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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

10‑K

(Mark One)

ý

ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015

OR

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.2017

www.carlisle.com 
Commission file number 1-9278

1‑9278

CARLISLE COMPANIES INCORPORATED
(Exact name of registrant as specified in its charter)

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

11605(480) 781-5000
(Telephone Number)
16430 North Community HouseScottsdale Road, Suite 600, Charlotte,
North Carolina 28277
400, Scottsdale, Arizona 85254
(Address of principal executive office, including zip code)

(704) 501-1100
(Telephone Number)office)

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

Title of each className of each exchange on which registered
Common stock, $1 par value New York Stock Exchange
Preferred Stock Purchase Rights, $1 par value New York Stock Exchange

Indicate by check mark if the registrant is a well-knownwell‑known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý☒ No o

☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o☐  No ý

☒

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 ý☒  No o

☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-TS‑T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý☒  No o

☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-KS‑K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant'sregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K10‑K or any amendment to this Form 10-K.    ý

10‑K. ☒

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

Large accelerated filer ý☒Accelerated filer o☐
Non-accelerated filer o
(Do not check if a
smaller reporting company)☐		Smaller reporting company o☐
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-212b‑2 of the Exchange Act). Yes o☐  No ý

☒

The aggregate market value of the shares of common stock of the registrant held by non-affiliatesnon‑affiliates was approximately $6.2$5.9 billion based upon the closing price of the common stock on the New York Stock Exchange on June 30, 2015.

2017.

As of February 4, 2016, 64,194,43213, 2018, 61,789,121 shares of common stock of the registrant were outstanding;


outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 18, 20162, 2018 are incorporated by reference in Part III.



TABLE OF CONTENTS
Page
Part I 
3
Item 1.  Business. 
3
Item 1A.  Risk Factors. 
9
Item 1B.  Unresolved Staff Comments. 
11
Item 2.  Properties.
12
Item 3.  Legal Proceedings. 
12
Item 4.  Mine Safety Disclosures.
12
Part II 
12
Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 
12
Item 6.  Selected Financial Data. 
13
Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations. 
14
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk. 
38
Item 8.  Financial Statements and Supplementary Data. 
40
Report of Independent Registered Public Accounting Firm 
40
Consolidated Statements of Earnings and Comprehensive Income 
44
Consolidated Balance Sheets 
45
Consolidated Statements of Cash Flows 
46
Consolidated Statements of Shareholders’ Equity 
47
Notes to Consolidated Financial Statements 
48
Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 
84
Item 9A.  Controls and Procedures. 
84
Item 9B.  Other Information. 
85
Part III 
85
Item 10.  Directors and Executive Officers of the Registrant. 
85
Item 11.  Executive Compensation. 
86
Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 
86
Item 13.  Certain Relationships and Related Transactions. 
86
Item 14.  Principal Accountant Fees and Services. 
87
Part IV 
87
Item 15.  Exhibits and Financial Statement Schedules. 
87
Signatures 
90


Table of Contents

PART I

Part I

Item 1.  Business.


Overview

Carlisle Companies Incorporated ("Carlisle"Incorporated's (“Carlisle”, the "Company"“Company”, "we"“we”, "us"“us” or "our"“our”) was incorporated in 1986 in Delaware as a holding company for Carlisle Corporation, whose operations began in 1917, and its wholly-owned subsidiaries. Carlisle is a diversified manufacturing company consisting of five segments whichthat manufacture and distribute a broad range of products. Additional information is contained in Items 7 and 8.

        The Company's executive offices are located at 11605 North Community House Road, Suite 600, Charlotte, North Carolina. The Company's main telephone number All references to "Notes" refer to our Notes to Consolidated Financial Statements in this annual report on Form 10-K.

Our Company website is (704) 501-1100. The Company's Internet website address iswww.carlisle.com. Through this Internet website (found in the "Investor Relations" link), the Company makesthrough which we make available, free of charge, itsour Annual Report on Form 10-K,10‑K, Quarterly Reports on Form 10-Q10‑Q and Current Reports on Form 8-K8‑K and all amendments to those reports, as soon as reasonably practicable after these reports are electronically filed with or furnished to the Securities and Exchange Commission.

Management Philosophy/Commission (“SEC”).

Business Strategy

        The Company strives

We strive to be the market leader of highly-engineeredhighly‑engineered products in the various niche markets it serves. The Company iswe serve. We are dedicated to achieving low-costlow‑cost positions and providing service excellence based on, among other things, superior quality, on-timeon‑time delivery and short cycle times.


The presidentsrole of senior corporate management is to (i) allocate and manage capital, (ii) manage the various operating companiesCompany’s portfolio of businesses including identifying acquisitions and businesses for divestiture in an effort to optimize the portfolio, (iii) evaluate and motivate segment management personnel and (iv) provide general management oversight and counsel.
The segment presidents are given considerable autonomy and have a significant level of independent responsibility for their businesses and theirbusinesses' operating performance. The Company believes that this structure encourages entrepreneurial action and enhances responsive decision making, thereby enabling each operation to better serve its customers and react quickly to its customers'customers’ needs.

        The Company's executive management role is to (i) provide general management oversight and counsel, (ii) manage the Company's portfolio of businesses including identifying acquisition candidates and assisting in acquiring candidates identified by the operating companies, as well as identifying businesses for divestiture in an effort to optimize the portfolio, (iii) allocate and manage capital, (iv) evaluate and motivate operating management personnel, and (v) provide selected other services.

The Company utilizes its Carlisle Operating System ("COS"(“COS”), a manufacturing structure and strategy deployment system based on lean enterprise and six sigma principles, to drive improving operational improvements.performance. COS is a continuous improvement process that defines the way the Company does business. Waste is eliminated and efficiencies are improved enterprise wide, allowing the Companyus to increase overall profitability. Improvements are not limited to production areas, as COS is also driving improvements in new product innovation, engineering, supply chain management, warranty and product rationalization. COS has created a culture of continuous improvement across all aspects of the Company'sour business operations.

The Company has a long-standinglong‑standing acquisition strategy. Traditionally, the Company haswe have focused on strategic acquisitions or acquiring new businesses that can be added to existing operations, or "bolt-ons."operations. In addition, the Company considers acquiring new businesses that can operate independently from other Carlisle companies. Factors considered by the Company in making an acquisition include consolidation opportunities, technology, customer dispersion, operating capabilities and growth potential. The Company hasWe acquired four businesses during 2017, which complement our existing Carlisle Construction Materials (“CCM”) and Carlisle FoodService (“CFS”) segments. We also pursuedpursue the sale of operating divisionsa business when it is determined they no longer fit within the Company's long-termCompany’s long‑term goals or strategy.

strategy, and on February 1, 2018 announced the signing of a definitive agreement to sell CFS to The Jordan Company for $750 million (refer to Note 20).


For more details regarding the acquisition and divestitureacquisitions of the Company'sCompany’s businesses during the past three years, see "Partrefer to “Part II—Item 7. Management'sManagement’s Discussion and Analysis of Financial Condition


and Results of Operations—Acquisitions"Acquisitions” and NotesNote 3 and 4 to the Consolidated .



Financial Statements in Item 8.

Information About Segments


Information on the Company'sCompany’s revenues, earnings,operating income and identifiable assets forfrom continuing operations by industry segment for the last three fiscal years is as follows:

Financial Information about Industry Segments

(in millions)
 2015 2014 2013 

Net Sales to Unaffiliated Customers

          

Carlisle Construction Materials

 $2,002.6 $1,935.4 $1,776.5 

Carlisle Interconnect Technologies

  784.6  669.1  577.7 

Carlisle Fluid Technologies

  203.2  —  — 

Carlisle Brake & Friction

  310.2  355.3  350.0 

Carlisle FoodService Products

  242.6  244.2  238.8 
​​​ ​ ​​ ​ ​​ ​ ​

Total

 $3,543.2 $3,204.0 $2,943.0 
​​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​
​​​​ ​​ ​ ​​​ ​

Earnings Before Interest and Income Taxes

          

Carlisle Construction Materials

 $351.1 $268.8 $264.0 

Carlisle Interconnect Technologies

  141.6  132.2  89.4 

Carlisle Fluid Technologies

  20.8  —  — 

Carlisle Brake & Friction

  17.3  26.8  33.5 

Carlisle FoodService Products

  27.3  29.6  27.0 

Corporate(1)

  (56.2) (49.1) (47.1)
​​​ ​ ​​ ​ ​​ ​ ​

Total

 $501.9 $408.3 $366.8 
​​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​
​​​​ ​​ ​ ​​​ ​

Identifiable Assets

          

Carlisle Construction Materials

 $899.2 $915.1 $886.9 

Carlisle Interconnect Technologies

  1,264.0  1,296.3  1,017.5 

Carlisle Fluid Technologies

  659.5  —  — 

Carlisle Brake & Friction

  553.0  591.3  603.7 

Carlisle FoodService Products

  199.0  198.4  193.2 

Corporate(2)

  379.4  757.6  791.4 
​​​ ​ ​​ ​​​ ​ ​

Total

 $3,954.1 $3,758.7 $3,492.7 
​​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​
​​​​ ​​ ​ ​​​ ​
(1)
Includes general corporate expenses

(2)
Consists primarily of cash and cash equivalents and other invested assets, and includes assets of discontinued operations not classified as held for sale

(in millions) 2017 2016 2015
Net Sales to Unaffiliated Customers      
Carlisle Construction Materials $2,336.2
 $2,052.6
 $2,002.6
Carlisle Interconnect Technologies 815.3
 834.6
 784.6
Carlisle FoodService Products 339.1
 250.2
 242.6
Carlisle Fluid Technologies 281.4
 269.4
 203.2
Carlisle Brake & Friction 317.9
 268.6
 310.2
Total $4,089.9
 $3,675.4
 $3,543.2
Operating Income  
  
  
Carlisle Construction Materials $421.9
 $430.3
 $351.1
Carlisle Interconnect Technologies 89.5
 143.9
 143.0
Carlisle FoodService Products 39.5
 31.5
 27.3
Carlisle Fluid Technologies 16.1
 31.2
 20.9
Carlisle Brake & Friction 2.6
 (135.9) 17.4
Segment Totals 569.6
 501.0
 559.7
Corporate and unallocated (1)
 (63.9) (62.9) (56.4)
Total $505.7
 $438.1
 $503.3
Identifiable Assets  
  
  
Carlisle Construction Materials $1,898.6
 $891.6
 $899.2
Carlisle Interconnect Technologies 1,473.0
 1,446.3
 1,264.0
Carlisle FoodService Products 469.3
 206.1
 199.0
Carlisle Fluid Technologies 678.7
 640.9
 659.5
Carlisle Brake & Friction 433.8
 389.9
 553.0
Segment Total 4,953.4
 3,574.8
 3,574.7
Corporate and unallocated (2)
 346.4
 391.0
 376.2
Total $5,299.8
 $3,965.8
 $3,950.9
(1)
Includes general corporate expenses and other unallocated costs.
(2)
Consists primarily of pooled cash and cash equivalents.
Description of Businesses by Segment

Carlisle Construction Materials ("CCM" or the "Construction Materials segment"(“CCM”)

The Construction MaterialsCCM segment manufacturesis a market leader in designing, manufacturing and sells rubber ("EPDM"),selling thermoplastic polyolefin ("TPO"(“TPO”), ehtylene propylene diene monomer rubber (“EPDM”) and polyvinyl chloride (“PVC”) membrane ("PVC")and metal roofing systems. In addition, CCM markets and sells accessories purchased from third party suppliers. CCM also manufactures and distributes energy-efficientenergy‑efficient rigid foam insulation panels for substantially all roofing applications. Roofing materials and insulation are sold together in warranted systems or separately in non-warranted systems to the new construction, re-roofing and maintenance, general construction and industrial markets. Through its coatingsThe roofing materials, including insulation, are primarily sold under the SynTec, Versico and waterproofing operation, thisHunter Panels product lines in the United States of America (“U.S.” or “United States”) and throughout the world and, in addition, the Resitrix and Hertalan product lines in Europe. The segment manufactures and sells liquid and spray-appliedspray‑applied waterproofing membranes, vapor and air barriers and HVAC duct sealants and


hardware for the commercial and residential construction markets.markets through its coatings and waterproofing operation. The segment manufactures block molded expanded polystyrene for a variety of end markets, predominantly roofing and waterproofing through its Insulfoam product line. The majority of CCM'sCCM’s products are sold through a network of authorized sales representatives and distributors.

On November 1, 2017, we acquired Accella Performance Materials LLC, a Delaware limited liability company and Accella Holdings LLC, a Delaware limited liability company (together, “Accella”). Accella, operating through its subsidiaries, is a North American specialty polyurethanes platform, offering a broad range of polyurethane products and solutions across a broad diversity of markets and applications.



CCM operates manufacturing facilities located throughout the United States, its primary market, and in Germany, the Netherlands and Romania. Insulation facilities are located in Montgomery, New York, Franklin Park, Illinois, Lake City, Florida, Terrell, Texas, Smithfield, Pennsylvania, Tooele, Utah and Puyallup, Washington. EPDM manufacturing operations are located in Carlisle, Pennsylvania, Greenville, Illinois, Kampen,the Netherlands and in Hamburg and Waltershausen, Germany. TPO facilities are located in Senatobia, Mississippi, Tooele, Utah and Carlisle,Pennsylvania. Metal roofing facilities are located in Colorado, Florida, Kentucky, Maryland and Pennsylvania. Coatings and waterproofing manufacturing operations include four production facilities in North America.America and one in the United Kingdom. Block molded expanded polystyrene or EPS, operations include nineare located in eight production and fabrication facilities across the United States. CCM completed construction ofalso has a PVC manufacturing plant in Greenville, Illinois,Illinois. CCM, through its Accella operations, presently has nine production facilities across the United States, as well as one in 2013 and began production in the first quarter of 2014.

Germany.

Raw materials for this segment include methylene diphenyl diisocyanate (“MDI”), polyol, EPDM polymer, TPO polymer, carbon black, processing oils, solvents, asphalt, methylene diphenyldiisocyanate, polyol, polyester fabric, black facer paper, oriented strand board, clay and various packaging materials. Critical raw materials generally have at least two vendor sources to better assure adequate supply. ForThe vendor typically has multiple processing facilities for raw materials that are single sourced, the vendor typically has multiple processing facilities.

sourced.

Sales and earnings for CCM tend to be somewhat higher in the second and third quarters due to increased construction activity during those periods.

periods from favorable weather conditions.

The working capital practices for this segment include:

Standard accounts receivable payment terms of 45 days to 90 days.

(ii)
Standard accounts payable payment terms of 30 days to 60 days.

(iii)
Inventories are maintained in sufficient quantities to meet forecasted demand.

CCM serves a large and diverse customer base; however, in 2015 two2017 CCM's largest distributor customerscustomer represented approximately 34%15% of this segment'ssegment’s net sales, onebut did not represent 10% of which, Beacon Roofing Supply, Inc.,the Company’s consolidated net sales. On January 2, 2018, CCM's largest distribution customer completed a merger with another significant customer, and together would have represented 10%22% of CCM's 2017 net sales and 12% of the Company's consolidated net sales. The loss of either of these customersthis customer could have a material adverse effect on this segment's and the Company's results of operationssegment’s net sales and operating cash flowsincome. Backlog orders are not considered a significant factor of CCM’s business and were $64.7 million and $46.0 million as of December 31, 2017 and 2016, respectively; however, not all of these orders are firm in the affected reporting period, however, we consider it unlikely that such an event would have a material adverse effect on our financial position.

nature. All orders are reasonably expected to be filled in 2018.

This segment faces competition from numerous competitors that produce roofing, insulation and waterproofing products for commercial and residential applications. The level of competition within this market varies by product line. As one of four major manufacturers in the niche single-plysingle‑ply industry, CCM competes through pricing, innovative products, long-termlong‑term warranties and customer service. CCM offers separately-pricedseparately‑priced extended warranty contracts on certain of its products ranging from five years to 40 years, the most significant being those offered on its installed roofing systems, ranging from five years to thirty years and, subject to certain exclusions, coveringcovers leaks in the roofing system attributable to a problem with the particular product or the installation of the product. In order to qualify for the warranty, theThe building owner must have the roofing system installed by an independent authorized roofing contractor trained by CCM to install its roofing systems.

systems in order to qualify for the warranty.

Carlisle Interconnect Technologies ("CIT" or the "Interconnect Technologies segment"(“CIT”)

The Interconnect TechnologiesCIT segment designsis a market leader in designing, manufacturing and manufactures high-performanceselling high‑performance wire, cable, connectors, contacts and cable assemblies and satellite communication equipment for the transfer of power and data primarily for the aerospace, medical, defense electronics, test and measurement equipment and select industrial markets. This segment operates manufacturing facilities in the United States, Switzerland, China Mexico, and the United Kingdom,Mexico, with the United States, Europe and China being the primary target markets for sales. Sales are made by direct sales personnel and independent sales representatives.


Raw materials for this segment include gold, copper conductors that are plated with tin, nickel, or silver, polyimide tapes, polytetrafluoroethylene ("PTFE"(“PTFE”) tapes, PTFE fine powder resin, thermoplastic resins, stainless steel, beryllium copper rod, machined metals, plastic parts and various marking and identification materials. Key raw materials are typically sourced worldwide and have at least two vendorsupplier sources to better assure adequate supply.

        Sales and earnings of the Interconnect Technologies segment are generally not seasonal in nature.


The working capital practices for this segment include:

Standard accounts receivable payment terms of 30 days to 60 days.

(ii)
Standard accounts payable payment terms of 30 days to 60 days.

(iii)
Inventories are maintained in sufficient quantities to meet forecasted demand. The majority of CIT'sCIT’s sales are from made-to-ordermade‑to‑order products, resulting in inventories purchased on demand.

CIT serves a large and diverse customer base; however, in 20152017 one customer represented 22%approximately 10% of this segment'ssegment’s net sales, but did not represent 10% of the Company'sCompany’s consolidated net sales. The loss of this customer could have a material adverse effect on this segment'ssegment’s net sales and cash flows.

operating income. Backlog orders were $299.9 million and $217.6 million as of December 31, 2017 and 2016, respectively; however, not all of these orders are firm in nature. Of the $299.9 million in backlog orders as of December 31, 2017, $11.3 million is not reasonably expected to be filled in 2018.

The Interconnect TechnologiesCIT segment faces competition from numerous competitors within each of the markets that it serves. While product specifications, certifications and life cycles vary by market, the Interconnect TechnologiesCIT segment primarily positions itself to gain design specification for customer platforms or products with long life cycles and high barriers to entry, such as in the aerospace and medical markets whichthat generally have high standards for product certification as deemed by the Federal Aviation Administration (FAA)(“FAA”) and Food and Drug Administration (FDA)(“FDA”), respectively. The Interconnect TechnologiesCIT segment competes primarily on the basis of its product performance and its ability to meet its customers'customers’ highly specific design, engineering and delivery needs on a timely basis. Relative to many of its competitors that are large multi-nationalmulti‑national corporations, the Interconnect TechnologiesCIT segment retains the ability to remain agile and respond quickly to customer needs and market opportunities. Pricing
Carlisle FoodService Products (“CFS”)
On February 1, 2018, the Company announced the signing of a definitive agreement to sell its CFS operations to The Jordan Company for $750 million in cash, subject to certain adjustments. The transaction is subject to customary closing conditions, including regulatory clearances, and is expected to close in the first quarter of 2018.

The CFS segment is a secondary buying criterionmarket leader in designing, manufacturing and selling of commercial foodservice and janitorial products with three main focus markets. CFS is a leading provider of (i) tabletop dining supplies, table coverings and display serving ware, (ii) food preparation, storage and handling and transport supplies and tools and (iii) cleaning and sanitation tools and waste handling for most customers.

restaurants, hotels, hospitals, nursing homes, business and industry work sites and education and government facilities. CFS’s Dinex® brand business is a leading provider of healthcare meal delivery systems for in‑room and mobile dining for acute care hospital patients and senior assisted living residents. CFS’s Sanitary Maintenance Products group is a leading provider of Sparta® brand cleaning brushes, floor care supplies and waste handling for janitorial professionals managing cleaning and maintenance for commercial, industrial and institutional facilities. The CFS segment also includes the San Jamar product lines, acquired on January 9, 2017, which are leading brands of universal dispensing systems and food safety products for foodservice and hygiene applications. With the acquisition, CFS designs and distributes dispensers for paper towels, tissue, soap and air purification as well as personal and food safety products for commercial and institutional foodservice and sanitary maintenance customers, under the San Jamar brand.

CFS operates manufacturing facilities in the United States and Mexico. Sales are primarily in North America. CFS’s product lines are distributed from four primary distribution centers located in North Carolina, Oklahoma, Illinois and Wisconsin to wholesalers, distributors and dealers. These distributor and dealer customers, in turn, sell to restaurants, hotels and on-site foodservice operators and sanitary maintenance professionals. Distributors and dealer business relationships are managed through both direct sales personnel and subcontracted manufacturer representatives.

Raw materials used by the CFS segment include polymer resins, stainless steel and aluminum. Key raw materials are sourced nationally from recognized suppliers of these materials.

The working capital practices for this segment include:
Standard accounts receivable payment terms of 30 days to 60 days.
Standard accounts payable payment terms of 30 days to 90 days.
Inventories are maintained in sufficient quantities to meet forecasted demand.

The CFS segment serves a large and diverse customer base; however, in 2017 three distributor customers together represented approximately 21% of this segment’s net sales, none of which represented 10% of the Company’s consolidated net sales. The loss of one of these distributor customers could have a material adverse effect on this segment’s net sales and operating income. Backlog orders are not considered a significant factor of CFS’s business and were $7.7 million and $5.6 million as of December 31, 2017 and 2016, respectively; however, not all of these orders are firm in nature. All orders are reasonably expected to be filled in 2018.
The CFS segment is engaged in markets that are generally highly competitive and competes equally on price, service and product performance.

Carlisle Fluid Technologies ("CFT" or the "Fluid Technologies segment"(“CFT”)

        On April 1, 2015, the Company acquired 100% of the Finishing Brands business from Graco Inc. ("Graco").

The Company has reported the results of the acquired business asCFT segment is a new reporting segment named Carlisle Fluid Technologies. The Fluid Technologies segment designs, manufactures,market leader in designing, manufacturing and sells highly-engineeredselling highly‑engineered liquid and powder finishing equipment and system components primarily in the automotive, automotive refinishing, aerospace, agriculture, construction, marine and rail industries. The businesssegment operates manufacturing and assembly facilities primarily in the United States, Mexico, Brazil, the United Kingdom, Germany,Switzerland, China and Japan, with nearlyapproximately 60% of its sales outside the United States. The Fluid TechnologiesCFT segment manufactures and sells products whichthat are sold under the brand names of Binks®Binks®, DeVilbiss®DeVilbiss®, Ransburg®Ransburg®, BGK®and BGK®MS Powder®. The majority of sales into theseCFT's industries are made through a worldwide network of distributors, national accounts, integrators and some direct to end-userend‑user sales. These business relationships are managed primarily through direct sales personnel worldwide.

Key raw materials for this segment include carbon and various grades of stainless steel, brass, aluminum, copper, machined metals, carbide, machined plastic parts and polytetrafluoroethylene (PTFE).PTFE. Key raw materials are typically sourced worldwide and have at least two vendor sources to better assure adequate supply.

        Sales

Approximately 20% to 25% of CFT’s annual net sales are for the development and earningsin some cases assembly of large fluid handling or other application systems projects. Timing of these system sales can result in sales that are higher in certain quarters versus other quarters within the Fluid Technologies segment are generally not seasonal in nature.

same calendar year. In addition, timing of system sales may cause significant year over year sales variances.

The working capital practices for this segment include:

Standard accounts receivable payment terms of 30 days to 90 days.

(ii)
Standard accounts payable payment terms of 30 days to 60 days.

(iii)
Inventories are maintained in sufficient quantities to meet forecasted demand.

CFT serves a large and diverse customer base. The loss of any single customer would not have a material adverse effect on this segment'sthe segment’s net sales and cash flows.

operating income. Backlog orders are not considered a significant factor of CFT’s business and were $31.9 million and $33.1 million as of December 31, 2017 and 2016, respectively; however, not all of these orders are firm in nature. All orders are reasonably expected to be filled in 2018.


The Fluid TechnologiesCFT segment competes against both regional and international manufacturers. Major competitive factors include innovative designs, the ability to provide customers with lower cost of ownership, than its competitors, dependable performance and high quality at a competitive price. Fluid Technologies'CFT’s product's ability to spray, mix or deliver a wide range of coatings, applied uniformly in exact increments, is critical to the overall appearance and functionality of the finished product.functionality. The segment'ssegment’s installed base of global customers is supported by a worldwide distribution network with the ability to deliver critical spare parts and other services. Brands whichthat are well recognized and respected internationally, combined with a diverse base of customers, applications and industries served, positions the Fluid TechnologiesCFT segment to continue designing patented, innovative equipment and solutions for customers across the globe.

Carlisle Brake & Friction ("CBF" or the "Brake & Friction segment"(“CBF”)

The Brake & FrictionCBF segment consists of off-highwayis a market leader in designing, manufacturing and selling high-performance braking products and systems and clutch transmission friction products for off-highway, on-highway,off‑highway, on‑highway, aircraft and other industrial applications. CBF also includes the performance racing group which marketsdesigns, manufactures and sells high-performancehigh‑performance motorsport braking products. The Brake & FrictionCBF segment manufactures and sells products which are sold under several brand names, such as Hawk®Hawk®, Wellman®,Wellman® and Velvetouch®Velvetouch®. CBF'sCBF’s products are sold by direct sales personnel to Original Equipment Manufacturers ("OEMs"(“OEMs”), mass merchandisers and various wholesale and industrial distributors around the world, including North America, Europe, Asia and South America, and Africa.America. Key markets served include construction, agriculture, mining,

aircraft, heavy truck,on-highway and performance racing. Manufacturing facilities are located in the United States, the United Kingdom, Italy, China, Japan and India, where we have established a light manufacturing presence.

The brake manufacturing operations require the use of various metal products such as castings, pistons, springs and bearings. With respect to friction products, the raw materials used are fiberglass, phenolic resin, metallic chips, copper and iron powders, steel, custom-fabricatedcustom‑fabricated cellulose sheet and various other organic materials. Raw materials are sourced worldwide to better assure adequate supply, and criticalsupply. Critical raw materials generally have at least two vendor sources.

        Earnings tend to be higher in the first half of the year due to product mix.

The working capital practices for this segment include:


Standard accounts receivable payment terms of 30 days to 60 days.

(ii)
Standard accounts payable payment terms of 30 days to 90 days.

(iii)
Inventories are maintained in sufficient quantities to meet forecasted demand.

CBF serves a large and diverse customer base; however, in 20152017 one customer represented approximately 18%20% of this segment'ssegment’s net sales, but did not represent 10% of the Company'sCompany’s consolidated net sales. The loss of this customer could have a material adverse effect on this segment'ssegment’s net sales and cash flows.

operating income. Backlog orders were $190.3 million and $119.0 million as of December 31, 2017 and 2016, respectively; however, not all of these orders are firm in nature. All orders are reasonably expected to be filled in 2018.

This segment competesstrives to be a market leader by competing globally against regional and international manufacturers. Few competitors participate in all served markets. A majority of competitors participate in only a few of CBF'sCBF’s served markets on a


regional or global basis. Markets served are competitive and the major competitive factors include product performance, quality, product availability and price. The relative importance of these competitive factors varies by market segment and channel.

Carlisle FoodService Products ("CFSP" or the "FoodService Products segment")

        The FoodService Products segment is a leading manufacturer, distributor, and seller of commercial foodservice and janitorial products with three main focus markets. CFSP is a leading provider of (i) tabletop dining supplies, table coverings, and display serving ware, (ii) food preparation, storage & handling and transport supplies and tools, and (iii) cleaning & sanitation tools and waste handling to restaurants, hotels, hospitals, nursing homes, business & industry work sites, education, and government facilities. CFSP's Dinex brand business is a leading provider of healthcare meal delivery systems for in-room and mobile dining for acute care hospital patients and senior assisted living residents. CFSP's Sanitary Maintenance Products group is the leading provider of Sparta brand cleaning brushes, floor care supplies, and waste handling for janitorial professionals managing commercial building, industrial, and institutional facilities cleaning and maintenance.

        CFSP operates manufacturing facilities in the United States and Mexico. Sales are primarily in North America. CFSP's product line is distributed from three primary distribution centers located in Charlotte, North Carolina, Oklahoma City, Oklahoma, and Batavia, Illinois, to wholesalers, distributors, and dealers. These distributor and dealer customers, in turn, sell to restaurant, hotel, and onsite foodservice operators and sanitary maintenance professionals. Distributors and dealer business relationships are managed through both direct sales personnel and subcontracted manufacturer representatives.

        Raw materials used by the FoodService Products segment include polymer resins, stainless steel, and aluminum. Key raw materials are sourced nationally from recognized suppliers of these materials.

        Sales in the FoodService Products segment tend to be marginally stronger in the second and third quarters.

        The working capital practices for this segment include:

        The FoodService Products segment serves a large and diverse customer base; however, in 2015 three distributor customers together represented 28% of this segment's net sales, none of which represented 10% of the Company's consolidated net sales. The loss of one of these customers could have a material adverse effect on this segment's net sales and cash flows.

        The FoodService Products segment is engaged in markets that are generally highly competitive, and competes equally on price, service, and product performance.

Principal Products

        The Company's products are discussed above and in Note 2 to the Consolidated Financial Statements in Item 8.


Intellectual Property

The Company owns or holds the right to use a variety of patents, trademarks, licenses, inventions, trade secrets and other intellectual property rights. The Company has adopted a variety of measures


and programs to ensure the continued validity and enforceability of its various intellectual property rights.

Backlog

        Backlog of orders generally is not a significant factor in most of the Company's businesses, as most of the Company's products have relatively short order-to-delivery periods. Backlog of orders was $389.6 million at December 31, 2015 and $376.3 million at December 31, 2014; however, not all of these orders are firm in nature.

Government Contracts

        At December 31, 2015, the Company had no material contracts that were subject to renegotiation of profits or termination at the election of the U.S. government.

Research and Development

Research and development activities include the development of new product lines, the modification of existing product lines to comply with regulatory changes and the research of cost efficiencies through raw material substitution and process improvements. The Company'sCompany’s research and development expenses were $54.9 million, $48.1 million and $42.8 million in 2017, 2016 and 2015, compared to $33.8 millionrespectively, representing 1.3% of net sales in 2014both 2017 and $29.3 million2016 and 1.2% of net sales in 2013.

2015.

Environmental Matters

        See "Part

Refer to “Part II—Item 7. Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations—Environmental"Environmental” and Note 11 to the Consolidated Financial Statements in Item 8 for information regarding environmental matters.

Employees

        The

As of December 31, 2017, the Company had approximately 12,00014,000 employees none of whom were covered by aand also had approximately 1,600 temporary workers. Certain international employees are subject to local work councils or collective bargaining agreement, at December 31, 2015.agreements. The Company believes the state of its relationship with its employees is generally good.

International

        For

Refer to Note 2 for foreign net sales and an allocation of the Company's assets, see Note 2 to the Consolidated Financial Statements in Item 8.

NYSE Affirmation

        On May 13, 2015, David A. Roberts, the Company's Chief Executive Officer, submitted to the New York Stock Exchange (the "NYSE") the Annual CEO Certification and certified therein that he was not aware of any violation by the Company of the NYSE's Corporate Governance listing standards.

Company’s assets.

Item 1A.  Risk Factors.

The Company'sCompany’s business, financial condition, results of operations and cash flows can be affected by a number of factors including but not limited to those set forth below, those set forth in our "Forward“Forward Looking Statements"Statements” disclosure in Item 7 and those set forth elsewhere in this Annual Report on Form 10-K,10‑K, any one of which could cause the Company'sCompany’s actual results to vary materially from recent results or from anticipated future results.

Several of the market segments that the Company serves are cyclical and sensitive to domestic and global economic conditions.

Several of the market segments in which the Company sells its products are, to varying degrees, cyclical and may experience periodic downturns in demand. For example, the Brake & FrictionCBF segment is susceptible to downturns in the construction, agriculture and mining industries, the Interconnect Technologiesindustries. The CIT segment is susceptible to downturns in the commercial airline industry, and the Construction MaterialsCCM segment is susceptible to downturns in the commercial construction industry. In addition, both the Interconnect Technologies segment and the Brake & Friction segment may be negatively impacted by reductions in military spending.

        Current uncertainty


Uncertainty regarding global economic conditions may have an adverse effect on the businesses, results of operations and financial condition of the Company and its customers, distributors and suppliers. Among the economic factors which may affect performance are: manufacturing activity, commercial and residential construction, difficulties entering new markets and general economic conditions such as inflation, deflation, interest rates and credit availability. These effects may, among other things, negatively impact the level of purchases, capital expenditures and creditworthiness of the Company'sCompany’s customers, distributors and suppliers, and therefore, the Company'sCompany’s results of operations, margins and orders. The Company cannot predict if, when or how much worldwide economic conditions will improve.fluctuate. These conditions are highly unpredictable and beyond the Company's control. If these conditions deteriorate, however, the Company'sCompany’s business, financial condition, results of operations and cash flows could be materially adversely affected.

The Company'sCompany’s earnings growth strategy is partially dependent on the acquisition and successful integration of other businesses.

The Company has a long standing acquisition program and expects to continuehistory of acquiring businesses.businesses as part of its earnings growth strategy. Typically, the Company considers acquiring bolt-ons.companies than can be integrated within an existing business. Acquisitions of this type involve numerous risks, which may include potential difficulties in integrating the business into existing operations; a failure to realize expected sales growth and operating and cost synergies and efficiencies;from integration initiatives to combine the acquired business with an existing business; increasing dependency on the markets served by certainthe combined businesses; increased debt to finance the acquisitions or the inability to obtain adequate financing on reasonable terms.

The Company also considers the acquisition of businesses whichthat may operate independent of existing operations,businesses that involve similar risks with respect to a failure to realize expected sales growth or operating and cost reductions within the acquired business; and could increase the possibility of diverting management'scorporate management’s attention from its existing operations.

        On April 1, 2015, the Company acquired 100% of the Finishing Brands business from Graco Inc. ("Graco"). The Company has reported the results of the acquired business as a new reporting segment named Carlisle Fluid Technologies.

The successful integrationrealization of the businesssales growth and cost reductions and synergies with our existing businesses and within acquired stand-alone businesses and therefore increases in profitability overall, is dependent upon the realization of efficiencies and synergies.successful integration initiatives. If these integration initiatives do not occur, there may be a negative effect on the Company'sCompany’s business, financial condition, results of operations and cash flows.

        If the Company is unable to successfully integrate any acquired business or realize growth, synergies, and efficiencies that were expected when determining a purchase price, goodwill and other intangible assets acquired may be considered impaired, resulting in an adverse impact on the


Company's results of operations. See "Part II—Item“Part II-Item 7. Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies"Operations” for a discussion of factors considered in the subsequent valuation of the Company's acquired goodwill and intangible assets.

recent acquisition information.

The Company has significant concentrations in the commercial construction market.

For the year ended December 31, 2015,2017, approximately 56%57% of the Company'sCompany’s revenues and 63%approximately 83% of its EBIT (excluding Corporate expenses)operating income were generated by the Construction MaterialsCCM segment. Construction spending is affected by economic conditions, changes in interest rates, demographic and population shifts and changes in construction spending by federal, state and local governments. A decline in the commercial construction market could adversely affect the Company'sCompany’s business, financial condition, results of operations and cash flows. Additionally, adverse weather conditions such as heavy or sustained rainfall, cold weather and snow can limit construction activity and reduce demand for roofing materials. Weather conditions can also be a positive factor, as demand for roofing materials may rise after harsh weather conditions due to the need for replacement materials.


The Construction MaterialsCCM segment competes through pricing, among other factors. Increased competition in this segment has placed, and could continue to place, negative pressure on operating results in future periods.


The Company is subject to risks arising from international economic, political, legal and business factors.

The Company has increased, and anticipates that it will continue to increase, its presence in global markets. Approximately 25%23% of the Company'sCompany’s revenues in 20152017 were generated outside the United States. The Company expects that this percentage will grow as the Company continues to expand its international sales efforts. In addition, to compete globally, all of the Company'sCompany’s segments operate businesshave operations outside the United States.

The Company'sCompany’s increasing reliance on non-U.S.international revenues and non-U.S.international manufacturing bases exposes its business, financial condition, operating results and cashflowscash flows to a number of risks, including price and currency controls; government embargoes or foreign trade restrictions; extraterritorial effects of U.S. laws such as the Foreign Corrupt Practices Act; expropriation of assets; war, civil uprisings, acts of terror and riots; political instability; nationalization of private enterprises; hyperinflationary conditions; the necessity of obtaining governmental approval for new and continuing products and operations, currency conversion or repatriation of assets; legal systems of decrees, laws, taxes, regulations, interpretations and court decisions that are not always fully developed and that may be retroactively or arbitrarily applied; cost and availability of international shipping channels; and customer loyalty to local companies.

The loss of, or a significant decline in business with, one or more of the Company'sCompany’s key customers could adversely affect the Company'sCompany’s business, financial condition, results of operations and cash flows.

The Company operates in several specialty niche markets in which a large portion of the segment'ssegment’s revenues are attributable to a few large customers. See "Item“Item 1. Business—Overview—Description of Businesses by Segment"Segment” for a discussion of customer concentrations by segment. A significant reduction in purchases by one or more of these customers could have a material adverse effect on the business, financial condition, results of operations or cash flows of one or more of the Company'sCompany’s segments.

Some of the Company'sCompany’s key customers enjoy significant purchasing power that may be used to exert pricing pressure on the Company. Additionally, as many of the Company'sCompany’s businesses are part of a long supply chain to the ultimate consumer, the Company'sCompany’s business, financial condition, results of operations or cash flows could be adversely affected if one or more key customers elects to in-sourcein‑source or find alternative suppliers for the production of a product or products that the Company currently provides.


Raw Materialmaterial costs are a significant component of the Company'sCompany’s cost structure and are subject to volatility.

The Company utilizes petroleum-basedpetroleum‑based products, steel and other commodities in its manufacturing processes. Raw materials, including inbound freight, accounted for approximately 60%57% of the Company'sCompany’s cost of goods sold in 2015.2017. Significant increases in the price of these materials may not be recovered through selling price increases and could adversely affect the Company'sCompany’s business, financial condition, results of operations and cash flows. The Company also relies on global sources of raw materials, which could be adversely impacted by unfavorable shipping or trade arrangements and global economic conditions.

         If the Company

Security breaches or its business partners are unable to adequately protect the Company'ssignificant disruptions of our information assets from cyber-based attackstechnology systems or other security incidents, the Company's operationsviolations of data privacy laws could be disrupted.

        The Company is increasingly dependentadversely affect our business.


We rely on information technology includingsystems, some of which are managed by third-parties, to process, transmit and store electronic information, and to manage or support critical business processes. Security breaches of these systems could result in the internet, for the storage, processing, and transmissionunauthorized or inappropriate access to confidential information or personal data entrusted to us by our business partners. Additionally, these systems may be disrupted as a result of its electronic, business-related, information assets.attacks by computer hackers or viruses, human error or wrongdoing, operational failures or other catastrophic events. The Company leverages its internal information technology infrastructures, and those of its business partners, to enable, sustain and supportprotect its global business interests. Ininterests, however, any of the event thataforementioned breaches or disruptions could adversely affect our business.

We are subject to data privacy and security laws, regulations and customer-imposed controls as a result of having access to and processing confidential, personal and/or sensitive data in the Company or its business partnerscourse of business. If we are unable to prevent, detect,

maintain reliable information technology systems and remediate cyber-based attacks or otherappropriate controls with respect to privacy and security incidents in a timely manner, the Company's operationsrequirements, we may suffer regulatory consequences that could be disruptedcostly or the Company may incur financial or reputational losses arising from the theft, alteration, misuse, unauthorized disclosure, or destruction of its information assets.

         The Company may be impacted by new regulations related to conflict minerals.

        In August 2012, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC adopted new disclosure regulations for public companies that manufacture products that contain certain minerals and their derivatives known as conflict minerals, if these minerals are necessary to the functionality or production of the company's products. While the regulations do not require that a company discontinue the use of conflict minerals, the Company nevertheless may be impacted by the regulations. If one or more of the Company's key customers declares that it will become "conflict-free" the Company may be forced to re-evaluate the sourcing of certain of its raw materials or risk the loss of business with the customer. This could have the effect of limiting the pool of suppliers from which the Company sources its raw materials and the Company may be unable to obtain conflict-free raw materials at competitive prices, which could have a material adverse effect on the Company's business, financial condition, results of operations, or cash flows. Additionally, given the complex nature of the Company's supply chain and, in some cases, an extensive chain of custody for materials that the Company uses in its production processes, the Company may incur significant costs to comply with the disclosure requirements, including costs related to determining the source of any of the relevant minerals used in its products.

otherwise adversely affect our business.


Currency fluctuation could have a material impact on the Company'sCompany’s reported results of business operations.

The Company'sCompany’s global net sales and other activities are translated into U.S. dollarsDollars ("USD") for reporting purposes. The strengthening or weakening of the U.S. dollarUSD could result in unfavorable translation effects as the results of transactions in foreign countries are translated into U.S. dollars.USD. In addition, sales and purchases in currencies other than the U.S. dollarUSD expose the Company to fluctuations in foreign currencies relative to the U.S. dollar.USD. Increased strength of the U.S. dollarUSD will decrease the Company'sCompany’s reported revenues or margins in respect of sales conducted in foreign currencies to the extent the Company is unable or determines not to increase local currency prices. Likewise, decreased strength of the U.S. dollarUSD could have a material adverse effect on the cost of materials and products purchased overseas. Many of the Company'sCompany’s sales that are exported by its U.S. subsidiaries to foreign


countries are denominated in U.S. dollars,USD, reducing currency exposure. However, increased strength of the U.S. dollarUSD may decrease the competitiveness of our U.S. subsidiaries'subsidiaries’ products that are sold in U.S. dollarsUSD within foreign locations.

         Increases in the cost of providing pension benefits and healthcare benefits could adversely affect the Company's business, financial condition, results of operations, and cash flows.

        Pension expense associated with the Company's defined benefit retirement plans may fluctuate significantly depending on future market performance of plan assets and changes in actuarial assumptions.

        Net income may be negatively impacted by a decrease in the rate of return on plan assets. Income or expense for the plans is calculated using actuarial valuations. Unfavorable changes in key economic indicators can change the assumptions.

The most significant assumptions used are the discount rate and the expected long-term rate of return on plan assets. The key economic factors that affect the expense would also likely affect the amount of cash contributionsCompany has entered into foreign currency forward contracts to the core pension and post-employment plans.

        To help mitigate the fluctuation in future cash contributions to the core pension plan, the Company implemented a liability driven investment approach. This approach seeks to invest primarily in fixed income investments to match the changes in the plan liabilities that occur as a resultexposure of changes in the discount rate. Risk tolerance is established through careful considerationcertain of plan liabilities, plan funded status, and corporate financial condition. The established target allocation is 88% fixed income securities and 12% equity securities. Fixed income investments are diversified across core fixed income, long duration, and high yield bonds. Equity investments are diversified across U.S. and international stocks. Investment risk is measured and monitored on an ongoing basis through investment portfolio reviews, annual liability measures, and asset/liability studies.

        Additionally, the Company's business, financial condition,our results of operations and cash flows may be impacted by future increases in healthcare cost trends.

to such fluctuations. Refer to Note 18 for a discussion of these contracts.

Dispositions, failure to successfully complete dispositions or restructuring activities could negatively affect the Company.

From time to time, the Company, as part of its commitment to concentrate on its core business, may dispose of all or a portion of certain businesses. Such dispositions involve a number of risks and present financial, managerial and operational challenges, including diversion of managementmanagement's attention from the Company'sCompany’s core businesses, increased expense associated with the dispositions, potential disputes with the customers or suppliers of the disposed businesses, potential disputes with the acquirers of the disposed businesses and a potential dilutive effect on the Company'sCompany’s earnings per share. If dispositions are not completed in a timely manner, there may be a negative effect on the Company'sCompany’s cash flows and/or the Company'sCompany’s ability to execute its strategy. See Note 4 in Item 8 for discussion of Assets Held for Sale and Discontinued Operations.

Additionally, from time to time, the Company may undertake consolidation and other restructuring projects in an effort to reduce costs and streamline its operations. Such restructuring activities may divert managementmanagement's attention from the Company'sCompany’s core businesses, increase expenses on a short-termshort‑term basis and lead to potential disputes with the employees, customers or suppliers of the affected businesses. If restructuring activities are not completed in a timely manner or if anticipated cost savings, synergies and efficiencies are not realized, there may be a negative effect on the Company'sCompany’s business, financial condition, results of operations and cash flows.


During 2017, the Company implemented cost reduction plans and incurred restructuring and severance charges of $26.8 million, primarily resulting from a reduction in workforce, facility consolidation, relocation, accelerated depreciation and lease termination costs associated with our CFT, CBF and CIT segments. Refer to Note 4 for a discussion of these restructuring programs.
The Company'sCompany’s operations are subject to regulatory risks.

Certain products manufactured by our businesses operating in the aerospace and medical markets are subject to extensive regulation by the Federal Aviation Administration (FAA)FAA and Food and Drug Administration (FDA),FDA, respectively. It can be costly and time-consumingtime‑consuming to obtain and maintain regulatory approvals as well as maintain certifications to supply our products to OEM aerospace customers and to obtain regulatory approvals to market medical devices. Product approvals subject to regulations might not be granted for new devices on a timely basis, if at all. Proposed new regulations or changes to regulations could result in the need to incur significant additional costs to comply. Continued government scrutiny, including reviews of the FDA medical device pre-marketpre‑market authorization and post-marketpost‑market surveillance processes, may impact the requirements for our medical device interconnect components. Failure to effectively respond to changes to applicable laws and regulations or comply with existing and future laws and regulations may have a negative effect on the Company'sCompany’s business, financial condition, results of operations and cash flows.


Item 1B.  Unresolved Staff Comments.
None.

        None.

Item 2.  Properties.

The number, location and size of the Company'sCompany’s principal properties as of December 31, 20152017, are shown on the following chart by segment.


 Location  
 Square Footage
(in millions)		 

 North
America		  
  
  
 No. of
Facilities		  Number of Facilities 
Square Footage
(in millions)
Segment
 Europe Asia Other Owned Leased  North America Europe Asia Other Total Owned Leased

Carlisle Construction Materials

 21 6 — — 27 4.3 0.6  50
 6
 —
 —
 56
 5.0
 1.1

Carlisle Interconnect Technologies

 8 2 3 — 13 0.5 0.9  12
 3
 3
 —
 18
 0.7
 1.0

Carlisle Fluid Technologies

 6 3 2 2 13 0.6 0.1  6
 2
 2
 2
 12
 0.6
 0.1

Carlisle Brake and Friction

 4 2 4 — 10 0.8 0.5  4
 2
 4
 —
 10
 1.0
 0.5

Carlisle FoodService Products

 8 — — — 8 0.2 0.8  13
 1
 —
 —
 14
 0.2
 0.9
​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​

Totals

 47 13 9 2 71 6.4 2.9  85
 14
 9
 2
 110
 7.5
 3.6
​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​
​​​​​​​​​​​​​​​
​​​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

In addition to the manufacturing plants, and warehousing facilities and offices listed above, we lease our worldwide headquarters in Scottsdale, Arizona and regional corporate offices in Charlotte, NCHong Kong and in Shanghai, China. We consider theseour principal properties, as well as the related machinery and equipment, to be well maintained and suitable and adequate for their intended purpose.


Item 3.  Legal Proceedings.

We are party to certain lawsuits in the ordinary course of business. Information pertaining toabout our legal proceedings can be found in Note 11 to the Consolidated Financial Statementsis included in this Annual Report,Note 11, and is incorporated by reference herein.

Aside from the amounts disclosed in Note 11, if any, we do not believe that these proceedings, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operations or cash flows.

Item 4.  Mine Safety Disclosures.

Not applicable.


PART II

Part II

Item 5.  Market for Registrant'sRegistrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

The Company'sCompany’s common stock is traded on the New York Stock Exchange. AtAs of December 31, 2015,2017, there were 1,3561,235 shareholders of record.

The number of beneficial holders is substantially greater than the number of record holders because a significant portion of our common stock is held of record in broker “street names”.


Quarterly cash dividends paid, and the high and low prices of the Company'sCompany’s stock on the New York Stock Exchange in 20152017 and 20142016 were as follows:

2015
 First Second Third Fourth 
2017 First Second Third Fourth

Dividends per share

 $0.25 $0.25 $0.30 $0.30  $0.35
 $0.35
 $0.37
 $0.37

Stock Price

 
 		 
 		 
 		 
 		   
  
  
  

High

 $95.10 $102.26 $104.60 $92.70  $112.03
 $109.58
 $100.80
 $115.91

Low

 $86.79 $91.87 $86.91 $84.11  $103.30
 $93.50
 $92.40
 $99.15


2014
 First Second Third Fourth 
2016 First Second Third Fourth

Dividends per share

 $0.22 $0.22 $0.25 $0.25  $0.30
 $0.30
 $0.35
 $0.35

Stock Price

 
 		 
 		 
 		 
 		   
  
  
  

High

 $80.57 $88.19 $88.36 $92.06  $99.79
 $105.68
 $108.49
 $115.96

Low

 $71.51 $75.28 $78.93 $74.69  $77.82
 $98.38
 $98.85
 $101.57


The following table summarizes the Company'sCompany’s purchases of its common stock forduring the quarterthree months ended December 31, 2015:

Period
 (a)
Total Number
of Shares
Purchased		 (b)
Average Price
Paid Per
Share		 (c)
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs		 (d)
Maximum Number
(or Approximate
Dollar Value) of
Shares that May
Yet Be Purchased
Under the Plans or
Programs(1)		 

October 2015

  210,464 $88.01  210,464  2,212,631 

November 2015

  352,782 $86.27  352,782  1,859,849 

December 2015

  342,103 $88.83  342,103  1,517,746 
​​​ ​ ​​​​​ ​ ​​​​

Total

  905,349     905,349    
​​​ ​ ​​​​​​ ​​​​
​​​​​​​​​​​​​​
​​​ ​ ​​​​​ ​ ​​​​
2017:
(1)
Represents the number of shares that can be repurchased under the Company's stock repurchase program. The stock repurchase program was originally approved on November 3, 1999, and was reactivated on August 17, 2004. At the time of the adoption, the Company had the authority to purchase 741,890 split-adjusted shares of common stock. The Board of Directors authorized the repurchase of an additional 2,500,000 shares of the Company's common stock on August 1, 2007, and the repurchase of an additional 1,400,000 shares of the Company's common stock on February 12, 2008.

(2)
2017
(a)
Total Number
of Shares
Purchased
(b)
Average Price
Paid Per Share
(c)
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
(d)
Maximum Number
(or Approximate
Dollar Value) of
Shares that May
Yet Be Purchased
Under the Plans or
Programs(1)
October—
$—
—
2,116,151
November—
$—
—
2,116,151
December—
$—
—
2,116,151
Total—
—
(1)
Represents the number of shares that can be repurchased under the Company’s stock repurchase program. On February 6, 2018, the Board approved an increase in the Company's stock repurchase program for up to 13.7 million shares.
The Company may also reacquire shares outside of the repurchase program from time to time in connection with the forfeiture of shares in satisfaction of tax withholding obligations from the vesting of share-basedshare‑based compensation. There were no shares reacquired in transactions outside the repurchase program during the three months ended December 31, 2015.2017.


Item 6.  Selected Financial Data.

Five-Year Summary

(in millions except shares,
shareholders of record, and per share data)
 2015 2014 2013 2012 2011 

Summary of Operations

                

Net sales

 
$
3,543.2		 
$
3,204.0		 
$
2,943.0		 
$
2,851.2		 
$
2,492.4		 

Gross margin

 $1,006.7 $819.5 $745.6 $767.0 $584.1 

Selling & administrative expenses

 $461.9 $379.0 $353.7 $356.6 $298.8 

Research & development expenses

 $42.8 $33.8 $29.3 $26.1 $21.7 

Other (income) expense, net

 $0.1 $(1.6)$(4.2)$12.4 $(2.4)

Earnings before interest and income taxes

 $501.9 $408.3 $366.8 $371.9 $266.0 

Interest expense, net

 $34.0 $32.2 $33.8 $25.5 $21.0 

Income from continuing operations, net of tax

 $319.6 $251.7 $235.2 $228.7 $172.0 

Basic earnings per share

 $4.89 $3.89 $3.69 $3.64 $2.77 

Diluted earnings per share

 $4.82 $3.83 $3.61 $3.57 $2.73 

Income (loss) income from discontinued operations, net of tax

 $0.1 $(0.4)$(25.5)$41.5 $8.3 

Basic (loss) earnings per share

 $— $— $(0.40)$0.66 $0.14 

Diluted (loss) earnings per share          

 $— $(0.01)$(0.39)$0.65 $0.13 

Net income

 $319.7 $251.3 $209.7 $270.2 $180.3 

Basic earnings per share

 $4.89 $3.89 $3.29 $4.30 $2.91 

Diluted earnings per share

 $4.82 $3.82 $3.22 $4.22 $2.86 

Financial Position

  
 		  
 		  
 		  
 		  
 		 

Net working capital(1)

 
$
713.6		 
$
1,219.3		 
$
1,158.6		 
$
734.7		 
$
617.2		 

Property, plant and equipment, net (held & used)

 $585.8 $547.3 $497.2 $465.2 $379.3 

Total assets

 $3,954.1 $3,758.7 $3,493.0 $3,457.3 $3,137.9 

Long-term debt

 $598.7 $749.8 $751.0 $752.3 $604.2 

% of total capitalization(2)

  20.3  25.4  27.4  29.6  28.7 

Shareholders' equity

 $2,347.4 $2,205.0 $1,986.1 $1,788.1 $1,500.1 

Other Data

  
 		  
 		  
 		  
 		  
 		 

Average shares outstanding—basic(in thousands)

  
64,844		  
64,170		  
63,471		  
62,513		  
61,457		 

Average shares outstanding—diluted(in thousands)

  65,804  65,304  64,806  63,610  62,495 

Dividends paid

 $72.3 $61.2 $53.7 $48.0 $43.5 

Per share

 $1.10 $0.94 $0.84 $0.76 $0.70 

Capital expenditures

 $72.1 $118.8 $110.8 $140.4 $79.6 

Depreciation & amortization

 $129.3 $104.0 $113.9 $104.9 $88.0 

Shareholders of record

  1,356  1,407  1,498  1,591  1,669 
(1)
Net working capital is defined as total current assets less total current liabilities.

