CARLISLE COMPANIES INCORPORATED Carlisle Companies Incorporated ("Carlisle", the "Company", "we", "us" or "our") is a leading supplier of innovative building envelope products and energy-efficient solutions for customers creating sustainable buildings of the future. Through ourCarlisle Construction Materials ("CCM") business and family of leading brands, we deliver innovating, labor reducing and environmentally responsible products and solutions to customers through the Carlisle Experience. Over the life of a building, our products help drive lower greenhouse gas emissions, improve energy savings for building owners and operators, and increase a building's resiliency to the elements. Driven by our strategic plan, Vision 2025,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.Carlisle is also a leading provider of products in the aerospace, medical technologies and general industrial markets through itsCarlisle Interconnect Technologies ("CIT") andCarlisle Fluid Technologies ("CFT") businesses. 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 Consolidated Financial Statements in this Annual Report on Form 10-K. For more information regarding our consolidated results, segment results, and liquidity and capital resources for the year endedDecember 31, 2020 as compared to the year endedDecember 31, 2019 , refer to "Part II-Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2020 Annual Report on Form 10-K, as revised by the Company's Current Report on Form 8-K filed with theSEC onSeptember 14, 2021 (the "2020 Annual Report on Form 10-K").
Executive Overview
Carlisle delivered outstanding results in 2021, weathering the coronavirus pandemic ("COVID-19"), and accelerating into the global economic recovery despite significant challenges in our supply chain, pervasive and persistent inflation, and labor shortages. Guided by Vision 2025 and rooted in our culture of continuous improvement through the Carlisle Operating System ("COS"), we recorded record fourth quarter revenues, operating income, earnings per share ("EPS") and adjusted EBITDA. When Vision 2025 was introduced, we committed to a leaner, more focused portfolio and a pivot towards investing in our highest-returning businesses, particularly CCM. CCM's outstanding performance in 2021 confirmed that our strategy towards a more building products focus is correct. CCM once again constituted the greater portion of total Company sales and earnings, supported by its ability to provide the best-in-classCarlisle Experience across our channel partners. CCM continues to benefit from a robust pipeline of re-roofing demand and a growing desire of the marketplace for a broad set of energy efficient product solutions from CCM that support the sustainable design, construction and repair of buildings. This, coupled with continued price discipline and successfully navigating significant raw material and labor shortages through improved sourcing and operational efficiencies, CCM executed extremely well in 2021. CCM also made significant strides in expanding its presence in the building envelope with its acquisition ofASP Henry Holdings, Inc. ("Henry"), augmenting our coatings and waterproofing offerings and establishing a stronger foundation of integrated building envelope systems that improve energy efficiency of buildings. Heading into 2022, we believe CCM is well positioned given the strong re-roofing cycle inthe United States , increasing demand for energy-efficient products and the broad range of building envelope solutions CCM can offer after the acquisition of Henry. Our other segments made great strides in both driving growth and profitability improvement leveraging rebounds across end markets. CIT delivered results in line with our expectations in a year when it was tasked with level setting its cost structure in what is proving to be a prolonged, cyclically subdued demand environment. Restructuring activities are substantially completed at CIT, and backlog is back to levels not seen since before COVID-19. CFT exceeded sales expectations, continuing to leverage its focus on manufacturing efficiencies, selling and customer service excellence, and new product innovation. We are encouraged by increasing passenger air travel and improved capital spending in medical and industrial markets, all of which are returning to pre-pandemic levels and are key end markets for CIT and CFT. We remain balanced and disciplined in our approach to capital deployment. We are maintaining an elevated level of capital expenditures in 2022 to drive future growth, particularly in our building products businesses. We continue to manage an active merger and acquisition pipeline focused on synergistic businesses with attractive growth characteristics that complement our high-margin product lines. We will remain active in returning capital to stockholders, after raising our dividend in 2021 for the 45th consecutive year and returning$428.1 million to stockholders in the form of share repurchases and cash dividends. Finally, we had a successful debt issuance of 18
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We are well on our way to achieving Vision 2025, which continues to give us
clear direction and consistency of mission of returns-focused capital
deployment, talent management, and drive to create significant value to all of
Summary Financial Results (in millions, except per share amounts) 2021 2020 Revenues$ 4,810.3 $ 3,969.9 Operating income$ 567.5 $ 487.8 Operating margin percentage 11.8 % 12.3 % Income from continuing operations$ 387.0 $ 325.7 Income (loss) from discontinued operations$ 34.7
$ 7.26 $ 5.90 Income (loss) from discontinued operations$ 0.65 $ (0.10) Non-comparable items(1)$ 54.0 $ 43.6 (1)Non-comparable items include items that, by their nature, tend to obscure the Company's 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 a detailed reconciliation of these items.
