million and $42.9 million, respectively.

Counterparties to the above contracts are highly rated financial institutions, none of which experienced any significant downgrades in the three months ended March 31, 2015 that would reduce the receivable amount owed, if any, to the Company.

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 68.1	$ 50.1
Currency translation adjustments	(50.6)	0.4
Net unrealized pension and other benefit actuarial gains and prior service costs	1.3
Net unrealized losses on financial instruments, net of tax	(16.0)	(1.3)
Total other comprehensive loss	(65.3)	(0.9)
Comprehensive income	$ 2.8	$ 49.2

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Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 22.7	$ 70.9
Accounts receivable, net	289.8	233.5
Inventories	314.4	290.1
Prepaid expenses and other current assets	84.3	87.2
Total current assets	711.2	681.7
Property, plant and equipment	1,891.9	1,868.7
Less accumulated depreciation	(630.7)	(630.5)
Property, plant and equipment, net	1,261.2	1,238.2
Goodwill and intangible assets	59.1	59.8
Investments in affiliated companies	32.0	34.2
Other assets	23.7	22.5
Total assets	2,087.2	2,036.4
Current liabilities:
Short-term borrowings	0.2	1.3
Accounts payable	140.1	175.0
Accrued liabilities	139.2	134.3
Total current liabilities	279.5	310.6
Long-term debt	480.0	415.0
Other non-current liabilities	162.2	160.9
Total liabilities	921.7	886.5
Stockholders’ equity:
Common stock, $0.01 par value, 200.0 shares authorized, 105.8 and 104.8 shares issued at March 31, 2015 and December 31, 2014, respectively	1.1	1.0
Additional paid-in capital	706.8	678.5
Retained earnings	904.0	845.5
Accumulated other comprehensive loss	(135.0)	(69.7)
Total stockholders' equity including treasury stock value	1,476.9	1,455.3
Less — Treasury stock, at cost, 9.5 shares at March 31, 2015 and 9.3 shares at December 31, 2014	(311.4)	(305.4)
Total stockholders’ equity	1,165.5	1,149.9
Total liabilities and stockholders’ equity	$ 2,087.2	$ 2,036.4

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Inventories - (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Inventory Disclosure [Abstract]
Raw materials	$ 133.0	$ 111.1
Work in progress	48.2	48.5
Finished goods	133.2	130.5
Total inventories	$ 314.4	$ 290.1

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2015

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Schedule of Change in Fair Value of Foreign Currency Forward Exchange Contracts Under Hedge Designations

The change in fair value of our foreign currency forward exchange contracts under hedge designations recorded net of tax within accumulated other comprehensive income for the quarters ended March 31, 2015 and 2014 was as follows:

	Quarter Ended March 31,
(In millions)	2015			2014
Unrealized (losses) gains at beginning of period, net of tax	$	(9.2	)	$	7.2
Losses (gains) reclassified to net sales		2.8			(1.1	)
(Decrease) increase in fair value		(18.8	)		0.6
Unrealized (losses) gains at end of period, net of tax	$	(25.2	)	$	6.7

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Segment Information - Schedule of Operating Segment Reporting Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Segment Reporting Information [Line Items]
Total sales	$ 471.8	$ 461.7
Operating income	82.6	74.6
Depreciation and amortization	18.3	17.1
Stock-based compensation expense	12.0	8.8
Accrual basis additions to capital expenditures	66.5	40.0
Operating Segments
Segment Reporting Information [Line Items]
Total sales	471.8	461.7
Composite Materials
Segment Reporting Information [Line Items]
Total sales	387.8	374.8
Operating income	89.2	75.9
Depreciation and amortization	16.7	15.6
Stock-based compensation expense	3.6	3.3
Accrual basis additions to capital expenditures	62.1	38.4
Composite Materials | Operating Segments
Segment Reporting Information [Line Items]
Total sales	367.4	356.3
Composite Materials | Intersegment Elimination
Segment Reporting Information [Line Items]
Total sales	20.4	18.5
Engineered Products
Segment Reporting Information [Line Items]
Total sales	104.5	105.5
Operating income	14.7	16.4
Depreciation and amortization	1.5	1.4
Stock-based compensation expense	0.5	0.7
Accrual basis additions to capital expenditures	4.4	1.6
Engineered Products | Operating Segments
Segment Reporting Information [Line Items]
Total sales	104.4	105.4
Engineered Products | Intersegment Elimination
Segment Reporting Information [Line Items]
Total sales	0.1	0.1
Corporate and Other
Segment Reporting Information [Line Items]
Total sales	(20.5)	(18.6)
Operating income	(21.3)	(17.7)
Depreciation and amortization	0.1	0.1
Stock-based compensation expense	7.9	4.8
Corporate and Other | Intersegment Elimination
Segment Reporting Information [Line Items]
Total sales	$ (20.5)	$ (18.6)