(2)
Percent
Selected Consolidated Financial Data
(in millions except for per share data) 2017 2016 2015 2014 2013
Summary of Operations          
Net sales $4,089.9
 $3,675.4
 $3,543.2
 $3,204.0
 $2,943.0
Gross margin 1,148.0
 1,157.3
 1,006.7
 819.5
 745.6
Selling and administrative expenses 589.4
 532.0
 461.9
 379.0
 353.7
Research and development expenses 54.9
 48.1
 42.8
 33.8
 29.3
Operating income 505.7
 438.1
 503.3
 409.9
 366.9
Income from continuing operations 365.3
 250.8
 319.6
 251.7
 235.2
Basic earnings per share $5.75
 $3.87
 $4.89
 $3.89
 $3.69
Diluted earnings per share $5.71
 $3.83
 $4.82
 $3.83
 $3.61
Net income 365.5
 250.1
 319.7
 251.3
 209.7
Basic earnings per share $5.75
 $3.86
 $4.89
 $3.89
 $3.29
Diluted earnings per share $5.71
 $3.82
 $4.82
 $3.82
 $3.22
Financial Position  
  
  
  
  
Total assets $5,299.8
 $3,965.8
 $3,950.9
 $3,754.9
 $3,488.5
Long-term debt 1,586.2
 596.4
 595.6
 746.0
 746.5
Other Data  
  
  
  
  
Dividends paid $92.1
 $84.5
 $72.3
 $61.2
 $53.7
Per share $1.44
 $1.30
 $1.10
 $0.94
 $0.84
Refer to Note 1 for information regarding retrospective adjustment of total capitalization is defined as long-term debt divided by long-term debt plus shareholders' equity.prior year amounts resulting from presentation of operating income. Refer to Note 3for information regarding recent acquisitions and their impact to financial results.


Item 7.  Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations.

Executive Overview

        We are


Carlisle Companies Incorporated (“Carlisle”, the “Company”, “we”, “us” or “our”) is a multi-national company that designs, manufactures and sells a wide range of products primarily throughout North America, Western Europe and the Asia Pacific region viaregion. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of our financial statements with a narrative from the following segments:

    •
    Carlisle Construction Materials ("CCM" orperspective of Company management. All references to “Notes” refer to our Notes to Consolidated Financial Statements in this annual report on Form 10-K.

During the "Construction Materials segment");

•
Carlisle Interconnect Technologies ("CIT" orfourth quarter of 2017, we revised (i) the "Interconnect Technologies segment");

•
Carlisle Fluid Technologies ("CFT" orConsolidated Statement of Earnings to include a subtotal of operating income, with non-operating (income) expense reflected as a separate line item below interest expense, net and (ii) its segment measure of profit and loss to operating income (previously earnings before interest and taxes). We have reclassified certain prior period amounts to conform to the "Fluid Technologies segment");

•
Carlisle Brake & Friction ("CBF" orcurrent period presentation. These changes were made to better reflect our results of operations and to be consistent with the "Brake & Friction segment"); and

•
Carlisle FoodService Products ("CFSP" orchange in the "FoodService Products segment").

measure of operating performance evaluated by the Chief Operating Decision Maker, our Chief Executive Officer.


Executive Overview
We are focusedfocus on achieving profitable growth in theseour segments both organically, through new product development, product line extensions and entering new markets, andas well as through acquisitions of businesses that complement our existing technologies, products and market channels. We have approximately 12,000 employees. We focus on obtaining profitable growth through:

    •
    Year-over-year
Year‑over‑year improvement in sales, earnings before interest andoperating income taxes ("EBIT") margins, net earnings and return on invested capital ("ROIC"(“ROIC”),

•
;
Reduction of working capital (defined as receivables, plus inventories, net of accounts payable) as a percentage of net sales,

•
Globalization,sales;
Globalization; and

•
Maintenance of a strong and flexible balance sheet.

Resources are allocated among the operating companies based on management'smanagement’s assessment of their ability to obtain leadership positions and competitive advantages in the markets they serve.

        A key philosophy


2017 was another year of milestones. Our revenue surpassed $4 billion for the first time, driven by a strong U.S. commercial roofing market, off-highway vehicle markets recovering from market lows, and strategic acquisitions. We further returned a record $360.5 million to shareholders in howthe form of $92.1 million of dividends and $268.4 million of share repurchases. We successfully executed on our commitment to deploy capital in support of our growth strategy as evidenced by a record nearly $1 billion deployed into acquisitions, a Carlisle record amount. These acquisitions included San Jamar, Inc., (“San Jamar”), Arbo Holdings Limited (“Arbo”), Drexel Metals, Inc., (“Drexel Metals”), and Accella Holdings LLC, the parent company to Accella Performance Materials Inc. (collectively “Accella”), the largest acquisition in Carlisle's history. Finally, we drive profitable growth organically isissued $1 billion of senior notes to optimize our capital structure. This debt issue was the largest in Carlisle's history and was favorably received by the capital markets.

With a recently increased $1 billion of availability on our credit revolver, and with our strong cash generation, we expect to have ample liquidity to make further investments in our businesses and continue to return capital to our shareholders.

While we are still evaluating the long-term impact of the recent change in United States ("U.S.") tax policy, our 2017 results include $52.6 million of estimated positive direct and indirect impact due to the Tax Cuts and Jobs Act (the “Tax Act”), consisting of a benefit of remeasuring deferred taxes of $90.2 million, one-time toll charges for foreign earnings of $32.5 million, and expense from the change in assertion related to reinvestment of foreign earnings of $5.1 million.

The Carlisle Operating System ("COS"(“COS”). COS is a manufacturing structure and strategy deployment system, based on lean enterprise and six sigma principles and is a continuous improvement process that defines the way we do business. Waste is eliminated and efficiencies improved enterprise wide. Improvements are not limited to production areas, as COS also drives improvements in new product innovation, engineering, supply chain management, warranty, and product rationalization. COS has created acornerstone of Carlisle's culture of continuous improvement across all aspectsoperational excellence, continued to drive improvements throughout the organization in 2017. Savings from COS were a significant contributor to our solid operating income performance. As the next phase of COS is deployed, we will move from a factory based system to focus on consistent application of COS in our business processes.

On February 1, 2018, we announced the signing of a definitive agreement to sell Carlisle FoodService Products (“CFS”) to The Jordan Company for $750 million (refer to Note 20).


Summary Financial Results 
(in millions, except per share amounts) 2017 2016 Change 2016 2015 Change 
Net sales $4,089.9
 $3,675.4
 11.3 % $3,675.4
 $3,543.2
 3.7 % 
Impairment charges $—
 $141.5
 (100.0)% $141.5
 $—
 100.0 % 
Operating income $505.7
 $438.1
 15.4 % $438.1
 $503.3
 (13.0)% 
Operating margin 12.4% 11.9% 50
bps 11.9% 14.2% (230)bps
Income from continuing operations $365.3
 $250.8
 45.7 % $250.8
 $319.6
 (21.5)% 
Diluted EPS from continuing operations $5.71
 $3.83
 49.1 % $3.83
 $4.82
 (20.5)% 
              
Items affecting comparability: (1)
             
Impact to operating income $51.8
 $25.1
 

 $25.1
 $13.1
 

 
Impact to income from continuing operations $(11.8) $16.5
 

 $16.5
 $8.0
 

 
Impact to diluted EPS from continuing operations $(0.18) $0.26
 

 $0.26
 $0.12
 

 
(1)
Items affecting comparability primarily include acquisition related costs, exit and disposal costs, facility rationalization costs, gains from divestitures and the impact of the Tax Act. The tax effect is based on the rate of the jurisdiction where the expense is deductible. Refer to Items Affecting Comparability in this MD&A for further discussion.

2017 Compared with 2016
Net sales increased primarily reflecting contribution from acquisitions in the Carlisle Construction Materials (“CCM”), CFS and Carlisle Interconnect Technologies (“CIT”) segments as well as higher net sales volume at CCM, associated with favorable commercial roofing market conditions, and higher net sales volume at Carlisle Brake & Friction (“CBF”), associated with higher demand from the construction, agriculture and mining markets. These increases were partially offset by lower net sales volume at CIT, driven by challenges in the commercial aerospace market.
The increase in operating income and operating margin primarily reflected the non-recurrence of $141.5 million of goodwill and other intangible assets impairment charges taken at our CBF segment in 2016, higher net sales volumes in the CCM and CBF segments, savings from COS and acquired earnings from San Jamar in the CFS segment. This increase was partially offset by rising raw material costs in the CCM segment, lower sales and operating margin at CIT, approximately $36.5 million for facility rationalization and exit and disposal costs and $11.5 million of acquired inventory costs.

Diluted EPS improved primarily reflecting the the aforementioned increases in operating income combined with the positive net impact of the Company's business operations.

        Another key strategyTax Act.


We generated $458.7 million in driving profitableoperating cash flows during 2017.  We utilized cash on hand, cash provided by operations and funds from our $1.0 billion notes issued in November 2017 to fund acquisitions, fund capital projects and return capital to shareholders.
Outlook
For 2018, on a continuing operations basis, we expect total net sales growth in the mid-teens, led by the performance of our CCM, CIT and CBF segments. Net sales growth is throughexpected to be primarily driven by growth related to strength in the domestic commercial roofing market and contributions from acquisitions in the CCM segment, higher demand for aerospace, medical and test and measurement markets in the CIT segment and growth in the core markets of agriculture, mining and construction in the CBF segment.
2016 Compared with 2015 

Net sales increased primarily due to higher net sales volume at CCM, reflecting favorable commercial roofing market conditions, full year sales from the acquired Finishing Brands business and higher sales from CIT, reflecting higher sales volume and contribution from acquisitions. We typically acquire businesses thatThese increases were partially offset by lower net sales at CBF. CBF's results are complementaryconsistent with reported significant sales declines in the construction, mining and aircraft off-highway equipment sectors.

The decrease in operating income primarily reflected the impairment of goodwill and other intangible assets at our CBF segment of $141.5 million. Refer to our existing segmentsCritical Accounting Estimates in this MD&A for further discussion. This reduction was partially offset by $79.2 million increase in operating income from the CCM segment due to favorable raw material and can be integrated into them. However, from time to time we may acquire new businesses that can operate independently from other segments. Factors we consider in making an acquisition includepricing dynamics and higher sales volume and the abilitycontribution of a full year of the acquired businessesFinishing Brands business within the CFT segment.

Acquisitions

2017 Acquisitions

On November 1, 2017, we acquired Accella, a specialty polyurethane platform, for estimated consideration of $670.7 million. Accella offers a wide range of polyurethane products and solutions across a broad diversity of markets and applications. Accella provides an excellent adjacent opportunity into the attractive polyurethane market, which includes Spray Polyurethane Foam and Liquid Applied Roofing. The results of operations of the acquired business are reported within the CCM segment.

On July 3, 2017, we acquired Drexel Metals for consideration of $55.8 million. Drexel Metals is a leading provider of architectural standing seam metal roofing systems for commercial, institutional and residential applications. The results of operations of the acquired business are reported within the CCM segment.

On January 31, 2017, we acquired Arbo for consideration of $11.5 million, including the estimated fair value of contingent consideration of $2.5 million. Arbo is a leading provider of sealants, coatings and membrane systems used for waterproofing and sealing buildings and other structures. The results of operations of the acquired business are reported within the CCM segment.
On January 9, 2017, we acquired San Jamar for consideration of $217.2 million. San Jamar is a leading provider of universal dispensing systems and food safety products for foodservice and hygiene applications. San Jamar complements the operating performance at CFS by adding innovative new products, opportunities to driveexpand our presence in complementary sales channels and adding a history of profitable growthgrowth. The results of operations of the acquired business are reported within the CFS segment.

2016 Acquisitions
On October 3, 2016, we acquired Star Aviation, Inc. (“Star Aviation”), for consideration of $82.7 million. Star Aviation is a leading provider of design and engineering services, testing and certification work and manufactured products for in-flight connectivity applications on commercial, business and military aircraft. Star Aviation complements CIT’s highly specialized engineering and design capabilities in the future by increasing our EBIT margins, operating cash flows,in-flight connectivity market, where we expect further growth opportunities from the demand for retro-fit and net earnings. We have also pursuedline-fit for satellite connectivity, as well as, development in emerging connectivity technologies. The results of operations of the sale of businesses when it is determined they no longer fitacquired business are reported within the Company's long-term goals or strategy.

        In connection with our growthCIT segment.


On June 10, 2016, we acquired Micro-Coax, Inc. and acquisition strategy, onKroll Technologies, LLC, (collectively “Micro-Coax”) for consideration of $96.6 million. The acquired business is a provider of high-performance, high frequency coaxial wire and cable and cable assemblies to the defense, satellite, test and measurement and other industrial markets. The results of operations of the acquired business are reported within the CIT segment.

On February 19, 2016, we acquired MS Oberflächentechnik AG (“MS Powder”), a Swiss-based developer and manufacturer of powder coating systems and related components, for consideration of $12.4 million, including the estimated fair value of contingent consideration of $4.3 million. The results of operations of the acquired business are reported within the CFT segment.

2015 Acquisition

On April 1, 2015, the Companywe acquired the Finishing Brands business from Graco, Inc. ("Graco"(“Graco”) for total cash consideration of $598.9$611.1 million. The CompanyWe added a reportable segment, Fluid Technologies, to reflect the acquisition of Finishing Brands. Fluid TechnologiesCFT is a global manufacturer and supplier of finishing equipment and systems serving diverse end markets for paints and coatings, including original equipment ("OE"(“OE”) automotive, automotive refinishing, aerospace, agriculture, construction, marine, rail and other industrial applications. From the period beginning April 1, 2015 through December 31, 2015, Fluid Technologies has contributed net sales of $203.2 million and EBIT of $20.8 million

Refer to the Company's 2015 results.


        For a more in-depthNote 3 for further discussion of the results discussed in this "Executive Overview", please refer to the discussion on "Financial Reporting Segments" presented later in "Management's Discussion and Analysis of Financial Condition andour acquisitions.


Consolidated Results of Operations".

        For the year ended December 31, 2015,Operations

Net Sales

2017 Compared with 2016
(in millions) 2017 2016 Change 
Acquisition
Effect
 
Price / Volume
Effect
 
Exchange
Rate Effect
Net sales $4,089.9
 $3,675.4
 11.3% 6.4% 5.0% (0.1)%
The increase in net sales increased 11% to $3.54 billion, compared to $3.20 billion in the prior year, primarily reflecting sales from the acquired Finishing Brands and LHi businesses of 8.8%. Our organic net sales growth (defined as net sales excluding sales from acquired businesses within the last twelve months, as well as the impact of changes in foreign exchange rates) of 3.6%2017 primarily reflected increasedthe contribution of $104.8 million from the acquisitions of Accella, Drexel Metals and Arbo in the CCM segment and $86.3 million from the acquisition of San Jamar in the CFS segment. The increase in net sales volumes at Construction Materialsvolume in 2017 primarily reflected favorable commercial roofing market conditions and Interconnect Technologies,higher demand for CBF products. These increases were partially offset by lower sales volume at Brake and FrictionCIT, primarily as a result of the aforementioned challenges in the commercial aerospace market and lower selling price. Foreign currency fluctuations had aprice at CCM.
2016 Compared with 2015
(in millions) 2016 2015 Change 
Acquisition
Effect
 
Price / Volume
Effect
 
Exchange
Rate Effect
Net sales $3,675.4
 $3,543.2
 3.7% 2.6% 1.3% (0.2)%
The increase in net sales primarily resulted from higher sales volume at CCM and CIT, partially offset by lower sales volume at CBF. The negative impact of price to net sales primarily resulted from lower selling price at CCM and CIT. The increase in net sales from acquired businesses primarily resulted from contribution of 1.8%.

        For$66.6 million from the year ended December 31, 2015 EBIT rose 23%acquisition of Finishing Brands and the 2016 acquisition of MS Powder in the CFT segment.

Net Sales by Geographic Area 

(in millions)
 2017 2016 2015
United States $3,162.2
 77% $2,835.7
 77% $2,659.4
 75%
International:  
  
  
  
  
  
Europe 411.3
  
 381.8
  
 384.4
  
Asia 272.2
  
 241.9
  
 225.5
  
Canada 90.9
  
 77.2
  
 114.9
  
Mexico and Latin America 79.3
  
 76.1
  
 81.6
  
Middle East and Africa 43.4
  
 42.6
  
 55.7
  
Other 30.6
  
 20.1
  
 21.7
  
Total International 927.7
 23% 839.7
 23% 883.8
 25%
Net sales $4,089.9
  
 $3,675.4
  
 $3,543.2
  
2017 Compared with 2016
Total net sales to $501.9 million,customers located outside the U.S. increased primarily reflecting higher international sales by CCM, largely reflecting improving European and Canadian sales compared with prior year. Higher international sales also reflected increased sales to Europe and Asia from CBF. Partially offsetting this increase in international sales was decrease in European sales by CIT.
2016 Compared with 2015
Total net sales to customers located outside the U.S. decreased primarily due to reduction of international sales by CCM, largely reflecting declining Canadian sales as a result of reduced construction activity compared with prior year. Partially offsetting this decline in international sales was the contribution of international sales from the acquisition of the Finishing Brands business reported in the CFT segment. The increase of net sales into Asia in 2016 was primarily attributable to CFT. Approximately 33% of CFT's net sales were to customers in Asia in 2016.

Gross Margin 
(in millions) 2017 2016 Change 2016 2015 Change
Gross margin $1,148.0
 $1,157.3
 (0.8)% $1,157.3
 $1,006.7
 15.0%
Gross margin percentage 28.1% 31.5%   31.5% 28.4%  
Depreciation and amortization $97.2
 $82.2
   $82.2
 $79.9
  
2017 Compared with 2016
The decrease in gross margin percentage (gross margin expressed as a percentage of net sales) in 2017 was primarily driven by lowerunfavorable raw material dynamics at CCM and unfavorable changes in mix, primarily at CIT as a result of the aforementioned challenges in the commercial aerospace market. Also included in gross margin in 2017 were exit and disposal costs particularlytotaling $10.9 million primarily at Construction Materials relatedCIT and CBF attributable to materials that are tiedour exit and disposal initiatives (refer to crude oil as well as related lower energyNote 4 for further discussion), and acquired inventory costs lower labor and material usage costs from COS,of $11.5 million. These decreases were partially offset by lower per unit costs resulting from higher capacity utilization driven by higher net sales volume in the CCM and the aforementioned acquisitions. These positive impacts were partially offset by lower selling price. Carlisle's overall EBIT margin in 2015 rose 150 basis points to 14.2%, primarily reflecting lower raw material costsCBF segments and lower labor and material usage costs from the Carlisle Operating System. Included in EBIT in 2015 was $10.7 million in non-recurring costs related to the acquisition of Finishing Brands. By comparison, included in EBIT in 2014 was $9.0 million in plant startup costs at Construction Materials and $3.5 million in costs related to the acquisition of LHi.

        For the year ended December 31, 2015, income from continuing operations, net of tax, of $319.6 million, or $4.82 per diluted share, grew 27% in 2015 from income of $251.7 million, or $3.83 per diluted share, in 2014. The increase was due to higher EBIT driven by the aforementioned factors. For more information regarding the change in income from continuing operations from 2014 to 2015, refer to the discussion below on "2015 Compared to 2014".

        For the year ended December 31, 2014, net sales increased 8.9% to $3.20 billion from net sales of $2.94 billion for the year ended December 31, 2013. Organic net sales in 2014 grew 7.9% primarily reflecting 11% organic net sales growth at Interconnect Technologies, on strong demand for aerospace applications, and organic net sales growth of 8.9% at Construction Materials, on strong demand for commercial roofing. Overall net sales at Brake & Friction and Foodservice Products grew modestly during 2014. The acquisition of LHi, that occurred on October 1, 2014, contributed $26.1 million, or 0.9%, to net sales in 2014.

        For the year ended December 31, 2014, EBIT grew 11% and EBIT margin increased 20 basis points to 12.7% reflecting lower per unit costs resulting from higher capacity utilization driven by higher net sales volume as well as lower labor and material usage costssavings from COS. These EBIT margin improvements were partially offset by lower selling price, and, at Construction Materials, higher plant startup and product line closing costs versus the prior year and higher freight expense.

        For the year ended December 31, 2014, income from continuing operations, net of tax increased 7.0% to $251.7 million, or $3.83 per diluted share, from income of $235.2 million, or $3.61 per diluted share, for the year ended December 31, 2013. Included in income from continuing operations for the year ended December 31, 2013 was a tax benefit of $11.8 million from the release of a deferred tax liability from an election in a foreign jurisdiction that resulted in an increase in the tax basis of an international operation. For more information regarding the change in income from continuing operations from 2013 to 2014, refer to the discussion below on "2014


2016 Compared to 2013".

with 2015

In 2016, we expect total net sales growth to be in the mid-single digit percentage range. Net sales growth is expected to be primarily driven by growth at Interconnect Technologies, on higher demand for aerospace and medical connector applications, and growth at Fluid Technologies, reflecting new


products and sales penetration initiatives. Growth in 2016 at Construction Materials is expected to reflect moderate growth in the commercial roofing market. While raw material costs are currently at lower levels than prior periods, and may decline further, the Company faces pricing pressure in a number of its markets that could impact selling price.

2015 Compared to 2014

Net Sales

(in millions)
 2015 2014 Change Acquisition
Effect		 Volume
Effect		 Price
Effect		 Exchange
Rate Effect		 

Net sales

 $3,543.2 $3,204.0  10.6% 8.8% 5.0% (1.4)% (1.8)%

        Net sales in 2015 grew 11% over the prior year primarily reflecting acquisition growth of 8.8% and organic net sales growth of 3.6%. The acquisition of the Finishing Brands business, reported in the Fluid Technologies segment, contributed $203.2 million, and the acquisition of LHi, reported in the Interconnect Technologies segment, contributed $79.0 million. Organic net sales growth of 3.6% in 2015 reflected 5.0% higher net sales volume, primarily at Construction Materials, partially offset by 1.4% lower selling price also from Construction Materials and within Interconnect Technologies. The negative 1.8% impact from fluctuations in foreign exchange was primarily attributable to the weaker Euro and Canadian Dollar versus the U.S. Dollar impacting the Construction Materials segment and the weaker Euro and British pound versus the U.S. Dollar impacting the Brake & Friction segment.

Net Sales by Geographic Area

Country
(in millions)
 2015 2014 

United States

 $2,659.4  75%$2,441.7  76%

International:

             

Europe

  384.4     357.4    

Asia

  225.5     136.0    

Canada

  114.9     117.1    

Mexico and Latin America

  81.6     82.0    

Middle East and Africa

  55.7     48.7    

Other

  21.7     21.1    
​​​ ​ ​​​​​ ​ ​​​​

Total International

  883.8  25% 762.3  24%
​​​ ​ ​​​​​ ​ ​​​​

Net sales

 $3,543.2    $3,204.0    
​​​ ​ ​​​​​ ​ ​​​​
​​​​​​​​​​​​​​
​​​ ​ ​​​​​ ​ ​​​​

        We have a long-term goal of achieving 30% of total net sales from outside the United States. Total net sales to customers located outside the United States increased from $762.3 million in 2014, or 23.8% of net sales, to $883.8 million in 2015, or 24.9% of net sales. The increase in global sales was primarily driven by contribution from the acquisition of the Finishing Brands business reported in the Fluid Technologies segment of $118.7 million. The increase in net sales to customers outside the United States also reflected higher sales volumes at Interconnect Technologies and contribution from the LHi acquisition. These increases were partially offset by the negative impact of foreign exchange fluctuations primarily at Construction Materials and Brake & Friction and lower net sales volume at Brake & Friction and Foodservice Products.

        The 66% increase in net sales into Asia in 2015 was primarily attributable to the aforementioned acquisitions. Approximately 30% of Fluid Technologies' net sales were to customers in Asia in 2015.


Gross Margin

(in millions)
 2015 2014 Change 

Gross profit

 $1,006.7 $819.5  22.8%

Gross margin

  28.4% 25.6%   

        In 2015, the increase in gross margin (gross profit expressed as a percentage of net sales) of 280 basis points was primarily driven by lower raw material costs at Construction Materials, lower labor and material usage costsCCM, savings from the Carlisle Operating SystemCOS and lower per unit costs related to higher capacity utilization driven by higher sales volume. These positive impacts were partially offset by the aforementioned lower selling prices.prices at CCM and CIT. Included in cost of goods soldgross margin in 20152016 was $8.6$2.0 million in additional cost of goods sold fromassociated with the acquisitionfair valuation of Finishing Brands reportedacquired inventory in the Fluid Technologies segment resulting from recording acquired inventory at fair value. Included in gross profit and gross margin in 2014 was $1.6 million in cost of goods sold related to recording acquired inventory at estimated fair value for the LHi acquisition in the Interconnect Technologies segment, $9.0 million in plant startup and product line closing costs at Construction Materials related to startup of its PVC manufacturing operations and new TPO manufacturing facility, and $0.9 million in expense to discontinue production of Construction Materials' Insulfoam product line at its Smithfield, PA facility.

CIT segment. 


Selling and Administrative Expenses

(in millions)
 2015 2014 Change  2017 2016 Change 2016 2015 Change

Selling and administrative expenses

 $461.9 $379.0 21.9% $589.4
 $532.0
 10.8% $532.0
 $461.9
 15.2%

As a percentage of net sales

 13.0% 11.8%    14.4% 14.5%   14.5% 13.0%  
Depreciation and amortization $70.6
 $54.7
   $54.7
 $48.5
  

2017 Compared with 2016
The increase in selling and administrative expense in 2017 primarily reflected charges for the facility rationalization and plant restructuring projects at CFT and CIT (refer to Note 4 for further discussion), and acquired selling and administrative expenses, primarily in the CFS and CCM segments. The selling and administrative costs from acquired businesses also included non-cash amortization of acquired intangible assets.
2016 Compared with 2015
Selling and administrative expensesexpense increased 22% versus the prior year primarily due to $67.0 milliona full year of expenseexpenses from the acquired Finishing Brands and LHi businesses,business, higher selling costs primarily at Construction MaterialsCCM on higher net sales volume, higher expense from increased staffing and performance-based incentive compensation costs at Construction Materials,CCM and increasedCIT and expenses related to our exit and disposal plans during 2016 (refer to Note 4 for further discussion). During 2016, CIT incurred employee termination costs of $7.6 million related to planned growth opportunities and enhancements in its long-term cost competitiveness within certain international operations. Expenses to close certain facilities and relocate administrative functions at CFT and Corporate expenses.were $4.1 million and $3.8 million, respectively. These increased expensesincreases were partially offset by lower selling and administrative expense costsreduced expenses at Brake & Friction due to lower net sales volume and cost reduction efforts. During 2015, the Company incurred $2.1 million in transaction costs related to the Finishing Brands acquisition, of which $0.7 million was allocated to the Fluid Technologies segment and the remaining $1.4 million allocated to Corporate. By comparison, in 2014, the Company incurred $1.9 million in transaction expenses for the acquisition of LHi in the Interconnect TechnologiesCBF segment.

        Selling and administrative expense as a percentage of Net sales increased 120 basis points to 13.0% as a result of the Fluid Technologies segment having a higher ratio of selling and administrative expense to net sales versus the other segments, in part due to the amortized cost of acquired intangible assets.



Research and Development Expenses

(in millions)
 2015 2014 Change  2017 2016 Change 2016 2015 Change

Research and development expenses

 $42.8 $33.8 26.6% $54.9
 $48.1
 14.1% $48.1
 $42.8
 12.4%

As a percentage of net sales

 1.2% 1.1%    1.3% 1.3%   1.3% 1.2%  
Depreciation and amortization $1.3
 $0.9
   $0.9
 $0.9
  

2017 Compared with 2016
The increase in Researchresearch and development expenses in 2015 versus the prior year reflected $4.3 of expense from acquired operations as well as increased activities related to new product development, primarily at the CIT and CCM segments. These increases were partially offset by reduced expenses at the CBF segment.
2016 Compared with 2015
The increase in research and development expenses reflected increased activities related to new product development, primarily at the CIT segment. The increase also reflected contribution from the acquired Finishing Brands business, as well as increased new product development activities at the CFT segment. These increases were partially offset by reduced expenses at the CBF segment.
Impairment of Goodwill and Intangible Assets
(in millions) 2017 2016 Change 2016 2015 Change
Impairment charges $—
 $141.5
 (100.0)% $141.5
 $—
 100.0%
As a percentage of net sales —% 3.8%   3.8% —%  
In 2016, CBF's net sales continued to decline due to continued weakness in off-highway equipment markets tied to lower demand for commodities and indicators of a longer period before CBF’s markets were expected to recover. Therefore, we recognized impairment charges of $141.5 million in the Interconnect Technologies and Construction Materials segments.

third quarter of 2016. Refer to Critical Accounting Estimates in this MD&A for further discussion.

Other Operating (Income) Expense, Net

(in millions)
 2015 2014  2017 2016 2015

Other (income) expense, net

 $0.1 $(1.6)
Other operating (income) expense, net $(2.0) $(2.4) $(1.3)

2017 Compared with 2016
The changedecrease in Other (income) expense, net from 2014 toother operating income primarily reflected gains on sales of property, plant and equipment in 2016, that did not recur in 2017.
2016 Compared with 2015
The increase in other operating income primarily reflected gains on sales of property, plant and equipment in 2016, compared with 2015.

Operating Income
(in millions) 2017 2016 Change 2016 2015 Change
Operating income $505.7
 $438.1
 15.4% $438.1
 $503.3
 (13.0)%
Operating margin percentage 12.4% 11.9%   11.9% 14.2%  
2017 Compared with 2016
The increase in operating income and operating margin primarily reflected the non-recurrence of gains$141.5 million of goodwill and other intangible assets impairment charges taken at our CBF segment in 2014 consisting of final settlement proceeds of $0.9 million at Interconnect Technologies, related to the Thermax acquisition, and a $1.1 million gain at FoodService Products on the sale of its property2016, higher net sales volumes in the Netherlands.

EBIT (Earnings Before InterestCCM and Taxes)

CBF segments, savings from COS and acquired earnings from San Jamar in the CFS segment. This increase was partially offset by rising raw material costs in the CCM segment, lower sales and operating margin at
(in millions)
 2015 2014 Change 

EBIT

 $501.9 $408.3  22.9%

EBIT Margin

  14.2% 12.7%   

CIT, approximately $36.5 million of facility rationalization and exit and disposal costs and $11.5 million of acquired inventory costs.

2016 Compared with 2015
The growthdecrease in EBIToperating income and operating income margin primarily reflected the goodwill and other intangible asset impairment charges of 23% in 2015 versus the prior year was primarily attributable to the aforementioned$141.5 million recognized at our CBF segment as well as exit and disposal costs of $15.5 million recognized at our CIT and CFT segments and Corporate. Partially offsetting these reductions were higher sales volume at CCM and CIT, lower raw material costs, primarily at Construction Materials, lower per unit cost resulting from higher capacity utilization, lower labor and material usage costs resulting from COS and the Carlisle Operating System, and contribution from acquisitions.

non-recurrence of certain costs that occurred in 2015, including acquisition related costs in the CFT segment of $9.3 million.


Interest Expense, Net

(in millions)
 2015 2014 Change  2017 2016 Change 2016 2015 Change

Interest expense

 $34.7 $33.7    $34.0
 $31.9
   $31.9
 $34.7
  

Interest income

 (0.7) (1.5)    (0.5) (1.3)   (1.3) (0.7)  
​​ ​ ​​ ​ ​​​

Interest expense, net

 $34.0 $32.2 5.6% $33.5
 $30.6
 9.5% $30.6
 $34.0
 (10.0)%
​​ ​ ​​ ​ ​​​
​​​​​​​
​​​ ​​ ​ ​​​

2017 Compared with 2016
The increase in net Interestinterest expense, net in 2015 versus the prior year primarily reflected interest on the combined $1.0 billion of Notes, $600 million and $400 million with stated interest rates of 3.75% and 3.5%, respectively, issued in November 2017 and interest on borrowings under our Revolving Credit Facility (the “Facility”) during the year, partially offset by the August 2016 retirement of our $150.0 million senior unsecured note that had a stated interest rate of 6.125% (refer to Note 12 for further discussion).
2016 Compared with 2015
The decrease in interest expense, net primarily reflected the August 2016 retirement of our $150.0 million senior unsecured note that had a stated interest rate of 6.125% (refer to Note 12 for further discussion).

Other Non-operating (Income) Expense, Net
(in millions) 2017 2016 2015
Other non-operating (income) expense, net $4.0
 $(3.0) $1.4
Items affecting comparability (1)
 $4.2
 $(0.5) $—
(1)
Items affecting comparability include income tax related indemnification losses and (gains) losses on divestitures, refer to Items Affecting Comparability.

2017 Compared with 2016
The increase in other non-operating expense primarily reflected the net impact of the expiration of income tax related indemnification assets, totaling $4.6 million (refer to Note 3 for further discussion), and a divestiture of a business in the CIT segment.
2016 Compared with 2015
The increase in other non-operating income primarily reflected strengthening of the U.S. Dollar and related changes in foreign exchange gains as compared with 2015, and the gain on sale of CFT Scotland in 2016.


Income Taxes
(in millions) 2017 2016 Change 2016 2015 Change
Provision for income taxes $102.9
 $159.7
 (35.6)% $159.7
 $148.3
 7.7%
Effective tax rate 22.0% 38.9%   38.9% 31.7%  
2017 Compared with 2016
On December 22, 2017, the U.S. enacted comprehensive tax legislation commonly referred to as the Tax Act. The Tax Act included significant changes to existing tax law including, among other things, a reduction to the U.S. federal corporate income tax rate from 35% to 21% and a one-time tax on deferred foreign income ("Transition Tax"). 
For 2017, our results include the estimated impact of the Tax Act resulting in interest capitalized into property, planta provisional tax benefit of $57.7 million. This benefit is comprised of a charge of $32.5 million related to the Transition Tax and equipmenta benefit of $90.2 million from the rate reduction impacting the Company's U.S. deferred tax balances. Additionally, the effective income tax rate was impacted by a charge of $5.1 million related to a change in 2015 versus 2014, due to lower capital projectsassertion associated with the reinvestment of foreign earnings which resulted in 2015, and lower interest income as a result of lower cash on hand in 2015 versus 2014. During 2015, the Company used $598.9 million of its cash on hand to acquire Finishing Brands. The Company's cash balance declined from $730.8 million as of December 31, 2014, to $410.7 million as of December 31, 2015.

Income Taxes

(in millions)
 2015 2014 Change 

Income tax expense

 $148.3 $124.4  19.2%

Effective tax rate

  31.7% 33.1%   

        The 2015an effective income tax rate of 31.7%22%. We expect a positive impact from tax reform in 2018, with an effective tax rate of approximately 25-27%, principally due to the reduction in the U.S. federal corporate tax rate.


Refer to Note 6 in additional information related to income taxes.
2016 Compared with 2015
The 2016 effective income tax rate of 38.9% differs from the statutoryU.S. Federal tax rate of 35% primarily due to the impairment of goodwill, reduced by foreign earnings taxed at rates lower than the U.S. federal tax rate,rates, the deduction for U.S. manufacturing activities, US Federal foreign tax credits, and the recognition of certain state tax attributes. The recognition of the stateUS Federal foreign tax attributes, which is the primary driver of the decreasecredits arose in the year over yearfourth quarter of 2016 resulting from a non-cash distribution of capital from a foreign subsidiary generating a net tax rate, occurred asbenefit of approximately $9 million. At the end of 2016, there were approximately $6.6 million of Federal foreign tax credit carryovers, which have an expiration date of 2026.

Segment Results of Operations
Carlisle Construction Materials (“CCM”)

On November 1, 2017, we acquired Accella, a resultspecialty polyurethane platform, for estimated consideration of $670.7 million. Accella offers a change in judgment duewide range of polyurethane products and solutions across a broad diversity of markets and applications. Accella provides an excellent adjacent opportunity into the attractive polyurethane market, which includes Spray Polyurethane Foam and Liquid Applied Roofing. On July 3, 2017, we acquired Drexel Metals for estimated consideration of $55.8 million. Drexel Metals is a leading provider of architectural standing seam metal roofing systems for commercial, institutional and residential applications. On January 31, 2017, we acquired Arbo for consideration of $11.5 million. Arbo is a leading provider of sealants, coatings and membrane systems used for waterproofing and sealing buildings and other structures. Refer to new factsNote 3 for further information regarding the expected deferred tax asset realization from state tax loss and credit carryforwards for which the Company previously held a valuation allowance. We estimate our effective tax rate foracquisitions.

2017 Compared with 2016 will be approximately 33%.


Income from Continuing Operations

(in millions)
 2015 2014 Change 

Income from continuing operations

 $319.6 $251.7  27.0%

EPS

  
 		  
 		  
 		 

Basic

 $4.89 $3.89    

Diluted

  4.82  3.83    
(in millions) 2017 2016 Change 
Acquisition
Effect
 Price / Volume Effect 
Exchange
Rate Effect
Net sales $2,336.2
 $2,052.6
 13.8 % 5.1% 8.6% 0.1%
Operating income $421.9
 $430.3
 (2.0)%      
Operating margin 18.1% 21.0%        
Depreciation and amortization $41.9
 $35.6
        
Items affecting comparability (1)
 $9.5
 $—
        

        Income from continuing operations increased 27% in 2015 versus the prior year primarily due to higher EBIT as well as a lower effective tax rate in 2015 versus 2014.

Income (Loss) from Discontinued Operations

(1)
Items affecting comparability include acquisition related costs ($9.5 million in 2017), refer to Items Affecting Comparability.


(in millions)
 2015 2014 

Income (loss) from discontinued operations

 $0.1 $(2.1)

Tax benefit

  —  (1.7)
​​​ ​ ​​ ​ ​

 $0.1 $(0.4)
​​​ ​ ​​ ​ ​
​​​​​​​​
​​​ ​ ​​ ​ ​

EPS

       

Basic

 $— $— 

Diluted

  —  (0.01)

        Loss from discontinued operations for the year ended December 31, 2014 primarily reflected a net after-tax loss on the sale of the Transportation Products business arising from the final working capital adjustment.

Net Income

(in millions)
 2015 2014 Change 

Net income

 $319.7 $251.3  27.2%

EPS

  
 		  
 		  
 		 

Basic

 $4.89 $3.89    

Diluted

  4.82  3.82    

        The increase in net income during the year ended December 31, 2015 versus the prior year was primarily attributable to higher income from continuing operations.

2014 Compared to 2013

Net Sales

(in millions)
 2014 2013 Change Acquisition
Effect		 Volume
Effect		 Price
Effect		 Exchange
Rate Effect		 

Net Sales

 $3,204.0 $2,943.0  8.9% 0.9% 9.1% (1.2)% 0.1%

        Net sales in 2014 grew 8.9% over the prior year primarily reflecting organicCCM’s net sales growth of 7.9% and acquisition growth of 0.9%. Organic net sales growth of 7.9% in 2014 reflected 9.1% higher net sales volume, partially offset by 1.2% lower selling price from Construction Materials and Interconnect Technologies. Overall organic net sales growth in 2014 was driven by 11% organic sales growth at Interconnect Technologies on strong aerospace demand and 8.9% net sales growth at Construction Materials driven by growth in commercial construction and commercial re-roofing. Brake & Friction and Foodservice Products both achieved modest increases in net sales volume in


2014. The acquisition of LHi on October 1, 2014 reported in the Interconnect Technologies segment contributed $26.1 million to total net sales in 2014. Refer to the discussion below on "Acquisitions".

Net Sales by Geographic Area

Country
(in millions)
 2014 2013 
United States $2,441.7  76%$2,260.8  77%
International:             

Europe

  357.4     330.4    

Asia

  136.0     126.3    

Canada

  117.1     90.1    

Mexico and Latin America

  82.0     69.7    

Middle East and Africa

  48.7     47.4    

Other

  21.1     18.3    
​​​ ​ ​​​​​ ​ ​​​​

Total International

  762.3  24% 682.2  23%
​​​ ​ ​​​​​ ​ ​​​​
Net sales $3,204.0    $2,943.0    
​​​ ​ ​​​​​ ​ ​​​​
​​​​​​​​​​​​​​
​​​ ​ ​​​​​ ​ ​​​​

        Total net sales to customers located outside the United States increased from $682.2 million in 2013, or 23.2% of net sales, to $762.3 million in 2014, or 23.8% of net sales. The 12% increase in net sales from outside the United States from 2013 to 2014 primarily reflected higher net sales by Construction Materials into Canada, Europe and Asia and by Interconnect Technologies into Asia, Europe and Mexico.

Gross Margin

(in millions)
 2014 2013 Change 

Gross profit

 $819.5 $745.6  9.9%

Gross margin

  25.6% 25.3%   

        Gross marginvolume associated with strong demand in 2014 increased 30 basis points due to lower per unit costs related to higher capacity utilization driven by higher sales volume and lower labor and material usage costs from the Carlisle Operating System. These positive impacts werefavorable U.S. non-residential roofing markets, partially offset by lower selling price at Construction Materials, Interconnect Technologies and Brake & Friction, and higher costs at Construction Materials for plant startup, product line closing, freight expense and product warranty. Included in gross profit and gross margin in 2014 was $9.0 million in plant startup and product line closing costs at Construction Materials related to startup of its PVC manufacturing operations and new TPO manufacturing facility and $0.9 million in expense to discontinue production of its Insulfoam product line at its Smithfield, PA facility. These expenses in 2014 compared to $7.3 million in plant startup costs at Construction Materials in the same prior year period. Also included in gross profit and gross margin in 2014 were $0.8 million in restructuring costs related to the closure of our Akron plant in the Brake & Friction segment, as compared to restructuring costs of $0.9 million in the prior year.

        During 2014, we incurred $1.6 million in additional cost of goods sold from the acquisition of LHi reported in the Interconnect Technologies segment resulting from the fair valuation of acquired inventory. By comparison, during 2013, we incurred $1.1 million in additional cost of goods sold from the acquisition of Thermax reported in the Interconnect Technologies segment.


Selling and Administrative Expenses

(in millions)
 2014 2013 Change 

Selling & Administrative

 $379.0 $353.7  7.2%

As a percentage of net sales

  11.8% 12.0%   

        Selling and administrative expenses increased 7.2% versus the prior year primarily reflecting higher selling and commission costs tied to higher sales, higher acquisition costs, increased performance based incentive compensation expense and investments in information security. Included in selling and administrative expenses in 2014 was $3.5 million of expenses from the LHi operations acquired in the Interconnect Technologies segment. During 2014, Interconnect Technologies incurred $1.9 million in transaction expenses connected to the acquisition of LHi.

Research and Development Expenses

(in millions)
 2014 2013 Change 

Research and Development

 $33.8 $29.3  15.3%

As a percentage of net sales

  1.1% 1.0%   

        The increase in Research and development expenses during 2014 reflected increased product development costs primarily in the Brake & Friction segment.

Other (Income) Expense, Net

(in millions)
 2014 2013 

Other (income) expense, net

 $(1.6)$(4.2)

        Other income in 2014 primarily reflected a $1.1 million gain on the sale of property in the Foodservice Products segment for sale of its property in the Netherlands, a $0.4 million gain in the Brake & Friction segment on the sale of its plant in Akron, OH, and a $0.9 million gain from final settlement of the Thermax acquisition by Interconnect Technologies recognized in the first quarter of 2014. These gains were partially offset by losses on the disposal of fixed assets and foreign exchange losses.

        Other income in 2013 primarily reflected fair value adjustments related to commodity swap agreements in the Interconnect Technologies segment and contingent consideration for the PDT acquisition in the Construction Materials segment as well as a gain on the sale of property in the Construction Materials and Foodservice Products segments. During the third quarter of 2013, the Construction Materials recorded a $1.3 million gain related to the settlement of contingent consideration related to its 2011 acquisition of PDT based upon an earn-out settlement agreement with the former owners, which was paid in the fourth quarter of 2013. In addition, during the third quarter of 2013, Foodservices Products sold its distribution facility in Reno, NV and recognized a pre-tax gain of $1.0 million on the sale. During the third and fourth quarter of 2013, Construction Materials sold property and fixed assets in Kingston, NY and Kent, WA and recognized a gain of $1.0 million on the sale.

EBIT (Earnings Before Interest and Taxes)

(in millions)
 2014 2013 Change 

EBIT

 $408.3 $366.8  11.3%

EBIT Margin

  
12.7
%		 
12.5
%		   

        EBIT grew 11% in 2014 reflecting lower per unit costs from higher capacity utilization driven by sales volume and lower labor and material usage from the Carlisle Operating System, partially offset by lower selling price, the aforementioned higher operating costs at Construction Materials and higher costs in 2014 related to acquisitions and employee severance in 2014 versus 2013.

Interest Expense

(in millions)
 2014 2013 Change 

Interest expense

 $33.7 $34.3    

Interest income

  (1.5) (0.5)   
​​​ ​ ​​ ​ ​​​​

Interest Expense, net

 $32.2 $33.8  (4.7)%
​​​ ​ ​​ ​ ​​​​
​​​​​​​​​​​
​​​​ ​​ ​ ​​​​

        The reduction in net interest expense in 2014 versus the prior year primarily reflected an increase in capitalized interest and increased interest income for higher average cash on hand in 2014 versus 2013.

Income Taxes

(in millions)
 2014 2013 Change 

Income tax expense

 $124.4 $97.8  27.2%

Effective tax rate

  33.1% 29.4%   

        The 29.4% effective rate for 2013 reflected a tax benefit of $11.8 million related to a tax election made in a foreign jurisdiction that resulted in the release of deferred tax liabilities.

Income from Continuing Operations

(in millions)
 2014 2013 Change 

Income from continuing operations, net of tax

 $251.7 $235.2  7.0%

EPS

  
 		  
 		  
 		 

Basic

 $3.89 $3.69    

Diluted

  3.83  3.61    

        Income from continuing operations increased 7.0% in 2014 versus the prior year primarily due to higher EBIT and lower net interest expense, partially offset by a higher effective tax rate in 2014 versus 2013.

Loss from Discontinued Operations

(in millions)
 2014 2013 

Loss from discontinued operations

 $(2.1)$(60.5)

Tax benefit

  (1.7) (35.0)
​​​ ​ ​​ ​​

 $(0.4)$(25.5)
​​​ ​ ​​ ​​
​​​​​​​​
​​​ ​ ​​ ​ ​

EPS

       

Basic

 $— $(0.40)

Diluted

  (0.01) (0.39)

        Loss from discontinued operations for the year ended December 31, 2014 primarily reflected a net after-tax loss on the sale of the Transportation Products business arising from the final working capital adjustment.


        Loss from Discontinued Operations for the year ended December 31, 2013 primarily reflected the results of the Transportation Products business, which was sold on December 31, 2013 to American Industrial Partners ("AIP"). During 2013, the Transportation Products business had net sales of $767.9 million. Included in loss from discontinued operations during 2013 was a pre-tax goodwill impairment charge of $100.0 million due to a decline in the reporting unit's estimated fair value relative to its carrying value. In addition, the Company recorded a pre-tax loss of $12.3 million on the sale of the Transportation Products business, which included charges of $8.4 million for curtailment and settlement charges related to the transfer of all former Transportation Products business employees and certain of the pension and other post employment obligations to AIP as part of the sale. The after-tax loss from discontinued operations for the full year 2013 reflected the aforementioned losses from operations due to the goodwill impairment charge, offset by operating earnings of the Transportation Products business and a net after-tax gain on the sale of the Transportation Products business of $6.2 million.

Net Income

(in millions)
 2014 2013 Change 

Net income

 $251.3 $209.7  19.8%

EPS

  
 		  
 		  
 		 

Basic

 $3.89 $3.29    

Diluted

  3.82  3.22    

        The increase in Net income during 2014 versus the prior year primarily reflected the increase in Income from Continuing Operations in 2014 versus 2013 and decrease in Loss from Discontinued Operations in 2014 versus 2013.

Acquisitions and Disposals

        The Company funded the aforementioned acquisition of Finishing Brands on April 1, 2015 with cash on hand. The preliminary amount of goodwill recorded related to the acquisition is $175.2 million as of December 31, 2015, reported in the Fluid Technologies segment.

        The goodwill recognized in the acquisition of Finishing Brands is attributable to the experienced workforce of Finishing Brands, the expected operational improvements through implementation of COS, opportunities for geographic and product line expansions in addition to supply chain efficiencies, and the significant strategic value of the business to Carlisle.

        On October 1, 2014, the Company completed the acquisition of LHi for $194.0 million, utilizing cash on hand. LHi's manufacturing operations are located in Shenzhen, China. LHi provides world-class medical device manufacturers with interconnect components used for patient monitoring, electrosurgery, diagnostic imaging and surgical instrumentation. Results of LHi's operations are reported within the Interconnect Technologies segment. The acquisition of LHi complements Interconnect Technologies' existing medical cabling product offerings, adds global presence, and provides further end market diversification within the Interconnect Technologies segment. The final amount of goodwill recorded related to the acquisition of LHi was $112.8 million.


Financial Reporting Segments

Carlisle Construction Materials ("CCM" or the "Construction Materials segment")

(in millions)
 2015 2014 Change $ Change % 2014 2013 Change $ Change % 

Net sales

 $2,002.6 $1,935.4 $67.2  3.5%$1,935.4 $1,776.5 $158.9  8.9%

EBIT

 $351.1 $268.8 $82.3  30.6%$268.8 $264.0 $4.8  1.8%

EBIT Margin

  17.5% 13.9%       13.9% 14.9%      

2015 Compared to 2014

        CCM's 3.5%price. CCM’s net sales growth in 2015 primarilyalso reflected higher sales volumesthe contribution of 6.5%, partially offset by a 2.0% negative impact from foreign exchange fluctuations primarily$104.8 million from the stronger U.S. dollar versus the Euroacquisitions of Accella, Drexel Metals and the Canadian dollar,Arbo in 2017.


CCM’s operating income and 1.0% lower selling prices. CCM's net sales volume growthoperating margin decrease was primarily driven by increased activity in both commercial constructionrising raw material costs, lower selling prices and re-roofing. CCM's net sales into Europe declined 13%,$7.7 million of which 16% related to the negative impact of foreign exchange,acquired inventory costs, partially offset by 3% organichigher net sales growth. CCM's net sales into Canada, declined 9%, of which 13% related to the negative impact of foreign exchange, partially offset by 4% organic net sales growth.

        CCM's EBIT grew 31%volume and EBIT margins expanded 360 basis points to 17.5% in 2015 due primarily to lower raw material costs, with additional contributionsavings from lower per unit cost from higher capacity utilization, lower labor and material usage costs from COS, and the non-recurrence of $9.0 million in startup expense in 2014 at its new PVC and TPO production facilities. CCM's raw material costs were lower in 2015 versus 2014 primarily due to lower input costs driven by the decline in crude oil and other energy commodity pricing. These positive impacts were partially offset by unfavorable changes in mix, lower selling price, and the negative impact of foreign exchange fluctuations related to the U.S. Dollar versus the Canadian Dollar and versus the Euro.

        CCM'soperating efficiencies through COS.  


Outlook
CCM’s net sales and EBIToperating income are generally higher in the second and third quarters of the year due to increased construction activity during these periods. CCM'sCCM’s commercial roofing business is comprised of approximately 70%predominantly of net sales from re-roofing, which derives demand from a large base of installed roofs requiring replacement in a given year, and 30%less extensively from roofing for new commercial construction.

        Growth in demand Demand for CCM's commercial roofing applicationsinsulation products is also driven in part by growth in commercial construction in the United States and increased enforcement of building codes related to energy efficiency driving demand for commercial insulation products. Conditions for the commercial construction market remain favorable due to lower energy prices and increasing availability of credit. The commercial roofing outlook in Europe is expected to remain relatively flat.efficiency. Growth in demand in the commercial construction market canmay be negatively impacted by changes in fiscal policy and increases in interest rates. The availability of labor to fulfill installations may also be a near term constraint on growth in the commercial roofing market. A reduction

The outlook for commercial construction in the economic outlook for the U.S. tiedremains positive. In 2018, we expect CCM to slowing conditionsachieve mid-single digit organic net sales growth. Contributions from acquisitions will result in overseas markets could also negatively impact growtha mid-teens segment sales increase. We expect CCM to continue operating with price discipline in the commercial construction market.

