UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED March 31, 2021

Commission file number 1-9278

www.carlisle.com

CARLISLE COMPANIES INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware	31-1168055
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

(480) 781-5000

(Registrant's telephone number, including area code)

16430 North Scottsdale Road, Suite 400, Scottsdale, Arizona 85254

(Address of principal executive offices, including zip code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	CSL	New York Stock Exchange
Preferred stock purchase rights	n/a	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 

Yes ☒ No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Yes ☐ No  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

On April 21, 2021, there were 52,191,863 shares of the registrant's common stock, par value $1.00 per share, outstanding.

Carlisle Companies Incorporated

Table of Contents

	Page
PART I
Item 1. Financial Statements	3
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)	3
Condensed Consolidated Balance Sheets (Unaudited)	4
Condensed Consolidated Statement of Cash Flows (Unaudited)	5
Condensed Statement of Shareholders' Equity (Unaudited)	6
Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3. Quantitative and Qualitative Disclosure about Market Risk	27
Item 4. Controls and Procedures	27
PART II
Item 1. Legal Proceedings	27
Item 1A. Risk Factors	27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3. Defaults Upon Senior Securities	27
Item 4. Mine Safety Disclosures	27
Item 5. Other Information	27
Item 6. Exhibits	28
Signature	29

2

PART I

Item 1. Financial Statements

Carlisle Companies Incorporated

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)

	Three Months Ended March 31,
(in millions, except per share amounts)	2021		2020
Revenues	$	1,029.0	$	1,030.2
Cost of goods sold	767.3		751.8
Selling and administrative expenses	159.8		161.9
Research and development expenses	12.6		14.4
Other operating income, net	(0.2)		(0.6)
Operating income	89.5		102.7
Interest expense, net	19.2		18.9
Loss on extinguishment of debt	—		8.8
Interest income	(0.5)		(0.7)
Other non-operating expense (income), net	3.9		(0.5)
Income before income taxes	66.9		76.2
Provision for income taxes	14.7		14.4
Net income	$	52.2	$	61.8
Earnings per share attributable to common shares:
Basic	$	0.98	$	1.10
Diluted	$	0.97	$	1.09
Average shares outstanding:
Basic	53.0		55.8
Diluted	53.6		56.5
Comprehensive income:
Net income	$	52.2	$	61.8
Other comprehensive loss:
Foreign currency losses	(13.3)		(28.3)
Amortization of unrecognized net periodic benefit costs, net of tax	1.2		1.0
Other, net of tax	(2.0)		(18.2)
Other comprehensive loss	(14.1)		(45.5)
Comprehensive income	$	38.1	$	16.3

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

3

Carlisle Companies Incorporated

Condensed Consolidated Balance Sheets (Unaudited)

(in millions, except par values)	March 31, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	767.2	$	902.2
Receivables, net of allowance for credit losses of $6.3 million and $6.8 million, respectively	683.2		612.7
Inventories, net	528.2		503.5
Contract assets	77.1		84.5
Prepaid expenses	27.4		37.0
Other current assets	61.4		69.4
Total current assets	2,144.5		2,209.3
Property, plant, and equipment, net	764.4		774.1
Goodwill, net	1,735.5		1,738.2
Other intangible assets, net	1,000.8		1,034.8
Other long-term assets	107.0		110.0
Total assets	$	5,752.2	$	5,866.4
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	359.2	$	317.6
Accrued and other current liabilities	266.8		295.0
Contract liabilities	32.9		32.5
Current portion of debt	1.2		1.1
Total current liabilities	660.1		646.2
Long-term liabilities:
Long-term debt, less current portion	2,081.0		2,080.2
Contract liabilities	238.1		235.8
Other long-term liabilities	361.2		366.5
Total long-term liabilities	2,680.3		2,682.5
Shareholders' equity:
Preferred stock, $1 par value per share (5.0 shares authorized and unissued)	—		—
Common stock, $1 par value per share (200.0 shares authorized; 52.1 and 52.9 shares outstanding, respectively)	78.7		78.7
Additional paid-in capital	443.4		441.7
Treasury shares, at cost (26.3 and 25.5 shares, respectively)	(1,951.6)		(1,814.4)
Accumulated other comprehensive loss	(111.1)		(97.0)
Retained earnings	3,952.4		3,928.7
Total shareholders' equity	2,411.8		2,537.7
Total liabilities and equity	$	5,752.2	$	5,866.4

