Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 13, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | HEXCEL CORP /DE/ | |
Entity Central Index Key | 717,605 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 89,825,472 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | HXL |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 119.1 | $ 35.2 |
Accounts receivable, net | 245 | 245.6 |
Inventories, net | 313.4 | 291 |
Prepaid expenses and other current assets | 30 | 35.2 |
Total current assets | 707.5 | 607 |
Property, plant and equipment | 2,662.3 | 2,378.4 |
Less accumulated depreciation | (836.8) | (752.8) |
Net property, plant and equipment | 1,825.5 | 1,625.6 |
Goodwill and other intangible assets | 74 | 72.2 |
Investments in affiliated companies | 67.1 | 53.1 |
Other assets | 63.1 | 42.7 |
Total assets | 2,737.2 | 2,400.6 |
Current liabilities: | ||
Current portions of capital lease and term loan | 4.2 | 4.3 |
Accounts payable | 128.6 | 137.3 |
Accrued liabilities | 125 | 130.3 |
Total current liabilities | 257.8 | 271.9 |
Commitments and contingencies (see Note 11) | ||
Long-term debt | 829.6 | 684.4 |
Other non-current liabilities | 223.1 | 199.4 |
Total liabilities | 1,310.5 | 1,155.7 |
Stockholders' equity: | ||
Common stock, $0.01 par value, 200.0 shares authorized, 107.5 shares and 106.7 shares issued at September 30, 2017 and December 31, 2016, respectively | 1.1 | 1.1 |
Additional paid-in capital | 766.5 | 738.8 |
Retained earnings | 1,419.1 | 1,254.7 |
Accumulated other comprehensive loss | (57.2) | (174.4) |
Total stockholders' equity including treasury stock value | 2,129.5 | 1,820.2 |
Less – Treasury stock, at cost, 17.7 shares at September 30, 2017, and 15.3 shares at December 31, 2016, respectively. | (702.8) | (575.3) |
Total stockholders' equity | 1,426.7 | 1,244.9 |
Total liabilities and stockholders' equity | $ 2,737.2 | $ 2,400.6 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
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 | 107,500,000 | 106,700,000 |
Treasury stock, shares | 17,700,000 | 15,300,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 491.5 | $ 500.5 | $ 1,461.6 | $ 1,520.8 |
Cost of sales | 355.9 | 364.8 | 1,052 | 1,091.8 |
Gross margin | 135.6 | 135.7 | 409.6 | 429 |
Selling, general and administrative expenses | 34.7 | 35.1 | 115.7 | 121.1 |
Research and technology expenses | 11.8 | 11.5 | 36.5 | 34.8 |
Operating income | 89.1 | 89.1 | 257.4 | 273.1 |
Interest expense, net | 7 | 5.5 | 20 | 16.8 |
Non-operating expense | 0.4 | |||
Income before income taxes, and equity in earnings from affiliated companies | 82.1 | 83.6 | 237.4 | 255.9 |
Provision for income taxes | 13.6 | 16.1 | 44.3 | 67.5 |
Income before equity in earnings from affiliated companies | 68.5 | 67.5 | 193.1 | 188.4 |
Equity in earnings from affiliated companies | 1.2 | 0.7 | 2.8 | 1.9 |
Net income | $ 69.7 | $ 68.2 | $ 195.9 | $ 190.3 |
Basic net income per common share | $ 0.77 | $ 0.74 | $ 2.16 | $ 2.04 |
Diluted net income per common share | 0.76 | 0.72 | 2.13 | 2.01 |
Dividends per share | $ 0.125 | $ 0.11 | $ 0.345 | $ 0.32 |
Weighted-average common shares: | ||||
Basic | 90.1 | 92.7 | 90.7 | 93.1 |
Diluted | 91.4 | 94.1 | 92.1 | 94.6 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net Income | $ 69.7 | $ 68.2 | $ 195.9 | $ 190.3 |
Currency translation adjustments | 28.7 | (0.4) | 87.2 | (11) |
Net unrealized pension and other benefit actuarial gains and prior service credits | (0.6) | 0.4 | (1.6) | 1.9 |
Net unrealized gains on financial instruments (net of tax) | 7.7 | 1.7 | 31.6 | 0.2 |
Total other comprehensive income (loss) | 35.8 | 1.7 | 117.2 | (8.9) |
Comprehensive income | $ 105.5 | $ 69.9 | $ 313.1 | $ 181.4 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities | ||
Net income | $ 195.9 | $ 190.3 |
Reconciliation to net cash provided by operating activities: | ||
Depreciation and amortization | 76.3 | 69 |
Amortization related to financing | 0.6 | 1.4 |
Deferred income taxes | 15.1 | 50.5 |
Equity in earnings from affiliated companies | (2.8) | (1.9) |
Stock-based compensation | 15.5 | 13.6 |
Changes in assets and liabilities: | ||
Decrease (increase) in accounts receivable | 19.7 | (16.8) |
Increase in inventories | (6.7) | (5) |
Decrease (increase) in prepaid expenses and other current assets | 1.4 | (7.3) |
Decrease in accounts payable/accrued liabilities | (9.8) | (9.1) |
Other – net | 3.3 | 2.1 |
Net cash provided by operating activities | 308.5 | 286.8 |
Cash flows from investing activities | ||
Capital expenditures | (221.3) | (231.8) |
Acquisition of business and investment in affiliate | (12) | (33.6) |
Net cash used for investing activities | (233.3) | (265.4) |
Cash flows from financing activities | ||
Proceeds from senior notes due 2027 (including original issue discount of $1.7) | 398.3 | |
Proceeds from settlement of treasury locks associated with senior notes due 2027 | 10 | |
Proceeds from Euro term loan | 37.4 | 27.4 |
Repayments of Euro term loan | (4.1) | |
Borrowing from senior unsecured credit facility | 63 | |
Repayment of senior unsecured credit facility | (290) | |
Other debt, net | (0.4) | (0.4) |
Dividends paid | (31.3) | (29.7) |
Repurchase of stock | (122) | (84.9) |
Activity under stock plans | 6.8 | (1) |
Net cash provided by (used in) financing activities | 1 | (27.3) |
Effect of exchange rate changes on cash and cash equivalents | 7.7 | (0.2) |
Net increase (decrease) in cash and cash equivalents | 83.9 | (6.1) |
Cash and cash equivalents at beginning of period | 35.2 | 51.8 |
Cash and cash equivalents at end of period | 119.1 | 45.7 |
Supplemental data: | ||
Accrual basis additions to property, plant and equipment | 218 | 232.6 |
Senior Notes Due 2027 | ||
Cash flows from financing activities | ||
Issuance costs related to debt | $ (3.7) | |
Credit Facility | ||
Cash flows from financing activities | ||
Issuance costs related to debt | $ (1.7) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Parenthetical) $ in Millions | Sep. 30, 2017USD ($) |
Statement Of Cash Flows [Abstract] | |
Original issue discount of senior notes due 2027 | $ 1.7 |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
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, 2016 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 to present fairly the statement of financial position, results of operations and cash flows for the interim periods presented. The Condensed Consolidated Balance Sheet as of December 31, 2016 was derived from the audited 2016 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 2016 Annual Report on Form 10-K filed with the SEC on February 9, 2017. Investments in Affiliated Companies We have a 50% equity ownership investment in a joint venture Aerospace Composites Malaysia Sdn. Bhd. (“ACM”). This investment is accounted for using the equity method of accounting. In 2016, the Company invested a total of $30.0 million in three new affiliates. In 2017, the Company invested an additional $12 million in two of these affiliates. The investments are each below a 20% ownership level and the Company accounts for these investments using the cost method. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2014-09 (ASU 2014-09), “ Revenue from Contracts with Customers”. We are in the process of assessing the anticipated impact of the amended standard on our financial statements. We have certain contracts under which we produce products with no alternative use and the Company has an enforceable right to payment. As a result, the Company will be required to record revenue for these contracts over time as opposed to at the time of shipment as we do today. We expect to complete our evaluation by the end of fiscal 2017, which will allow us to determine the impact of the new standard on our consolidated results of operations and financial condition. The Company plans to adopt the new standard on January 1, 2018 using the modified retrospective method. In July 2015, the FASB issued Accounting Standards Update No.2015-11 (“ASU 2015-11”), Simplifying the Measurement of Inventory. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases In March 2016, the FASB issued Accounting Standards Update No. 2016-06 (ASU 2016-06), Contingent put and call options in debt instruments. In August of 2016, the FASB issued Accounting Standards Update No. 2016-15 (ASU 2016-15) "Classification of Certain Cash Receipts and Cash Payments” In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (ASU 2017-04), Simplifying the test for Goodwill Impairment, In March 2017, the FASB issued Accounting Standards Update No. 2017-07 (ASU 2017-07), Compensation-Retirement Benefits, In August 2017, the FASB issued Accounting Standards Update No. 2017-12 (ASU 2017-12), Targeted Improvement to Accounting for Hedging Activities, better align hedge accounting with an organization’s risk management activities in the financial statements. In addition, the ASU simplifies the application of hedge accounting guidance in areas where practice issues exist. The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early |