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Derivative Financial Instruments - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Interest Rate Swap Agreements
Derivative [Line Items]
Number of derivative contracts	2
Fixed interest rate (as a percent)	0.959%		0.754%
Interest Rate Swap Agreements | U.S. dollars
Derivative [Line Items]
Variable Rate Basis	LIBOR
Foreign Currency Forward Exchange Contracts
Derivative [Line Items]
Number of credit contingency features	0
Foreign currency unrealized gains expected to be reclassified into earnings over next twelve months, tax	$ 15.5
Foreign Currency Forward Exchange Contracts | Cash Flow Hedging
Derivative [Line Items]
Gains (losses) in other comprehensive income, effective portion	(23.7)	0.8
Designated as Hedging Instrument | Interest Rate Swap Agreements
Derivative [Line Items]
Floating rate obligation	75
Notional amount	150.0
Carrying value / fair value of derivative liabilities included in other liabilities	0.5		0.3
Carrying value / fair value of derivative assets included in other assets			0.1
Designated as Hedging Instrument | Swaps maturing March 2016
Derivative [Line Items]
Notional amount	50.0
Designated as Hedging Instrument | Swaps maturing September 2016
Derivative [Line Items]
Notional amount	50.0
Designated as Hedging Instrument | Swaps maturing March 2017
Derivative [Line Items]
Notional amount	50.0
Designated as Hedging Instrument | Foreign Currency Forward Exchange Contracts
Derivative [Line Items]
Notional amount	322.4		255.8
Carrying value / fair value of derivative liabilities included in other liabilities	32.8		12.7
Carrying value / fair value of derivative assets included in other assets	0.3		0.3
Designated as Hedging Instrument | Foreign Currency Forward Exchange Contracts | Cash Flow Hedging
Derivative [Line Items]
Recorded in gross margin	(3.6)	1.6
Not Designated as Hedging Instrument | Foreign Currency Forward Exchange Contracts
Derivative [Line Items]
Carrying value / fair value of derivative liabilities included in other liabilities	10.0		5.5
Carrying value / fair value of derivative assets included in other assets	0.6		0.8
Net gains (losses) on derivative contracts not designated as hedges	$ (16.6)	$ (0.2)

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Derivative Financial Instruments - Schedule of Change in Fair Value of Foreign Currency Forward Exchange Contracts Under Hedge Designations (Details) (Designated as Hedging Instrument, Foreign Currency Forward Exchange Contracts, USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Designated as Hedging Instrument | Foreign Currency Forward Exchange Contracts
Derivative [Line Items]
Unrealized (losses) gains at beginning of period, net of tax	$ (9.2)	$ 7.2
Losses (gains) reclassified to net sales	2.8	(1.1)
(Decrease) increase in fair value	(18.8)	0.6
Unrealized (losses) gains at end of period, net of tax	$ (25.2)	$ 6.7

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Income Taxes

3 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Note 7 — Income Taxes

The income tax provision for the quarter ended March 31, 2015 was $12.9 million. The effective tax rate for the first quarter of 2015 was 16.0%. The 2015 quarter included $11.6 million of benefits primarily related to the release of reserves for uncertain tax positions.  Excluding these discrete benefits, our effective tax rate for the first quarter was 30.4%. The income tax provision for the quarter ended March 31, 2014 was $22.8 million, an effective tax rate of 31.3%.

