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 and nine months ended September 30, 2017 and 2016 were as follows:

	(Unaudited)
	Composite		Engineered		Corporate &
(In millions	Materials		Products		Other (a)			Total
Third Quarter 2017
Net sales to external customers	$	398.9	$	92.6	$	—		$	491.5
Intersegment sales		16.4		—		(16.4	)		—
Total sales		415.3		92.6		(16.4	)		491.5
Operating income		90.0		12.1		(13.0	)		89.1
Depreciation and amortization		24.8		1.9		0.1			26.8
Stock-based compensation		1.1		0.1		1.0			2.2
Accrual basis additions to capital expenditures		47.4		0.5		—			47.9

Third Quarter 2016
Net sales to external customers	$	398.2	$	102.3	$	—		$	500.5
Intersegment sales		16.2		—		(16.2	)		—
Total sales		414.4		102.3		(16.2	)		500.5
Operating income		88.8		12.9		(12.6	)		89.1
Depreciation and amortization		21.7		1.8		—			23.5
Stock-based compensation		0.7		0.1		—			0.8
Accrual basis additions to capital expenditures		84.4		5.9		0.1			90.4

Nine Months Ended September 30, 2017
Net sales to external customers	$	1,183.7	$	277.9	$	—		$	1,461.6
Intersegment sales		48.6		—		(48.6	)		—
Total sales		1,232.3		277.9		(48.6	)		1,461.6
Operating income		264.0		37.2		(43.8	)		257.4
Depreciation and amortization		70.6		5.6		0.1			76.3
Stock-based compensation		5.7		1.0		8.8			15.5
Accrual basis additions to capital expenditures		208.5		9.5		—			218.0

Nine Months Ended September 30, 2016
Net sales to external customers	$	1,219.3	$	301.5	$	—		$	1,520.8
Intersegment sales		53.2		—		(53.2	)		—
Total sales		1,272.5		301.5		(53.2	)		1,520.8
Operating income		281.2		36.8		(44.9	)		273.1
Depreciation and amortization		63.5		5.4		0.1			69.0
Stock-based compensation		4.9		0.9		7.8			13.6
Accrual basis additions to capital expenditures		221.6		10.9		0.1			232.6
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(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:

	September 30,			December 31,
(In millions)	2017			2016
Composite Materials	$	57.9		$	56.1
Engineered Products		16.1			16.1
Goodwill and intangible assets	$		74.0	$	72.2

No impairments have been recorded against these amounts.