Net Income per Common Share
Net Income per Common Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | Note 2 — Net Income per Common Share Quarter Ended September 30, Nine Months Ended September 30, (In millions, except per share data) 2017 2016 2017 2016 Basic net income per common share: Net income $ 69.7 $ 68.2 $ 195.9 $ 190.3 Weighted average common shares outstanding 90.1 92.7 90.7 93.1 Basic net income per common share $ 0.77 $ 0.74 $ 2.16 $ 2.04 Diluted net income per common share: Net income 69.7 68.2 195.9 190.3 Weighted average common shares outstanding — Basic 90.1 92.7 90.7 93.1 Plus incremental shares from assumed conversions: Restricted stock units 0.4 0.4 0.4 0.5 Stock options 0.9 1.0 1.0 1.0 Weighted average common shares outstanding — Dilutive 91.4 94.1 92.1 94.6 Diluted net income per common share $ 0.76 $ 0.72 $ 2.13 $ 2.01 Total shares underlying stock options of 0.1 million and 0.2 million were excluded from the computation of diluted net income per share for the quarter and nine months ended September 30, 2017, as they were anti-dilutive. Total shares underlying stock options of 0.4 million and 0.5 million were excluded from the computation of diluted net income per share for the quarter and nine months ended September 30, 2016, as they were anti-dilutive. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3 — September 30, December 31, (In millions) 2017 2016 Raw materials $ 133.6 $ 120.6 Work in progress 46.8 53.7 Finished goods 133.0 116.7 Total Inventory $ 313.4 $ 291.0 |
Retirement and Other Postretire
Retirement and Other Postretirement Benefit Plans | 9 Months Ended |
Sep. 30, 2017 | |
Defined Benefit Pension Plans And Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Retirement and Other Postretirement Benefit Plans | Note 4 — 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 and nine months ended September 30, 2017 and 2016 were as follows: Quarter Ended September 30, Nine Months Ended September 30, (In millions) 2017 2016 2017 2016 U.S. Nonqualified Defined Benefit Retirement Plans Service cost $ 0.4 $ 0.3 $ 1.1 $ 0.9 Interest cost 0.1 0.2 0.4 0.5 Settlement expense 0.2 ― 0.3 ― Net amortization and deferral 0.1 — 0.3 0.2 Net periodic benefit cost $ 0.8 $ 0.5 $ 2.1 $ 1.6 September 30, 2017 December 31, 2016 Amounts recognized on the balance sheet: Accrued liabilities $ 1.1 $ 1.1 Other non-current liabilities 20.3 18.6 $ 21.4 $ 19.7 Quarter Ended September 30, Nine Months Ended September 30, (In millions) 2017 2016 2017 2016 European Defined Benefit Retirement Plans Service cost $ 0.3 $ 0.2 $ 0.7 $ 0.6 Interest cost 1.1 1.5 3.3 4.4 Expected return on plan assets (2.0 ) (2.1 ) (6.1 ) (6.2 ) Net amortization and deferral — 0.2 0.2 0.5 Net periodic benefit credit $ (0.6 ) $ (0.2 ) $ (1.9 ) $ (0.7 ) September 30, 2017 December 31, 2016 Amounts recognized on the balance sheet: Noncurrent asset $ 32.9 $ 23.9 Accrued liabilities 1.0 0.4 Other non-current liabilities 19.7 16.2 Total accrued benefit $ 20.7 $ 16.6 Contributions We generally fund our U.S. non-qualified defined benefit retirement plans when benefit payments are incurred. We did not make any contributions under the provisions of these non-qualified plans in the third quarter of 2017 and we have contributed approximately $0.1 million in the first nine months of 2017 to cover unfunded benefits. We expect to contribute a total of $1.1 million in 2017. We contributed $0.2 million to our U.S. non-qualified defined benefit retirement plans during We contributed $0.9 million and $1.2 million to our European defined benefit retirement plans in the third quarters of 2017 and 2016, respectively. Contributions to the defined benefit retirement plans were $2.8 million and $4.9 million for the nine months ended September 30, 2017 and 2016, respectively. We plan to contribute approximately $4.6 million during 2017 to our European plans. We contributed $6.0 million to our European plans during 2016. Postretirement Health Care and Life Insurance Benefit Plans We recorded $0.3 million of net amortization gain deferral for the quarter and $0.9 million for the nine months ended September 30, 2017. Net periodic benefit costs of our postretirement health care and life insurance benefit plans for the quarters and nine months ended September 30, 2017 and 2016 were not material. September 30, 2017 December 31, 2016 Amounts recognized on the balance sheet: Accrued liabilities $ 0.5 $ 0.5 Other non-current liabilities 3.7 3.9 Total accrued benefit $ 4.2 $ 4.4 In connection with our postretirement plans, we contributed about $0.1 million during each of the quarters ended September 30, 2017 and 2016. We periodically fund our postretirement plans to pay covered expenses as they are incurred. We expect to contribute approximately $0.5 million in 2017 to cover unfunded benefits. We contributed $0.2 million to our postretirement plans during 2016. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Note 5 –– (In millions) September 30, 2017 December 31, 2016 Current portion of capital lease $ — $ 0.5 Current portion of Euro term loan 4.2 3.8 Current portion of debt $ 4.2 $ 4.3 Non-current portion of Euro term loan 62.4 22.6 Senior unsecured credit facility- revolving loan due 2021 75.0 365.0 4.7% senior notes due 2025 300.0 300.0 Senior notes due 2025 - original issue discount and deferred financing costs (2.9 ) (3.2 ) 3.95% senior notes due 2027 400.0 ― Senior notes due 2027 - original issue discount and deferred financing costs (5.1 ) ― Other debt 0.2 ― Long-term debt 829.6 684.4 Total debt $ 833.8 $ 688.7 In February 2017, the Company issued $400 million in aggregate principal amount of 3.95% Senior Unsecured Notes due in 2027. The interest rate on these senior notes may be increased by 0.25% each time a credit rating applicable to the notes is downgraded. The maximum rate is 5.95%. The net proceeds of approximately $394.6 million were initially used to repay, in part, $350 million of our Senior Unsecured Revolving Credit Facility (the “Facility”) and the remainder was used for general purposes including share repurchases. The conditions and covenants related to the senior notes are less restrictive than those of our Facility. The effective interest rate for the outstanding period in the first nine months was 3.86% inclusive of approximately a 0.25% benefit of treasury locks. The fair value of the senior notes due in 2027 based on quoted prices utilizing Level 2 inputs was $410.0 million at September 30, 2017. In August 2015, the Company issued $300 million in aggregate principal amount of 4.7% Senior Unsecured Notes due in 2025. The interest rate on these senior notes may be increased by 0.25% each time a credit rating applicable to the notes is downgraded. The maximum rate is 6.7%. The conditions and covenants related to the senior notes are less restrictive than those of our Facility. The effective interest rate for the first nine-months of 2017 was 4.85%. The fair value of the notes due in 2025 based on quoted prices utilizing Level 2 inputs was $323.4 million at September 30, 2017. As of September 30, 2017, total borrowings under our $700 million Facility were $75 million, which approximates fair value using Level 2 inputs. The Company utilized its Facility at various borrowing levels with $451 million and $524 million representing the highest amounts borrowed within the nine months ended September 30, 2017 and 2016, respectively. The Facility permits us to issue letters of credit up to an aggregate amount of $40 million. Outstanding letters of credit reduce the amount available for borrowing under our revolving loan. As of September 30, 2017, we had no outstanding letters of credit under the Facility, resulting in undrawn availability under the Facility as of September 30, 2017 of $625.0 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. The average interest rate on the Facility was 2.36% for the nine months of 2017. The average interest rate was 1.8% for 2016. In June 2016, we entered into a € € € €56.4 million (or $66.6 million) and €25 million (or $26.4 million), which approximates fair value. The term loan is guaranteed by Hexcel Corporation. