Goodwill and Other Intangible Assets, net

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets, net

Goodwill

In the second quarter of 2020, changes in facts and circumstances and general market declines from COVID-19 resulted in reduced expectations of future operating results. The Company considered these circumstances and the potential long-term impact on cash flows associated with its reporting units and determined that an indicator of possible impairment existed within its CFT and CBF reporting units. Accordingly, the Company performed a quantitative impairment analysis to determine the fair values of those reporting units. The Company used both an income approach utilizing the discounted cash flow method ("DCF") and a market approach utilizing the public company market multiple method. The key techniques and assumptions used include:


Valuation Technique						Key Assumptions
Discounted future cash flows						•Estimated future revenues •Earnings before interest, taxes, depreciation and amortization ("EBITDA") margins •Discount rates
Market multiple method						•Peer public company group •Financial performance of reporting units relative to peer public company group

Based on the output of the analysis, the Company determined that the fair values of both the CFT and CBF reporting units exceeded their carrying amounts. Accordingly, no impairment charges were required as of June 30, 2020.

The changes in the carrying amount of goodwill, net by segment follows:


(in millions)	CCM		CIT		CFT		CBF⁽¹⁾		Total
Balance as of December 31, 2019	$	597.1	$	835.2	$	187.5	$	96.5	$	1,716.3
Goodwill acquired during year⁽²⁾	1.5		—		—		—		1.5

Measurement period adjustments⁽³⁾	—		(5.2)		—		—		(5.2)
Currency translation and other	(0.4)		(2.5)		(1.3)		(0.1)		(4.3)
Balance as of June 30, 2020	$	598.2	$	827.5	$	186.2	$	96.4	$	1,708.3

⁽¹⁾CBF goodwill, net is presented net of accumulated impairment losses of $130.0 million recorded in 2016. No other segments have incurred impairment losses.

⁽²⁾The Company acquired one business for an aggregate purchase price of $3.2 million during the first six months of 2020.

⁽³⁾Refer to Note 4 for further information on goodwill resulting from recent acquisitions.

Indefinite-Lived Intangible Assets

As noted above, in the second quarter of 2020 changes in facts and circumstances and general market declines from COVID-19 resulted in reduced revenues. The Company considered these circumstances and the potential long-term impact on revenues associated with its trade names and determined that an indicator of possible impairment existed within its CFT and CBF trade names. Accordingly, the Company performed a quantitative impairment analysis to determine the fair values of its CFT and CBF indefinite-lived trade names using an income approach, commonly known as the relief from royalty method. Key assumptions made by management in developing the inputs to the associated model include growth rates, expected royalty rates, discount rates and tax rates.

Based on the output of the analysis, the Company determined that the fair values of both the CFT and CBF indefinite-lived trade names exceeded their carrying amounts. Accordingly, no impairment charges were required as of June 30, 2020.

A summary of the Company's other intangible assets, net follows:


	June 30, 2020										December 31, 2019
(in millions)	Acquired Cost		Accumulated Amortization		Net Book Value		Acquired Cost		Accumulated Amortization		Net Book Value
Assets subject to amortization:
Customer relationships	$	1,048.8	$	(392.8)	$	656.0	$	1,054.4	$	(354.9)	$	699.5
Technology and intellectual property	304.1		(185.8)		118.3		304.1		(167.0)		137.1
Trade names and other	111.5		(44.4)		67.1		100.0		(38.7)		61.3
Assets not subject to amortization:
Trade names	242.5		—		242.5		242.7		—		242.7
Other intangible assets, net	$	1,706.9	$	(623.0)	$	1,083.9	$	1,701.2	$	(560.6)	$	1,140.6

The net book values of other intangible assets, net by reportable segment follows:


(in millions)	June 30, 2020		December 31, 2019
Carlisle Construction Materials	$	321.5	$	345.3
Carlisle Interconnect Technologies	413.1		441.0
Carlisle Fluid Technologies	262.3		272.8
Carlisle Brake & Friction	77.1		80.2
Corporate	9.9		1.3
Total	$	1,083.9	$	1,140.6