        CCM'stheir markets.

CCM’s ability to maintain current selling price and volume levels is subject to significant competition, in particular from competitors that have recently added manufacturing capacity of commercial roofing and commercial insulation products and as a result of lower raw material costs.products. Raw material input costs are expected to declineincrease moderately from current levels due to lower crude oil and related commodity pricing, howeverpricing. Also, selling price pressure may negatively impact CCM'sCCM’s ability to maintain current EBIToperating income margin levels or obtain incremental EBIT margin from lower raw material costs.

operating margin.


2014

2016Compared to 2013

        CCM'swith2015

(in millions) 2016 2015 Change 
Acquisition
Effect
 
Price / Volume
Effect
 
Exchange
Rate Effect
Net sales $2,052.6
 $2,002.6
 2.5% —% 2.6% (0.1)%
Operating income $430.3
 $351.1
 22.6%      
Operating margin 21.0% 17.5%        
Depreciation and amortization $35.6
 $37.3
        

CCM’s net sales growth of 8.9%reflected strong demand in 2014 versus 2013 reflected higher sales volume,the U.S. for commercial roofing and insulation applications, partially offset by lower selling price. CCM'sprice and lower international demand. CCM’s net sales growth primarily reflected higher sales volumes of 5.1%, partially offset by 2.2% negative pricing impact. International sales decreased primarily due to sales volume growthreductions in 2014 was primarily driven by increased demand from growth inCanada as compared with the new commercial construction and re-roofing markets. For the full year 2014, CCM's net sales of its commercial roofing membrane and commercial polyiso insulation applications overall grew by 10%. With respect to international sales, CCM's net sales outside of the U.S. grew 17% during 2014 primarily reflecting increasedprior year. CCM’s net sales into Canada wheredeclined approximately 40%, due to weakened new construction activity as compared with prior year.
CCM’s operating income and operating margin growth was due primarily to favorable raw material costs, higher net sales grew by 33%. CCM's net sales into Europe grew by 12% for the full year, reflecting strong double digit organic sales growthand savings from operating efficiencies through COS. CCM’s raw material costs were lower in the first half of 2014 followed by slightly lower sales growth in the second half of 2014 due to weakening economic conditions in Europe and weakening of the Euro2016 versus the U.S. dollar.

        CCM's EBIT margin declined 100 basis points versus the prior year2015 primarily due to lower selling price, higher plant startupinput costs driven by the decline in crude oil and product line closing costs versus the prior year and higher freight costs.other energy commodity pricing. These negativepositive impacts were partially offset by lower per unit costs resulting from higher capacity utilization, and reductionunfavorable changes in material usage and labor costs driven by the Carlisle Operating System. During 2014, CCM incurred product line closing costs of $0.9 million related to discontinuing production of its Insulfoam product line at its Smithfield, PA, facility. In addition, CCM incurred $9.0 million of plant startup expense at its new PVC facility and new TPO manufacturing facility in 2014. By comparison, CCM incurred $7.3 million of plant startup expense in 2013. Included in CCM's EBIT in 2013 were gains that did not recur in 2014 consisting of a $1.3 million gain related to the settlement of contingent consideration related to its 2011 acquisition of PDT, a net pre-tax gain of $1.0 million on the sale of property and fixed assets in Kingston, NY, and Kent, WA, and a gain of $1.9 million on the sale of solar roofing inventory that had previously been determined to be obsolete.

selling price.

Carlisle Interconnect Technologies ("CIT" or(“CIT”)

We have initiated plans to relocate certain of our medical manufacturing operations in Shenzhen, China to a new manufacturing operation in Dongguan, China. We have also initiated and substantially completed plans to relocate certain of our aerospace manufacturing operations in Littleborough, United Kingdom to an existing manufacturing operation. As a result of these efforts, focused on improving operational efficiencies throughout the "Interconnect Technologies segment")

business, we anticipate continuing costs related to plant restructuring and facility rationalization throughout 2018. We expect to generate savings beginning in 2018 from these operational efficiency improvement efforts. Refer to Note 4 for further information regarding exit and disposal activities.



2017 Compared with 2016
(in millions)
 2015 2014 Change $ Change % 2014 2013 Change $ Change %  2017 2016 Change 
Acquisition
Effect
 
Price / Volume
Effect
 
Exchange
Rate Effect

Net sales

 $784.6 $669.1 $115.5 17.3%$669.1 $577.7 $91.4 15.8% $815.3
 $834.6
 (2.3)% 5.4% (7.6)% (0.1)%

EBIT

 $141.6 $132.2 $9.4 7.1%$132.2 $89.4 $42.8 47.9%

EBIT Margin

 18.0% 19.8%     19.8% 15.5%     
Operating income $89.5
 $143.9
 (37.8)%      
Operating margin 11.0% 17.2%        
Depreciation and amortization $55.8
 $48.8
        
Items affecting comparability (1)
 $18.0
 $14.9
        

2015 Compared to 2014

        CIT's
(1)
Items affecting comparability include exit and disposal and facility rationalization costs ($18.0 million in 2017 and $11.3 million in 2016) and acquisition related costs ($3.6 million in 2016), refer to Items Affecting Comparability.


CIT’s net sales growth of 17% in 2015decrease primarily reflected acquisition growth of 11.8%, fromorganic net sales decline due to softness experienced in the acquisition of the LHi medical cabling business, and higher sales volumes of 8.5%, primarily on higher demand for its in-flightaerospace in‑flight entertainment and connectivity (IFEC) applications sold(“IFEC”) markets, and lower volumes driven by in-sourcing initiatives by a large commercial aerospace customer, partially offset by growth in our SatCom product line and the acquisitions of Micro-Coax and Star Aviation.
CIT’s operating income and operating margin decline was primarily related to unfavorable mix and the sales volume decline. The operating income decline also included plant restructuring and facility rationalization costs related to efforts focused on improving operational efficiencies throughout the business totaling $18.0 million in 2017, compared with $11.3 million in 2016, partially offset by savings from COS.
Outlook
Net sales into the commercial aerospace markets and slightly higher volumes on higher demand for connectivity applications sold into the defense and test and measurement markets. The increase inmarket comprised approximately 62% of CIT's total net sales, including net sales from acquisitions and higher sales volumes were partially offset by 2.8% lower selling price.

        CIT's EBIT increased 7.1% in 2015 on higher net sales volume, lower labor and material usage costs from COS, and $7.8 million in EBIT contribution from the acquisition of LHi, partially offset by lower contractual selling price. CIT's EBIT margin declined 180 basis points versus the prior year primarily due to selling price reductions and the dilutive impact of the LHi acquisition on margin. These negative impacts were partially offset by lower per unit costs resulting from higher capacity utilization, lower labor and material usage costs from COS and lower raw material costs. Included in CIT's EBIT in 2014 was $3.5 million in costs related to the acquisition of LHi, including higher cost of goods sold related to recording acquired inventory at estimated fair value as of the acquisition date. Partially offsetting these costs in 2014 was a gain of $0.9 million recognized upon the final settlement of the acquisition of Thermax from Belden.

        During 2014, CIT began construction on a new 216,000 sq. ft. manufacturing facility in Nogales, Mexico, to meet growing demand for its aerospace applications and to support growth in its medical


applications. The total cost of CIT's new facility was $23.4 million. Shipments began in the first quarter 2015 and the project was completed in the second quarter of 2015. In the third quarter of 2015, CIT announced a $13 million project to expand its production facilities in Dongguan, China into a new 260,000 sq. ft. facility to meet expected demand in both the medical technology and aerospace markets. This project is expected to be completed in 2017. CIT expects to incur startup costs of approximately $1.5 million in 2016 on this project and another $1.5 million in startup costs in 2017. Also in the fourth quarter 2015, CIT announced a $13 million project to expand its existing aerospace facility in Franklin, WI to increase manufacturing capacity by 30,000 sq. ft. to meet expected demand for its recently launched SatCom antenna adaptor plate used as part of satellite-based IFEC applications. The Franklin, WI expansion is expected to be completed in 2016. CIT expects to incur startup costs of approximately $3.0 million related to this project, primarily in the first half of 2016.

Star Aviation. The longer term outlook in the commercial aerospace market remains favorable with a strong delivery cycle for new commercial aircraft expected over the next several years. The outlook for the market for IFEC applications also remains positive on increasing demand for on board connectivity applications used in both installed aircraft seating and through personal mobile devices using wireless connectivity (Wi-Fi)(Wi‑Fi) access. One of CIT's customers, for which it supplies IFEC interconnect components, comprises approximately 22% of CIT's net sales. CIT has connectivity applications for use with grounded Wi-Fi providers, and, with its newly developed SatCom antenna adaptor plate product, for use by satellite Wi-Fi providers. Satellite based connectivity has higher bandwidth and can be accessed in flight over water.

        As a result of the LHi acquisition, combined with CIT's base medical business, net


Net sales into the medical market comprise approximately 15%16% of CIT'sCIT’s total net sales. CIT is actively pursuing new products, customers and complementary technologies to support its expansion into the growing healthcare technology market. The medical technology markets in which CIT competes isare experiencing vendor consolidation trends among larger medical OEM's,OEM’s, to whom CIT offers improved product verification capabilities and value-addedvalue‑added vertical integration through its multiple product offerings.

2014 Compared

In 2018, we expect CIT to 2013

        CIT's 16%achieve mid-single digit net sales growth, in 2014 primarily reflected organic saleswith growth of 11%driven by IFEC, medical and test and measurement products.

2016 Compared with 2015
(in millions) 2016 2015 Change 
Acquisition
Effect
 
Price / Volume
Effect
 
Exchange
Rate Effect
Net sales $834.6
 $784.6
 6.4% 3.4% 3.2% (0.3)%
Operating income $143.9
 $143.0
 0.6%      
Operating margin 17.2% 18.2%        
Depreciation and amortization $48.8
 $44.3
        
Items affecting comparability (1)
 $14.9
 $0.3
        
(1)
Items affecting comparability include exit and disposal and facility rationalization costs ($11.3 million in 2016) and acquisition related costs ($3.6 million in 2016 and $0.3 million in 2015), refer to Items Affecting Comparability.

CIT’s net sales from acquisitions of 4.5%. CIT's 11% organic sales growth primarily reflected higher sales volume driven by strongof 4.3%, largely related to the aerospace demand slightlyand medical technology applications, and acquisition growth of 3.4% from the acquisitions of Micro-Coax and Star Aviation. These increases were partially offset by lower selling priceprices of 1.1%. Net sales in CIT’s aerospace and medical markets increased by 4.3% and 7.5%, respectively, due to higher demand. These increases were partially offset by a decline in sales in the defense, industrial and test and measurement markets.

CIT’s operating income increased primarily due to savings from contractual price reductions thatCOS and higher net sales volume led by IFEC demand, partially offset by lower selling price. CIT’s operating margin decrease was partially attributable to the aforementioned employee termination benefits expense of $7.6 million as well as $3.7 million in plant startup costs for the new facility in Dongguan, China, to expand manufacturing capacity. Also included in CIT’s operating income was $3.5 million in expense related to the acquisitions of Micro-Coax and Star Aviation, primarily related to additional costs associated with the fair valuation of inventory.
In the fourth quarter 2015, CIT announced a project to expand its existing aerospace facility in Franklin, Wisconsin to increase manufacturing capacity by 30,000 sq. ft. to meet demand for its SatCom antenna adaptor plate used as part of satellite‑based IFEC applications. In 2016, CIT incurred costs of approximately $3.1 million related to this project.

Carlisle FoodService Products (“CFS”)

On February 1, 2018, we announced the signing of a definitive agreement to sell CFS to The Jordan Company for $750 million in cash, subject to certain adjustments. The transaction is subject to customary closing conditions, including regulatory clearances, and is expected to close in the first quarter of 2018.

On January 9, 2017, we acquired San Jamar for total consideration of $217.2 million. With the addition of San Jamar, CFS is now a leading provider of universal dispensing systems and food safety products for foodservice and hygiene applications.

2017 Compared with 2016
(in millions) 2017 2016 Change 
Acquisition
Effect
 
Price / Volume
Effect
 
Exchange
Rate Effect
Net sales $339.1
 $250.2
 35.5% 34.5% 1.0% —%
Operating income $39.5
 $31.5
 25.4%      
Operating margin 11.6% 12.6%        
Depreciation and amortization $22.8
 $9.1
        
Items affecting comparability (1)
 $4.1
 $1.3
        
(1)
Items affecting comparability and include acquisition related costs ($4.1 million in 2017 and $1.3 million in 2016), refer to Items Affecting Comparability.
CFS’s net sales growth primarily reflected contribution of $86.3 million from the acquisition of San Jamar and higher demand in the healthcare market. 

CFS’s operating income increase primarily reflected the San Jamar acquisition, which contributed $5.9 million to operating income, higher selling prices, and savings from COS. CFS's operating margin decrease in 2017 primarily reflected lower operating margins of San Jamar including acquired inventory costs of $3.8 million.
2016 Compared with 2015
(in millions) 2016 2015 Change 
Acquisition
Effect
 
Price / Volume
Effect
 
Exchange
Rate Effect
Net sales $250.2
 $242.6
 3.1% —% 3.1% —%
Operating income $31.5
 $27.3
 15.4%      
Operating margin 12.6% 11.3%        
Depreciation and amortization $9.1
 $9.7
        
Items affecting comparability (1)
 $1.3
 $—
        
(1)
Items affecting comparability include acquisition related costs ($1.3 million in 2016), refer to Items Affecting Comparability.

CFS’s net sales growth primarily reflected higher demand in the foodservice products market. Net sales to the foodservice market increased by 5.7%, due to increased sales to larger accounts and national chains and improvements from new sales initiatives. Net sales to the janitorial/sanitation market increased by 2.7% due to higher demand for waste handling products. These increases were in part tied topartially offset by lower raw material commodity prices. CIT's net sales to the aerospace markethealthcare market.

CFS’s operating income and operating margin increase primarily reflected higher net sales volume, improved selling price, product engineering and lower labor costs from COS and lower raw material costs. Partially offsetting the

operating income and operating income margin increases is $1.3 million of acquisition costs related to the acquisition of San Jamar.

Carlisle Fluid Technologies (“CFT”)

Driven by focus on improving operational efficiencies throughout the business, we initiated facility consolidation efforts in 2014 were up 14%the third quarter of 2017. These plans involve exiting our manufacturing operations in Brazil and Mexico, exiting the systems sales business in Germany and relocating the manufacturing operations currently in Angola, Indiana to our existing Bournemouth, United Kingdom manufacturing operations. These actions are substantially complete, with total exit and disposal and facility rationalization costs incurred totaling $11.6 million related to these efforts, principally in 2017. Additionally, as previously announced, we have incurred $1.0 million costs related to the relocation of CFT's administrative functions and facilities within the U.S. Refer to Note 4 for further information regarding exit and disposal activities.

2017 Compared with 2016
(in millions) 2017 2016 Change 
Acquisition
Effect
 
Price / Volume
Effect
 
Exchange
Rate Effect
Net sales $281.4
 $269.4
 4.5 % 0.5% 5.4% (1.4)%
Operating income $16.1
 $31.2
 (48.4)%      
Operating margin 5.7% 11.6%        
Depreciation and amortization $23.0
 $20.7
        
Items affecting comparability (1)
 $12.6
 $4.2
        
(1)
Items affecting comparability include exit and disposal and facility rationalization costs ($12.6 million in 2017 and $4.1 million in 2016) and acquisition related costs ($0.1 million in 2016), refer to Items Affecting Comparability.

CFT’s net sales growth primarily onreflected higher demand for IFEC applicationsgeneral industrial products in the U.S. and Europe, increased sales volumes in Asia Pacific, primarily as a result of the timing of systems sales, favorable pricing initiatives, and contribution of sales from MS Powder. This growth is partially offset by unfavorable fluctuations in foreign exchange rates.

CFT’s operating income and operating margin decrease primarily reflected ongoing investments to position the business for future growth and margin improvement. Included in CFT's operating income for 2017 were restructuring and facility rationalization costs of $12.6 million, compared with $4.1 million in 2016.
Outlook
The longer term outlook in the Boeing 787 program. CITtransportation and general industrial markets remains steady with a stable backlog of systems and standard projects expected over the next year. We expect the opportunity for growth in the Asia-Pacific markets to continue to increase in conjunction with the expanding powder opportunities. In 2018, we expect CFT to achieve mid-single digit net sales into the testgrowth, with growth expected in general industrial and measurement market increased by 20% in 2014. CIT'sautomotive refinish markets.
2016 Compared with 2015
(in millions) 2016 2015 Change 
Acquisition
Effect
 
Price / Volume
Effect
 
Exchange
Rate Effect
Net sales $269.4
 $203.2
 32.6% 32.8% 1.0% (1.2)%
Operating income $31.2
 $20.9
 49.3%      
Operating margin 11.6% 10.3%        
Depreciation and amortization $20.7
 $15.0
        
Items affecting comparability (1)
 $4.2
 $9.3
        
(1)
Items affecting comparability include exit and disposal and facility rationalization costs ($4.1 million in 2016) and acquisition related costs ($0.1 million in 2016 and $9.3 million in 2015), refer to Items Affecting Comparability.

CFT’s net sales togrowth primarily reflected the military market were relatively level tocontribution from the priorfull year reflecting lower demandof Finishing Brands of $60.9 million in the first halfquarter of 20142016, as well as contribution from MS Powder during 2016 of $5.7 million. This growth is partially offset by sales volume growth in the second halfa negative impact related to foreign currency of 2014 from new program development. Partially offsetting this was a 7% decline in net sales1.2%.


During 2016, our CFT segment recognized costs primarily associated with employee termination benefits and relocation costs of $4.1 million related to the industrial market. Therelocation of administrative functions to Scottsdale, Arizona and closure of facilities in Swanton, Ohio and France.
CFT’s operating income and operating margin increase primarily reflected the non-recurrence of $9.3 million of acquisition of LHi on October 1, 2014 contributed $26.1 millionrelated costs incurred in net sales to CIT in 2014, all comprising sales to the medical market.

        CIT's EBIT margin increased significantly by 430 basis points in 2014 versus the prior year due to lower per unit costs resulting from higher capacity utilization driven by higher sales volume, and reduction in material usage and labor costs driven by the Carlisle Operating System. Included in CIT's EBIT was $1.9 million in transaction expenses for the acquisition of LHi and $1.6 million in cost of goods sold related to recording acquired inventory at estimated fair value2015, as of the acquisition date. Partially offsetting these costs in 2014 was a gain of $0.9 million recognized upon the final settlement of the acquisition of Thermax from Belden. By comparison, included in CIT's EBIT in 2013 was $1.1 million in acquisition costs primarily due to additional costs of goods sold resulting from recording the acquired Thermax inventory at estimated fair valuewell as, of the acquisition date.


Carlisle Fluid Technologies ("CFT")

(in millions)
 2015 2014 Change $ Change % 

Net sales

 $203.2 $— $203.2  —%

EBIT

 $20.8 $— $20.8  —%

EBIT Margin

  10.2% —%      

        On April 1, 2015, the Company completed the acquisition of the Finishing Brands business from Graco Inc. Beginningacquisition full year contribution to operating income of $6.4 million in the second quarter 2015, the Company added a reportable segment, CFT, to reflect the acquisition of Finishing Brands.

        Through the nine month period from April 1, 2015 through December 31, 2015, CFT's EBIT and EBIT margin includes acquisition related costs for Finishing Brands of $8.6 million additional costs of goods sold related to recording acquired inventory at fair value and $0.7 million allocated transaction costs. These acquisition related costs were incurred in the secondfirst quarter of 2015. CFT's EBIT2016. Included in 2015CFT’s operating income is also included amortizationthe aforementioned $4.1 million in restructuring expense of $13.2 million, or 6.5% of CFT's net sales, resulting from recording the acquired intangible assets at fair value.

        Approximately 20% to 25% of CFT's annual net sales are for the developmentconsolidation and assembly of large fluid handling or other application systems projects. Timing of these system sales can result in sales that are higher in certain quarters versus other quarters within the same calendar year. In addition, timing of system sales can cause significant year over year sales variances.

        In 2016, CFT is establishing global headquarters in Phoenix, Arizona to streamline administrative functions and coordinate its global strategy. CFT may experience additional costs related to integration and headquarter relocation activities. CFT intends to hire additional sales, marketing and administrative staff in 2016 to support its organizational and sales growth strategy.

        Approximately 60% of CFT's net sales are outside the United States, a significant amount of which represent net sales into Asia and Europe. CFT's ability to increase net sales could be impacted by slowing growth in Asia and challenging economic conditions in Europe. A significant portion of CFT's operating earnings are generated by its subsidiaries in the United Kingdom, Japan and China, operating in British pounds, Japanese Yen and Chinese Renminbi, respectively. The results of these subsidiaries' operations are translated and reported within our consolidated results in U.S. dollars. Consistent declines in the currencies for these countries versus the U.S. dollar could negatively impact CFT's U.S. dollar reported results for both net sales and EBIT. Overall, CFT's results are subject to foreign exchange fluctuations of the U.S. Dollar versus the British Pound, Japanese Yen, Chinese Renminbi, Euro, Mexican Peso, Brazilian Real and Australian Dollar.

Carlisle Brake & Friction ("CBF" or(“CBF”)

We have aggressively addressed CBF's challenging markets by realigning its cost structure. In conjunction with such, on February 9, 2017, we announced that we would exit our manufacturing operations in Tulsa, Oklahoma and relocate the "Brake & Friction segment")

majority of those operations to our existing manufacturing facility in Medina, Ohio. This action is expected to continue through mid-2018. Refer to Note 4 for further information.


As part of the relocation effort, we will also invest additional capital in our Medina, Ohio facility. The capital investment is anticipated to be approximately $16.0 million to $19.0 million to expand the facility and between approximately $15.0 million to $16.0 million to purchase new, more efficient equipment to replace equipment not being relocated.

During the third quarter of 2016, indicators pointed to a longer period before CBF’s markets were expected to recover. Given these conditions, we recognized goodwill and other intangible asset impairment charges of $141.5 million in 2016. Refer to Critical Accounting Estimates in this MD&A for further discussion.

2017 Compared with 2016
(in millions)
 2015 2014 Change
$		 Change
%		 2014 2013 Change
$		 Change
%		  2017 2016 Change 
Acquisition
Effect
 
Price / Volume
Effect
 
Exchange
Rate Effect

Net sales

 $310.2 $355.3 $(45.1) (12.7)%$355.3 $350.0 $5.3 1.5% $317.9
 $268.6
 18.4% —% 18.5% (0.1)%

EBIT

 $17.3 $26.8 $(9.5) (35.4)%$26.8 $33.5 $(6.7) (20.0)%

EBIT Margin

 5.6% 7.5%     7.5% 9.6%     
Impairment charges $—
 $141.5
        
Operating income $2.6
 $(135.9) 101.9%      
Operating margin 0.8% (50.6)%        
Depreciation and amortization $23.0
 $20.8
        
Items affecting comparability (1)
 $5.1
 $—
        

2015 Compared to 2014

        CBF's
(1)
Items affecting comparability include exit and disposal and facility rationalization costs ($5.1 million in 2017), refer to Items Affecting Comparability.


CBF’s net sales declined 13%growth reflected higher demand from the construction, mining and agriculture markets, partially offset by a decrease in 2015 reflecting a 7.6% decline from lowerthe aerospace market. 

CBF’s operating income and operating margin increase in 2017 primarily reflected the non-recurrence of $141.5 million of goodwill and other intangible asset impairment charges taken in 2016, higher net sales volume and a 5.1% negative impactsavings from foreign exchange fluctuations from the stronger U.S. Dollar versus the Euro, British poundCOS. The increase was partially offset by unfavorable mix and Yen in 2015 versus the prior year. CBF's primary marketsrestructuring and facility rationalization costs of construction, mining, and agriculture were negatively impacted by slower global conditions and depressed conditions in the commodities markets. CBF's net sales of its off-highway braking applications into the


construction market declined by 16%. CBF's net sales into the mining and agriculture markets declined by 14% and 20%, respectively.

        CBF's EBIT declined 35% and its EBIT margin declined 190 basis points to 5.6% in 2015, primarily reflecting lower net sales volume, higher per unit costs resulting from lower capacity utilization, and the negative impact of foreign exchange fluctuations of approximately $3.0 million. Also included in CBF's EBIT in 2015 was $1.7$5.1 million in severance costs, $3.4 million in asset impairment charges, and $0.5 million in closing costs for its Akron facility. By comparison, in 2014 CBF incurred $1.2 million in severance costs from staff reduction actions taken to align its cost structure2017, associated with current demand levels and $4.3 million in inventory impairments.

        Consistent with forecasts by large OEM's, demand for CBF's off-highway applications for heavy industrial equipment in construction and mining is expected to remain soft and may decline further due to slowing growth in China and lower demand for commodities. the exit of our Tulsa, Oklahoma manufacturing operations.


Outlook
CBF faces competitive pricing pressure in the current demand environment and from competitors that manufacture and sell products in Euros. Throughout this downturn, CBF has takenaggressively addressed its challenging markets by realigning its cost reduction measuresstructure, by reducing headcount and its non-production related operating expenses. In 2018, we expect CBF to aligncontinue to achieve low teens sales growth, with growth expected in core markets of agriculture, mining and construction.

2016 Compared with 2015
(in millions) 2016 2015 Change 
Acquisition
Effect
 
Price / Volume
Effect
 
Exchange
Rate Effect
Net sales $268.6
 $310.2
 (13.4)% —% (12.7)% (0.7)%
Impairment charges $141.5
 $—
        
Operating income $(135.9) $17.4
 (881.0)%      
Operating margin (50.6)% 5.6%        
Depreciation and amortization $20.8
 $21.4
        
Items affecting comparability (1)
 $—
 $1.6
        
(1)
Items affecting comparability include exit and disposal and facility rationalization costs ($1.6 million in 2015), refer to Items Affecting Comparability.

CBF’s net sales demand.

        A significant portion of CBF's operating earnings are generated by its subsidiariesdeclined due to continued weakness in Italyoff-highway equipment markets dependent on and the United Kingdom selling and operating in Euros and British pounds, respectively.tied to lower demand for commodities. The results of these subsidiaries' operations are translated and reported within our consolidated results in U.S. dollars. Consistentlower net sales were primarily due to declines in the Euro orconstruction, mining, aircraft braking and on-highway markets.

Indicators as of September 30, 2016, pointed to a longer period before CBF’s markets were expected to recover. Given these conditions, during the British pound versus the U.S. dollar could negatively impact CBF's U.S. dollar reported results for both net sales and EBIT.

        Asthird quarter of December 31, 2015, the carrying value of the CBF reporting unit's2016, we recognized goodwill and other indefinite-lived intangible assetsasset impairment charges of $141.5 million. Refer to Critical Accounting Estimates in this MD&A for further discussion.

CBF’s operating income and operating margin decline was $226.6 millionimpacted by goodwill and $117.2 million, respectively. The most recent annual goodwillintangible asset impairment test was performed for all reporting unitscharges, as of October 1, 2015. During this testing, we estimated that CBF's fair value, utilizing the method discussed above, exceeded its carrying value by approximately 15%. Further, based on our estimates of fair value for specific indefinite-lived intangible assets utilized by the CBF reporting unit, we concluded that no impairment exists at December 31, 2015.

        For additional information in regards to our policy with respect to testing goodwill and indefinite-lived intangible assets for impairment, refer to "Critical Accounting Policies".

        As noted above, the Company believes that the facts and circumstances as of December 31, 2015 indicate that no impairment exists with respect to CBF's goodwill and other indefinite-lived intangible assets. If the estimates of recovery in CBF's end markets do not materialize as expected and/or the U.S. Dollar continues to strengthen and therefore results are lower than anticipated, an impairment loss may be recorded.

        While the Company believes its conclusions regarding the estimates of fair value of the CBF reporting unit and its indefinite-lived intangible assets are appropriate, the estimates of fair value of the CBF reporting unit and its indefinite-lived intangible assets are subject to uncertainty and by nature include judgments and estimates regarding various factors including the rate and extent of recovery in the markets that CBF serves, the realization of future sales price increases, fluctuations in exchange rates, fluctuation in price and availability of key raw materials, future operating efficiencies, and discount rates.

2014 Compared to 2013

        CBF's 1.5% net sales increase in 2014 reflected 1.0% organic sales growth and a 0.5% positive impact on net sales from fluctuations in foreign exchange rates primarily reflecting the increase in the British pound and Euro versus the U.S. dollar that occurred in the first half of 2014. The positive impact from foreign exchange fluctuations on CBF's net sales reversed significantly in the latter part of 2014 when both the Euro and British Pound declined versus the U.S. dollar. CBF's 1.0% organic sales


growth in 2014 reflected approximately 2% higher net sales volume offset by 1% lower selling price. CBF's net sales to the construction market grew by 11% in 2014 reflecting recovering market conditions as well as new customer initiatives. Offsetting this growth was 7% lower net sales to the agriculture market, which declined due to lower crop prices and lower farm income reducing equipment demand. Net sales to the mining market in 2014 declined by 11% versus the prior year. Demand in the agriculture and mining markets were relatively stable through the first half of 2014; however, declined more significantly in the second half of 2014 reflecting significant weakening in the agriculture and commodities markets and slowing global economic conditions.

        CBF's EBIT margin decreased 210 basis points in 2014 versus the prior year primarily due to the impact of lower selling price that occurred in the first half of 2014, partially offset by lower per unit costs resulting from higherlower capacity utilization driven by higher sales volume. During 2014, CBF incurred $1.2 million in severance costs from staff reduction actions taken to align its cost structure with current demand levels. Also in 2014, CBF incurred $4.3 million in charges to inventory, compared to $1.8 million in charges to inventory in 2013. Partially offsetting these costs was a gain of $0.4 million on the sale of its facility in Akron, OH, during the fourth quarter of 2014.

        On October 11, 2013, to further streamline operations and reduce manufacturing costs, CBF announced plans to close its manufacturing facility in Akron, OH, relocate manufacturing previously conducted at this facility to other CBF facilities, and sell the facility's remaining assets. The project was completed in the first half of 2015 with total costs of $2.2 million, including employee termination, accelerated depreciation, impairment of long-lived assets and equipment relocation costs. The Company incurred exit and disposal costs of $0.9 million in 2013, $0.8 million in 2014 and $0.5 million in 2015.

Carlisle FoodService Products ("CFSP" or the "FoodService Products segment")

(in millions)
 2015 2014 Change
$		 Change
%		 2014 2013 Change
$		 Change
%		 

Net sales

 $242.6 $244.2 $(1.6) (0.7)%$244.2 $238.8 $5.4  2.3%

EBIT

 $27.3 $29.6 $(2.3) (7.8)%$29.6 $27.0 $2.6  9.6%

EBIT Margin

  11.3% 12.1%       12.1% 11.3%      

2015 Compared to 2014

        CFSP's net sales in 2015 declined 0.7% primarily due to lower net selling price that wassales volume, partially offset by higher net sales volume. Net sales to the foodservice market were unchanged as compared to 2014 reflecting higher demand in the domestic foodservice market, offset by changes in customer mixcost reduction actions.


Corporate and lower international demand in Europe and Asia. Net sales to the janitorial/sanitation market grew by 5% reflecting increased sales to retail supercenters. Net sales to the healthcare market declined by 5% primarily due to the non-recurrence of a large order with a customer in 2014 for rethermalization equipment.

        CFSP's EBIT declined 7.8% and EBIT margin declined 80 basis points primarily due to lower selling price connected with selling incentives and higher cost of capitalized inventory recognized in cost of goods sold. These negative impacts were partially offset by lower raw material costs. Included in CFSP's results for 2014 was a gain of $1.1 million on the sale of property in The Netherlands.

        CFSP's primary markets of foodservice, healthcare and janitorial/sanitation are expected to grow in line with low-single digit growth estimates for United States Growth Domestic Product.

2014 Compared to 2013

        CFSP's 2.3% net sales increase in 2014 primarily reflected higher sales volume and increased selling price realization. CFSP's net sales to the foodservice market increased by 1%. Net sales to the


healthcare market increased by 4% primarily driven by a large rethermalization equipment order with a customer. Net sales to the janitorial/sanitation market increased by 3%.

        CFSP's EBIT in 2014 grew 9.6% to $29.6 million, reflecting continued progress on its performance improvement efforts that began in 2012. CFSP's EBIT margin grew 80 basis points primarily due to lower freight expense from initiatives to improve scheduling and shipment logistics and higher selling price realization. Included in CFSP's EBIT in 2014 was a $1.1 million gain from the sale of property in The Netherlands during the second quarter 2014. By comparison, included in CFSP's EBIT in 2013 was a $1.0 million gain on the sale of property in Reno, NV.

Corporate

Unallocated
(in millions)
 2015 2014 Change
$		 Change
%		 2014 2013 Change
$		 Change
%		 

Corporate expenses

 $56.2 $49.1 $7.1  14.5%$49.1 $47.1 $2.0  4.2%

As a percentage of net sales

  1.6% 1.5%       1.5% 1.6%      

Corporate expenses are largely comprised of operating expenses related to compensation, benefits and travel expense for the corporate office staff, business development costs and certain compliance costs not allocated to the segments. Corporate expenseexpenses also includes certain gains and losses related to employee benefit obligations that are not allocated to the segments, such as pension and post-employmentpost‑employment benefit obligation settlements and curtailment charges, as well as, gains and losses associated with workers'workers’ compensation obligations.

        For

(in millions) 2017 2016 Change 2016 2015 Change
Corporate expenses $63.9
 $62.9
 1.6% $62.9
 $56.4
 11.5%
As a percentage of net sales 1.6% 1.7%   1.7% 1.6%  
Depreciation and amortization $2.6
 $2.8
   $2.8
 $1.6
  
Items affecting comparability (1)
 $2.5
 $4.7
   $4.7
 $1.9
  
(1)
Items affecting comparability include acquisition related costs ($1.7 million in 2017, $1.2 million in 2016 and $1.9 million in 2015), exit and disposal and facility rationalization costs ($0.8 million in 2017 and $3.8 million in 2016) and gains on divestitures ($0.3 million in 2016), refer to Items Affecting Comparability.

2017 Compared with 2016
The 2017 increase primarily reflects increased acquisition-related transaction and legal costs, partially offset by a decrease in the year endedcompensation related and other relocation expenses, primarily related to 2016 costs incurred to relocate the corporate office to Scottsdale, Arizona.

2016 Compared with 2015
The increase in corporate expenses primarily reflected increased staff related costs and expenses pertaining to the relocation of administrative functions to our new headquarters in Scottsdale, Arizona, as well as an increase in other employee related expenses. We incurred $3.8 million of costs related primarily to employee termination benefits and expenses associated with relocating employees. This increase is partially offset by reduced stock-based compensation expense reflecting the change in our CEO on December 31, 2015, Corporate expenses increased 14% fromand the prior year primarily due to higher staffing costs, performance-based incentive compensation expense and sponsorshipnon-recurrence of companywide management programs. In addition, the company incurred $1.4 million in transactiontransactions costs forrelated to the acquisition of the Finishing Brands business in the second quarter ofprior year. The former CEO’s 2015 which was reported in Corporate expenses.

        Forawards were fully expensed


at the year ended December 31, 2014, Corporate expenses increased 4.2% from the prior year perioddate granted, due to higher investments in information security, performance based incentive compensation expense, and increased business development expense.

his attainment of retirement eligibility prior to the award being granted. The current CEO’s awards are expensed over the service period of three years.


Liquidity and Capital Resources


A summary of our cash and cash equivalents by region follows:
(in millions) December 31, 2017 December 31, 2016
Europe $38.7
 $52.8
China 17.6
 22.5
Asia Pacific region (excluding China) 21.0
 19.1
Other international regions 22.4
 13.5
Non-U.S. subsidiaries cash and cash equivalents 99.7
 107.9
U.S. subsidiaries cash and cash equivalents 279.9
 277.4
Cash and cash equivalents $379.6
 $385.3
We maintain liquidity sources primarily consisting of cash and cash equivalents and our unused committed $600 million credit facility. As of December 31, 2015, we had $410.7 million of cash on hand, of which $122.0 million was located in wholly-owned subsidiaries ofas well as availability under the Company outside the United States.Facility. Cash heldgenerated by subsidiaries outside the United States is held in U.S. Dollars or in the currency of the country in which it is located. Itoperations is our intentionprimary source of liquidity. Another potential source of liquidity is access to usepublic capital markets via our automatic registration statement on Form S-3 filed November 8, 2017, subject to market conditions at that time. On November 16, 2017, we completed a public offering for $1.0 billion of notes due 2024 and 2027 (the “2024 and 2027 Notes”). During 2017, we utilized operating cash held outsideflows and borrowings from the United StatesFacility to fund share repurchases, capital expenditures and the operating activitiesacquisitions of Accella, San Jamar, Drexel and Arbo. We repaid the Facility with proceeds from the issuance of our foreign subsidiaries, to make2024 and 2027 Notes. See Debt Instruments below for further investments in our foreign operations, and to invest in additional growth opportunities for the Company through acquisitions. information.
Cash outside the United States is generally held in deposit accounts with banking institutions that are parties to our credit facility. The majority of these accounts are at bank subsidiaries that are owned by U.S. corporate banks. Repatriation of cash held by foreign subsidiaries may require the accrual and payment of taxes in the United States; however, consistent with our unremitted earnings, we consider such related cash to be permanently reinvested in our foreign operations and our current plans do not demonstrate a need, nor do we plan, to repatriate such cash to fund U.S. operations and financing activities. We plan to continue to invest in our international business and potential acquisitions to achieve our stated goal of 30% of net sales outside of the United States.

        In addition, cash held by subsidiaries in China is subject to local laws and regulations that require government approval for conversion of such cash to and from U.S. Dollars, as well as for transfer of such cash to entities that are outside of China.


As previously discussed, in December 2017, the U.S. enacted comprehensive tax legislation that included significant changes to existing tax law including, among other things, a reduction to the U.S. federal corporate income tax rate from 35% to 21% and a one-time tax on deferred foreign income. As a result, we have changed our indefinite reinvestment assertions due to the impact of December 31, 2015,tax reform and have recorded a deferred tax liability of $7.9 million related to cash repatriation primarily related to foreign withholding taxes. However, we haddo not expect the one-time repatriation tax on deferred foreign income will have a significant impact on our liquidity or capital resources. We expect the Tax Act will allow greater flexibility in deploying our foreign cash in future years.

We believe we have sufficient financial resources to meet our business requirements for at least the next 12 months, including capital expenditures for worldwide manufacturing, working capital requirements, dividends, common stock repurchases, acquisitions and strategic investments.

We also anticipate we will have sufficient cash equivalentson hand, as well as available liquidity under our revolving credit facility, to pay outstanding principal balances of $21.4 million located in wholly owned subsidiariesour existing notes by the respective maturity dates. We intend to obtain additional liquidity by accessing the capital markets to repay the outstanding balance if these sources of liquidity have been used for other strategic purposes by the Company within China.

time of maturity. See Debt Instruments below.


Sources and Uses of Cash

and Cash Equivalents


 Twelve Months
Ended
December 31,		  
 
(in millions)
 2015 2014 2013  2017 2016 2015

Net cash provided by operating activities

 $529.2 $295.9 $414.7  $458.7
 $531.2
 $529.2

Net cash used in investing activities

 (670.8) (297.8) 270.1  (1,094.3) (293.4) (670.8)

Net cash used in financing activities

 (173.0) (20.2) (41.5)
Net cash provided (used) in financing activities 627.2
 (261.1) (173.0)

Effect of foreign currency exchange rate changes on cash

 (5.5) (1.6) (1.3) 2.7
 (2.1) (5.5)
​​ ​ ​​ ​ ​​ ​ ​

Change in cash and cash equivalents

 $(320.1)$(23.7)$642.0  $(5.7) $(25.4) $(320.1)
​​ ​ ​​ ​ ​​​ ​
​​​​​​​
​​ ​​​ ​ ​​ ​ ​

2015


2017 Compared to 2014

with 2016


We generated operating cash flows totaling $458.7 million for 2017 (including working capital uses of $59.2 million), compared with $531.2 million for 2016 (including working capital sources of $23.6 million). Lower operating cash flows in 2017 reflect a decrease in working capital sources resulting from higher accounts receivable associated with higher net sales volume at CCM and CBF, increased inventory in preparation for forecasted sales volumes at CCM and CIT and timing of prepaid expense payments.
The Company hadcash used in investing activities of $1.1 billion for 2017 primarily reflected cash utilized of $934.3 million, net of cash acquired, for the acquisitions of Accella, Drexel Metals and Arbo in the CCM segment and the acquisition of San Jamar in the CFS segment and $159.9 million in capital expenditures. In comparison, cash used in investing activities of $293.4 million for 2016 primarily reflected cash utilized of $185.5 million, net of cash acquired, for the acquisition of Star Aviation and Micro-Coax in the CIT segment and MS Powder in the CFT segment and $108.8 million in capital expenditures.

The cash provided by operatingfinancing activities of $627.2 million for 2017 primarily reflected $997.2 million net proceeds from our $1.0 billion 2024 and 2027 Notes, partly offset by share repurchases of $268.4 million and dividend payments of $92.1 million, reflecting the increased dividend rate of $1.44 per share. Borrowings were used to fund the aforementioned acquisitions and share repurchases. In comparison, cash used in financing activities of $261.1 million for 2016 primarily reflected payment of $150.0 million on bonds that matured during the third quarter of 2016, share repurchases of $75.0 million and dividend payments of $84.5 million reflecting the dividend rate of $1.30 per share, partially offset by $53.1 million of proceeds from exercised stock options.

2016 Compared with 2015
We generated operating cash flows totaling $531.2 million for 2016 (including working capital increase of $23.6 million) compared with $529.2 million for the year ended December 31,in 2015 compared to cash provided(including working capital increase of $295.9 million in the prior year.$77.9 million). The increase in net cash provided by operating activities was primarily attributable to increased cash income, resulting from lower raw material costs, cash taxes paid, cash from acquired businesses andsales volume, partially offset by a difference of $145.0 million betweendecrease in cash provided by working capital of $94.6 million in 2015 and cash used of $50.4 million in 2014. In 2015, cash provided by changes in inventory of $23.0 million compared to cash used of $27.7 million in 2014. Cash provided by changes in accrued expenses of $79.9 million in 2015 compared to cash provided of $14.5 million in 2014, and includes differences in usage of cash for tax payments in 2015 versus 2014.

        We use the ratio of our average working capital balances (defined as the average of the quarter end balances, excluding current year acquisitions, of trade receivables plus net inventory, less trade payables) as a percentage of annualized sales (defined as year-to-date net sales, excluding current year acquisitions, calculated on an annualized basis) to evaluate our effectiveness in managing our cash requirements in relation to changes in sales activity. The Company has a long term strategy is to reduce the ratio of workingcapital. Working capital as a percentagecompared with prior year primarily reflected difference in timing of net sales in orderaccrued taxes and related payments, as well as expanded inventory due to generate strong cash flow from our businesses and improve overall liquidity as our business activities grow. However in 2015, average working capital as a percentage of annualized sales increased 40 basis points to 18.2%, as compared to a percentage of 17.8% for 2014, primarily as a result of higher average working capital as a percentage of net sales in the first half of 2015 on higher commercial roofing demand at Construction Materials.

        Cash used in investing activities was $670.8 million in 2015 compared to $297.8 million in 2014. In 2015,service level strategies. 

The cash used in investing activities includedof $293.4 million for 2016 primarily reflected cash utilized of $185.5 million, net of cash acquired, for the acquisitions of Micro-Coax and Star Aviation in the CIT segment and the acquisition of MS Powder in the CFT segment and $108.8 million in capital expenditures. In comparison, cash used in investing activities of $670.8 million for 2015 primarily reflected cash utilized of $598.9 million, net of $12.2 million cash acquired, used to acquirefor the acquisition of Finishing Brands and $72.1 million in capital expenditures. In 2014, cash used in investing activities included $118.8 million in capital expenditures and $194.0 million, net of $6.7 million cash acquired, used to acquire LHi Technologies. Also in 2014, we received $9.7 million as part of the final working capital settlement from the sale of the Transportation Products business.

        Capital expenditures of $72.1 million in 2015 declined by $46.7 million from expenditures of $118.8 million in 2014. The decline was primarily attributable to lower capital expenditures at Construction Materials in 2015 due to completion of its new TPO and PVC production facilities in 2014. During 2015, the Interconnect Technologies segment spent $34.5 million in capital expenditures, including $7.0 million for the completion of its new manufacturing facility in Nogales, Mexico, as well as other projects tied to product or capacity expansion.


Cash used in financing activities was $173.0of $261.1 million in 2015 compared to $20.2for 2016 primarily reflected payment of $150.0 million in 2014. During 2015,on bonds that matured during the third quarter of 2016, share repurchases of $75.0 million and dividend payments of $84.5 million reflecting the dividend rate of $1.30 per share, partially offset by $53.1 million of proceeds from exercised stock options. In comparison, cash used in financing activities of $173.0 million for 2015 primarily reflected $137.2 incash utilized for share repurchases of $137.2 million and dividends payments of $72.3 million in dividends paid and $2.9 million in debt repayments,reflecting the dividend rate of $1.10 per share, partially offset by net$44.8 million of proceeds from exercised stock options. 

Outlook
Our priorities for the use of cash inflows relatedare to the exercise of employee stock options of $39.4 millioninvest in 2015. The Company started its


systematic share repurchase program in 2015growth and repurchased 1,496,411 shares. Also in 2015, we increasedperformance improvement opportunities for our existing businesses through capital expenditures, pursue strategic acquisitions that meet shareholder return criteria, pay dividends to shareholders by 17%, representing the 39th consecutive year of dividend increases.

2014 Comparedand return value to 2013

        Net cash provided by operating activities, which includes continuing and discontinued operations, was $295.9 million in the year ended December 31, 2014, compared to $414.7 million in 2013. The decrease was primarily due to funds used for working capital in 2014 versus cash provided by working capital in 2013 and the disposition of the Transportation Products business on December 31, 2013. We used cash for working capital in 2014 due to higher organic sales growth and production activity from higher demand in the fourth quarter of 2014 compared to the prior year. In addition, cash provided by working capital in 2013 benefited from inventory reduction efforts at the divested Carlisle Transportation Product segment.

        Cash used for working capital and other assets and liabilities of $50.4 million in 2014 compared to cash provided by working capital of $48.0 million in 2013, reflecting lower net cash flow related to working capital of $98.4 million in 2014 versus 2013. Cash used for working capital in 2014 primarily consisted of a $27.7 million increase in inventories, an $18.1 million increase in accounts receivable and a $13.6 million reduction in accounts payable and long term liabilities, partially offset by a $14.5 million increase in accrued expenses. Cash provided by working capital in 2013 primarily consisted of a $35.6 million reduction in inventories and an $8.4 million decrease in accounts receivable, partially offset by a $8.0 million decrease in accounts payable and accrued expenses. For the full year 2014, average working capital as a percentage of annualized sales declined by 90 basis points to 17.8%, as compared to a percentage of 18.7% for 2013.

        Cash used in investing activities was $297.8 million in 2014 compared to $270.1 million provided by investing activities in 2013. In 2014, cash used in investing activities included $118.8 million in capital expenditures and $194.0 million, net of $6.7 million cash acquired, used to acquire LHi Technologies. Also in 2014, we received $9.7 million as part of the final working capital settlement from the sale of the Transportation Products business. In 2013, cash provided by investing activities related to $369.0 million in proceeds on the sale of the Transportation Products business, net of cash on hand at the time of sale, and $11.9 million in proceeds on the sale of equipment, partially offset by $110.8 million in capital expenditures.

shareholders through share repurchases.

Capital expenditures of $118.8in 2018 are expected to be between $135 million and $160 million, which primarily includes continued investments in 2014 compared to $110.8 million in 2013. The Construction Materials segment represented 43% of total capital expenditures in 2014 as a result of projects to construct a new TPO plant in Carlisle, PA,CCM facilities and complete construction on a new PVC plant in Greenville, IL. CCM's total capital expenditures were $51.4 million in 2014. During 2014, the Interconnect Technologies segment spent $32.2 million in capital expenditures primarily for the construction of a new manufacturing facility in Nogales, Mexico.

        Cash used in financing activities was $20.2 million in 2014 compared to $41.5 million in 2013. During 2014, cash used in financing activities related to $61.2 million in dividends paid and $1.5 million in repayments on industrial and revenue bonds, partially offset by net cash inflows related to the exercise of employee stock options.


Debt Instruments, Guarantees and Covenants

        The following table quantifies certain contractual cash obligations and commercial commitments at December 31, 2015:

(in millions)
 Total 2016 2017 2018 2019 2020 Thereafter 

Short-term credit lines and long-term debt

 $750.1 $150.1 $— $— $— $250.0 $350.0 

Interest on long-term debt(1)

  165.0  35.1  25.9  25.9  25.9  25.9  26.3 

Noncancelable operating leases

  75.5  18.3  14.5  13.0  10.9  7.1  11.7 

Estimated workers' compensation claims

  19.4  5.1  3.6  2.6  1.9  1.4  4.8 

Estimated post-retirement benefit payments

  279.6  14.9  15.3  14.7  13.9  13.6  207.2 
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Total commitments

 $1,289.6 $223.5 $59.3 $56.2 $52.6 $298.0 $600.0 
​​​ ​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​​ ​​
​​​​​​​​​​​​​​​​​​​​​​​
​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​
(1)
Future expected interest payments are calculated based on the stated rate for fixed rate debt and the effective interest rate at December 31, 2015 for variable rate debt.

        The above table does not include $159.7 million of long-term deferred revenue and $202.7 million of other long-term liabilities, of which $32.4 million relates to unrecognized income tax benefits. Excluded Other long-term liabilities consist primarily of deferred income tax liabilities and deferred compensation. Due to factors such as the timing of book-tax difference reversals and retirement of employees, it is not reasonably possible to estimate when these will become due.

        The amount of $19.4 million in obligations for workers compensation claims reflected an estimate for discounted claims reported to the company and incurred but not yet reported. The Company's estimate is based upon actuarial assumptions and loss development factors and the Company's historical loss experience. See Note 11 in the Notes to Consolidated Financial Statements.

        The amount of $279.6 million in post-retirement benefit payments primarily reflected undiscounted estimated employee obligations under the Company's qualified defined benefit pension plans,capacity upgrades, as well as obligationsinvestment in CIT and CBF facility rationalization. Planned capital expenditures for 2018 include business sustaining projects, cost reduction efforts and new product expansion.


No minimum contributions to our domestic pension plans are required in 2018. However, during 2018 we expect to pay approximately $1.4 million in participant benefits under the Company's non-qualified executive supplemental and director plans. We do not expect to make any discretionary contributions to our other pension plans in 2018. We did not make any contributions to the domestic pension plans during 2017.

We intend to pay dividends to our shareholders and other post-retirement welfare plans. The amounthave increased our dividend rate annually for the past 41 years. On February 6, 2018 the Board of estimated obligations is based uponDirectors declared a regular quarterly dividend of $0.37 per share, payable on March 1, 2018 to shareholders of record at the close of business on February 20, 2018.

We repurchased approximately 2.7 million shares in 2017 as part of our plan provisions, increases to compensation levels, actuarial assumptions and health care cost trends. Of the $279.6return capital to shareholders, utilizing $268.4 million in estimated obligations, approximately $240.4 million reflect projected benefit obligations under the Company's qualified defined benefit plans. The Company maintains a trust in which plan assets of the trust, based upon their fair value measurement asour cash on hand. As of December 31, 2015, and expected return on assets are expected2017, we had authority to fully fundrepurchase 2.1 million shares. On February 6, 2018, the Board approved a 5.0 million share increase in the Company's projected benefit obligationsstock repurchase program, increasing total authorized shares to 13.7 million, with 7.1 million available for its qualified defined benefit plans. See Note 1, Note 13, and Note 16repurchase. Shares may be repurchased at management’s discretion. Purchases may occur from time‑to‑time in the Notesopen market and no maximum purchase price has been set. The Company plans to Consolidated Financial Statements.

        Although we have entered into purchase agreements for certain key raw materials, there were no such contracts withcontinue to repurchase shares in 2018 on a term exceeding one year in place at December 31, 2015.

        Our $600 million senior unsecured revolving credit facility (the "Facility") allows for borrowings of between one monthsystematic basis. The decision to repurchase shares will depend on price, availability and six month maturity at an interest rate spread of 1.125 percentage points over Libor, based upon our current investment grade credit rating. The Facility has an annual facility fee of 0.125 percentage points of the overall facility, or $750,000. We use the facility for general working capital purposes and to provide additional liquidity to pursue growth opportunities including acquisitions. The Facility expires on December 12, 2018. At December 31, 2015, we had $600 million available under the Facility. The Facility provides for grid-based interest pricing based on the credit rating of our senior unsecured bank debt or other unsecured senior debt and our utilization of the facility. Our senior unsecured debt is rated BBB by Standard & Poor's and Baa2 by Moody's. The facility requires us to meet various restrictive covenants and limitations including certain leverage

corporate developments.


ratios, interest coverage ratios, and limits on outstanding debt balances held by certain subsidiaries. We had no borrowings on our facility during the year ended December 31, 2015.

