SEC Company Response from CARLISLE COMPANIES (CSL) — Oct 29, 2008
CARLISLE COMPANIES INC
Date: Oct. 29, 2008 · CIK: 0000790051 · Accession: 0001104659-08-066472
AI Filing Summary & Sentiment
Referenced dates: October 10, 2008
Letter
Division of Corporation Finance Securities and Exchange Commission Re: Carlisle Companies Incorporated Form 10-K for Fiscal Year Ended December 31, Form 10-Q for Fiscal Quarter Ended June 30, File No. 1-9278
Dear Mr. Decker:
This letter is submitted by Carlisle Companies Incorporated (“Carlisle” or the “Company”) in response to the comment of the staff of the Division of Corporate Finance of the Securities and Exchange Commission as set forth in your letter dated October 10, 2008 relating to the Company’s (i) Form 10-K for the fiscal year-ended December 31, 2007, filed February 29, 2008 (the “2007 Form 10-K”), and (ii) Form 10-Q for the fiscal period ended June 30, 2008, filed August 7, 2008.
For your convenience, the text of your letter has been reproduced below in bold type with the response to each numbered comment set forth immediately below the comment.
General
1. Where a comment below requests additional disclosures or other revisions to be made, please show us in your supplemental response what the revisions will look like. These revisions should be included in your future filings.
We believe the following responses appropriately address the staff’s comments and Carlisle will reflect these revisions in all future filings, as appropriate.
FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 2008
Consolidated Statements of Earnings and Comprehensive Income, page 2
2. We note your response to prior comment 5. It remains unclear how you determined that the $4.7 million charge related to management and facilities transition of a braking business in the United Kingdom and asset charges related to closed facilities of $2.0 million should be excluded from your determination of operating income.
We remind you that paragraph 45 of SFAS 144 states that a gain or loss recognized on the sale of a long-lived asset that is not a component of an entity should be included in the determination of operating income. Please clearly disclose the nature of each of these items, how you calculated each item, and your basis for excluding each item from your determination of operating income. Your explanation should address whether the brake business for which the $4.7 million charge is related to is the same brake business which has been reported in discontinued operations based on your disclosures on page 10. If so, tell us what consideration you have to reflecting the $4.7 million in discontinued operations pursuant to paragraphs 41 through 44 of SFAS 144.
The asset write-down of $2.0 million reported in the Company’s 10-Q for the period ended June 30, 2007, represented fixed assets in the Transportation Products segment of which $1.8 million were sold at auction in 2007 and $0.2 million were scrapped. In June 2007, management decided to move production from its Slinger, Wisconsin wheel facility to its existing wheel facility in Aiken, SC. The Slinger fixed assets met the criteria of Long-Lived Assets to be Disposed of by Sale under paragraph 30 of SFAS 144. The assets were measured at the lower of their carrying amount or fair value and in accordance with paragraph 34 of SFAS 144 were written down to fair value less the cost to sell. The $2.0 million loss was recognized in Income from Continuing Operations and reported in the Company’s Earnings Before Interest and Income Taxes (“EBIT”) in the second and third quarter 2007 Form 10-Q as well as in the 2007 Form 10-K.
Effective 2008, Carlisle changed its financial statement presentation from that of EBIT representing operating income to reflecting Operating Income as a subtotal within Income from Continuing Operations. Management intends to reclassify the $2.0 million loss to Other Operating Expense in the year-to-date 2007 Consolidated Statement of Earnings and Comprehensive Income presented in the Company’s September 30, 2008 Form 10-Q which will include the loss in the Operating Income subtotal. The reclassification will also result in the inclusion of this loss in the Form 10-Q year-to-date 2007 Operating Income presented for the Transportation Products segment.
The brake business, for which the $4.7 million charge was recorded in the second quarter 2007, is the Company’s off-highway brake business. The off-highway brake business is a continuing operation that is reported within the Specialty Products segment. The brake business included in discontinued operations is the Company’s on-highway brake business. When Carlisle purchased the off-highway brake operation located in the U.K, the seller was contracted to manufacture and manage the operation until such time as Carlisle could transfer the assets to its own facilities. In the second quarter 2007, the Company finalized the value of the assets transferred to Carlisle’s U.K. facility. The Company recorded a loss of $4.7 million reflecting adjustments to inventory and fixed assets as well as a transition production and administrative fee paid to the former owner. The $4.7 million loss was recognized in Income from Continuing Operations and reported in EBIT in the second and third quarter 2007 Form 10-Q as well as in the 2007 Form 10-K.