Revenues increased in 2021 primarily reflecting higher volumes and price realization in our CCM and CFT segments, contributions from the acquisition of Henry in the CCM segment and favorable foreign currency impacts, partially offset by lower volumes in our CIT segment, which has been impacted by the prolonged aerospace decline.
Operating income increased in 2021 primarily reflecting price realization,
higher volumes and savings from the Carlisle Operating System ("COS"), however
operating margin decreased primarily reflecting raw material, wage and freight
inflation, higher stock compensation costs from the vesting and settlement of
our one-time stock appreciation rights, and higher acquisition and amortization
expense from the acquisition of Henry.
Diluted earnings per share from continuing operations increased primarily from
the above operating income performance ($1.09 per share), reduced average shares
outstanding ($0.24 per share) resulting from our share repurchase program and a
lower effective tax rate ($0.08 per share), partially offset by higher interest
expense ($0.05 per share) from our issuance of $850 million in aggregate
principal amount of unsecured senior notes.
Consolidated Results of Operations
Revenues
Price /
Acquisition Volume Exchange
(in millions) 2021 2020 Change % Effect Effect Rate Effect
Revenues $ 4,810.3 $ 3,969.9 $ 840.4 21.2 % 4.7 % 16.0 % 0.5 %
The increase in revenues in 2021 primarily reflected higher sales volumes and
price realization in our CCM and CFT segments across all markets in which they
operate, contributions from the acquisition of Henry in the CCM segment and
favorable foreign currency impacts, partially offset by lower CIT volumes as a
result of the prolonged aerospace decline.
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Table of Contents Revenues by Geographic Area (in millions) 2021 2020 United States$ 4,039.5 84 %$ 3,327.8 84 % International: Europe 359.8 313.0 Asia and Middle East 198.5 180.5 North America (excluding U.S.) 170.0 128.9 Africa 13.0 10.4 Other 29.5 9.3Total International 770.8 16 % 642.1 16 % Revenues$ 4,810.3 $ 3,969.9 Gross Margin (in millions) 2021 2020 Change % Gross margin$ 1,314.7 $ 1,137.4 $ 177.3 15.6 % Gross margin percentage 27.3 % 28.7 %
Depreciation and amortization
Gross margin percentage (gross margin expressed as a percentage of revenues) declined in 2021, driven by raw material and wage inflation, partially offset by savings from COS. Cost of goods sold in 2021 included$2.2 million of acquired inventory costs associated with the Henry acquisition in the CCM segment. Also included in cost of goods sold were exit and disposal costs totaling$9.7 million in 2021, primarily at CIT, attributable to our restructuring initiatives, compared with$12.4 million in 2020. Refer to Note 8 for further information on exit and disposal activities. Selling and Administrative Expenses (in millions) 2021 2020 Change % Selling and administrative expenses$ 698.2 $ 603.2 $ 95.0 15.7 % As a percentage of revenues 14.5 % 15.2 % Depreciation and amortization$ 113.7 $ 96.6 Selling and administrative expenses increased in 2021 primarily reflecting acquisition costs of$22.2 million related to the acquisition of Henry in the CCM segment, higher incentive compensation costs and wage inflation. Also included in selling and administrative expenses were exit and disposal costs totaling$4.5 million in 2021, primarily at CIT, attributable to our restructuring initiatives, compared with$5.9 million in 2020. Refer to Note 8 for further information on exit and disposal activities. Research and Development Expenses (in millions) 2021 2020 Change
%
Research and development expenses
9.9 % As a percentage of revenues 1.0 % 1.1 % Depreciation and amortization$ 1.8 $ 2.0
Research and development expenses were higher in 2021 primarily reflecting higher new product development expenses at our CIT and CFT segments.