Debt Instruments

Senior Notes

On November 20, 2012,16, 2017, we completed a public offering of $350.0$1.0 billion, including $600.0 million of notes with a stated interest rate of 3.75% due November 15, 2022December 1, 2027 (the "2022 Notes"“2027 Notes”). The 2022 Notes were issued at a discount of approximately $1.1 million, resulting in proceeds of approximately $348.9 million. Interest on the 2022 Notes is paid each May 15 and November 15, which commenced on May 15, 2013. The proceeds were utilized to re-pay borrowings under our $600 million revolving credit facility and fund the acquisition of Thermax on December 17, 2012.

        On December 9, 2010, we completed a public offering of $250.0$400.0 million of notes with a stated interest rate of 5.125%3.5% due December 15, 20201, 2024 (the "2020 Notes"“2024 Notes”). The 20202024 and 2027 Notes were issued at a discount, of approximately $1.1 million, resulting in net proceeds of approximately $248.9$997.2 million. Interest on the 2020 Notes is paid each June 151 and December 15, which commenced1, commencing on June 15, 2011.1, 2018. The proceeds were2024 and 2027 Notes are subject to our existing indenture and accordingly, are subject to the same restrictive covenants and limitations as our existing indebtedness.


We have senior unsecured notes outstanding of $250.0 million due 2020 (at a stated interest rate of 5.125%), $350.0 million due 2022 (at a stated interest rate of 3.75%), $400.0 million due 2024 (at a stated interest rate of 3.5%) and $600.0 million due 2027 (at a stated interest rate of 3.75%) that are rated BBB by Standard & Poor’s and Baa2 by Moody’s.

Revolving Credit Facility

On February 21, 2017, we entered into a second amendment (the “Amendment”) to our Third Amended and Restated Credit Agreement (the “Credit Agreement”) administered by JPMorgan Chase Bank, N.A. Among other things, the Amendment increases the lenders' aggregate revolving commitment from $600.0 million to $1.0 billion and extends the maturity date of the Credit Agreement from December 12, 2018 to February 21, 2022. The Facility has a feature that allows the Company to increase availability, at our option, by an aggregate amount of up to $500.0 million through increased commitments from existing lenders or the addition of new lenders. Under the Facility, we may also enter into commitments in the form of standby, commercial or direct pay letters of credit for an amount not to exceed $50.0 million. The Facility provides for variable interest pricing based on the credit rating of the senior unsecured bank debt or other unsecured senior debt and is also subject to commitment fees.

During 2017, we borrowed $1.2 billion under the Facility, primarily utilized to re-payfund acquisitions, share repurchases and capital expenditures, and fully repaid the $1.2 billion of borrowings under the Facility, with proceeds from our 2024 and 2027 Notes and cash from operations. As of December 31, 2017, we had no amounts outstanding under our revolving credit facility, that were used to partially finance the acquisition of Hawk.

        We have outstanding senior notes for principal amount of $150.0 million that mature on August 15, 2016 (the "2016 Notes"). Interest on the 2016 Notes is paid each February 15 and August 15, which commenced on February 15, 2007.

        At December 31, 2015, the fair value of our $350 million 3.75% notes due 2022, $250 million 5.125% notes due 2020 and $150 million 6.125% notes due 2016, using Level 2 inputs, is approximately $349.3 million, $268.6 million and $152.9 million, respectively. Fair value is estimated based on current yield rates plus our estimated credit spreadwith $1.0 billion available for financings with similar terms and maturities.

use.


We also maintain a $45.0 million uncommitted line of credit, of which $45.0 million was available for borrowing as of December 31, 2015. We had no borrowings under the uncommitted line of credit during 2015.

        As of December 31, 2015, we had outstanding letters of credit amounting to $30.2 million. Letters of credit are issued primarily to provide security under insurance arrangements and certain borrowings and are issued under a continuing credit agreement with J.P. Morgan Chase Bank, N.A.

        Under our various debt and credit facilities, we are required to meet various restrictive covenants and limitations under our senior notes and revolving credit facility including certain leverage ratios, interest coverage ratios and limits on outstanding debt balances held by certain subsidiaries. We were in compliance with all covenants and limitations in 2015 and 2014.

        We view our debt to capital ratio (defined as short-term debt plus long-term debt divided by the sum of total Shareholders' equity, long-term debt and short-term debt) as an important indicator of our ability to utilize debt in financing acquisitions and capital investments. As of December 31, 2015,2017 and 2016.


Refer to Note 12 for further information on our debt to capital ratio was 24%.

Cash Management

        Our priorities for the use ofinstruments.



Contractual Obligations
The following table quantifies certain contractual cash are to invest in growthobligations and performance improvement opportunities for our existing businesses and maintain assets through capital expenditures, pursue strategic acquisitions that meet shareholder return criteria, pay dividends to shareholders, and return value to shareholders through share repurchases.

        Capital expenditures in 2016 are expected to be between $100 million and $125 million. The amount of expenditures is higher than capital expenditures in 2015 due to planned expenditures for the Fluid Technologies segmentcommercial commitments as well as investments by Interconnect Technologies to expand its manufacturing capacity in Dongguan, China and Franklin, WI. Planned capital expenditures for 2016 include business sustaining projects, cost reduction efforts, and new product expansion.


        No minimum contributions to our pension plans are required in 2016. However, during 2016 we expect to pay approximately $1.0 million in participant benefits under the executive supplemental and director plans. In light of our plans' funded status, we do not expect to make any discretionary contributions to our other pension plans in 2016. We did not make any contributions to the pension plans during 2015.

        We intend to pay dividends to our shareholders and have increased our dividend rate annually for the past 39 years.

        We repurchased 1,496,411 shares in 2015 as part of our plan to return capital to shareholders, utilizing $137.2 million of our cash on hand. As of December 31, 2015, we had authority2017:

(in millions) Total 2018 2019 2020 2021 2022 Thereafter
Long-term debt $1,600.0
 $—
 $—
 $250.0
 $—
 $350.0
 $1,000.0
Interest on long-term debt (1)
 432.3
 63.7
 63.7
 63.7
 50.9
 49.8
 140.5
Noncancelable operating leases 84.9
 22.6
 18.2
 12.1
 8.9
 6.9
 16.2
Estimated workers' compensation claims (2)
 15.4
 4.3
 3.0
 2.1
 1.5
 1.1
 3.4
Estimated defined benefit plan payments (3)
 269.7
 13.7
 13.9
 13.9
 13.3
 13.2
 201.7
Total commitments $2,402.3
 $104.3
 $98.8
 $341.8
 $74.6
 $421.0
 $1,361.8
(1)
Future expected interest payments are calculated based on the stated rate for fixed rate debt as of December 31, 2017.
(2)
The amount of $15.4 million in obligations for workers compensation claims reflects undiscounted estimated claims reported to the Company and incurred but not yet reported. Our estimate and the related timing is based upon actuarial assumptions and loss development factors and historical loss experience. Refer to Note 11 for further information.
(3)
The amount of $269.7 million in defined benefit plan payments reflects undiscounted estimated employee obligations under the Company’s qualified defined benefit pension plans. The estimated obligation is based upon plan provisions, increases to compensation levels and actuarial assumptions and mortality rate trends. Approximately $234.7 million of the $269.7 million in estimated obligations reflects projected benefit obligations under the Company’s qualified defined benefit plans. We maintain a trust in which plan assets of the trust are expected to fully fund the Company’s projected benefit obligations for its qualified defined benefit plans based upon their fair value measurement as of December 31, 2017, and expected return on assets. Refer to Note 13 for further information.
In addition to repurchase an additional 1,517,746 shares. Shares may be repurchased at management's direction. Purchases may occur from time-to-time in the open market and no maximum purchase price has been set. The Company plans to continue to repurchase shares in 2016 on a systematic basis and may seek authorization from the Board of Directors to purchase additional shares in 2016. The decision to repurchase shares will depend on price, availability,our debt maturities and other corporate developments.

        We believe that ourcontractual obligations discussed above, we have other commitments, which we expected to fund with available cash, on hand,projected operating cash flows, available credit facilities linesor future financing transactions, if necessary. The above table does not include (i) long‑term deferred revenue, (ii) unrecognized income tax benefits and deferred income tax liabilities and (iii) deferred compensation. As a result of credit, access to bank financing and capital markets, and leasing programs provide adequate liquidity and capital resources to fund ongoing operations, repay our $150 million 2016 notes due August 15, 2016, expand existing lines of business, and make strategic acquisitions. In addition, we believe that our liquidity and capital resources from U.S. operations are adequate to fund our U.S. operations and corporate activities without a need to repatriate funds held by subsidiaries outside the United States. However, the ability to maintain existing credit facilities and access the capital markets can be impacted by economic conditions outside our control, specifically credit market tightness or sustained market downturns. Our cost to borrow and capital market access can be impacted by debt ratings assigned by independent rating agencies, based on certain credit measuresfactors such as interest coverage, funds from operationsthe timing of book‑tax difference reversals and various leverage ratios.

retirement of employees, it is not reasonably possible to estimate when these will become due.


There were no contracts for the purchase of goods or services that are enforceable and legally binding and/or require minimum quantities with a term exceeding one year as of December 31, 2017, although we routinely enter into purchase agreements for certain key raw materials.

Environmental

We are subject to increasingly stringent environmental laws and regulations, including those relating to air emissions, wastewater discharges, chemical and hazardous waste management and disposal. Some of these environmental laws hold owners or operators of land, businesses or offsite disposal facilities liable for their own and for previous owners'owners’ or operators'operators’ releases of hazardous or toxic substances or wastes. Other environmental laws and regulations require the obtainment and compliance with environmental permits. To date, costs of complying with environmental, health and safety requirements have not been material and we do not currently have any significant accruals related to potential future costs of environmental remediation atas of December 31, 20152017 and 2014,2016, nor do we have any asset retirement obligations recorded at those dates. However, the nature of our operations and our long history of industrial activities at certain of our current or former facilities, as well as those acquired, could potentially result in material environmental liabilities or asset retirement obligations.

While we must comply with existing and pending climate change legislation, regulation, international treaties or accords, current laws and regulations do not have a material impact on our business, capital expenditures or financial position. Future events, including those relating to climate change or greenhouse gas regulation, couldmay require us to incur expenses related to the modification or curtailment of operations, installation of pollution control equipment or investigation and cleanup of contaminated sites.


Off-Balance Sheet Arrangements
Refer to Note 11 for discussion of off-balance sheet arrangements. 


Critical Accounting Estimates

Our significant accounting policies are more fully described in Note 1. In preparing the Consolidated Financial Statements in Item 8. Certainconformity with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company’s management must make informed decisions which impact the reported amounts and related disclosures. Such decisions include the selection of our accounting policies require the application of significant judgment by management in selecting the appropriate accounting principles to be applied and assumptions for calculating financial estimates. By their nature, theseon which to base estimates and judgments are subjectthat affect the reported amounts of assets, liabilities, sales and expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to revenue recognition, deferred revenue and extended product warranties, goodwill and indefinite-lived intangible assets, valuation of long-lived assets and income taxes on an inherent degree of uncertainty. These judgments are basedongoing basis. The Company bases its estimates on our historical experience, terms of existing contracts, our observation of trends in the industry, information provided by our customers and information available from other outside sources, that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. 

Business Combinations

As noted in “Executive Overview” we have a long-standing strategy of acquiring businesses. We account for these business combinations as appropriate. We consider certainrequired by GAAP under the acquisition method of accounting, policies relatedwhich requires us to revenuerecognize the assets acquired and the liabilities assumed at their acquisition date fair values. Deferred taxes are recorded for any differences between fair value and tax basis of assets acquired and liabilities assumed, and can vary based on the structure of the acquisition as to whether it is a taxable or non-taxable transaction. To the extent the purchase price of the acquired business exceeds the fair values of the assets acquired and liabilities assumed, including deferred income taxes recorded in connection with the transaction, such excess is recognized as goodwill (see further below for our critical accounting estimate regarding post-acquisition accounting for goodwill). The most critical areas of judgment in applying the acquisition method include selecting the appropriate valuation techniques and assumptions that are used to measure the acquired assets and assumed liabilities at fair value, particularly for intangible assets, contingent consideration, acquired tangible assets such as property, plant and equipment, and inventory.

The key techniques and assumptions utilized by type of major acquired asset or liability generally include:
Asset/LiabilityTypical Valuation TechniqueKey Assumptions
Technology-based intangible assetsRelief from royalty method
- Estimated future revenues from acquired technology
- Royalty rates that would be paid if licensed from a third-party
- Discount rates
Customer-based intangible assetsMultiple-period excess earnings method
- Estimated future revenues from existing customers
- Rates of customer attrition
- Discount rates
- Contributory asset charges
Trademark/trade name intangible assetsRelief from royalty method
- Estimated future revenues from acquired trademark/trade name
- Economic useful lives (definite vs. indefinite)
- Royalty rates that would be paid if licensed from a third-party
- Discount rates
Property, plant & equipmentMarket comparable transactions (real property) and replacement cost new less economic deprecation (personal property)
- Similarity of subject property to market comparable transactions
- Costs of like equipment in new condition
- Economic obsolescence rates
InventoryNet realizable value less (i) estimated costs of completion and disposal and (ii) a reasonable profit allowance for the seller
- Estimated percentage complete (WIP inventory)
- Estimated selling prices
- Estimated completion and disposal costs
- Estimated profit allowance for the seller
Contingent ConsiderationDiscounted future cash flows
- Future revenues and/or net earnings
- Discount rates


In selecting techniques and assumptions noted above, we generally engage third-party, independent valuation professionals to assist us in developing the assumptions and applying the valuation techniques to a particular business combination transaction. In particular, the discount rates selected are compared to and evaluated with (i) the industry weighted-average cost of capital, (ii) the inherent risks associated with each type of asset and (iii) the level and timing of future cash flows appropriately reflecting market participant assumptions.

As noted above, goodwill represents a residual amount of purchase price. However, the primary items that generate goodwill include the value of the synergies between the acquired company and our existing businesses and the value of the acquired assembled workforce, neither of which qualifies for recognition inventoryas an intangible asset. Refer to Note 3 for more information regarding business combinations, specifically the items that generated goodwill in our recent acquisitions.

Subsequent Measurement of Goodwill

Goodwill is not amortized but is tested annually, or more often if impairment indicators are present, for impairment at a reporting unit level, based on a comparison of the fair value of the reporting unit with its carrying value. In the first quarter of 2017, we adopted Accounting Standards Update (“ASU”) 2017-04, Simplifying the Test for Goodwill Impairment (refer to Note 1). This ASU eliminated Step 2 of the goodwill impairment test. While the elimination of Step 2 will reduce the cost and valuation, deferred revenue and extended product warranty, valuationcomplexity of performing goodwill impairment tests, it could result in different amounts being recognized in future periods versus the previous two-step test, as we are no longer required to perform a hypothetical purchase price allocation to measure the goodwill impairment. This hypothetical purchase price allocation required the reporting unit's underlying net assets be measured at fair value with differences from their carrying values either increasing or decreasing the hypothetical amount of goodwill and therefore increasing or decreasing any potential goodwill impairment loss. The methods and key assumptions utilized to determine the fair value of our reporting units will not change as a result of adopting this ASU.

We estimate the fair value of our reporting units primarily based on the income approach utilizing the discounted cash flow method ("DFC"). We also use fair value estimates derived from the market approach utilizing the public company market multiple method to validate the results of the discounted cash flow method, which require us to make assumptions about the applicability of those multiples to our reporting units. The discounted cash flow method requires us to estimate future cash flows and discount those amounts to present value. The key assumptions that drive fair value, via the DFC, include:

Industry weighted-average cost of capital (“WACC”): We utilize a WACC relative to each reporting unit’s industry as the discount rate for estimated future cash flows. The WACC is intended to represent a rate of return that would be expected by a market place participant.
Revenue growth rates: We utilize a revenue growth rate based on historical growth patterns, industry analysis and management’s experience, which vary based on the reporting unit being evaluated.
Operating margins: We utilize historical and expected operating margins, which vary based on the projections of each reporting unit being evaluated.

We have determined that we have five reporting units and have allocated goodwill to those reporting units as follows: 
(in millions) December 31, 2017 December 31, 2016
Carlisle Construction Materials $544.3
 $117.5
Carlisle Interconnect Technologies 640.3
 639.1
Carlisle FoodService Products 149.7
 60.3
Carlisle Fluid Technologies 171.0
 167.9
Carlisle Brake & Friction 96.5
 96.4
Total $1,601.8
 $1,081.2
Annual Impairment Test

We test our goodwill for impairment annually in the fourth-quarter as of October 1. For the 2017 impairment test, all reporting units were tested for impairment using ASU 2017-04's quantitative approach, resulting in fair value that exceeded their carrying value for each of the above reporting units.


While we believe our conclusions regarding the estimates of fair value of our reporting units are appropriate, these estimates are subject to uncertainty and by nature include judgments and estimates regarding various factors such as the rate and extent of growth in the markets that our reporting units serve, the realization of future sales price and volume increases, fluctuations in exchange rates, fluctuations in price and availability of key raw materials, future operating efficiencies and as it pertains to discount rates, the volatility in interest rates and costs of equity.

2016 CBF Reporting Unit Impairment
During the third quarter of 2016, we recognized a goodwill impairment charge of $130.0 million related to our CBF reporting unit, primarily reflecting continued declines in sales related to overall market conditions and lower expectations of recovery in CBF’s various end markets. We continue to closely monitor actual results versus expectations as well as whether, and to what extent, any significant changes in current events or conditions result in corresponding changes to our expectations about future estimated cash flows as well as the WACC. If our adjusted expectations of recovery, both in size and timing, in CBF’s end markets do not materialize, or the WACC increases (based on increases in interest rates, market rates of return, and market volatility), we may be required to record additional intangible asset and goodwill impairment charges, which may be material. At December 31, 2016, goodwill allocated to the CBF reporting unit totaled $96.5 million and the fair value of the CBF reporting unit exceeded its carrying value by 5%.
Refer to Note 10 for more information regarding goodwill.
Subsequent Measurement of Indefinite‑Lived Intangible Assets

As discussed above, indefinite-lived intangible assets valuationare recognized and recorded at their acquisition-date fair values. Intangible assets with indefinite useful lives are not amortized but are tested annually at the appropriate unit of long-livedaccount, which generally equals the individual asset, or more often if impairment indicators are present. Indefinite-lived intangible assets are tested for impairment via a one-step process by comparing the fair value of the intangible asset with its carrying value. The company recognizes an impairment charge for the amount by which the carrying amount exceeds the intangible asset's value. We generally estimate the fair value of our indefinite-lived intangible assets consistent with the techniques noted above using our expectations about future cash flows, discount rates and royalty rates for purposes of the annual test. We monitor for significant changes in those assumptions during interim reporting periods. We also periodically re-assess indefinite-lived intangible assets as to whether their useful lives can be determined, and if so, we would begin amortizing any applicable intangible asset.
Annual Impairment Test
We evaluated our indefinite‑lived intangible assets for impairment as of October 1, 2017, and determined that their fair values exceeded their carrying values in conjunction with our annual impairment test.

2016 Wellman® Trade Name Impairment
During 2016, the CBF reporting unit experienced lower than expected sales, primarily in the construction and mining industries. Management considered these results and the potential long-term effect of market conditions on the operations of the CBF reporting unit and determined that an indicator of possible impairment existed. During the first and second quarters of 2016, management determined that the fair values of the trade names within the CBF reporting unit exceeded their carrying values. However, as a result of the interim impairment test performed during the third quarter of 2016, management determined that the fair value of the Wellman® trade name within the CBF reporting unit did not exceed its carrying value. The primary assumptions that drive fair value related to trade names include:

Future revenue generated by product sales that utilize the trade name;
Royalty rate that would be paid if the asset was licensed from a third party; and
Discount rate utilized, which reflects the associated industry WACC (discussed above) plus a single asset risk premium.

This interim impairment test resulted in an impairment charge for the Wellman® trade name of $11.5 million in the CBF segment in the third quarter of 2016.

Refer to Note 10 for more information regarding intangible assets.


Valuation of Long‑Lived Assets
Long‑lived assets or asset groups, including amortizable intangible assets, are tested for recoverability whenever events or circumstances indicate that the undiscounted future cash flows do not exceed the carrying amount of the asset or asset group. For purposes of testing for impairment, we group our long‑lived assets classified as held and used at the lowest level for which identifiable cash flows are largely independent of the cash flows from other assets and pensionsliabilities, which means that in many cases multiple assets are tested for recovery as a group. Our asset groupings vary based on the related business in which the long‑lived assets are employed and the interrelationship between those long‑lived assets in producing net cash flows; for example, multiple manufacturing facilities may work in concert with one another or may work on a stand‑alone basis to produce net cash flows. We utilize our long‑lived assets in multiple industries and economic environments and our asset groupings reflect these various factors.

We monitor the operating and cash flow results of our long‑lived assets or asset groups classified as held and used to identify whether events and circumstances indicate the remaining useful lives of those assets should be adjusted, or if the carrying value of those assets or asset groups may not be recoverable. Undiscounted estimated future cash flows are compared to the carrying value of the long‑lived asset or asset group in the event indicators of impairment are identified. In developing our estimates of future undiscounted cash flows, we utilize our internal estimates of future revenues, costs and other post-retirement plansnet cash flows from operating the long-lived asset or asset group over the life of the asset or primary asset if an asset group. This requires us to make judgments about future levels of sales volumes, pricing, raw material costs and other operating expenses.

If the undiscounted estimated future cash flows are less than the carrying amount, we determine the fair value of the asset or asset group and record an impairment charge in current earnings to the extent carrying value exceeds fair value. Fair values may be determined based on estimated discounted cash flows, by prices for like or similar assets in similar markets or a combination of both. There are currently no long‑lived assets or asset groups classified as held and used for which there were indicators of impairment that would require a recoverability test.

Long‑lived assets or asset groups that are part of a disposal group that meets the criteria to be critical policies dueclassified as held for sale are not assessed for impairment, but rather a loss on sale is recorded against the disposal group if fair value, less cost to sell, of the estimation processes involved.

disposal group is less than its carrying value. If the disposal group’s fair value exceeds its carrying value we record a gain, assuming all other criteria for a sale are met, when the transaction closes.


Revenue Recognition.    We recognizeRecognition
For the three years ended December 31, 2017, we recognized revenue when all of the criteria under current U.S.then existing GAAP arewere met. Those include:


pervasive evidence of an arrangement exists,

•
delivery has occurred,

•
the customer takes ownership and assumes risk of loss,

•
collection is probable at the time of sale and

•
the sales price is fixed or determinable.


The first four criteria are generally a matter of fact based on the terms and conditions of sale along with estimates of delivery times for those sales with delivery terms and an assessment of customer credit risk at the time of sale. The most critical judgments involved in revenue recognition are primarily those related to concluding that the sales price is determinable. We offer various early payment discounts, rebates and other incentives to our customers primarily for competitive reasons. We estimate the impact of these items at the time of sale based on historical experience of the ultimate price collected for similar transactions with similar customers, industries and geographic markets adjustedand adjust based on any known events or conditions that would suggest a different outcome. We believe that we have sufficient history and other information available to produce a reliable estimate and conclude that the price is determinable at the time of sale. We reflect the impact of these various discounts and incentives as a reduction of revenue at the time of sale and subsequently adjust the initial estimate as new information becomes available.

        Inventories.    Inventories are valued at the lower of cost or market with cost determined primarily on an average cost basis. Cost of inventories includes direct as well as certain indirect costs associated with the acquisition and production process. These costs include raw materials, direct and indirect labor, and manufacturing overhead. Manufacturing overhead includes materials, depreciation and amortization related to property, plant, and equipment and other intangible assets used directly and indirectly


Beginning in the acquisition and production of inventory, and costs related to our distribution network such as inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs, and other such costs associated with preparing our products for sale.

        Under U.S. GAAP, market is defined as current replacement cost, subject to a floor and a ceiling. The floor is net realizable value less an approximately normal profit margin and the ceiling is net realizable value. Net realizable value is defined as estimated selling price less costs of completion and disposal. The estimates that are subject to uncertainty include estimates of selling prices, costs of completion and disposal, and the levels of excess and obsolete inventory. The Company regularly reviews inventory quantities on hand for indicators that cost may exceed market. These indicators include excess and obsolete inventory and trends in raw material costs or selling prices. The Company utilizes historical write-off information as well as forecasted selling prices to determine if market is


below cost. At year end, if any reserves are recorded they are not reversed and market is established as the inventory's new cost basis. In general, the Company performs the test described above at a product level.

        Deferred Revenue and Extended Product Warranty.    We offer extended warranty contracts on sales of certain products; the most significant being those offered on our installed roofing systems within the Construction Materials segment. The lives of these warranties range from five to thirty years. All2018, revenue from the sale of these contracts is deferred and amortized on a straight-line basis over the life of the contracts. Current costs of services performed under these contracts are expensed as incurred. We also record an additional loss and a corresponding reserve if the total expected costs of providing serviceswill be recognized under the contract at a product line level exceed unearned revenues equalguidance in Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Refer to such excess. We estimate total expected warranty costs using quantitative measures based on historical claims experience and management judgment.

        Goodwill and Indefinite-Lived Intangible Assets.    Indefinite-lived intangible assets are recognized and recorded at their acquisition-date fair values. Intangible assets with indefinite useful lives are not amortized but are tested annually, or more often if impairment indicators are present, for impairment via a one-step process by comparing the fair value of the intangible asset with its carrying value. If the intangible asset's carrying value exceeds its fair value, an impairment charge is recorded in current earnings for the difference. We estimate the fair value of our indefinite-lived intangible assets based on the income approach utilizing the discounted cash flow method. We periodically re-assess indefinite-lived intangible assets as to whether their useful lives can be determined and if so, we begin amortizing any applicable intangible asset.

        Goodwill is not amortized but is tested annually, or more often if impairment indicators are present, for impairment at a reporting unit level. We have determined that our operating segments are our reporting units. We have allocated goodwill to our reporting units as follows:

(in millions)
 December 31,
2015		 December 31,
2014		 

Carlisle Construction Materials

 $118.7 $123.3 

Carlisle Interconnect Technologies

  555.4  554.3 

Carlisle Fluid Technologies

  173.4  — 

Carlisle Brake & Friction

  226.6  226.6 

Carlisle FoodService Products

  60.3  60.3 
​​​ ​ ​​ ​ ​

Total

 $1,134.4 $964.5 
​​​ ​ ​​ ​ ​
​​​​​​​​
​​​ ​ ​​ ​ ​

        For the 2015 impairment test, four reporting units were tested for impairment using ASC 350's quantitative approach: Carlisle Construction Materials, Carlisle Interconnect Technologies, Carlisle Brake & Friction, and Carlisle FoodService Products. We estimate that all of our indefinite-lived intangible assets' fair values exceeded their carrying values at these reporting units. We estimated the fair value of our reporting units primarily based on the income approach utilizing the discounted cash flow method. We also utilized fair value estimates derived from the market approach utilizing the public company market multiple method to validate the results of the discounted cash flow method, which required us to make assumptions about the applicability of those multiples to our reporting units. The discounted cash flow method required us to estimate future cash flows and discount those amounts to present value. The key assumptions that drove fair value included:


        Fair value exceeded carrying value for the above reporting units at December, 31, 2015. While we believe these assumptions are appropriate, they are subject to uncertainty and by nature include judgments and estimates regarding various factors including the realization of sales price increases, fluctuation in price and availability in key raw materials, and operating efficiencies.

        The Carlisle Fluid Technologies reporting unit was tested for impairment using ASC 350's qualitative approach due to the fact that the business that comprises the CFT reporting unit was acquired AprilNote 1 2015 and based on our comparison of estimates of future performance at December 31, 2015 versus our estimates at the time of the acquisition we concluded that there were no significant changes and therefore no indicators of impairment at December 31, 2015. Our estimates of future performance considered factors such as sales growth, expected raw materials pricing, and the business environment of the industries CFT serves. We will continue to evaluate the CFT reporting unit for indicators of impairment on an interim basis and expect to perform a quantitative analysis at the next annual impairment test.

        As discussed in Item 2 of the Company's September 30, 2015 Quarterly Report on 10-Q under Financial Reporting Segments, we performed an interim goodwill impairment test for the Carlisle Brake & Friction reporting unit as of September 30, 2015 and concluded that its fair value exceeded its carrying value. During the annual impairment testing performed as of October 1, 2015, we estimated that CBF's fair value, utilizing the method discussed above, similarly continued to exceed its carrying value by approximately 15%. Further, based on our estimates of fair value for specific indefinite-lived intangible assets utilized by the CBF reporting unit we concluded that no impairment exists at December 31, 2015. We have and will continue to monitor EBIT margins versus forecasted performance for this reporting unit given the economic conditions in its industry as to whether there are any indicators of impairment. Consequently, if our current estimates of recovery in CBF's end markets do not materialize as expected and/or the U.S. Dollar continues to strengthen, and therefore results continue to be lower than anticipated, or if interest rates and other factors affecting the industry WACC adversely change, an impairment loss may be recorded.

        See Note 10 to the Consolidated Financial Statements in Item 8 for more information regarding goodwill.

        Valuationthe effect of Long-Lived Assets.    Long-lived assets or asset groups, including amortizable intangible assets, are tested for impairment whenever events or circumstances indicate thatadopting the carrying amount of the asset or asset group may not be recoverable. For purposes of testing for impairment, we group our long-lived assets classified as held and used at the lowest level for which identifiable cash flows are largely independent of the cash flows from other assets and liabilities. Our asset groupings vary based on the related business in which the long-lived asset is employed and the interrelationship between those long-lived assets in producing net cash flows; for example, multiple manufacturing facilities may work in concert with one another or may work on a stand-alone basis to produce net cash flows. We utilize our long-lived assets in multiple industries and economic environments and our asset grouping reflects these various factors

        We monitor the operating and cash flow results of our long-lived assets or asset groups classified as held and used to identify whether events and circumstances indicate the remaining useful lives of those assets should be adjusted, or if the carrying value of those assets or asset groups may not be recoverable. In the event indicators of impairment are identified, undiscounted estimated future cash flows are compared to the carrying value of the long-lived asset or asset group. If the undiscounted estimated future cash flows are less than the carrying amount, we determine the fair value of the asset or asset group and record an impairment charge in current earnings to the extent carrying value exceeds fair value. Fair values may be determined based on estimated discounted cash flows, by prices


for like or similar assets in similar markets, or a combination of both. There are currently no long-lived assets or asset groups classified as held and used for which the related undiscounted cash flows do not substantially exceed their carrying amounts.

        Long-lived assets or asset groups that are part of a disposal group that meets the criteria to be classified as held for sale are not assessed for impairment but rather if fair value, less cost to sell, of the disposal group is less than its carrying value a loss on sale is recorded against the disposal group.

        Pensions.    We maintain defined benefit retirement plans for certain employees. The annual net periodic expense and benefit obligations related to these plans are determined on an actuarial basis. This determination requires assumptions to be made concerning general economic conditions (particularly interest rates), expected return on plan assets, increases to compensation levels, and health care cost trends. These assumptions are reviewed periodically by management in consultation with our independent actuary and investment manager. Changes in the assumptions to reflect actual experience can result in a change in the net periodic expense and accrued benefit obligations. Beginning in 2016, we will move from utilizing a weighted-average discount rate, which was derived from the yield curve used to measure the benefit obligation at the beginning of the period, to a spot yield rate curve to estimate the pension benefit obligation and net periodic benefit costs. The change in estimate provides a more accurate measurement of service and interest costs by applying the spot rate that could be used to settle each projected cash flow individually. This change in estimate is not expected to have a material effect on net periodic benefit costs for 2016.

        The defined benefit pension plans' assets consist primarily of fixed-income and equity mutual funds, which are considered Level 1 assets under the fair value hierarchy as their fair value is derived from market-observable data. We use the market related valuation method to determine the value of plan assets, which recognizes the change of the fair value of the plan assets over five years. If actual experience differs from these long-term assumptions, the difference is recorded as an unrecognized actuarial gain (loss) and then amortized into earnings over a period of time based on the average future service period, which may cause the expense related to providing these benefits to increase or decrease. The weighted-average expected rate of return on plan assets was 6.20% for the 2015 valuation. While we believe 6.20% is a reasonable expectation based on the plan assets' mix of fixed income and equity investments, significant differences in actual experience or significant changes in the assumptions used may materially affect the pension obligations and future expense. The effects of a 0.25% increase or decrease in the expected rate of return would cause our estimated 2015 pension expense to be approximately $0.4 million lower or $0.4 million higher, respectively. The assumed weighted-average discount rate was 4.15% for the 2015 valuation. The effects of a 0.25% increase or decrease in the assumed discount rate would cause our projected benefit obligation at December 31, 2015 to be approximately $3.8 million lower or $3.7 million higher, respectively. We used a weighted-average assumed rate of compensation increase of 4.29% for the 2015 valuation. This rate is not expected to change in the foreseeable future and is basedstandard on our actual rate of compensation increase over the past several years, adjusted to reflect management's expectations regarding future labor costs.

        We also have a limited number of unfunded post-retirement benefit programs that provide certain retirees with life insurance, medical and prescription drug coverage. The annual net periodic expense and benefit obligations of these programs are also determined on an actuarial basis and are subject to assumptions on the discount rate and increases in compensation levels. The discount rate used for the 2015 valuation was 3.99%. The effects of a 1% increase or decrease in either the discount rate or the assumed health care cost trend rates would not be material. Similar to the defined benefit retirement plans, these plans' assumptions are reviewed periodically by management in consultation with our independent actuary. Changes in the assumptions can result in a change in the net periodic expense and accrued benefit obligations.

reported revenue.

Income Taxes.Taxes
We record income taxes in accordance with ASC 740,Income Taxes, which includesincluding an estimate of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our financial statements or tax returns.

        Deferred tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We periodically assess the realizability of deferred tax assets and the adequacy of deferred tax liabilities.

        Realization of deferred tax assets involves estimates regarding (1) the timing and amount of the reversal of taxable temporary differences, (2) expected future taxable income, and (3) the impact of tax planning strategies. We believe that it is more likely than not that we may not realize the benefit of certain deferred tax assets and, accordingly, have established a valuation allowance against them. In assessing the need for a valuation allowance, we consider all available positive and negative evidence, including past operating results, projections of future taxable income and the feasibility of and potential changes to ongoing tax planning strategies. Although realization is not assured for the remaining deferred tax assets, we believe it is more likely than not that the remaining deferred tax assets will be realized. However, deferred tax assets could be reduced in the near term if our estimates of taxable income during the carryforward period are significantly reduced or tax planning strategies are no longer viable.


The amount of income tax that we pay annually is dependent on various factors, including the timing of certain deductions and ongoing audits by federal, state and foreign tax authorities, which may result in proposed adjustments. We perform reviews of our income tax positions on a quarterly basis and accrue for potential uncertain tax positions. We believe we have adequately provided for any reasonably foreseeable outcome related to these matters.


The changes included in the Tax Act are broad and complex. As such, on December 22, 2017, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin 118 (“SAB 118”). SAB 118 expresses views of the SEC regarding ASC Topic 740, Income Taxes in the reporting period that includes the enactment date of the Tax Act. The SEC staff issuing SAB 118 recognized that a registrant’s review of certain income tax effects of the Tax Act may be incomplete at the time financial statements are issued for the reporting period that includes the enactment date, including interim periods therein. If a company does not have the necessary information available, prepared or analyzed for certain income tax effects of the Tax Act, SAB 118 allows a company to report provisional numbers and adjust those amounts during the measurement period not to extend beyond one year. We have recorded provisional amounts for all known and estimable impacts of the Tax Act that are effective for the year ended December 31, 2017. Future adjustments to the provisional numbers will be recorded as discrete adjustments to income tax provision in the period in which those adjustments become estimable and/or are finalized.

We continue to review the anticipated impacts of the global intangible low taxed income and base erosion anti-abuse tax on us, which are not effective until calendar year 2018 and are not expected to impact 2017 amounts. Within the calculation of our tax amounts, we have used assumptions and estimates that may change as a result of future guidance, interpretation and rule-making from various regulatory bodies.

Deferred Revenue and Extended Product Warranty

We offer extended warranty contracts on sales of certain products, the most significant being those offered on our installed roofing systems within the CCM segment. The lives of these warranties range from five to 40 years. All revenue from the sale of these contracts is deferred and amortized on a straight‑line basis over the life of the contracts. Current costs of services performed under these contracts are expensed as incurred. We also record an additional loss and a corresponding reserve if the total expected costs of providing services under the contract exceed unearned revenues equal to such excess. We estimate total expected warranty costs using actuarially derived estimates of future costs of servicing the warranties. The key inputs that are utilized to develop these estimates include historical claims experience by type of roofing membrane, location, and labor and material costs. The estimates of the volume and severity of these claims and associated costs are dependent upon the above assumptions and future results could differ from our current expectations. We currently do not have any material loss reserves recorded associated with our extended product warranties.

New Accounting Standards Not Yet Effective

        See

Refer to Note 1 to the Consolidated Financial Statements in Item 8 for more information regarding new accounting standardsstandards.

Items Affecting Comparability

Items affecting comparability include costs, and losses or gains related to, among other things, growth and profitability improvement initiatives and other events outside of core business operations (such as asset impairments, exit and disposal and facility rationalization charges, costs of and related to acquisitions, gains and losses from and costs related to divestitures, and discrete tax items). Because these items affect our, or any particular operating segment's, financial condition or results in a specific period in which they are not yet effective.

Forward-Lookingrecognized, we believe it is appropriate to present the total of these items to provide information regarding the comparability of results of operations period to period.


The components of items affecting comparability for the years ended December 31 follows:
(in millions, except per share amounts) 2017
 
Impact to
Operating Income
 Impact to Income from Continuing Operations Impact to Diluted EPS
Exit and disposal costs $26.8
 $18.5
 $0.29
Other facility rationalization costs 9.7
 7.0
 0.11
Acquisition related costs:   

  
Inventory step-up amortization 11.5
 7.1
 0.11
Other acquisition costs 3.8
 3.1
 0.05
Indemnification losses —
 4.6
 0.07
Losses from divestitures —
 0.5
 0.01
Tax reform (benefit) —
 (52.6) (0.82)
Total items affecting comparability $51.8
 $(11.8) $(0.18)
       
  2016
(in millions, except per share amounts) Impact to
Operating Income		 Impact to Income from Continuing Operations Impact to Diluted EPS
Exit and disposal costs $15.5
 $10.6
 $0.16
Other facility rationalization costs 3.7
 2.7
 0.05
Acquisition related costs:   

  
Inventory step-up amortization 2.0
 1.2
 0.02
Other acquisition costs 4.2
 2.6
 0.04
Gains from divestitures (0.3) (0.6) (0.01)
Total items affecting comparability $25.1
 $16.5
 $0.26
       
  2015
(in millions, except per share amounts) Impact to
Operating Income		 Impact to Income from Continuing Operations Impact to Diluted EPS
Exit and disposal costs $0.5
 $0.3
 $—
Other facility rationalization costs 1.1
 0.7
 0.01
Acquisition related costs:   

  
Inventory step-up amortization 8.6
 5.2
 0.08
Other acquisition costs 2.9
 1.8
 0.03
Total items affecting comparability $13.1
 $8.0
 $0.12

The tax effect of items affecting comparability is based on the statutory rate in the jurisdiction in which the expense or income is deductible or taxable. The per share impact of items affecting comparability to each period is based on diluted shares outstanding using the two-class method (refer to Note 7).

Forward‑Looking Statements

This report contains forward-lookingforward‑looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-lookingForward‑looking statements generally use words such as "expect," "foresee," "anticipate," "believe," "project," "should," "estimate," "will," "plans"“expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” “plans”, "forecast"“forecast” and similar expressions and reflect our expectations concerning the future. Such statements are made based on known events and circumstances at the time of publication and, as such, are subject in the future to unforeseen risks and uncertainties. It is possible that our future performance may differ materially from current expectations expressed in these forward-lookingforward‑looking statements, due to a variety of factors such as: increasing price and product/service competition by foreign and domestic competitors, including new entrants; technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effectivecost‑effective basis; our mix of products/services; increases in raw material costs which cannot be recovered in product pricing; domestic and foreign governmental and public policy changes including environmental and industry regulations; threats associated with and efforts to combat terrorism; protection and validity of patent and other intellectual property rights; the successful integration and identification of our strategic acquisitions; the cyclical nature of our businesses; and the outcome of pending and future litigation and governmental proceedings. In addition, such statements could be affected by general industry and market conditions and growth rates, the condition of the financial

and credit markets and general domestic and international economic conditions including interest rate and currency exchange rate fluctuations. Further, any conflict in the


international arena may adversely affect general market conditions and our future performance. We undertake no duty to update forward-lookingforward‑looking statements.


Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk in the form of changes in interest rates, foreign currency exchange rates and commodity prices for raw materials. We may, from time to time, enter into derivative financial instruments to manage these risks; however, we do not utilize such instruments or contracts for speculative or trading purposes. In the event that we enter into a derivative financial instrument, it is possible that such future dated contracts could no longer serve as a hedge if the projected cash flow does not occur as anticipated at the time of contract initiation.

Interest Rate Risk

We are exposed to interest rate risks as a result of our borrowing and investing activities, which principally includes long-termlong‑term borrowings used to maintain liquidity and to fund our business operations and capital requirements. FromWe may enter into interest rate swaps from time to time to manage our mix of fixed and variable interest rate debt effectively, weeffectively. We may enter into other interest rate swaps.derivatives such as treasury locks or zero cost collars to manage forecasted interest rates associated with bond offerings. As of December 31, 20152017 and 20142016, there were no interest rate swaps or other derivative instruments in place and, at both dates, all of our long-termlong‑term debt (including the current portion) was fixed-ratefixed‑rate and U.S. dollarDollar denominated. We also have a $600 million$1.0 billion revolving credit facility that allows for borrowings at a variable interest rate. We had no outstanding borrowings under this facility as of December 31, 20152017 and 2014.

2016. The nature and amount of our long-termlong‑term debt may vary from time to time as a result of business requirements, market conditions and other factors. We consider the risk to our results of operations from changes in market rates of interest to be minimal as such instruments are fixed-rate. However, for purposes of calculating the market risks associated with the fair value of our long-term debt, we use a one hundred basis point change in market interest rates. As of December 31, 2015 and 2014, the market risk associated with the fair value of our long-term debt, assuming a one hundred basis point change in interest rates was approximately $35 million and $40 million, respectively.

        As a multi-national company, afixed‑rate.

Foreign Currency Exchange Risk

A portion of our operating cash flows are denominated in foreign currencies, and ascurrencies. As such we are exposed to market risk from changes in foreign currency exchange rates. We are primarily exposed to the exchange rates of currencies including the Canadian Dollar, Chinese Renminbi, Euro, British Pound and Japanese Yen. We continually evaluate our foreign currency exposure based on current market conditions and the locations in which we conduct our business. We manage most of our foreign currency exposure on a consolidated basis, which allows us to net certain exposures and take advantage of natural offsets. In order to mitigate foreign currency risk, we may, from time to time, enter into derivative financial instruments, generally foreign currency forward contracts, to hedge the cash flows related to certain foreign currency denominated sales and purchase transactions expected within one year and the related recognized trade receivable or payable. The gains and losses on these contracts offset changes in the value of the related exposures. It is our policy to enter into foreign currency derivative financial instruments only to the extent considered necessary to meet the objectives set forth above. We generally do not hedge the risk from translation of sales and earnings into U.S. dollarsDollars for financial reporting.


We had foreign exchange forward contracts with maturities less than one year for instruments that are designated and qualify as an accounting cash flow hedge with an aggregate U.S. Dollar equivalent notional amountvalue of $7.1$22.3 million outstandingand $17.6 million as of December 31, 2015.2017 and 2016, respectively. The gross fair value was $(0.2) million and $0.9 million as of December 31, 2017 and 2016, respectively. The effective portion of changes in the fair value of the contracts is recorded in accumulated other comprehensive loss in the Consolidated Statements of Shareholders’ Equity and is recognized in operating income when the underlying forecasted transaction impacts earnings. We also had foreign exchange contracts with maturities less than one year for instruments that are not designed as a cash flow hedge, but nonetheless are entered into as an economic hedge of certain foreign currency risk with an aggregate U.S. Dollar equivalent notional value of $38.6 million and $39.3 million as of December 31, 2017 and 2016, respectively. The gross fair value was $0.2 million and $(0.3) million as of December 31, 2017 and 2016, respectively. The unrealized gains and losses resulting from these contracts forare not significant and are recognized in other non-operating (income) expense, net within the reporting period is minimal as they were entered into at or near December 31, 2015. Consolidated Statements of Earnings and Comprehensive Income and partially offset corresponding foreign exchange gains and losses on the underlying items being economically hedged.

The near term sensitivity of these contracts to changes in foreign currency exchange rates is also minimal as they are scheduled to mature in the first quarter of 2016.within 12 months. Further, changes in the fair value of these contracts will be offset by changes in the cash flows of the underlying foreign currency denominated sales, purchases, assets and liabilities which the contracts are intended to mitigate.

mitigate (both accounting and economic hedges).

Commodity Price Risk

We continually address the impact of changes in commodity prices on our results of operations and cash flow. Our exposure to changes in commodity prices is principally indirect as we do not directly purchase exchange-tradedexchange‑traded commodities, but rather purchase raw materials that are a result of further downstream processing (as noted in Item 1 of this Form 10-K)10‑K), primarily those inputs resulting from processing crude oil, natural gas, iron ore, gold, silver and copper. We generally manage the risk of changes in commodity prices that impact our raw material costs by seeking to (1)(i) offset increased costs through increases in prices, (2)(ii) alter the nature and mix of raw materials used to manufacture our finished goods or (3)(iii) enter into commodity-linkedcommodity‑linked sales or purchase contracts, all to the extent possible based on competitive and other economic factors. We may also from time to time enter into derivative financial instruments to mitigate such impact however, atas of December 31, 20152017 and 20142016 we had no derivative financial instruments in place.



Item 8.  Financial Statements and Supplementary Data.


Report of Independent Registered Public Accounting Firm

The

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors and Shareholders of Carlisle Companies Incorporated

Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheetssheet of Carlisle Companies Incorporated (the “Company”) as of December 31, 2015 and 2014,2017, and the related consolidated statementsstatement of earnings, and comprehensive income, shareholders' equity, and cash flows for each of the three years in the periodyear ended December 31, 2015. These2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements arepresent fairly, in all material respects, the responsibilityfinancial position of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

Company as of December 31, 2017, and the results of its operations and its cash flows for the year ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

We conducted our auditshave also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States). (PCAOB), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 16, 2018, expressed an unqualified opinion on the Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesmisstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements. An auditOur audits also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ DELOITTE & TOUCHE LLP

Phoenix, Arizona
February 16, 2018
We have served as the Company’s auditor since 2017.


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The shareholders and the Board of Directors of Carlisle Companies Incorporated

Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Carlisle Companies Incorporated (the “Company”) as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the financial statements referred to above present fairly,Company maintained, in all material respects, the consolidatedeffective internal control over financial positionreporting as of Carlisle Companies Incorporated at December 31, 2015 and 2014, and the consolidated results of its operations and its cash flows for each of the three years2017, based on criteria established in the period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles.

Internal Control - Integrated Framework (2013) issued by COSO.


We have also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), Carlisle Companies Incorporated'sthe consolidated financial statements as of and for the year ended December 31, 2017, of the Company and our report dated February 16, 2018, expressed an unqualified opinion on those financial statements.

As described in Management's Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Accella Holdings LLC., Drexel Metals, Inc., Arbo Holdings Limited and SJ Holdings, Inc. (collectively the “Excluded Acquisitions”), which were acquired on November 1, 2017, July 3, 2017, January 31, 2017 and January 9, 2017, respectively, and whose financial statements constitute 22.2% of total assets and 4.7% of net sales of the consolidated financial statement amounts as of and for the year ended December 31, 2015, based on criteria established in Internal Control—Integrated Framework issued by2017. Accordingly, our audit did not include the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 8, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP
Charlotte, North Carolina
February 8, 2016



Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Carlisle Companies Incorporated

        We have audited Carlisle Companies Incorporated's internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Carlisle Companies Incorporated'sExcluded Acquisitions.


Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management'sManagement’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company'sCompany’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.



Definition and Limitations of Internal Control over Financial Reporting
A company'scompany’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles. A company'scompany’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company'scompany’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        As indicated in the accompanying Management's Report on Internal Control over Financial Reporting, management's assessment

/s/ DELOITTE & TOUCHE LLP
Phoenix, Arizona
February 16, 2018


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the Finishing Brands business which was acquired on April 1, 2015 and is reported as new reporting segment named Carlisle Fluid Technologies ("CFT"). The results of CFT are included in the 2015 consolidated financial statementsShareholders of Carlisle Companies Incorporated and constitute $659.5 million and $620.8 million of total and net assets, respectively, as of December 31, 2015 and $203.2 million and $20.8 million of net sales and earnings before interest and income taxes, respectively, for the year then ended. Our audit of internal control over financial reporting of Carlisle Companies Incorporated also did not include an evaluation of the internal control over financial reporting of CFT.

        In our opinion, Carlisle Companies Incorporated maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the COSO criteria.


