Exit and Disposal activities

3 Months Ended

Mar. 31, 2018

Restructuring and Related Activities [Abstract]

Exit and Disposal Activities

Exit and Disposal Activities

Beginning in the fourth quarter of 2016, and through 2018, the Company has undertaken operational restructuring and other cost reduction actions to streamline processes and manage costs throughout various departments. These actions resulted in exit, disposal, and employee termination benefit costs, primarily resulting from planned reductions in workforce, facility consolidations and relocations, and lease termination costs, as further discussed below by operating segment.

CIT

The Company continues to incur costs to relocate certain of its medical manufacturing operations in Shenzhen, China to a new manufacturing operation in Dongguan, China. During the three months ended March 31, 2018, employee termination benefit costs associated with this plan totaled $0.7 million. Cumulative exit and disposal costs recognized is $14.8 million through March 31, 2018, with total costs expected to approximate $15.7 million. The remaining costs are expected to be incurred principally through the second half of 2018. Other associated costs are not expected to

be significant.

During 2017, the Company entered into a letter of undertaking with the Chinese government, whereby the Company designated $10.1 million in cash specifically for the payment of employee termination benefits associated with the Chinese medical business action discussed above. Cash payments out of these designated funds began in August 2017 and will continue through the first half of 2018. The designated cash balance as of March 31, 2018, totaled $2.9 million.

CFT

During 2017, the Company initiated plans to restructure its global footprint. These plans involve exiting manufacturing operations in Brazil and Mexico, exiting the systems sales business in Germany, and relocating the manufacturing operations in Angola, Indiana, to its existing Bournemouth, United Kingdom, manufacturing operations. During the three months ended March 31, 2018, exit and disposal expense totaled less than $0.1 million, primarily reflecting employee termination benefit costs and legal fees. This project was substantially complete as of March 31, 2018, with cumulative exit and disposal costs of $10.4 million.

CBF

During 2017, the Company announced that it would exit its manufacturing operations in Tulsa, Oklahoma and relocate the majority of those operations to its existing manufacturing facility in Medina, Ohio. This action is expected to take approximately 18 to 21 months to complete. Total associated exit and disposal costs are expected to be between $17.0 million to $20.5 million, including:

• Non-cash accelerated depreciation of long-lived assets at the Oklahoma facility, which is primarily property, plant and equipment that will not be transferred to Ohio (between $3.5 million to $5.0 million expected to be recognized ratably through the remainder of 2018),

• Costs to relocate and install equipment (between $4.0 million to $5.0 million, expected to be incurred primarily in mid-2018),

• Employee retention and termination benefits (approximately $3.0 million, expected to be incurred ratably through the second half of 2018),

• Other associated costs related to the closure of the facility and internal administration of the project (between $6.5 million to $7.5 million, expected to be incurred primarily in the second half of 2018).

During the three months ended March 31, 2018, exit and disposal expense totaled $2.0 million, primarily related to accelerated depreciation and employee termination benefits.

Consolidated Summary

The Company's exit and disposal expense by activity follows:

(in millions)	Three Months Ended March 31,
	2018		2017
Accelerated depreciation	$	0.8	$	—
Employee severance and benefit arrangements	0.7		2.4
Relocation costs	0.2		0.3
Other restructuring costs	1.4		0.5
Total exit and disposal costs	$	3.1	$	3.2

The Company's exit and disposal activities expense by segment follows:

(in millions)	Three Months Ended March 31,
	2018		2017
Carlisle Brake & Friction	$	2.0	$	0.3
Carlisle Interconnect Technologies	1.1		2.3
Carlisle Fluid Technologies	—		0.5
Corporate	—		0.1
Total exit and disposal costs	$	3.1	$	3.2

The Company's exit and disposal activities expense by financial statement line item follows:

(in millions)	Three Months Ended March 31,
	2018		2017
Cost of goods sold	$	2.3	$	1.5
Selling and administrative expenses	0.6		1.3
Other operating (income) expense, net	0.2		0.3
Research and development expenses	—		0.1
Total exit and disposal costs	$	3.1	$	3.2

The Company's change in exit and disposal activities liability follows:

(in millions)	CIT			CFT			CBF			Total
Balance as of January 1, 2018	$	4.9		$	6.7		$	1.5		$	13.1
Charges	1.1			—			2.0			3.1
Cash payments	(2.5		)	(3.6		)	(1.0		)	(7.1		)
Other adjustments and non-cash settlements	(0.2		)	—			(0.8		)	(1.0		)
Balance as of March 31, 2018	$	3.3		$	3.1		$	1.7		$	8.1

The liability of $8.1 million primarily relates to employee severance and benefit arrangements, and is included in accrued expenses on the Condensed Consolidated Balance Sheet.