Other Operating (Income) Expense, net (in millions) 2021 2020 Change
%
Other operating (income) expense, net
NM
Other operating income, net in 2021 primarily reflected$3.5 million of rebates,$1.6 million of royalty income and$0.4 million from rental income, partially offset by$5.0 million of impairment charges. Other operating expense, net in 2020 primarily reflected$6.0 million of impairment charges and$2.4 million of losses on sales of fixed assets, primarily at CCM and CIT. Partially offsetting the expense was$2.5 million of rebates,$1.7 million of rental income,$1.4 million of royalty income and$0.7 million gain from insurance recoveries. 20
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Table of Contents Operating Income (in millions) 2021 2020 Change % Operating income$ 567.5 $ 487.8 $ 79.7 16.3 % Operating margin percentage 11.8 % 12.3 %
Refer to Segment Results of Operations within this MD&A for further information related to segment operating income results.
Interest Expense, net (in millions) 2021 2020 Change % Interest expense, net$ 80.3 $ 76.6 $ 3.7 4.8 % Interest expense, net of capitalized interest, during 2021 primarily reflected higher long-term debt balances associated with our public offering of$550.0 million of 2.20% unsecured senior notes and$300.0 million of 0.55% unsecured senior notes completed inSeptember 2021 , and draws on our Revolving Credit Facility (the "Facility") in the third quarter of 2021, which were repaid in full in the third quarter of 2021. Interest expense, net of capitalized interest, during 2020 primarily reflected higher long-term debt balances associated with our public offering of$750.0 million of 2.75% unsecured senior notes completed inFebruary 2020 , and draws on our Facility in the first quarter of 2020, which were repaid in full in the second quarter of 2020. Refer to Note 14 for further information on our long-term debt.
Loss on Extinguishment of Debt
Loss on extinguishment of debt of$8.8 million related to the early redemption in full of$250.0 million aggregate principal amount of our outstanding 5.125% unsecured senior notes dueDecember 15, 2020 (the "2020 Notes"). The 2020 Notes were redeemed onMarch 29, 2020 at the redemption price of$262.1 million . The redemption price included a premium of$8.4 million , along with$0.4 million of deferred issuance costs. Refer to Note 14 for further discussion. Interest Income (in millions) 2021 2020 Change % Interest income$ (1.2) $ (4.7) $ 3.5 (74.5) %
Interest income decreased during 2021 primarily related to lower cash balances and lower yields.
Other Non-operating Expense, net (in millions) 2021 2020 Change %
Other non-operating expense, net
Other non-operating expense, net in 2021 primarily reflected the release of the remaining indemnification assets related to the acquisitions ofPetersen Aluminum Corporation ("Petersen") andAccella Holdings LLC ("Accella") resulting from escrow expirations, and changes in foreign currencies against theU.S. Dollar. Other non-operating expense, net in 2020 primarily reflected the release of a portion of the indemnification asset related to the Petersen acquisition resulting from escrow expirations, and net impact of the resolution of certain tax uncertainties related to the Accella acquisition and release of the corresponding indemnification assets, partially offset by foreign exchange gains and a gain on sale of a business at CFT. Income Taxes (in millions) 2021 2020 Change % Provision for income taxes$ 95.5 $ 78.5 $ 17.0 21.7 % Effective tax rate 19.8 % 19.4 % The provision for income taxes on continuing operations for 2021 is higher than 2020 primarily reflecting higher pre-tax income in theU.S. , and to a lesser extent in foreign jurisdictions. This equated to higher taxes of$18.3 million , with approximately$1.3 million of net lower taxes related to other permanent differences and the impact of prior year taxes in the current year. 21
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Refer to Note 9 for further information related to income taxes.
Income (Loss) from Discontinued Operations (in millions) 2021 2020 Change % Income (loss) from discontinued operations before taxes$ 9.9 $ (8.3) $ 18.2 NM Benefit from income taxes (24.8)
(2.7)
Income (loss) from discontinued operations$ 34.7
Income from discontinued operations of$34.7 million in 2021 relates to improved operating results from theCarlisle Brake & Friction ("CBF") segment, compared to 2020. The 2021 period also reflects a pre-tax loss on sale, offset by an income tax benefit from the sale of the equity interests and assets comprising the CBF segment inAugust 2021 .
