Segment Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Information

Note 16 — Segment Information

The financial results for our 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 segments based on operating income, and generally account for intersegment sales based on arm’s length prices. We report two segments, Composite Materials and Engineered Products. Corporate and certain other expenses are not allocated to the segments, except to the extent that the expense can be directly attributable to the segment. Corporate & Other is shown to reconcile to Hexcel’s consolidated results.

In addition to the product line-based segmentation of our business, we also monitor sales into our principal end markets as a means to understanding demand for our products. Therefore, for each segment, we have also reported disaggregated sales by end market.

The following table presents financial information on our segments as of December 31, 2016, 2015 and 2014, and for the years then ended.

(In millions)	Composite Materials		Engineered Products		Corporate & Other			Total
Third-Party Sales
2016	$	1,610.0	$	394.3	$	—		$	2,004.3
2015		1,458.7		402.5		—			1,861.2
2014		1,420.9		434.6		—			1,855.5
Intersegment sales
2016	$	67.6	$	0.1	$	(67.7	)	$	—
2015		70.4		8.5		(78.9	)		—
2014		66.7		1.8		(68.5	)		—
Operating income (loss)
2016	$	368.3	$	50.0	$	(58.2	)	$	360.1
2015		336.2		55.8		(59.6	)		332.4
2014		308.8		67.0		(70.0	)		305.8
Depreciation
2016	$	86.0	$	7.2	$	0.1		$	93.3
2015		70.0		6.1		0.3			76.4
2014		65.5		5.5		0.2			71.2
Equity in earnings from affiliated companies
2016	$	—	$	2.5	$	—		$	2.5
2015		0.2		1.8		—			2.0
2014		—		1.4		—			1.4
Other expense (income), net
2014	$	—	$	—	$	6.0		$	6.0
Segment assets
2016	$	2,127.2	$	220.7	$	52.7		$	2,400.6
2015		1,892.0		239.4		56.0			2,187.4
2014		1,600.7		241.1		194.6			2,036.4
Investments in affiliated companies
2016	$	—	$	23.1	$	30.0		$	53.1
2015		10.1		20.3		—			30.4
2014		10.2		24.0		—			34.2
Accrual basis additions to property, plant and equipment
2016	$	305.2	$	14.9	$	0.1		$	320.2
2015		276.0		13.0		—			289.0
2014		260.1		10.1		—			270.2

Geographic Data

Net sales and long-lived assets, by geographic area, consisted of the following for the three years ended December 31, 2016, 2015 and 2014:

(In millions)	2016		2015		2014
Net sales by Geography (a):
United States	$	957.8	$	955.4	$	933.2
International
France		335.2		320.6		346.9
Spain		219.7		217.8		183.4
Germany		169.5		83.2		69.8
United Kingdom		154.2		125.1		135.8
Austria		92.8		93.1		112.6
Other		75.1		66.0		73.8
Total international		1,046.5		905.8		922.3
Total consolidated net sales	$	2,004.3	$	1,861.2	$	1,855.5
Net Sales to External Customers (b):
United States	$	833.1	$	850.1	$	834.5
International
Germany		210.5		163.7		154.8
Spain		204.4		149.7		155.3
France		153.8		140.3		159.1
United Kingdom		95.5		84.2		95.6
Other		507.0		473.2		456.2
Total international		1,171.2		1,011.1		1,021.0
Total	$	2,004.3	$	1,861.2	$	1,855.5
Long-lived assets (c):
United States	$	1,213.8	$	1,109.9	$	990.1
International
France		217.2		112.1		68.7
United Kingdom		130.8		133.4		116.2
Spain		56.2		59.8		68.5
Other		79.8		69.3		88.8
Total international		484.0		374.6		342.2
Total consolidated long-lived assets	$	1,697.8	$	1,484.5	$	1,332.3

(a) Net sales by geography based on the location in which the product sold was manufactured.

(b) Net sales to external customers based on the location to which the product sold was delivered.

(c) Long-lived assets primarily consist of property, plant and equipment, net and goodwill.

Significant Customers and Suppliers

Approximately 41%, 35% and 31% of our 2016, 2015 and 2014 net sales, respectively, were to Airbus and its subcontractors. Of the 41% of overall sales to Airbus and its subcontractors in 2016, 37% related to Commercial Aerospace market applications and 4% related to Space & Defense market applications. Approximately 28%, 31% and 32% of our 2016, 2015 and 2014 net sales, respectively, were to Boeing and related subcontractors. Of the 28% of overall sales to Boeing and its subcontractors in 2016, 26% related to Commercial Aerospace market applications and 2% related to Space & Defense market applications.  In the Composite Materials segment approximately 17%, 21% and 20% of sales for 2016, 2015 and 2014, respectively, were to Boeing and its subcontractors. Approximately 48%, 42% and 39% of sales for 2016, 2015 and 2014, respectively were to Airbus and its subcontractors. In the Engineered Products segment approximately 69%, 71% and 71% of sales for 2016, 2015 and 2014, respectively were to Boeing and its subcontractors.

A significant decline in business with Airbus or Boeing could materially impact our business, operating results, prospects and financial condition.

Certain key raw materials we consume are available from relatively few sources, and in many cases the cost of product qualification makes it impractical to develop multiple sources of supply. The lack of availability of these materials could under certain circumstances materially impact our consolidated results of operations.