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

4

Carlisle Companies Incorporated

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Three Months Ended March 31,
(in millions)	2021		2020
Operating activities:
Net income	$	52.2	$	61.8
Reconciliation of net income to net cash provided by operating activities:
Depreciation	23.7		24.6
Amortization	30.6		32.2
Lease expense	6.8		7.4
Stock-based compensation	14.9		12.7
Loss on extinguishment of debt	—		8.8
Deferred taxes	(1.1)		(2.3)
Other operating activities, net	4.2		6.0
Changes in assets and liabilities, excluding effects of acquisitions:
Receivables	(72.9)		(8.3)
Inventories	(30.8)		(64.9)
Contract assets	8.2		(3.3)
Prepaid expenses and other assets	20.6		32.5
Accounts payable	45.6		6.9
Accrued and other current liabilities	(24.7)		(58.9)
Contract liabilities	2.9		6.9
Other long-term liabilities	(12.6)		(8.9)
Net cash provided by operating activities	67.6		53.2
Investing activities:
Capital expenditures	(20.0)		(22.8)
Investment in securities	(10.2)		—
Acquisitions, net of cash acquired	—		(2.4)
Other investing activities, net	1.8		0.9
Net cash used in investing activities	(28.4)		(24.3)
Financing activities:
Proceeds from notes	—		740.7
Repayment of notes	—		(258.5)
Borrowings from revolving credit facility	—		500.0
Financing costs	—		(24.2)
Repurchases of common stock	(150.0)		(120.6)
Dividends paid	(28.4)		(28.3)
Proceeds from exercise of stock options	13.5		10.5
Withholding tax paid related to stock-based compensation	(7.6)		(6.4)
Other financing activities, net	(0.3)		(0.2)
Net cash (used in) provided by financing activities	(172.8)		813.0
Effect of foreign currency exchange rate changes on cash and cash equivalents	(1.4)		(5.4)
Change in cash and cash equivalents	(135.0)		836.5
Cash and cash equivalents at beginning of period	902.2		351.2
Cash and cash equivalents at end of period	$	767.2	$	1,187.7

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

5

Carlisle Companies Incorporated

Condensed Consolidated Statement of Shareholders’ Equity (Unaudited)

	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Shares in Treasury			Total Shareholders' Equity
(in millions, except per share amounts)	Shares	Amount								Shares	Cost
Balance as of December 31, 2019	55.7	$	78.7	$	416.6	$	(124.1)	$	3,721.3	22.7	$	(1,449.7)	$	2,642.8
Net income	—	—		—		—		61.8		—	—		61.8
Other comprehensive loss, net of tax	—	—		—		(45.5)		—		—	—		(45.5)
Dividends - $0.50 per share	—	—		—		—		(28.3)		—	—		(28.3)
Repurchases of common stock	(1.0)	—		—		—		—		1.0	(125.3)		(125.3)
Issuances and deferrals, net for stock based compensation(1)	0.2	—		5.5		—		—		(0.2)	7.5		13.0
Balance as of March 31, 2020	54.9	$	78.7	$	422.1	$	(169.6)	$	3,754.8	23.5	$	(1,567.5)	$	2,518.5
Balance as of December 31, 2020	52.9	$	78.7	$	441.7	$	(97.0)	$	3,928.7	25.5	$	(1,814.4)	$	2,537.7
Net income	—	—		—		—		52.2		—	—		52.2
Other comprehensive loss, net of tax	—	—		—		(14.1)		—		—	—		(14.1)
Dividends - $0.525 per share	—	—		—		—		(28.5)		—	—		(28.5)
Repurchases of common stock	(1.0)	—		—		—		—		1.0	(150.0)		(150.0)
Issuances and deferrals, net for stock based compensation(1)	0.2	—		1.7		—		—		(0.2)	12.8		14.5
Balance as of March 31, 2021	52.1	$	78.7	$	443.4	$	(111.1)	$	3,952.4	26.3	$	(1,951.6)	$	2,411.8