We also have audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), theaccompanying consolidated balance sheetssheet of Carlisle Companies Incorporated as of December 31, 2015 and 20142016, and the related consolidated statements of earnings and comprehensive income, shareholders' equity, and cash flows for each of the threetwo years in the period ended December 31, 20152016. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Carlisle Companies Incorporated at December 31, 2016, and our report dated February 8,the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 2016, expressed an unqualified opinion thereon.

in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP
Charlotte, North Carolina
Phoenix, Arizona
February 8, 2016

13, 2017,
except for Note 2, as to which the date is
February 16, 2018



Carlisle Companies Incorporated

Consolidated Statements of Earnings and Comprehensive Income

 
 For the Years Ended December 31, 
(in millions except share and per share amounts)
 2015 2014 2013 

Net sales

 $3,543.2 $3,204.0 $2,943.0 

Cost of goods sold

  
2,536.5		  
2,384.5		  
2,197.4		 

Selling and administrative expenses

  461.9  379.0  353.7 

Research and development expenses

  42.8  33.8  29.3 

Other (income) expense, net

  0.1  (1.6) (4.2)
​​​ ​ ​​​ ​​ ​ ​

Earnings before interest and income taxes

  501.9  408.3  366.8 

Interest expense, net

  
34.0		  
32.2		  
33.8		 
​​​ ​ ​​ ​ ​​​ ​

Earnings before income taxes from continuing operations

  467.9  376.1  333.0 

Income tax expense (Note 6)

  
148.3		  
124.4		  
97.8		 
​​​ ​ ​​​ ​​ ​ ​

Income from continuing operations

  319.6  251.7  235.2 

Discontinued operations (Note 4)

  
 		  
 		  
 		 

Income (loss) before income taxes

  0.1  (2.1) (60.5)

Income tax benefit

  —  (1.7) (35.0)
​​​ ​ ​​ ​ ​​​ ​

Income (loss) from discontinued operations

  0.1  (0.4) (25.5)
​​​ ​ ​​ ​ ​​ ​ ​

Net income

 $319.7 $251.3 $209.7 
​​​ ​ ​​ ​ ​​​ ​
​​​​​​​​​​​
​​​ ​​​ ​ ​​ ​​

Basic earnings (loss) per share attributable to common shares(1)

          

Income from continuing operations

 $4.89 $3.89 $3.69 

Loss from discontinued operations

  —  —  (0.40)
​​​ ​ ​​ ​ ​​ ​ ​

Basic earnings per share

 $4.89 $3.89 $3.29 
​​​ ​ ​​ ​ ​​​ ​
​​​​​​​​​​​
​​​ ​​​ ​ ​​ ​​

Diluted earnings (loss) per share attributable to common shares(1)

          

Income from continuing operations

 $4.82 $3.83 $3.61 

Loss from discontinued operations

  —  (0.01) (0.39)
​​​ ​ ​​ ​ ​​ ​ ​

Diluted earnings per share

 $4.82 $3.82 $3.22 
​​​ ​ ​​ ​ ​​​ ​
​​​​​​​​​​​
​​​ ​​​ ​ ​​ ​​

Comprehensive Income

          

Net income

 $319.7 $251.3 $209.7 

Other comprehensive income (loss) (Note 18)

          

Change in foreign currency translation

  (29.6) (26.1) (1.6)

Change in accrued post-retirement benefit liability, net of tax

  4.6  (3.8) 5.9 

Loss on hedging activities, net of tax

  (0.3) (0.4) (0.3)
​​​ ​ ​​ ​ ​​​ ​

Other comprehensive income (loss)

  (25.3) (30.3) 4.0 
​​​ ​ ​​ ​ ​​ ​ ​

Comprehensive income

 $294.4 $221.0 $213.7 
​​​ ​ ​​ ​ ​​​ ​
​​​​​​​​​​​
​​​ ​​​ ​ ​​ ​ ​
(1)
Earning per share calculated based on the two-class method.
  For the Years Ended December 31,
(in millions except per share amounts) 2017 2016 2015
Net sales $4,089.9
 $3,675.4
 $3,543.2
       
Cost of goods sold 2,941.9
 2,518.1
 2,536.5
Selling and administrative expenses 589.4
 532.0
 461.9
Research and development expenses 54.9
 48.1
 42.8
Impairment charges —
 141.5
 —
Other operating (income) expense, net (2.0) (2.4) (1.3)
Operating income 505.7
 438.1
 503.3
Interest expense, net 33.5
 30.6
 34.0
Other non-operating expense (income), net 4.0
 (3.0) 1.4
Income from continuing operations before income taxes 468.2
 410.5
 467.9
Provision for income taxes 102.9
 159.7
 148.3
Income from continuing operations 365.3
 250.8
 319.6
       
Discontinued operations:  
  
  
Income (loss) before income taxes 0.3
 (1.1) 0.1
Income tax provision (benefit) 0.1
 (0.4) —
Income (loss) from discontinued operations 0.2
 (0.7) 0.1
Net income $365.5
 $250.1
 $319.7
       
Basic earnings per share attributable to common shares:  
  
  
Income from continuing operations $5.75
 $3.87
 $4.89
Loss from discontinued operations —
 (0.01) —
Basic earnings per share $5.75
 $3.86
 $4.89
       
Diluted earnings per share attributable to common shares:  
  
  
Income from continuing operations $5.71
 $3.83
 $4.82
Loss from discontinued operations —
 (0.01) —
Diluted earnings per share $5.71
 $3.82
 $4.82
       
Average shares outstanding (in thousands):      
Basic 63,073
 64,226
 64,844
Diluted 63,551
 64,883
 65,804
       
Dividends declared and paid per share 1.44
 $1.30
 $1.10
       
Comprehensive Income:  
  
  
Net income $365.5
 $250.1
 $319.7
Other comprehensive income (loss):  
  
  
Change in foreign currency translation 46.6
 (36.7) (29.6)
Change in accrued post-retirement benefit liability, net of tax (5.2) 1.0
 4.6
Other, net of tax (4.9) 0.6
 (0.3)
Other comprehensive income (loss) 36.5
 (35.1) (25.3)
Comprehensive income $402.0
 $215.0
 $294.4
See Note 7 for detailed calculations.accompanying Notes to Consolidated Financial Statements


Carlisle Companies Incorporated 
Consolidated Balance Sheets

(in millions except share and per share amounts) December 31, 2017 December 31, 2016
ASSETS  
  
Current assets:  
  
Cash and cash equivalents $379.6
 $385.3
Receivables, net 657.7
 511.6
Inventories 507.9
 377.0
Prepaid expenses 25.1
 24.3
Other current assets 74.3
 57.0
Total current assets 1,644.6
 1,355.2
     
Property, plant and equipment, net 780.9
 632.2
     
Other assets:  
  
Goodwill, net 1,601.8
 1,081.2
Other intangible assets, net 1,234.4
 872.2
Other long-term assets 38.1
 25.0
Total other assets 2,874.3
 1,978.4
Total assets $5,299.8
 $3,965.8
     
LIABILITIES AND EQUITY  
  
Current liabilities:  
  
Accounts payable 352.4
 243.6
Accrued expenses 278.4
 246.7
Deferred revenue 27.8
 23.2
Total current liabilities 658.6
 513.5
     
Long-term liabilities:  
  
Long-term debt 1,586.2
 596.4
Deferred revenue 188.0
 172.0
Other long-term liabilities 338.7
 217.0
Total long-term liabilities 2,112.9
 985.4
     
Commitments and contingencies (see Note 11) 


 


     
Shareholders' equity:  
  
Preferred stock, $1 par value per share (5,000,000 shares authorized and unissued) —
 —
Common stock, $1 par value per share (200,000,000 shares authorized; 61,839,734 and 64,257,182 shares outstanding, respectively) 78.7
 78.7
Additional paid-in capital 353.7
 335.3
Deferred compensation equity 10.4
 10.3
Treasury shares, at cost (16,613,193 and 14,178,801 shares, respectively) (649.6) (382.6)
Accumulated other comprehensive loss (85.7) (122.2)
Retained earnings 2,820.8
 2,547.4
Total shareholders' equity 2,528.3
 2,466.9
Total liabilities and equity $5,299.8
 $3,965.8
See accompanying notes to Consolidated Financial Statements



Carlisle Companies Incorporated

Consolidated Balance Sheets

Statements of Cash Flows

(in millions except share and per share amounts)
 December 31,
2015		 December 31,
2014		 

Assets

       

Current assets:

       

Cash and cash equivalents

 $410.7 $730.8 

Receivables, net of allowance of $4.7 in 2015 and $4.8 in 2014

  502.5  439.2 

Inventories (Note 8)

  356.0  339.1 

Deferred income taxes (Note 6)

  —  35.4 

Prepaid expenses and other current assets

  50.3  67.0 
​​​​ ​​ ​ ​

Total current assets

  1,319.5  1,611.5 
​​​ ​ ​​​ ​

Property, plant, and equipment, net of accumulated depreciation of $568.7 in 2015 and $513.7 in 2014 (Note 9)

  585.8  547.3 

Other assets:

  
 		  
 		 

Goodwill, net (Note 10)

  1,134.4  964.5 

Other intangible assets, net (Note 10)

  887.8  611.7 

Other long-term assets

  26.6  23.7 
​​​ ​ ​​ ​ ​

Total other assets

  2,048.8  1,599.9 
​​​ ​​​ ​ ​

TOTAL ASSETS

 $3,954.1 $3,758.7 
​​​ ​ ​​​ ​
​​​​​​​​
​​​ ​ ​​​ ​

Liabilities and Shareholders' Equity

       

Current liabilities:

       

Short-term debt, including current maturities (Note 12)

 $149.9 $— 

Accounts payable

  212.6  198.0 

Accrued expenses

  219.4  176.3 

Deferred revenue (Note 14)

  24.0  17.9 
​​​​ ​​ ​ ​

Total current liabilities

  605.9  392.2 
​​​ ​ ​​​ ​

Long-term liabilities:

       

Long-term debt (Note 12)

  598.7  749.8 

Deferred revenue (Note 14)

  159.7  151.1 

Other long-term liabilities (Note 16)

  242.4  260.6 
​​​ ​ ​​ ​​

Total long-term liabilities

  1,000.8  1,161.5 
​​​​ ​​ ​ ​

Shareholders' equity:

       

Preferred stock, $1 par value per share. Authorized and unissued 5,000,000 shares

  —  — 

Common stock, $1 par value per share. Authorized 200,000,000 shares; 78,661,248 shares issued; 64,051,600 outstanding in 2015 and 64,691,059 outstanding in 2014

  78.7  78.7 

Additional paid-in capital

  293.4  247.8 

Deferred compensation equity (Note 5)

  8.0  6.0 

Cost of shares in treasury—14,383,241 shares in 2015 and 13,723,201 shares in 2014

  (327.4) (200.1)

Accumulated other comprehensive loss (Note 18)

  (87.1) (61.8)

Retained earnings

  2,381.8  2,134.4 
​​​​ ​​ ​ ​

Total shareholders' equity

  2,347.4  2,205.0 
​​​ ​ ​​​ ​

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 $3,954.1 $3,758.7 
​​​ ​ ​​ ​​
​​​​​​​​
​​​ ​ ​​ ​ ​
  For the Years Ended December 31,
(in millions) 2017 2016 2015
Operating activities      
Net income $365.5
 $250.1
 $319.7
Reconciliation of net income to cash flows provided by operating activities:  
  
  
Depreciation 84.9
 75.1
 73.5
Amortization 84.2
 62.7
 55.8
Impairment charges —
 141.5
 —
Stock-based compensation, net of tax benefit 13.2
 (2.6) 2.7
Deferred taxes (58.5) (25.0) (15.8)
Other operating activities, net 13.9
 (6.0) (1.3)
Changes in assets and liabilities, excluding effects of acquisitions:  
  
  
Receivables (53.9) 0.3
 (11.8)
Inventories (48.5) (12.2) 23.0
Prepaid expenses and other assets (20.1) (9.2) 6.7
Accounts payable 42.7
 21.6
 (2.9)
Accrued expenses 20.6
 23.1
 62.9
Deferred revenues 19.3
 11.7
 15.5
Other long-term liabilities (4.6) 0.1
 1.2
Net cash provided by operating activities 458.7
 531.2
 529.2
       
Investing activities  
  
  
Acquisitions, net of cash acquired (934.3) (185.5) (598.9)
Capital expenditures (159.9) (108.8) (72.1)
Other investing activities, net (0.1) 0.9
 0.2
Net cash used in investing activities (1,094.3) (293.4) (670.8)
       
Financing activities  
  
  
Proceeds from revolving credit facility 1,189.0
 —
 —
Repayments of revolving credit facility (1,189.0) —
 —
Proceeds from notes 997.2
 —
 —
Repayments of notes —
 (150.0) (1.5)
Repurchases of common stock (268.4) (75.0) (137.2)
Dividends paid (92.1) (84.5) (72.3)
Financing costs (8.3) —
 —
Proceeds from exercise of stock options, net (1.2) 48.4
 39.4
Other financing activities, net —
 —
 (1.4)
Net cash provided (used) in financing activities 627.2
 (261.1) (173.0)
       
Effect of foreign currency exchange rate changes on cash and cash equivalents 2.7
 (2.1) (5.5)
       
Change in cash and cash equivalents (5.7) (25.4) (320.1)
Cash and cash equivalents  
  
  
Beginning of period 385.3
 410.7
 730.8
End of period $379.6
 $385.3
 $410.7

See accompanying notes to Consolidated Financial Statements




Carlisle Companies Incorporated

Consolidated Statements of Cash Flows

Shareholders’ Equity 


 
 For the Years Ended
December 31,		 
(in millions)
 2015 2014 2013 

Operating activities

          

Net income

 $319.7 $251.3 $209.7 

Reconciliation of net income to cash flows provided by operating activities:

          

Depreciation

  73.5  64.7  75.4 

Amortization

  55.8  39.3  38.5 

Non-cash compensation, net of tax benefit

  2.7  3.3  11.9 

Gain on sale of businesses

  —  —  (6.2)

(Gain) loss on sale of property and equipment, net

  1.0  (0.9) (1.3)

Impairment of assets

  —  —  100.3 

Deferred taxes

  (15.8) (9.9) (61.7)

Foreign exchange (gain) loss

  —  (2.0) 0.1 

Changes in assets and liabilities, excluding effects of acquisitions and divestitures:

          

Receivables

  (11.8) (18.1) 8.4 

Inventories

  23.0  (27.7) 35.6 

Prepaid expenses and other assets

  6.7  (5.5) 11.1 

Accounts payable

  (2.9) (5.1) (20.6)

Accrued expenses and deferred revenues

  78.4  14.5  12.6 

Long-term liabilities

  1.2  (8.5) 0.9 

Other operating activities

  (2.3) 0.5  — 
​​​ ​ ​​​ ​​ ​ ​

Net cash provided by operating activities

  529.2  295.9  414.7 
​​​ ​ ​​ ​ ​​​ ​

Investing activities

          

Capital expenditures

  (72.1) (118.8) (110.8)

Acquisitions, net of cash

  (598.9) (194.0) — 

Proceeds from sale of property and equipment

  0.2  5.3  11.9 

Proceeds from sale of business

  —  9.7  369.0 
​​​ ​ ​​ ​ ​​ ​ ​

Net cash provided by (used in) investing activities

  (670.8) (297.8) 270.1 
​​​ ​ ​​​ ​​ ​ ​

Financing activities

          

Net change in short-term borrowings and revolving credit lines

  (1.4) —  — 

Repayments of long-term debt

  (1.5) (1.5) (1.5)

Debt issuance costs

  —  —  (0.6)

Acquistion date value of contingent consideration settled

  —  —  (5.2)

Dividends paid

  (72.3) (61.2) (53.7)

Proceeds from issuance of treasury shares and stock options

  39.4  42.5  19.5 

Repurchases of common stock

  (137.2) —  — 
​​​ ​​​ ​ ​​ ​​

Net cash used in financing activities

  (173.0) (20.2) (41.5)
​​​ ​ ​​ ​ ​​ ​ ​

Effect of foreign currency exchange rate changes on cash and cash equivalents

  (5.5) (1.6) (1.3)
​​​ ​ ​​ ​ ​​ ​ ​

Change in cash and cash equivalents

  (320.1) (23.7) 642.0 

Cash and cash equivalents

          

Beginning of period

  730.8  754.5  112.5 
​​​ ​ ​​ ​ ​​​ ​

End of period

 $410.7 $730.8 $754.5 
​​​ ​ ​​​ ​​ ​ ​
​​​​​​​​​​​
​​​ ​ ​​ ​​​ ​ ​
(in millions except share and per share amounts)Common Stock Outstanding Additional Paid-In Capital Deferred Compensation Equity Accumulated Other Comprehensive Income (Loss) Retained Earnings Shares in Treasury Total Shareholders' Equity
Shares Amount     Shares Cost 
Balance as of January 1, 201564,691,059
 $78.7
 $247.8
 $6.0
 $(61.8) $2,134.4
 13,723,201
 $(200.1) $2,205.0
Net income—
 —
 —
 —
 —
 319.7
 —
 —
 319.7
Other comprehensive loss, net of tax—
 —
 —
 —
 (25.3) —
 —
 —
 (25.3)
Cash dividends - $1.10 per share—
 —
 —
 —
 —
 (72.3) —
 —
 (72.3)
Repurchases of common stock(1,496,411) —
 —
 —
 —
 —
 1,496,411
 (137.2) (137.2)
Issuances and deferrals, net for stock based compensation (1)
856,952
 —
 45.6
 2.0
 —
 —
 (836,371) 9.9
 57.5
Balance as of December 31, 201564,051,600
 $78.7
 $293.4
 $8.0
 $(87.1) $2,381.8
 14,383,241
 $(327.4) $2,347.4
Net income—
 —
 —
 —
 —
 250.1
 —
 —
 250.1
Other comprehensive loss, net of tax—
 —
 —
 —
 (35.1) —
 —
 —
 (35.1)
Cash dividends - $1.30 per share—
 —
 —
 —
 —
 (84.5) —
 —
 (84.5)
Repurchases of common stock(782,057) —
 —
 —
 —
 —
 782,057
 (75.7) (75.7)
Issuances and deferrals, net for stock based compensation (1)
987,639
 —
 41.9
 2.3
 —
 —
 (986,497) 20.5
 64.7
Balance as of December 31, 201664,257,182
 $78.7
 $335.3
 $10.3
 $(122.2) $2,547.4
 14,178,801
 $(382.6) $2,466.9
Net income—
 —
 —
 —
 —
 365.5
 —
 —
 365.5
Other comprehensive income, net of tax—
 —
 —
 —
 36.5
 —
 —
 —
 36.5
Cash dividends - $1.44 per share—
 —
 —
 —
 —
 (92.1) —
 —
 (92.1)
Repurchases of common stock(2,719,538) —
 —
 —
 —
 —
 2,719,538
 (268.4) (268.4)
Issuances and deferrals, net for stock based compensation (1)
302,090
 —
 18.4
 0.1
 —
 —
 (285,146) 1.4
 19.9
Balance as of December 31, 201761,839,734
 $78.7
 $353.7
 $10.4
 $(85.7) $2,820.8
 16,613,193
 $(649.6) $2,528.3

See acompanying notes to Consolidated Financial Statements

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


Carlisle Companies Incorporated

Consolidated Statements of Shareholders' Equity

(In millions, except share and per share amounts)

 
 Common Stock  
  
 Accumulated
Other
Comprehensive
Income (loss)		  
 Shares in Treasury  
 
 
 Additional
Paid-In
Capital		 Deferred
Compensation
Equity		 Retained
Earnings		 Total
Shareholders'
Equity		 
 
 Shares Amount Shares Cost 

Balance at December 31, 2012

  63,127,299 $78.7 $171.4 $0.6 $(35.5)$1,788.3  15,249,714 $(215.4)$1,788.1 

Net income

     —  —  —  —  209.7     —  209.7 

Other comprehensive income, net of tax

     —  —  —  4.0  —     —  4.0 

Cash dividends—$0.84 per share

     —  —  —  —  (53.7)    —  (53.7)

Stock based compensation other(1)

  531,478  —  29.7  2.4  —  —  (488,233) 5.9  38.0 
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Balance at December 31, 2013

  63,658,777  78.7  201.1  3.0  (31.5) 1,944.3  14,761,481  (209.5) 1,986.1 

Net income

     —  —  —  —  251.3     —  251.3 

Other comprehensive loss, net of tax

     —  —  —  (30.3) —     —  (30.3)

Cash dividends—$0.94 per share

     —  —  —  —  (61.2)    —  (61.2)

Stock based compensation(1)

  1,032,282  —  46.7  3.0  —  —  (1,038,280) 9.4  59.1 
​​​ ​ ​​ ​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​​​ ​ ​​ ​​

Balance at December 31, 2014

  64,691,059  78.7  247.8  6.0  (61.8) 2,134.4  13,723,201  (200.1) 2,205.0 

Net income

     —  —  —  —  319.7     —  319.7 

Other comprehensive loss, net of tax

     —  —  —  (25.3) —     —  (25.3)

Cash dividends—$1.10 per share

     —  —  —  —  (72.3)    —  (72.3)

Common stock repurchase

  (1,496,411) —  —  —  —  —  1,496,411  (137.2) (137.2)

Stock based compensation(1)

  856,952  —  45.6  2.0  —  —  (836,371) 9.9  57.5 
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Balance at December 31, 2015

  64,051,600 $78.7 $293.4 $8.0 $(87.1)$2,381.8  14,383,241 $(327.4)$2,347.4 
​​​ ​ ​​ ​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​​​ ​ ​​ ​​
​​​​​​​​​​​​​​​​​​​​​​​​​​​​​
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​
(1)
Stock based compensation includes stock option activity, net of tax, and restricted share activity

See accompanying notes to Consolidated Financial Statements



Notes to Consolidated Financial Statements

Note 1—1—Summary of Accounting Policies

Nature of Business

Carlisle Companies Incorporated, its wholly owned subsidiaries and their divisions or subsidiaries, referred to herein as the "Company"“Company” or "Carlisle,"“Carlisle,” is a global diversified company that designs, manufactures and markets a wide range of products that serve a broad range of niche markets including commercial roofing, energy, agriculture, mining, construction, aerospace and defense electronics, medical technology, transportation, general industrial, protective coating,coatings, wood, auto refinishing and foodservice and healthcare and sanitary maintenance. The Company markets its products as a component supplier to original equipment manufacturers, distributors as well asand directly to end-users.

Basis of Consolidation

Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany transactions and accounts have been eliminated. During the fourth quarter of 2017, the Company revised (i) the Consolidated Statement of Earnings to include a subtotal of operating income, with non-operating (income) expense reflected as a separate line item below interest expense, net and (ii) its segment measure of profit and loss to operating income (previously earnings before interest and taxes). The Company has reclassified certain prior period amounts to conform to the current period presentation of operating income, including other operating (income) expense, operating income and other non-operating (income) expense in the Consolidated Statements of Earnings and operating income in Notes 2 and 19. These changes were made to better reflect the Company's fiscal year-end is December 31.

results of operations and to be consistent with the change in the measure of operating performance evaluated by the Chief Operating Decision Maker, the Company's Chief Executive Officer.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("(“United States"States” or "U.S."“U.S.”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash Equivalents

        Debt securities

Highly liquid investments with a maturity of three months or less when acquired are considered cash equivalents.

Revenue Recognition

Revenues are recognized when persuasive evidence of an arrangement exists, goods have been shipped (or services have been rendered), the customer takes ownership and assumes risk of loss, collection is probable and the sales price is fixed or determinable.

Provisions for rights of return, discounts, and rebates to customers and other adjustments are provided for at the time of sale as a deduction to revenue. Costs related to standard warranties are estimated at the time of sale and recorded as a component of Costcost of goods sold.

Shipping and Handling Costs

Costs incurred to physically transfer product to customer locations are recorded as a component of cost of goods sold. Charges passed on to customers are recorded into net sales.


Other Non-operating (Income) Expense
Other non-operating (income) expense primarily includes foreign currency exchange (gains) losses, indemnification (gains) losses associated with acquired businesses, (income) loss from equity method investments and (gains) losses on sales of a business.


Receivables and Allowance for Doubtful Accounts

Receivables are stated at net realizable value. The Company performs ongoing evaluations of its customers'customers’ current creditworthiness, as determined by the review of their credit information to determine if events have occurred subsequent to the recognition of the revenue and related receivable



Notes to Consolidated Financial Statements (Continued)

Note 1—Summary of Accounting Policies (Continued)

that provides evidence that such receivable will be realized at an amount less than that recognized at the time of sale. Estimates of net realizable value are based on historical losses, adjusting for current economic conditions and, in some cases, evaluating specific customer accounts for risk of loss. The allowance for doubtful accounts was $6.6 million, $4.0 million and $4.7 million atas of December 31, 2017, 2016 and 2015, $4.8 million at December 31, 2014, and $3.3 million at December 31, 2013.respectively. Changes in economic conditions in specific markets in which the Company operates could have an effect on reserve balances required and on the ability to recognize revenue until cash is collected or collectability is probable. The following is activity


Changes in the Company's allowance for doubtful accounts for the years ended December 31:

31 follows:

(in millions) 2017 2016 2015
Balance as of January 1 $4.0
 $4.7
 $4.8
Provision charged to expense 1.3
 0.3
 0.1
Amounts acquired 2.0
 0.4
 1.5
Amounts written off, net of recoveries (0.7) (1.4) (1.7)
Balance as of December 31 $6.6
 $4.0
 $4.7

(in millions)
 2015 2014 2013 

Balance at January 1

 $4.8 $3.3 $5.2 

Provision charged to expense

  0.3  1.2  0.1 

Provision charged to other accounts

  0.1  1.1  (1.4)

Amounts written off, net of recoveries

  (0.5) (0.8) (0.6)
​​​ ​ ​​ ​ ​​ ​ ​

Balance at December 31

 $4.7 $4.8 $3.3 
​​​ ​​​ ​ ​​ ​​
​​​​​​​​​​​
​​​ ​ ​​ ​ ​​ ​ ​

Inventories

Inventories are valued at the lower of cost or marketand net realizable value with cost determined primarily on an average cost basis. Cost of inventories includes direct as well as certain indirect costs associated with the acquisition and production process. These costs include raw materials, direct and indirect labor and manufacturing overhead. Manufacturing overhead includes materials, depreciation and amortization related to property, plant and equipment and other intangible assets used directly and indirectly in the acquisition and production of inventory and costs related to the Company'sCompany’s distribution network such as inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs and other such costs associated with preparing the Company'sCompany’s products for sale.

Deferred Revenue and Extended Product Warranty

The Company offers extended warranty contracts on sales of certain products; the most significant being those offered on its installed roofing systems within the Construction MaterialsCCM segment. The livesterm of these warranties range from five to thirty40 years. All revenue forfrom the sale of these contracts is deferred and amortized on a straight-linestraight‑line basis over the life of the contracts. The weighted average life of the contracts is approximately 19 years. Current costs of services performed under these contracts are expensed as incurred and included in Costcost of goodgoods sold. The Company also recordswould record a reserve within Accruedaccrued expenses if the total expected costs of providing services at a product line level exceed unearned revenues. Total expected costs of providing extended product warranty services are actuarially determined using standard quantitative measures based on historical claims experience and management judgment. See Refer to Note 14 for additional information regarding deferred revenue and extended product warranties.

Property, Plant and Equipment

Property, plant and equipment are stated at cost including interest costs associated with qualifying capital additions. Costs allocated to property, plant and equipment of acquired companies are based on estimated fair value at the date of acquisition. Depreciation is principally computed on the straight-linea straight‑line basis over the estimated useful lives of the assets. Depreciation includes the amortization



Notes to Consolidated Financial Statements (Continued)

Note 1—Summary of Accounting Policies (Continued)

of capital leases. Asset lives are generally 20 to 40 years for buildings, five to 15 years for machinery and equipment and threetwo to ten20 years for leasehold improvements.

Leasehold improvements are amortized based on the shorter of the underlying lease term or the asset’s estimated useful life.


Valuation of Long-LivedLong‑Lived Assets

        Long-lived

Long‑lived assets or asset groups, including amortizable intangible assets, are tested for impairment whenever events or circumstances indicate that the carrying amount of the asset or asset group may not be recoverable. For purposes of testing for impairment, theThe Company groups its long-livedlong‑lived assets classified as held and used at the lowest level for which identifiable cash flows are largely independent of the cash flows from other assets and liabilities.liabilities for purposes of testing for impairment. The Company's Company’s

asset groupings vary based on the related business in which the long-lived asset islong‑lived assets are employed and the interrelationship between those long-livedlong‑lived assets in producing net cash flows; for example, multiple manufacturing facilities may work in concert with one another or may work on a stand-alonestand‑alone basis to produce net cash flows. The Company utilizes its long-livedlong‑lived assets in multiple industries and economic environments and its asset groupings reflect these various factors.

The Company monitors the operating and cash flow results of its long-livedlong‑lived assets or asset groups classified as held and used to identify whether events and circumstances indicate the remaining useful lives of those assets should be adjusted or if the carrying value of those assets or asset groups may not be recoverable. InUndiscounted estimated future cash flows are compared with the carrying value of the long‑lived asset or asset group in the event indicators of impairment are identified, undiscounted estimated future cash flows are compared to the carrying value of the long-lived asset or asset group.identified. If the undiscounted estimated future cash flows are less than the carrying amount, the Company determines the fair value of the asset or asset group and records an impairment charge in current earnings to the extent carrying value exceeds fair value. Fair values may be determined based on estimated discounted cash flows by prices for like or similar assets in similar markets or a combination of both.

        Long-lived

Long‑lived assets or asset groups that are part of a disposal group that meets the criteria to be classified as held for sale are not assessed for impairment, but rather a loss is recorded against the disposal group if fair value, less cost to sell, of the disposal group is less than its carrying value a loss is recorded against the disposal group.

value.

Goodwill and Other Intangible Assets

Intangible assets are recognized and recorded at their acquisition-dateacquisition date fair values. Intangible assets that are subject to amortization are amortized on a straight-line basis over their useful lives. Definite-lived intangible assets consist primarily of acquired customer relationships, patents and patents,technology, certain trade names and non-compete agreements and intellectual property.agreements. The Company determines the useful life of its customer relationshipdefinite-lived intangible assets based on multiple factors including the size and make-up of the acquired customer base, the expected dissipation of those customers over time, the Company'sCompany’s own experience in the particular industry, the impact of known trends such as technological obsolescence, product demand or other factors and the period over which expected cash flows are used to measure the fair value of the intangible asset at acquisition. The Company periodically re-assesses the useful lives of its customer relationshipdefinite-lived intangible assets when events or circumstances indicate that useful lives have significantly changed from the previous estimate.

Intangible assets with indefinite useful lives are not amortized but are tested annually, or more often if impairment indicators are present, for impairment via a one-step process by comparing the fair value of the intangible asset with its carrying value. If the intangible asset'sasset’s carrying value exceeds its fair value, an impairment charge is recorded in current earnings for the difference.excess. The Company estimates the fair value of its indefinite-lived intangible assets based on the income approach utilizing



Notes to Consolidated Financial Statements (Continued)

Note 1—Summary of Accounting Policies (Continued)

the discounted cash flow method. The Company'sCompany’s annual testing date for indefinite-lived intangible assets is October 1. The Company periodically re-assesses indefinite-lived intangible assets as to whether their useful lives can be determined and, if so, begins amortizing any applicable intangible asset.

Goodwill is not amortized but is tested annually, or more often if impairment indicators are present, for impairment at a reporting unit level. The Company'sCompany’s annual testing date for goodwill is October 1. The Company has determinedfive reporting units, that align with its operating segments are its reporting units.

        See reportable segments. 

Refer to Note 10 for additional information regarding goodwill and other intangible assets.


Lease Arrangements

The Company is a party to various lease arrangements that include scheduled rent increases, rent holidays or may provide for contingent rentals or incentive payments to be made to the Company as part of the terms of the lease. Scheduled rent increases and rent holidays are included in the determination of minimum lease payments when assessing lease classification and, along with any lease incentives, are included in rent expense on a straight-linestraight‑line basis over the lease term. Scheduled rent increases that are dependent upon a change in an index or rate such as the consumer price index or prime rate are included in the determination of rental expense at the time the rate or index changes. Contingent rentals are excluded from the determination of minimum lease payments when assessing lease classification and are included in the determination of rent expense when the event that will require additional rents is considered probable. See Note 11 for additional information regarding rent expense.


Contingencies and Insurance Recoveries

The Company is exposed to losses related to various potential claims related to its employee obligations and other matters in the normal course of business, including commercial, employee or regulatory litigation. The Company records a liability related to such potential claims, both those reported to the Company and incurred but not yet reported, when probable and reasonably estimable and withestimable. With respect to workers'workers’ compensation obligations. Theobligations, the Company utilizes actuarial models to estimate the ultimate total cost of such claims, primarily based on historical loss experience and expectations about future costs of providing workersworkers’ compensation benefits.

        As part of its risk management strategy, the

The Company maintains occurrence-basedoccurrence‑based insurance contracts related to certain contingent losses primarily workers'workers’ compensation, medical and dental, general liability, property and product liability claims up to applicable retention limits.limits as part of its risk management strategy. The Company records a recovery under these insurance contracts when such recovery is deemed probable. See Refer to Note 11 for additional information regarding contingencies and insurance recoveries.

Pension and Other Post Retirement Benefits

The Company maintains defined benefit pension plans primarily for certain domestic employees. Additionally, the Company has a limited number of post-retirement benefit programs that provide certain retirees with life insurance, medical and prescription drug coverage. The annual net periodic expensebenefit cost and projected benefit obligations related to these plans are determined on an actuarial basis annually on December 31, unless a remeasurement event occurs in an interim period. This determination requires assumptions to be made concerning general economic conditions (particularly interest rates), expected return on plan



Notes to Consolidated Financial Statements (Continued)

Note 1—Summary of Accounting Policies (Continued)

assets, increases to compensation levels and health care costmortality rate trends. These assumptions are reviewed periodically by management in consultation with its independent actuary. Changes in the assumptions to reflect actual experience can result in a change in the net periodic expensebenefit cost and accruedprojected benefit obligations.

The defined benefit pension plans'plans’ assets are measured at fair value annually on December 31, unless a remeasurement event occurs in an interim period. The Company uses the market related valuation method to determine the value of plan assets for purposes of determining the expected return on plan assets component of net periodic benefit cost. The market related valuation method recognizes the change of the fair value of the plan assets over five years. If actual experience differs from these long-term assumptions, the difference is recorded as an unrecognized actuarial gain (loss) and then amortized into earnings over a period of time based on the average future service period, which may cause the expense related to providing these benefits to increase or decrease. See Refer to Note 13 for additional information regarding these plans and the associated plan assets.

Income Taxes

Income taxes are recorded in accordance with ASCthe Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 740,IncomeTaxes, which includes an estimate of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company'sCompany’s financial statements or tax returns. Deferred tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  See Refer to Note 6 for additional information regarding income taxes.

Stock-Basedtaxes including Staff Accounting Bulletin 118 (“SAB 118”) impacts.


Stock‑Based Compensation

The Company accounts for stock-basedstock‑based compensation under the fair-valuefair‑value method. Accordingly, equity classified stock-basedstock‑based compensation cost is measured at the grant date, based on the fair value of the award and is recognized as expense over the requisite service period, which generally matches the stated vesting period of the award but may also be shorter if the employee is retirement-eligibleretirement‑eligible and under the award'saward’s terms may fully-vestfully vest upon retirement from the Company. The Company recognizes expense for awards that have graded vesting features under the graded vesting method, which considers each separately vesting tranche as though they were, in substance, multiple awards. See Refer to Note 5 for additional information regarding stock-based compensation.

Foreign Currency Matters

The functional currency of the Company'sCompany’s subsidiaries outside the United States is the currency of the primary economic environment in which the subsidiary operates. Assets and liabilities of these operations are translated to the U.S. Dollar at the exchange rate in effect at each balance sheet date. Income statement accounts are translated at the average rate of exchange prevailing during the year. Translation adjustments arising from the use of differing exchange rates

from period to period are included as a component of shareholders'shareholders’ equity in Accumulatedaccumulated other comprehensive income (loss). Gains and losses from foreign currency transactions and from the remeasurement of monetary assets and liabilities and associated income statement activity of foreign subsidiaries where the functional currency is the U.S. Dollar and the records are maintained in the local currency are included in Otherother non-operating (income) expense, net.




Notes

Derivative Instruments and Hedge Accounting
From time-to-time, the Company may enter into derivative financial instruments to hedge various risks to cash flows or the fair value of recognized assets and liabilities, including those arising from fluctuations in foreign currencies, interest rates and commodities. The Company recognizes these instruments at the time they are entered into and measures them at fair value. For instruments that are designated and qualify as cash flow hedges under U.S. GAAP, the changes in fair value period-to-period, less any ineffective portion, are classified in accumulated other comprehensive income in the Consolidated Financial Statements (Continued)

of Shareholders’ Equity, until the underlying transaction being hedged impacts earnings. Any ineffectiveness is recorded in current period income. For those instruments that are designated and qualify as fair value hedges under U.S. GAAP, the changes in fair value period-to-period of both the derivative instrument and underlying hedged item are recognized currently in earnings. For those instruments not designated or do not qualify as hedges under U.S. GAAP, the changes in fair value period-to-period are classified immediately in current period income, within other non-operating (income) expense, net within the Consolidated Statements of Earnings and Comprehensive Income. Refer to Note 1—Summary18 for a description of Accounting Policies (Continued)

the Company's current derivative instrument and hedging activities.

New Accounting Standards Adopted

        In November 2015,

Effective January 1, 2017, the FASB issued Company adopted Accounting Standards Update (“ASU”) 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2015-17,Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes ("ASU 2015-17"2016-09”).  The ASU 2015-17 requires entities to present deferred tax assets and liabilities as noncurrent in a classified balance sheet insteadsimplifies several aspects of separating into current and noncurrent amounts. ASU 2105-17 is effectivethe accounting for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods, on a prospective or retrospective basis. Early adoption is permitted for all companies in any interim or annual period. ASU 2015-17 was early adopted as of December 31, 2015 onstock compensation, including: 

On a prospective basis, all income tax effects of awards are recognized in the statement of operations as tax expense or benefit at the time that the awards vest or are settled, which resulted in a $7.9 million discrete income tax benefit for 2017.
On a prospective basis, all income tax effects of awards are recognized in the statement of cash flows as only operating activities.
The cash paid to a tax authority when shares are withheld to satisfy the tax withholding obligation are classified as financing activities on the statement of cash flows on a retrospective basis. The adoption had no impact on cash flows presentation as the Company has historically presented these amounts as financing activities.
Companies are required to elect the method of accounting for forfeitures of share-based payments, either by recognizing such forfeitures as they occur or estimating the number of awards expected to be forfeited and prior periodsadjusting such estimate when it is deemed likely to change. The Company elected to account for forfeitures as they occur and the adoption did not have not been restated.a material impact on stock-based compensation expense.

Effective January 1, 2017, the Company adopted ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies how an entity is required to test goodwill for impairment by eliminating step 2 of the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. Instead, entities should measure an impairment charge for the excess of carrying amount over the fair value of the respective reporting unit. The elimination of step 2 will reduce the complexity and cost of the subsequent measurement of goodwill.

Effective October 1, 2017, the Company adopted ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which expands an entity's ability to hedge nonfinancial risk and financial risk components and reduces complexity in fair value hedges of interest rate risk. ASU 2017-12 eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in fair value of a hedging instrument to be presented in the same income statement line item as the hedged item. The guidance also ceases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. ASU 2017-12 requires the use of a modified retrospective approach for cash flow and net investment hedges that exist as of the date of adoption. The adoption of ASU 2015-17this standard did not have ana significant impact on the Company's consolidated results of operations, net assets,earnings, cash flows or cash flows. See Note 6 for additional information regarding deferred tax assets and liabilities.

financial position.



New Accounting Standards Issued But Not Yet Effective

Adopted

In May 2014, the FASB issued ASU 2014-09,Revenue from Contracts with Customers(“ASU 2014-09”). ASU 2014-09 outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance issued by the FASB, including industry specific guidance. ASU 2014-09 provides accounting guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts with customers to provide goods and services. The guidance also provides a modelstandard allows for either full retrospective or modified retrospective adoption. The company will adopt the measurement and recognition of gains and losses onstandard, using the sale of certain nonfinancial assets, such as property and equipment, including real estate.

        ASU 2014-09 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2017. The new standard must be adopted using either a fullmodified retrospective approach, for allinterim and annual periods presented in the period of adoption or a modified retrospective approach.

beginning on January 1, 2018. ASU 2014-09 also requires entities to disclose both quantitative and qualitative information to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

        We


To date, the Company's assessment has included (i) utilizing questionnaires to assist with identifying its revenue streams, (ii) performing sample contract analysis and (iii) assessing the identified differences in recognition and measurement that may result from adopting ASU 2014-09. The Company has made conclusions regarding separately-priced extended warranty contracts and variable consideration for four of its segments. The Company continues its analysis for the CIT segment with respect to (i) contracts with multi-year prospective volume rebates and (ii) whether certain contracts’ revenues will be recognized over time or at a point in time, but does not anticipate significant changes in its current revenue recognition pattern. Based on the evaluation to date, the Company does not anticipate the adoption of this standard will have a material impact on reported current net sales. However, given the Company's acquisition strategy within diverse business segments, including assessing the revenues from the recently acquired Accella Holdings LLC, there may be additional revenue streams acquired during the year of adoption that require evaluation to determine the impact on net sales. Further, the Company anticipates providing incremental disaggregated revenue disclosures, including net sales by end market in its Condensed Consolidated Financial Statements, beginning in the first quarter of 2018. The Company continues to evaluate the impact of a cumulative catch-up adjustment, if any, and does not expect it to be significant to the Consolidated Balance Sheet.

In February 2016, the FASB issued ASU 2016-02, Leases(Topic 842)(“ASU 2016-02”) which requires lessees to recognize a lease liability for the obligation to make lease payments, measured at the present value on a discounted basis, and a right-of-use (“ROU”) asset for the right to use the underlying asset for the duration of the lease term, measured at the lease liability amount adjusted for lease prepayments, lease incentives received and initial direct costs. The lease liability and ROU asset are recognized in the balance sheet at the commencement of the lease. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. Classification will be based on criteria that are largely similar to those applied in current lease accounting. ASU 2016-02 is effective for the Company beginning January 1, 2019, and requires the use of a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period presented in the financial statements. The Company plans to adopt on January 1, 2019. The Company has not yet determined the impact of adopting the standard on our financial statements nor have we determined whether we will utilize the full retrospective or the modified retrospective approach.

Consolidated Financial Statements. 


In April 2015,March 2017, the FASB issued ASU 2015-03,Simplifying2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Debt Issuance Costs ("Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2015-03"2017-07”)., which requires employers to include only the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating income, if such measure is presented. The other components of net benefit cost, including amortization of prior service cost/credit and settlement and curtailment effects, are to be included in non-operating income. ASU 2015-03 requires2017-07 also stipulates that debt issuance costs related to a recognized debt liability be presented inonly the balance sheet as a direct deduction from the carrying amountservice cost component of that debt liability, consistentnet benefit cost is eligible for capitalization into inventory or other tangible assets. The effective date for adoption of this guidance is January 1, 2018, with debt discounts. ASU 2015-03 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2015, and early adoption is permitted. The provisions of ASU 2015-03 are not expected toCompany is currently evaluating the effect that this standard will have a material effect on the Company's financial condition.

        In August 2015, the FASB issued ASU 2015-15,Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements ("ASU 2015-15"). ASU 2015-15 expands guidance provided in ASU 2015-03 and states that presentation of costs associated with securing a revolving line of credit as an asset is permitted, regardless of whether a balance is outstanding. ASU 2015-15 is effective for annual reporting periods, including interim reporting periods within those



Notes to Consolidated Financial Statements, (Continued)

Note 1—Summary of Accounting Policies (Continued)

periods, beginning after December 15, 2015, and early adoption is permitted. The provisions of ASU 2015-15 arehowever does not expected tobelieve this update will have a material effectsignificant impact.


Note 2—Segment Information
The Company has organized its operations into five primary segments based on the Company's financial condition.

        In April 2015, the FASB issued ASU 2015-05,Customer's Accounting For Fees Paid In A Cloud Computing Arrangement ("ASU 2015-05"),products it sells, each of which provides guidance forrepresent a customer's accounting for cloud computing costs. ASU 2015-05 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2015. The provisions of ASU 2015-05 are not expected to have a material effect on the Company's financial condition, results of operations, or cash flows.

        In July 2015, the FASB issued ASU 2015-11,Simplifying the Measurement of Inventory ("ASU 2015-11"), which applies to inventory valued at first-in, first-out ("FIFO") or average cost. ASU 2015-11 requires inventory to be measured at the lower of cost and net realizable value, rather than at the lower of cost or market. ASU 2015-11 is effective on a prospective basis for annual periods, including interim reporting periods within those periods, beginning after December 15, 2016, with early adoption permittedreportable segment as of the beginning of an interim or annual reporting period. The Company reports inventory on an average-cost basis and thus will be required to adopt the standard; however, the provisions of ASU 2015-11 are not expected to have a material effect on the Company's financial condition or results of operations.

        In September 2015, the FASB issued ASU 2015-16,Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments ("ASU 2015-16"). ASU 2015-16 eliminates the requirement to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. In addition, separate presentation on the face of the income statement or disclosure in the notes is required regarding the portion of the adjustment recorded in the current period earnings, by line item, that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is to be applied prospectively for measurement period adjustments that occur after the effective date. ASU 2015-16 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2015, and early adoption is permitted. Since it is prospective, the impact of ASU 2015-16 on the Company's financial condition and earnings will depend upon the nature of any measurement period adjustments identified in future periods.

Note 2—Segment Information

        The Company's operations are reported in the following segments:

follows:

Carlisle Construction Materials ("CCM" or the "Construction Materials segment"(“CCM”)—the principal products of this segment are insulation materials, rubber (EPDM), thermoplastic polyolefin (TPO), and polyvinyl chloride (PVC) roofing membranes used predominantly on non-residential low-sloped roofs, related roofing accessories, including flashings, fasteners, sealing tapes and coatings and waterproofing products. CCM also manufactures and distributes energy-efficient rigid foam insulation panels for substantially all roofing applications. The markets served primarily include new construction, re-roofing and maintenance of low-sloped roofs, water containment, HVAC sealants and coatings and waterproofing.

In addition, CCM offers a broad range of specialty polyurethane products and solutions across a broad diversity of markets and applications.

Carlisle Interconnect Technologies ("CIT" or (“CIT”)—the "Interconnect Technologies segment") —the principal products of this segment are high-performance wire, cable, connectors, contacts and cable



Notes to Consolidated Financial Statements (Continued)

Note 2—Segment Information (Continued)

assemblies for the transfer of power and data primarily for the aerospace, medical, defense electronics, test and measurement equipment and select industrial markets.

        Carlisle Fluid Technologies ("CFT" or the "Fluid Technologies segment")—the principal products of this segment are industrial finishing equipment and integrated system solutions for spraying, pumping, mixing, metering, and curing of a variety of coatings used in the transportation, general industrial, protective coating, wood, specialty, and auto refinishing markets.

        Carlisle Brake & Friction ("CBF" or the "Brake & Friction segment")—the principal products of this segment include high-performance brakes and friction material, and clutch and transmission friction material for the construction, agriculture, mining, aerospace, and motor sports markets.


Carlisle FoodService Products ("CFSP" or(“CFS”)—On February 1, 2018, the "FoodService Products segment")—Company announced the signing of a definitive agreement to sell CFS (refer to Note 20). The principal products of this segment include commercial and institutional foodservice permanentware, table coverings, cookware, catering equipment, fiberglass and composite material trays and dishes, industrial brooms, brushes, mops and rotary brushes for commercial and non-commercialnon‑commercial foodservice operators and sanitary maintenance professionals.

        Corporate EBIT includes other unallocated costs, primarily

Carlisle Fluid Technologies (“CFT”)—the principal products of this segment are industrial liquid and powder finishing equipment and integrated system solutions for spraying, pumping, mixing, metering and curing of a variety of coatings used in the transportation, general corporate expenses. Corporate assets consist primarilyindustrial, protective coating, wood, specialty and auto refinishing markets.
Carlisle Brake & Friction (“CBF”)—the principal products of cashthis segment include high-performance brakes and cash equivalents, deferred taxes, corporate aircraft,friction material and other invested assets.

clutch and transmission friction material for the construction, agriculture, mining, on-highway, aerospace and motor sports markets.


As discussed in Note 1, during the fourth quarter of 2017, the Company revised its segment measure of profit and loss to operating income (previously earnings before interest and taxes).The Company has reclassified certain prior period amounts to conform to the current period presentation of operating income.


Summary financial information by reportable business segment for the years ended December 31 follows:
(in millions) Net Sales Operating Income Assets 
Depreciation
and
Amortization
 
Capital
Spending
2017          
Carlisle Construction Materials $2,336.2
 $421.9
 $1,898.6
 $41.9
 $61.0
Carlisle Interconnect Technologies 815.3
 89.5
 1,473.0
 55.8
 53.2
Carlisle FoodService Products 339.1
 39.5
 469.3
 22.8
 8.9
Carlisle Fluid Technologies 281.4
 16.1
 678.7
 23.0
 8.8
Carlisle Brake & Friction 317.9
 2.6
 433.8
 23.0
 26.8
Segment Total 4,089.9
 569.6
 4,953.4
 166.5
 158.7
Corporate and unallocated (1)
 —
 (63.9) 346.4
 2.6
 1.2
Total $4,089.9
 $505.7
 $5,299.8
 $169.1
 $159.9
2016  
  
  
  
  
Carlisle Construction Materials 2,052.6
 430.3
 891.6
 35.6
 24.9
Carlisle Interconnect Technologies 834.6
 143.9
 1,446.3
 48.8
 43.9
Carlisle FoodService Products 250.2
 31.5
 206.1
 9.1
 8.2
Carlisle Fluid Technologies 269.4
 31.2
 640.9
 20.7
 11.7
Carlisle Brake & Friction 268.6
 (135.9)
(2 
) 
389.9
 20.8
 9.4
Segment Total 3,675.4
 501.0
 3,574.8
 135.0
 98.1
Corporate and unallocated (1)
 —
 (62.9) 391.0
 2.8
 10.7
Total $3,675.4
 $438.1
 $3,965.8
 $137.8
 $108.8
2015  
  
  
  
  
Carlisle Construction Materials $2,002.6
 $351.1
 $899.2
 $37.3
 $21.0
Carlisle Interconnect Technologies 784.6
 143.0
 1,264.0
 44.3
 31.6
Carlisle FoodService Products 242.6
 27.3
 199.0
 9.7
 6.3
Carlisle Fluid Technologies 203.2
 20.9
 659.5
 15.0
 1.9
Carlisle Brake & Friction 310.2
 17.4
 553.0
 21.4
 11.1
Segment Total 3,543.2
 559.7
 3,574.7
 127.7
 71.9
Corporate and unallocated (1)
 —
 (56.4) 376.2
 1.6
 0.2
Total $3,543.2
 $503.3
 $3,950.9
 $129.3
 $72.1
(1)
Corporate operating income includes other unallocated costs, primarily general corporate expenses. Corporate assets consist primarily of cash and cash equivalents, deferred taxes and other invested assets.
(2)
Includes impairment charges of $141.5 million. Refer to for further discussion.

Geographic Area Information—Net sales are based on the country to which the product was delivered. Net sales by region for the years ended December 31 are as follows (in millions):

follows: 
Country
 2015 2014 2013 
(in millions) 2017 2016 2015

United States

 $2,659.4 $2,441.7 $2,260.8  $3,162.2
 $2,835.7
 $2,659.4

International:

         
    

Europe

 384.4 357.4 330.4  411.3
 381.8
 384.4

Asia

 225.5 136.0 126.3  272.2
 241.9
 225.5

Canada

 114.9 117.1 90.1  90.9
 77.2
 114.9

Mexico and Latin America

 81.6 82.0 69.7  79.3
 76.1
 81.6

Middle East and Africa

 55.7 48.7 47.4  43.4
 42.6
 55.7

Other

 21.7 21.1 18.3  30.6
 20.1
 21.7
​​ ​ ​​ ​​​ ​ ​

Net sales

 $3,543.2 $3,204.0 $2,943.0  $4,089.9
 $3,675.4
 $3,543.2
​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​
​​​ ​​ ​ ​​​ ​

        Long-lived assets, comprised of net property, plant, and equipment, are as follows (in millions):


Country
 2015 2014 2013 

Long-lived assets held and used:

          

United States

 $461.3 $452.1 $420.7 

Europe

  47.9  48.4  48.1 

Asia

  29.0  22.5  19.8 

United Kingdom

  19.2  7.2  7.4 

Mexico

  27.8  17.0  1.0 

Other

  0.6  0.1  0.2 
​​​ ​ ​​ ​​​ ​ ​

Total long-lived assets

 $585.8 $547.3 $497.2 
​​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​
​​​​ ​​ ​ ​​​ ​


Notes to Consolidated Financial Statements (Continued)

Note 2—Segment Information (Continued)

        Financial information for operations by reportable business segment is included in the following summary:

(in millions)
 Net Sales EBIT Assets Depreciation
and
Amortization		 Capital
Spending		 

2015

                

Carlisle Construction Materials

 $2,002.6 $351.1 $899.2 $37.3 $21.0 

Carlisle Interconnect Technologies

  784.6  141.6  1,264.0  44.3  31.6 

Carlisle Fluid Technologies

  203.2  20.8  659.5  15.0  1.9 

Carlisle Brake & Friction

  310.2  17.3  553.0  21.4  11.1 

Carlisle FoodService Products

  242.6  27.3  199.0  9.7  6.3 

Corporate(1)

  —  (56.2) 379.4  1.6  0.2 
​​​ ​ ​​​ ​​ ​ ​​ ​ ​​ ​ ​

Total

 $3,543.2 $501.9 $3,954.1 $129.3 $72.1 
​​​​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​​​​​​​
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

2014

                

Carlisle Construction Materials

 $1,935.4 $268.8 $915.1 $34.6 $51.4 

Carlisle Interconnect Technologies

  669.1  132.2  1,296.3  37.6  32.2 

Carlisle Fluid Technologies

  —  —  —  —  — 

Carlisle Brake & Friction

  355.3  26.8  591.3  21.9  11.2 

Carlisle FoodService Products

  244.2  29.6  198.4  8.8  17.5 

Corporate(1)

  —  (49.1) 757.6  1.1  6.5 
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Total

 $3,204.0 $408.3 $3,758.7 $104.0 $118.8 
​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​
​​​​​​​​​​​​​​​​​
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

2013

                

Carlisle Construction Materials

 $1,776.5 $264.0 $886.9 $31.0 $64.5 

Carlisle Interconnect Technologies

  577.7  89.4  1,017.5  34.4  12.2 

Carlisle Fluid Technologies

  —  —  —  —  — 

Carlisle Brake & Friction

  350.0  33.5  603.7  21.3  10.4 

Carlisle FoodService Products

  238.8  27.0  193.2  7.7  10.8 

Corporate(1)

  —  (47.1) 791.4  1.7  — 
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Total

 $2,943.0 $366.8 $3,492.7 $96.1 $97.9 
​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​
​​​​​​​​​​​​​​​​​
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​
(1)
EBIT includes general corporate expenses and Assets consist primarily of cash and cash equivalents and other investedLong‑lived assets, excluding deferred tax assets and includesintangible assets, by region as of discontinued operations not classified as held for sale.

        A reconciliation of assets, depreciation and amortization, and capital spending reported above to the amounts presented on the Consolidated Statement of Cash Flows is asDecember 31 follows:

(in millions)
 2015 2014 2013 

Depreciation and amortization per table above

 $129.3 $104.0 $96.1 

Depreciation and amortization of discontinued operations

  —  —  17.8 
​​​ ​ ​​ ​ ​​​ ​

Total depreciation and amortization

 $129.3 $104.0 $113.9 
​​​ ​ ​​​ ​​ ​ ​
​​​​​​​​​​​
​​​ ​ ​​ ​​​ ​ ​
(in millions) 2017 2016
United States $618.1
 $495.5
International:  
  
Europe 83.4
 48.4
Asia 46.6
 38.3
Mexico and Latin America 37.0
 28.4
United Kingdom 27.2
 21.3
Other 0.5
 0.3
Total long-lived assets $812.8
 $632.2



Notes to Consolidated Financial Statements (Continued)

Note 2—Segment Information (Continued)


(in millions)
 2015 2014 2013 

Capital spending per table above

 $72.1 $118.8 $97.9 

Capital spending of discontinued operations

  —  —  12.9 
​​​ ​ ​​ ​​​ ​ ​

Total capital spending

 $72.1 $118.8 $110.8 
​​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​
​​​​ ​​ ​ ​​​ ​

Customer Information—Net sales to Beacon Roofing Supply, Inc. accounted for approximately 10% of the Company'sCompany’s consolidated net sales during the year ended December 31, 2015. Sales to this customer originate in the ConstructionCCM segment. No other customer accounted for 10% or more of the Company'sCompany’s total net sales.

sales for the years ended December 31, 2017 and 2016.

