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Carlisle Companies Inc.

10/25/2024 | Press release | Distributed by Public on 10/25/2024 12:29

Quarterly Report for Quarter Ending September 30, 2024 (Form 10-Q)

csl-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

FOR THE QUARTERLY PERIOD ENDED September 30, 2024


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

FOR THE TRANSITION PERIOD FROM _____ TO _____.

Commission file number 1-9278

www.carlisle.com

CARLISLE COMPANIES INCORPORATED

(Exact name of registrant as specified in its charter)


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

16430 North Scottsdale Road, Suite 400, Scottsdale, Arizona85254

(Address of principal executive offices, including zip code)

(480)781-5000

(Registrant's telephone number, including area code)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $1 par value	CSL	New York Stock Exchange

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


Yes	☒	No	☐

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


Yes	☒	No	☐

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


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

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


Yes	☐	No	☐

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


Yes	☐	No	☒

On October 18, 2024, there were 45,327,469 shares of the registrant's common stock, par value $1.00 per share, outstanding.

Carlisle Companies Incorporated

Table of Contents


Page
PART I-Financial Information

Item 1. Financial Statements	3

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)	3

Condensed Consolidated Balance Sheets (Unaudited)	4

Condensed Consolidated Statements of Cash Flows (Unaudited)	5

Condensed Consolidated Statements of Stockholders' Equity (Unaudited)	6

Notes to Condensed Consolidated Financial Statements (Unaudited)	8

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3. Quantitative and Qualitative Disclosure about Market Risk	33

Item 4. Controls and Procedures	33

PART II-Other Information

Item 1. Legal Proceedings	34

Item 1A. Risk Factors	34

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3. Defaults Upon Senior Securities	34

Item 4. Mine Safety Disclosures	34

Item 5. Other Information	34

Item 6. Exhibits	35

Signature	36

PART I-Financial Information

Item 1. Financial Statements

Carlisle Companies Incorporated

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)


Three Months Ended September 30,	Nine Months Ended September 30,
(in millions, except per share amounts)	2024	2023	2024	2023
Revenues	$	1,333.6	$	1,259.8	$	3,880.7	$	3,459.4

Cost of goods sold	819.2	793.7	2,398.5	2,244.9
Selling and administrative expenses	191.8	161.7	547.9	467.6
Research and development expenses	8.1	7.2	26.6	20.7
Other operating income, net	(1.9)	(2.7)	(11.4)	(3.0)
Operating income	316.4	299.9	919.1	729.2
Interest expense, net	18.6	19.4	56.0	57.0
Interest income	(22.6)	(3.6)	(44.3)	(12.5)
Other non-operating (income) expense, net	(1.1)	0.6	(1.5)	(1.2)
Income from continuing operations before income taxes	321.5	283.5	908.9	685.9
Provision for income taxes	74.9	66.6	206.2	158.7
Income from continuing operations	246.6	216.9	702.7	527.2

Discontinued operations:
(Loss) income before income taxes	(4.4)	43.2	497.7	20.2
(Benefit from) provision for income taxes	(2.1)	(5.5)	51.4	(14.5)
(Loss) income from discontinued operations	(2.3)	48.7	446.3	34.7
Net income	$	244.3	$	265.6	$	1,149.0	$	561.9

Basic earnings per share attributable to common shares:
Income from continuing operations	$	5.36	$	4.37	$	14.93	$	10.43
(Loss) income from discontinued operations	(0.05)	0.98	9.48	0.69
Basic earnings per share	$	5.31	$	5.35	$	24.41	$	11.12

Diluted earnings per share attributable to common shares:
Income from continuing operations	$	5.30	$	4.32	$	14.74	$	10.32
(Loss) income from discontinued operations	(0.05)	0.97	9.36	0.68
Diluted earnings per share	$	5.25	$	5.29	$	24.10	$	11.00

Average shares outstanding:
Basic	45.9	49.5	47.0	50.4
Diluted	46.5	50.1	47.6	51.0

Comprehensive income:
Net income	$	244.3	$	265.6	$	1,149.0	$	561.9
Other comprehensive income (loss):
Foreign currency gains (losses)	10.1	(15.8)	5.4	(1.7)
Amortization of unrecognized net periodic benefit costs, net of tax	0.5	0.2	1.4	0.8
Other, net of tax	0.1	0.1	2.0	(0.3)
Other comprehensive income (loss)	10.7	(15.5)	8.8	(1.2)
Comprehensive income	$	255.0	$	250.1	$	1,157.8	$	560.7

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

Carlisle Companies Incorporated

Condensed Consolidated Balance Sheets (Unaudited)


(in millions, except par values)	September 30, 2024	December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,530.6	$	576.7
Receivables, net of allowance for credit losses of $4.8 million and $3.9 million, respectively	799.2	615.3
Inventories	462.4	361.7
Prepaid expenses	27.7	21.2
Other current assets	91.5	107.6
Assets held for sale	-	1,725.6
Total current assets	2,911.4	3,408.1

Property, plant, and equipment, net	670.7	655.2
Goodwill	1,342.0	1,202.5
Other intangible assets, net	1,425.9	1,252.9
Other long-term assets	128.4	101.3
Total assets	$	6,478.4	$	6,620.0

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	327.3	$	245.5
Current portion of debt	403.0	402.7
Accrued and other current liabilities	310.4	292.9
Contract liabilities	27.7	26.4
Liabilities held for sale	-	218.8
Total current liabilities	1,068.4	1,186.3

Long-term liabilities:
Long-term debt, less current portion	1,887.2	1,886.7
Contract liabilities	315.5	297.6
Other long-term liabilities	444.4	420.4
Total long-term liabilities	2,647.1	2,604.7

Stockholders' equity:
Preferred stock, $1 par value per share (5.0 shares authorized and unissued)	-	-
Common stock, $1 par value per share (200.0 shares authorized; 45.4 and 47.7 shares outstanding, respectively)	78.7	78.7
Additional paid-in capital	580.7	553.8
Treasury shares, at cost (33.2 and 30.9 shares, respectively)	(4,449.5)	(3,326.4)
Accumulated other comprehensive loss	(102.3)	(111.1)
Retained earnings	6,655.3	5,634.0
Total stockholders' equity	2,762.9	2,829.0
Total liabilities and equity	$	6,478.4	$	6,620.0

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

Carlisle Companies Incorporated

Condensed Consolidated Statements of Cash Flows (Unaudited)


Nine Months Ended September 30,
(in millions)	2024	2023
Operating activities:
Net income	$	1,149.0	$	561.9
Reconciliation of net income to net cash provided by operating activities:
Depreciation	51.7	66.9
Amortization	74.9	102.4
Lease expense	18.9	22.0
Stock-based compensation	22.9	30.2
Deferred taxes	(5.7)	(35.5)
(Gain) loss on sale of discontinued operations	(456.7)	49.9
Other operating activities, net	8.7	26.9
Changes in assets and liabilities, excluding effects of acquisitions:
Receivables	(157.1)	(145.3)
Inventories	(103.9)	117.0
Contract assets	10.2	13.2
Prepaid expenses and other assets	(5.9)	7.4
Accounts payable	66.5	49.4
Accrued and other current liabilities	(11.0)	(41.4)
Contract liabilities	18.5	14.0
Other long-term liabilities	(21.3)	(26.6)
Net cash provided by operating activities	659.7	812.4

Investing activities:
Proceeds from sale of discontinued operations, net of cash disposed	1,998.0	-
Acquisitions, net of cash acquired	(414.3)	-
Capital expenditures	(76.7)	(106.3)
Investment in securities	0.6	0.9
Other investing activities, net	1.3	18.7
Net cash provided by (used in) investing activities	1,508.9	(86.7)

Financing activities:
Repayment of notes	-	(300.0)
Borrowings from revolving credit facility	22.0	84.0
Repayments of revolving credit facility	(22.0)	(84.0)
Repurchases of common stock	(1,166.1)	(580.0)
Dividends paid	(127.4)	(119.3)
Proceeds from exercise of stock options	73.1	17.7
Withholding tax paid related to stock-based compensation	(17.7)	(10.4)
Other financing activities, net	(4.8)	(2.5)
Net cash used in financing activities	(1,242.9)	(994.5)

Effect of foreign currency exchange rate changes on cash and cash equivalents	(0.6)	-
Change in cash and cash equivalents	925.1	(268.8)
Less: change in cash and cash equivalents of discontinued operations	(28.8)	(12.0)
Cash and cash equivalents at beginning of period	576.7	364.8
Cash and cash equivalents at end of period	$	1,530.6	$	108.0

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

Carlisle Companies Incorporated

Condensed Consolidated Statements of Stockholders' Equity (Unaudited)


Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Shares in Treasury	Total Stockholders' Equity
(in millions, except per share amounts)	Shares	Amount	Shares	Cost
Balance as of June 30, 2023	50.0	$	78.7	$	531.6	$	(143.5)	$	5,246.1	28.4	$	(2,680.9)	$	3,032.0
Net income	-	-	-	-	265.6	-	-	265.6
Other comprehensive loss, net of tax	-	-	-	(15.5)	-	-	-	(15.5)
Dividends - $0.85 per share	-	-	-	-	(42.2)	-	-	(42.2)
Repurchases of common stock	(1.2)	-	-	-	-	1.2	(333.2)	(333.2)
Issuances and deferrals, net for stock based compensation(1)	-	-	12.8	-	-	-	4.3	17.1
Balance as of September 30, 2023	48.8	$	78.7	$	544.4	$	(159.0)	$	5,469.5	29.6	$	(3,009.8)	$	2,923.8

