Segment Information

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Information

Note 18 — 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.

The following table presents financial information on our segments as of December 31, 2020, 2019 and 2018, and for the years then ended.

(In millions)	Composite Materials			Engineered Products			Corporate & Other			Total
Third-party sales
2020	$	1,185.9		$	316.5		$	—		$	1,502.4
2019		1,863.1			492.6			—			2,355.7
2018		1,770.5			418.6			—			2,189.1
Intersegment sales
2020	$	53.9		$	2.5		$	(56.4	)	$	—
2019		83.4			0.8			(84.2	)		—
2018		74.6			0.1			(74.7	)		—
Operating income (loss)
2020	$	60.7		$	9.4		$	(56.0	)	$	14.1
2019		411.3			72.0			(58.1	)		425.2
2018		373.8			50.6			(53.2	)		371.2
Depreciation and amortization
2020	$	125.5		$	15.3		$	0.1		$	140.9
2019		126.5			15.1			0.1			141.7
2018		113.9			9.1			0.1			123.1
Equity in earnings from affiliated companies
2020	$	(0.3	)	$	(1.1	)	$	(0.2	)	$	(1.6	)
2019		(0.3	)		4.3			(0.3	)		3.7
2018		—			5.6			—			5.6
Other operating expense
2020	$	32.1		$	9.8		$	16.0		$	57.9
2019		-			-			-			-
2018		-			7.7			-			7.7
Segment assets
2020	$	2,382.3		$	473.8		$	61.7		$	2,917.8
2019		2,669.6			465.2			(6.2)			3,128.6
2018		2,501.9			272.9			49.3			2,824.1
Investments in affiliated companies
2020	$	2.0		$	35.0		$	7.7		$	44.7
2019		2.2			36.1			8.2			46.5
2018		2.4			32.1			14.2			48.7
Accrual basis additions to property, plant and equipment
2020	$	38.6		$	3.9		$	—		$	42.5
2019		185.8			5.2			—			191.0
2018		173.5			5.6			—			179.1

Geographic Data

Net sales and long-lived assets, by geographic area, consisted of the following for the three years ended December 31, 2020, 2019 and 2018:

(In millions)	2020		2019		2018
Net Sales by Geography (a):
United States	$	792.6	$	1,246.9	$	1,055.9
International
France		226.1		364.3		369.8
Spain		101.5		166.6		189.5
Germany		127.1		221.3		216.0
United Kingdom		104.8		168.9		167.3
Austria		83.6		110.1		111.4
Other		66.7		77.6		79.2
Total international		709.8		1,108.8		1,133.2
Total consolidated net sales	$	1,502.4	$	2,355.7	$	2,189.1
Net Sales to External Customers (b):
United States	$	703.5	$	1,083.3	$	909.8
International
Germany	124.6		212.8		233.1
France	106.7		191.9		201.7
Spain	107.4		188		194.1
United Kingdom		37.7		77.4		79.0
Other		422.5		602.3		571.4
Total international		798.9		1,272.4		1,279.3
Total	$	1,502.4	$	2,355.7	$	2,189.1
Long-lived Assets (c):
United States	$	1,523.3	$	1,609.2	$	1,332.1
International
France	398.5		387.1		397.7
United Kingdom	144.4		151.9		146.1
Spain	57.7		57.2		56.6
Other	86.6		84.3		86.3
Total international		687.2		680.5		686.7
Total consolidated long-lived assets	$	2,210.5	$	2,289.7	$	2,018.8

(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 at December 31, 2020, 2019 and 2018. Also included at December 31, 2020 and 2019 are right of use assets related to operating leases.

Significant Customers and Suppliers

Approximately 33% and 39% of our 2020 and 2019 net sales, respectively, were to Airbus and its subcontractors. Of the 33% of overall sales to Airbus and its subcontractors in 2020, 30% related to Commercial Aerospace market applications and 3% related to Space & Defense market applications. Approximately 19% and 25% of our 2020 and 2019 net sales were to Boeing and related subcontractors. Of the 19% of overall sales to Boeing and its subcontractors in 2020, 16% related to Commercial Aerospace market applications and 3% related to Space & Defense market applications. In the Composite Materials segment approximately 13% of sales for 2020, 17% for 2019 and 16% for 2018, were to Boeing and its subcontractors. Approximately 38%, 44% and 46% of sales for 2020, 2019 and 2018, respectively were to Airbus and its subcontractors. In the Engineered Products segment approximately 40%, 55% and 63% of sales for 2020, 2019 and 2018, 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.