As previously noted, effective 2008 the Company changed its financial statement presentation from that of EBIT representing operating income to reflecting Operating Income as a subtotal within Income from Continuing Operations. Management intends to reclassify the $4.7 million loss to Other Operating Expense in the year-to-date 2007 Consolidated Statement of Earnings and Comprehensive Income presented in the Company’s September 30, 2008 Form 10-Q which will include the loss in the Operating Income subtotal. The reclassification will also result in the inclusion of this loss in the Form 10-Q year-to-date 2007 Operating Income presented for the Specialty Products segment.
The following table illustrates the reclassifications noted above in the Statement of Earnings and Other Comprehensive Income for the September 30, 2008 Form 10-Q:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)
(Preliminary)
(Preliminary)
2007*
Net sales
$
832.5
$
730.4
$
2,347.9
$
2,044.8
Cost and expenses:
Cost of goods sold
668.4
570.7
1,886.0
1,610.9
Selling and administrative expenses
79.1
67.3
234.9
199.9
Research and development expenses
3.2
3.2
9.8
9.2
Other operating expense
—
—
—
6.7
Operating income
81.8
89.2
217.2
218.1
Other non-operating income, net
(0.6
)
(51.0
)
(1.4
)
(55.3
)
Interest expense, net
6.1
6.3
15.3
8.2
Income before income taxes
76.3
133.9
203.3
265.2
Income tax expense
25.7
49.6
67.6
93.0
Income from continuing operations, net of tax
50.6
84.3
135.7
172.2
* For the nine months ended September 30, 2007, charges totaling $6.7 million have been reclassified from Other non-operating income, net to Other operating expense.
The segment footnote and Management Discussion and Analysis will also be updated to reflect this reclassification as follows:
Segment Footnote
2008 (Preliminary)
Three Months Ended September 30,
Sales
Operating
Income
Sales
Operating
Income
In millions
Construction Materials
$
448.1
$
60.8
$
417.0
$
63.8
Transportation Products
205.2
8.7
193.3
15.5
Applied Technologies
131.2
12.7
77.1
10.7
Specialty Products
48.0
8.2
43.0
7.4
Corporate
—
(8.6
)
—
(8.2
)
Total
$
832.5
$
81.8
$
730.4
$
89.2
2008 (Preliminary)
Operating
Operating
Nine Months Ended September 30,
Sales
Income
Assets
Sales
Income*
Assets
In millions
Construction Materials
$
1,171.8
$
129.8
$
785.5
$
1,026.4
$
139.8
$
873.6
Transportation Products
691.0
53.7
548.8
668.5
64.9
514.7
Applied Technologies
350.7
36.0
594.7
226.9
28.0
242.5
Specialty Products
134.4
21.7
122.9
123.0
14.7
118.9
Corporate
—
(24.0
)
143.8
—
(29.3
)
131.3
Total
$
2,347.9
$
217.2
$
2,195.7
$
2,044.8
$
218.1
$
1,881.0
* For the nine months ended September 30, 2007, charges of $2.0 million and $4.7 million have been reclassified from non-operating income to operating income for the Transportation Products and Specialty Products segments, respectively.
M,D&A Sales & Earnings
Other operating expense, net of $6.7 million for the nine months ended September 30, 2007 included a $4.7 million charge related to management and facilities transition of a braking business in the United Kingdom, as well as asset charges related to closed facilities of $2.0 million.
Please do not hesitate to contact Carol Lowe at 704-501-1106 or Steven Ford at 315-477-9108 if you have any questions concerning our response.