(1)Issuances and deferrals, net for stock-based compensation reflects share activity related to option exercises, restricted and performance shares vested, and net issuances and deferrals associated with deferred compensation equity.

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

6

Carlisle Companies Incorporated

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1—Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by Carlisle Companies Incorporated (the "Company" or "Carlisle"). The accompanying unaudited Condensed Consolidated Financial Statements do not include all disclosures as required by accounting principles generally accepted in the United States of America ("United States" or "U.S."), and should be read in conjunction with the Company’s audited Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 (the "2020 Annual Report on Form 10-K").

The accompanying unaudited Condensed Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the U.S. and, of necessity, include some amounts that are based upon management estimates and judgments. The accompanying unaudited Condensed Consolidated Financial Statements include assets, liabilities, revenues and expenses of all majority-owned subsidiaries. Intercompany transactions and balances are eliminated in consolidation.

In the Company's opinion, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting solely of adjustments of a normal, recurring nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented.

Note 2—Segment Information

The Company reports its results of operations through the following four segments, each of which represents a reportable segment as follows:

Carlisle Construction Materials ("CCM")—this segment produces a complete range of building envelope products for commercial, industrial and residential buildings, including single-ply roofing, rigid foam insulations, spray polyurethane foam technologies, architectural metal, heating, ventilation and air conditioning ("HVAC") hardware and sealants, below-grade waterproofing, and air and vapor barrier systems focused on the weatherproofing and thermal performance of the building envelope.

Carlisle Interconnect Technologies ("CIT")—this segment produces high-performance wire and cable, including optical fiber, for the commercial aerospace, military and defense electronics, medical device, industrial, and test and measurement markets. CIT's product portfolio also includes sensors, connectors, contacts, cable assemblies, complex harnesses, racks, trays, and installation kits, in addition to engineering and certification services.

Carlisle Fluid Technologies ("CFT")—this segment produces highly engineered liquid, powder, sealants and adhesives finishing equipment and integrated system solutions for spraying, pumping, mixing, metering and curing of a variety of coatings used in the automotive manufacture, general industrial, protective coating, wood, specialty and automotive refinishing markets.

Carlisle Brake & Friction ("CBF")—this segment produces high performance and severe duty brake, clutch and transmission applications for the construction, agriculture, mining, aircraft, on-highway and other industrial markets.

A summary of segment information follows:

	Three Months Ended March 31,
	2021				2020
(in millions)	Revenues		Operating Income (Loss)		Revenues		Operating Income (Loss)
Carlisle Construction Materials	$	719.3	$	121.3	$	676.4	$	107.7
Carlisle Interconnect Technologies	155.8		(10.7)		224.5		16.4
Carlisle Fluid Technologies	65.8		4.3		58.3		2.8
Carlisle Brake & Friction	88.1		6.1		71.0		(3.8)
Segment total	1,029.0		121.0		1,030.2		123.1
Corporate and unallocated(1)	—		(31.5)		—		(20.4)
Total	$	1,029.0	$	89.5	$	1,030.2	$	102.7

(1)Corporate operating loss includes other unallocated costs, primarily general corporate expenses.

7

Note 3—Acquisitions

Motion Tech Automation, LLC

On July 22, 2020, the Company acquired 100% of the equity of Motion Tech Automation, LLC ("MTA") for consideration of $33.3 million, including $0.3 million of cash acquired and post-closing adjustments, which were finalized in the third quarter of 2020. The acquired products and services include sensors, manufacturing services, distribution services and engineering services to packaging and label, life sciences, semiconductor, fluid handling, and test and measurement customers.

