Exit and Disposal Activities

9 Months Ended

Sep. 30, 2018

Restructuring and Related Activities [Abstract]

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 is substantially complete with the relocation of certain of its medical manufacturing operations in Shenzhen, China, to a new manufacturing operation in Dongguan, China. During the three and nine months ended September 30, 2018, employee termination benefit costs associated with this plan totaled $0.1 million and $1.3 million, respectively. The project is substantially complete with cumulative exit and disposal costs recognized of $15.4 million through September 30, 2018, with total costs expected to approximate $15.6 million.

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 were completed in the second quarter of 2018.

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. All facility closures were completed in the first quarter of 2018 and production moved to either the Jackson, Tennessee, or Bournemouth facilities. During the nine months ended September 30, 2018, exit and disposal costs totaled $0.8 million, primarily reflecting employee termination benefit costs and legal fees. This project was substantially complete as of September 30, 2018, with cumulative exit and disposal costs of $11.1 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 $18.5 million to $21.5 million, including:

• Non-cash accelerated depreciation of long-lived assets at the Oklahoma facility, primarily related to property, plant and equipment that will not be transferred to Ohio (between $3.5 million to $4.5 million expected to be recognized ratably through the remainder of 2018),

• Costs to relocate and install equipment (between $5.0 million to $6.0 million, incurred primarily in mid-2018),

• Employee retention and termination benefits (approximately $3.0 million, 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 $7.0 million to $8.0 million, incurred primarily in the second half of 2018).

During the three and nine months ended September 30, 2018, exit and disposal costs totaled $3.2 million and $8.5 million, respectively, primarily related to equipment moving expenses, accelerated depreciation and employee termination benefits. Remaining costs of approximately $7.0 million are expected to be incurred principally in the fourth quarter of 2018.

Consolidated Summary

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


(in millions)	Three Months Ended September 30,									Nine Months Ended September 30,
			2018			2017			2018			2017
Employee severance and benefit arrangements	$	0.5		$	9.9		$	2.2		$	15.3
Accelerated depreciation	0.4			—			1.5			—
Relocation costs	0.3			0.2			0.7			1.1
Other restructuring costs	2.9			1.5			7.4			3.4
Total exit and disposal costs	$	4.1		$	11.6		$	11.8		$	19.8

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


(in millions)	Three Months Ended September 30,									Nine Months Ended September 30,
			2018			2017			2018			2017
Carlisle Brake & Friction	$	3.2		$	1.0		$	8.5		$	3.0
Carlisle Interconnect Technologies	0.6			2.7			2.5			7.5
Carlisle Fluid Technologies	0.3			7.5			0.8			8.5
Corporate	—			0.4			—			0.8
Total exit and disposal costs	$	4.1		$	11.6		$	11.8		$	19.8

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


(in millions)	Three Months Ended September 30,									Nine Months Ended September 30,
			2018			2017			2018			2017
Cost of goods sold	$	4.0		$	3.1		$	10.0		$	6.9
Selling and administrative expenses	—			8.5			1.3			12.8
Other operating (income) expense, net	—			—			0.4			—
Research and development expenses	0.1			—			0.1			0.1
Total exit and disposal costs	$	4.1		$	11.6		$	11.8		$	19.8

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


(in millions)	CIT		CFT		CBF		Total
Balance as of December 31, 2017	$	4.9	$	6.7	$	1.5	$	13.1
Charges	2.5		0.8		8.5		11.8
Cash payments	(5.9)		(6.9)		(6.7)		(19.5)
Other adjustments and non-cash settlements	(1.2)		—		(1.5)		(2.7)
Balance as of September 30, 2018	$	0.3	$	0.6	$	1.8	$	2.7

The liability of $2.7 million primarily relates to employee severance and benefit arrangements, and is included in accrued expenses on the Condensed Consolidated Balance Sheet.