The loss from discontinued operations of
Refer to Note 4 for additional information related to discontinued operations.
Segment Results of Operations
CCM's world-class team delivered record annual revenues in an extremely difficult operating environment. In anticipation of solid construction market demand in 2021, our employees stood ready to produce; communicated clearly with our channel partners about our raw material requirements; built inventory; increased capacity; and remained steadfast in applying COS to drive efficiencies across CCM. We intend to maintain our pricing discipline in the marketplace, capturing the full value of the Carlisle Experience, which reflects our commitment to servicing the increasingly complex needs of our customers. CCM continues to benefit from a growing backlog fueled by the strong re-roofing cycle inthe United States , an ever-increasing emphasis on the energy-efficiency of buildings, and our investments in expansion of our presence in the building envelope. Our increasing focus on building products is exemplified by our acquisition of Henry, which has delivered excellent results since being acquired inSeptember 2021 , and where integration thus far has been smooth. Additionally, re-roofing demand remains strong inthe United States market. The lingering effects of the COVID-19 pandemic and raw material and labor constraints have contributed to growing backlogs and significant increases in near-term demand. With buildings accounting for a significant portion of annual global greenhouse gas emissions, we continue to focus on innovation, emphasizing the development of products that improve energy efficiency. In 2021, we announced plans to invest more than$60 million to build a state-of-the-art LEED certified facility inSikeston, Missouri where CCM will manufacture energy-efficient polyiso insulation. Within our architectural metals platform, we have set plans in motion for three new locations in underserved regions around theU.S. while making progress consolidating our teams to drive commercial synergies and operational efficiencies. Additionally, we have invested approximately$12 million into a 40,000 square foot research and development technical center inCarlisle, Pennsylvania . This investment will help us to maintain a technological leadership position in the building and construction industry while meeting the demands of climate adaptation for buildings. Price / Acquisition Volume Exchange (in millions) 2021 2020 Change % Effect Effect Rate Effect Revenues$ 3,836.7 $ 2,995.6 $ 841.1 28.1 % 5.9 % 21.9 % 0.3 % Operating income$ 684.3 $ 581.6 $ 102.7 17.7 % Operating margin percentage 17.8 % 19.4 %
Depreciation and amortization
$ 27.8 $ 7.4 (1)Non-comparable items include items that, by their nature, tend to obscure the segment's 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 a detailed reconciliation of these items. CCM's revenue increase in 2021 primarily reflected higher volumes from strength inU.S. commercial roofing and all building product lines, price realization across all markets and contributions from the Henry acquisition. 22
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CCM's operating margin percentage declined in 2021 as pricing actions served to substantially offset raw material inflation on a dollar basis during the year while wage and freight inflation, and higher acquisition and amortization costs from the Henry acquisition more than offset improved operating efficiencies from COS.
CIT delivered sequential improvement in results throughout a year where the team successfully focused its efforts on consolidating its manufacturing footprint and level setting its cost structure to a cyclically challenged demand backdrop in the global aerospace industry given the negative impacts of the COVID-19 pandemic. Notably, CIT returned to year-over-year revenue growth in the second half of 2021 with strong backlog building to levels not seen since before the pandemic. During the third quarter of 2021, we announced plans to exit our manufacturing operations inCarlsbad, California , and relocate the majority of those operations to existing facilities inNorth America . The project is estimated to take a remaining 12 to 15 months to complete. Total projected costs are expected to approximate$5.6 million , with approximately$4.1 million of costs remaining to be incurred. During the third quarter of 2020, as a result of the market declines caused by COVID-19, we announced the closure of our manufacturing operations inKent, Washington , and the relocation of selected operations to existing facilities primarily inNorth America . This project is substantially complete with cumulative exit and disposal costs of$16.6 million recognized throughDecember 31, 2021 . Price / Acquisition Volume Exchange (in millions) 2021 2020 Change % Effect Effect Rate Effect Revenues$ 687.8 $ 731.6 $ (43.8) (6.0) % 0.6 % (6.9) % 0.3 % Operating loss$ (17.5) $ (2.1) $ (15.4) NM Operating margin percentage (2.5) % (0.3) % Depreciation and amortization$ 75.1 $ 77.5 Non-comparable items(1)$ 18.0 $ 22.8 (1)Non-comparable items include items that, by their nature, tend to obscure the segment's 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 a detailed reconciliation of these items.
