Segment Information

6 Months Ended

Jun. 30, 2019

Note 11 — 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 quarter and six months ended June 30, 2019 and 2018 were as follows:

	(Unaudited)
	Composite		Engineered		Corporate &
(In millions	Materials		Products		Other (a)			Total
Second Quarter 2019
Net sales to external customers	$	484.0	$	125.0	$	—		$	609.0
Intersegment sales		21.5		—		(21.5	)		—
Total sales	$	505.5	$	125.0	$	(21.5	)	$	609.0
Operating income		111.8		16.3		(13.0	)		115.1
Depreciation and amortization		30.1		3.8		0.1			34.0
Stock-based compensation		1.1		0.4		0.9			2.4
Accrual basis additions to capital expenditures		49.0		1.1		—			50.1

Second Quarter 2018
Net sales to external customers	$	445.8	$	101.7	$	—		$	547.5
Intersegment sales		20.3		—		(20.3	)		—
Total sales	$	466.1	$	101.7	$	(20.3	)	$	547.5
Operating income		93.1		15.9		(12.5	)		96.5
Depreciation and amortization		27.5		2.3		—			29.8
Stock-based compensation		0.9		0.1		1.1			2.1
Accrual basis additions to capital expenditures		43.4		1.3		—			44.7

Six Months Ended June 30, 2019
Net sales to external customers	$	971.7	$	247.2	$	—		$	1,218.9
Intersegment sales		40.7		0.1		(40.8	)		—
Total sales	$	1,012.4	$	247.3	$	(40.8	)	$	1,218.9
Operating income		224.3		31.1		(37.5	)		217.9
Depreciation and amortization		65.0		7.6		0.1			72.7
Stock-based compensation		5.2		1.2		7.1			13.5
Accrual basis additions to capital expenditures		105.8		1.8		—			107.6

Six Months Ended June 30, 2018
Net sales to external customers	$	890.4	$	197.2	$	—		$	1,087.6
Intersegment sales		39.5		—		(39.5	)		—
Total sales	$	929.9	$	197.2	$	(39.5	)	$	1,087.6
Operating income		184.1		25.8		(31.0	)		178.9
Depreciation and amortization		55.0		4.6		—			59.6
Stock-based compensation		4.5		0.8		6.7			12.0
Accrual basis additions to capital expenditures		88.7		1.3		—			90.0

(a)

We do not allocate corporate expenses to the operating segments.

Goodwill and Intangible Assets	Composite			Engineered
(In millions)	Materials			Products			Total
Balance at December 31, 2018	$	98.2		$	44.1		$	142.3
Amortization Expense		(1.1	)		(2.4	)		(3.5	)
Additions		—			145.1			145.1
Currency translation adjustments		(0.2	)		(0.1	)		(0.3	)
Balance at June 30, 2019	$	96.9		$	186.7		$	283.6

The addition to goodwill and intangible assets is due to the acquisition of ARC Technologies LLC, discussed in Note 13. At June 30, 2019, the balance of goodwill and intangible assets was $189.6 million and $94.0 million, respectively. No impairments have been recorded against these amounts.