Consideration of $16.4 million has been preliminarily allocated to goodwill, $4.3 million to definite-lived intangible assets, $4.9 million to inventory, $2.7 million to accounts receivable and $1.3 million to accounts payable. In accordance with the purchase agreement, Carlisle is indemnified for up to $1.6 million, and recorded an indemnification asset of $1.5 million in other long-term assets relating to the indemnification for pre-acquisition debt and tax withholdings liabilities. The preliminary fair value and weighted average useful lives of the acquired definite-lived intangible assets are as follows:

(in millions)	Fair Value		Weighted Average Useful Life (in years)
Technologies	$	2.3	9
Customer relationships	1.0		9
Trade names	1.0		5
Total	$	4.3

All of the $16.4 million preliminary value allocated to goodwill is deductible for tax purposes. Goodwill of $11.0 million, $2.8 million and $2.6 million has been preliminarily assigned to the CCM, CIT and CFT reporting units, respectively, which aligns with the reportable segments.

Note 4—Earnings Per Share

The Company’s restricted shares contain non-forfeitable rights to dividends and are considered participating securities for purposes of computing earnings per share pursuant to the two-class method. The computation below of earnings per share excludes income attributable to the unvested restricted shares from the numerator and excludes the dilutive impact of those underlying shares from the denominator.

The computation below of earnings per share includes the income attributable to the vested and deferred restricted shares and restricted stock units in the numerator and includes the dilutive impact of those underlying shares in the denominator.

Stock options are included in the calculation of diluted earnings per share utilizing the treasury stock method and performance share awards are included in the calculation of diluted earnings per share considering those are contingently issuable. Neither is considered to be a participating security as they do not contain non-forfeitable dividend rights.

8

Net income and share data used in the basic and diluted earnings per share computations using the two-class method follows:

	Three Months Ended March 31,
(in millions, except per share amounts)	2021			2020
Net income	$	52.2		$	61.8
Less: dividends declared	(28.5)			(28.3)
Undistributed earnings	23.7			33.5
Percent allocated to common shareholders(1)	99.7		%	99.7		%
	23.6			33.4
Add: dividends declared on common stock, restricted share units and vested and deferred restricted and performance shares	28.4			28.2
Net income attributable to common shares	$	52.0		$	61.6
Shares:
Basic weighted-average shares outstanding	53.0			55.8
Effect of dilutive securities:
Performance awards	0.1			0.2
Stock options	0.5			0.5
Diluted weighted-average shares outstanding	53.6			56.5
Per share net income attributable to common shares:
Basic	$	0.98		$	1.10
Diluted	$	0.97		$	1.09
(1) Basic weighted-average common shares outstanding	53.0			55.8
Basic weighted-average shares outstanding and unvested restricted shares expected to vest	53.2			56.0
Percent allocated to common shareholders	99.7		%	99.7		%

	Three Months Ended March 31,
(in millions)	2021	2020
Anti-dilutive stock options excluded from EPS calculation(1)	0.6	0.2

(1)Represents stock options excluded from the calculation of diluted earnings per share, as such options’ assumed proceeds upon exercise would result in the repurchase of more shares than the underlying award.

Note 5—Revenue Recognition

The Company receives payment at the inception of the contract for separately priced extended service warranties, and revenue is deferred and recognized on a straight-line basis over the life of the contracts. Remaining performance obligations for extended service warranties represent the transaction price for the remaining stand-ready obligation to perform warranty services. A summary of estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of March 31, 2021, follows:

(in millions)	Remainder of 2021		2022		2023		2024		2025		2026		Thereafter
Extended service warranties	$	17.5	$	22.1	$	20.9	$	19.9	$	19.0	$	18.0	$	143.5

The Company has applied the practical expedient to not disclose information about remaining performance obligations that have original expected durations of one year or less.