Balance as of June 30, 2024	46.4	$	78.7	$	570.3	$	(113.0)	$	6,456.9	32.2	$	(3,988.6)	$	3,004.3
Net income	-	-	-	-	244.3	-	-	244.3
Other comprehensive income, net of tax	-	-	-	10.7	-	-	-	10.7
Dividends - $1.00 per share	-	-	-	-	(45.9)	-	-	(45.9)
Repurchases of common stock	(1.1)	-	-	-	-	1.1	(470.5)	(470.5)
Issuances and deferrals, net for stock based compensation(1)	0.1	-	10.4	-	-	(0.1)	9.6	20.0
Balance as of September 30, 2024	45.4	$	78.7	$	580.7	$	(102.3)	$	6,655.3	33.2	$	(4,449.5)	$	2,762.9

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

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

Carlisle Companies Incorporated

Condensed Consolidated Statements of Stockholders' Equity (Unaudited)


Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Shares in Treasury	Total Stockholders' Equity
(in millions, except per share amounts)	Shares	Amount	Shares	Cost
Balance as of December 31, 2022	50.9	$	78.7	$	512.6	$	(157.8)	$	5,027.1	27.5	$	(2,436.2)	$	3,024.4
Net income	-	-	-	-	561.9	-	-	561.9
Other comprehensive loss, net of tax	-	-	-	(1.2)	-	-	-	(1.2)
Dividends - $2.35 per share	-	-	-	-	(119.5)	-	-	(119.5)
Repurchases of common stock	(2.3)	-	-	-	-	2.3	(585.3)	(585.3)
Issuances and deferrals, net for stock based compensation(1)	0.2	-	31.8	-	-	(0.2)	11.7	43.5
Balance as of September 30, 2023	48.8	$	78.7	$	544.4	$	(159.0)	$	5,469.5	29.6	$	(3,009.8)	$	2,923.8

Balance as of December 31, 2023	47.7	$	78.7	$	553.8	$	(111.1)	$	5,634.0	30.9	$	(3,326.4)	$	2,829.0
Net income	-	-	-	-	1,149.0	-	-	1,149.0
Other comprehensive income, net of tax	-	-	-	8.8	-	-	-	8.8
Dividends - $2.70 per share	-	-	-	-	(127.7)	-	-	(127.7)
Repurchases of common stock	(2.9)	-	-	-	-	2.9	(1,176.0)	(1,176.0)
Issuances and deferrals, net for stock based compensation(1)	0.6	-	26.9	-	-	(0.6)	52.9	79.8
Balance as of September 30, 2024	45.4	$	78.7	$	580.7	$	(102.3)	$	6,655.3	33.2	$	(4,449.5)	$	2,762.9

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

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

Carlisle Companies Incorporated

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1-Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by Carlisle Companies Incorporated (the "Company" or "Carlisle"). The accompanying unaudited Condensed Consolidated Financial Statements do not include all disclosures as required by accounting principles generally accepted in the United States of America ("United States" or "U.S."), and should be read in conjunction with the Company's audited Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Annual Report on Form 10-K").

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

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

The Company has reclassified certain prior periods' amounts to conform with the current period presentation on the Condensed Consolidated Statements of Cash Flows to reclassify amounts related to the loss on sale of discontinued operations from stock-based compensation, prepaid expenses and other assets, accrued and other current liabilities, and other long-term liabilities to a separately disclosed line item. In Note 5-Discontinued Operations, the Company has redefined certain captions on the Condensed Consolidated Statements of Income related to prior periods to reflect the dispositions of the Carlisle Fluid Technologies ("CFT") and Carlisle Interconnect Technologies ("CIT") businesses. The Company reclassified certain prior period amounts to conform with the current period presentation of revenues by end market as discussed in Note 7-Revenue Recognition to reflect the nature of revenues in information regularly reviewed by the Company.

Discontinued Operations

The results of operations for the Company's CFT and CIT segments have been reclassified as discontinued operations for all periods presented in the Condensed Consolidated Statements of Income. Assets and liabilities subject to the sale of CIT have been reclassified as held for sale for all periods presented in the Condensed Consolidated Balance Sheets. Refer to Note 5-Discontinued Operations for additional information.

Note 2-New Accounting Pronouncements

New Accounting Standards Issued Recently Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which is intended to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for the Company's fiscal year beginning January 1, 2024 and requires the use of a retrospective approach to all prior periods presented. The Company adopted the standard on January 1, 2024, and plans to adopt the standard for interim periods beginning January 1, 2025. The Company is evaluating the potential impact of its adoption of ASU 2023-07 on the Company's audited Consolidated Financial Statements but does not anticipate that such an adoption will have a material impact.

New Accounting Standards Issued But Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which is intended to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. ASU 2023-09 also includes certain other amendments intended to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for the Company's fiscal year beginning January 1, 2025 and allows the use of a prospective or retrospective approach. The Company plans to adopt the standard

on January 1, 2025 and has not yet determined the potential impact of its adoption of ASU 2023-09 on the Company's audited Consolidated Financial Statements.

Note 3-Segment Information

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

Carlisle Construction Materials ("CCM")-this segment produces a complete line of premium single-ply roofing products and warranted roof systems and accessories for the commercial building industry, including ethylene propylene diene monomer ("EPDM"), thermoplastic polyolefin ("TPO") and polyvinyl chloride ("PVC") membrane, polyisocyanurate ("polyiso") insulation, and engineered metal roofing and wall panel systems for commercial and residential buildings.

Carlisle Weatherproofing Technologies ("CWT")-this segment produces building envelope solutions that effectively drive energy efficiency and sustainability in commercial and residential applications. Products include high-performance waterproofing and moisture protection products, protective roofing underlayments, fully integrated liquid and sheet applied air/vapor barriers, sealants/primers and flashing systems, roof coatings and mastics, spray polyurethane foam and coating systems for a wide variety of thermal protection applications and other premium polyurethane products, block-molded expanded polystyrene insulation, engineered products for HVAC applications, and premium products for a variety of industrial and surfacing applications.

A summary of segment information follows:


Three Months Ended September 30,
2024	2023
(in millions)	Revenues	Operating Income (Loss)	Revenues	Operating Income (Loss)
Carlisle Construction Materials	$	998.2	$	303.0	$	914.0	$	272.5
Carlisle Weatherproofing Technologies	335.4	46.8	345.8	58.8
Segment total	1,333.6	349.8	1,259.8	331.3
Corporate and unallocated(1)	-	(33.4)	-	(31.4)
Total	$	1,333.6	$	316.4	$	1,259.8	$	299.9

Nine Months Ended September 30,
2024	2023
(in millions)	Revenues	Operating Income (Loss)	Revenues	Operating Income (Loss)
Carlisle Construction Materials	$	2,870.7	$	861.0	$	2,437.5	$	675.6
Carlisle Weatherproofing Technologies	1,010.0	148.2	1,021.9	142.4
Segment total	3,880.7	1,009.2	3,459.4	818.0
Corporate and unallocated(1)	-	(90.1)	-	(88.8)
Total	$	3,880.7	$	919.1	$	3,459.4	$	729.2

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

Note 4-Acquisitions

2024 Acquisition

MTL Holdings

On May 1, 2024, the Company completed the acquisition of 100% of the equity of MTL Holdings LLC ("MTL") for cash consideration of $424.6 million, including $10.3 million of cash acquired, subject to certain customary post-closing purchase price adjustments. MTL is a leading provider of prefabricated perimeter edge metal systems and non-insulated architectural metal wall systems for commercial, institutional and industrial buildings.

In the three months ended September 30, 2024 and for the period from May 1, 2024 to September 30, 2024, MTL contributed revenues of $33.3 million and $55.2 million, respectively, and operating income of $3.8 million and $5.6 million, respectively. The results of operations of the acquired business are reported as part of the CCM segment.

The following table summarizes the consideration transferred to acquire MTL 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	Measurement Period Adjustments	Preliminary Allocation
(in millions)	As of 5/1/2024	As of 9/30/2024
Total cash consideration transferred	$	423.1	$	1.5	$	424.6
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	10.3	-	10.3
Receivables, net	14.0	-	14.0
Inventories	17.2	-	17.2
Prepaid expenses and other current assets	0.9	-	0.9
Property, plant and equipment	10.7	-	10.7
Definite-lived intangible assets	248.3	-	248.3
Other long-term assets	8.1	-	8.1
Accounts payable	(5.9)	-	(5.9)
Accrued and other current liabilities	(6.1)	-	(6.1)
Deferred income taxes	(6.9)	-	(6.9)
Other long-term liabilities	(6.7)	-	(6.7)
Total identifiable net assets	283.9	-	283.9
Goodwill	$	139.2	$	1.5	$	140.7

The goodwill recognized in the acquisition of MTL reflects market participant synergies attributable to significant raw material purchase synergies with CCM, other administrative synergies, the value of the assembled workforce to Carlisle and opportunities for product line expansions. The Company acquired $14.1 million of gross contractual accounts receivable, of which $0.1 million was not expected to be collected at the date of acquisition. All of the goodwill has been preliminarily assigned to the Carlisle Architectural Metals reporting unit, which is part of the CCM reportable segment. Goodwill totaled $140.7 million, of which $134.0 million is deductible for tax purposes.

The preliminary fair values and weighted average useful lives of the acquired definite-lived intangible assets are as follows:


(in millions)	Fair Value	Weighted Average Useful Life (in years)
Customer relationships	$	183.1	13
Trade names	44.6	19
Technologies	18.1	11
Software	2.5	5
Total	$	248.3

The Company has also preliminarily recorded, as part of the purchase price allocation, deferred tax liabilities primarily related to intangible assets of approximately $6.9 million.

2023 Acquisition

Polar Industries

On November 8, 2023, the Company completed the acquisition of select assets of Polar Industries, Inc., Fox Transport, Inc. and LRH, LLC (collectively "Polar") for cash consideration of $36.1 million, subject to certain customary post-closing purchase price adjustments, which were finalized in the first quarter of 2024. Polar is a manufacturer of expanded polystyrene and graphite polystyrene for residential and commercial applications.