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Note 6 — Interest Rate Swap and Interest Lock Agreements In December 2016, we swapped €25.0 million of floating rate obligations for fixed rate obligations at a rate of 0.365% against EURIBOR in Euros. The swap amortizes over seven equal annual installments, which began on June 30, 2017 until the final maturity on June 30, 2023. In April 2017, we swapped €35.0 million of floating rate obligations at a rate of 0.59% against EURIBOR in Euros. The swap amortizes over six unequal annual installments beginning June 30, 2019 until the final maturity on June 30, 2024. Both derivatives are accounted for as cash flow hedges of the floating rate Euro term loan. To ensure the swap is highly effective, all of the principal terms of the swap matched the terms of the bank loan. The fair value of the interest rate swaps were liabilities of $0.4 million and $0.1 million at September 30, 2017 and December 31, 2016, respectively. The Company also uses treasury locks to protect against unfavorable movements in the benchmark treasury rate related to forecasted debt issuances. In September 2016 and February 2017, the Company entered into interest rate treasury lock agreements with notional values of $150 million and $100 million for the 2017 note issuance. We accounted for these 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 March 2020, which we account for as cash flow hedges. The aggregate notional amount of these contracts was $317.6 million and $423.8 million at September 30, 2017 and December 31, 2016, respectively. The purpose of these contracts is to hedge a portion of the forecasted transactions of our 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, gains of $9.7 million and $31.7 million, respectively, were recorded in other comprehensive income (“OCI”) for the three and nine months ended September 30, 2017 and losses of $1.4 million and $10.7 million, respectively, were recorded in OCI for the three and nine months ended September 30, 2016. We classified the carrying amount of these contracts of $13.5 million in other assets and $4.3 million in other liabilities on the Condensed Consolidated Balance Sheets at September 30, 2017 and $33.9 million in other liabilities at December 31, 2016. During the three and nine months ended September 30, 2017, we recognized net losses of $0.6 million and $11.4 million in gross margin, respectively. During the three and nine months ended September 30, 2016, we recognized net losses of $5.0 million and $13.5 million in gross margin, respectively. For the quarters and nine months ended September 30, 2017 and 2016, 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 re-measurement 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 September 30, 2017 and 2016, we recognized net foreign exchange gains of $4.0 million and $0.8 million, respectively, in the Condensed Consolidated Statements of Operations. During the nine months ended September 30, 2017 and 2016, we recognized net foreign exchange gains of $15.4 million and of $3.4 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 $0.1 million classified in other assets and $1.6 million in other liabilities and $1.0 million classified in other assets and $0.3 million in other liabilities on the September 30, 2017 and December 31, 2016 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 and nine months ended September 30, 2017 and 2016 was as follows: Quarter Ended September 30, Nine Months Ended September 30, (In millions) 2017 2016 2017 2016 Unrealized losses at beginning of period, net of tax $ (1.3 ) $ (16.5 ) $ (25.9 ) $ (15.0 ) Losses reclassified to net sales 0.6 4.0 8.9 10.1 Increase (decrease) in fair value 7.2 (1.7 ) 23.5 (9.3 ) Unrealized gains (losses) at end of period, net of tax $ 6.5 $ (14.2 ) $ 6.5 $ (14.2 ) We expect to reclassify $1.7 million of unrealized gains into earnings over the next twelve months as the hedged sales are recorded. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7 — Income Taxes The income tax provisions for the third quarter and nine months ended September 30, 2017 were $13.6 million and $44.3 million. The effective tax rate for the third quarter was 16.5% as the quarter benefitted from the impact of tax credits identified during the quarter as well as deductions associated with share-based compensation payments. The third quarter provision also included a non-recurring discrete tax benefit of $4.2 million from the reversal of provisions for uncertain tax provisions. The income tax provision for the quarter ended September 30, 2016 was $16.1 million, including a net benefit of $6.6 million from the release of reserves for uncertain tax positions. The provision for the first nine months of 2017 also included a nonrecurring discrete benefit of $9.1 million from the release of a valuation allowance in a foreign jurisdiction. The effective tax rate, excluding these benefits, for the nine months of 2017 was 24.2% as compared to 30.5% in 2016, as both periods benefitted from deductions associated with share-based compensation payments in addition to the tax credits identified in 2017. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
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 $14.1 million and $6.3 million, respectively, at September 30, 2017. 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 an asset of $0.6 million and a liability of $0.4 million at September 30, 2017. • Foreign exchange derivative assets and liabilities — valued using quoted forward prices at the reporting date. Fair value of assets and liabilities at September 30, 2017 was $13.5 million and $5.9 million, respectively. Counterparties to the above contracts are highly rated financial institutions, none of which experienced any significant downgrades in the nine months ended September 30, 2017 that would reduce the receivable amount owed, if any, to the Company. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