Note 3—3—Acquisitions

2015 Acquisition

Finishing Brands

2017 Acquisitions
Accella Holdings LLC
On AprilNovember 1, 2015,2017, the Company acquired 100% of the Finishing Brands businessequity of Accella Holdings LLC, the parent company to Accella Performance Materials Inc. (collectively “Accella”), a specialty polyurethane platform, from Graco Inc. ("Graco")Accella Performance Materials LLC, a subsidiary of Arsenal Capital Partners, for total cash consideration of $598.9$670.7 million, netsubject to a cash, working capital and indebtedness settlement, which the Company expects to finalize in the first quarter of $12.2 million cash acquired.2018. Accella offers a wide range of polyurethane products and solutions across a broad diversity of markets and applications. The Company funded the acquisition with cash on hand. As ofborrowings from the acquisition date, the Company recorded a payableRevolving Credit Facility (refer to GracoNote 12 for $20.6 million representing the estimated working capital settlement. In the third quarter of 2015, the Company finalized the working capital settlement with Graco for $21.1 million in cash. The additional cash consideration paid has been allocated to goodwill. The Company has reported the results of the acquired business as a new reportable segment named Carlisle Fluid Technologies ("CFT")subsequent refinancing transactions). CFT is a global manufacturer and supplier of finishing equipment and systems serving diverse end markets for paints and coatings, including original equipment ("OE") automotive, automotive refinishing, aerospace, agriculture, construction, marine, rail, and other industrial applications.

        CFT


Accella contributed net sales of $203.2$64.0 million and earnings before interest and taxesan operating loss of $20.8$9.0 million for the period from AprilNovember 1, 20152017, to December 31, 2015. Earnings before interest and taxes2017. The operating loss for the period from AprilNovember 1, 20152017, to December 31, 20152017, includes $8.6$5.5 million of non-recurring incremental cost of goods sold related to measuring inventory at fair value, and $0.7$2.0 million, of non-recurring acquisition-related costs related primarily to professional fees, as well as $9.3$1.8 million and $3.9$0.8 million of amortization expense of customer relationships, and acquired technology respectively.

and trade names, respectively and $1.1 million of acquisition-related costs related primarily to professional fees. The Finishing Brandsresults of operations of the acquired business are reported as part of the CCM segment.

The Accella amounts included in the pro forma financial information below are based on the Finishing Brands'Accella’s historical results and therefore may not be indicative of the actual results if operatedowned by Carlisle. The pro forma adjustments represent management'smanagement’s best estimates based on information available at the time the pro forma information was prepared and may differ from the adjustments that may actually have been required. Accordingly, pro forma information should not be relied upon as being indicative of the historical results that would have been realized had the acquisition occurred as of the date indicated or that may be achieved in the future.



Notes to Consolidated Financial Statements (Continued)

Note 3—Acquisitions (Continued)

The unaudited combined pro forma financial information presented below includes Netnet sales and Incomeincome from continuing operations, net of tax, of the Company as if the business combination had occurred on January 1, 2016, based on the purchase price allocation presented below:
  Unaudited Pro Forma
  Twelve Months Ended December 31,
(in millions) 2017 2016
Net sales $4,439.4
 $4,029.8
Income from continuing operations 351.8
 235.2

The pro forma financial information reflects adjustments to Accella's historical financial information to apply the Company's accounting policies and to reflect the additional depreciation and amortization related to the preliminary fair value adjustments of the acquired net assets of $10.8 million in 2017 and $8.5 million in 2016, together with the

associated tax effects. Also, the pro forma financial information reflects costs of goods sold related to the fair valuation of inventory and acquisition-related costs described above as if they occurred in 2016.
The following table summarizes the consideration transferred to acquire Accella and the preliminary allocation of the purchase price among the assets acquired and liabilities assumed. The acquisition has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires that consideration be allocated to the acquired assets and assumed liabilities based upon their acquisition date fair values with the remainder allocated to goodwill. The fair values are preliminary and subject to change pending receipt of the final valuation for all acquired assets and liabilities.
  
Preliminary
Allocation
(in millions) As of 11/1/2017
Total cash consideration transferred $670.7
Recognized amounts of identifiable assets acquired and liabilities assumed:  
Cash and cash equivalents $16.5
Receivables, net 66.8
Inventories 48.5
Prepaid expenses and other current assets 0.9
Property, plant and equipment 59.6
Definite-lived intangible assets 240.0
Other long-term assets 15.6
Accounts payable (45.5)
Income tax payable 2.0
Accrued expenses (23.2)
Other long-term liabilities (15.6)
Deferred income taxes (83.5)
Total identifiable net assets 282.1
Goodwill $388.6

The goodwill recognized in the acquisition of Accella is attributable to its significant supply chain efficiencies and other administrative opportunities and the strategic value of the business to Carlisle, in addition to opportunities for product line expansions. The Company acquired $68.5 million of gross contractual accounts receivable, of which $1.7 million was not expected to be collected at the date of acquisition. Goodwill of $38.5 million is tax deductible, primarily in the United States. All of the goodwill has been preliminarily assigned to the CCM reporting unit which aligns with the CCM reportable segment. The $240.0 million value allocated to definite-lived intangible assets consists of $146.0 million of customer relationships with useful lives ranging from 9 to 12 years, various acquired technologies of $66.0 million with useful lives ranging from 3 to 14 years and trade names of $28.0 million with useful lives ranging from 4 to 14 years. In accordance with the purchase agreement, Carlisle is indemnified for up to $25.0 million, and recorded an indemnification asset of $15.6 million in other long-term assets relating to the indemnification for a pre-acquisition income tax liability. The Company has also recorded, as part of the purchase price allocation, deferred tax liabilities related to intangible assets of approximately $83.5 million. See Note 6 for further information regarding tax uncertainties acquired in the Accella acquisition.

Excluding Accella, proforma results of operations for the 2017 acquisitions have not been presented because the effect of these acquisitions was not material to the Company's financial condition or results of operations for any of the periods presented.


Drexel Metals

On July 3, 2017, the Company acquired 100% of the equity of Drexel Metals, Inc., (“Drexel Metals”) for total consideration of $55.8 million. Drexel Metals is a leading provider of architectural standing seam metal roofing systems for commercial, institutional and residential applications.

For the period from July 3, 2017, to December 31, 2017, Drexel Metals contributed net sales of $26.8 million and an operating loss of $0.2 million to the Company's consolidated results. The results of operations of the acquired business are reported within the CCM segment.

Consideration has been preliminarily allocated to goodwill of $26.9 million, $19.0 million to definite-lived intangible assets, $10.4 million to indefinite-lived intangible assets, $8.8 million to inventory, $5.3 million to accounts receivable, $5.8 million to accounts payable and $10.8 million to deferred income and other taxes payable. Definite-lived intangible assets consist of customer relationships with an estimated useful life of nine years. Of the $26.9 million of goodwill, none is deductible for tax purposes. All of the goodwill was assigned to the CCM reporting unit, which aligns with the reportable segment.

Arbo

On January 31, 2017, the Company acquired 100% of the equity of Arbo Holdings Limited (“Arbo”) for total consideration of GBP 9.1 million or $11.5 million, including the estimated fair value of contingent consideration of GBP 2.0 million or $2.5 million and a working capital settlement, which was finalized in the second quarter of 2017. Arbo is a provider of sealants, coatings and membrane systems used for waterproofing and sealing buildings and other structures.

For the period from January 31, 2017, to December 31, 2017, Arbo contributed net sales of $14.0 million and operating income of $0.3 million to the Company's consolidated results. The results of operations of the acquired business are reported within the CCM segment.

Consideration has been allocated to goodwill of $4.7 million, $2.2 million to definite-lived intangible assets, $2.1 million to inventory, $1.6 million to indefinite-lived intangibles, $1.5 million to accounts receivable, $1.4 million to accounts payable and $1.4 million to deferred income and other taxes payable. Definite-lived intangible assets consist of customer relationships with an estimated useful life of 15 years. Of the $4.7 million of goodwill, $1.3 million is deductible for tax purposes. All of the goodwill was assigned to the CCM reporting unit, which aligns with the reportable segment.

San Jamar

On January 9, 2017, the Company acquired 100% of the equity of SJ Holdings, Inc. (“San Jamar”) for total consideration of $217.2 million. San Jamar is a provider of universal dispensing systems and food safety products for foodservice and hygiene applications. San Jamar complements the operating performance at CFS by adding new products, opportunities to expand the Company's presence in complementary sales channels and a history of profitable growth.

For the period from January 9, 2017, to December 31, 2017, San Jamar contributed net sales of $86.3 million and operating income of $5.9 million to the Company's consolidated results. The results of operations of the acquired business are reported within the CFS segment.


The following table summarizes the consideration transferred to acquire San Jamar and the preliminary allocation and measurement period adjustments to arrive at the final allocation of the purchase price among the assets acquired and liabilities assumed. The acquisition has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires that consideration be allocated to the acquired assets and assumed liabilities based upon their acquisition date fair values, with the remainder allocated to goodwill. 
  Preliminary
Allocation		 Measurement
Period 
Adjustments		 Final Allocation
(in millions) As of 1/9/2017  As of 12/31/2017
Total consideration transferred $217.2
 $—
 $217.2
Recognized amounts of identifiable assets acquired and liabilities assumed:      
Cash and cash equivalents $3.5
 $—
 $3.5
Receivables 9.1
 —
 9.1
Inventories 13.1
 0.4
 13.5
Prepaid expenses and other current assets 2.3
 0.2
 2.5
Property, plant and equipment 4.2
 —
 4.2
Definite-lived intangible assets 135.1
 (0.2) 134.9
Indefinite-lived intangible assets 23.6
 —
 23.6
Other long-term assets 3.2
 —
 3.2
Accounts payable (7.0) (0.1) (7.1)
Income tax payable (0.5) —
 (0.5)
Accrued expenses (4.3) (0.7) (5.0)
Other long-term liabilities (4.8) 0.3
 (4.5)
Deferred income taxes (47.2) (2.4) (49.6)
Total identifiable net assets 130.3
 (2.5) 127.8
Goodwill $86.9
 $2.5
 $89.4


The valuation of property, plant and equipment, intangible assets and income tax obligations is final as of December 31, 2017. The goodwill recognized in the acquisition of San Jamar is attributable to its experienced workforce, expected operational improvements through implementation of the Carlisle Operating System ("COS"), opportunities for product line expansions in addition to supply chain efficiencies and other administrative opportunities and the significant strategic value of the business to Carlisle. Of the $89.4 million of goodwill, $5.2 million is deductible for tax purposes. All of the goodwill was assigned to the CFS reporting unit, which aligns with the reportable segment. The $134.9 million value allocated to definite-lived intangible assets consists of $97.8 million of customer relationships with an estimated useful life of 13 years, various acquired technologies of $36.4 million with useful lives ranging from seven to 10 years and a non-compete agreement of $0.7 million with an estimated useful life of two years. Indefinite-lived intangible assets consist of acquired trade names.
As a result of the acquisition, the Company recognized approximately $4.5 million of pre-acquisition tax liabilities, with a corresponding indemnification asset of $3.6 million, as the seller has indemnified Carlisle for certain of these liabilities. The indemnification asset will be subsequently measured and recognized on the same basis as the corresponding liability. The related seller indemnification asset will expire in stages through the third quarter of 2021 unless claims are made against the seller prior to that date.
2016 Acquisitions

Proforma results of operations for the 2016 acquisitions have not been presented because the effect of these acquisitions was not material to the Company's financial condition or results of operations for any of the periods presented.

Star Aviation
On October 3, 2016, the Company acquired 100% of the equity of Star Aviation, Inc. (“Star Aviation”), for total consideration of $82.7 million. Star Aviation is a provider of design and engineering services, testing and certification work and manufactured products for in-flight connectivity applications on commercial, business and military aircraft.

The following table summarizes the consideration transferred to acquire Star Aviation and the preliminary allocation and measurement period adjustments to arrive at the final allocation of the purchase price among the assets acquired and liabilities assumed. The acquisition has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires that consideration be allocated to the acquired assets and assumed liabilities based upon their acquisition date fair values, with the remainder allocated to goodwill. 
  Preliminary
Allocation		 Measurement
Period 
Adjustments		 Final Allocation
(in millions) As of 10/3/2016  As of 9/30/2017
Total consideration transferred $82.7
 $—
 $82.7
Recognized amounts of identifiable assets acquired and liabilities assumed:      
Cash and cash equivalents $0.3
 $—
 $0.3
Receivables 5.9
 (0.1) 5.8
Inventories 3.1
 (0.2) 2.9
Prepaid expenses and other current assets 0.1
 —
 0.1
Property, plant and equipment 3.3
 (0.3) 3.0
Definite-lived intangible assets 29.0
 —
 29.0
Accounts payable (1.3) 0.2
 (1.1)
Accrued expenses (0.8) 0.1
 (0.7)
Total identifiable net assets 39.6
 (0.3) 39.3
Goodwill $43.1
 $0.3
 $43.4


The valuation of property, plant and equipment and intangible assets is final as of September 30, 2017. The goodwill recognized in the acquisition of Star Aviation is attributable to its experienced workforce, expected operational improvements through implementation of the COS, opportunities for product line expansions in addition to supply chain efficiencies and other administrative opportunities and the significant strategic value of the business to Carlisle. Goodwill of $43.4 million is deductible for tax purposes in the U.S. All of the goodwill was assigned to the CIT reporting unit which aligns with the reportable segment. The $29.0 million value allocated to definite-lived intangible assets consists of $23.9 million of customer relationships with useful lives ranging from five to 10 years, various acquired technologies of $4.7 million with useful a useful life of six years and a non-compete agreement of $0.4 million with a useful life of five years.
Micro-Coax
On June 10, 2016, the Company acquired 100% of the equity of Micro-Coax, Inc. and Kroll Technologies, LLC, (collectively “Micro-Coax”) for total consideration of $96.6 million. The acquired business is a provider of high-performance, high frequency coaxial wire and cable and cable assemblies to the defense, satellite, test and measurement and other industrial markets.

The following table summarizes the consideration transferred to acquire Micro-Coax and the preliminary allocation and measurement period adjustments to arrive at the final allocation of the purchase price among the assets acquired and liabilities assumed. The acquisition has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires that consideration be allocated to the acquired assets and assumed liabilities based upon their acquisition date fair values, with the remainder allocated to goodwill. 
  
Preliminary
Allocation
 
Measurement
Period 
Adjustments
 
Final
Allocation
(in millions) As of 6/10/2016      As of 6/30/2017
Total consideration transferred $97.3
 $(0.7) $96.6
Recognized amounts of identifiable assets acquired and liabilities assumed:      
Cash and cash equivalents $1.5
 $—
 $1.5
Receivables 6.3
 —
 6.3
Inventories 8.6
 —
 8.6
Prepaid expenses and other current assets 0.4
 (0.1) 0.3
Property, plant and equipment 30.0
 (14.0) 16.0
Definite-lived intangible assets 31.5
 (5.0) 26.5
Indefinite-lived intangible assets 2.0
 (2.0) —
Other long-term assets 1.0
 —
 1.0
Accounts payable (1.7) —
 (1.7)
Accrued expenses (2.4) (0.1) (2.5)
Total identifiable net assets 77.2
 (21.2) 56.0
Goodwill $20.1
 $20.5
 $40.6

The valuation of property, plant and equipment and intangible assets is final as of June 30, 2017. The goodwill recognized in the acquisition of Micro-Coax is attributable to its experienced workforce, expected operational improvements through implementation of the COS, opportunities for product line expansions in addition to supply chain efficiencies and other administrative opportunities and the significant strategic value of the business to Carlisle. Goodwill of $40.6 million is deductible for tax purposes in the U.S. All of the goodwill was assigned to the CIT reporting unit which aligns with the reportable segment. The $26.5 million value allocated to definite-lived intangible assets consists of $14.5 million of customer relationships with a useful life of 12 years, various acquired technologies of $10.6 million with a useful life of seven years, an amortizable trade name of $0.9 million with a useful life of 10 years and a non-compete agreement of $0.5 million with a useful life of three years.
MS Oberflächentechnik AG
On February 19, 2016, the Company acquired 100% of the equity of MS Oberflächentechnik AG (“MS Powder”), a Swiss-based developer and manufacturer of powder coating systems and related components, for total consideration of CHF 12.3 million, or $12.4 million, including the estimated fair value of contingent consideration of CHF 4.3 million, or $4.3 million.
Consideration has been allocated to definite-lived intangible assets of $9.7 million, $4.1 million to indefinite-lived intangible assets and $2.2 million to deferred tax liabilities, with $2.9 million allocated to goodwill.  Definite-lived intangible assets consist of $8.3 million of technology with a useful life of seven years and customer relationships of $1.4 million with a useful life of 10 years. None of the goodwill is deductible for tax purposes. All of the goodwill was assigned to the CFT reporting unit, which aligns with the reportable segment.


2015 Acquisition

Finishing Brands
On April 1, 2015, the Company acquired 100% of the Finishing Brands business from Graco Inc. for total consideration of $611.1 million.  The Company funded the acquisition with cash on hand.  The Company reports the results of the acquired business as the CFT segment. 

Finishing Brands contributed net sales of $203.2 million and operating income of $20.9 million for the period from April 1, 2015 to December 31, 2015. Operating income for the period from April 1, 2015 to December 31, 2015 includes $8.6 million of incremental cost of goods sold related to measuring inventory at fair value and $0.7 million of acquisition-related costs related primarily to professional fees, as well as $9.3 million and $3.9 million of amortization expense of customer relationships and acquired technology, respectively.
The Finishing Brands amounts included in the pro forma financial information below are based on the Finishing Brands’ historical results and therefore may not be indicative of the actual results if operated by Carlisle. The pro forma adjustments represent management’s best estimates based on information available at the time the pro forma information was prepared and may differ from the adjustments that may actually have been required. Accordingly, pro forma information should not be relied upon as being indicative of the historical results that would have been realized had the acquisition occurred as of the date indicated or that may be achieved in the future.
The unaudited combined pro forma financial information presented below includes net sales and income from continuing operations, net of tax, of the Company as if the business combination had occurred on January 1, 2014, based on the preliminary purchase price allocation presented below:


 Pro Forma Twelve
Months Ended
December 31,		  Unaudited Pro Forma
(in millions)
 2015 2014  Twelve Months Ended December 31, 2015

Net sales

 $3,604.4 $3,482.3  $3,604.4

Income from continuing operations

 332.2 271.4  332.2


The pro forma financial information reflects adjustments to Finishing Brands'Brands’ historical financial information to apply the Company's accounting policies and to reflect the additional depreciation and amortization related to the preliminary fair value adjustments of the acquired net assets, together with the associated tax effects. Also, the pro forma financial information reflects the non-recurring costs of goods sold related to the fair valuation of inventory and acquisition-related costs described above as if they occurred in 2014.


The following table summarizes the consideration transferred to acquire Finishing Brands and the preliminary allocation and measurement period adjustments to arrive at the final allocation of the purchase price among the assets acquired and liabilities assumed. The acquisition has been accounted for using the acquisition method of accounting in accordance with ASC 805,Business



Notes to Consolidated Financial Statements (Continued)

Note 3—Acquisitions (Continued)

Combinations, which requires that consideration be allocated to the acquired assets and assumed liabilities based upon their acquisition date fair values with the remainder allocated to goodwill.

 The measurement period adjustments resulted primarily from finalizing valuations of inventory with corresponding measurement period adjustment to deferred taxes.

 Preliminary
Allocation		 Measurement
Period
Adjustments		 Preliminary
Allocation		  
Preliminary
Allocation
 
Measurement
Period 
Adjustments
 
Final
Allocation
(in millions)
 As of
4/1/2015		 Nine Months
Ended
12/31/2015		 As of
12/31/2015		  As of 4/1/2015 As of 3/31/2016

Total cash consideration transferred and payable

 $610.6 $0.5 $611.1 
​​ ​ ​​ ​ ​​​ ​
​​​​​​​
​​ ​​​ ​ ​​ ​​
Total cash consideration transferred $610.6
 $0.5
 $611.1

Recognized amounts of identifiable assets acquired and liabilities assumed:

             

Cash and cash equivalents

 
$
12.2		 
$
—		 
$
12.2		  $12.2
 $—
 $12.2

Receivables

 57.3 — 57.3  57.3
 1.2
 58.5

Inventories

 40.9 3.0 43.9  40.9
 2.2
 43.1

Prepaid expenses and other current assets

 6.4 — 6.4  6.4
 (0.2) 6.2

Property, plant, and equipment

 41.0 (0.3) 40.7 
Property, plant and equipment 41.0
 (0.2) 40.8

Definite-lived intangible assets

 216.0 — 216.0  216.0
 —
 216.0

Indefinite-lived intangible assets

 125.0 — 125.0  125.0
 —
 125.0

Deferred income tax assets

 1.9 (1.2) 0.7  1.9
 (1.2) 0.7

Other long-term assets

 3.8 (0.3) 3.5  3.8
 (0.3) 3.5

Line of credit

 (1.4) — (1.4) (1.4) —
 (1.4)

Accounts payable

 (16.3) — (16.3) (16.3) —
 (16.3)

Income tax payable

 (1.9) (0.1) (2.0) (1.9) (0.1) (2.0)

Accrued expenses

 (15.6) — (15.6) (15.6) —
 (15.6)

Deferred income tax liabilities

 (28.8) 0.6 (28.2) (28.8) 0.6
 (28.2)

Other long-term liabilities

 (5.6) (0.7) (6.3) (5.6) (0.7) (6.3)
​​ ​ ​​ ​ ​​​ ​

Total identifiable net assets

 434.9 1.0 435.9  434.9
 1.3
 436.2
​​ ​ ​​ ​​​ ​ ​

Goodwill

 $175.7 $(0.5)$175.2  $175.7
 $(0.8) $174.9
​​ ​​​ ​ ​​ ​​
​​​​​​​
​​ ​ ​​​ ​​ ​ ​


The goodwill recognized in the acquisition of Finishing Brands is attributable to its experienced workforce, the expected operational improvements through implementation of the Carlisle Operating System,COS, opportunities for geographic and product line expansions in addition to supply chain efficiencies and other administrative opportunities and the significant strategic value of the business to Carlisle. The Company acquired $58.8$60.0 million of gross contractual accounts receivable, of which $1.5 million iswas not expected to be collected.collected at the date of acquisition. Goodwill of $132.9 million is tax deductible, primarily in the United States. All of the goodwill was assigned to the CFT reporting unit which aligns with the reportable segment. Indefinite-lived intangible assets of $125.0 million represent acquired trade names. The $216.0 million value allocated to definite-lived intangible assets consists of $186.0 million of customer relationships with a useful life of 15 years and various acquired technologies of $30.0 million with useful lives ranging from five to eight years. The Company recorded an indemnification asset of $3.0 million in Other non-currentother long-term assets relating to the indemnification of Carlisle for a pre-acquisition income tax liability in accordance with the purchase agreement. The Company has also recorded, as part of the purchase price allocation, deferred tax liabilities related to intangible assets of approximately $28.2 million.



Notes to Consolidated Financial Statements (Continued)

See Note 3—Acquisitions (Continued)

        As additional10 for further information is obtained, adjustments may be made to the preliminary purchase price allocation. The Company is still finalizing the fair value of certain tangible assets,regarding deferred tax liabilities and accrued expenses.

2014acquired in the Finishing Brands acquisition.

Prior Acquisition

Matters


LHi Technology

        On

In conjunction with the October 1, 2014 the Company acquired 100% of the equityacquisition of LHi Technology ("LHi"(“LHi”) for total cash consideration of $194.0 million, net of $6.7 million cash acquired, inclusive of, the working capital settlement. The Company funded the acquisition with cash on hand. LHi is a leading designer, manufacturer and provider of cable assemblies and related interconnect components to the medical equipment and device industry. The acquisition strengthens Carlisle's launch of its medical cable and cable assembly product line by adding new products, new customers, and complementary technologies to better serve the global healthcare market. LHi operates within the Interconnect Technologies segment.

        The following table summarizes the consideration transferred to acquire LHi and the final allocation among the assets acquired and liabilities assumed. The acquisition has been accounted for using the acquisition method of accounting which requires that consideration be allocated to the acquired assets and liabilities based upon their acquisition date fair values with the remainder allocated to goodwill.

 
 Final
Allocation		 
(in millions)
 As of
10/1/2015		 

Total cash consideration transferred

 $200.7 
​​​ ​ ​
​​​​​
​​​​ ​

Recognized amounts of identifiable assets acquired and liabilities assumed:

    

Cash and cash equivalents

 
$
6.7		 

Receivables

  26.9 

Inventories

  17.1 

Prepaid expenses and other current assets

  2.9 

Property, plant, and equipment

  4.5 

Definite-lived intangible assets

  74.5 

Indefinite-lived intangible assets

  6.0 

Other long-term assets

  8.8 

Accounts payable

  (16.9)

Income tax payable

  (0.3)

Accrued expenses

  (6.0)

Net deferred tax liabilities

  (16.2)

Other long-term liabilities

  (20.1)
​​​ ​ ​

Total identifiable net assets

  87.9 
​​​ ​ ​

Goodwill

 $112.8 
​​​ ​ ​
​​​​​
​​​ ​ ​


Notes to Consolidated Financial Statements (Continued)

Note 3—Acquisitions (Continued)

        The goodwill recognized in the acquisition of LHi is attributable to the workforce of LHi, the solid financial performance in the medical cable market, and the significant strategic value of the business to Carlisle. Goodwill arising from the acquisition of LHi is not deductible for income tax purposes. All of the goodwill was assigned to the Interconnect Technologies reporting unit. Indefinite-lived intangible assets of $6.0 million represent acquired trade names. The $74.5 million value allocated to definite-lived intangible assets consists of $57.0 million of customer relationships with a useful life of 15 years, $16.0 million of acquired technology with a useful life of six years, and a $1.5 million non-compete agreement with a useful life of five years. The Company recorded an indemnification asset of $8.7 million in Otherother long-term assets relating to the indemnification of Carlisle for certain pre-acquisition liabilities, in accordance with the purchase agreement. The Company has also recorded deferred tax liabilitiesprincipally related to intangible assets asdirect and indirect tax uncertainties. During the third quarter of 2016, the Company concluded that $2.6 million of the closing date.

Note 4—Disposal of Long-lived Assets and Discontinued Operations

Saleindirect tax uncertainties were no longer probable, therefore resulting in the reversal of the Transportation Products Business

        On December 31, 2013,related indemnification asset and the Company sold its Transportation Products business for total cash considerationcorresponding liability. During the third quarter of $375 million, subject to2017, the working capital adjustment componentescrow covering the remaining direct and indirect tax uncertainties expired and the remaining indirect tax uncertainties were no longer probable, resulting in the reversal of the sale agreement. The working capital adjustment was finalized during 2014 for $9.7$6.1 million indemnification asset and resultedcorresponding $1.5 million liability, with


the net change of $4.6 million reflected in a $1.0 million after-tax loss. The after-tax loss was reported in discontinued operations.

        After-tax (loss) income from Discontinued Operations of ($25.5) million for the year ended December 31, 2013 reflects the operations of the Transportation Products business which included a $100.0 million pre-tax goodwill impairment charge recorded during 2013. The Transportation Products business had net sales of $767.9 million for the year ended December 31, 2013.

Other Divestitures of Long-lived Assets and Long-lived Assets Held for Sale

        During 2014, the Company completed the sale of CBF's Akron, OH, facility for cash proceeds of $1.2 million, recognizing a pre-tax gain of $0.4 million within Other income (expense),non-operating (income) expense, net in the Consolidated Statement of Earnings.


Note 4—Exit and Disposal Activities
The Company completedhas undertaken operational restructuring and other cost reduction actions to streamline processes and manage costs throughout various departments within the saleCompany. The Company implemented cost reduction plans, which 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

During 2017, the Company initiated plans to relocate certain of its aerospace manufacturing operations in Littleborough, United Kingdom to an existing manufacturing operation in Nogales, Mexico. During 2017, exit and disposal costs totaled $2.0 million. This project was substantially complete as of December 31, 2017.

As previously announced, the Company is incurring costs to relocate certain of its medical manufacturing operations in Shenzhen, China to a new manufacturing operation in Dongguan, China. During 2017, employee termination benefit costs associated with this plan totaled $6.1 million. Cumulative exit and disposal costs recognized totaled $14.1 million through December 31, 2017, with total costs expected to approximate $15.2 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 the third quarter of 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 began in August 2017 out of these designated funds and will continue through the first half of 2018. The designated cash balance as of December 31, 2017, totaled $4.6 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 currently in Angola, Indiana to its existing Bournemouth, United Kingdom manufacturing operations. During 2017, exit and disposal costs totaled $10.4 million, primarily reflecting employee termination benefit costs and accelerated depreciation. Total costs are expected to approximate $10.5 million, with the remaining costs expected to be incurred in first-quarter 2018.

As previously announced, the Company is incurring costs related to the relocation of CFT's administrative functions and facilities within the U.S. During 2017, exit and disposal cost totaled $1.0 million, primarily reflecting relocation and facility closure costs. This project was substantially complete as of December 31, 2017, with cumulative exit and disposal costs of $5.1 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 $17.5 million to $21.0 million, including:

Non-cash accelerated depreciation of long-lived assets at the Oklahoma facility, which is primarily property, locatedplant and equipment that will not be transferred to Ohio (between $5.0 million to $6.5 million expected to be recognized ratably through the first quarter of 2019),
Costs to relocate and install equipment (between $5.0 million to $6.0 million, expected to be incurred primarily in the Netherlands during 2014 for cash proceedssecond half of $1.42018),
Employee retention and termination benefits (approximately $2.5 million, recognizing a $1.1expected 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 $5.0 million pre-tax gain within Other income (expense), netto $6.0 million, expected to be incurred primarily in the Consolidated Statementsecond half of Earnings.

        During 2013, the Company completed the sale of CCM's Kent, WA, long-lived tangible assets for cash proceeds of $5.4 million, recognizing a pre-tax gain of $1.6 million within Other income (expense), net in the Consolidated Statement of Earnings.

        During 2013, the Company completed the sale of Reno, NV, long-lived tangible assets for cash proceeds of $6.2 million, recognizing a pre-tax gain of $1.0 million within Other income (expense), net in the Consolidated Statement of Earnings.

Income (Loss) from Discontinued Operations

        Discontinued operations for the year ended December 31, 2013 includes the results of the Transportation Products business, which was a component of the Company and was classified as discontinued in the Consolidated Statement of Earnings for all periods presented.

2018).


Notes

During 2017, exit and disposal expense totaled $5.1 million, primarily related to employee termination benefits and accelerated depreciation.

Consolidated Financial Statements (Continued)

Note 4—Disposal of Long-lived AssetsSummary


Exit and Discontinued Operations (Continued)

        Income (loss) from discontinued operations for the year ended December 31, 2013, includes a $30.4 million net loss from operations of the Transportation Products business, inclusive of a pre-tax goodwill impairment charge of $100.0 million.

Note 5—Stock-Based Compensation

        Stock-based compensation cost is recognized over the requisite service period, which generally equals the stated vesting period, unless the stated vesting period exceeds the date upon which an employee reaches retirement eligibility. Pre-tax stock-based compensation expense in continuing operations was $17.4 million, $15.7 million and $17.0 milliondisposal costs by activity for the years ended December 31 2015, 2014,follows:

(in millions) 2017 2016 2015
Employee severance and benefit arrangements $17.8
 $10.1
 $—
Accelerated depreciation 3.7
 0.4
 —
Relocation costs 1.5
 3.8
 —
Other restructuring costs 3.8
 1.2
 0.5
Total exit and disposal costs $26.8
 $15.5
 $0.5

Exit and 2013, respectively. Pre-tax stock-based compensation expense includes $0.9 million related to discontinued operationsdisposal costs by segment for the yearyears ended December 31 2013.

follows:

(in millions) 2017 2016 2015
Carlisle Interconnect Technologies 9.5
 $7.6
 $—
Carlisle Fluid Technologies 11.4
 4.1
 —
Carlisle Brake & Friction 5.1
 —
 0.5
Corporate 0.8
 3.8
 —
Total exit and disposal costs $26.8
 $15.5
 $0.5

Exit and disposal costs by financial statement line item for the years ended December 31 follows:
(in millions) 2017 2016 2015
Cost of goods sold 10.9
 $—
 $0.5
Selling and administrative expenses 15.8
 15.0
 —
Research and development expenses 0.1
 —
 —
Other operating (income) expense, net —
 0.5
 —
Total exit and disposal costs $26.8
 $15.5
 $0.5


Changes in exit and disposal liabilities for the years ended December 31 follows:
(in millions) CIT CFT CBF Corporate Total
Balance as of December 31, 2016 $7.6
 $0.7
 $—
 $0.7
 $9.0
Charges 9.5
 11.4
 5.1
 0.8
 26.8
Cash payments (12.2) (3.9) (1.5) (1.5) (19.1)
Other adjustments and non-cash settlements —
 (1.5) (2.1) —
 (3.6)
Balance as of December 31, 2017 $4.9
 $6.7
 $1.5
 $—
 $13.1

The liability of $13.1 million as of December 31, 2017, primarily relates to employee severance and benefit arrangements and is included in accrued expenses in the Consolidated Balance Sheet.
Note 5—Stock‑Based Compensation
Incentive Compensation Program

The Company maintains an Incentive Compensation Program (the "Program"“Program”) for executives, certain other employees of the Company and its operating segments and subsidiaries and the Company'sCompany’s non-employee directors. Members of the Board of Directors that receive stock-based compensation are treated as employees for accounting purposes. The Program was approved by shareholders on May 6, 2015. The Program allows for up to 4.2 million awards to eligible employees of stock options, restricted stock, stock appreciation rights, performance shares and units or other awards based on Company common stock. AtAs of December 31, 2015, 4,460,142 shares2017, 3.3 million were available for grant under this plan, of which 1,604,716 shares were available for the issuance of stock awards.

Grants

        Forplan.


During the year ended December 31, 2015,2017, the Company awarded 316,345364,675 stock options, 58,04091,098 restricted stock awards, 58,04047,285 performance share awards and 12,15713,399 restricted stock units with an aggregate grant-date fair value of approximately $19.7$26.8 million to be expensed over the requisite service period for each award.

Stock-based compensation expense, which is included in selling and administrative expenses in the Consolidated Statement of Earnings, for the years ended December 31 follows:
(in millions) 2017 2016 2015
Stock option awards $7.7
 $6.1
 $5.1
Restricted stock awards 6.0
 4.5
 5.9
Performance share awards 5.6
 4.7
 6.3
Restricted stock units 1.4
 1.2
 1.1
Total stock-based compensation expense $20.7
 $16.5
 $18.4


The Company recognized an income tax benefit of $12.5 million related to total stock-based compensation expense for the year ended December 31, 2017.

Stock Option Awards

Options issued under the Program generally vest one-thirdon a straight-line basis over a three year period on the first anniversary date of grant, one-third on the second anniversary of grant, and the remaining one-third on the third anniversary of grant. All options have a maximum term life of 10 years. Shares issued to cover options under the Program may be issued from shares held in treasury, from new issuances of shares or a combination of the two.

        For 2015, 2014 and 2013 share-based compensation expense related to stock options was as follows:

 
 Years Ended December 31, 
(in millions, except per share amounts)
 2015 2014 2013 

Pre-tax compensation expense

 $5.1 $4.5 $4.9 

After-tax compensation expense

 $3.2 $2.8 $3.0 

Impact on diluted EPS

 $0.05 $0.04 $0.05 


Notes to Consolidated Financial Statements (Continued)

Note 5—Stock-Based Compensation (Continued)

Unrecognized compensation cost related to stock options of $3.7$5.1 million atas of December 31, 2015,2017, is to be recognized over a weighted-average period of 1.951.87 years.

        Excess income tax benefits related to share-based compensation expense that must be recognized directly in equity are considered financing cash flows. The amount of financing cash flows for these benefits was $15.9 million, $13.2 million, and $5.3 million for the years ended December 31, 2015, 2014, and 2013, respectively.


The Company utilizes the Black-Scholes-Merton ("BSM"Black‑Scholes-Merton (“BSM”) option pricing model to determine the fair value of its stock option awards. The BSM relies on certain assumptions to estimate an option'soption’s fair value. The weighted average assumptions used in the determination of fair value for stock option awards in 2015, 2014, and 2013 were asfor the years ended December 31 follows:


 2015 2014 2013 
(in millions, except per share amounts) 2017 2016 2015

Expected dividend yield

 1.1% 1.2% 1.2% 1.3% 1.4% 1.1%

Expected life in years

 5.71 5.74 5.71 
Expected life (in years) 5.58
 5.61
 5.71

Expected volatility

 27.3% 29.3% 32.2% 25.6% 27.5% 27.3%

Risk-free interest rate

 1.4% 1.7% 1.0% 1.9% 1.4% 1.4%

Weighted-average fair value

 $21.19 $19.15 $17.58 
Weighted-average grant date fair value (per share) $24.57
 $19.30
 $21.19
Fair value of options granted $8.8
 $7.2
 $6.7
Intrinsic value of options exercised $8.5
 $56.4
 $42.7
Fair value of options vested $5.4
 $4.7
 $4.6


The expected life of options is based on the assumption that all outstanding options will be exercised at the midpoint of the valuation date (if vested) or the vesting dates (if unvested) and the options'options’ expiration date. The expected volatility is based on historical volatility as well as implied volatility of the Company'sCompany’s options. The risk-free interest rate is based on rates of U.S. Treasury issues with a remaining life equal to the expected life of the option. The expected dividend yield is based on the projected annual dividend payment per share, divided by the stock price at the date of grant.

        Stock option activity under the Company's


A summary of stock option awards for 2015, 2014, and 2013 was as follows:

 
 Shares Weighted-Average
Price		 

Outstanding at December 31, 2012

  3,225,131 $35.88 
​​​ ​ ​​ ​ ​

Options granted

  283,975  64.80 

Options exercised

  (472,040) 33.81 

Options forfeited

  (44,059) 48.47 
​​​ ​ ​​ ​ ​

Outstanding at December 31, 2013

  2,993,007 $38.76 
​​​ ​ ​​ ​ ​

Options granted

  259,035  73.08 

Options exercised

  (925,520) 38.63 

Options forfeited

  (49,885) 56.89 
​​​ ​​​ ​ ​

Outstanding at December 31, 2014

  2,276,637 $42.32 
​​​​ ​​ ​ ​

Options granted

  316,345  92.84 

Options exercised

  (748,270) 38.44 

Options forfeited

  (34,632) 81.68 
​​​ ​ ​​ ​ ​

Outstanding at December 31, 2015

  1,810,080 $52.00 
​​​ ​ ​​​ ​
​​​​​​​​
​​​ ​ ​​ ​ ​


Notes to Consolidated Financial Statements (Continued)

Note 5—Stock-Based Compensation (Continued)

        The weighted-average grant-date fair value of options granted during the years ended December 31, 2015, 2014, and 2013 was $6.7 million, $5.0 million, and $5.0 million, respectively.

        The total intrinsic value of options exercised during the years ended December 31, 2015, 2014, and 2013 was $42.7 million, $41.7 million, and $15.5 million, respectively. The weighted-average contractual term of options outstanding at December 31, 2015, 2014, and 2013 was 5.63, 5.71, and 5.72 years, respectively.

        At December 31, 2015, 2014, and 2013, 1,281,126, 1,666,647, and 2,378,543 options were exercisable, with a weighted-average exercise price of $39.09, $34.24, and $34.87, respectively. The weighted-average contractual term of options exercisable at December 31, 2015 and 2014 was 4.43 and 4.72 years, respectively.

        The aggregate intrinsic value of options outstanding and exercisable at December 31, 2015, and 2014 was $63.5 million and $91.8 million, respectively. The total grant date fair value of options vestedactivity during the year ended December 31, 2015, 2014, and 2013 was $4.6 million, $4.0 million, and $8.0 million, respectively.

2017, follows:

  Number of Shares Weighted-Average Exercise Price Weighted-Average Contractual Term 
Aggregate Intrinsic Value
(in millions)
Outstanding as of December 31, 2016 1,263,665
 $70.95
    
Options granted 364,675
 107.63
    
Options exercised (165,959) 56.61
    
Options forfeited / expired (31,069) 92.49
    
Outstanding as of December 31, 2017 1,431,312
 81.49
 6.8 $46.2
Vested and exercisable as of December 31, 2017 732,408
 66.24
 5.2 $34.7


Restricted Stock Awards

Restricted stock awarded under the Program is generally released to the recipient after a period of approximately three years. The number and weighted-average grant-date fair value of restricted shares issued in each of the last three years was as follows: in 2015, 58,040 awards were granted at a weighted-average fair value of $90.54; in 2014, 104,773 awards were granted at a weighted-average fair value of $76.70; and in 2013, 71,255 awards were granted at a weighted-average fair value of $64.80. Compensation expense related to restricted stock awards of $5.9 million, $5.1 million, and $4.6 million was recognized for the years ended December 31, 2015, 2014, and 2013, respectively. Unrecognized compensation cost related to restricted stock awards of $4.3$9.0 million atas of December 31, 20152017, is to be recognized over a weighted-average period of 1.582.1 years.



Notes to Consolidated Financial Statements (Continued)

Note 5—Stock-Based Compensation (Continued)

The following represents activityfair value of shares vested during the year ended December 31, 2017, was $11.4 million.


Information related to restricted stock forawards during the years ended December 31 2015, 2014, and 2013:

follows:

 
 Number of
Shares		 Weighted-Average
Grant Date
Fair Value		 

Outstanding at December 31, 2012

  284,235 $25.99 
​​​ ​ ​​ ​ ​

Shares granted

  71,255  64.80 

Shares vested

  (109,445) 34.08 

Shares forfeited

  (5,055) 47.85 
​​​ ​ ​​ ​ ​

Outstanding at December 31, 2013

  240,990 $49.66 
​​​ ​ ​​ ​ ​

Shares granted

  104,773  76.70 

Shares vested

  (94,590) 38.57 

Shares forfeited

  (4,185) 63.73 
​​​ ​​​ ​ ​

Outstanding at December 31, 2014

  246,988 $65.14 
​​​​ ​​ ​ ​

Shares granted

  58,040  90.54 

Shares vested

  (75,740) 49.56 

Shares forfeited

  (2,881) 81.32 
​​​ ​ ​​ ​ ​

Outstanding at December 31, 2015

  226,407 $76.66 
​​​ ​ ​​​ ​
​​​​​​​​
​​​ ​ ​​ ​ ​
(in millions, except per share amounts) 2017 2016 2015
Weighted-average grant date fair value (per share) $106.78
 $84.73
 $90.54

Performance Share Awards

        The Company granted 58,040, 67,970,


A summary of restricted stock awards outstanding and 71,255 performance share awards inactivity during the yearsyear ended December 31, 2015, 2014, and 2013, respectively. The performance2017, follows:
  Number of Shares Weighted-Average Grant Date Fair Value
Outstanding as of December 31, 2016 225,265
 $82.59
Shares granted 91,098
 106.78
Shares vested (105,282) 77.41
Shares forfeited (2,760) 94.21
Outstanding as of December 31, 2017 208,321
 95.63


Performance Share Awards
Performance shares vest based on the employee rendering three years of service to the Company and the attainment of a market condition over the performance period, which is based on the Company'sCompany’s relative total shareholder return versus the S&P Midcap 400 Index®Index® over a pre-determined time period as determined by the Compensation Committee of the Board of Directors. The grant date fair value of the 2015, 2014, and 2013 performance shares of $112.39, $95.72, and $91.33, respectively, was estimated using a Monte-Carlo simulation approach based on a three year measurement period. Such approach entails the use of assumptions regarding the future performance of the Company's stock and those of the S&P Midcap 400 Index®. Those assumptions include expected volatility, risk-free interest rates, correlation coefficients and dividend reinvestment. Dividends accrue on the performance shares during the performance period and are to be paid in cash based upon the number of awards ultimately earned.

        The Company expenses the compensation cost associated with the performance awards on a straight-line basis over the vesting period of approximately three years. In the years ended December 31, 2015, 2014, and 2013, the Company recognized approximately $6.3 million, $6.0 million, and $6.5 million, respectively, of compensation cost related to the performance share awards. Unrecognized compensation cost related to performance share awards of $3.7$6.7 million atas of December 31, 20152017, is to be recognized over a weighted-average period of 1.671.66 years. The fair value of shares vested during the year ended December 31, 2017, was $11.6 million.


For purposes of determining diluted earnings per share, the performance share awards are considered contingently issuable shares and are included in diluted earnings per share based upon the number of shares that would have been awarded had the conditions at the end of the reporting period continued until the end of the performance period. See Note 7 for further information regarding earnings per share computations.




Notes

The Company utilizes the Monte-Carlo simulation approach based on a three year measurement period to Consolidated Financial Statements (Continued)

Note 5—Stock-Based Compensation (Continued)

        The following represents activitydetermine the fair value of performance shares. Such approach entails the use of assumptions regarding the future performance of the Company’s stock and those of the S&P Midcap 400 Index®. Those assumptions include expected volatility, risk‑free interest rates, correlation coefficients and dividend reinvestment. Dividends accrue on the performance shares during the performance period and are to be paid in cash based upon the number of awards ultimately earned.


Information related to performance shares forduring the years ended December 31 2015, 2014, and 2013:

follows:

 
 Number of
Peformance
Units		 2015
Awards		 2014
Awards		 2013
Awards		 2012
Awards		 2011
Awards		 2010
Awards		 

Outstanding at December 31, 2012

  230,730  —  —  —  79,340  93,840  57,550 

Units granted

  71,255  —  —  71,255  —  —  — 

Units converted to shares

  89,610  —  —  —  —  89,610  — 

Units vested and issued

  (45,544) —  —  —  —  —  (45,544)

Units vested and deferred

  (12,006) —  —  —  —  —  (12,006)

Units forfeited

  (5,055) —  —  (1,080) (1,745) (2,230) — 
​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​

Outstanding at December 31, 2013

  328,990  —  —  70,175  77,595  181,220  — 
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​​​​​​​​​​​​​
​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​

Units granted

  67,970  —  67,970  —  —  —  — 

Units converted to shares

  69,920  —  —  —  69,920  —  — 

Units vested and issued

  (135,008) —  —  —  —  (135,008) — 

Units vested and deferred

  (46,212) —  —  —  —  (46,212) — 

Units forfeited

  (4,185) —  (1,465) (1,630) (1,090) —  — 
​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​

Outstanding at December 31, 2014

  281,475  —  66,505  68,545  146,425  —  — 
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​​​​​​​​​​​​​
​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​

Units granted

  58,040  58,040  —  —  —  —  — 

Units converted to shares

  37,496  —  —  37,496  —  —  — 

Units vested and issued

  (112,814) —  —  —  (112,814) —  — 

Units vested and deferred

  (33,611) —  —  —  (33,611) —  — 

Units forfeited

  (2,340) (1,220) (750) (370) —  —  — 
​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​

Outstanding at December 31, 2015

  228,246  56,820  65,755  105,671  —  —  — 
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​​​​​​​​​​​​​
​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​​ ​​​ ​ ​
(in millions, except per share amounts)
 2017 2016 2015
Weighted-average grant date fair value (per share) $141.83
 $119.08
 $112.39

        The Company's relative total shareholder return versus companies in



A summary of performance shares outstanding and activity during the S&P Midcap 400 Index® over the period covered by the 2013 awards, 2012 awards, and 2011 awards resulted in participants being awarded an additional 37,496 shares, 69,920 shares, and 89,610 shares, respectively, under the plan. The awarding of these additional shares had no impact on stock-based compensation expense as the likelihood of their issuance was included in the determination of grant date fair value using a Monte Carlo simulation approach.

year ended December 31, 2017, follows:

  Number of Shares Weighted-Average Grant Date Fair Value
Outstanding as of December 31, 2016 219,559
  
Units granted 47,285
 $141.83
Units converted (withheld) (8,786) 112.39
Units vested and issued (86,619) 95.72
Units vested and deferred (17,413) 95.72
Units forfeited (2,760) 126.66
Outstanding as of December 31, 2017 151,266
 123.99

Restricted Stock Units

Restricted stock units are awarded to eligible directors and fully vested and are expensed upon grant date. The restricted stock units awarded to eligible directors are fully vested and will be paid in shares of Company common stock after the director ceases to serve as a member of the Board, or if earlier, upon a change in control of the Company. The $90.54Company granted 13,399, 14,359 and 12,157 units in 2017, 2016 and 2015, respectively. Units had a weighted-average grant date fair value per share of the$107.87, $83.31 and $90.54 in 2017, 2016 and 2015, restrictedrespectively. Restricted stock units fair value is based on the closing market price of the stock on February 4, 2015, the daterespective dates of the grant.

grants.


Deferred Compensation—Compensation - Equity

Certain employees are eligible to participate in the Company'sCompany’s Non-qualified Deferred Compensation Plan (the "Deferred“Deferred Compensation Plan"Plan”). Participants may elect to defer all or part of their stock-based compensation.restricted and performance shares. Participants have elected to defer 253,520280,982 and 294,574 shares of Company common stock as of December 31, 2015,2017 and 228,047 shares as of December 31, 2014.2016, respectively. Company stock held for future issuance of vested awards is classified as deferred compensation equity in the Consolidated Balance Sheets and is recorded at grant date fair value.

Such deferred shares are included in basic earnings per share.

Note 6—Income Taxes
U.S. Tax Reform

On December 22, 2017, the U.S. enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act included significant changes to existing tax law including, among other things, a reduction to the U.S. federal corporate income tax rate from 35% to 21% and a one-time tax on deferred foreign income ("Transition Tax"). 

The changes included in the Tax Act are broad and complex. As such, on December 22, 2017, the Securities and Exchange Commission (“SEC”) issued SAB 118. SAB 118 expresses views of the SEC regarding ASC Topic 740, Income Taxes in the reporting period that includes the enactment date of the Tax Act. The SEC staff issuing SAB 118 recognized that a registrant’s review of certain income tax effects of the Tax Act may be incomplete at the time financial statements are issued for the reporting period that includes the enactment date, including interim periods therein. If a company does not have the necessary information available, prepared or analyzed for certain income tax effects of the Tax Act, SAB 118 allows a company to report provisional numbers and adjust those amounts during the measurement period not to extend beyond one year. The Company has recorded provisional amounts for all known and estimable impacts of the Tax Act that are effective for the year ended December 31, 2017. Future adjustments to the provisional numbers will be recorded as discrete adjustments to income tax provision in the period in which those adjustments become estimable and/or are finalized.

For the year ended December 31, 2017, the estimated impact of the Tax Act resulted in a provisional tax benefit of $57.7 million. This benefit is comprised of a charge of $32.5 million related to the Transition Tax and a benefit of $90.2 million from the rate reduction impacting the valuation of the Company’s U.S. deferred tax balances.

The Company continues to review the anticipated impacts of the global intangible low taxed income (“GILTI”) and base erosion anti-abuse tax (“BEAT”) on the Company, which are not effective until calendar year 2018 and are not expected to impact 2017 balances. Within the calculation of the Company’s tax balances, the Company has used assumptions


Notes to Consolidated Financial Statements (Continued)

Note 6—

and estimates that may change as a result of future guidance, interpretation and rule-making from various regulatory bodies.

Income Taxes

Tax Disclosures


A summary of pre-taxpre‑tax income from U.S. and non U.S.non-U.S. operations is asfor the years ended December 31 follows:

(in millions)
 2015 2014 2013 

Continuing operations

          

U.S. domestic

 $393.8 $318.9 $291.9 

Foreign

  74.1  57.2  41.1 
​​​​ ​​ ​ ​​​ ​

Total pre-tax income from continuing operations

  467.9  376.1  333.0 
​​​ ​ ​​​ ​​ ​ ​

Discontinued operations

          

U.S. domestic

  0.1  (3.2) (132.4)

Foreign

  —  1.1  71.9 
​​​​ ​​ ​ ​​​ ​

Total pre-tax income (loss) from discontinued operations

  0.1  (2.1) (60.5)
​​​ ​ ​​ ​ ​​ ​ ​

Total pre-tax income

 $468.0 $374.0 $272.5 
​​​ ​ ​​ ​ ​​​ ​
​​​​​​​​​​​
​​​ ​​​ ​ ​​ ​ ​
(in millions) 2017 2016 2015
Continuing operations:      
U.S. domestic $395.2
 $319.0
 $393.8
Foreign 73.0
 91.5
 74.1
Total pre-tax income from continuing operations 468.2
 410.5
 467.9
Discontinued operations:  
  
  
U.S. domestic 0.3
 (1.1) 0.1
Foreign —
 —
 —
Total pre-tax income (loss) from discontinued operations 0.3
 (1.1) 0.1
Total pre-tax income $468.5
 $409.4
 $468.0


The provision for income taxes from continuing operations is asfor the years ended December 31 follows:

(in millions)
 2015 2014 2013 

Current expense

          

Federal and State

 $140.1 $118.4 $97.2 

Foreign

  24.0  16.1  21.9 
​​​ ​ ​​ ​ ​​ ​ ​

Total current expense

  164.1  134.5  119.1 
​​​ ​ ​​ ​ ​​ ​ ​

Deferred expense (benefit)

          

Federal and State

  (12.7) (8.5) (8.2)

Foreign

  (3.1) (1.6) (13.1)
​​​ ​ ​​ ​ ​​ ​ ​

Total deferred expense (benefit)

  (15.8) (10.1) (21.3)
​​​ ​ ​​ ​​​ ​ ​

Total tax expense

 $148.3 $124.4 $97.8 
​​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​
​​​​ ​​ ​ ​​​ ​
(in millions) 2017 2016 2015
Current expense:      
Federal and State $133.0
 $155.5
 $140.1
Foreign 28.4
 29.2
 24.0
Total current expense 161.4
 184.7
 164.1
Deferred expense (benefit):  
  
  
Federal and State (64.7) (15.5) (12.7)
Foreign 6.2
 (9.5) (3.1)
Total deferred expense (benefit) (58.5) (25.0) (15.8)
Total tax expense $102.9
 $159.7
 $148.3


A reconciliation of the tax provision forfrom continuing operations computed at the U.S. federal statutory rate to the actual tax provision is asfor the years ended December 31 follows:

(in millions)
 2015 2014 2013  2017 2016 2015

Taxes at the 35% U.S. statutory rate

 $163.8 $131.6 $116.6  $163.9
 $143.7
 $163.8

State and local taxes, net of federal income tax benefit

 1.9 7.4 4.9  10.8
 8.6
 1.9

Benefit of foreign earnings taxed at lower rates

 (7.9) (5.2) (3.0) (6.7) (8.1) (7.9)

Benefit for domestic manufacturing deduction

 (11.5) (8.7) (9.7) (10.4) (12.6) (11.5)

Benefit associated with foreign reorganization

 — — (11.8)
Tax credits (2.3) (10.7) —
Tax impact of impairment of goodwill —
 41.2
 —
Impact of U.S. tax reform (57.7) —
 —
Change in investment assertion on foreign earnings 5.1
 —
 —

Other, net

 2.0 (0.7) 0.8  0.2
 (2.4) 2.0
​​ ​ ​​ ​ ​​​ ​

Tax expense

 $148.3 $124.4 $97.8  $102.9
 $159.7
 $148.3
​​ ​ ​​​ ​​ ​ ​
​​​​​​​
​​ ​ ​​ ​​​ ​ ​

Effective income tax rate on continuing operations

 31.7% 33.1% 29.4% 22.0% 38.9% 31.7%
​​ ​ ​​ ​ ​​​ ​


Cash payments for income taxes, net of refunds, were $142.8 million, $192.3 million and $123.0 million, $138.5 million,in 2017, 2016 and $127.7 million, in 2015, 2014, and 2013, respectively.