The Company has allocated consideration of $20.9 million to goodwill, all of which is deductible for tax purposes. The Company assigned all of the goodwill to the CWT reporting unit, which is part of the CWT reportable segment. The Company allocated consideration of $2.6 million to customer relationships, with a useful life of nine years,

$9.4 million to property, plant and equipment, $1.8 million to inventory, $1.8 million to accounts receivable, $0.2 million to accounts payable and $0.2 million to accrued and other current liabilities.

Subsequent Event

PFB Holdco

On October 17, 2024, the Company entered into a definitive agreement to acquire 100% of the equity of PFB Holdco, Inc. ("Plasti-Fab") for cash consideration of $259.5 million, subject to certain customary purchase price adjustments. Plasti-Fab is a leading vertically integrated provider of expanded polystyrene insulation products across Canada and the Midwestern United States. The transaction is subject to customary closing conditions, including regulatory clearances, and is expected to close in the fourth quarter of 2024.

Note 5-Discontinued Operations

On May 21, 2024, the Company completed the sale of CIT for cash proceeds of $2.025 billion, subject to certain customary purchase price adjustments, which were finalized in the third quarter of 2024.

On October 2, 2023, the Company completed the sale of CFT for cash proceeds of $520 million, subject to certain customary purchase price adjustments.

The sales of CIT and CFT are consistent with the Company's pivot to a pure play building products company, employing a capital allocation approach to its highest returning businesses.

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


Three Months Ended September 30, 2024
CIT	CFT	Other	Total
Revenues	$	-	$	-	$	-	$	-

Cost of goods sold	-	-	-	-
Other operating expenses, net	-	-	-	-
Operating loss	-	-	-	-
Other non-operating expense, net	0.6	4.2	1.9	6.7
Loss from discontinued operations before income taxes and (gain) loss on sale	(0.6)	(4.2)	(1.9)	(6.7)
(Gain) loss on sale of discontinued operations	(2.6)	0.3	-	(2.3)
Income (loss) from discontinued operations before income taxes	2.0	(4.5)	(1.9)	(4.4)
Benefit from income taxes	(0.6)	(1.1)	(0.4)	(2.1)
Income (loss) from discontinued operations	$	2.6	$	(3.4)	$	(1.5)	$	(2.3)


Three Months Ended September 30, 2023
CIT	CFT	Other	Total
Revenues	$	218.2	$	76.4	$	-	$	294.6

Cost of goods sold	162.7	42.4	-	205.1
Other operating expenses, net	30.2	17.2	-	47.4
Operating income	25.3	16.8	-	42.1
Other non-operating (income) expense, net	(0.2)	(0.7)	0.7	(0.2)
Income (loss) from discontinued operations before income taxes and loss from classification to held for sale	25.5	17.5	(0.7)	42.3
Loss (gain) on sale of discontinued operations(1)	2.7	(3.6)	-	(0.9)
Income (loss) from discontinued operations before income taxes	22.8	21.1	(0.7)	43.2
(Benefit from) provision for income taxes	(11.2)	5.4	0.3	(5.5)
Income (loss) from discontinued operations	$	34.0	$	15.7	$	(1.0)	$	48.7

(1)Includes expenses related to legal fees and stock-based compensation that were related to the sales of CFT and CIT, which are incorporated into the (gain)/loss on sale of discontinued operations upon the close of the sale, but incurred prior to the close of the transaction.


Nine Months Ended September 30, 2024
CIT	CFT	Other	Total
Revenues	$	328.6	$	-	$	-	$	328.6

Cost of goods sold	237.5	-	-	237.5
Other operating expenses, net	34.4	-	-	34.4
Operating income	56.7	-	-	56.7
Other non-operating expense, net	0.5	11.8	3.4	15.7
Income (loss) from discontinued operations before income taxes and loss on sale	56.2	(11.8)	(3.4)	41.0
(Gain) loss on sale of discontinued operations	(457.3)	0.6	-	(456.7)
Income (loss) from discontinued operations before income taxes	513.5	(12.4)	(3.4)	497.7
Provision for (benefit from) income taxes	56.4	(3.8)	(1.2)	51.4
Income (loss) from discontinued operations	$	457.1	$	(8.6)	$	(2.2)	$	446.3


Nine Months Ended September 30, 2023
CIT	CFT	Other	Total
Revenues	$	650.6	$	227.1	$	-	$	877.7

Cost of goods sold	496.9	129.5	-	626.4
Impairment(1)	-	24.8	-	24.8
Other operating expenses, net	99.6	55.5	-	155.1
Operating income	54.1	17.3	-	71.4
Other non-operating expense (income), net	0.2	(0.2)	1.3	1.3
Income (loss) from discontinued operations before income taxes and loss from classification to held for sale	53.9	17.5	(1.3)	70.1
Loss on sale of discontinued operations(2)	2.7	47.2	-	49.9
Income (loss) from discontinued operations before income taxes	51.2	(29.7)	(1.3)	20.2
Benefit from income taxes	(5.8)	(7.0)	(1.7)	(14.5)
Income (loss) from discontinued operations	$	57.0	$	(22.7)	$	0.4	$	34.7

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

(2)Includes expenses related to legal fees, stock-based compensation, and loss on valuation allowance that were related to the sales of CFT and CIT, which are incorporated into the (gain)/loss on sale of discontinued operations upon the close of the sale, but incurred prior to the close of the transaction.

Expense reflected in CIT, CFT and Other in the third quarter and CFT and Other the first nine months of 2024 are primarily related to legal matters related to the sold businesses.

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


(in millions)	December 31, 2023
ASSETS
Cash and cash equivalents	$	28.8
Receivables, net	145.5
Inventories	149.5
Contract assets	75.9
Prepaid other current assets	23.7

Property, plant, and equipment, net	183.4
Goodwill	838.0
Other intangible assets, net	259.3
Other long-term assets	21.5
Total assets of the disposal group classified as held for sale	$	1,725.6

LIABILITIES
Accounts payable	$	84.3
Contract liabilities	1.4
Accrued liabilities and other	52.4

Other long-term liabilities	80.7
Total liabilities of the disposal group classified as held for sale	$	218.8

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


Nine Months Ended September 30, 2024
(in millions)	CIT	CFT	Other	Total
Net cash provided by (used in) operating activities	$	9.0	$	(8.6)	$	(2.2)	$	(1.8)
Net cash provided by investing activities	1,986.3	-	-	1,986.3
Net cash (used in) provided by financing activities(1)	(2,024.1)	8.6	2.2	(2,013.3)
Change in cash and cash equivalents from discontinued operations	(28.8)	-	-	(28.8)
Cash and cash equivalents from discontinued operations at beginning of period	28.8	-	-	28.8
Cash and cash equivalents from discontinued operations at end of period	$	-	$	-	$	-	$	-


Nine Months Ended September 30, 2023
(in millions)	CIT	CFT	Other	Total
Net cash provided by operating activities	$	99.4	$	50.7	$	0.4	$	150.5
Net cash used in investing activities	(17.4)	(1.6)	-	(19.0)
Net cash used in financing activities(1)	(87.1)	(56.0)	(0.4)	(143.5)
Change in cash and cash equivalents from discontinued operations	(5.1)	(6.9)	-	(12.0)
Cash and cash equivalents from discontinued operations at beginning of period	23.9	11.3	-	35.2
Cash and cash equivalents from discontinued operations at end of period	$	18.8	$	4.4	$	-	$	23.2

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

Note 6-Earnings Per Share

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

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

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

Income from continuing operations and share data used in the basic and diluted earnings per share computations using the two-class method follows:


Three Months Ended September 30,	Nine Months Ended September 30,
(in millions, except per share amounts and percentages)	2024	2023	2024	2023
Income from continuing operations	$	246.6	$	216.9	$	702.7	$	527.2
Less: dividends declared	45.9	42.2	127.7	119.5
Undistributed earnings	200.7	174.7	575.0	407.7
Percent allocated to common stockholders(1)	99.8	%	99.8	%	99.8	%	99.8	%
Undistributed earnings allocated to common stockholders	200.3	174.3	573.9	406.7
Add: dividends declared to common shares, restricted share units and vested and deferred restricted and performance shares	45.8	42.1	127.4	119.3
Income from continuing operations attributable to common stockholders	$	246.1	$	216.4	$	701.3	$	526.0

Shares:
Basic weighted-average shares outstanding	45.9	49.5	47.0	50.4
Effect of dilutive securities:
Performance awards	0.2	0.2	0.2	0.2
Stock options	0.4	0.4	0.4	0.4
Diluted weighted-average shares outstanding	46.5	50.1	47.6	51.0

Per share income from continuing operations attributable to common shares:
Basic	$	5.36	$	4.37	$	14.93	$	10.43
Diluted	$	5.30	$	4.32	$	14.74	$	10.32

(1)	Basic weighted-average shares outstanding	45.9	49.5	47.0	50.4
Basic weighted-average shares outstanding and unvested restricted shares expected to vest	46.0	49.6	47.1	50.6
Percent allocated to common stockholders	99.8	%	99.8	%	99.8	%	99.8	%

To calculate earnings per share for income from discontinued operations and for net income, the denominator for both basic and diluted earnings per share is the same as used in the above table.