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Retirement and Other Postretirement Benefit Plans - Schedule of Net Periodic Benefit Costs of Defined Benefit Retirement Plans (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
U.S. Non-qualified Defined Benefit Retirement Plans
Net periodic benefit costs of defined benefit retirement plans
Service cost	$ 0.3	$ 0.3
Interest cost	0.1	0.2
Net amortization and deferral	0.8	0.9
Settlement expense		1.3
Net periodic benefit cost (credit)	1.2	2.7
European Defined Benefit Retirement Plans
Net periodic benefit costs of defined benefit retirement plans
Service cost	0.2	0.2
Interest cost	1.6	1.8
Expected return on plan assets	(2.2)	(2.4)
Net amortization and deferral	0.2	0.1
Net periodic benefit cost (credit)	$ (0.2)	$ (0.3)

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Commitments and Contingencies - Schedule of Product Warranty (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Changes in accrued product warranty cost
Balance at the beginning of the period	$ 11.3
Deductions and other	(3.3)
Balance at the end of the period	$ 8.0

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 10 — Commitments and Contingencies

We are involved in litigation, investigations and claims arising out of the normal conduct of our business, including those relating to commercial transactions, environmental, employment, and health and safety matters. We estimate and accrue our liabilities when a loss becomes probable and estimable. These judgments take into consideration a variety of factors, including the stage of the proceeding; potential settlement value; assessments by internal and external counsel; and assessments by environmental engineers and consultants of potential environmental liabilities and remediation costs. Such estimates are not discounted to reflect the time value of money due to the uncertainty in estimating the timing of the expenditures, which may extend over several years.

While it is impossible to ascertain the ultimate legal and financial liability with respect to certain contingent liabilities and claims, we believe, based upon our examination of currently available information, our experience to date, and advice from legal counsel, that the individual and aggregate liabilities resulting from the ultimate resolution of these contingent matters, after taking into consideration our existing insurance coverage and amounts already provided for, will not have a material adverse impact on our consolidated results of operations, financial position or cash flows.

Environmental Matters

We are subject to various U.S. and international federal, state and local environmental, and health and safety laws and regulations. We are also subject to liabilities arising under the Federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or “Superfund”), the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, and similar state and international laws and regulations that impose responsibility for the control, remediation and abatement of air, water and soil pollutants and the manufacturing, storage, handling and disposal of hazardous substances and waste.

We have been named as a potentially responsible party (“PRP”) with respect to several hazardous waste disposal sites that we do not own or possess, which are included on, or proposed to be included on, the Superfund National Priority List of the U.S. Environmental Protection Agency (“EPA”) or on equivalent lists of various state governments. Because CERCLA allows for joint and several liability in certain circumstances, we could be responsible for all remediation costs at such sites, even if we are one of many PRPs. We believe, based on the amount and nature of our waste, our existing insurance coverage, the amounts already provided for and the number of other financially viable PRPs, that our liability in connection with such matters will not be material.

Lodi, New Jersey Site

Pursuant to the New Jersey Industrial Site Recovery Act, Hexcel entered into an Administrative Consent Order for the environmental remediation of a manufacturing facility we own and formerly operated in Lodi, New Jersey. We have been remediating this site in accordance with a State approved plan and continue to do so under the New Jersey Licensed Site Remediation Professional program.  Hexcel has completed all active investigation and remediation activities and is in the final phase of clean-up including restoration of the river embankment and installation of a barrier to prevent contaminant migration. Hexcel is in the process of monitoring contaminant levels to support a Monitored Natural Attenuation program. The accrual balance is $0.6 million as of March 31, 2015 and was $1.7 million at December 31, 2014.

Lower Passaic River

Hexcel and a group of approximately 72 other PRPs comprise the Lower Passaic Cooperating Parties Group (the “CPG”). Hexcel and the CPG are subject to a May 2007 Administrative Order on Consent (“AOC”) to perform a Remedial Investigation/Feasibility Study (“RI/FS”) of environmental conditions in the Lower Passaic River watershed. We were included in the CPG based on our operations at our former manufacturing site in Lodi, New Jersey.