CIT's revenue decline in 2021 primarily reflected lower volumes, led by the downturn in the commercial aerospace market as a result of slow recovery in build rates on narrow and wide-body aircraft and depletion of inventory in the channel.
CIT's operating margin percentage decrease in 2021 was driven by lower volumes, raw material and wage inflation, and unfavorable mix, partially offset by savings from COS and lower travel and other administrative costs.
Driven by accelerating industrial capital expenditures as companies expand capacity in response to supply constraints, CFT delivered strong revenue growth, despite the supply chain issues challenging the automotive industry. This growth was supported by a commitment to new product introductions, price discipline and excellent performance by our teams inEurope andChina . We also continue to make progress integrating and growing our newer platforms of sealants and adhesives, foam, and powder. With a focus on innovation, a leaner cost structure, and push into automation, we are optimistic about the CFT team's ability to generate sustainable value creation by driving and leveraging solid growth at healthy incremental margins, and, ultimately delivering on its Vision 2025 goals. Price / Acquisition Volume Exchange (in millions) 2021 2020 Change % Effect Effect Rate Effect Revenues$ 285.8 $ 242.7 $ 43.1 17.8 % 1.9 % 13.6 % 2.3 % Operating income$ 24.0 $ 5.3 $ 18.7 352.8 % Operating margin percentage 8.4 % 2.2 % Depreciation and amortization$ 23.1 $ 23.4 Non-comparable items(1)$ 0.9 $ 1.3 (1)Non-comparable items include items that, by their nature, tend to obscure the segment's 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 a detailed reconciliation of these items. 23
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CFT's revenue increase in 2021 primarily reflected increased volumes, particularly in the general industrial end market, price realization, favorable foreign currency impacts and contributions from acquisitions.
CFT's operating margin percentage increase in 2021 was driven by higher volumes, price realization and savings from COS, partially offset by higher wage and incentive compensation costs, and raw material inflation.
Liquidity and Capital Resources
A summary of our cash and cash equivalents by region follows: (in millions)
December 31, 2021 December 31, 2020
Europe $ 12.3 $ 113.7
North America (excludingU.S. ) 40.8
50.8
China 17.8
18.4
Asia Pacific (excludingChina ) 12.9
27.0
International cash and cash equivalents 83.8
209.9
U.S. cash and cash equivalents 240.6
687.2
Total cash and cash equivalents $ 324.4 $
897.1
We maintain liquidity sources primarily consisting of cash and cash equivalents as well as availability under our Facility. In the near term, cash on hand is our primary source of liquidity. The decrease in cash and cash equivalents compared toDecember 31, 2020 , is primarily related to the acquisition of Henry, share repurchases, payment of dividends to stockholders and capital expenditures, partially offset by a portion of the proceeds from our public offering of$300.0 million in aggregate principal amount of unsecured senior notes due inSeptember 2023 and$550.0 million in aggregate principal amount of unsecured senior notes due inMarch 2032 , and from the sale of CBF. In certain countries, primarilyChina , our cash is subject to local laws and regulations that require government approval for conversion of such cash toU.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 inCanada andChina , we may be subject to withholding taxes, and as such we have accrued$10.4 million in anticipation of those taxes as ofDecember 31, 2021 . We believe we have sufficient cash on hand, availability under the Facility and operating cash flows to meet our business requirements for at least the next 12 months. At the discretion of management, the Company may use available cash on capital expenditures, dividends, common stock repurchases, acquisitions and strategic investments. We also anticipate we will have sufficient cash on hand, as well as available liquidity under the Facility, to pay outstanding principal balances of our existing notes by the respective maturity dates. Another potential source of liquidity is access to public capital markets, subject to market conditions. We may access the capital markets to repay the outstanding balances of our existing notes. Refer to Debt Instruments below.