Three Months Ended September 30,	Nine Months Ended September 30,
(in millions)	2024	2023	2024	2023
(Loss) income from discontinued operations attributable to common stockholders for basic and diluted earnings per share	$	(2.3)	$	48.6	$	445.4	$	34.7
Net income attributable to common stockholders for basic and diluted earnings per share	243.8	264.9	1,146.8	560.5
Anti-dilutive stock options excluded from earnings per share calculation(1)	-	0.6	0.1	0.7

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

Note 7-Revenue Recognition

The Company receives payment at the inception of the contract for separately priced extended service warranties, and revenue is deferred and recognized on a straight-line basis over the life of the contracts. Remaining performance obligations for extended service warranties represent the transaction price for the remaining stand-ready obligation to perform warranty services. A summary of estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of September 30, 2024, follows:


(in millions)	Remainder of 2024	2025	2026	2027	2028	2029	Thereafter
Extended service warranties	$	7.1	$	28.0	$	27.0	$	25.9	$	24.9	$	23.9	$	206.4

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

Contract Balances

Contract liabilities relate to payments received in advance of performance under a contract, primarily related to extended service warranties in the CCM and CWT reportable segments. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract. A summary of the change in contract liabilities for the nine months ended September 30, follows:


(in millions)	2024	2023
Balance as of January 1	$	324.0	$	294.8
Revenue recognized	(21.5)	(20.1)
Revenue deferred	40.7	40.1
Balance as of September 30	$	343.2	$	314.8

Revenues by End-Market

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


Three Months Ended September 30, 2024
(in millions)	CCM	CWT	Total
General construction:
Non-residential	$	922.2	$	161.6	$	1,083.8
Residential	76.0	141.5	217.5
Total construction	998.2	303.1	1,301.3
Heavy equipment	-	26.1	26.1
General industrial and other	-	6.2	6.2
Total revenues	$	998.2	$	335.4	$	1,333.6

Three Months Ended September 30, 2023
(in millions)	CCM	CWT	Total
General construction:
Non-residential	$	839.8	$	141.8	$	981.6
Residential	74.2	173.4	247.6
Total construction	914.0	315.2	1,229.2
Heavy equipment	-	26.3	26.3
General industrial and other	-	4.3	4.3
Total revenues	$	914.0	$	345.8	$	1,259.8


Nine Months Ended September 30, 2024
(in millions)	CCM	CWT	Total
General construction:
Non-residential	$	2,647.8	$	459.4	$	3,107.2
Residential	222.9	451.0	673.9
Total construction	2,870.7	910.4	3,781.1
Heavy equipment	-	81.9	81.9
General industrial and other	-	17.7	17.7
Total revenues	$	2,870.7	$	1,010.0	$	3,880.7

Nine Months Ended September 30, 2023
(in millions)	CCM	CWT	Total
General construction:
Non-residential	$	2,235.7	$	418.9	$	2,654.6
Residential	201.8	510.9	712.7
Total construction	2,437.5	929.8	3,367.3
Heavy equipment	-	80.8	80.8
General industrial and other	-	11.3	11.3
Total revenues	$	2,437.5	$	1,021.9	$	3,459.4

Revenues by Geographic Area

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


Three Months Ended September 30, 2024
(in millions)	CCM	CWT	Total
United States	$	902.4	$	297.1	$	1,199.5
International:
Europe	62.2	4.9	67.1
North America (excluding U.S.)	26.0	28.8	54.8
Asia and Middle East	5.7	2.0	7.7
Africa	-	1.1	1.1
Other	1.9	1.5	3.4
Total international	95.8	38.3	134.1
Total revenues	$	998.2	$	335.4	$	1,333.6

Three Months Ended September 30, 2023
(in millions)	CCM	CWT	Total
United States	$	830.0	$	305.4	$	1,135.4
International:
Europe	52.1	4.3	56.4
North America (excluding U.S.)	24.1	29.9	54.0
Asia and Middle East	6.0	2.5	8.5
Africa	0.3	2.0	2.3
Other	1.5	1.7	3.2
Total international	84.0	40.4	124.4
Total revenues	$	914.0	$	345.8	$	1,259.8


Nine Months Ended September 30, 2024
(in millions)	CCM	CWT	Total
United States	$	2,608.5	$	895.5	$	3,504.0
International:
Europe	176.1	15.7	191.8
North America (excluding U.S.)	66.1	85.7	151.8
Asia and Middle East	13.5	5.5	19.0
Africa	0.3	2.7	3.0
Other	6.2	4.9	11.1
Total international	262.2	114.5	376.7
Total revenues	$	2,870.7	$	1,010.0	$	3,880.7

Nine Months Ended September 30, 2023
(in millions)	CCM	CWT	Total
United States	$	2,194.4	$	903.5	$	3,097.9
International:
Europe	156.9	14.3	171.2
North America (excluding U.S.)	67.3	87.3	154.6
Asia and Middle East	13.1	7.1	20.2
Africa	0.9	4.5	5.4
Other	4.9	5.2	10.1
Total international	243.1	118.4	361.5
Total revenues	$	2,437.5	$	1,021.9	$	3,459.4

Note 8-Stock-Based Compensation

Stock-based compensation cost by award type follows:


(in millions)	Three Months Ended September 30,	Nine Months Ended September 30,
2024	2023	2024	2023
Stock option awards	$	3.5	$	3.6	$	10.8	$	11.0
Performance share awards	2.7	2.2	7.4	6.8
Restricted stock awards	1.8	1.8	7.4	6.6
Total stock-based compensation cost incurred	8.0	7.6	25.6	24.4
Capitalized cost during the period	(0.7)	(1.1)	(2.5)	(3.4)
Amortization of capitalized cost during the period	0.7	1.1	2.6	3.6
Total stock-based compensation expense	$	8.0	$	7.6	$	25.7	$	24.6

Note 9-Income Taxes

The effective income tax rate on continuing operations for the nine months ended September 30, 2024, was 22.7%. The year-to-date provision for income taxes included taxes on earnings at an anticipated rate of 23.7% and a tax benefit of $9.2 million of discrete activity primarily related to excess tax benefits from employee stock compensation.

The effective income tax rate on continuing operations for the nine months ended September 30, 2023, was 23.1%.

Note 10-Inventories


(in millions)	September 30, 2024	December 31, 2023
Raw materials	$	156.8	$	120.9
Work-in-process	26.1	26.2
Finished goods	289.5	222.5
Reserves	(10.0)	(7.9)
Inventories	$	462.4	$	361.7

Note 11-Accrued and Other Current Liabilities


(in millions)	September 30, 2024	December 31, 2023
Customer incentives	$	96.2	$	112.7
Compensation and benefits	87.7	77.2
Standard product warranties	28.6	24.9
Income and other accrued taxes	30.5	19.9
Other accrued liabilities	67.4	58.2
Accrued and other current liabilities	$	310.4	$	292.9

Standard Product Warranties

The Company offers various standard warranty programs on its products, primarily for certain installed roofing systems. The Company's liability for such warranty programs is included in accrued and other current liabilities. The change in standard product warranty liabilities for the nine months ended September 30, follows:


(in millions)	2024	2023
Balance as of January 1	$	24.9	$	25.2
Provision	15.2	10.3
Acquired warranty obligations	0.8	-
Claims	(12.4)	(12.0)
Foreign exchange	0.1	(0.1)
Balance as of September 30	$	28.6	$	23.4

Note 12-Long-term Debt


(in millions)	Fair Value(1)
September 30, 2024	December 31, 2023	September 30, 2024	December 31, 2023
2.20% Notes due 2032	$	550.0	$	550.0	$	465.5	$	445.9
2.75% Notes due 2030	750.0	750.0	689.2	666.2
3.75% Notes due 2027	600.0	600.0	590.0	575.2
3.50% Notes due 2024	400.0	400.0	398.6	392.5
Unamortized discount, debt issuance costs and other	(9.8)	(10.6)
Total long term-debt	2,290.2	2,289.4
Less: current portion of debt	403.0	402.7
Long term-debt, less current portion	$	1,887.2	$	1,886.7

(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, the debt instruments are classified as Level 2 in the fair value hierarchy.

Revolving Credit Facility

On April 3, 2024, the Company and Carlisle, LLC, as co-borrowers, entered into a Fifth Amended and Restated Credit Agreement (the "Credit Agreement") with JPMorgan Chase Bank, N.A. as administrative agent, and the lenders party thereto. The Credit Agreement provides for a $1.0 billion unsecured revolving line of credit with a maturity date of April 3, 2029 and amends and restates the Company's Fourth Amended and Restated Credit Agreement, as amended (the "Prior Credit Agreement"), which was scheduled to expire on February 5, 2025. Borrowings under the Credit Agreement bear interest, at the Company's election, (i) at the Base Rate plus a margin ranging from 0.00% to 0.50% or (ii) at the applicable benchmark rate plus a margin ranging from 0.825% to 1.500%, in each case, based on the Company's debt rating from time to time. The benchmark rate for loans denominated in (i) U.S. dollars is the Adjusted Term SOFR Rate, (ii) Canadian dollars is the Adjusted Term CORRA Rate, (iii) Sterling is Daily Simple SONIA, (iv) euros is the Adjusted EURIBOR Rate and (v) yen is Adjusted TIBOR Rate. The commitments are also subject to a facility fee on the daily aggregate amount of the revolving commitment (whether used or unused) ranging from 0.05% to 0.25% based on the Company's debt rating from time to time. Funding of the loans under the Credit Agreement is subject to customary drawdown conditions. The Company incurred $1.9 million of financing costs in the second quarter of 2024 in connection with finalizing the Credit Agreement, which together with any existing unamortized costs, will be recognized ratably over the new extended maturity date of the Credit Agreement.

During the nine months ended September 30, 2024, borrowings and repayments under the Credit Agreement totaled $22.0 million with a weighted average interest rate of 8.50%. As of September 30, 2024 and December 31, 2023, the Company had no outstanding balance and $1.0 billion available for use under the Credit Agreement and the Prior Credit Agreement, respectively.

Covenants and Limitations

Under the Company's debt and credit facilities, the Company is required to meet various 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 financial covenants and limitations as of September 30, 2024 and December 31, 2023.

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 its own financial and performance assurance to third parties. The Company has not issued any guarantees on behalf of any third parties. As of September 30, 2024 and December 31, 2023, the Company had $22.9 million and $17.6 million in letters of credit and bank guarantees outstanding. The Company has multiple arrangements to obtain letters of credit, which include an agreement with unspecified availability and separate agreements for up to $80.0 million in letters of credit, of which $57.1 million was available for use as of September 30, 2024.

