Discontinued Operations

6 Months Ended

Jun. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

On June 14, 2023, the Company signed a definitive agreement to sell CFT to an affiliate of Lone Star Funds for proceeds of $520 million at closing, subject to certain adjustments. The transaction is subject to customary closing conditions, including regulatory clearances, and is expected to close in the third quarter of 2023. The sale of CFT is consistent with the Company's optimization strategy, as laid out in Vision 2025.

A summary of the results from discontinued operations included in the Condensed Consolidated Statements of Income and Comprehensive Income follows:


	Three Months Ended June 30,
(in millions)	2023						2022
	CFT		Other		Total		CFT			Other		Total
Revenues	$	78.0	$	—	$	78.0	$	72.0		$	—	$	72.0

Cost of goods sold	44.6		—		44.6		44.8			—		44.8
Impairment(1)	24.8		—		24.8		—		—	—		—
Other operating expenses, net	18.5		—		18.5		20.2			—		20.2
Operating (loss) income	(9.9)		—		(9.9)		7.0			—		7.0
Other non-operating expense (income), net	0.5		1.1		1.6		(0.6)			(4.1)		(4.7)
(Loss) income from discontinued operations before income taxes and loss from classification to held for sale	(10.4)		(1.1)		(11.5)		7.6			4.1		11.7
Loss from classification to held for sale(2)	50.8		—		50.8		—			—		—
(Loss) income from discontinued operations before income taxes	(61.2)		(1.1)		(62.3)		7.6			4.1		11.7
(Benefit from) provision for income taxes	(14.9)		(0.5)		(15.4)		2.0			(1.0)		1.0
(Loss) income from discontinued operations	$	(46.3)	$	(0.6)	$	(46.9)	$	5.6		$	5.1	$	10.7


	Six Months Ended June 30,
(in millions)	2023						2022
	CFT		Other		Total		CFT		Other		Total
Revenues	$	150.7	$	—	$	150.7	$	143.1	$	—	$	143.1

Cost of goods sold	87.1		—		87.1		90.1		—		90.1
Impairment(1)	24.8		—		24.8		—		—		—
Other operating expenses, net	38.3		—		38.3		41.4		—		41.4
Operating income	0.5		—		0.5		11.6		—		11.6
Other non-operating expense (income), net	0.5		0.6		1.1		0.2		(4.2)		(4.0)
(Loss) income from discontinued operations before income taxes and loss from classification to held for sale	—		(0.6)		(0.6)		11.4		4.2		15.6
Loss from classification to held for sale(2)	50.8		—		50.8		—		—		—
(Loss) income from discontinued operations before income taxes	(50.8)		(0.6)		(51.4)		11.4		4.2		15.6
(Benefit from) provision for income taxes	(12.4)		(2.0)		(14.4)		2.5		(0.8)		1.7
(Loss) income from discontinued operations	$	(38.4)	$	1.4	$	(37.0)	$	8.9	$	5.0	$	13.9

(1)In the second quarter of 2023, as a result of the anticipated sale of the CFT reporting unit, the Company evaluated the reporting unit for impairment and determined that it was more likely than not that the carrying value of the reporting unit exceeded its fair value. Accordingly, an impairment analysis was performed which resulted in a goodwill impairment charge of $24.8 million.

(2)Includes the valuation allowance to reduce the carrying amount of the disposal group to its fair value less costs to sell and other transaction expenses incurred.

A summary of the carrying amounts of major assets and liabilities of CFT, which were classified as held for sale in the Condensed Consolidated Balance Sheets follows:


(in millions)	June 30, 2023		December 31, 2022
ASSETS
Cash and cash equivalents	$	9.2	$	11.3
Receivables, net	65.9		76.1
Inventories	92.2		89.3
Prepaid other current assets	9.9		12.6
Valuation allowance(1)	(45.1)		—
Total current assets			189.3

Property, plant, and equipment, net	49.5		51.6
Goodwill, net	163.4		187.5
Other intangible assets, net	216.7		222.6
Other long-term assets	2.9		1.9
Total long-term assets			463.6
Total assets of the disposal group classified as held for sale(2)	$	564.6	$	652.9

LIABILITIES
Accounts payable	$	19.5	$	23.8
Accrued liabilities and other	26.7		35.6
Total current liabilities			59.4

Other long-term liabilities	9.7		12.3
Total long-term liabilities			12.3
Total liabilities of the disposal group classified as held for sale(2)	$	55.9	$	71.7

(1) The Company has recorded a contra asset to reflect the carrying amount of the disposal group at its fair value less cost to sell.

(2) The assets and liabilities of the disposal group classified as held for sale are classified as current on the June 30, 2023 Condensed Consolidated Balance Sheet as it is probable that the sale will occur and proceeds will be collected within one year.

A summary of cash flows from discontinued operations included in the Condensed Consolidated Statements of Cash Flows follows:



	Six Months Ended June 30, 2023
(in millions)	CFT		Other		Total
Net cash provided by operating activities	$	36.3	$	1.4	$	37.7
Net cash used in investing activities	(0.5)		—		(0.5)
Net cash used in financing activities(1)	(37.9)		(1.4)		(39.3)
Change in cash and cash equivalents from discontinued operations	(2.1)		—		(2.1)
Cash and cash equivalents from discontinued operations at beginning of period	11.3		—		11.3
Cash and cash equivalents from discontinued operations at end of period	$	9.2	$	—	$	9.2


	Six Months Ended June 30, 2022
(in millions)	CFT		Other		Total
Net cash provided by (used in) operating activities	$	3.4	$	(2.1)	$	1.3
Net cash (used in) provided by investing activities	(3.0)		132.0		129.0
Net cash used in financing activities(1)	(2.6)		(129.9)		(132.5)
Change in cash and cash equivalents from discontinued operations	(2.2)		—		(2.2)
Cash and cash equivalents from discontinued operations at beginning of period	10.7		—		10.7
Cash and cash equivalents from discontinued operations at end of period	$	8.5	$	—	$	8.5

(1)Represents (repayments) or borrowings from the Carlisle cash pool to fund working capital and capital expenditures and return of capital upon sale.

On August 2, 2021, the Company completed the sale of the equity interests and assets comprising its former Carlisle Brake & Friction ("CBF") segment for gross proceeds of (i) $250 million at closing, subject to certain adjustments, and (ii) the right to receive up to an additional $125 million based on CBF's achievement of certain performance targets. On February 23, 2022, the Company received $125 million in cash for the full amount of the contingent consideration. The sale of CBF was consistent with the Company's optimization strategy, as laid out in Vision 2025.