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 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 _________________ (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. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Note 10 — Accumulated Other Comprehensive (Loss) Income Comprehensive income represents net income and other gains and losses affecting stockholders’ equity that are not reflected in the Consolidated Statements of Operations. The components of accumulated other comprehensive (loss) income as of September 30, 2017 and December 31, 2016 were as follows: (In millions) Unrecognized Defined Benefit and Postretirement Plan Costs Change in Fair Value of Derivatives Products (a) Foreign Currency Translation Total Balance at December 31, 2016 $ (14.6 ) $ (18.7 ) $ (141.1 ) $ (174.4 ) Other comprehensive (loss) income before reclassifications (1.1 ) 23.1 87.2 109.2 Amounts reclassified from accumulated other comprehensive loss (0.5 ) 8.5 — 8.0 Other comprehensive (loss) income (1.6 ) 31.6 87.2 117.2 Balance at September 30, 2017 $ (16.2 ) $ 12.9 $ (53.9 ) $ (57.2 ) (a) Includes forward foreign exchange contracts and interest rate derivatives The amounts reclassified to earnings from the unrecognized net defined benefit and postretirement plan costs component of accumulated other comprehensive loss for the quarter were $0.4 million of net gains less taxes of $0.1 million and were $0.7 million of net gains less $0.2 million of taxes for the nine months ended September 30, 2017. The amounts reclassified to earnings from the change in fair value of the derivatives component of accumulated other comprehensive loss for the three and nine months ended September 30, 2017 were net losses of $0.4 million net taxes of $0.1 million and net losses of $10.7 million less taxes of $2.2 million, respectively. The currency translation adjustments are not currently adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 — 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 international, U.S., 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. Lower Passaic River Study Area Hexcel and a group of approximately 51 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 March 2016, the EPA issued a Record of Decision (“ROD”) setting forth the EPA’s selected remedy for the lower eight miles of the river. The ROD calls for capping and dredging of the lower eight miles of the Passaic River, with the placement of an engineered cap over the entire eight miles, at an expected cost ranging from $0.97 billion to $2.07 billion, according to the EPA. Because the EPA has not yet selected a remedy for the upper nine miles of the Lower Passaic River, this estimate range does not include any costs related to a future remedy for the upper portion of the river. Now that it has issued the final ROD, the EPA will seek to hold some combination of the PRPs liable to perform the work selected through the ROD. At this point, we have not yet determined our allocable share of performing the selected remedy. 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 has determined that its accrual is sufficient at this time. The accrual balance was $2.0 million as of September 30, 2017 and $2.1 million at December 31, 2016. Despite the issuance of the final ROD, there continue to be many uncertainties associated with the selected remedy, the Company’s allocable share of the remediation and the amount of insurance coverage. 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. 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 served notice 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 $0.6 million at both September 30, 2017 and at December 31, 2016, respectively. 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 and other sites are accrued in the consolidated balance sheets. As of September 30, 2017, our aggregate environmental related accruals were $2.8 million, of which $0.9 million was included in accrued liabilities with the remainder included in non-current liabilities. As of December 31, 2016, our aggregate environmental related accruals were $3.2 million, of which $1.4 million was included in accrued liabilities with the remainder included in non-current liabilities. As related to certain environmental matters 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 $16 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, amount of insurance coverage, 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 each of the quarters ended September 30, 2017 and 2016 was $0.1 million and $0.2 million, respectively, and $0.3 million and $0.7 million for the nine months ended September 30, 2017 and 2016, respectively. In addition, our operating costs relating to environmental compliance charged to expense were $2.4 million and $2.6 million for the quarters ended September 30, 2017 and 2016, respectively and $7.1 million and $7.5 million for the nine months ended September 30, 2017 and 2016 , respectively. Product Warranty We provide for an estimated amount of product warranty expense, which 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. Warranty expense for the quarter and nine months ended September 30, 2017, and accrued warranty cost, included in “accrued liabilities” in the Condensed Consolidated Balance Sheets at September 30, 2017 and December 31, 2016, were as follows: Product (In millions) Warranties Balance as of December 31, 2016 $ 5.5 Warranty expense 2.5 Deductions and other (1.8 ) Balance as of June 30, 2017 $ 6.2 Warranty expense 0.2 Deductions and other (0.6 ) Balance as of September 30, 2017 $ 5.8 |
Stock Repurchase Plan
Stock Repurchase Plan | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stock Repurchase Plan | Note 12 — Stock Repurchase Plan In October 2015, our Board authorized the repurchase of $250 million of the Company’s stock (“2015 Repurchase Plan”). On February 9, 2017, our Board authorized the repurchase of $300 million of the Company’s stock (“2017 Repurchase Plan”). In the third quarter of 2017, the Company spent $1.2 million to repurchase our common stock and for the first nine months of 2017 the Company spent $122.0 million to repurchase our common stock. At September 30, 2017, the 2015 plan was completed and the Company has $270.7 million remaining under the 2017 Repurchase Plan. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 13 — S u On October 2, |
Significant Accounting Polici21
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
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 to present fairly the statement of financial position, results of operations and cash flows for the interim periods presented. The Condensed Consolidated Balance Sheet as of December 31, 2016 was derived from the audited 2016 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 2016 Annual Report on Form 10-K filed with the SEC on February 9, 2017. |
Investments in Affiliated Companies | Investments in Affiliated Companies We have a 50% equity ownership investment in a joint venture Aerospace Composites Malaysia Sdn. Bhd. (“ACM”). This investment is accounted for using the equity method of accounting. In 2016, the Company invested a total of $30.0 million in three new affiliates. In 2017, the Company invested an additional $12 million in two of these affiliates. The investments are each below a 20% ownership level and the Company accounts for these investments using the cost method. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2014-09 (ASU 2014-09), “ Revenue from Contracts with Customers”. We are in the process of assessing the anticipated impact of the amended standard on our financial statements. We have certain contracts under which we produce products with no alternative use and the Company has an enforceable right to payment. As a result, the Company will be required to record revenue for these contracts over time as opposed to at the time of shipment as we do today. We expect to complete our evaluation by the end of fiscal 2017, which will allow us to determine the impact of the new standard on our consolidated results of operations and financial condition. The Company plans to adopt the new standard on January 1, 2018 using the modified retrospective method. In July 2015, the FASB issued Accounting Standards Update No.2015-11 (“ASU 2015-11”), Simplifying the Measurement of Inventory. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases In March 2016, the FASB issued Accounting Standards Update No. 2016-06 (ASU 2016-06), Contingent put and call options in debt instruments. In August of 2016, the FASB issued Accounting Standards Update No. 2016-15 (ASU 2016-15) "Classification of Certain Cash Receipts and Cash Payments” In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (ASU 2017-04), Simplifying the test for Goodwill Impairment, In March 2017, the FASB issued Accounting Standards Update No. 2017-07 (ASU 2017-07), Compensation-Retirement Benefits, In August 2017, the FASB issued Accounting Standards Update No. 2017-12 (ASU 2017-12), Targeted Improvement to Accounting for Hedging Activities, better align hedge accounting with an organization’s risk management activities in the financial statements. In addition, the ASU simplifies the application of hedge accounting guidance in areas where practice issues exist. The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early |