Note 13-Employee Benefit Plans

Defined Benefit Plans

The Company recognizes net periodic benefit cost based on the actuarial analysis performed at the previous year end, adjusted if certain significant events occur during the year. The components of net periodic benefit cost follows:


Three Months Ended September 30,	Nine Months Ended September 30,
(in millions)	2024	2023	2024	2023
Service cost	$	0.6	$	0.5	$	1.7	$	1.6
Interest cost	1.5	1.6	4.5	4.7
Expected return on plan assets	(2.0)	(2.0)	(5.9)	(6.1)
Amortization of unrecognized loss(1)	0.6	0.3	1.8	1.0
Net periodic benefit cost	$	0.7	$	0.4	$	2.1	$	1.2

(1)Includes amortization of unrecognized actuarial (gain) loss and prior service credits and excludes provision for income tax of $(0.1) million and $(0.4) million for the three and nine months ended September 30, 2024, respectively, and $(0.1) million and $(0.2) million for the three and nine months ended September 30, 2023, respectively.

The components of net periodic benefit cost, other than the service cost component, are included in other non-operating expense, net.

Subsequent Event

In October 2024, the Company entered into an agreement under which approximately $55 million of $134.3 million in pension obligations in its defined benefit pension plans were transferred to an insurance company. Under the agreement, the Company will purchase a group annuity contract for approximately 1,300 plan participants that will provide for an irrevocable commitment to make annuity payments to the affected participants. The payment obligation for the affected participants will be transferred from the pension plans to the insurance company. The transfer will not change the amount of the monthly pension benefits received by the affected participants.

The purchase of the group annuity contract will be funded through existing plan assets. The Company expects to recognize a non-cash pension settlement charge of approximately $21 million before tax in the fourth quarter of 2024. This charge represents the acceleration of deferred charges currently accrued in accumulated other comprehensive loss. The actual amount of the settlement charge will depend on the value of plan assets and the discount rate as of the measurement date.

Note 14-Financial Instruments

Foreign Currency Forward Contracts

The Company uses foreign currency forward contracts to 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.

A summary of the Company's designated and non-designated hedges follows:


September 30, 2024	December 31, 2023
(in millions)	Fair Value(1)	Notional Value	Fair Value(1)	Notional Value
Designated hedges	$	(0.3)	$	30.2	$	(0.9)	$	26.6
Non-designated hedges	(0.2)	33.8	(0.6)	56.4

(1)The fair value of foreign currency forward contracts is included in other current assets (accrued and other current liabilities). 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 fair value hierarchy.

Designated Hedges

For instruments that are designated and qualify as cash flow hedges, the Company had foreign currency forward contracts with maturities less than one year. The changes in the fair value of the contracts are recorded in accumulated other comprehensive income (loss) and recognized in the same line item as the impact of the hedged item, revenues or cost of sales, when the underlying forecasted transaction impacts earnings. The change in accumulated other comprehensive loss related to foreign currency cash flow hedges was immaterial for the three and nine months ended September 30, 2024 and 2023. Gains and losses on the contracts representing hedge components excluded from the assessment of hedge effectiveness are recognized in the same line item as the hedged item, revenues or cost of sales, currently.

Non-Designated Hedges

For instruments that are not designated as a cash flow hedge, the Company had foreign exchange contracts with maturities less than one year. The unrealized gains and losses resulting from these contracts were immaterial for the three and nine months ended September 30, 2024 and 2023, and are recognized in other non-operating expense, net and partially offset corresponding foreign exchange gains and losses on these balances.

Rabbi Trust

The Company has established a Rabbi Trust to provide for a degree of financial security to cover its obligations under its deferred compensation plan. Contributions to the Rabbi Trust by the Company are made at the discretion of management and generally are made in cash and invested in money-market funds. The Company consolidates the Rabbi Trust and therefore includes the investments in its Condensed Consolidated Balance Sheets. As of September 30, 2024 and December 31, 2023, the Company had $4.3 million and $4.4 million of cash, respectively, and $12.3 million and $11.5 million of short-term investments, respectively. The short-term investments are classified as trading securities and are measured at fair value using quoted market prices in active markets (i.e., Level 1 measurements) with changes in fair value recorded in net income and the associated cash flows presented as operating cash flows.

Investment Securities

In accordance with its investment policy, the Company invests its excess cash from time-to-time in investment grade bonds and other securities to achieve higher yields. As of September 30, 2024 and December 31, 2023, the Company had $20.1 million and $19.8 million of investment grade bonds, respectively. The investment grade bonds are classified as available-for-sale and measured at fair value using quoted market prices in active markets (i.e., Level 1 measurements) with changes in fair value recorded in accumulated comprehensive income (loss), until realized, and the associated cash flows presented as investing cash flows.

Other Financial Instruments

Other financial instruments include cash and cash equivalents, accounts receivable, net, accounts payable, accrued expenses and long-term debt. The carrying value for cash and cash equivalents, accounts receivable, net, accounts payable and accrued expenses approximates fair value because of their short-term nature and generally negligible credit losses (refer to Note 12 for the fair value of long-term debt).

Note 15-Commitments and Contingencies

Litigation

Over the years, the Company has been named as a defendant, along with numerous other defendants, in lawsuits in various courts in which plaintiffs have alleged injury due to exposure to asbestos-containing friction products produced and sold predominantly by the Company's discontinued Motion Control business between the late-1940s and the mid-1980s and roofing products produced and sold by Henry Company LLC, which the Company acquired on September 1, 2021. The Company has been subject to liabilities for indemnity and defense costs associated with these lawsuits.

The Company has recorded a liability for estimated indemnity costs associated with pending and future asbestos claims. As of September 30, 2024, the Company believes that its accrual for these costs is not material to the Company's financial position, results of operations, or operating cash flows.

The Company recognizes expenses for defense costs associated with asbestos claims during the periods in which they are incurred. Refer to the 2023 Annual Report on Form 10-K for the Company's accounting policy related to litigation defense costs.

The Company currently maintains insurance coverage and is the beneficiary of other arrangements that provide coverage with respect to asbestos-related claims and associated defense costs. The Company records the insurance coverage as a receivable in an amount it reasonably estimates is probable of recovery for pending and future asbestos-related indemnity claims. Since the Company's insurance coverage contains various exclusions, limits of coverage and self-insured retentions and may be subject to insurance coverage disputes, the Company may incur expenses for indemnity and defense costs and recognize income from insurance recoveries in different periods, as such recoveries are recorded only if and when it becomes probable that such costs will be covered by insurance.

The Company is also involved in various other legal actions and proceedings arising in the ordinary course of business. In the opinion of management, the ultimate outcomes of such actions and proceedings, either individually or in the aggregate, are not expected to have a material adverse effect on the Company's financial position, results of operations, or operating cash flows.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Carlisle Companies Incorporated ("Carlisle", the "Company", "we", "us" or "our") is a leading manufacturer and supplier of innovative building envelope products and solutions for more energy efficient buildings. Through our building products businesses, Carlisle Construction Materials ("CCM") and Carlisle Weatherproofing Technologies ("CWT"), and family of leading brands, we deliver innovative, labor-reducing and environmentally responsible products and solutions to customers through the Carlisle Experience. Carlisle is committed to generating superior stockholder returns and maintaining a balanced capital deployment approach, including investments in our businesses, strategic acquisitions, share repurchases and continued dividend increases.

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 perspective of Company management. All references to "Notes" refer to our Notes to Condensed Consolidated Financial Statements in Item 1 of this Quarterly Report on Form 10-Q.

Executive Overview

Carlisle delivered another quarter of strong performance, despite a continued decline in residential markets along with the impact of weather-related and port strike events, which negatively impacted shipping days, contractor days on the roof and manufacturing output. We continued to execute on our Vision 2030 strategies, and we are pleased with our third quarter performance against our 2030 goals.

CCM continued its strong momentum with its 2024 accomplishments into the third quarter, driven by healthy contractor backlogs, robust re-roofing activity, and excellent margin performance. CCM sales were up 9% year-over-year assisted by the inventory normalization in the channel and the acquisition of MTL Holdings LLC ("MTL"). CCM's 30.4% operating margin and 32.8% adjusted EBITDA margin in the third quarter reflected strong volume leverage, a positive raw material environment, and excellent operating execution through the Carlisle Operating System (COS).

As we look at CWT's performance, while we were pleased with progress on share gain initiatives within CWT, a higher interest rate environment, low housing turnover, and affordability challenges resulted in a further slowing of housing activity in the quarter. For the quarter, these challenges impacted sales and drove a decline of 3% year-over-year. Despite the near-term challenges facing CWT, we remain pleased and optimistic about the prospects for this segment.

We continue to be encouraged by the positive long-term outlook in the North American building products markets and the strength of the Carlisle business model. Our pivot to a "pure play" building products company is delivering the expected outcomes and demonstrating our commitment to being superior capital allocators. Additionally, we believe that leveraging the megatrends around energy efficiency and labor savings, along with growing re-roof demand, and our introduction of innovative new products, are creating additional catalysts for growth. Similar to Vision 2025, we believe Vision 2030 positions us well to drive above-market growth and earn a premium in the marketplace.

Carlisle remains committed to generating superior shareholder returns through our balanced capital deployment approach. This quarter, we repurchased 1.1 million shares of our common stock for $466.1 million and increased our dividend 18%, marking the 48th consecutive annual dividend increase.

We are excited about our recent agreement to acquire PFB Holdco, Inc. ("Plasti-Fab"), which aligns with our Vision 2030 strategy to enhance our "best-in-class" building envelope product portfolio following the completion of our pivot to a "pure play" building products company earlier this year. The acquisition of Plasti-Fab establishes Carlisle as a leading manufacturer in the $1.5 billion North American expanded polystyrene insulation market and provides vertically integrated polystyrene capabilities to our Insulfoam business while adding scale, supporting retail channel growth, and filling key geographic gaps in the U.S. and Canada.