Sources and Uses of Cash and Cash Equivalents
(in millions) 2021
2020
Net cash provided by operating activities$ 421.7 $ 696.7 Net cash used in investing activities (1,486.4)
(122.6)
Net cash provided by (used in) financing activities 488.1
(24.7)
Effect of foreign currency exchange rate changes on cash (1.2)
1.6
Change in cash and cash equivalents$ (577.8) $ 551.0 Operating Activities We generated operating cash flows totaling$421.7 million for 2021 (including working capital uses of$275.2 million ), compared with$696.7 million for 2020 (including working capital sources of$81.5 million ). Lower operating cash flows in 2021 primarily reflected an increase in receivables and inventory from higher sales, partially offset by higher payables due to rising raw material costs. 24
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Investing Activities
Cash used in investing activities of$1,486.4 million for 2021 primarily reflected the acquisition of Henry for$1,571.3 million , net of cash acquired, capital expenditures of$134.8 million and investment in securities of$30.2 million , partially offset by proceeds of$247.7 million from the sale of CBF. Cash used in investing activities of$122.6 million for 2020 primarily reflected capital expenditures of$95.5 million and the acquisition ofMotion Tech Automation, LLC , net of cash acquired, for$33.0 million .
Financing Activities
Cash provided by financing activities of$488.1 million for 2021 primarily reflected net proceeds from our September public offering of$850.0 million in aggregate principal amount of unsecured senior notes and proceeds from the exercise of stock options, net of withholding tax, of$77.4 million , partially offset by share repurchases of$315.6 million , and cash dividend payments of$112.5 million , reflecting the increased annual dividend of$2.13 per share. Cash used in financing activities was$24.7 million for 2020. Net proceeds from our February notes offering, partially offset by the early redemption of our 2020 Notes, and financing costs associated with our February notes offering, totaled$458.0 million . Additionally in 2020, we used cash of$382.4 million for share repurchases and$112.4 million for cash dividend payments.
Share Repurchases
OnFebruary 5, 2019 , the Board approved a 5 million share increase in the Company's stock repurchase program. OnFebruary 2, 2021 , the Board approved an additional 5 million share increase in the Company's stock repurchase program. We repurchased approximately 1.9 million shares in 2021 as part of our plan to return capital to stockholders, utilizing$315.6 million of our cash on hand. As ofDecember 31, 2021 , we had authority to repurchase 5.1 million shares. Purchases may occur from time to time over an indefinite period of time in the open market, in privately negotiated transactions and through block trades, and no maximum purchase price has been set. The decision to repurchase shares depends on price, availability and other corporate developments and is subject to the discretion of the Board. The Company plans to continue to repurchase shares in 2022 on an opportunistic basis. We intend to pay dividends to our stockholders and have increased our dividend rate annually for the past 45 years. OnFebruary 8, 2022 , the Board declared a regular quarterly dividend of$0.54 per share, payable onMarch 1, 2022 , to stockholders of record at the close of business onFebruary 18, 2022 .
Debt Instruments
Senior Notes
OnSeptember 28, 2021 , the Company completed a public offering of$550.0 million in aggregate principal amount of unsecured senior notes with a stated interest rate of 2.20% dueMarch 1, 2032 (the "2032 Notes"). The 2032 Notes were issued at a discount of$4.8 million , resulting in proceeds to the Company of$545.2 million . The Company incurred costs to issue the 2032 Notes of approximately$1.1 million , inclusive of credit rating agencies' and attorneys' fees and other costs. The discount and issuance costs are amortized to interest expense over the life of the 2032 Notes. Interest is paid eachMarch 1 andSeptember 1 , commencingMarch 1, 2022 . OnSeptember 28, 2021 , the Company completed a public offering of$300.0 million in aggregate principal amount of unsecured senior notes with a stated interest rate of 0.55% dueSeptember 1, 2023 (the "2023 Notes" and together with the 2032 Notes the "Notes") and callable beginning onSeptember 1, 2022 . The 2023 Notes were issued at a discount of$2.6 million , resulting in proceeds to the Company of$297.4 million . The Company incurred costs to issue the 2023 Notes of approximately$0.6 million , inclusive of credit rating agencies' and attorneys' fees and other costs. The discount and issuance costs are amortized to interest expense over the life of the 2023 Notes. Interest is paid eachMarch 1 andSeptember 1 , commencingMarch 1, 2022 . We also have unsecured senior unsecured notes outstanding of$350.0 million dueNovember 15, 2022 (at a stated interest rate of 3.75%),$400.0 million dueDecember 1, 2024 (at a stated interest rate of 3.5%),$600.0 million dueDecember 1, 2027 (at a stated interest rate of 3.75%) and$750 million dueMarch 1, 2030 (at a stated interest rate of 2.75%) that are rated BBB byStandard & Poor's and Baa2 by Moody's. 25
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Revolving Credit Facility
OnSeptember 14, 2021 , the Company entered into a first amendment (the "Amendment") to the Company's Fourth Amended and Restated Credit Agreement (as amended, the "Facility") administered byJPMorgan Chase Bank, N.A . Among other things, the Amendment revised the referenced benchmark interest rates to provide for a successor interest rate to LIBOR due to the cessation of certain LIBOR rates as ofDecember 31, 2021 . During 2021, borrowings and repayments under the Facility totaled$650.0 million with a weighted average interest rate of 1.1%. During 2020, borrowings and repayments under the Facility totaled$500.0 million with a weighted average interest rate of 1.9%. As ofDecember 31, 2021 andDecember 31, 2020 , there were no borrowings under the Facility and$1.0 billion of availability.