Net Income per Common Share (Ta
Net Income per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Summary of Earnings Per Share Basic and Diluted | Quarter Ended September 30, Nine Months Ended September 30, (In millions, except per share data) 2017 2016 2017 2016 Basic net income per common share: Net income $ 69.7 $ 68.2 $ 195.9 $ 190.3 Weighted average common shares outstanding 90.1 92.7 90.7 93.1 Basic net income per common share $ 0.77 $ 0.74 $ 2.16 $ 2.04 Diluted net income per common share: Net income 69.7 68.2 195.9 190.3 Weighted average common shares outstanding — Basic 90.1 92.7 90.7 93.1 Plus incremental shares from assumed conversions: Restricted stock units 0.4 0.4 0.4 0.5 Stock options 0.9 1.0 1.0 1.0 Weighted average common shares outstanding — Dilutive 91.4 94.1 92.1 94.6 Diluted net income per common share $ 0.76 $ 0.72 $ 2.13 $ 2.01 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | September 30, December 31, (In millions) 2017 2016 Raw materials $ 133.6 $ 120.6 Work in progress 46.8 53.7 Finished goods 133.0 116.7 Total Inventory $ 313.4 $ 291.0 |
Retirement and Other Postreti24
Retirement and Other Postretirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Defined Benefit Retirement Plans | U.S. | Non-qualified | |
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 and nine months ended September 30, 2017 and 2016 were as follows: Quarter Ended September 30, Nine Months Ended September 30, (In millions) 2017 2016 2017 2016 U.S. Nonqualified Defined Benefit Retirement Plans Service cost $ 0.4 $ 0.3 $ 1.1 $ 0.9 Interest cost 0.1 0.2 0.4 0.5 Settlement expense 0.2 ― 0.3 ― Net amortization and deferral 0.1 — 0.3 0.2 Net periodic benefit cost $ 0.8 $ 0.5 $ 2.1 $ 1.6 |
Schedule of Amounts Recognized on Balance Sheet | September 30, 2017 December 31, 2016 Amounts recognized on the balance sheet: Accrued liabilities $ 1.1 $ 1.1 Other non-current liabilities 20.3 18.6 $ 21.4 $ 19.7 |
Defined Benefit Retirement Plans | European | |
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 September 30, Nine Months Ended September 30, (In millions) 2017 2016 2017 2016 European Defined Benefit Retirement Plans Service cost $ 0.3 $ 0.2 $ 0.7 $ 0.6 Interest cost 1.1 1.5 3.3 4.4 Expected return on plan assets (2.0 ) (2.1 ) (6.1 ) (6.2 ) Net amortization and deferral — 0.2 0.2 0.5 Net periodic benefit credit $ (0.6 ) $ (0.2 ) $ (1.9 ) $ (0.7 ) |
Schedule of Amounts Recognized on Balance Sheet | September 30, 2017 December 31, 2016 Amounts recognized on the balance sheet: Noncurrent asset $ 32.9 $ 23.9 Accrued liabilities 1.0 0.4 Other non-current liabilities 19.7 16.2 Total accrued benefit $ 20.7 $ 16.6 |
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 and nine months ended September 30, 2017 and 2016 were not material. September 30, 2017 December 31, 2016 Amounts recognized on the balance sheet: Accrued liabilities $ 0.5 $ 0.5 Other non-current liabilities 3.7 3.9 Total accrued benefit $ 4.2 $ 4.4 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt and Capital Lease Obligations | (In millions) September 30, 2017 December 31, 2016 Current portion of capital lease $ — $ 0.5 Current portion of Euro term loan 4.2 3.8 Current portion of debt $ 4.2 $ 4.3 Non-current portion of Euro term loan 62.4 22.6 Senior unsecured credit facility- revolving loan due 2021 75.0 365.0 4.7% senior notes due 2025 300.0 300.0 Senior notes due 2025 - original issue discount and deferred financing costs (2.9 ) (3.2 ) 3.95% senior notes due 2027 400.0 ― Senior notes due 2027 - original issue discount and deferred financing costs (5.1 ) ― Other debt 0.2 ― Long-term debt 829.6 684.4 Total debt $ 833.8 $ 688.7 |
Derivative Financial Instrume26
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 and nine months ended September 30, 2017 and 2016 was as follows: Quarter Ended September 30, Nine Months Ended September 30, (In millions) 2017 2016 2017 2016 Unrealized losses at beginning of period, net of tax $ (1.3 ) $ (16.5 ) $ (25.9 ) $ (15.0 ) Losses reclassified to net sales 0.6 4.0 8.9 10.1 Increase (decrease) in fair value 7.2 (1.7 ) 23.5 (9.3 ) Unrealized gains (losses) at end of period, net of tax $ 6.5 $ (14.2 ) $ 6.5 $ (14.2 ) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segment Reporting Information | 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 _________________ (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: 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 |
Accumulated Other Comprehensi28
Accumulated Other Comprehensive (Loss) Income (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive (Loss) Income | The components of accumulated other comprehensive (loss) income as of September 30, 2017 and December 31, 2016 were as follows: (In millions) Unrecognized Defined Benefit and Postretirement Plan Costs Change in Fair Value of Derivatives Products (a) Foreign Currency Translation Total Balance at December 31, 2016 $ (14.6 ) $ (18.7 ) $ (141.1 ) $ (174.4 ) Other comprehensive (loss) income before reclassifications (1.1 ) 23.1 87.2 109.2 Amounts reclassified from accumulated other comprehensive loss (0.5 ) 8.5 — 8.0 Other comprehensive (loss) income (1.6 ) 31.6 87.2 117.2 Balance at September 30, 2017 $ (16.2 ) $ 12.9 $ (53.9 ) $ (57.2 ) (a) Includes forward foreign exchange contracts and interest rate derivatives |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty | Warranty expense for the quarter and nine months ended September 30, 2017, and accrued warranty cost, included in “accrued liabilities” in the Condensed Consolidated Balance Sheets at September 30, 2017 and December 31, 2016, were as follows: Product (In millions) Warranties Balance as of December 31, 2016 $ 5.5 Warranty expense 2.5 Deductions and other (1.8 ) Balance as of June 30, 2017 $ 6.2 Warranty expense 0.2 Deductions and other (0.6 ) Balance as of September 30, 2017 $ 5.8 |
Significant Accounting Polici30
Significant Accounting Policies - Additional Information (Details) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)Affiliate | Dec. 31, 2016USD ($)Affiliate | |
Significant Accounting Policies [Line Items] | ||
Investments in affiliates | $ | $ 12 | $ 30 |
Number of affiliates | Affiliate | 2 | 3 |
Aerospace Composites Malaysia Sdn. Bhd. | ||
Significant Accounting Policies [Line Items] | ||
Interest in affiliated company, accounted for using equity method of accounting (as a percent) | 50.00% | |
Maximum | ||
Significant Accounting Policies [Line Items] | ||
Interest in affiliated company, accounted for using cost method of accounting (as a percent) | 20.00% |
Net Income per Common Share (De
Net Income per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Basic net income per common share: | ||||
Net income | $ 69.7 | $ 68.2 | $ 195.9 | $ 190.3 |
Weighted average common shares outstanding — Basic (in shares) | 90.1 | 92.7 | 90.7 | 93.1 |
Basic net income per common share | $ 0.77 | $ 0.74 | $ 2.16 | $ 2.04 |
Diluted net income per common share: | ||||
Net income | $ 69.7 | $ 68.2 | $ 195.9 | $ 190.3 |
Weighted average common shares outstanding — Basic (in shares) | 90.1 | 92.7 | 90.7 | 93.1 |
Plus incremental shares from assumed conversions: | ||||
Restricted stock units (in shares) | 0.4 | 0.4 | 0.4 | 0.5 |
Stock options (in shares) | 0.9 | 1 | 1 | 1 |
Weighted average common shares outstanding — Dilutive (in shares) | 91.4 | 94.1 | 92.1 | 94.6 |
Diluted net income per common share | $ 0.76 | $ 0.72 | $ 2.13 | $ 2.01 |
Net Income per Common Share - A
Net Income per Common Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive securities excluded from computation of earnings per share amount (in shares) | 0.1 | 0.4 | 0.2 | 0.5 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 133.6 | $ 120.6 |