9

Contract Balances

Contract liabilities relate to payments received in advance of performance under a contract, primarily related to extended service warranties in the CCM segment, systems contracts in the CFT segment and highly customized product contracts in the CIT segment. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract. A summary of the change in contract liabilities for the three months ended March 31, follows:

(in millions)	2021		2020
Balance as of January 1	$	268.3	$	247.4
Revenue recognized	(15.2)		(13.3)
Revenue deferred	17.9		20.1
Balance as of March 31	$	271.0	$	254.2

Contract assets relate to the Company's right to payment for performance completed to date under a contract, primarily related to highly customized product contracts within the CIT and CFT segments. Accounts receivable are recorded when the right to payment becomes unconditional, which generally occurs over twelve months or less. A summary of the change in contract assets for the three months ended March 31, follows:

(in millions)	2021		2020
Balance as of January 1	$	84.5	$	100.5
Balance as of March 31	77.1		103.6
Change in contract assets	$	(7.4)	$	3.1

Revenues by End-Market

A summary of revenues disaggregated by major end-market industries and reconciliation of disaggregated revenue by segment follows:

	Three Months Ended March 31, 2021
(in millions)	CCM		CIT		CFT		CBF		Total
General construction	$	674.1	$	—	$	—	$	—	$	674.1
Aerospace	—		65.9		—		3.9		69.8
Heavy equipment	20.3		—		—		71.9		92.2
Medical	—		55.2		—		—		55.2
Transportation	—		—		33.8		8.9		42.7
General industrial and other	24.9		34.7		32.0		3.4		95.0
Total revenues	$	719.3	$	155.8	$	65.8	$	88.1	$	1,029.0
	Three Months Ended March 31, 2020
(in millions)	CCM		CIT		CFT		CBF		Total
General construction	$	635.8	$	—	$	—	$	—	$	635.8
Aerospace	—		136.7		—		5.9		142.6
Heavy equipment	21.5		—		—		54.1		75.6
Medical	—		48.2		—		—		48.2
Transportation	—		—		35.3		8.2		43.5
General industrial and other	19.1		39.6		23.0		2.8		84.5
Total revenues	$	676.4	$	224.5	$	58.3	$	71.0	$	1,030.2

10

Revenues by Geographic Area

A summary of revenues based on the country to which the product was delivered and reconciliation of disaggregated revenue by segment follows:

	Three Months Ended March 31, 2021
(in millions)	CCM		CIT		CFT		CBF		Total
United States	$	626.3	$	111.5	$	30.6	$	27.5	$	795.9
International:
Europe	60.6		14.4		12.5		29.6		117.1
Asia	3.9		20.6		19.2		22.6		66.3
North America (excluding U.S.)	23.6		4.5		2.5		4.1		34.7
Middle East and Africa	3.4		2.6		0.4		0.3		6.7
Other	1.5		2.2		0.6		4.0		8.3
Total international	93.0		44.3		35.2		60.6		233.1
Total revenues	$	719.3	$	155.8	$	65.8	$	88.1	$	1,029.0
	Three Months Ended March 31, 2020
(in millions)	CCM		CIT		CFT		CBF		Total
United States	$	596.9	$	161.4	$	28.3	$	30.7	$	817.3
International:
Europe	51.1		19.3		10.4		19.4		100.2
Asia	3.3		18.4		16.9		15.1		53.7
North America (excluding U.S.)	19.6		12.4		2.0		2.9		36.9
Middle East and Africa	3.9		4.9		0.5		0.2		9.5
Other	1.6		8.1		0.2		2.7		12.6
Total international	79.5		63.1		30.0		40.3		212.9
Total revenues	$	676.4	$	224.5	$	58.3	$	71.0	$	1,030.2

Note 6—Stock-Based Compensation

Stock-based compensation cost by award type follows:

(in millions)	Three Months Ended March 31,
	2021		2020
Stock option awards	$	3.8	$	3.2
Restricted stock awards	2.2		2.1
Performance share awards	2.5		2.1
Restricted stock units	—		1.4
Stock appreciation rights	3.9		(3.6)
Total stock-based compensation cost incurred	12.4		5.2
Capitalized (cost) credit during the period	(4.3)		3.3
Amortization of capitalized cost during the period	6.8		4.2
Total stock-based compensation expense	$	14.9	$	12.7

Note 7—Exit and Disposal and Other Restructuring Activities

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 consolidation and relocation, and lease termination costs. The primary actions are discussed below by operating segment.