In June 2007, the EPA issued a draft Focused Feasibility Study (“FFS”) that considers interim remedial options for the lower eight miles of the river, in addition to a “no action” option. On April 11, 2014, the EPA issued a revised FFS, which proposes several alternatives, including the bank to bank dredging of the lower eight miles of the river at an expected cost ranging from $0.8 billion to $3.25 billion, according to the EPA, but also includes a “no action” option.  The comment period for the revised FFS closed on August 20, 2014 and a final decision is not expected for several months.  Hexcel is not currently subject to any obligation to undertake the work contemplated by the FFS, nor have we determined our allocable share of any remediation alternatives. However, based on a review of the Company’s position, and as no point within the range is a more probable outcome than any other point, the Company recorded the lower end of the expected range. The accrual balance was $2.0 million as of March 31, 2015 and $2.1 million at December 31, 2014. Despite the issuance of the revised FFS, there are many uncertainties associated with the final agreed upon remediation and the Company’s allocable share of the remediation. Given those uncertainties, the amounts accrued may not be indicative of the amounts for which the Company is ultimately responsible and will be refined as events in the remediation process develop.

Kent, Washington Site

We were party to a cost-sharing agreement regarding the operation of certain environmental remediation systems necessary to satisfy a post-closure care permit issued to a previous owner of our Kent, Washington site by the EPA.  Under the terms of the cost-sharing agreement, we were obligated to reimburse the previous owner for a portion of the cost of the required remediation activities.  The previous owner, who also continues to own an adjacent site, has installed certain remediation and isolation technologies on its upgradient site and is operating those pursuant to an order agreed with the State of Washington.  We and the Washington Department of Ecology have reached an agreed order to perform certain cleanup activities on our site by certain deadlines, and we are in full compliance with the order. The Department of Ecology has recently approved a reduced number of wells and a reduced pumping volume for Hexcel’s wells on its property and agreed with a plan for more active remediation going forward.  The total accrued liability related to this matter was $0.6 million at March 31, 2015 and $0.5 million at December 31, 2014.

Omega Chemical Corporation Superfund Site, Whittier, California

We are a PRP at a former chemical waste site in Whittier, California. The PRPs at Omega have established a PRP Group, the “Omega PRP Group”, and are currently investigating and remediating soil and groundwater at the site pursuant to a Consent Decree with the EPA.  The Omega PRP Group has attributed approximately 1.07% of the waste tonnage sent to the site to Hexcel.  In addition to the Omega site specifically, the EPA is investigating the scope of regional groundwater contamination in the vicinity of the Omega site and issued a Record of Decision; the Omega PRP Group members have been noticed by the EPA as PRPs who will be required to be involved in the remediation of the regional groundwater contamination in that vicinity as well.  As a member of the Omega PRP group, Hexcel will incur costs associated with the investigation and remediation of the Omega site and the regional groundwater remedy, although our ultimate liability, if any, in connection with this matter cannot be determined at this time. The total accrued liability relating to potential liability for both the Omega site and regional groundwater remedies was $0.5 million at March 31, 2015 and $0.6 million at December 31, 2014.

Summary of Environmental Reserves

Our estimate of liability as a PRP and our remaining costs associated with our responsibility to remediate the Lower Passaic River in New Jersey; Lodi, New Jersey; Kent, Washington; and other sites are accrued in the consolidated balance sheets. As of March 31, 2015, our aggregate environmental related accruals were $3.9 million, of which $2.1 million was included in accrued liabilities with the remainder included in non-current liabilities.  As of December 31, 2014, our aggregate environmental related accruals were $5.0 million, of which $3.2 million was included in accrued liabilities with the remainder included in non-current liabilities. As related to certain environmental matters, except for the Lodi site, the accrual was estimated at the low end of a range of possible outcomes since no amount within the range is a better estimate than any other amount. If we had accrued at the high end of the range of possible outcomes for those sites where we are able to estimate our liability, our accrual would have been $28 million higher. These accruals can change significantly from period to period due to such factors as additional information on the nature or extent of contamination, the methods of remediation required, changes in the apportionment of costs among responsible parties and other actions by governmental agencies or private parties, or the impact, if any, of being named in a new matter.

Environmental remediation spending charged to our reserve balance for the quarter ended March 31, 2015 and 2014 was $1.3 million and $1.0 million, respectively.  In addition, our operating costs relating to environmental compliance charged to expense were $3.1 million and $3.5 for the quarters ended March 31, 2015 and 2014, respectively.  Capital expenditures for environmental matters were $0.9 million and $1.1 million for the quarters ended March 31, 2015 and 2014, respectively.