Summary of Financial Results


Three Months Ended September 30,	Nine Months Ended September 30,
(in millions, except per share amounts and percentages)	2024	2023	2024	2023
Revenues	$	1,333.6	$	1,259.8	$	3,880.7	$	3,459.4
Operating income	$	316.4	$	299.9	$	919.1	$	729.2
Operating margin	23.7	%	23.8	%	23.7	%	21.1	%
Income from continuing operations	$	246.6	$	216.9	$	702.7	$	527.2
(Loss) income from discontinued operations	$	(2.3)	$	48.7	$	446.3	$	34.7
Diluted earnings per share attributable to common shares:
Income from continuing operations	$	5.30	$	4.32	$	14.74	$	10.32
(Loss) income from discontinued operations	$	(0.05)	$	0.97	$	9.36	$	0.68

Adjusted EBITDA(1)	$	367.9	$	339.7	$	1,051.0	$	855.7
Adjusted EBITDA margin(1)	27.6	%	27.0	%	27.1	%	24.7	%

(1)Adjusted EBITDA and adjusted EBITDA margin are intended to provide investors and others with information about Carlisle's and our segments' performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items. Refer to Non-GAAP Financial Measures in this MD&A for more information about, and a detailed reconciliation of, these items.

Consolidated Results of Operations

Revenues


(in millions, except percentages)	2024	2023	Change	%	Organic	Acquisition Effect	Exchange Rate Effect
Three months ended September 30	$	1,333.6	$	1,259.8	$	73.8	5.9	%	2.9	%	3.0	%	-	%
Nine months ended September 30	$	3,880.7	$	3,459.4	$	421.3	12.2	%	10.2	%	2.0	%	-	%

Revenues increased in the third quarter and the first nine months of 2024, primarily reflecting higher sales in our non-residential construction end market of $102.2 million and $452.6 million, respectively, as continued inventory normalization and growing re-roof activity led to increased construction activity in the quarter and the year to date period.

Gross Margin


(in millions, except percentages)	Three Months Ended September 30,	Nine Months Ended September 30,
2024	2023	Change	%	2024	2023	Change	%
Gross margin	$	514.4	$	466.1	$	48.3	10.4	%	$	1,482.2	$	1,214.5	$	267.7	22.0	%
As a percentage of revenues	38.6	%	37.0	%	38.2	%	35.1	%
Depreciation and amortization	$	16.4	$	15.3	$	46.7	$	44.8

Gross margin as a percentage of revenues increased in the third quarter and the first nine months of 2024, driven primarily by volume leverage on strong sales growth in our CCM segment.

Selling and Administrative Expenses


(in millions, except percentages)	Three Months Ended September 30,	Nine Months Ended September 30,
2024	2023	Change	%	2024	2023	Change	%
Selling and administrative expenses	$	191.8	$	161.7	$	30.1	18.6	%	$	547.9	$	467.6	$	80.3	17.2	%
As a percentage of revenues	14.4	%	12.8	%	14.1	%	13.5	%
Depreciation and amortization	$	27.8	$	23.4	$	78.8	$	70.0

Selling and administrative expenses increased in the third quarter of 2024, primarily driven by higher wage and benefit expenses of $11.6 million, increased sales and marketing expenses of $7.0 million due to increased commissions expense as a result of higher sales volumes and increased amortization expense of $4.6 million primarily from the acquisition of MTL.

Selling and administrative expenses increased in the first nine months of 2024, primarily driven by higher wage and benefit expenses of $34.2 million, increased sales and marketing expenses of $19.6 million due to increased

commissions expense as a result of higher sales volumes and increased amortization expense of $8.9 million primarily from the acquisition of MTL.

Research and Development Expenses


(in millions, except percentages)	Three Months Ended September 30,	Nine Months Ended September 30,
2024	2023	Change	%	2024	2023	Change	%
Research and development expenses	$	8.1	$	7.2	$	0.9	12.5	%	$	26.6	$	20.7	$	5.9	28.5	%
As a percentage of revenues	0.6	%	0.6	%	0.7	%	0.6	%
Depreciation and amortization	$	0.4	$	0.3	$	1.1	$	1.0

Research and development expenses were higher in the third quarter and the first nine months of 2024, primarily reflecting higher new product development expenses at our CCM segment ($0.6 million in the third quarter and $5.0 million in the first nine months of 2024) and CWT segment ($0.3 million in the third quarter and $0.9 million in the first nine months of 2024). The increase in research and development expenses is consistent with a key pillar of Vision 2030 to drive innovation, with a commitment to investing in the creation of new products and solutions that add value through advancements in sustainability and energy and labor efficiencies.

Other Operating Income, net


(in millions, except percentages)	Three Months Ended September 30,	Nine Months Ended September 30,
2024	2023	Change	%	2024	2023	Change	%
Other operating income, net	$	(1.9)	$	(2.7)	$	0.8	NM	$	(11.4)	$	(3.0)	$	(8.4)	NM

Other operating income, net, decreased in the third quarter of 2024, primarily driven by a $1.5 million loss from litigation settlements in the third quarter of 2024.

Other operating income, net, increased in the first nine months of 2024, primarily driven by a $5.0 million gain from an insurance settlement received in the second quarter of 2024.

Operating Income


(in millions, except percentages)	Three Months Ended September 30,	Nine Months Ended September 30,
2024	2023	Change	%	2024	2023	Change	%
Operating income	$	316.4	$	299.9	$	16.5	5.5	%	$	919.1	$	729.2	$	189.9	26.0	%
Operating margin percentage	23.7	%	23.8	%	23.7	%	21.1	%

Refer toSegment Results of Operationswithin this MD&A for further information related to segment operating income results.

Interest Expense, net


(in millions, except percentages)	Three Months Ended September 30,	Nine Months Ended September 30,
2024	2023	Change	%	2024	2023	Change	%
Interest expense, net	$	18.6	$	19.4	$	(0.8)	(4.1)	%	$	56.0	$	57.0	$	(1.0)	(1.8)	%

Interest expense, net of capitalized interest, decreased in the third quarter and the first nine months of 2024, primarily reflecting lower long-term debt balances associated with the redemption of $300.0 million of our 0.55% unsecured senior notes in September 2023. Refer to Note 12 for further information on our long-term debt.

Interest Income


(in millions, except percentages)	Three Months Ended September 30,	Nine Months Ended September 30,
2024	2023	Change	%	2024	2023	Change	%
Interest income	$	(22.6)	$	(3.6)	$	(19.0)	NM	$	(44.3)	$	(12.5)	$	(31.8)	NM

Interest income increased during the third quarter and the first nine months of 2024, primarily reflecting higher yields and a higher invested cash balance due to proceeds from the sale of Carlisle Interconnect Technologies ("CIT") in the second quarter of 2024.

Other Non-operating (Income) Expense, net


(in millions, except percentages)	Three Months Ended September 30,	Nine Months Ended September 30,
2024	2023	Change	%	2024	2023	Change	%
Other non-operating (income) expense, net	$	(1.1)	$	0.6	$	(1.7)	NM	$	(1.5)	$	(1.2)	$	(0.3)	NM

Other non-operating (income) expense, net, increased in the third quarter of 2024, primarily reflecting favorable changes to Rabbi Trust investments of $1.2 million and to foreign currencies against the U.S. Dollar of $0.7 million, partially offset by unfavorable changes to pension assets of $0.3 million.

Other non-operating (income) expense, net, increased in the first nine months of 2024, primarily reflecting favorable changes to Rabbi Trust investments of $1.2 million, partially offset by unfavorable changes to pension assets of $0.8 million.

Income Taxes


(in millions, except percentages)	Three Months Ended September 30,	Nine Months Ended September 30,
2024	2023	Change	%	2024	2023	Change	%
Provision for income taxes	$	74.9	$	66.6	$	8.3	12.5	%	$	206.2	$	158.7	$	47.5	29.9	%
Effective tax rate	23.3	%	23.5	%	22.7	%	23.1	%

The increase in provision for income taxes on continuing operations for the first nine months of 2024, primarily reflected higher pre-tax income. The year-to-date provision for income taxes included taxes on earnings at an anticipated rate of 23.7% and a tax benefit of $9.2 million of discrete activity primarily related to excess tax benefits from employee stock compensation.

(Loss) Income from Discontinued Operations


(in millions)	Three Months Ended September 30,	Nine Months Ended September 30,
2024	2023	Change	%	2024	2023	Change	%
(Loss) income before income taxes	$	(4.4)	$	43.2	$	(47.6)	NM	$	497.7	$	20.2	$	477.5	NM
(Benefit from) provision for income taxes	(2.1)	(5.5)	51.4	(14.5)
(Loss) income from discontinued operations	$	(2.3)	$	48.7	$	446.3	$	34.7

(Loss) income from discontinued operations for the third quarter of 2024 primarily reflected legal matters related to Carlisle Interconnect Technologies ("CIT") and Carlisle Fluid Technologies ("CFT"), which were sold in May 2024 and October 2023, respectively, compared to full operating results from CIT and CFT product lines in 2023.

(Loss) income from discontinued operations for the first nine months of 2024 primarily reflected the pre-tax gain on sale of the CIT business of $457.3 million and operating results of $56.2 million compared to the pre-tax loss on sale of the CFT business of $47.2 million, partially offset by operating results of $53.9 million from CIT and $17.5 million from CFT in the first nine months of 2023.

Refer to Note 5 for further information on our discontinued operations.

Segment Results of Operations

Carlisle Construction Materials

This segment produces a complete line of premium energy-efficient single-ply roofing products and warranted roof systems and accessories for the commercial building industry, including ethylene propylene diene monomer

("EPDM"), thermoplastic polyolefin ("TPO") and polyvinyl chloride ("PVC") membrane, polyisocyanurate ("polyiso") insulation, and engineered metal roofing and wall panel systems for commercial and residential buildings.