11

CIT

During the third quarter of 2020, the Company initiated plans to exit its manufacturing operations in Kent, Washington, as a result of market declines from the coronavirus pandemic ("COVID-19 pandemic"). Select operations will be relocated to existing facilities primarily in North America. The project is estimated to take 12 to 18 months to complete. During the three months ended March 31, 2021, exit and disposal costs totaled $0.6 million, primarily for employee termination benefit costs. Total exit and disposal costs are expected to approximate $14.7 million, with approximately $7.5 million costs remaining to be incurred, primarily in 2021.

Other Actions

The Company implemented restructuring activities to reduce its overall headcount as a result of general market declines resulting from the effects of the COVID-19 pandemic. These actions resulted in severance expense of $0.7 million at CIT during the three months ended March 31, 2021.

Consolidated Summary

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

(in millions)	Three Months Ended March 31,
	2021		2020
Employee severance and benefit arrangements	$	1.9	$	1.9
Relocation costs	0.1		0.2
Accelerated depreciation and impairments	—		1.2
Facility cleanup costs	(1.0)		0.8
Other restructuring costs	0.4		0.7
Total exit and disposal costs	$	1.4	$	4.8

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

(in millions)	Three Months Ended March 31,
	2021		2020
Carlisle Interconnect Technologies	$	1.3	$	1.9
Carlisle Fluid Technologies	0.1		—
Carlisle Brake & Friction	—		2.8
Carlisle Construction Materials	—		0.1
Total exit and disposal costs	$	1.4	$	4.8

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

(in millions)	Three Months Ended March 31,
	2021		2020
Cost of goods sold	$	0.8	$	3.0
Selling and administrative expenses	0.6		1.6
Other operating expense, net	—		0.2
Total exit and disposal costs	$	1.4	$	4.8

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

(in millions)	Total
Balance as of December 31, 2020	$	6.7
Charges	1.4
Cash payments	(0.7)
Balance as of March 31, 2021	$	7.4

The liability of $7.4 million primarily relates to employee severance and benefit arrangements and is included in accrued and other current liabilities.

12

Note 8—Income Taxes

The effective income tax rate on continuing operations for the three months ended March 31, 2021, was 22.0%. The year-to-date provision for income taxes included taxes on earnings at an anticipated rate of 24.5% and a tax impact of $1.7 million related to discrete activity. The year-to-date net discrete tax benefit relates primarily to a reduction of prior year tax liabilities and excess tax benefits related to employee stock compensation.

The effective income tax rate on continuing operations for the three months ended March 31, 2020, was 18.9%.

Note 9—Inventories, net

(in millions)	March 31, 2021		December 31, 2020
Raw materials	$	197.1	$	193.1
Work-in-process	92.5		85.5
Finished goods	281.4		266.0
Reserves	(42.8)		(41.1)
Inventories, net	$	528.2	$	503.5

Note 10—Goodwill and Other Intangible Assets, net

Goodwill

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, 2020	$	613.0	$	835.6	$	193.1	$	96.5	$	1,738.2
Measurement period adjustments(2)	—		—		(0.2)		—		(0.2)
Currency translation and other	(1.5)		(0.4)		(0.6)		—		(2.5)
Balance as of March 31, 2021	$	611.5	$	835.2	$	192.3	$	96.5	$	1,735.5

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

Other Intangible Assets, net

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

	March 31, 2021						December 31, 2020
(in millions)	Acquired Cost		Accumulated Amortization		Net Book Value		Acquired Cost	Accumulated Amortization	Net Book Value
Assets subject to amortization:
Customer relationships	$	1,058.0	$	(454.3)	$	603.7	$