Notes to Consolidated Financial Statements (Continued)

Note 6—Income Taxes (Continued)

        Deferred

The components of deferred tax assets (liabilities) atas of December 31 related to the following:

follows:
(in millions)
 2015 2014  2017 2016

Deferred revenue

 $25.3 $25.7  $20.1
 $26.9

Warranty reserves

 5.6 4.3  4.7
 7.1

Inventory reserves

 10.9 9.0  8.7
 12.1

Allowance for doubtful accounts

 4.6 3.8  3.7
 4.5

Employee benefits

 41.5 41.4  31.3
 45.2

Foreign loss carryforwards

 1.9 3.7  3.8
 2.9
Federal tax credit carryovers 3.1
 6.6

Deferred state tax attributes

 16.2 15.8  13.6
 14.6

Other, net

 (1.4) 2.3  2.4
 7.0
​​ ​ ​​ ​ ​

Gross deferred assets

 104.6 106.0  91.4
 126.9
​​ ​ ​​ ​ ​

Valuation allowances

 (4.3) (9.6) (4.3) (1.3)
​​ ​ ​​ ​ ​

Deferred tax assets after valuation allowances

 $100.3 $96.4  $87.1
 $125.6
​​ ​ ​​ ​ ​
​​​​​
​​ ​ ​​ ​ ​
    
Undistributed foreign earnings (7.9) (1.7)

Depreciation

 (46.5) (43.8) (42.7) (42.4)

Amortization

 (55.1) (47.3) (47.3) (60.7)

Acquired identifiable intangibles

 (142.4) (136.2) (188.3) (134.7)
​​ ​ ​​ ​ ​

Gross deferred liabilities

 (244.0) (227.3) (286.2) (239.5)
​​ ​ ​​ ​ ​

Net deferred tax liabilities

 $(143.7)$(130.9) $(199.1) $(113.9)
​​ ​ ​​ ​ ​
​​​​​
​​ ​ ​​ ​ ​


As of December 31, 2015,2017, the Company had no deferred tax assets related to net operating loss ("NOL"(“NOL”) carryforwards for U.S. federal tax purposes but had a deferred tax asset for state NOL carryforwards and credits of approximately $11.9$9.5 million (expiring 2016-2035)2018 through 2037) and deferred tax assets related to NOL carryforwards in foreign jurisdictions of approximately $1.9$3.8 million (expiring 2016-2023)2022 through 2026). The Company believes that it is likely that certain of the state attributes will expire unused and therefore has established a valuation allowance of approximately $4.3$1.2 million against the deferred tax assets associated with these attributes. The Company believes that substantially all of the foreign NOLs will be utilized before expiration and therefore has not established a valuation allowance against the deferred tax assets associated with these NOL carryforwards. Approximately $2.9As of December 31, 2017, the Company has $3.1 million of the valuation allowance with respect to state attributes that was recorded on December 31, 2014 was released during the year due to management's changefederal passive foreign tax credit carryover (expiring in judgement regarding the portion of the attributes that was likely to expire unused.2023). The change in judgment occurred as predictions of future taxable income in certain state jurisdictions were increased due to the Finishing Brands acquisition and various restructuring actions that occurred during the year. Although realization is not assured for the remaining deferred tax assets, the Company believes that it is unlikely that passive foreign source income will be generated to utilize the timingpassive foreign tax credit before expiration and amount of the reversal of taxable temporary differences, expected future taxable income and tax planning strategies will generate sufficient income to be fully realized. However, deferred tax assets could be reduced in the future if our estimates of the timing and amount of the reversal of taxable temporary differences, expected future taxable income during the carryforward period are significantly reduced or tax planning strategies are no longer viable.

therefore has established a full valuation allowance.

Deferred tax assets and (liabilities)liabilities are classified as long-term consistent with the requirements of ASU 2015-17,Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes ("ASU 2015-17") which was adopted early in 2015 on a prospective basis.long-term. Foreign deferred tax assets and (liabilities) are grouped separately from U.S. domestic assets and (liabilities)liabilities and are analyzed on a jurisdictional basis.



Notes to Consolidated Financial Statements (Continued)

Note 6—Income Taxes (Continued)

Deferred tax assets and (liabilities) are included in the balance sheetConsolidated Balance Sheet as of December 31 follows:

(in millions)
 2015 2014 

Deferred income taxes

 $— $35.4 

Accrued expenses

  —  (0.2)

Other long-term assets

  0.3  1.4 

Other long-term liabilities

  (144.0) (167.5)
​​​ ​ ​​ ​​

Net deferred tax liabilities

 $(143.7)$(130.9)
​​​ ​ ​​ ​​
​​​​​​​​
​​​ ​ ​​ ​ ​
(in millions) 2017 2016
Other long-term assets $1.4
 $1.1
Other long-term liabilities (200.5) (115.0)
Net deferred tax liabilities $(199.1) $(113.9)



The Company is not required to provide income taxes on the excess of the amount forof the financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration. The Company'sCompany’s excess of financial reporting over the tax basis of investments in foreign subsidiaries is approximately equal to the cumulative unremitted earnings and cumulative translation adjustments of its foreign subsidiaries. The Company reconsiders this assertion quarterly.

        At The Company’s cumulative unremitted earnings and cumulative translation adjustments at December 31, 2015, the2017, were approximately $608.0 million.

The Company intendspreviously intended to permanently reinvest abroad substantially all of the earnings of its foreign subsidiaries. The Transition Tax resulted in elimination of the taxable basis differences in our foreign subsidiaries related to foreign earnings for US tax purposes. However, basis differences still may remain at the local country level. The Company has identified appropriate long term usesdetermined that an amount approximately equal to foreign cash balances will no longer be permanently reinvested for such earnings outside the United States, considers the unremitted earnings to be indefinitely reinvested, and accordingly has made no significant provision for income or withholding taxes that would be due upon distribution of such earnings. The calculation of the deferred tax liability on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries is not practicable due to the complexity of calculating earnings and profits and taxes through multiple tiers of entities, the impact of local country purposes, which results in an accrual of $7.9 million related to withholding and income taxes, the impact of tax elections, the characterization of income for purposes of the foreign tax credit and limitations, and foreign currency effects.

        The Company's cumulative unremitted earnings and cumulative translation adjustments at December 31, 2015 were approximately $490 million.

taxes.


Unrecognized tax benefits reflect the difference between the tax benefits of positions taken or expected to be taken on income tax returns and the tax benefits that meet the criteria for current recognition in the financial statements. The Company periodically assesses its unrecognized tax benefits.

A summary of the movement in gross unrecognized tax benefits (before estimated interest and penalties) is asfor the years ended December 31 follows:

(in millions)
 2015 2014 2013 

Balance at January 1

 $23.8 $10.2 $9.3 

Additions based on tax positions related to current year

  0.9  1.8  1.3 

Additions related to purchase accounting

  3.0  13.6  — 

Adjustments for tax positions of prior years

  1.3  (0.1) 1.6 

Reductions due to statute of limitations

  (1.2) (1.2) (2.0)

Reductions due to settlements

  —  (0.4) — 

Adjustments due to foreign exchange rates

  (0.1) (0.1) — 
​​​ ​ ​​ ​ ​​​ ​

Balance at December 31

 $27.7 $23.8 $10.2 
​​​ ​ ​​​ ​​ ​ ​
​​​​​​​​​​​
​​​ ​ ​​ ​​​ ​ ​
(in millions) 2017 2016 2015
Balance as of January 1 $24.6
 $27.7
 $23.8
Additions based on tax positions related to current year 3.0
 0.6
 0.9
Additions related to acquisition positions 15.8
 —
 3.0
Adjustments for tax positions of prior years 1.5
 —
 1.3
Reductions due to statute of limitations (3.3) (2.1) (1.2)
Reductions due to settlements (1.7) (1.4) —
Adjustments due to foreign exchange rates 0.7
 (0.2) (0.1)
Balance as of December 31 $40.6
 $24.6
 $27.7


If the unrecognized tax benefits as of December 31, 20152017, were to be recognized, approximately $28.5$44.3 million would impact the Company'sCompany’s effective tax rate. The amount impacting the Company's



Notes to Consolidated Financial Statements (Continued)

Note 6—Income Taxes (Continued)

Company’s effective rate is calculated by adding accrued interest and penalties to the gross unrecognized tax benefit and subtracting the tax benefit associated with state taxes and interest.

The Company classifies and reports interest and penalties associated with unrecognized tax benefits as a component of the income tax provision on the Consolidated Statements of Earnings and Comprehensive Income, and as a long-termlong‑term liability on the Consolidated Balance Sheets. The total amount of such interest and penalties accrued, but excluded from the table above, at the years ending 2017, 2016 and 2015 2014,were $6.5 million, $4.7 million and 2013 were $4.9 million, $3.8 million, and $1.2 million, respectively.

The Company is subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions. During the year the Company has workedis working with the IRS to complete its compliance assurance process for the 20142016 tax year. The Company is also currently working with the IRS to complete its compliance assurance audit for the 20152017 tax year and expects conclusion of the process within the next twelve months.

Generally, state income tax returns are subject to examination for a period of three to five years after filing. Substantially all material state tax matters have been concluded for tax years through 2010.2012. Various state income tax returns for subsequent years are in the process of examination. At this stage the outcome is uncertain; however, the Company believes that contingencies have been adequately provided for. Statutes of limitation vary among the foreign jurisdictions in which the Company operates. Substantially all foreign tax matters have been concluded for tax years through 2009.2008. The Company believes that foreign tax contingencies associated with income tax examinations underway or open tax years have been provided for adequately.


Based on the outcome of certain examinations or as a result of the expiration of statutes of limitations for certain jurisdictions, we believethe Company believes that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by approximately $4$6 million to $5$7 million. TheThese previously unrecognized tax benefits relate to a variety of tax issues including tax matters relating to prior acquisitions and various state matters.


Note 7—7—Earnings Per Share

The Company'sCompany’s restricted shares and restricted stock units contain non-forfeitable rights to dividends and therefore, 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 the income attributable to the unvested restricted shares and restricted stock units from the numerator and excludes the dilutive impact of those underlying shares from 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-forfeitablenon‑forfeitable dividend rights.



Notes to Consolidated Financial Statements (Continued)

Note 7—Earnings Per Share (Continued)

The following reflects the Incomeincome from continuing operations and share data used in the basic and diluted earnings per share computations using the two-class method:

(in millions except share and per share amounts)
 2015 2014 2013 

Numerator:

          

Income from continuing operations

 $319.6 $251.7 $235.2 

Less: dividends declared—common stock outstanding, restricted shares and restricted share units

  (72.3) (61.2) (53.7)
​​​ ​ ​​ ​ ​​​ ​

Undistributed earnings

  247.3  190.5  181.5 

Percent allocated to common shareholders(1)

  99.3% 99.5% 99.5%
​​​ ​ ​​ ​ ​​ ​ ​

  245.6  189.5  180.6 

Add: dividends declared—common stock

  71.4  60.4  53.4 
​​​ ​ ​​ ​ ​​​ ​

Numerator for basic and diluted EPS

 $317.0 $249.9 $234.0 
​​​ ​ ​​​ ​​ ​ ​
​​​​​​​​​​​
​​​ ​ ​​ ​​​ ​ ​

Denominator (in thousands):

          

Denominator for basic EPS: weighted-average common shares outstanding

  64,844  64,170  63,471 

Effect of dilutive securities:

          

Performance awards

  253  362  416 

Stock options

  707  772  919 
​​​​ ​​ ​ ​​​ ​

Denominator for diluted EPS: adjusted weighted-average common shares outstanding and assumed conversion

  65,804  65,304  64,806 
​​​ ​ ​​​ ​​ ​ ​
​​​​​​​​​​​
​​​ ​ ​​ ​​​ ​ ​

Per share income from continuing operations:

          

Basic

 $4.89 $3.89 $3.69 
​​​ ​ ​​ ​ ​​​ ​
​​​​​​​​​​​
​​​ ​​​ ​ ​​ ​​

Diluted

 $4.82 $3.83 $3.61 
​​​ ​ ​​​ ​​ ​ ​
​​​​​​​​​​​
​​​ ​ ​​ ​​​ ​ ​

(1)

 

Basic weighted-average common shares outstanding

  64,844  64,170  63,471 

 

Basic weighted-average common shares outstanding, unvested restricted shares expected to vest and restricted share units

  65,304  64,512  63,797 
​​​​​ ​ ​​ ​ ​​ ​ ​

 

Percent allocated to common shareholders

  99.3% 99.5% 99.5%
​​​​​​ ​​ ​ ​​​ ​


Notes to Consolidated Financial Statements (Continued)

Note 7—Earnings Per Share (Continued)

        To calculate earnings per sharetwo‑class method for the Loss from discontinued operations and for Net income, theyears ended December 31:

(in millions except share and per share amounts) 2017 2016 2015
Income from continuing operations $365.3
 $250.8
 $319.6
Less: dividends declared - common stock outstanding, restricted shares and restricted share units (92.1) (84.5) (72.3)
Undistributed earnings 273.2
 166.3
 247.3
Percent allocated to common shareholders (1)
 99.3% 99.3% 99.3%
  271.3
 165.0
 245.6
Add: dividends declared - common stock 90.9
 83.6
 71.4
Income from continuing operations attributable to common shares $362.2
 $248.6
 $317.0
       
Shares (in thousands):  
  
  
Weighted-average common shares outstanding  63,073
 64,226
 64,844
Effect of dilutive securities:  
  
  
Performance awards 137
 257
 253
Stock options 341
 400
 707
Adjusted weighted-average common shares outstanding and assumed conversion 63,551
 64,883
 65,804
       
Per share income from continuing operations:  
  
  
Basic $5.75
 $3.87
 $4.89
Diluted $5.71
 $3.83
 $4.82
       
(1) Basic weighted-average common shares outstanding
 63,073
 64,226
 64,844
Basic weighted-average common shares outstanding, unvested restricted shares expected to vest and restricted share units 63,513
 64,682
 65,304
Percent allocated to common shareholders 99.3% 99.3% 99.3%


The denominator for both basic and diluted earnings per share is the same as used in the above table. The Losstable to calculate per share amounts for the income from discontinued operations and net income. The income from discontinued operations and net income for the Net income were asyears ended December 31 follows:

(in millions)
 2015 2014 2013 

Income (loss) from discontinued operations attributable to common shareholders for basic and diluted earnings per share

 $0.1 $(0.4)$(25.4)

Net income attributable to common shareholders for basic and diluted earnings per share

 $317.1 $249.5 $208.6 

Antidilutive stock options excluded from EPS calculation(1)

  257.5  —  — 
(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 shares generated than the underlying award.

(in millions except share amounts presented in thousands) 2017 2016 2015
Income (loss) from discontinued operations $0.2
 $(0.7) $0.1
Net income attributable to common shareholders for basic and diluted earnings per share $362.4
 $248.0
 $317.1
Anti-dilutive stock options excluded from EPS calculation (1)
 320.6
 23.1
 257.5
(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 underlyingaward.

Note 8—8—Inventories

The components of Inventories atinventories as of December 31 were as follows:

(in millions)
 2015 2014  2017 2016

Finished goods

 $205.1 $188.1  $291.9
 $218.6

Work-in-process

 48.8 45.3  64.0
 51.3

Raw materials

 133.9 132.2  185.5
 143.4

Reserves

 (31.8) (26.5) (33.5) (36.3)
​​ ​ ​​ ​​

Inventories

 $356.0 $339.1  $507.9
 $377.0
​​ ​ ​​ ​​
​​​​​
​​ ​ ​​ ​ ​



Note 9—9—Property, Plant and Equipment,

net

The components of Property,property, plant and equipment, net of accumulated depreciation atas of December 31 were as follows:

(in millions)
 2015 2014  2017 2016

Land

 $59.9 $37.1  $74.5
 $60.2

Buildings and leasehold improvements

 324.6 284.6  389.1
 342.5

Machinery and equipment

 735.4 690.7  896.9
 784.7

Projects in progress

 34.6 48.6  127.2
 57.5
​​ ​ ​​ ​​

 1,154.5 1,061.0 
Property, plant and equipment, gross 1,487.7
 1,244.9

Accumulated depreciation

 (568.7) (513.7) (706.8) (612.7)
​​ ​ ​​​ ​

Property, plant, and equipment, net

 $585.8 $547.3 
​​ ​ ​​ ​ ​
​​​​​
​​​ ​​ ​ ​
Property, plant and equipment, net $780.9
 $632.2

        During 2015, 2014, and 2013, the Company capitalized

Capitalized interest in the amount oftotaled $2.4 million, $0.9 million and $1.0 million $2.2 million,for 2017, 2016 and $1.7 million,2015, respectively.



Notes to Consolidated Financial Statements (Continued)

Note 10—10—Goodwill and Other Intangible Assets,

net

The changes in the carrying amount of Goodwill,goodwill, net for the years ended December 31 2015 and 2014 were as follows:

(in millions)
 Construction
Materials		 Interconnect
Technologies		 Fluid
Technologies		 Brake and
Friction		 FoodService
Products		 Total 

Net balance at January 1, 2014

 $129.1 $442.6 $— $226.7 $60.3 $858.7 

Goodwill acquired during year(1)

  —  111.7  —  —  —  111.7 

Currency translation

  (5.8) —  —  (0.1) —  (5.9)
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Net balance at December 31, 2014

 $123.3 $554.3 $— $226.6 $60.3 $964.5 
​​​​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​​​​​​​​​​
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Goodwill acquired during year(1)

  —  —  175.7  —  —  175.7 

Measurement period adjustments

  —  1.1  (0.5) —  —  0.6 

Currency translation

  (4.6) —  (1.8) —  —  (6.4)
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Net balance at December 31, 2015

 $118.7 $555.4 $173.4 $226.6 $60.3 $1,134.4 
​​​​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​​​​​​​​​​
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​
(1)
See Note 3 for further information on goodwill resulting from recent acquisitions.

        On April 1, 2015, the Company acquired 100% of the Finishing Brands business from Graco for a total purchase price of $611.1 million, gross and $598.9 million, net of cash acquired.

(in millions) CCM CIT CFT CBF CFS Total
Net balance as of December 31, 2015 $118.7
 $555.4
 $173.4
    $226.6
 $60.3
 $1,134.4
Goodwill acquired during year (1)
 —
 83.7
 2.9
 —
 —
 86.6
Impairment charges —
 —
 —
 (130.0) —
 (130.0)
Measurement period adjustments —
 —
 (0.3) —
 —
 (0.3)
Currency translation and other (1.2) —
 (8.1)
(2) 
(0.2) —
 (9.5)
Net balance as of December 31, 2016 $117.5
 $639.1
 $167.9
 $96.4
 $60.3
 $1,081.2
Goodwill acquired during year (1)
 420.2
 —
 —
 —
 86.9
 507.1
Impairment charges —
 —
 —
 —
 —
 —
Measurement period adjustments —
 0.3
 —
 —
 2.5
 2.8
Currency translation and other 6.6
 0.9
 3.1
 0.1
 —
 10.7
Net balance as of December 31, 2017 $544.3
 $640.3
 $171.0
 $96.5
 $149.7
 $1,601.8
(1)
See Note 3 for further information on goodwill resulting from recent acquisitions.
(2)
Includes a $4.9 million correction of certain deferred tax liabilities acquired in the Finishing Brands acquisition.
The resulting goodwill recorded of $175.2 million, after preliminary measurement period adjustments, was allocated to the CFT reporting unit which aligns with the reportable segment.

        On October 1, 2014, the Company acquired LHi for a total purchase price of $200.7 million, gross and $194.0 million, net of cash acquired. The resulting goodwill recorded of $112.8 million, after measurement period adjustments, was allocated to the Interconnect Technologies reporting unit.

        The Company's OtherCompany’s other intangible assets, net atas of December 31, 2015, are as2017, follows:

(in millions)
 Acquired
Cost		 Accumulated
Amortization		 Net Book
Value		  Acquired Cost Accumulated Amortization Net Book Value

Assets subject to amortization:

             

Intellectual property

 $180.7 $(55.0)$125.7 
Technology and intellectual property $309.4
 $(100.7) $208.7

Customer relationships

 673.9 (160.5) 513.4  979.6
 (260.6) 719.0

Other

 13.5 (10.6) 2.9 
Trade names and other 44.6
 (13.7) 30.9

Assets not subject to amortization:

         
  
  

Trade names

 245.8 — 245.8  275.8
 —
 275.8
​​ ​​​ ​ ​​ ​​

Other intangible assets, net

 $1,113.9 $(226.1)$887.8  $1,609.4
 $(375.0) $1,234.4
​​ ​​​ ​ ​​ ​​
​​​​​​​
​​​ ​​ ​ ​​ ​ ​



Notes to Consolidated Financial Statements (Continued)

Note 10—Goodwill and Other Intangible Assets (Continued)

The Company's OtherCompany’s other intangible assets, net atas of December 31, 2014, are2016, follows:
(in millions) Acquired Cost Accumulated Amortization Net Book Value
Assets subject to amortization:      
Intellectual property $200.7
 $(72.4) $128.3
Customer relationships 704.3
 (201.6) 502.7
Other 15.4
 (11.7) 3.7
Assets not subject to amortization:  
  
  
Trade names 237.5
 —
 237.5
Other intangible assets, net $1,157.9
 $(285.7) $872.2


The remaining weighted-average amortization period of intangible assets subject to amortization as follows:

of December 31, 2017, follows (in years):
(in millions)
 Acquired
Cost		 Accumulated
Amortization		 Net Book
Value		 

Assets subject to amortization:

          

Intellectual property

 $146.6 $(37.8)$108.8 

Customer relationships

  494.6  (122.3) 372.3 

Other

  20.6  (12.1) 8.5 

Assets not subject to amortization:

          

Trade names

  122.1  —  122.1 
​​​ ​​​ ​ ​​ ​​

Other intangible assets, net

 $783.9 $(172.2)$611.7 
​​​ ​​​ ​ ​​ ​​
​​​​​​​​​​​
​​​​ ​​ ​ ​​ ​ ​
Intellectual property7.3
Customer relationships10.8
Trade names and other9.1
Total assets subject to amortization10.0

        Estimated


Intangible assets subject to amortization expense over the next five years isas of December 31, 2017, will be amortized as follows: $58.5 million in 2016, $57.7 million in 2017, $57.7 million in 2018, $57.6 million in 2019, and $54.4 million in 2020.

(in millions) 2018 2019 2020 2021 2022 Thereafter
Estimated future amortization expense $112.2
 $111.6
 $108.6
 $103.4
 $94.5
 $428.3

The net carrying values of the Company's OtherCompany’s other intangible assets, net by reportable segment as of December 31 follows:
(in millions) 2017 2016
Carlisle Construction Materials $325.1
 $55.2
Carlisle Interconnect Technologies 344.5
 379.1
Carlisle Fluid Technologies 302.5
 313.7
Carlisle Brake & Friction 92.9
 99.3
Carlisle FoodService Products 169.4
 24.9
Total $1,234.4
 $872.2


2016 Impairment

In the third quarter of 2016, the Company concluded that its expectations of recovery in the near term in CBF’s related end markets had declined to the extent that it was more likely than not that the fair value of the Wellman®  trade name and CBF reporting unit were below their carrying values. As a result, in the third quarter of 2016 the Company recognized impairment charges within its CBF segment of $11.5 million related to the Wellman® trade name and $130.0 million of goodwill, resulting in a carrying value of $35.4 million and $96.5 million, respectively. Consistent with its accounting policies effective at the date of impairment, the Company performed the impairment tests for these assets through a one-step process for the Wellman® trade name and a two-step process for goodwill.

Wellman® Trade Name Impairment
The Company based its estimate of fair value of the Wellman® trade name on the income approach utilizing the discounted future cash flow method. As part of estimating discounted future cash flows attributable to the Wellman® trade name, management estimated future revenues, royalty rates and discount rates. These represent the most significant assumptions used in the Company’s evaluation of the fair value of the Wellman® trade name (i.e., Level 3 measurements). As a result, management determined that the fair value of the Wellman® trade name was below its carrying value and recorded an impairment charge equal to the difference as follows:

noted above.
(in millions)
 2015 2014 

Carlisle Construction Materials

 $60.9 $72.3 

Carlisle Interconnect Technologies

  357.3  386.6 

Carlisle Fluid Technologies

  325.3  — 

Carlisle Brake & Friction

  117.2  123.5 

Carlisle FoodService Products

  27.1  29.3 
​​​ ​ ​​ ​ ​

Total

 $887.8 $611.7 
​​​ ​ ​​ ​ ​
​​​​​​​​
​​​ ​ ​​ ​ ​

        Acquired patents and intellectual property will be amortized over a weighted-average period

CBF Goodwill Impairment
Similarly, for Step 1 of 8.6 years. The acquiredthe two-step goodwill impairment test, the Company estimated the fair value of the CBF reporting unit based on the income approach utilizing the discounted cash flow method. Estimated industry weighted average cost of capital, revenue growth rates and operating margins for the Company's customer relationship intangible assetsCBF reporting unit represent the most significant assumptions used in the Company’s evaluation of fair value (i.e., Level 3 measurements). As a result, the Company determined that the fair value of the CBF reporting unit was below its carrying value by approximately 25% and therefore Step 2 of the goodwill impairment test was required to measure the amount of the Goodwill impairment. In performing the Step 2 analysis, the Company was required to allocate the reporting units’ fair value to the estimated useful life is as follows (in millions):

fair values of the CBF reporting unit’s underlying asset and liabilities, both those recognized and unrecognized, with the residual amount reflecting the implied value of goodwill at September 30, 2016.
 
 Gross Balance as
of December 31,		 
Estimated Useful Life (Years)
 2015 2014 

5 - 9

 $25.5 $27.1 

10 - 14

 $72.3 $72.3 

15 - 19

 $468.4 $287.5 

20 - 24

 $107.7 $107.7 
​​​ ​ ​​ ​ ​

Total

 $673.9 $494.6 
​​​ ​ ​​ ​ ​
​​​​​​​​
​​​ ​ ​​ ​ ​

See Note 1 in these Notes to Consolidated Financial Statements for further information regarding the valuation of goodwill and indefinite-livedindefinite‑lived intangible assets.



Notes to Consolidated Financial Statements (Continued)

Note 11—11—Commitments and Contingencies

Leases

The Company currently leases a portion of its manufacturing facilities, distribution centers and equipment, someequipment. Some of whichthe leases include scheduled rent increases stated in the lease agreement, generally expressed as a stated percentage increase of the minimum lease payment over the lease term. The Company currently has no leases that require rent to be paid based on contingent events nor has it received any lease incentive payments.events. Rent expense was $30.2 million, $27.4 million and $25.9 million $23.7 million,in 2017, 2016 and $23.9 million in 2015, 2014, and 2013, respectively, inclusive of rent based on scheduled rent increases and rent holidays recognized on a straight-linestraight‑line basis.
Future minimum payments under its various non-cancelablenon‑cancelable operating leases in each of the next fivefuture years are approximately $18.3 million in 2016, $15.0 million in 2017, $13.2 million in 2018, $10.9 million in 2019, $7.1 million in 2020, and $11.7 million thereafter.

Workers'follows:

(in millions) 2018 2019 2020 2021 2022 Thereafter
Future minimum payments $22.6
 $18.2
 $12.1
 $8.9
 $6.9
 $16.2


Workers’ Compensation Claims and Related Losses

The Company has accrued approximately $19.4$14.9 million and $23.5$18.1 million related to workers'workers’ compensation claims atas of December 31, 20152017 and 2014,2016, respectively. AtAs of December 31, 2015, $6.02017, $4.6 million and $13.4 million are included in Accrued expenses and Other long-term liabilities, respectively, and at December 31, 2014, $7.8 million and $15.7$10.3 million were included in Accruedaccrued expenses and Other long-termother long‑term liabilities, respectively, in the Consolidated Balance Sheet. Workers' compensation obligations related to former employees associated with the Transportation Products business and arising prior to the salerespectively. As of the Transportation Products business have been retained by the Company and the Company is obligated to pay the related claims until they are extinguished or otherwise settled. The Company will not be held liable for any workers' compensation claims related to the former Transportation Products business incurred after December 31, 2013.2016, $5.8 million and $12.3 million were included in accrued expenses and other long‑term liabilities, respectively. The liability related to workers'workers’ compensation claims, both those reported to the Company and those incurred but not yet reported, is estimated based on actuarial estimates, and loss development factors and the Company'sCompany’s historical loss experience.

The Company maintains occurrence-basedoccurrence‑based insurance coverage with certain insurance carriers in accordance with its risk management practices that provides for reimbursement of workers'workers’ compensation claims in excess of $0.5 million. The Company records a recovery receivable from the insurance carriers when such recovery is deemed probable based on the nature of the claim and history of recoveries. AtAs of December 31, 20152017 and 20142016, the Company did not have any significant recovery receivables recorded for workers'workers’ compensation claims.

Letters of Credit and Guarantees
During the normal course of business, the Company enters into commitments in the form of letters of credit and bank guarantees to provide financial and performance assurance to third parties. As of December 31, 2017 and 2016, the Company had $26.3 million and $28.7 million letters of credit and bank guarantees outstanding, respectively. The Company has multiple arrangements to obtain letters of credit, which include an agreement with an unspecified availability and separate agreements for up to $80.0 million in letters of credit, of which $55.9 million was available as of December 31, 2017.
Litigation

Over the years, the Company has been named as a defendant, along with numerous other defendants, in lawsuits in various state courts in which plaintiffs have alleged injury due to exposure to asbestos-containingasbestos‑containing brakes, which Carlisle manufactured in limited amounts between the late-1940'slate‑1940’s and the mid-1980's.mid‑1980’s. In addition to compensatory awards, these lawsuits may also seek punitive damages.

Generally, the Company has obtained dismissals or settlements of its asbestos-relatedasbestos‑related lawsuits with no material effect on its financial condition, results of operations or cash flows. The Company maintains insurance coverage that applies to the Company'sCompany’s defense costs and payments of settlements or judgments in connection with asbestos-relatedasbestos‑related lawsuits.

At this time, the amount of reasonably possible additional asbestos claims, if any, is not material to the Company'sCompany’s financial position, results of operations or operating cash flows although these matters



Notes to Consolidated Financial Statements (Continued)

Note 11—Commitments and Contingencies (Continued)

could result in the Company being subject to monetary damages, costs or expenses and charges against earnings in particular periods.

The Company may occasionally be involved in various other legal actions arising in the normal course of business. In the opinion of management, the ultimate outcome of such actions, either individually or in the aggregate, will not have a material adverse effect on the consolidated financial position, results of operations for a particular period or annual operating cash flows of the Company.


Environmental Matters

The Company is subject to increasingly stringent environmental laws and regulations, including those relating to air emissions, wastewater discharges and chemical and hazardous waste management and disposal. Some of these environmental laws hold owners or operators of land or businesses liable for their own and for previous owners' or operators' releases of hazardous or toxic substances or wastes. Other environmental laws and regulations require the obtainment of and compliance with environmental permits. To date, costs of complying with environmental, health and safety requirements have not been material and we dothe Company does not currently have any significant accruals related to potential future costs of environmental remediation atas of December 31, 20152017 and 2014,2016, nor do wedoes the Company have any asset retirement obligations recorded at those dates. However, the nature of the Company'sCompany’s operations and its long history of industrial activities at certain of its current or former facilities, as well as those acquired, could potentially result in material environmental liabilities or asset retirement obligations.


While the Company must comply with existing and pending climate change legislation, regulation, international treaties or accords, current laws and regulations do not have a material impact on its business, capital expenditures or financial position. Future events, including those relating to climate change or greenhouse gas regulation, could require the Company to incur expenses related to the modification or curtailment of operations, installation of pollution control equipment or investigation and cleanup of contaminated sites.

Note 12—Borrowings

        As12—Long-term Debt

The Company's borrowings as of December 31 2015 and 2014 the Company's borrowings were as follows:

(in millions)
 2015 2014 

3.75% notes due 2022, net of unamortized discount of ($0.8) and ($0.9), respectively

 $349.2 $349.1 

5.125% notes due 2020, net of unamortized discount of ($0.6) and ($0.7), respectively

  249.4  249.3 

6.125% notes due 2016, net of unamortized discount of ($0.1) and ($0.2), respectively

  149.9  149.8 

Revolving credit facility

  —  — 

Industrial development and revenue bonds

  —  1.5 

Other, including capital lease obligations

  0.1  0.1 
​​​ ​ ​​ ​ ​

Total long-term debt

  748.6  749.8 

Less 6.125% notes due 2016 classified as current

  (149.9) — 
​​​ ​ ​​​ ​

Total long-term debt, net of current portion

 $598.7 $749.8 
​​​ ​ ​​ ​​
​​​​​​​​
​​​ ​ ​​ ​ ​
  2017 2016 
Fair Value (1)
(in millions)   2017 2016
3.75% Notes due 2027 $600.0
 $—
 $607.1
 $—
3.5% Notes due 2024 400.0
 —
 403.7
 —
3.75% Notes due 2022 350.0
 350.0
 358.9
 347.2
5.125% Notes due 2020 250.0
 250.0
 264.8
 263.1
Unamortized discount, debt issuance costs and other (13.8) (3.6)    
Total long term-debt 1,586.2
 596.4
    
Less current portion of long-term debt —
 —
    
Total long term-debt, net of current portion $1,586.2
 $596.4
    
(1)
The fair value is estimated based on current yield rates plus the Company’s estimated credit spread available for financings with similar terms and maturities. Based on these inputs, debt instruments are classified as Level 2 in the fair value hierarchy.
In August 2016, the Company utilized cash on hand to repay the outstanding principal balance of $150.0 million on the 6.125% senior unsecured notes. 
3.75% Notes Due 2027
On November 16, 2017, the Company completed a public offering of $600.0 million of notes with a stated interest rate of 3.75% due December 1, 2027 (the “2027 Notes”). The 2027 Notes were issued at a discount of $2.4 million, resulting in proceeds to the Company of $597.6 million. The Company incurred costs to issue the 2027 Notes of approximately $7.7 million, inclusive of underwriters’, credit rating agencies’ and attorneys’ fees and other costs. The discount and issuance costs are amortized to interest expense over the life of the 2027 Notes. Interest is paid each June 1 and December 1, commencing on June 1, 2018.

3.5% Notes Due 2024
On November 16, 2017, the Company completed a public offering of $400.0 million of notes with a stated interest rate of 3.5% due December 1, 2024 (the “2024 Notes”). The 2024 Notes were issued at a discount of $0.4 million, resulting in proceeds to the Company of $399.6 million. The Company incurred costs to issue the 2024 Notes of approximately $4.5 million, inclusive of underwriters’, credit rating agencies’ and attorneys’ fees and other costs. The discount and issuance costs are amortized to interest expense over the life of the 2024 Notes. Interest is paid each June 1 and December 1, commencing on June 1, 2018.



Notes to Consolidated Financial Statements (Continued)

Note 12—Borrowings (Continued)

3.75% Notes Due 2022

On November 20, 2012, the Company completed a public offering of $350.0 million of notes with a stated interest rate of 3.75% due November 15, 2022 (the "2022 Notes"“2022 Notes”). The 2022 Notes were issued at a discount of $1.1 million, resulting in proceeds to the Company of $348.9 million. The 2022 Notes are presented net of the related discount in Long-term debt in the consolidated balance sheet at December 31, 2015 and 2014. Interest on the 2022 Notes will be paid each May 15 and November 15, commencing on May 15, 2013. The Company incurred costs to issue the 2022 Notes of approximately $2.9 million, inclusive of underwriters'underwriters’, credit rating agencies'agencies’ and attorneys'attorneys’ fees and other costs. The issuance costs have been recorded in Other long-term assets in the consolidated balance sheet at December 31, 2015 and 2014. Both the discount and the issuance costs will beare being amortized to interest expense over the life of the 2022 Notes.

        The 2022 Notes, in whole or in part, may be redeemed at the Company's option, plus accrued Interest is paid each May 15 and unpaid interest, at any time prior to August 15, 2022 at a price equal to the greater of:

    •
    100% of the principal amount; or

    •
    The sum of the present values of the remaining scheduled payments of principal and interest discounted to the redemption date on a semi-annual basis at the Treasury Rate plus 35 basis points.

        The 2022 Notes may also be redeemed at any time after August 15, 2022, in whole or in part, at the Company's option at 100% of the principal amount, plus accrued and unpaid interest. Upon a change-in-control triggering event, the Company will be required to offer to repurchase the 2022 Notes at 101% of the principal amount, plus accrued and unpaid interest.

        The 2022 Notes are subject to the Company's existing indenture dated January 15, 1997 with Bank of New York Mellon, as trustee, and accordingly are subject to the same restrictive covenants and limitations as the Company's existing indebtedness. The 2022 Notes are general unsecured obligations of the Company and rank equally with the Company's existing and future unsecured and unsubordinated indebtedness. The 2022 Notes are subordinate to any existing or future debt or other liabilities of the Company's subsidiaries. At December 31, 2015, the principal amount of the Company's subsidiaries indebtedness was $0.1 million.

November 15.


5.125% Notes Due 2020

On December 9, 2010, the Company completed a public offering of $250.0 million of notes with a stated interest rate of 5.125% due December 15, 2020 (the "2020 Notes"“2020 Notes”). The 2020 Notes were issued at a discount of approximately $1.1 million, resulting in proceeds to the Company of approximately $248.9 million. The Company incurred costs to issue the 2020 Notes are presented net of the related discount in Long-term debt in the consolidated balance sheet at December 31, 2015approximately $1.9 million, inclusive of underwriters’, credit rating agencies’ and 2014.attorneys’ fees and other costs. Interest on the 2020 Notes is paid each June 15 and December 15.


Notes Terms and Redemption Features
The 2027, 2024, 2022 and 2020 Notes (jointly the “Notes”) are presented net of the related discount and debt issuance costs in whole or in part,long‑term debt. The Notes may be redeemed at the Company's option, in whole or in part, plus accrued and unpaid interest, at any time prior to September 15, 2020the dates stated below, at a price equal to the greater of:

    •
    of (i) 100% of the principal amounts; or


Notes to Consolidated Financial Statements (Continued)

Note 12—Borrowings (Continued)

    •
    The (ii) the sum of the present values of the remaining scheduled payments of principal and interest discounted to the redemption date on a semi-annual basis at the Treasury Rate plus 35 basis points.

a spread (noted below). The 2020 Notes may also be redeemed at any time after September 15, 2020,the dates noted below, in whole or in part, at the Company's option at 100% of the principal amount, plus accrued and unpaid interest.

Debt InstrumentDateSpread
3.75% Notes due 2027September 1, 202725 basis points
3.5% Notes due 2024October 1, 202420 basis points
3.75% Notes due 2022August 15, 202235 basis points
5.125% Notes due 2020September 15, 202035 basis points

Upon a change-in-control triggering event, the Company will be required to offer to repurchase the 2020 Notes at 101% of the principal amount, plus accrued and unpaid interest.

The 2020 Notes are subject to the Company's existing indenture dated January 15, 1997, with Bank of New York Mellon, as trustee, and accordingly, are subject to the same restrictive covenants and limitations as the Company's existing indebtedness. The 2020 Notes are general unsecured obligations of the Company and rank equally with the Company's existing and future unsecured and unsubordinated indebtedness. The 2020 Notes are subordinate to any existing or future debt or other liabilities of the Company's subsidiaries.

6.125% Notes Due 2016

        On August 18, 2006, the Company completed a public offering of $150.0 million of notes with a stated interest rate of 6.125% due August 15, 2016 (the "2016 Notes"). The 2016 Notes were issued at a discount of approximately $1.1 million, resulting in proceeds to the Company of approximately $148.9 million. The 2016 Notes are presented net of the related discount in Short-term debt in the consolidated balance sheet at December 31, 2015 and in Long-term debt in the consolidated balance sheet at December 31, 2014. Interest on the 2016 Notes is paid each February 15 and August 15.

        The 2016 Notes, in whole or in part, may be redeemed at the Company's option, plus accrued and unpaid interest, at any time prior to August 15, 2016 at a price equal to the greater of:

    •
    100% of the principal amounts; or

    •
    The sum of the present values of the remaining scheduled payments of principal and interest discounted to the redemption date on a semi-annual basis at the Treasury Rate plus 20 basis points.

        Upon a change-in-control triggering event, the Company will be required to offer to repurchase all or any part of the 2016 Notes at 101% of the principal amount, plus accrued and unpaid interest.

        The 2016 Notes are subject to the Company's existing indenture dated January 15, 1997 with Bank of New York Mellon, as trustee, and accordingly are subject to the same restrictive covenants and limitations as the Company's existing indebtedness. The 2016 Notes are general unsecured obligations of the Company and rank equally with the Company's existing and future unsecured and unsubordinated indebtedness. The 2016 Notes are subordinate to any existing or future debt or other liabilities of the Company's subsidiaries.

Revolving Credit Facilities

Facility (the “Facility”)

On October 20, 2011, the Company entered into a Third Amended and Restated Credit Agreement ("(“the Credit Agreement"Agreement”) administered by JPMorganJ.P. Morgan Chase Bank, N.A. ("(“JPMorgan Chase"Chase”). On December 12, 2013, the Company executed an amendment to the facility ("the Amendment") to amend certain terms and extend the term of the facility to December 12, 2018. The
On February 21, 2017, the Company entered into a second amendment (the "Amendment") to the Company's Third Amended and Restated Credit Agreement (the “Credit Agreement”) administered by JPMorgan Chase Bank, N.A. Among other things, the Amendment increased the lenders' aggregate revolving commitment from $600.0 million to $1.0 billion and extended the maturity date of the Facility from December 12, 2018 to February 21, 2022. During the first quarter of 2017, the Company incurred $1.4 million of debt issuance costs to finalize the amendment, which will be recognized ratably over the extended maturity date of the Facility. The Facility has a feature that allows the Company to increase availability, at the Company's option, by an aggregate amount of up to $500.0 million through increased commitments from existing lenders or the addition of new lenders. Under the Facility, the Company may also enter into commitments in the form of standby, commercial, or direct pay letters of credit for an amount not to exceed $50.0 million.

The Facility provides for a $600 million revolving line of credit.



Notes to Consolidated Financial Statements (Continued)

Note 12—Borrowings (Continued)

        The new revolving credit facility provides for grid-basedvariable interest pricing based on the credit rating of the Company's senior unsecured bank debt or other unsecured senior debt. The facilityFacility is also subject to fees based on applicable rates as defined in the agreement and the aggregate commitment, regardless of usage. The Facility requires the Company to meet various restrictive covenants and limitations including certain leverage ratios, interest coverage ratios and limits on outstanding debt balances held by certain subsidiaries.

        At

As of December 31, 2015,2017, the Company had $600.0 million$1.0 billion available under its Amended Credit Agreement. There was no interest on borrowingsDuring 2017 the Company borrowed and repaid $1.2 billion under the revolving credit facility in 2015 and 2014.

Uncommitted Lines of Credit

        The Company also maintains an uncommitted line of credit of which $45.0 million was available for borrowing as of December 31, 2015 and 2014.Facility. There were no borrowings under the uncommitted line of credit.

Letters of Credit

        As of December 31, 2015, the Company had outstanding issued letters of credit amounting to $30.2 million. Letters of credit are issued primarily to provide security under insurance arrangements and certain borrowings and are issued under a continuing credit agreement with J.P. Morgan Chase Bank, N.A.

Industrial Development and Revenue Bonds

        The industrial development and revenue bonds were collateralized by letters of credit, Company guarantees and/or by the facilities and equipment acquired through the proceeds of the related bond issuances. In December 2014, the Company repaid $1.5 million of the outstanding principal on the industrial development and revenue bonds. The Company repaid the remaining $1.5 million of the outstanding principal on the industrial development and revenue bonds during the second quarter of 2015.

Facility in 2016.

Covenants and Limitations

Under the Company'sCompany’s debt and credit facilities, the Company is required to meet various restrictive covenants and limitations, including limitations on certain leverage ratios, interest coverage and limits on outstanding debt balances held by certain subsidiaries. The Company was in compliance with all covenants and limitations in 20152017 and 2014.

Other Matters

2016.

Interest Payments
Cash payments for interest were $29.6 million, $35.9 million and $35.1 million in 2015, $35.2 million in 2014, and $35.0 million in 2013. Interest expense, net is presented net of interest income of $0.7 million in 2015, $1.5 million in 2014, and $0.5 million in 2013.

        Regarding the Company's long-term debt, $150.0 million (excluding unamortized discount of $0.1 million) matures in2017, 2016 and is presented in short-term debt as of December 31, 2015, $250.0 million (excluding unamortized discount of $0.6 million) matures in 2020, and $350.0 million (excluding unamortized discount of $0.8 million) matures in 2022.

respectively.



Notes to Consolidated Financial Statements (Continued)

Note 12—Borrowings (Continued)

        At December 31, 2015, the fair value of the Company's par value $350.0 million, 3.75% senior notes due 2022, $250 million, 5.125% senior notes due 2020, and par value $150 million, 6.125% senior notes due 2016, using the Level 2 inputs, is approximately $349.3 million, $268.6 million, and $152.9 million, respectively. Fair value is estimated based on current yield rates plus the Company's estimated credit spread available for financings with similar terms and maturities. The Company estimates that the fair value of amounts outstanding under the revolving credit facility approximates their carrying value.

Note 13—13—Retirement Plans

Defined Benefit Plans

The Company maintains defined benefit retirement plans, primarily for certain domestic employees.employees, as presented below. All plans are frozen to new entrants, with the exception of the executive supplemental and director defined benefit pension plans. Benefits are based primarily on years of service and earnings of the employee.

The Company recognizes the funded status of its defined benefit planssignificant assumptions used in the Consolidated Balance Sheets. The funded status ismeasurement of the difference between the retirement plans' projected benefit obligation and the fair value of the retirement plans' assets as of the measurement date.

        Included in Accumulated other comprehensive income (loss), net of tax at December 31, 2015, are the following amounts that have not yet been recognized in net periodic pension costs: unrecognized actuarial lossesbenefit cost primarily include the discount rate, rate of $42.2 million ($26.4 million, net of tax) and unrecognized prior service cost of $1.1 million ($0.7 million, net of tax). The prior service cost and actuarial loss included in Accumulated other comprehensive incomecompensation increase and expected to be recognized in net periodic pension cost duringlong-term return on plan assets. Weighted‑average assumptions for the yearprojected benefit obligation for the years ended December 31 2016,follows:

  2017 2016
Discount rate 3.49% 3.86%
Rate of compensation increase 3.81% 3.82%

Weighted‑average assumptions for net periodic benefit cost for the years ended December 31 follows:
  2017 2016 2015
Discount rate 3.91% 4.35% 3.87%
Rate of compensation increase 3.82% 4.29% 4.29%
Expected long-term return on plan assets 6.30% 6.20% 6.30%

The Company considers several factors in determining the long-term rate of return for plan assets. Asset-class return expectations are $0.2 million cost ($0.1 million cost, netset using a combination of tax)empirical and $2.1 million ($1.3 million, net of tax), respectively.



Notes to Consolidated Financial Statements (Continued)

Note 13—Retirement Plans (Continued)

        The reconciliationforward-looking analyses. Capital market assumptions for the composition of the beginningCompany’s asset portfolio are intended to capture the behavior of asset classes observed over several market cycles. The Company also looks to historical returns for reasonability and ending balances ofappropriateness.



The following table reconciles the change in the projected pension benefit obligation, the fair value of thechange in plan assets and the ending accumulated benefit obligation are asfunded status for the years ended December 31 follows:

(in millions)
 2015 2014  2017 2016

Funded status

         

Projected benefit obligation

         

Beginning of year

 $192.3 $179.7  $172.5
 $174.3

Change in benefit obligation:

       
  

Service cost

 3.7 4.0  2.6
 3.4

Interest cost

 7.1 7.7  5.3
 5.4

Plan amendments

 — 0.6  0.7
 (0.1)

Actuarial (gain)/loss

 (16.7) 19.1  15.5
 1.2

Benefits paid

 (12.1) (18.8) (13.8) (11.7)
​​ ​ ​​ ​ ​

End of year

 174.3 192.3  $182.8
 $172.5
​​ ​ ​​ ​ ​

Fair value of plan assets

       
  

Beginning of year

 177.3 173.5  $163.2
 $162.7

Change in plan assets:

       
  

Actual return on plan assets

 (3.5) 21.6  14.9
 11.2

Company contributions

 1.0 1.0  1.4
 1.0

Benefits paid

 (12.1) (18.8) (13.8) (11.7)
​​ ​​​ ​ ​

End of year

 162.7 177.3  $165.7
 $163.2
​​ ​​​ ​ ​

(Unfunded) funded status end of year

 $(11.6)$(15.0)
​​ ​ ​​ ​ ​
​​​​​
​​ ​ ​​ ​​
    
(Unfunded) status end of year $(17.1) $(9.3)
    

Accumulated benefit obligation at end of year

 $173.5 $191.2  $181.1
 $171.5
​​ ​ ​​ ​ ​


The accumulated benefit obligation differs from the projected pension benefit obligation in that it includes no assumption about future compensation levels. The Company'sCompany’s projected benefit obligation at December 31, 2015 includes approximately $21.3$22.3 million and $21.7 million related to the Company'sCompany’s executive supplemental and director defined benefit pension plans.plans as of December 31, 2017 and 2016, respectively. The Company’s accumulated benefit obligation includes approximately $20.7 million and $20.6 million related to the Company’s executive supplemental and director defined benefit pension plans as of December 31, 2017 and 2016, respectively. The executive supplemental and director defined benefit plans have no plan assets and the Company is not required to fund the obligations. The U.S. plans required to be funded by the Company were fully funded atas of December 31, 2015.

2017 and 2016.

The net pension assets (liabilities) included in the Consolidated Balance Sheets as of December 31 follows:
(in millions) 2017 2016
Long-term assets $5.2
 $12.4
Current liabilities (1.4) (1.4)
Long-term liabilities (20.9) (20.3)
Net pension asset (liability) $(17.1) $(9.3)

The amounts included in accumulated other comprehensive as of December 31 follows:
(in millions) 2017 2016
Unrecognized actuarial losses (gross) $48.8
 $40.2
Unrecognized actuarial losses (net of tax) 38.0
 25.3
Unrecognized prior service costs (gross) 1.3
 0.9
Unrecognized prior service costs (net of tax) 1.1
 0.5


The Company estimates that $0.3 million ($0.2 million net of tax) of prior service cost and $4.3 million ($3.4 million net of tax) of actuarial losses will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2018.

The components of net periodic benefit cost for the years ended December 31 follows: 
(in millions) 2017 2016 2015
Service cost $2.6
 $3.4
 $3.7
Interest cost 5.3
 5.4
 7.1
Expected return on plan assets (10.2) (10.1) (10.2)
Amortization of unrecognized net loss 2.3
 2.1
 4.1
Amortization of unrecognized prior service credit 0.2
 0.2
 0.2
Net periodic benefit cost $0.2
 $1.0
 $4.9

Disclosures on investment policies and strategies, categories of plan assets and the fair value measurements of the plans'plan assets at December 31, 2015 and 2014 by asset category are as follows:

Fair Value Measurements at December 31, 2015

included below.
Asset Category (in millions)
 Quoted Prices in
Active Markets
for Identical Assets
(Level 1)		 Significant
Observable
Inputs
(Level 2)		 Significant
Observable
Inputs
(Level 3)		 Total 

Cash

 $0.6 $— $— $0.6 

Mutual funds:

             

Equity mutual funds(1)

 $19.8 $— $— $19.8 

Fixed income mutual funds(2)

  142.3  —  —  142.3 
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Total

 $162.7 $— $— $162.7 
​​​ ​​​ ​ ​​ ​​​ ​ ​
​​​​​​​​​​​​​​
​​​ ​ ​​ ​​​ ​ ​​ ​ ​


Notes to Consolidated Financial Statements (Continued)

Note 13—Retirement Plans (Continued)

Fair Value Measurements at December 31, 2014

Asset Category (in millions)
 Quoted Prices in
Active Markets
for Identical Assets
(Level 1)		 Significant
Observable
Inputs
(Level 2)		 Significant
Observable
Inputs
(Level 3)		 Total 

Cash

 $0.6 $— $— $0.6 

Mutual funds:

             

Equity mutual funds(1)

 $21.4 $— $— $21.4 

Fixed income mutual funds(2)

  155.3  —  —  155.3 
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Total

 $177.3 $— $— $177.3 
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​​​​
​​​​ ​​ ​ ​​ ​ ​​ ​ ​
(1)
This category is comprised of investments in mutual funds that invest in equity securities such as large publicly traded companies listed in the S&P 500 Index; small to medium sized companies with market capitalization in the range of the Russell 2500 Index; and foreign issuers in emerging markets.