Product Warranty

We provide for an estimated amount of product warranty expense at the time revenue is recognized. This estimated amount is provided by product and based on historical warranty experience. In addition, we periodically review our warranty accrual and record any adjustments as deemed appropriate. Accrued warranty cost, included in “accrued liabilities” in the condensed consolidated balance sheets at March 31, 2015 and December 31, 2014, was as follows:

(In millions)	Product Warranties
Balance as of December 31, 2014	$	11.3
Deductions and other		( 3.3	)
Balance as of March 31, 2015	$	8.0

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2015

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Note 6 — Derivative Financial Instruments

Interest Rate Swap Agreements

As of March 31, 2015 the Company had two agreements to swap $75 million of floating rate obligations for fixed rate obligations at an average of 0.959% and 0.754% against LIBOR in U.S. dollars. Of the total of $150 million of swaps outstanding at March 31, 2015, $50 million matures in each of March 2016, September 2016, and March 2017. All of the swaps were accounted for as cash flow hedges of our floating rate bank loans. To ensure the swaps were highly effective, all the principal terms of the swaps matched the terms of the bank loans. The fair value of the interest rate swaps was a liability of $0.5 million at March 31, 2015 and an asset of $0.1 million and a liability of $0.3 million at December 31, 2014.

Foreign Currency Forward Exchange Contracts

A number of our European subsidiaries are exposed to the impact of exchange rate volatility between the U.S. dollar and the subsidiaries’ functional currencies, being either the Euro or the British Pound sterling.  We entered into contracts to exchange U.S. dollars for Euros and British Pound sterling through September 2017.  The aggregate notional amount of these contracts was $322.4 million and $255.8 million at March 31, 2015 and December 31, 2014, respectively.  The purpose of these contracts is to hedge a portion of the forecasted transactions of European subsidiaries under long-term sales contracts with certain customers.  These contracts are expected to provide us with a more balanced matching of future cash receipts and expenditures by currency, thereby reducing our exposure to fluctuations in currency exchange rates.  The effective portion of the hedges, losses of $23.7 million and gains of $0.8 million, were recorded in other comprehensive income (“OCI”) for the three months ended March 31, 2015 and 2014, respectively.  We classified the carrying amount of these contracts of $0.3 million in other assets and $32.8 million in other liabilities on the condensed consolidated balance sheets at March 31, 2015 and $0.3 million in other assets and $12.7 million classified in other liabilities at December 31, 2014.  During the three months ended March 31, 2015 and 2014, we recognized net decreases of $3.6 million and net increases of $1.6 million in gross margin, respectively.  For the quarters ended March 31, 2015 and 2014, hedge ineffectiveness was immaterial.

In addition, we enter into foreign exchange forward contracts which are not designated as hedges.  These are used to provide an offset to transactional gains or losses arising from the remeasurement of non-functional monetary assets and liabilities such as accounts receivable.  The change in the fair value of the derivatives is recorded in the statement of operations.  There are no credit contingency features in these derivatives.  During the quarters ended March 31, 2015 and 2014, we recognized net foreign exchange losses of $16.6 million and $0.2 million, respectively, in the Condensed Consolidated Statements of Operations. The net foreign exchange impact recognized from these hedges offset the translation exposure of these transactions.  The carrying amount of the contracts for asset and liability derivatives not designated as hedging instruments was $0.6 million classified in other assets and $10.0 million in other liabilities and $0.8 million classified in other assets and $5.5 million in other liabilities on the March 31, 2015 and December 31, 2014 Condensed Consolidated Balance Sheets, respectively.

The change in fair value of our foreign currency forward exchange contracts under hedge designations recorded net of tax within accumulated other comprehensive income for the quarters ended March 31, 2015 and 2014 was as follows:

	Quarter Ended March 31,
(In millions)	2015			2014
Unrealized (losses) gains at beginning of period, net of tax	$	(9.2	)	$	7.2
Losses (gains) reclassified to net sales		2.8			(1.1	)
(Decrease) increase in fair value		(18.8	)		0.6
Unrealized (losses) gains at end of period, net of tax	$	(25.2	)	$	6.7

We expect to reclassify $15.5 million of unrealized losses into earnings over the next twelve months as the hedged sales are recorded.