(in millions)	Three Months Ended September 30,	Organic	Acquisition Effect	Exchange Rate Effect
2024	2023	Change	%
Revenues	$	998.2	$	914.0	$	84.2	9.2	%	5.6	%	3.6	%	-	%
Operating income	$	303.0	$	272.5	$	30.5	11.2	%
Operating margin	30.4	%	29.8	%
Adjusted EBITDA(1)	$	327.6	$	289.4	$	38.2	13.2	%
Adjusted EBITDA margin(1)	32.8	%	31.7	%


(in millions, except percentages)	Nine Months Ended September 30,	Organic	Acquisition Effect	Exchange Rate Effect
2024	2023	Change	%
Revenues	$	2,870.7	$	2,437.5	$	433.2	17.8	%	15.5	%	2.3	%	-	%
Operating income	$	861.0	$	675.6	$	185.4	27.4	%
Operating margin	30.0	%	27.7	%
Adjusted EBITDA(1)	$	918.6	$	721.9	$	196.7	27.2	%
Adjusted EBITDA margin(1)	32.0	%	29.6	%

CCM's revenue increase in the third quarter and the first nine months of 2024 primarily reflected higher sales in the non-residential end market of $82.4 million and $412.1 million, respectively, driven by inventory normalization and growing re-roof activity benefiting from pent-up demand. CCM's operating margin and adjusted EBITDA margin increase in the third quarter and the first nine months of 2024 primarily reflected volume leverage on higher sales.

Carlisle Weatherproofing Technologies

This segment produces building envelope solutions that drive energy efficiency and sustainability in commercial and residential applications. Products include high-performance waterproofing and moisture protection products, protective roofing underlayments, fully integrated liquid and sheet applied air/vapor barriers, sealants/primers and flashing systems, roof coatings and mastics, spray polyurethane foam and coating systems for a wide variety of thermal protection applications and other premium polyurethane products, block-molded expanded polystyrene insulation, engineered products for HVAC applications, and premium products for a variety of industrial and surfacing applications.


(in millions)	Three Months Ended September 30,	Organic	Acquisition Effect	Exchange Rate Effect
2024	2023	Change	%
Revenues	$	335.4	$	345.8	$	(10.4)	(3.0)	%	(4.3)	%	1.4	%	(0.1)	%
Operating income	$	46.8	$	58.8	$	(12.0)	(20.4)	%
Operating margin	14.0	%	17.0	%
Adjusted EBITDA(1)	$	69.3	$	80.8	$	(11.5)	(14.2)	%
Adjusted EBITDA margin(1)	20.7	%	23.4	%


(in millions, except percentages)	Nine Months Ended September 30,	Organic	Acquisition Effect	Exchange Rate Effect
2024	2023	Change	%
Revenues	$	1,010.0	$	1,021.9	$	(11.9)	(1.2)	%	(2.4)	%	1.3	%	(0.1)	%
Operating income	$	148.2	$	142.4	$	5.8	4.1	%
Operating margin	14.7	%	13.9	%
Adjusted EBITDA(1)	$	215.4	$	215.5	$	(0.1)	-	%
Adjusted EBITDA margin(1)	21.3	%	21.1	%

CWT's revenue decrease in the third quarter and the first nine months of 2024 primarily reflected lower sales in the residential end market of $31.9 million and $59.9 million, respectively, partially offset by higher sales in the non-residential end market of $19.8 million and $40.5 million, respectively.

CWT's operating margin and adjusted EBITDA margin decrease in the third quarter of 2024 primarily reflected higher operating costs to support longer term growth initiatives. CWT's operating margin and adjusted EBITDA margin stayed relatively flat in the first nine months of 2024.

Liquidity and Capital Resources

A summary of our cash and cash equivalents by region follows:


(in millions)	September 30, 2024	December 31, 2023
Europe	$	14.3	$	14.0
North America (excluding U.S.)	12.2	34.1
China	3.3	9.8
International cash and cash equivalents	29.8	57.9
U.S. cash and cash equivalents	1,500.8	518.8
Total cash and cash equivalents	$	1,530.6	$	576.7

We maintain liquidity sources primarily consisting of cash and cash equivalents as well as availability under our credit facilities. In the near term, cash on hand is our primary source of liquidity. The increase in cash and cash equivalents compared to December 31, 2023, is primarily related to proceeds from our sale of CIT and cash generated from operations, partially offset by cash used on share repurchases, the purchase of MTL, payment of dividends to stockholders and capital expenditures.

In certain countries, our cash is subject to local laws and regulations that require government approval for conversion of such cash to U.S. Dollars, as well as for transfer of such cash, both temporarily and permanently outside of that jurisdiction. In addition, upon permanent transfer of cash outside of certain jurisdictions, primarily in Canada, we may be subject to withholding taxes, and as such we have accrued $6.3 million in anticipation of those taxes as of September 30, 2024.

We believe we have sufficient cash on hand, availability under our credit facilities and operating cash flows to meet our anticipated business requirements for at least the next 12 months. At the discretion of management, the Company may use available cash on capital expenditures, dividends, acquisitions, strategic investments or repurchases, redemptions or retirements of securities, including our common stock.

We also anticipate we will have sufficient cash on hand, availability under our credit facilities and operating cash flows to meet our anticipated long-term business requirements and to pay outstanding principal balances of our existing notes by the respective maturity dates. Another potential source of liquidity is access to public capital markets, subject to market conditions. We may access the capital markets for a variety of reasons, including to repay the outstanding balances of our outstanding debt and fund acquisitions. Refer to Note 12 for information on our long-term debt.

Sources and Uses of Cash and Cash Equivalents


Nine Months Ended September 30,
(in millions)	2024	2023
Net cash provided by operating activities	$	659.7	$	812.4
Net cash provided by (used in) investing activities	1,508.9	(86.7)
Net cash used in financing activities	(1,242.9)	(994.5)
Effect of foreign currency exchange rate changes on cash and cash equivalents	(0.6)	-
Change in cash and cash equivalents	$	925.1	$	(268.8)

Operating Activities

We generated operating cash flows of $659.7 million for the first nine months of 2024 (including working capital uses of $200.6 million), compared to $812.4 million for the first nine months of 2023 (including working capital uses of $4.3 million). Lower operating cash flows of $152.7 million for the first nine months of 2024 primarily reflected

lower operating cash provided by discontinued operations of $152.3 million and higher working capital uses of $196.3 million, partially offset by higher income from continuing operations of $175.5 million.

The increase in working capital uses related to a decrease in cash from higher inventory investments in 2024 of $220.9 million, reflecting the end of destocking of inventory experienced in 2023 and increased construction activity, and accounts receivable of $11.8 million, reflecting higher sales volumes. The increase in working capital uses was partially offset by an increase in cash from accounts payable of $17.1 million, related to higher inventory investments, and in accrued expenses of $30.4 million, reflecting lower payments in the year for customer incentives, rebates and cash bonuses related to 2023 performance.

Investing Activities

Cash provided by investing activities of $1,508.9 million for the first nine months of 2024 primarily reflected proceeds from the sale of CIT, net of cash disposed, of $1,998.0 million, offset by the purchase of MTL for $414.3 million, net of cash acquired, and capital expenditures of $76.7 million. Cash used in investing activities of $86.7 million for the first nine months of 2023 primarily reflected capital expenditures of $106.3 million, partially offset by the sale of equipment of $18.7 million.

Financing Activities

Cash used in financing activities of $1,242.9 million in the first nine months of 2024 primarily reflected share repurchases of $1,166.1 million and cash dividend payments of $127.4 million, reflecting the increased quarterly dividend of $1.00 per share, partially offset by net proceeds of $55.4 million from the exercising of stock options. Cash used in financing activities of $994.5 million during the first nine months of 2023 primarily reflected share repurchases of $580.0 million, the repayment of senior notes of $300.0 million and cash dividend payments of $119.3 million.

Debt Instruments

Revolving Credit Facility

During the nine months ended September 30, 2024, borrowing and repayments under the Credit Agreement totaled $22.0 million with a weighted average interest rate of 8.50%. As of September 30, 2024 and December 31, 2023, the Company had no outstanding balance and $1.0 billion available for use under the Credit Agreement and Prior Credit Agreement, respectively.

Debt Covenants

We are required to meet various covenants and limitations under our senior notes and credit facilities, 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 as of September 30, 2024 and December 31, 2023.

Refer to Note 12 for further information on our debt instruments.

Non-GAAP Financial Measures

EBIT, Adjusted EBIT, Adjusted EBITDA and Adjusted EBITDA Margin

Earnings before interest and taxes ("EBIT"), adjusted EBIT, adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") and adjusted EBITDA margin are intended to provide investors and others with information about our performance and our segments' performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items. As a result, management believes that these measures enhance the ability of investors to analyze trends in our business and evaluate our performance relative to similarly-situated companies. This information differs from net income, operating income, and operating margin determined in accordance with GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with GAAP. Our and our segments' EBIT, adjusted EBIT, adjusted EBITDA and adjusted EBITDA margin follows. These non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies.