Work in progress | 46.8 | 53.7 |
Finished goods | 133 | 116.7 |
Total Inventory | $ 313.4 | $ 291 |
Retirement and Other Postreti34
Retirement and Other Postretirement Benefit Plans - Schedule of Net Periodic Benefit Costs of Defined Benefit Retirement Plans (Details) - Defined Benefit Retirement Plans - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
U.S. | |||||
Net periodic benefit costs of defined benefit retirement plans | |||||
Service cost | $ 0.4 | $ 0.3 | $ 1.1 | $ 0.9 | |
Interest cost | 0.1 | 0.2 | 0.4 | 0.5 | |
Settlement expense | 0.2 | 0.3 | |||
Net amortization and deferral | 0.1 | 0.3 | 0.2 | ||
Net periodic benefit (credit) cost | $ 0.8 | $ 0.5 | $ 2.1 | $ 1.6 | |
Defined Benefit Plan, Tax Status [Extensible List] | us-gaap:NonqualifiedPlanMember | us-gaap:NonqualifiedPlanMember | us-gaap:NonqualifiedPlanMember | us-gaap:NonqualifiedPlanMember | us-gaap:NonqualifiedPlanMember |
European | |||||
Net periodic benefit costs of defined benefit retirement plans | |||||
Service cost | $ 0.3 | $ 0.2 | $ 0.7 | $ 0.6 | |
Interest cost | 1.1 | 1.5 | 3.3 | 4.4 | |
Expected return on plan assets | (2) | (2.1) | (6.1) | (6.2) | |
Net amortization and deferral | 0.2 | 0.2 | 0.5 | ||
Net periodic benefit (credit) cost | $ (0.6) | $ (0.2) | $ (1.9) | $ (0.7) |
Retirement and Other Postreti35
Retirement and Other Postretirement Benefit Plans - Schedule of Amounts Recognized on Balance Sheet (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Defined Benefit Retirement Plans | U.S. | |||
Amounts recognized on the balance sheet: | |||
Accrued liabilities | $ 1.1 | $ 1.1 | |
Other non-current liabilities | 20.3 | 18.6 | |
Total accrued benefit | $ 21.4 | $ 19.7 | |
Defined Benefit Plan, Tax Status [Extensible List] | us-gaap:NonqualifiedPlanMember | us-gaap:NonqualifiedPlanMember | us-gaap:NonqualifiedPlanMember |
Defined Benefit Retirement Plans | European | |||
Amounts recognized on the balance sheet: | |||
Noncurrent asset | $ 32.9 | $ 23.9 | |
Accrued liabilities | 1 | 0.4 | |
Other non-current liabilities | 19.7 | 16.2 | |
Total accrued benefit | 20.7 | 16.6 | |
Postretirement Health Care and Life Insurance Benefit Plans | |||
Amounts recognized on the balance sheet: | |||
Accrued liabilities | 0.5 | 0.5 | |
Other non-current liabilities | 3.7 | 3.9 | |
Total accrued benefit | $ 4.2 | $ 4.4 |
Retirement and Other Postreti36
Retirement and Other Postretirement Benefit Plans - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Defined Benefit Retirement Plans | U.S. | |||||
Amounts recognized on the balance sheet: | |||||
Employer contribution to defined benefit retirement plans | $ 0 | $ 100,000 | $ 200,000 | ||
Expected employer contribution in full current year | 1,100,000 | 1,100,000 | |||
Net amortization gain deferral | $ (100,000) | $ (300,000) | $ (200,000) | ||
Defined Benefit Plan, Tax Status [Extensible List] | us-gaap:NonqualifiedPlanMember | us-gaap:NonqualifiedPlanMember | us-gaap:NonqualifiedPlanMember | us-gaap:NonqualifiedPlanMember | us-gaap:NonqualifiedPlanMember |
Defined Benefit Retirement Plans | European | |||||
Amounts recognized on the balance sheet: | |||||
Employer contribution to defined benefit retirement plans | $ 900,000 | $ 1,200,000 | $ 2,800,000 | $ 4,900,000 | $ 6,000,000 |
Expected employer contribution in full current year | 4,600,000 | 4,600,000 | |||
Net amortization gain deferral | (200,000) | (200,000) | $ (500,000) | ||
Postretirement Health Care and Life Insurance Benefit Plans | |||||
Amounts recognized on the balance sheet: | |||||
Employer contribution to defined benefit retirement plans | 100,000 | $ 100,000 | $ 200,000 | ||
Expected employer contribution in full current year | 500,000 | 500,000 | |||
Net amortization gain deferral | $ 300,000 | $ 900,000 |
Debt - Schedule of Debt and Cap
Debt - Schedule of Debt and Capital Lease Obligations (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Current portion of capital lease | $ 0.5 | |
Current portion of Euro term loan | $ 4.2 | 3.8 |
Current portion of debt | 4.2 | 4.3 |
Non-current portion of Euro term loan | 62.4 | 22.6 |
Other Long-term Debt | 0.2 | |
Long-term debt | 829.6 | 684.4 |
Total debt | 833.8 | 688.7 |
Senior unsecured credit facility- revolving loan due 2021 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 75 | 365 |
4.7% senior notes due 2025 | ||
Debt Instrument [Line Items] | ||
Senior notes | 300 | 300 |
Senior notes - original issue discount and deferred financing costs | (2.9) | $ (3.2) |
3.95% senior notes due 2027 | ||
Debt Instrument [Line Items] | ||
Senior notes | 400 | |
Senior notes - original issue discount and deferred financing costs | $ (5.1) |
Debt - Schedule of Debt and C38
Debt - Schedule of Debt and Capital Lease Obligations (Parenthetical) (Details) | 9 Months Ended |
Sep. 30, 2017 | |
4.7% senior notes due 2025 | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate | 4.70% |
Debt instrument, maturity year | 2,025 |
Senior unsecured credit facility- revolving loan due 2021 | |
Debt Instrument [Line Items] | |
Debt instrument, maturity year | 2,021 |
3.95% senior notes due 2027 | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate | 3.95% |
Debt instrument, maturity year | 2,027 |
Debt - Additional Information (
Debt - Additional Information (Details) € in Millions | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Feb. 28, 2017USD ($) | Jun. 30, 2016EUR (€)tranche | Aug. 31, 2015USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2017EUR (€) | Dec. 31, 2016EUR (€) | |
Debt Instrument [Line Items] | ||||||||
Repayments of debt | $ 394,600,000 | |||||||
Borrowings | $ 829,600,000 | $ 684,400,000 | ||||||
Term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Face value | € | € 60 | |||||||
Debt instrument, interest rate terms | The loan has two tranches of which the first tranche for €25 million has a rate of Euribor +1.2% and a final maturity date of June 30, 2023. The first tranche is repayable in seven equal annual installments, which began on June 30, 2017. The second tranche for €35 million has a rate of Euribor +1.25% and a final maturity date of June 30, 2024. The first annual amortization payment for the second tranche is due June 30, 2019. There is a zero percent floor on the Euribor. | |||||||
Number of tranches | tranche | 2 | |||||||
Outstanding amount under loan | $ 66,600,000 | 26,400,000 | € 56.4 | € 25 | ||||
Term loan | Euribor | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, floor rate | 0.00% | |||||||
Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayments of debt | 350,000,000 | |||||||
3.95% senior unsecured notes due 2027 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face value | $ 400,000,000 | |||||||
Debt instrument, interest rate | 3.95% | |||||||
Debt instrument, maturity year | 2,027 | |||||||
Increase in senior notes interest rate | 0.25% | |||||||
Effective interest rate | 3.86% | 3.86% | ||||||
3.95% senior unsecured notes due 2027 | Level 2 | ||||||||
Debt Instrument [Line Items] | ||||||||
Fair value of senior notes | $ 410,000,000 | |||||||
3.95% senior unsecured notes due 2027 | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate | 5.95% | |||||||
3.95% senior unsecured notes due 2027 | Treasury Lock | Interest Lock Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of effective interest rate benefit | 0.25% | 0.25% | ||||||
4.7% senior unsecured notes due 2025 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face value | $ 300,000,000 | |||||||
Debt instrument, interest rate | 4.70% | |||||||
Debt instrument, maturity year | 2,025 | |||||||
Increase in senior notes interest rate | 0.25% | |||||||
Effective interest rate | 4.85% | 4.85% | ||||||
4.7% senior unsecured notes due 2025 | Level 2 | ||||||||
Debt Instrument [Line Items] | ||||||||
Fair value of senior notes | $ 323,400,000 | |||||||
4.7% senior unsecured notes due 2025 | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate | 6.70% | |||||||
Senior unsecured credit facility- revolving loan due 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face value | $ 700,000,000 | |||||||