Sincerely,
/s/ Carol P. Lowe
Show Raw Text
CORRESP
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filename1.htm
Carlisle Companies Incorporated
13925 Ballantyne
Corporate Place, Suite 400
Charlotte, North Carolina 28277
(704) 501-1100 · FAX (704) 501-1190
October 29, 2008
Mr. Rufus Decker
Accounting Branch Chief
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E., Stop 7010
Washington, D.C. 20549
Re: Carlisle Companies
Incorporated
Form 10-K for Fiscal Year Ended December 31,
2007
Form 10-Q for Fiscal Quarter Ended June 30,
2008
File No. 1-9278
Dear Mr. Decker:
This letter is submitted by Carlisle Companies Incorporated (“Carlisle”
or the “Company”) in response to the comment of the staff of the Division of
Corporate Finance of the Securities and Exchange Commission as set forth in
your letter dated October 10, 2008 relating to the Company’s (i) Form 10-K
for the fiscal year-ended December 31, 2007, filed February 29, 2008
(the “2007 Form 10-K”), and (ii) Form 10-Q for the fiscal period
ended June 30, 2008, filed August 7, 2008.
For your convenience, the text
of your letter has been reproduced below in bold type with the response to each
numbered comment set forth immediately below the comment.
General
1. Where a comment
below requests additional disclosures or other revisions to be made, please
show us in your supplemental response what the revisions will look like. These revisions should be included in your
future filings.
We believe the following responses
appropriately address the staff’s comments and Carlisle will reflect these
revisions in all future filings, as appropriate.
FORM 10-Q
FOR THE PERIOD ENDED JUNE 30, 2008
Consolidated Statements of
Earnings and Comprehensive Income, page 2
2. We note your
response to prior comment 5. It remains
unclear how you determined that the $4.7 million charge related to management
and facilities transition of a braking business in the United Kingdom and asset
charges related to closed facilities of $2.0 million should be excluded from
your determination of operating income.
We remind you that paragraph 45 of SFAS 144
states that a gain or loss recognized on the sale of a long-lived asset that is
not a component of an entity should be included in the determination of
operating income. Please clearly
disclose the nature of each of these items, how you calculated each item, and
your basis for excluding each item from your determination of operating
income. Your explanation should address
whether the brake business for which the $4.7 million charge is related to is
the same brake business which has been reported in discontinued operations
based on your disclosures on page 10.
If so, tell us what consideration you have to reflecting the $4.7
million in discontinued operations pursuant to paragraphs 41 through 44 of SFAS
144.
The asset write-down of $2.0 million reported in the Company’s 10-Q for
the period ended June 30, 2007, represented fixed assets in the
Transportation Products segment of which $1.8 million were sold at auction in
2007 and $0.2 million were scrapped. In June 2007,
management decided to move production from its Slinger, Wisconsin wheel
facility to its existing wheel facility in Aiken, SC. The Slinger fixed assets met the criteria of
Long-Lived Assets to be Disposed of by Sale under paragraph 30 of SFAS 144. The assets were measured at the lower of
their carrying amount or fair value and in accordance with paragraph 34 of SFAS
144 were written down to fair value less the cost to sell. The $2.0 million
loss was recognized in Income from Continuing Operations and reported in the
Company’s Earnings Before Interest and Income Taxes (“EBIT”) in the second and
third quarter 2007 Form 10-Q as well as in the 2007 Form 10-K.
Effective 2008, Carlisle changed its financial statement presentation
from that of EBIT representing operating income to reflecting Operating Income
as a subtotal within Income from Continuing Operations. Management intends to reclassify the $2.0
million loss to Other Operating Expense in the year-to-date 2007 Consolidated
Statement of Earnings and Comprehensive Income presented in the Company’s September 30,
2008 Form 10-Q which will include the loss in the Operating Income
subtotal. The reclassification will also
result in the inclusion of this loss in the Form 10-Q year-to-date 2007
Operating Income presented for the Transportation Products segment.
The brake business, for which the $4.7 million charge was recorded in
the second quarter 2007, is the Company’s off-highway brake business. The off-highway brake business is a
continuing operation that is reported within the Specialty Products segment. The brake business included in discontinued
operations is the Company’s on-highway brake business. When Carlisle purchased the off-highway brake
operation located in the U.K, the seller was contracted to manufacture and
manage the operation until such time as Carlisle could transfer the assets to
its own facilities. In the second
quarter 2007, the Company finalized the value of the assets transferred to
Carlisle’s U.K. facility. The Company
recorded a loss of $4.7 million reflecting adjustments to inventory and fixed
assets as well as a transition production and administrative fee paid to the
former owner. The $4.7 million loss was
recognized in Income from Continuing Operations and reported in EBIT in the second and third quarter 2007 Form 10-Q
as well as in the 2007 Form 10-K.