Debt Covenants
We are required to meet various restrictive covenants and limitations under our senior notes and the Facility including certain leverage ratios, interest coverage ratios and limits on outstanding debt balances held by certain subsidiaries. We were in compliance with all covenants and limitations as ofDecember 31, 2021 and 2020.
Refer to Note 14 for further information on our debt instruments.
Critical Accounting Estimates
Our significant accounting policies are more fully described in Note 1. In preparing the Consolidated Financial Statements in conformity withU.S. Generally Accepted Accounting Principles ("GAAP"), the Company's management must make informed decisions which impact the reported amounts and related disclosures. Such decisions include the selection of the appropriate accounting principles to be applied and assumptions on which to base estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to goodwill and indefinite-lived intangible assets, valuation of long-lived assets, revenue recognition, income taxes and extended product warranties on an ongoing basis. The Company bases its estimates on historical experience, terms of existing contracts, our observation of trends in the industry, information provided by our customers and information available from other outside sources, that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.
Business Combinations
As noted in Executive Overview we have a history and a strategy of acquiring
businesses. We account for these business combinations as required by GAAP under
the acquisition method of accounting, which requires us to recognize the assets
acquired and the liabilities assumed at their acquisition date fair values.
Deferred taxes are recorded for any differences between fair value and tax basis
of assets acquired and liabilities assumed and can vary based on the structure
of the acquisition as to whether it is a taxable or non-taxable transaction. To
the extent the purchase price of the acquired business exceeds the fair values
of the assets acquired and liabilities assumed, including deferred income taxes
recorded in connection with the transaction, such excess is recognized as
goodwill (see further below for our critical accounting estimate regarding
post-acquisition accounting for goodwill). The most critical areas of judgment
in applying the acquisition method include selecting the appropriate valuation
techniques and assumptions that are used to measure the acquired assets and
assumed liabilities at fair value, particularly for intangible assets,
contingent consideration, acquired tangible assets such as property, plant and
equipment, and inventory.
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The key techniques and assumptions utilized by type of major acquired asset or liability generally include:
Asset/Liability Typical Valuation Technique Key Assumptions
Technology-based intangible Relief from royalty method •Estimated future revenues from acquired
assets technology
•Royalty rates that would be paid if
licensed from a third-party
•Discount rates
Customer-based intangible Multiple-period excess earnings method •Estimated future revenues from existing
assets customers
•Rates of customer attrition
•Earnings before interest, taxes,
depreciation and amortization ("EBITDA")
margins
•Discount rates
•Contributory asset charges
Trademark/trade name Relief from royalty method •Estimated future revenues from acquired
intangible assets trademark/trade name
•Economic useful lives (definite vs.