	Three Months Ended September 30,	Nine Months Ended September 30,
(in millions, except percentages)	2024	2023	2024	2023
Net income (GAAP)	$	244.3	$	265.6	$	1,149.0	$	561.9
Less: (Loss) income from discontinued operations	(2.3)	48.7	446.3	34.7
Income from continuing operations (GAAP)	246.6	216.9	702.7	527.2
Provision for income taxes	74.9	66.6	206.2	158.7
Interest expense, net	18.6	19.4	56.0	57.0
Interest income	(22.6)	(3.6)	(44.3)	(12.5)
EBIT	317.5	299.3	920.6	730.4
Exit and disposal, and facility rationalization costs	1.9	1.7	2.7	4.5
Inventory step-up amortization and transaction costs	2.7	-	4.8	1.6
Impairment charges	-	0.5	-	1.8
(Gains) losses from acquisitions and disposals	(0.3)	(0.7)	(0.6)	1.8
Gains from insurance	-	-	(5.0)	-
Losses (gains) from litigation	1.5	(0.1)	1.9	(0.2)
Total non-comparable items	5.8	1.4	3.8	9.5
Adjusted EBIT	323.3	300.7	924.4	739.9
Depreciation	17.5	16.8	51.7	48.9
Amortization	27.1	22.2	74.9	66.9
Adjusted EBITDA	$	367.9	$	339.7	$	1,051.0	$	855.7
Divided by:
Total revenues	$	1,333.6	$	1,259.8	$	3,880.7	$	3,459.4
Adjusted EBITDA margin	27.6	%	27.0	%	27.1	%	24.7	%


Three Months Ended September 30, 2024
(in millions)	CCM	CWT	Corporate and unallocated
Operating income (loss) (GAAP)	$	303.0	$	46.8	$	(33.4)
Non-operating (income) expense, net(1)	(0.5)	0.3	(0.9)
EBIT	303.5	46.5	(32.5)
Exit and disposal, and facility rationalization costs	1.3	0.6	-
Inventory step-up amortization and transaction costs	0.1	-	2.6
Gains from acquisitions and disposals	(0.1)	(0.2)	-
Losses from litigation	1.0	0.5	-
Total non-comparable items	2.3	0.9	2.6
Adjusted EBIT	305.8	47.4	(29.9)
Depreciation	13.0	4.1	0.4
Amortization	8.8	17.8	0.5
Adjusted EBITDA	$	327.6	$	69.3	$	(29.0)
Divided by:
Total revenues	$	998.2	$	335.4	$	-
Adjusted EBITDA margin	32.8	%	20.7	%	NM

(1)Includes other non-operating expense (income), net, which may be presented in separate line items on the Condensed Consolidated Statements of Income and Comprehensive Income.


Three Months Ended September 30, 2023
(in millions)	CCM	CWT	Corporate and unallocated
Operating income (loss) (GAAP)	$	272.5	$	58.8	$	(31.4)
Non-operating expense (income), net(1)	0.3	(0.2)	0.5
EBIT	272.2	59.0	(31.9)
Exit and disposal, and facility rationalization costs	1.7	-	-
Impairment charges	-	0.5	-
Gains from acquisitions and disposals	(0.2)	(0.5)	-
Gains from litigation	-	-	(0.1)
Total non-comparable items	1.5	-	(0.1)
Adjusted EBIT	273.7	59.0	(32.0)
Depreciation	11.7	4.1	1.0
Amortization	4.0	17.7	0.5
Adjusted EBITDA	$	289.4	$	80.8	$	(30.5)
Divided by:
Total revenues	$	914.0	$	345.8	$	-
Adjusted EBITDA margin	31.7	%	23.4	%	NM

(1)Includes other non-operating expense (income), net, which may be presented in separate line items on the Condensed Consolidated Statements of Income and Comprehensive Income.


Nine Months Ended September 30, 2024
(in millions, except percentages)	CCM	CWT	Corporate and unallocated
Operating income (loss) (GAAP)	$	861.0	$	148.2	$	(90.1)
Non-operating income, net(1)	-	-	(1.5)
EBIT	861.0	148.2	(88.6)
Exit and disposal, and facility rationalization costs	1.6	1.1	-
Inventory step-up amortization and transaction costs	1.9	-	2.9
Gains from acquisitions and disposals	(0.2)	(0.4)	-
Gains from insurance	(5.0)	-	-
Losses from litigation	1.0	0.9	-
Total non-comparable items	(0.7)	1.6	2.9
Adjusted EBIT	860.3	149.8	(85.7)
Depreciation	38.1	12.4	1.2
Amortization	20.2	53.2	1.5
Adjusted EBITDA	$	918.6	$	215.4	$	(83.0)
Divided by:
Total revenues	$	2,870.7	$	1,010.0	$	-
Adjusted EBITDA margin	32.0	%	21.3	%	NM

(1)Includes other non-operating expense (income), net, which may be presented in separate line items on the Condensed Consolidated Statements of Income and Comprehensive Income.


Nine Months Ended September 30, 2023
(in millions, except percentages)	CCM	CWT	Corporate and unallocated
Operating income (loss) (GAAP)	$	675.6	$	142.4	$	(88.8)
Non-operating income, net(1)	-	-	(1.2)
EBIT	675.6	142.4	(87.6)
Exit and disposal, and facility rationalization costs	1.8	2.7	-
Inventory step-up amortization and transaction costs	-	-	1.6
Impairment charges	-	1.8	-
(Gains) losses from acquisitions and disposals	(0.5)	2.4	(0.1)
Gains from litigation	-	-	(0.2)
Total non-comparable items	1.3	6.9	1.3
Adjusted EBIT	676.9	149.3	(86.3)
Depreciation	32.8	13.2	2.9
Amortization	12.2	53.0	1.7
Adjusted EBITDA	$	721.9	$	215.5	$	(81.7)
Divided by:
Total revenues	$	2,437.5	$	1,021.9	$	-
Adjusted EBITDA margin	29.6	%	21.1	%	NM

(1)Includes other non-operating expense (income), net, which may be presented in separate line items on the Condensed Consolidated Statements of Income and Comprehensive Income.

Outlook

Our expectations for segment and total revenues for the fourth quarter of 2024 follows:


Revenues	Primary Drivers
CCM	Mid single-digit growth	•Pent-up re-roofing demand driving contractor backlogs •Contributions from the acquisition of MTL
CWT	Low single-digit decline	•Lower demand in residential end markets •Offset by share gains from key growth initiatives
Total CSL	Low single-digit growth

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally use words such as "expect," "foresee," "anticipate," "believe," "project," "should," "estimate," "will," "plans," "intends," "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-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-effective basis; our mix of products/services; increases in raw material costs that cannot be recovered in product pricing; domestic and foreign governmental and public policy changes, including environmental and industry regulations; the ability to meet our goals relating to our intended reduction of greenhouse gas emissions, including our net zero commitments; threats associated with and efforts to combat terrorism; protection and validity of patent and other intellectual property rights; the identification of strategic acquisition targets and our successful completion of any transaction and integration of our strategic acquisitions; our successful completion of strategic dispositions; the cyclical nature of our businesses; the impact of information technology, cybersecurity or data security breaches at our businesses or third parties; the outcome of pending and future litigation and governmental proceedings; the emergence or continuation of widespread health emergencies such as the COVID-19 pandemic, including, for example, expectations regarding their impact on our businesses, including on customer demand, supply chains and distribution systems, production, our ability to maintain appropriate labor levels, our ability to ship products to our customers, our future results, or our full-year financial outlook; and the other factors discussed in the reports we file with or furnish to the Securities and Exchange Commission from time to time. 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 inflation and interest rate and currency exchange rate fluctuations. Further, any conflict in the international arena, including the Russian invasion of Ukraine and war in the Middle East, may adversely affect general market conditions and our future performance. Any forward-looking statement speaks only as of the date on which that statement is made, and we undertake no duty to update any forward-looking statement to reflect events or circumstances, including unanticipated events, after the date on which that statement is made, unless otherwise required by law. New factors emerge from time to time and it is not possible for management to predict all of those factors, nor can it assess the impact of each of those factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

There have been no material changes in the Company's market risk for the nine months ended September 30, 2024. For additional information, refer to "PART II-Item 7A. Quantitative and Qualitative Disclosures About Market Risk" of the Company's Annual Report on Form 10-K for the year ended December 31, 2023 ("2023 Annual Report on Form10-K").

Item 4. Controls and Procedures

a.Evaluation of disclosure controls and procedures. Under the supervision and with the participation of the Company's management, including the Company'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's disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended. Based upon that evaluation and as of September 30, 2024, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective.

b.Changes in internal controls. During the third quarter of 2024, there were no changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II-Other Information

Item 1A. Risk Factors

There have been no material changes in the Company's risk factors disclosed in "PART I-Item 1A. Risk Factors" in our 2023 Annual Report on Form 10-K.

Item 1. Legal Proceedings

The Company is a party to certain lawsuits in the ordinary course of business. Information about legal proceedings is included in Note 15.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes the repurchase of common stock during the three months ended September 30, 2024:


(in millions, except per share amounts)	Total Number of Shares Purchased(1)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(2)
July	0.6	$	420.38	0.6	5.0
August	0.3	401.08	0.3	4.7
September	0.2	417.46	0.2	4.5
Total	1.1	1.1

(1)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-based compensation. During the three months ended September 30, 2024, there were less than 0.1 million shares reacquired in transactions outside of the share repurchase program.

(2)Represents the remaining total number of shares that can be repurchased under the Company's share repurchase program. On August 3, 2023, the Company's Board of Directors approved a 7.5 million share increase in the Company's share repurchase program. The share repurchase program has no expiration date, does not obligate the Company to purchase any specified amount of shares and remains subject to the discretion of the Board of Directors.

Item 4. Mine Safety Disclosures

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 5. Other Information

None of the Company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company's fiscal quarter ended September 30, 2024.

Item 6. Exhibits


Exhibit Number	Filed with this Form 10-Q	Incorporated by Reference
Exhibit Title	Form	Date Filed
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).	X
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).	X
32.1	Section 1350 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X
101.INS	Inline XBRL Instance.	X
101.SCH	Inline XBRL Taxonomy Extension Schema.	X
101.CAL	Inline XBRL Taxonomy Extension Calculation.	X
101.LAB	Inline XBRL Taxonomy Extension Labels.	X
101.PRE	Inline XBRL Taxonomy Extension Presentation.	X
101.DEF	Inline XBRL Taxonomy Extension Definition.	X
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).	X

Signature

Pursuant to the requirements 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

Date:	October 25, 2024	By:	/s/ Kevin P. Zdimal
Kevin P. Zdimal
Vice President and Chief Financial Officer

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