2
As previously noted, effective 2008 the Company changed its financial
statement presentation from that of EBIT representing operating income to
reflecting Operating Income as a subtotal within Income from Continuing
Operations. Management intends to
reclassify the $4.7 million loss to Other Operating Expense in the year-to-date
2007 Consolidated Statement of Earnings and Comprehensive Income presented in
the Company’s September 30, 2008 Form 10-Q which will include the
loss in the Operating Income subtotal.
The reclassification will also result in the inclusion of this loss in
the Form 10-Q year-to-date 2007 Operating Income presented for the
Specialty Products segment.
The following table illustrates the reclassifications noted above in
the Statement of Earnings and Other Comprehensive Income for the September 30,
2008 Form 10-Q:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)
2008
(Preliminary)
2007
2008
(Preliminary)
2007*
Net sales
$
832.5
$
730.4
$
2,347.9
$
2,044.8
Cost and expenses:
Cost of goods sold
668.4
570.7
1,886.0
1,610.9
Selling and administrative expenses
79.1
67.3
234.9
199.9
Research and development expenses
3.2
3.2
9.8
9.2
Other operating expense
—
—
—
6.7
Operating
income
81.8
89.2
217.2
218.1
Other non-operating income, net
(0.6
)
(51.0
)
(1.4
)
(55.3
)
Interest expense, net
6.1
6.3
15.3
8.2
Income
before income taxes
76.3
133.9
203.3
265.2
Income tax expense
25.7
49.6
67.6
93.0
Income from
continuing operations, net of tax
50.6
84.3
135.7
172.2
* For
the nine months ended September 30, 2007, charges totaling $6.7 million have
been reclassified from Other non-operating income, net to Other operating
expense.
The segment footnote and Management Discussion and Analysis will also
be updated to reflect this reclassification as follows:
Segment Footnote
3
2008 (Preliminary)
2007
Three Months Ended September 30,
Sales
Operating
Income
Sales
Operating
Income
In millions
Construction Materials
$
448.1
$
60.8
$
417.0
$
63.8
Transportation Products
205.2
8.7
193.3
15.5
Applied Technologies
131.2
12.7
77.1
10.7
Specialty Products
48.0
8.2
43.0
7.4
Corporate
—
(8.6
)
—
(8.2
)
Total
$
832.5
$
81.8
$
730.4
$
89.2
2008 (Preliminary)
2007
Operating
Operating
Nine Months Ended September 30,
Sales
Income
Assets
Sales
Income*
Assets
In
millions
Construction Materials
$
1,171.8
$
129.8
$
785.5
$
1,026.4
$
139.8
$
873.6
Transportation Products
691.0
53.7
548.8
668.5
64.9
514.7
Applied Technologies
350.7
36.0
594.7
226.9
28.0
242.5
Specialty Products
134.4
21.7
122.9
123.0
14.7
118.9
Corporate
—
(24.0
)
143.8
—
(29.3
)
131.3
Total
$
2,347.9
$
217.2
$
2,195.7
$
2,044.8
$
218.1
$
1,881.0
* For the nine months ended
September 30, 2007, charges of $2.0 million and $4.7 million have been
reclassified from non-operating income to operating income for the
Transportation Products and Specialty Products segments, respectively.
M,D&A Sales & Earnings
Other operating expense, net of $6.7 million for the nine months ended September 30, 2007
included a $4.7 million charge related to management and facilities transition
of a braking business in the United Kingdom, as well as asset charges related
to closed facilities of $2.0 million.
Please do not hesitate to contact Carol Lowe at 704-501-1106 or Steven Ford
at 315-477-9108 if you have any questions concerning our response.
Sincerely,
/s/ Carol P. Lowe
/s/ Steven J. Ford
Carol P. Lowe
Steven J. Ford
Vice President and
Vice President, Secretary
Chief Financial Officer
and General Counsel
4