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Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Significant Accounting Policies

Note 1 — Significant Accounting Policies

In these notes, the terms “Hexcel,” “the Company,” “we,” “us,” or “our” mean Hexcel Corporation and subsidiary companies. The accompanying condensed consolidated financial statements are those of Hexcel Corporation. Refer to Note 1 to the consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2014 for a discussion of our significant accounting policies.

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements have been prepared from the unaudited accounting records of Hexcel pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Certain information and footnote disclosures normally included in financial statements have been omitted pursuant to rules and regulations of the SEC.

In the opinion of management, the Condensed Consolidated Financial Statements include all normal recurring adjustments as well as any non-recurring adjustments necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods presented. The Condensed Consolidated Balance Sheet as of December 31, 2014 was derived from the audited 2014 consolidated balance sheet. Interim results are not necessarily indicative of results expected for any other interim period or for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2014 Annual Report on Form 10-K filed with the SEC on February 5, 2015.

Investments in Affiliated Companies

We have 50% equity ownership investments in an Asian joint venture Aerospace Composites Malaysia Sdn. Bhd. (“ACM”) and in Formax UK Limited (“Formax”).  These investments are accounted for using the equity method of accounting.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board issued Update No. 2014-09, Revenue from Contracts with Customers. The update clarifies the principles for recognizing revenue and develops a common revenue standard for all industries. The guidance is effective for the first quarter of 2017. Early application is not permitted. We are currently evaluating the impact of adopting this prospective guidance on our consolidated results of operations and financial condition.

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Debt - Schedule of Debt and Capital Lease Obligations (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Short-term borrowings	$ 0.2	$ 1.3
Long-term debt	480.0	415.0
Total debt	480.2	416.3
Working capital line of credit - China
Debt Instrument [Line Items]
Short-term borrowings	0.2	1.3
Senior unsecured credit facility - revolving loan due 2019
Debt Instrument [Line Items]
Long-term debt	480.0
Senior secured credit facility - revolving loan due 2018
Debt Instrument [Line Items]
Long-term debt		$ 415.0

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Net Income per Common Share (Tables)

3 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

Summary of Earnings Per Share Basic and Diluted

	Quarter Ended March 31,
(In millions, except per share data)	2015		2014
Basic net income per common share:
Net income	$	68.1	$	50.1
Weighted average common shares outstanding		96.2		98.5
Basic net income per common share	$	0.71	$	0.51
Diluted net income per common share:
Net income	$	68.1	$	50.1
Weighted average common shares outstanding — Basic		96.2		98.5
Plus incremental shares from assumed conversions:
Restricted stock units		0.6		0.7
Stock options		1.1		1.4
Weighted average common shares outstanding — Dilutive		97.9		100.6
Diluted net income per common share	$	0.70	$	0.50

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Segment Information

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Information

Note 9 — Segment Information

The financial results for our operating segments are prepared using a management approach, which is consistent with the basis and manner in which we internally segregate financial information for the purpose of assisting in making internal operating decisions. We evaluate the performance of our operating segments based on operating income, and generally account for intersegment sales based on arm’s length prices. Corporate and certain other expenses are not allocated to the operating segments, except to the extent that the expense can be directly attributable to the business segment.

Financial information for our operating segments for the quarters ended March 31, 2015 and 2014 is as follows:

	(Unaudited)
(In millions)	Composite Materials		Engineered Products		Corporate & Other (a)			Total
First Quarter 2015
Net sales to external customers	$	367.4	$	104.4	$	—		$	471.8
Intersegment sales		20.4		0.1		(20.5	)		—
Total sales		387.8		104.5		(20.5	)		471.8
Operating income (a)		89.2		14.7		(21.3	)		82.6
Depreciation and amortization		16.7		1.5		0.1			18.3
Stock-based compensation expense		3.6		0.5		7.9			12.0
Accrual basis additions to capital expenditures		62.1		4.4		—			66.5
First Quarter 2014
Net sales to external customers	$	356.3	$	105.4	$	—		$	461.7
Intersegment sales		18.5		0.1		(18.6	)		—
Total sales		374.8		105.5		(18.6	)		461.7
Operating income (a)		75.9		16.4		(17.7	)		74.6
Depreciation and amortization		15.6		1.4		0.1			17.1
Stock-based compensation expense		3.3		0.7		4.8			8.8
Accrual basis additions to capital expenditures		38.4		1.6		—			40.0

(a) We do not allocate corporate expenses to the operating segments.     