Debt instrument, maturity year | 2,021 | |||||||
Borrowings | $ 75,000,000 | $ 365,000,000 | ||||||
Borrowings amount utilized during the period | 451,000,000 | $ 524,000,000 | ||||||
Maximum amount available under credit facility to issue letters of credit | 40,000,000 | |||||||
Letters of credit outstanding under credit facility | 0 | |||||||
Undrawn availability under credit facility | $ 625,000,000 | |||||||
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. | |||||||
Average interest rate | 2.36% | 1.80% | ||||||
Senior unsecured credit facility- revolving loan due 2021 | Level 2 | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowings | $ 75,000,000 | |||||||
Senior unsecured credit facility- revolving loan due 2021 | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest coverage ratio required to be maintained | 350.00% | |||||||
Tranche one | Term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Face value | € | € 25 | |||||||
Variable interest rate basis | Euribor +1.2% | |||||||
Spread on variable interest rate basis | 1.20% | |||||||
Debt instrument, maturity date | Jun. 30, 2023 | |||||||
Debt instrument, payment terms | seven equal annual installments | |||||||
Beginning date of first required loan payment | Jun. 30, 2017 | |||||||
Tranche two | Term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Face value | € | € 35 | |||||||
Variable interest rate basis | Euribor +1.25% | |||||||
Spread on variable interest rate basis | 1.25% | |||||||
Debt instrument, maturity date | Jun. 30, 2024 | |||||||
Beginning date of first required loan payment | Jun. 30, 2019 |
Derivative Financial Instrume40
Derivative Financial Instruments - Additional Information (Details) € in Millions | Feb. 15, 2017USD ($) | Apr. 30, 2017EUR (€)installment | Feb. 28, 2017USD ($) | Dec. 31, 2016USD ($)installment | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Dec. 31, 2016EUR (€) |
Derivative [Line Items] | |||||||||
Foreign currency unrealized gains expected to be reclassified into earnings over next twelve months | $ 1,700,000 | $ 1,700,000 | |||||||
3.95% senior unsecured notes due 2027 | |||||||||
Derivative [Line Items] | |||||||||
Proceeds from issue of senior notes in settlement of derivatives | $ 10,000,000 | ||||||||
Swaps maturing September 2019 | |||||||||
Derivative [Line Items] | |||||||||
Average fixed interest rate (as a percent) | 1.087% | 1.087% | |||||||
Interest Rate Swap Agreements | |||||||||
Derivative [Line Items] | |||||||||
Derivative fixed interest rate (as a percent) | 0.59% | 0.365% | 0.365% | ||||||
Number of annual installments of swap amortization | installment | 6 | 7 | |||||||
Beginning date of swap amortization | Jun. 30, 2019 | Jun. 30, 2017 | |||||||
Final maturity date of swap amortization | Jun. 30, 2024 | Jun. 30, 2023 | |||||||
Carrying value / fair value of derivative liabilities included in other liabilities | $ 100,000 | $ 400,000 | $ 400,000 | ||||||
Interest Rate Swap Agreements | U.S. dollars | |||||||||
Derivative [Line Items] | |||||||||
Variable Rate Basis | LIBOR | ||||||||
Interest Rate Swap Agreements | EUR | |||||||||
Derivative [Line Items] | |||||||||
Variable Rate Basis | EURIBOR | EURIBOR | |||||||
Treasury Lock | Interest Lock Agreement | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | $ 100,000,000 | $ 150,000,000 | $ 150,000,000 | ||||||
Derivative agreement date | Sep. 30, 2016 | ||||||||
Derivative agreement second date | Feb. 28, 2017 | ||||||||
Treasury Lock | Interest Lock Agreement | 3.95% senior unsecured notes due 2027 | |||||||||
Derivative [Line Items] | |||||||||
Percentage of reduction in interest rate on senior notes | 0.25% | 0.25% | |||||||
Foreign Currency Forward Exchange Contracts | |||||||||
Derivative [Line Items] | |||||||||
Number of credit contingency features | item | 0 | ||||||||
Foreign Currency Forward Exchange Contracts | Cash Flow Hedging | |||||||||
Derivative [Line Items] | |||||||||
Gains (losses) in other comprehensive income, effective portion | 9,700,000 | (1,400,000) | $ 31,700,000 | (10,700,000) | |||||
Designated as Hedging Instrument | Swaps maturing September 2019 | |||||||||
Derivative [Line Items] | |||||||||
Floating rate obligation | 50,000,000 | 50,000,000 | |||||||
Designated as Hedging Instrument | Interest Rate Swap Agreements | |||||||||
Derivative [Line Items] | |||||||||
Floating rate obligation | € | € 35 | € 25 | |||||||
Carrying value / fair value of derivative assets included in other assets | $ 700,000 | 600,000 | 600,000 | ||||||
Designated as Hedging Instrument | Foreign Currency Forward Exchange Contracts | |||||||||
Derivative [Line Items] | |||||||||
Carrying value / fair value of derivative assets included in other assets | 13,500,000 | 13,500,000 | |||||||
Carrying value / fair value of derivative liabilities included in other liabilities | 33,900,000 | 4,300,000 | 4,300,000 | ||||||
Notional amount | 423,800,000 | 317,600,000 | 317,600,000 | ||||||
Designated as Hedging Instrument | Foreign Currency Forward Exchange Contracts | Cash Flow Hedging | |||||||||
Derivative [Line Items] | |||||||||
Net gain (loss) recognized in gross margin | (600,000) | (5,000,000) | (11,400,000) | (13,500,000) | |||||
Not Designated as Hedging Instrument | Foreign Currency Forward Exchange Contracts | |||||||||
Derivative [Line Items] | |||||||||
Carrying value / fair value of derivative assets included in other assets | 1,000,000 | 100,000 | 100,000 | ||||||
Carrying value / fair value of derivative liabilities included in other liabilities | $ 300,000 | 1,600,000 | 1,600,000 | ||||||
Net gains on derivative contracts not designated as hedges | $ 4,000,000 | $ 800,000 | $ 15,400,000 | $ 3,400,000 |
Derivative Financial Instrume41
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 | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative [Line Items] | ||||
Unrealized losses at beginning of period, net of tax | $ (1.3) | $ (16.5) | $ (25.9) | $ (15) |
Losses reclassified to net sales | 0.6 | 4 | 8.9 | 10.1 |
Increase (decrease) in fair value | 7.2 | (1.7) | 23.5 | (9.3) |
Unrealized gains (losses) at end of period, net of tax | $ 6.5 | $ (14.2) | $ 6.5 | $ (14.2) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||||
Provision for income taxes | $ 13.6 | $ 16.1 | $ 44.3 | $ 67.5 | |
Tax benefit from the release of reserves for uncertain tax positions and a valuation allowance in a foreign jurisdiction | $ 4.2 | $ 6.6 | $ 9.1 | ||
Effective tax rate (as a percent) | 16.50% | 24.20% | 30.50% |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2017USD ($)item | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Number of counterparties, which experienced significant downgrades | item | 0 |
Level 1 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Assets | $ 0 |
Liabilities | 0 |
Level 2 | Fair Value Measured on Recurring Basis | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Derivative assets | 14,100,000 |
Derivative liabilities | 6,300,000 |
Level 2 | Fair Value Measured on Recurring Basis | Interest Rate Swap Agreements | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Derivative assets | 600,000 |
Derivative liabilities | $ 400,000 |
Derivative assets and liabilities measurement valuation | Interest rate swaps — valued using LIBOR yield curves at the reporting date. |
Level 2 | Fair Value Measured on Recurring Basis | Foreign Currency Forward Exchange Contracts | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Derivative assets | $ 13,500,000 |
Derivative liabilities | $ 5,900,000 |
Derivative assets and liabilities measurement valuation | Foreign exchange derivative assets and liabilities — valued using quoted forward prices at the reporting date. |
Level 3 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Assets | $ 0 |
Liabilities | $ 0 |
Segment Information - Schedule
Segment Information - Schedule of Operating Segment Reporting Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Total sales | $ 491.5 | $ 500.5 | $ 1,461.6 | $ 1,520.8 |