(2)
This category is comprised of investments in mutual funds that invest in U.S. corporate and government fixed income securities, including asset-backed securities; high yield fixed income securities primarily rated BB, B, CCC, CC, C and D; and US dollar denominated debt securities of government, government related and corporate issuers in emerging market countries.

The Company employs a liability driven investment approach whereby plan assets are invested primarily in fixed income investments to match the changes in the projected benefit obligation of funded plans that occur as a result ofrelated to changes in the discount rate.interest rates. Risk tolerance is established through careful consideration of projected benefit obligations, plan funded status and the Company'sCompany’s other obligations and strategic investments.

The established target allocation is 88% fixed income securities and 12% equity securities. Fixed income investments are diversified across core fixed income, long duration and high yield bonds. Equity investments are diversified across large capitalization U.S. and international stocks. Investment risk is measured and monitored on an ongoing basis through investment portfolio reviews, annual projected benefit liability measurements and asset/liability studies.

The net asset (liability) consistsfair value measurement of the following amounts recorded on the Company's balance sheet atplans’ assets by asset category as of December 31 2015 and 2014:

follows:
(in millions)
 2015 2014 

Noncurrent assets

 $9.7 $7.7 

Current liabilities

  (1.0) (1.0)

Noncurrent liabilities

  (20.3) (21.7)
​​​ ​ ​​ ​ ​

Asset (liability) at end of year

 $(11.6)$(15.0)
​​​ ​ ​​ ​ ​
​​​​​​​​
​​​ ​ ​​ ​ ​
  Quoted Prices in Active Markets for Identical Assets (Level 1)
(in millions) 2017 2016
Cash $0.6
 $0.6
Mutual funds:  
  
Equity mutual funds (1)
 $19.4
 $20.6
Fixed income mutual funds (2)
 145.6
 142.0
Total $165.6
 $163.2

(1)
This category is comprised of investments in mutual funds that invest in equity securities such as large publicly traded companies listed in the S&P 500 Index; small to medium sized companies with market capitalization in the range of the Russell 2500 Index; and foreign issuers in emerging markets.
(2)
This category is comprised of investments in mutual funds that invest in U.S. corporate and government fixed income securities, including asset‑backed securities; high yield fixed income securities primarily rated BB, B, CCC, CC, C and D; and US dollar denominated debt securities of government, government related and corporate issuers in emerging market countries.
The Company made contributions of $1.4 million and $1.0 million during 2017 and 2016, respectively, which pertain to the pension plans during 2015, of which $1.0 million was contributed to the Company'sCompany’s executive supplemental and director defined benefit pension plans to payplans. This contribution covers current participant benefits as these plans have no plan assets. No minimum contributions to the pension plans were required in 2015.2017 and 2016. During 2016,2018, the Company expects to pay approximately $1.0$1.4 million in participant benefits under the executive supplemental and director plans. In light of the plans'plans’ funded status, the Company does not expect to make discretionary contributions to its other pension plans in 2016.



Notes to Consolidated Financial Statements (Continued)

Note 13—Retirement Plans (Continued)

        Components of net periodic benefit cost for the years ended December 31 are as follows:

2018.
(in millions)
 2015 2014 2013 

Service cost

 $3.7 $4.0 $5.1 

Interest cost

  7.1  7.7  8.1 

Expected return on plan assets

  (10.2) (10.8) (12.2)

Settlement cost

  —  —  8.9 

Amortization of unrecognized net loss

  4.1  3.3  6.5 

Amortization of unrecognized prior service credit

  0.2  0.3  0.3 
​​​​ ​​ ​ ​​​ ​

Net periodic benefit cost

 $4.9 $4.5 $16.7 
​​​ ​ ​​​ ​​ ​ ​
​​​​​​​​​​​
​​​ ​ ​​ ​​​ ​ ​

        Settlement and curtailment costs totaling $8.1 million relate to the sale of the Transportation Products business on December 31, 2013 and are included in income from discontinued operations for the year ended 2013. This total consists of $7.3 million in settlement costs, including recognition of $6.1 million of previously unrecognized actuarial losses, and a $0.8 million curtailment charge, inclusive of prior service cost. See Note 4 for further information related to the sale of the Transportation Products business.

        Weighted-average assumptions for benefit obligations at December 31 are as follows:


 
 2015 2014 

Discount rate

  4.15% 3.84%

Rate of compensation increase

  4.29% 4.29%

Expected long-term return on plan assets

  6.20% 6.30%

        Weighted-average assumptions for net periodic benefit cost for the years ended December 31 were as follows:

 
 2015 2014 2013 

Discount rate

  3.87% 4.58% 3.77%

Rate of compensation increase

  4.29% 4.29% 4.29%

Expected long-term return on plan assets

  6.30% 6.48% 6.50%

        Beginning in 2016, the Company will move from utilizing a weighted-average discount rate, which was derived from the yield curve used to measure the benefit obligation at the beginning of the period, to a spot yield rate curve to estimate the pension benefit obligation and net periodic benefit costs. The change in estimate provides a more accurate measurement of service and interest costs by applying the spot rate that could be used to settle each projected cash flow individually. This change in estimate is not expected to have a material effect on net periodic benefit costs for 2016.

        The Company considers several factors in determining the long-term rate of return for plan assets. Asset-class return expectations are set using a combination of empirical and forward-looking analyses. Capital market assumptions for the composition of the Company's asset portfolio are intended to capture the behavior of asset classes observed over several market cycles. The Company also looks to historical returns for reasonability and appropriateness.



Notes to Consolidated Financial Statements (Continued)

Note 13—Retirement Plans (Continued)

        The following is aA summary of estimated future benefits to be paid for the Company'sCompany’s defined benefit pension plans atas of December 31, 2015. Benefit payments are estimated based on the same assumptions used in the valuation of the projected benefit obligation.

2017, follows:
(in millions)
 Estimated Benefit
Payments		  Estimated Benefit Payments

Year

   

2016

 $14.9 

2017

 15.5 

2018

 15.1  $13.7

2019

 14.6  14.2

2020

 14.4  14.4

2021 - 2025

 64.3 
2021 14.1
2022 14.2
2023-2027 69.2



Defined Contribution Plan

        Additionally, the

The Company maintains defined contribution savings plans covering a significant portion of its eligible employees. ExpensesParticipant contributions are matched by the Company up to a 4.0% maximum of eligible compensation, subject to compensation and contribution limits as defined by the Internal Revenue Service. Employer contributions for the planssavings plan were approximately$14.8 million, $13.3 million and $12.2 million in 2017, 2016 and 2015, $11.1 millionrespectively.
Matching contributions are invested in 2014, and $10.0 million in 2013.

Employee Stock Ownership Plan

        The Companyfunds as directed by participants. Eligible participants may also sponsors an employee stock ownership plan ("ESOP") as part of one of its existing savings plans. Costs for the ESOP are included in the defined contribution plan noted above. The ESOP is availableelect to eligible domestic employees and includes a match of contributions made by plan participants to the savings planinvest up to a maximum of 4.00% of a participant's eligible compensation, divided between cash and an employee-directed election50.0% of the Company's common stock, not to exceed 50% of the total match. Participants are not allowed to direct their contributions to the savings plan to an investmentCompany’s matching contribution in the Company'sCompany common stock. A breakdown ofCommon shares held by the ESOP atcontribution savings plan as of December 31 is as follows:

(in millions)
 2015 2014 2013 

Shares held by the ESOP

  1.3  1.4  1.7 
​​​ ​ ​​ ​​​ ​ ​
(in millions) 2017 2016 2015
Common shares held 1.1
 1.2
 1.3


Note 14—14—Deferred Revenue and Extended Product Warranties

Deferred revenue consists primarily of unearned revenue related to separately priced extended warranty contracts on sales of certain products, the most significant being those offered on its installed roofing systems within the Construction MaterialsCCM segment.

Roofing Systems Deferred Revenue

Other deferred revenue primarily relates to customer prepayments on sales within the CFT segment.


The amount of deferred revenue recognized related to separately priced extended product warranties covering roofing systems was $18.5 million and $17.9 millionwarranty contracts for the years ended December 31 2015 and 2014,

follows:


Notes to Consolidated Financial Statements (Continued)

Note 14—Deferred Revenue and Extended Product Warranties (Continued)

respectively. Deferred

(in millions) 2017 2016 2015
Extended product warranty contracts amortization $20.4
 $19.5
 $18.5
The deferred revenue recognized in the Consolidated Balance Sheetsliability as of December 31 includes the following related to roofing systems extended product warranty contracts:

is summarized as follows:
(in millions)
 2015 2014 

Deferred revenue

       

Current

 $18.1 $17.5 

Long-term

  159.7  150.7 
​​​ ​ ​​ ​​

Deferred revenue liability

 $177.8 $168.2 
​​​ ​ ​​ ​​
​​​​​​​​
​​​ ​ ​​ ​ ​
(in millions) 2017 2016
Extended product warranty contracts - current $19.8
 $18.8
Customer prepayments - current 8.0
 4.4
Extended product warranty contracts - long-term 188.0
 172.0
Deferred revenue $215.8
 $195.2


Expected costs of services to be performed under extended product warranty contracts are actuarially determined. Any expected costs in excess of the deferred revenue liability are recognized within accrued expenses.

Note 15—Accrued expenses.

Other Deferred Revenue

        Other deferred revenue recognized in the Consolidated Balance SheetsExpenses

The components of accrued expenses as of December 31 primarily related to contracts within the Fluid Technologies segment, was as follows:

(in millions)
 2015 2014 

Deferred revenue

       

Current

 $5.9 $0.4 

Long-term

  —  0.4 
​​​ ​ ​​ ​ ​

Deferred revenue liability

 $5.9 $0.8 
​​​ ​ ​​ ​ ​
​​​​​​​​
​​​ ​ ​​ ​ ​
(in millions) 2017 2016
Compensation and benefits $104.1
 $97.9
Customer incentives 70.7
 58.1
Standard product warranties 30.9
 29.5
Income and other accrued taxes 19.4
 14.2
Other accrued expenses 53.3
 47.0
Accrued expenses $278.4
 $246.7

Note 15—


Standard Product Warranties

The Company offers various standard warranty programs on its products included in the price of its products, primarily for certain installed roofing systems, high-performance cables and assemblies, fluid technologies, braking products and foodservice equipment. The Company'sCompany’s liability for such warranty programs is included in Accruedaccrued expenses. The change in the Company'sCompany’s standard product warranty liabilities for the period endedas of December 31 is as follows:

(in millions)
 2015 2014 

Balance at January 1

 $15.2 $14.3 

Current year provision

  30.2  21.1 

Acquired warranty obligation

  1.1  — 

Current year claims

  (17.6) (20.2)
​​​ ​ ​​ ​​

Balance at December 31

 $28.9 $15.2 
​​​ ​ ​​ ​​
​​​​​​​​
​​​ ​ ​​ ​ ​
(in millions) 2017 2016
Balance as of January 1 $29.5
 $28.9
Current year provision 16.8
 23.7
Acquired warranty obligation 0.1
 —
Current year claims (16.5) (22.9)
Current year foreign exchange 1.0
 (0.2)
Balance as of December 31 $30.9
 $29.5



Notes to Consolidated Financial Statements (Continued)

Note 16—Other Long-TermLong‑Term Liabilities

The components of Other long-termother long‑term liabilities atas of December 31 were as follows:

(in millions)
 2015 2014  2017 2016

Deferred taxes and other tax liabilities

 $176.5 $195.4  $262.6
 $144.1

Pension and other post-retirement obligations

 26.3 24.8  26.6
 27.1
Deferred compensation 24.7
 21.2

Long-term workers' compensation

 13.4 15.7  10.3
 12.3

Deferred compensation

 16.8 14.0 

Other

 9.4 10.7  14.5
 12.3
​​​ ​​ ​ ​

Other long-term liabilities

 $242.4 $260.6  $338.7
 $217.0
​​ ​ ​​ ​ ​
​​​​​
​​ ​ ​​ ​ ​

Note 17—Shareholders' Rights



Deferred Compensation
The Company’s Deferred Compensation Plan allows certain eligible participants to defer a portion of their cash compensation and provides a matching contribution to the deferred compensation plan of up to 4.0% of eligible compensation. Eligible compensation may be deferred up to 10 years and distributed via lump sum or annual payment installments over an additional 10 year period. Participants allocate their deferred compensation amongst various investment options with earnings accruing to the participant.
The Company has established a Shareholders' Rights Agreement that is designedRabbi Trust to protect shareholder investment values. A dividend distributionprovide for a degree of one Preferred Stock Purchase Right (the "Rights") for each outstanding share of the Company's common stock was declared, payablefinancial security to shareholders of record on March 3, 1989. The Rights are attachedcover these obligations. Contributions to the issued and outstanding shares of the Company's common stock and will become exercisable under certain circumstances, including the acquisition of 25% of the Company's common stock, or 40% of the voting power, in which case all rights holders except the acquirer may purchase the Company's common stock at a 50% discount.

        IfRabbi Trust by the Company is acquiredare made at the discretion of management and generally are made in a merger or other business combination,cash and invested in money-market funds. The Company consolidates the Rights have not been redeemed, rights holders may purchaseRabbi Trust and therefore includes the acquirer's shares at a 50% discount. On May 26, 2006,investments in its Consolidated Balance Sheets. As of December 31, 2017 and 2016, the Company amended the Shareholders' Rights Agreement to, among other things, extend the termhad $13.2 million and $11.7 million of the Rights until May 25, 2016.

        Common shareholderscash, respectively and $4.0 million and $2.6 million of record on May 30, 1986short-term investments, respectively. Management has classified these instruments as trading securities and therefore gains and losses are entitled to five votes per share. Common stock acquired subsequent to that date entitles the holder to one vote per share until held four years, after which time the holder is entitled to five votes per share.

recorded in earnings, with cash flows presented as operating cash flows.


Note 18—17—Accumulated Other Comprehensive Income (Loss)

Loss

The changes in Accumulatedaccumulated other comprehensive loss by component, for the yearyears ended December 31 2015, was as follows:

(in millions)
 Accrued
post-retirement
benefit liability(1)		 Foreign
currency
translation		 Hedging
activities(2)		 Total 

Balance at December 31, 2014

 $(32.0)$(30.4)$0.6 $(61.8)

Other comprehensive gain (loss) before reclassifications

  3.0  (29.6) —  (26.6)

Amounts reclassified from accumulated other comprehensive loss

  4.5  —  (0.5) 4.0 

Income tax benefit (expense)

  (2.9) —  0.2  (2.7)
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Net other comprehensive income (loss)

  4.6  (29.6) (0.3) (25.3)
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Balance at December 31, 2015

 $(27.4)$(60.0)$0.3 $(87.1)
​​​ ​ ​​​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​​​​
​​​ ​ ​​ ​ ​​​ ​​ ​ ​
(in millions) 
Accrued
post-retirement benefit liability
 Foreign currency translation Other Total
Balance as of January 1, 2015 $(27.4) $(60.0) $0.3
 $(87.1)
Other comprehensive (loss) income before reclassifications (0.6) (36.7) 0.6
 (36.7)
Amounts reclassified from accumulated other comprehensive loss (1)
 2.3
 —
 (0.1) 2.2
Income tax (expense) benefit (0.7) —
 0.1
 (0.6)
Other comprehensive income (loss) 1.0
 (36.7) 0.6
 (35.1)
Balance as of December 31, 2016 (26.4) (96.7) 0.9
 (122.2)
Other comprehensive (loss) income before reclassifications (11.2) 46.6
 (4.4) 31.0
Amounts reclassified from accumulated other comprehensive loss (1)
 2.5
 —
 (0.5) 2.0
Income tax (expense) benefit 3.5
 —
 —
 3.5
Other comprehensive income (loss) (5.2) 46.6
 (4.9) 36.5
Balance as of December 31, 2017 $(31.6) $(50.1) $(4.0) $(85.7)
(1)
The accrued post‑retirement benefit liability reclassification pertains to the amortization of unrecognized actuarial gains and losses and prior service credits which is included in net periodic benefit cost. See Note 13 for additional pension discussion.


Notes

Note 18—Foreign Currency Forward Contracts
The Company uses foreign currency forward contracts to Consolidated Financial Statements (Continued)

Note 18—Accumulated Other Comprehensive Income (Loss) (Continued)

hedge a portion of its foreign currency exchange rate exposure to forecasted foreign currency denominated cash flows. These instruments are not held for speculative or trading purposes.


For instruments that are designated and qualify as a cash flow hedge, the Company had foreign currency forward contracts with maturities less than one year and an aggregate U.S. Dollar equivalent notional value of $22.3 million and $17.6 million as of December 31, 2017 and 2016, respectively. The gross fair value was $(0.2) million and $0.9 million as of December 31, 2017 and 2016, respectively. The changes in Accumulated other comprehensive income (loss) by component, for the year ended December 31, 2014, was as follows:

(in millions)
 Accrued
post-retirement
benefit liability(1)		 Foreign
currency
translation		 Hedging
activities(2)		 Total 

Balance at December 31, 2013

 $(28.2)$(4.3)$1.0 $(31.5)

Other comprehensive loss before reclassifications

  (8.9) (26.1) —  (35.0)

Amounts reclassified from accumulated other comprehensive loss

  3.7  —  (0.6) 3.1 

Income tax benefit (expense)

  1.4  —  0.2  1.6 
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Net other comprehensive income (loss)

  (3.8) (26.1) (0.4) (30.3)
​​​ ​ ​​​ ​​ ​ ​​​ ​

Balance at December 31, 2014

 $(32.0)$(30.4)$0.6 $(61.8)
​​​ ​​​ ​ ​​ ​ ​​ ​ ​
​​​​​​​​​​​​​​
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​
(1)
Current period amounts related to accrued post-retirement benefit liabilityfair value of the contracts are related to amortization of unrecognized actuarial gains and losses which is included in net periodic benefit cost for pension and other post-retirement welfare plans. See Note 13 for additional pension discussion.

(2)
Current period amounts related to hedging activities are a reduction to interest expense. On June 15, 2005, the Company entered into treasury lock contracts with a notional amount of $150.0 million to hedge the cash flow variability on forecasted debt interest payments associated with changes in interest rates. These contracts were designated as cash flow hedges and were deemed effective at the origination date. On August 15, 2006, the Company terminated the treasury lock contracts resulting in a gain of $5.6 million ($3.5 million, net of tax), which was deferredrecorded in accumulated other comprehensive income (loss) in the Consolidated Statements of Shareholders’ Equity and is being amortized to reduce interest expense until August 2016,recognized in the termsame Income Statement line item as the impact of the interest payments related tohedged item, revenues or cost of sales, when the $150.0 millionunderlying forecasted transaction impacts earnings. Gains and losses on the contracts representing hedge components excluded from the assessment of hedge effectiveness are recognized in notes issued on August 18, 2006. At December 31, 2015,the same income statement line item as the hedged item, revenues or cost of sales, currently.
For instruments that are not designed as a cash flow hedge, the Company had a remaining unamortized gainforeign exchange contracts with maturities less than one year and an aggregate U.S. Dollar equivalent notional value of $0.4$38.6 million ($0.3and $39.3 million as of December 31, 2017 and 2016, respectively. The gross fair value was $0.2 million and $(0.3) million as of December 31, 2017 and 2016, respectively. The unrealized gains and losses resulting from these contracts were immaterial and are recognized in other non-operating income, net and partially offset corresponding foreign exchange gains and losses on these balances.
The fair value of tax) whichforeign currency forward contracts is reflectedincluded in Accumulated other comprehensive income (loss)current assets. The fair value was estimated using observable market inputs such as forward and spot prices of the underlying exchange rate pair. Based on these inputs, derivative assets and liabilities are classified as Level 2 in the Company's Consolidated Balance Sheets.fair value hierarchy.


Notes to Consolidated Financial Statements (Continued)

Note 19—19—Quarterly Financial Data (Unaudited)

(in millions except per share data)
 First Second Third Fourth Year 

2015

                

Net sales

 $709.3 $984.6 $973.1 $876.2 $3,543.2 

Gross profit

 $173.0 $285.4 $295.5 $252.8 $1,006.7 

Other expenses

 $106.6 $137.4 $133.7 $127.1 $504.8 

Earnings before interest and income taxes

 $66.4 $148.0 $161.8 $125.7 $501.9 

Income from continuing operations, net of tax

 $39.5 $94.8 $103.6 $81.7 $319.6 

Basic earnings per share from continuing operations

 $0.60 $1.45 $1.59 $1.25 $4.89 

Diluted earnings per share from continuing operations

 $0.59 $1.43 $1.56 $1.24 $4.82 
​​​ ​ ​​​ ​​ ​ ​​​ ​​ ​ ​

Income (loss) from discontinued operations, net of tax

 $(0.1)$0.1 $— $0.1 $0.1 

Basic income per share from discontinued operations

 $— $— $— $— $— 

Diluted income per share from discontinued operations

 $— $— $— $— $— 
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Net income

 $39.4 $94.9 $103.6 $81.8 $319.7 

Basic earnings per share

 $0.60 $1.45 $1.59 $1.25 $4.89 

Diluted earnings per share

 $0.59 $1.43 $1.56 $1.24 $4.82 
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​ ​ ​

Dividends per share

 $0.25 $0.25 $0.30 $0.30 $1.10 

Stock price:

                

High

 $95.10 $102.26 $104.60 $92.70    

Low

 $86.79 $91.87 $86.91 $84.11    
​​​ ​​​ ​ ​​ ​​​ ​ ​​​​


(in millions except per share data)
 First Second Third Fourth Year 

2014

                

Net sales

 $650.4 $859.5 $904.1 $790.0 $3,204.0 

Gross profit

 $162.1 $224.6 $237.1 $195.7 $819.5 

Other expenses

 $99.1 $102.3 $103.1 $106.7 $411.2 

Earnings before interest and income taxes

 $63.0 $122.3 $134.0 $89.0 $408.3 

Income from continuing operations, net of tax

 $36.5 $75.7 $86.3 $53.2 $251.7 

Basic earnings per share from continuing operations

 $0.57 $1.17 $1.34 $0.81 $3.89 

Diluted earnings per share from continuing operations

 $0.56 $1.15 $1.31 $0.81 $3.83 
​​​​ ​​ ​ ​​ ​​​ ​ ​​ ​​

Income (loss) from discontinued operations, net of tax

 $(0.7)$(0.5)$1.0 $(0.2)$(0.4)

Basic income per share from discontinued operations

 $(0.01)$(0.01)$0.01 $0.01 $— 

Diluted income per share from discontinued operations

 $(0.01)$(0.01)$0.01 $— $(0.01)
​​​ ​ ​​ ​ ​​ ​​​ ​ ​​ ​​

Net income

 $35.8 $75.2 $87.3 $53.0 $251.3 

Basic earnings per share

 $0.56 $1.16 $1.35 $0.82 $3.89 

Diluted earnings per share

 $0.55 $1.14 $1.32 $0.81 $3.82 
​​​​ ​​ ​ ​​ ​​​ ​ ​​ ​​

Dividends per share

 $0.22 $0.22 $0.25 $0.25 $0.94 

Stock price:

                

High

 $80.57 $88.19 $88.36 $92.06    

Low

 $71.51 $75.28 $78.93 $74.69    
​​​ ​ ​​ ​ ​​ ​ ​​ ​ ​​​​
  2017
(in millions except per share data) First Second Third Fourth Year
Net sales $857.3
 $1,071.7
 $1,089.1
 $1,071.8
 $4,089.9
Gross margin 247.7
 314.0
 311.5
 274.8
 1,148.0
Operating income 96.0
 159.0
 146.7
 104.0
 505.7
Income from continuing operations 61.5
 102.3
 86.4
 115.1
 365.3
Net income 61.8
 102.3
 86.3
 115.1
 365.5
Basic earnings per share from continuing operations (1)
 $0.95
 $1.59
 $1.38
 $1.84
 $5.75
Diluted earnings per share from continuing operations (1)
 $0.94
 $1.58
 $1.37
 $1.82
 $5.71

    NOTE:

  2016
(in millions except per share data) First Second Third Fourth Year
Net sales $794.0
 $996.9
 $991.0
 $893.5
 $3,675.4
Gross margin 245.4
 321.2
 323.6
 267.1
 1,157.3
Operating income 110.1
 177.6
 35.7
 114.7
 438.1
Income (loss) from continuing operations 68.5
 115.3
 (9.5) 76.5
 250.8
Net income (loss) 68.5
 115.2
 (9.8) 76.2
 250.1
Basic earnings (loss) per share from continuing operations (1)
 $1.06
 $1.78
 $(0.15) $1.18
 $3.87
Diluted earnings (loss) per share from continuing operations (1)
 $1.05
 $1.75
 $(0.15) $1.17
 $3.83
(1)
The sum of quarterly earnings per share amounts may not equal the year due to rounding.
Note 20—Subsequent Events

On February 1, 2018, the Company announced the signing of a definitive agreement to sell its CFS operations to The sumJordan Company for $750 million in cash, subject to certain adjustments. The transaction is subject to customary closing conditions, including regulatory clearances, and is expected to close in the first quarter of the quarterly per share amounts may not agree to the respective annual amounts due to rounding.

2018.


Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.


Item 9A.  Controls and Procedures.

(a)    Under the supervision and with the participation of the Company'sCompany’s management, including the Company'sCompany’s chief executive officer and chief financial officer, the Company carried out an evaluation of the effectiveness of the design and operation of the Company'sCompany’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15.13a‑15. Based upon that evaluation and as of December 31, 2015,2017, the chief executive officer and chief financial officer have concluded that the Company'sCompany’s disclosure controls and procedures are effective.


Management has prepared a report on the Company'sCompany’s internal control over financial reporting in which management has determined that the Company'sCompany’s controls are effective. A copy of management'smanagement’s report is set forth below.

(b)    During the fourth quarter of 2015,2017, there were no changes in the Company'sCompany’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company'sCompany’s internal control over financial reporting.

Management's


Management’s Report on Internal Control over Financial Reporting.

Reporting

The Company'sCompany’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of the Company'sCompany’s management, including the chief executive officer and chief financial officer, the Company evaluated the effectiveness of the design and operation of its internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, the Company's Company’s

chief executive officer and chief financial officer concluded that the Company'sCompany’s internal control over financial reporting was effective as of December 31, 2015.

2017.

As discussed in Note 3 to the Consolidated Financial Statements in Item 8, the Company acquired 100%completed the acquisitions of the Finishing Brands business from GracoSJ Holdings, Inc. on AprilJanuary 9, 2017, Arbo Holdings Limited on January 31, 2017, Drexel Metals, Inc. on July 3, 2017, and Accella Holdings LLC on November 1, 2015. The Company has reported2017, (collectively the results of the acquired business as a new reporting segment named Carlisle Fluid Technologies ("CFT"“Acquired Businesses”). Management's assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of CFT. Asthe Acquired Businesses, which represented 22.2% of total assets as of December 31, 2015, CFT reported $659.5 million of total assets, $620.8 million2017, and 4.7% of net assets, and $203.2 million and $20.8 million of net sales and earnings before interest and income taxes, respectively, for the year then ended.

The internal controls over financial reporting have been assessed by ErnstDeloitte & YoungTouche LLP, whose report with respect to the effectiveness of internal controls over financial reporting is included herein.

herein at Item 8.

Item 9B.  Other Information.

None.



PART III


Part III

Item 10.  Directors and Executive Officers of the Registrant.

The following table sets forth certain information relating to each executive officer of the Company, as furnished to the Company by the executive officers. Except as otherwise indicated each executive officer has had the same principal occupation or employment during the past five years.

NameAgePosition with CompanyPeriod of Service

David A. Roberts

D. Christian Koch		 6852 Executive Chairman of the Board since January 2016; Chairman of the Board and Chief Executive Officer from June 2007 to December 2015.June 2007 to date

D. Christian Koch

51

Director, President and Chief Executive Officer since January 2016; President and Chief Operating Officer from May 2014 to December 2015; Group President, Carlisle Diversified Products from June 2012 to May 2014; President, Carlisle Brake & Friction from January 2009 to June 2012; President, Carlisle Asia-PacificAsia‑Pacific from February 2008 to January 2009.

 

February 2008 to date

John W. Altmeyer

 

56

58		 

President, Carlisle Construction Materials since July 1997.

 

June 1989 to date

Titus B. Ball

44Vice President, Chief Accounting Officer since May 2016; Director of Internal Audit from April 2011 to April 2016.January 2010 to date
Shelley J. Bausch52President, Carlisle Fluid Technologies since October 2017; Vice President, PPG Industrial Coatings from January 2014 to September 2017; Business Vice President, Finished Products, Dow Corning Corporation from April 2011 to January 2014.October 2017 to date
John E. Berlin

 

54

56		 

President, Carlisle Interconnect Technologies since February 1995.

 

January 1990 to date

Steven J. Ford

 

56

58		 

Vice President, Chief Financial Officer since November 2008 and Vice President, Secretary and General Counsel since July 1995.

1995 and Vice President, Chief Financial Officer from November 2008 to February 2017.		 

July 1995 to date

Trent A. Freiberg

43President, Carlisle FoodService Products since July 2012.July 2008 to date
Karl T. Messmer47President, Carlisle Brake & Friction since November 2015; Vice President & General Manager, Networking Solutions, Belden Inc. from October 2010 to September 2015.November 2015 to date
Amelia Murillo43Vice President, Human Resources since February 2016; Vice President, Finance & Administration, Carlisle Interconnect Technologies from October 2008 to April 2014.February 2016 to date
Robert M. Roche50Vice President, Chief Financial Officer since February 2017; Senior Vice President, Business Finance, Tyco International from August 2014 to February 2017, Chief Operating Officer & Senior Vice President, Business Finance, Tyco International from December, 2014 to August 2015, and Senior Vice President, Audit, Tyco International from January 2013 to August 2014.February 2017 to date
Scott C. Selbach

 

60

62		 

Vice President, Corporate Development since April 2006.

 

April 2006 to date

Douglas C. Taylor

48Vice President, Carlisle Operating System since June 2014; Director of Operational Excellence, Demmer Corporation from March 2013 to June 2014.June 2014 to date
Kevin P. Zdimal

 

45

47		 

Vice President, Business Development since May 2016, Vice President and Chief Accounting Officer sincefrom May 2010; Treasurer from September 20082010 to May 2010; Vice President of Finance and Administration, Carlisle Interconnect Technologies from July 2002 to August 2008.

2016.		 

September 1995 to date


The officers have been elected to serve at the pleasure of the Board of Directors of the Company. There are no family relationships between any of the above officers, and there is no arrangement or understanding between any officer and any other person pursuant to which he was selected anas officer.

Information required by Item 10 with respect to directors of the Company is incorporated by reference to the Company'sCompany’s definitive proxy statement to be filed with the Securities and Exchange Commission no later than 40 days before the Annual Meeting of Shareholders to be held on May 18, 2016.

2, 2018.

The Company has adopted a Business Code of Ethics covering, among others, its principal executive officer and all management involved in financial reporting. The Business Code of Ethics is published on the Company'sCompany’s website: www.carlisle.com. Any amendment to, or waiver of, any provision


of the Business Code of Ethics affecting such senior officers will be disclosed on the Company'sCompany’s website.


In the Company'sCompany’s definitive proxy statement we describe the procedures under which shareholders can recommend nominees for the Board of Directors. There have been no changes to those procedures since the Company'sCompany’s definitive proxy statement dated March 1, 2007.

8, 2017.

Item 11.  Executive Compensation.

Information required by Item 11 is incorporated by reference to the Company'sCompany’s definitive proxy statement to be filed with the Securities and Exchange Commission no later than 40 days before the Annual Meeting of Shareholders to be held on May 18, 2016.

2, 2018.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Security Ownership of Certain Beneficial Owners and Management

Information required by Item 12 is incorporated by reference to the Company'sCompany’s definitive proxy statement to be filed with the Securities and Exchange Commission no later than 40 days before the Annual Meeting of Shareholders to be held on May 18, 2016.

2, 2018.

Securities Authorized for Issuance under Equity Compensation Plans

The number of securities to be issued upon the exercise of stock options under the Company'sCompany’s equity compensation plans, the weighted average exercise price of the options and the number of securities remaining for future issuance as of December 31, 2015 are as2017, follows:

Plan Category
 Number of securities to
be issued upon exercise
of outstanding
options
(a)		 Weighted-average
price of outstanding
options, warrants
and rights
(b)		 Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
(c)		 

Equity compensation plans approved by equity security holders

  1,810,080 $52.00  4,460,142(1)

Equity compensation plans not approved by equity security holders

  —  n/a  — 

Total

  1,810,080 $52.00  4,460,142 
(1)
Includes 4,460,142 shares available for award under the Carlisle Companies Incorporated Incentive Compensation Program which was approved on May 6, 2015 (1,604,716 of which may be issued as stock awards).
  Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) 
Plan Category (a) (b) (c) 
Equity compensation plans approved by equity security holders 1,790,899
(1)$86.72
 3,251,102
(2)
Equity compensation plans not approved by equity security holders —
 n/a
 —
 
Total 1,790,899
 $86.72
 3,251,102
 
(1)
The number of securities to be issued does not include performance share awards, which are payable solely in cash. The number of securities to be issued also does not include restricted stock units as these awards vest immediately upon issuance.
(2)
Includes 1,271,033 of shares which may be issued as stock awards. Shares available for award under the Carlisle Companies Incorporated Incentive Compensation Program were approved on May 6, 2015.

Item 13.  Certain Relationships and Related Transactions.

Information required by Item 13 is incorporated by reference to the Company'sCompany’s definitive proxy statement to be filed with the Securities and Exchange Commission no later than 40 days before the Annual Meeting of Shareholders to be held on May 18, 2016.

2, 2018. 

Item 14.  Principal Accountant Fees and Services.

Information required by Item 14 is incorporated by reference to the Company'sCompany’s definitive proxy statement to be filed with the Securities and Exchange Commission no later than 40 days before the Annual Meeting of Shareholders to be held on May 18, 2016.

2, 2018.


PART IV


Part IV

Item 15.  Exhibits and Financial Statement Schedules.

(a)(1).        Financial statements required by Item 8 are as follows:

Consolidated Statements of Earnings and Comprehensive Income, years ended December 31, 2017, 2016 and 2015 2014, and 2013

48
44

Consolidated Balance Sheets, December 31, 20152017 and 2014

2016 		49
45

Consolidated Statements of Cash Flows, years ended December 31, 2017, 2016 and 2015 2014, and 2013

50
46

Consolidated Statements of Shareholders'Shareholders’ Equity, years ended December 31, 2017, 2016 and 2015 2014, and 2013

51
47

Notes to Consolidated Financial Statements

52
48

(a)(2).        Financial Statement Schedules:

        None.

Included in Item 8, as applicable.
(a)(3).        Exhibits applicable to the filing of this report are as follows:

listed in the following exhibit index.


Carlisle Companies Incorporated
Exhibit Index
Exhibit

(2.1

)Filed with this Form 10-KIncorporated by Reference
NumberExhibit TitleFormFile No.Date Filed
2.1
Master Transaction Agreement, dated October 20, 2013, between the Company and CTP Transportation Products, LLC.(u)

  
 

(2.2

8-K		)001-0927810/22/2013
2.2
Asset Purchase Agreement, dateddate October 20, 2013, between Carlisle Transportation Products, Inc., Carlisle Intangible Company and CTP Transportation Products, LLC.(u)

  
 

(2.3

8-K		)001-0927810/22/2013
2.3
Asset Purchase Agreement, dated October 20, 2013, between Carlisle Canada and CTP Transportation Products, LLC.(u)

  
 

(2.4

8-K		)001-0927810/22/2013
2.4
Stock Purchase Agreement, dated October 20, 2013, between Carlisle International BV and CTP Transportation Products, LLC.(u)

  
 

(2.5

8-K		)001-0927810/22/2013
2.5
Equity Purchase Agreement, dated October 20, 2013, between Carlisle Asia Pacific Limited and CTP Transportation Products, LLC.(u)

  
 

(2.6

8-K		)001-0927810/22/2013
2.6
Asset Purchase Agreement, dated October 20, 2013, between Carlisle Asia Pacific Limited and CTP Transportation Products, LLC.(u)

  
 

(2.7

8-K		)001-0927810/22/2013
2.7
Form of Trademark License Agreement between the Company, Carlisle Intangible Company and CTP Transportation Products, LLC.(u)

  
 

(2.8

8-K		)001-0927810/22/2013
2.8
Asset Purchase Agreement, dated October 7, 2014, between the Company, Carlisle Fluid Technologies, Inc., Graco Inc. and Finishing Brands Holdings Inc.(y)

  
 

(2.9

8-K		)001-0927810/8/2014
2.9
Amendment No. 1 to Asset Purchase Agreement, dated March 6, 2015, between the Company, Carlisle Fluid Technologies, Inc., Graco Inc. and Finishing Brands Holdings Inc.(z)

  
 

(2.10

8-K		)001-092783/9/2015
2.10
Form of Cross License Agreement (as amended by Amendment No. 1 to Asset Purchase Agreement), by and among the Company, Carlisle Fluid Technologies, Inc., Finishing Brands Holdings Inc., Graco Inc. and Gema Switzerland GmbH.(z)

  
 

(3.1

8-K		)001-092783/9/2015
2.11
Securities Purchase Agreement, dated September 29, 2017, between Accella Performance Materials LLC, Accella Holdings LLC and Carlisle Construction Materials, LLC.8-K001-0927810/2/2017
3.1
Restated Certificate of Incorporation of the Company.(bb)

  
 

(3.2

10-Q		)001-0927810/21/2015
3.2
Amended and Restated Bylaws of the Company.(cc)

  
 

(4.1

)Shareholders' Rights Agreement, February 8, 1989.(a)

8-K		 

(4.2

)Amendment No. 1 to Shareholders' Rights Agreement, dated August 7, 1996, between the Company and Harris Trust and Savings Bank, as rights agent.(c)

001-09278		 12/14/2015

(4.3

)Amendment No. 2 to Shareholders' Rights Agreement, dated May 26, 2006, between the Company and Computershare Investor Services, LLC (formerly Harris Trust and Savings Bank), as rights agent.(j)

4.1P
 

(4.4

)Form of Trust Indenture between the Company and Fleet National Bank.(d)

  
 

(4.5

S-3		)333-1678511/26/1996
4.2
First Supplemental Indenture, dated as of August 18, 2006, among the Company, U.S. Bank National Association (as successor to State Street Bank and Trust Company, as successor to Fleet National Bank) and The Bank of New York Trust Company, N.A.(k)

  
 

(4.6

8-K		)001-092788/18/2006
4.3
Second Supplemental Indenture, dated as of December 9, 2010, among the Company, U.S. Bank National Association (as successor to State Street Bank and Trust Company, as successor to Fleet National Bank) and The Bank of New York Mellon Trust Company, N.A.(p)

  
 

(4.7

8-K		)001-0927812/10/2010
4.4
Third Supplemental Indenture, dated as of November 20, 2012, among the Company, U.S. Bank National Association (as successor to State Street Bank and Trust Company, as successor to Fleet National Bank) and The Bank of New York Mellon Trust Company, N.A.(t)

  
 

(10.1

8-K		)001-0927811/20/2012
4.5
Form of 3.500% Notes due 2024.8-K001-0927811/16/2017
4.6
Form of 3.750% Notes due 2027.8-K001-0927811/16/2017

Carlisle Companies Incorporated
Exhibit Index
ExhibitFiled with this Form 10-KIncorporated by Reference
NumberExhibit TitleFormFile No.Date Filed
10.1*
Carlisle Companies Incorporated Amended and Restated Executive Incentive Program.(s)

  
 

(10.2

Schedule 14A		)001-092783/20/2012
10.2*
Form of Carlisle Companies Incorporated Nonqualified Stock Option Agreement.(f)

  
 

(10.3

10-Q		)001-0927811/8/2004
10.3*
Form of Carlisle Companies Incorporated Restricted Share Agreement with Non-Compete Covenant.(x)

  
 

(10.4

10-Q		)001-092787/22/2014
10.4*
Form of Amended and Restated Executive Severance Agreement.(n)

  
 

(10.5

10-K		)001-092782/27/2009
10.5*P
Summary Plan Description of Carlisle Companies Incorporated Director Retirement Plan, effective November 6, 1991.(b)

  
 

(10.6

10-K		)001-092783/24/1992
10.6*
Amendment to the Carlisle Companies Incorporated Director Retirement Plan.(e)

  
 

(10.7

10-K		)001-092783/11/2004
10.7*
Carlisle Companies Incorporated Amended and Restated Nonemployee Director Equity Plan.(h)

  
 

(10.8

Schedule 14A		)001-092783/9/2005
10.8*
Form of Carlisle Companies Incorporated Stock Option Agreement for Nonemployee Directors.(g)

  
 

(10.9

8-K		)001-092782/7/2005
10.9*
Form of Carlisle Companies Incorporated Nonqualified Stock Option Agreement for Nonemployee Directors.(i)

  
 

(10.10

8-K		)001-092785/10/2005
10.10*
Form of Carlisle Companies Incorporated Restricted Share Agreement for Nonemployee Directors.(i)

  
 

(10.11

8-K		)001-092785/10/2005
10.11*
Form of Carlisle Companies Incorporated Restricted Stock Unit Agreement for Nonemployee Directors.(n)

  
 

(10.12

10-K		)001-092782/27/2009
10.12*
Carlisle Companies Incorporated Amended and Restated Deferred Compensation Plan for Nonemployee Directors.(n)

  
 

(10.13

10-K		)001-092782/27/2009
10.13*
Carlisle Companies Incorporated Amended and Restated Incentive Compensation Program, effective January 1, 2015.(aa)

  
 

(10.14

Schedule 14A		)001-092783/20/2015
10.14*
Letter Agreement, dated June 5, 2007, between David A. Roberts and the Company.(l)

  
 

(10.15

8-K		)001-092786/12/2007
10.15*
Nonqualified Stock Option Agreement, dated as of June 21, 2007, between the Company and David A. Roberts.(m)

  
 

(10.16

10-Q		)001-092788/6/2007
10.16*
Restricted Share Agreement, dated as of June 21, 2007, between the Company and David A. Roberts.(m)


  

10-Q001-092788/6/2007
10.17*

(10.17

)Letter Agreements, dated January 11, 2008 and December 31, 2008, between D. Christian Koch and the Company.(n)

  
 

(10.18

10-K		)001-092782/27/2009
10.18*
Letter Agreement, dated August 4, 2011, between Fred A. Sutter and the Company.(q)

  
 

(10.19

10-Q		)001-0927810/25/2011
10.19
Carlisle Corporation Amended and Restated Supplemental Pension Plan.(r)

  
 

(10.20

10-K		)001-092782/10/2012
10.20
Amendment No. 1 to the Carlisle Corporation Supplemental Pension Plan, adopted February 4, 2014.(w)

  
 

(10.21

10-Q		)001-092784/22/2014
10.21*
Form of Carlisle Companies Incorporated Performance Share Agreement.(o)

  
 

(10.22

10-Q		)001-092784/27/2010
10.22*
Carlisle Companies Incorporated Amended and Restated Nonqualified Deferred Compensation Plan, dated January 1, 2012.(r)

  
 

(10.23

10-K		)001-092782/10/2012
10.23
Carlisle Companies Incorporated Nonqualified Benefit Plan Trust, dated February 2, 2010, by and between the Company and Wachovia Bank, National Association.(o)

  
 

(10.24

10-Q		)001-092784/27/2010

Carlisle Companies Incorporated
Exhibit Index
ExhibitFiled with this Form 10-KIncorporated by Reference
NumberExhibit TitleFormFile No.Date Filed
10.24
Third Amended and Restated Credit Agreement, dated as of October 20, 2011, among the Company, Carlisle Management Company, JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto.(q)

  
 

(10.25

10-Q		)001-0927810/25/2011
10.25
First Amendment to Third Amended and Restated Credit Agreement, dated as of December 12, 2013, by and among the Company, Carlisle Corporation, JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto.(v)

  
 

(12

8-K		)001-0927812/17/2013
10.26*
Letter Agreement, dated January 5, 2017, between Robert Roche and the Company.8-K001-092782/15/2017
10.27*
Form of Executive Severance Agreement.8-K001-092782/15/2017
10.28
Second Amendment to Third Amended and Restated Credit Agreement, dated as of February 21, 2017, by and among Carlisle Companies Incorporated, Carlisle Corporation, JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders party thereto.8-K001-092782/24/2017
10.29*
Form of Executive Severance Agreement8-K/A001-092784/12/2017
12.1
Ratio of Earnings to Fixed Charges.
 

X		  
21.1

(21

)Subsidiaries of the Registrant.
 

X		  
23.1

(23.1

)Consent of Independent Registered Public Accounting Firm—ErnstFirm – Deloitte & YoungTouche LLP.
 

X		  
23.2

(31.1

)Rule 13a-14(a)/15d-14(a) Certifications.
 

Consent of Independent Registered Public Accounting Firm – Ernst & Young LLP.		X  
31.1

(31.2

)Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) Certifications..
 

X		  
31.2

(32

)Section 1350 Certification.
 

Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).		X  
32.1

(101

)Section 1350 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002X
101.1Interactive Data File.X
(a)
Filed as an Exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1988 and incorporated herein by reference.

(b)
Filed as an Exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1991 and incorporated herein by reference.

(c)
Filed as an Exhibit to the Company's registration statement on Form 8-A12B/A (File No. 001-09278) filed August 9, 1996 and incorporated herein by reference.

(d)
Filed as an Exhibit to the Company's registration statement on Form S-3 (File No. 333-16785) filed November 26, 1996 and incorporated herein by reference.

(e)
Filed as an Exhibit to the Company's Annual Report on Form 10-K (File No. 001-09278) for the fiscal year ended December 31, 2003 and incorporated herein by reference.

(f)
Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q (File No. 001-09278) for the quarter ended September 30, 2004.

(g)
Filed as an Exhibit to the Company's Current Report on Form 8-K (File No. 001-09278) filed February 7, 2005 and incorporated herein by reference.

(h)
Filed as an Exhibit to the Company's Proxy Statement on Schedule 14A (File No. 001-09278) filed March 9, 2005 and incorporated herein by reference.

(i)
Filed as an Exhibit to the Company's Current Report on Form 8-K (File No. 001-09278) filed May 10, 2005 and incorporated herein by reference.

(j)
Filed as an Exhibit to the Company's Current Report on Form 8-K (File No. 001-09278) filed June 1, 2006 and incorporated herein by reference.

(k)
Filed as an Exhibit to the Company's Current Report on Form 8-K (File No. 001-09278) filed August 18, 2006 and incorporated herein by reference.

(l)
Filed as an Exhibit to the Company's Current Report on Form 8-K (File No. 001-09278) filed June 12, 2007 and incorporated herein by reference.

(m)
Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q (File No. 001-09278) for the quarter ended June 30, 2007 and incorporated herein by reference.

(n)
Filed as an Exhibit to the Company's Annual Report on Form 10-K (File No. 001-09278) for the fiscal year ended December 31, 2008 and incorporated herein by reference.

(o)
Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q (File No. 001-09278) for the quarter ended March 31, 2010 and incorporated herein by reference.

(p)
Filed as an Exhibit to the Company's Current Report on Form 8-K (File No. 001-09278) filed December 10, 2010 and incorporated herein by reference.

(q)
Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q (File No. 001-09278) for the quarter ended September 30, 2011 and incorporated by reference.

(r)
Filed as an Exhibit to the Company's Annual Report on Form 10-K (File No. 001-09278) for the fiscal year ended December 31, 2011 and incorporated herein by reference.

(s)
Filed as an Exhibit to the Company's Proxy Statement on Schedule 14A (File No. 001-09278) filed March 20, 2012 and incorporated herein by reference.

(t)
Filed as an Exhibit to the Company's Current Report on Form 8-K (File No. 001-09278) filed November 20, 2012 and incorporated herein by reference.

(u)
Filed as an Exhibit to the Company's Current Report on Form 8-K (File No. 001-09278) filed October 22, 2013 and incorporated herein by reference.

(v)
Filed as an Exhibit to the Company's Current Report on Form 8-K (File No. 001-09278) filed December 17, 2013 and incorporated herein by reference.

(w)
Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q (File No. 001-09278) for the quarter ended March 31, 2014 and incorporated herein by reference.

(x)
Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q (File No. 001-09278) for the quarter ended June 30, 2014 and incorporated herein by reference.

(y)
Filed as an Exhibit to the Company's Current Report on Form 8-K (File No. 001-09278) filed October 8, 2014 and incorporated herein by reference.

(z)
Filed as an Exhibit to the Company's Current Report on Form 8-K (File No. 001-09278) filed March 9, 2015 and incorporated herein by reference.

(aa)
Filed as an Appendix to the Company's Proxy Statement on Schedule 14A (File No. 001-09278) filed March 20, 2015 and incorporated herein by reference.

(bb)
Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q (File No. 001-09278) for the quarter ended September 30, 2015 and incorporated herein by reference.

(cc)
Filed as an Exhibit to the Company's Current Report on Form 8-K (File No. 001-09278) filed December 14, 2015 and incorporated herein by reference.

1
Filed Exhibits 10.1 through 10.22 constitute management* Management contracts or compensatory plans.
compensation plans or arrangements in which directors or executive officers are eligible to participate.

P Indicates paper filing.


Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Carlisle Companies Incorporated

By: /s/ STEVEN J. FORD
Steven J. Ford, Robert M. Roche
Robert M. Roche, Vice President and
Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.


/s/ D. CHRISTIAN KOCH
Christian Koch		/s/ Robin J. Adams
D. Christian Koch,Director,
Robin J. Adams, Director
President and
Chief Executive Officer
(Principal Executive Officer) /s/ DAVID A. ROBERTS
David A. Roberts,Executive Chairman
of the Board

/s/ STEVEN J. FORD
Steven J. Ford,Vice President and
Chief Financial Officer
(Principal Financial Officer)

/s/ ROBIN J. ADAMS
Robin J. Adams,Director

/s/ KEVIN P. ZDIMAL
Kevin P. Zdimal,Controller and
Chief Accounting Officer
(Principal Accounting Officer)

/s/ ROBERT G. BOHN
Robert G. Bohn,Director



/s/ ROBIN S. CALLAHAN
Robin S. Callahan,Director



/s/ JAMES D. FRIAS
James D. Frias,Director



/s/ TERRY D. GROWCOCK
Terry D. Growcock,Director



/s/ GREGG A. OSTRANDER
Gregg A. Ostrander,Director

  /s/ LAWRENCE A. SALA
Lawrence A. Sala,Director



/s/ MAGALEN C. WEBERT
Magalen C. Webert,DirectorRobert M. Roche		/s/ Robert G. Bohn

February 8, 2016



CARLISLE COMPANIES INCORPORATED
COMMISSION FILE NUMBER 1-9278
FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 2015

EXHIBIT LIST

Robert M. Roche, Vice President and
Robert G. Bohn, Director
Chief Financial Officer
(Principal Financial Officer)
 (12)
/s/ Titus B. BallRatio of Earnings to Fixed Charges/s/ Jonathan R. Collins
Titus B. Ball, Vice Presidentand
Jonathan R. Collins, Director
Chief Accounting Officer
(Principal Accounting Officer)/s/ James D. Frias
 
James D. Frias, Director
   
 (21)Subsidiaries of the Registrant/s/ Terry D. Growcock
 
Terry D. Growcock, Director
   
 (23.1)Consent of Independent Registered Public Accounting Firm—Ernst & Young LLP/s/ Gregg A. Ostrander
 Gregg A. Ostrander, Director
   
 (31.1)Rule 13a-14a/15d-14(a) Certifications/s/ Corrine D. Ricard
 Corrine D. Ricard, Director
   
 (31.2)Rule 13a-14a/15d-14(a) Certifications/s/ David A. Roberts
 
David A. Roberts, Director
   
 (32)Section 1350 Certification/s/ Lawrence A. Sala
 
Lawrence A. Sala, Director
   
 (101)/s/ Jesse G. Singh
Interactive Data FileJesse G. Singh, Director



QuickLinks

DOCUMENTS INCORPORATED BY REFERENCE
Part I
Overview
Part II
Report of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm
Carlisle Companies Incorporated Consolidated Statements of Earnings and Comprehensive Income
Carlisle Companies Incorporated Consolidated Balance Sheets
Carlisle Companies Incorporated Consolidated Statements of Cash Flows
Carlisle Companies Incorporated Consolidated Statements of Shareholders' Equity (In millions, except share and per share amounts)
Notes to Consolidated Financial Statements
Part III
Part IV
CARLISLE COMPANIES INCORPORATED COMMISSION FILE NUMBER 1-9278 FORM 10-K FOR FISCAL YEAR ENDED DECEMBER 31, 2015
EXHIBIT LIST
February 16, 2018


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