Goodwill and Intangible Assets

The carrying amount of gross goodwill and intangible assets by segment is as follows:

(In millions)	March 31, 2015		December 31, 2014
Composite Materials	$	43.0	$	43.7
Engineered Products		16.1		16.1
Goodwill and intangible assets	$	59.1	$	59.8

No impairments have been recorded against these amounts.

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Debt (Tables)

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Schedule of Debt and Capital Lease Obligations

(In millions)	March 31, 2015		December 31, 2014
Working capital line of credit — China	$	0.2	$	1.3
Short-term borrowings		0.2		1.3
Senior unsecured credit facility — revolving loan due 2019		480.0		—
Senior secured credit facility — revolving loan due 2018		—		415.0
Long-term debt		480.0		415.0
Total debt	$	480.2	$	416.3

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Inventories (Tables)

3 Months Ended

Mar. 31, 2015

Inventory Disclosure [Abstract]

Schedule of Inventories

(In millions)	March 31, 2015		December 31, 2014
Raw materials	$	133.0	$	111.1
Work in progress		48.2		48.5
Finished goods		133.2		130.5
Total inventories	$	314.4	$	290.1

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	Apr. 15, 2015
Document And Entity Information [Abstract]
Entity Registrant Name	HEXCEL CORP /DE/
Entity Central Index Key	0000717605
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		96,366,147
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

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Retirement and Other Postretirement Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2015

U.S. Non-qualified Defined Benefit Retirement Plans

Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]

Schedule of Net Periodic Benefit Costs of Defined Benefit Retirement Plans

Net periodic benefit costs of our defined benefit retirement plans for the quarters ended March 31, 2015 and 2014 were as follows:

	Quarter Ended March 31,
(In millions)	2015			2014
U.S. Nonqualified Defined Benefit Retirement Plans
Service cost	$	0.3	$	0.3
Interest cost		0.1		0.2
Net amortization and deferral		0.8		0.9
Settlement expense		—		1.3
Net periodic benefit cost	$	1.2	$	2.7

Schedule of Amounts Recognized on Balance Sheet

	March 31, 2015		December 31, 2014
Amounts recognized on the balance sheet:
Accrued liabilities	$	4.5	$	4.5
Other non-current liabilities		15.5		14.6
Total accrued benefit	$	20.0	$	19.1

European Defined Benefit Retirement Plans

Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]

Schedule of Net Periodic Benefit Costs of Defined Benefit Retirement Plans

	Quarter Ended March 31,
(In millions)	2015			2014
European Defined Benefit Retirement Plans
Service cost	$	0.2		$	0.2
Interest cost		1.6			1.8
Expected return on plan assets		(2.2	)		(2.4	)
Net amortization and deferral		0.2			0.1
Net periodic benefit credit	$	(0.2	)	$	(0.3	)

Schedule of Amounts Recognized on Balance Sheet

	March 31, 2015		December 31, 2014
Amounts recognized on the balance sheet:
Non-current asset	$	5.2	$	3.3
Accrued liabilities	$	1.5	$	0.4
Other non-current liabilities		16.5		17.1
Total accrued benefit	$	18.0	$	17.5

Postretirement Health Care and Life Insurance Benefit Plans

Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]

Schedule of Amounts Recognized on Balance Sheet

Net periodic benefit costs of our postretirement health care and life insurance benefit plans for the quarters ended March 31, 2015 and 2014 were immaterial.

	March 31,2015		December 31,2014
Amounts recognized on the balance sheet:
Accrued liabilities	$	0.6	$	0.6
Other non-current liabilities		5.4		5.7
Total accrued benefit	$	6.0	$	6.3