Operating income | 89.1 | 89.1 | 257.4 | 273.1 |
Depreciation and amortization | 26.8 | 23.5 | 76.3 | 69 |
Stock-based compensation | 2.2 | 0.8 | 15.5 | 13.6 |
Accrual basis additions to capital expenditures | 47.9 | 90.4 | 218 | 232.6 |
Corporate & Other and Intersegment Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | (16.4) | (16.2) | (48.6) | (53.2) |
Operating income | (13) | (12.6) | (43.8) | (44.9) |
Depreciation and amortization | 0.1 | 0.1 | 0.1 | |
Stock-based compensation | 1 | 8.8 | 7.8 | |
Accrual basis additions to capital expenditures | 0.1 | 0.1 | ||
Composite Materials | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 398.9 | 398.2 | 1,183.7 | 1,219.3 |
Composite Materials | Intersegment Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 16.4 | 16.2 | 48.6 | 53.2 |
Composite Materials | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 415.3 | 414.4 | 1,232.3 | 1,272.5 |
Operating income | 90 | 88.8 | 264 | 281.2 |
Depreciation and amortization | 24.8 | 21.7 | 70.6 | 63.5 |
Stock-based compensation | 1.1 | 0.7 | 5.7 | 4.9 |
Accrual basis additions to capital expenditures | 47.4 | 84.4 | 208.5 | 221.6 |
Engineered Products | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 92.6 | 102.3 | 277.9 | 301.5 |
Engineered Products | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 92.6 | 102.3 | 277.9 | 301.5 |
Operating income | 12.1 | 12.9 | 37.2 | 36.8 |
Depreciation and amortization | 1.9 | 1.8 | 5.6 | 5.4 |
Stock-based compensation | 0.1 | 0.1 | 1 | 0.9 |
Accrual basis additions to capital expenditures | $ 0.5 | $ 5.9 | $ 9.5 | $ 10.9 |
Segment Information - Schedul45
Segment Information - Schedule of Goodwill and Intangible Assets by Segment (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | ||
Goodwill and intangible assets | $ 74 | $ 72.2 |
Composite Materials | ||
Segment Reporting Information [Line Items] | ||
Goodwill and intangible assets | 57.9 | 56.1 |
Engineered Products | ||
Segment Reporting Information [Line Items] | ||
Goodwill and intangible assets | $ 16.1 | $ 16.1 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Segment Reporting [Abstract] | |
Goodwill And Intangible Asset Impairment | $ 0 |
Accumulated Other Comprehensi47
Accumulated Other Comprehensive (Loss) Income - Schedule of Components of Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance | $ 1,244.9 | ||||
Other comprehensive (loss) income before reclassifications | 109.2 | ||||
Amounts reclassified from accumulated other comprehensive loss | 8 | ||||
Total other comprehensive income (loss) | $ 35.8 | $ 1.7 | 117.2 | $ (8.9) | |
Balance | 1,426.7 | 1,426.7 | |||
Unrecognized Defined Benefit and Postretirement Plan Costs | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance | (14.6) | ||||
Other comprehensive (loss) income before reclassifications | (1.1) | ||||
Amounts reclassified from accumulated other comprehensive loss | (0.5) | ||||
Total other comprehensive income (loss) | (1.6) | ||||
Balance | (16.2) | (16.2) | |||
Change in Fair Value of Derivatives Products | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance | [1] | (18.7) | |||
Other comprehensive (loss) income before reclassifications | [1] | 23.1 | |||
Amounts reclassified from accumulated other comprehensive loss | [1] | 8.5 | |||
Total other comprehensive income (loss) | [1] | 31.6 | |||
Balance | [1] | 12.9 | 12.9 | ||
Foreign Currency Translation | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance | (141.1) | ||||
Other comprehensive (loss) income before reclassifications | 87.2 | ||||
Total other comprehensive income (loss) | 87.2 | ||||
Balance | (53.9) | (53.9) | |||
Accumulated Other Comprehensive Income (Loss) | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance | (174.4) | ||||
Balance | $ (57.2) | $ (57.2) | |||
[1] | Includes forward foreign exchange contracts and interest rate derivatives |
Accumulated Other Comprehensi48
Accumulated Other Comprehensive (Loss) Income - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Unrecognized Net Defined Benefit and Postretirement Plan Costs | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Reclassification adjustment from AOCI on unrecognized net defined benefit and postretirement plan costs, net gains | $ 0.4 | $ 0.7 |
Reclassification adjustment from AOCI on unrecognized net defined benefit and postretirement plan costs, tax | 0.1 | 0.2 |
Change in Fair Value of Derivatives Products | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Reclassification adjustment from AOCI on derivatives, net losses | 0.4 | 10.7 |
Reclassification adjustment from AOCI on derivatives, tax benefit | $ 0.1 | $ 2.2 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2016USD ($)mi | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)entity | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Loss Contingencies [Line Items] | ||||||
Accrual for environmental loss contingencies | $ 2,800,000 | $ 2,800,000 | $ 3,200,000 | |||
Aggregate environmental related accruals included in current accrued liabilities | 900,000 | 900,000 | 1,400,000 | |||
Amount which is better estimate within range | 0 | 0 | 0 | |||
Remediation accrual balance if accrued at high end of the range of possible outcomes | 16,000,000 | 16,000,000 | ||||
Environmental remediation spending charged to reserve balance | 100,000 | $ 200,000 | 300,000 | $ 700,000 | ||
Operating costs relating to environmental compliance | 2,400,000 | $ 2,600,000 | 7,100,000 | $ 7,500,000 | ||
Omega Chemical Corporation Superfund Site, Whittier | California | ||||||
Loss Contingencies [Line Items] | ||||||
Accrual for environmental loss contingencies | 600,000 | $ 600,000 | 600,000 | |||
Contribution to waste tonnage (as a percent) | 1.07% | |||||
Lower Passaic River | ||||||
Loss Contingencies [Line Items] | ||||||
Number of entities, in addition to Hexcel, who received a directive from the New Jersey Department of Environmental Protection | entity | 51 | |||||
Portion of the river for which Record of Decision setting forth the EPA's selected remedy (in miles) | mi | 8 | |||||
Portion of upper miles of river for which EPA not yet selected remedy | mi | 9 | |||||
Accrual for environmental loss contingencies | $ 2,000,000 | $ 2,000,000 | $ 2,100,000 | |||
Lower Passaic River | Minimum | ||||||
Loss Contingencies [Line Items] | ||||||
Expected cost of capping and dredging of the lower eight miles of the river by EPA | $ 970,000,000 | |||||
Lower Passaic River | Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Expected cost of capping and dredging of the lower eight miles of the river by EPA | $ 2,070,000,000 |
Commitments and Contingencies50
Commitments and Contingencies - Schedule of Product Warranty (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Sep. 30, 2017 | Jun. 30, 2017 | |
Changes in accrued product warranty cost | ||
Balance at the beginning of the period | $ 6.2 | $ 5.5 |
Warranty expense | 0.2 | 2.5 |
Deductions and other | (0.6) | (1.8) |
Balance at the end of the period | $ 5.8 | $ 6.2 |
Stock Repurchase Plan - Additio
Stock Repurchase Plan - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Feb. 09, 2017 | Oct. 31, 2015 | |
Equity Class Of Treasury Stock [Line Items] | |||||
Total cost of shares repurchased | $ 122,000,000 | $ 84,900,000 | |||
2015 Repurchase Plan | |||||
Equity Class Of Treasury Stock [Line Items] | |||||
Authorized amount to repurchase outstanding common stock | $ 250,000,000 | ||||
2017 Repurchase Plan | |||||
Equity Class Of Treasury Stock [Line Items] | |||||
Authorized amount to repurchase outstanding common stock | $ 300,000,000 | ||||
Remaining amount of authorized under 2017 Repurchase Plan | $ 270,700,000 | 270,700,000 | |||
2015 & 2017 Repurchase Plan | |||||
Equity Class Of Treasury Stock [Line Items] | |||||
Total cost of shares repurchased | $ 1,200,000 | $ 122,000,000 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Details) | Oct. 02, 2017 |
Structil SA | Subsequent event | |
Subsequent Event [Line Items] | |
Acquisition completion date | Oct. 2, 2017 |