indefinite)
•Royalty rates that would be paid if
licensed from a third-party
•Discount rates
Property, plant & equipment Market comparable transactions (real •Similarity of subject property to
property) and replacement cost, new less market comparable transactions
economic deprecation (personal property) •Costs of like equipment in new
condition
•Economic obsolescence rates
Inventory Net realizable value less (i) estimated •Estimated percentage complete (WIP
costs of completion and disposal, and inventory)
(ii) a reasonable profit allowance for •Estimated selling prices
the seller •Estimated completion and disposal costs
•Estimated profit allowance for the
seller
Contingent consideration Discounted future cash flows •Future revenues and/or net earnings
•Discount rates
In selecting techniques and assumptions noted above, we generally engage
third-party, independent valuation professionals to assist us in developing the
assumptions and applying the valuation techniques to a particular business
combination transaction. In particular, the discount rates selected are compared
to and evaluated with (i) the industry weighted-average cost of capital, (ii)
the inherent risks associated with each type of asset and (iii) the level and
timing of future cash flows appropriately reflecting market participant
assumptions.
As noted above, goodwill represents a residual amount of purchase price.
However, the primary items that generate goodwill include the value of the
synergies between the acquired company and our existing businesses and the value
of the acquired assembled workforce, neither of which qualifies for recognition
as an intangible asset. Refer to Note 3 for more information regarding business
combinations, specifically the items that generated goodwill in our recent
acquisitions.
Subsequent Measurement of
Goodwill is not amortized but is tested annually, or more often if impairment indicators are present, for impairment at a reporting unit level.Goodwill is tested for impairment via a one-step process by comparing the fair value of goodwill with its carrying value. We recognize an impairment for the amount by which the carrying amount exceeds the fair value. We estimate the fair value of our reporting units based on the income approach utilizing the discounted cash flow method and the market approach utilizing the public company market multiple method. The key techniques and assumptions generally include: Valuation Technique Key Assumptions Discounted future cash flows •Estimated future revenues •EBITDA margins •Discount rates Market multiple method •Peer public company group •Financial performance of reporting units relative to peer public company group In 2021, the CIT reporting unit was bifurcated into two reporting units,CIT Aerospace , Defense and Industrial ("AD&I") and CIT Medical, to align with the segment manager's review of the business. The goodwill previously 27
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assigned to the CIT reporting unit was allocated to the new reporting units based on their relative fair values. Accordingly, we have determined that we have four reporting units as ofDecember 31, 2021 and three reporting units as ofDecember 31, 2020 .Goodwill has been allocated to the reporting units as follows: December 31, December 31, (in millions) 2021 2020 Carlisle Construction Materials$ 1,172.6 $ 613.0 Carlisle Interconnect Technologies N/A 835.6
601.5 N/A
Carlisle Interconnect Technologies - Medical 233.7 N/A
Carlisle Fluid Technologies 191.2 193.1
Total $ 2,199.0 $ 1,641.7 Annual Impairment Test
EffectiveNovember 1, 2021 , we changed our goodwill impairment test fromOctober 1 to November 1 to better align with our annual budgeting and forecasting process. For 2021, this resulted in us performing two separate impairment tests as ofOctober 1, 2021 andNovember 1, 2021 . For theOctober 1 andNovember 1, 2021 impairment tests, the CCM reporting unit was tested for impairment using a qualitative approach. Under this approach, an entity may assess qualitative factors as well as relevant events and circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Through the results of our analysis, we determined that it is not more likely than not that the fair value of the CCM reporting unit was less than its carrying value and thus, a quantitative analysis was not performed. The CIT AD&I, CIT Medical and CFT reporting units were tested for impairment using the quantitative approach described above, resulting in fair values that substantially exceeded the carrying values, with the exception of CIT Medical, which exceeded its carrying value by approximately 10%. We will continue to closely monitor actual results versus expectations as well as whether and to what extent any significant changes in current events or conditions, including changes to the impacts of COVID-19 on our business, result in corresponding changes to our expectations about future estimated cash flows, discount rates and market multiples. If our adjusted expectations of the operating results, both in size and timing, of CIT Medical do not materialize, if the discount rate increases (based on increases in interest rates, market rates of return or market volatility) or if market multiples decline, we may be required to record goodwill impairment charges, which may be material. While we believe our conclusions regarding the estimates of fair value of our reporting units are appropriate, these estimates are subject to uncertainty and by nature include judgments and estimates regarding various factors. These factors include the rate and extent of growth in the markets that our reporting units serve, the realization of future sales price and volume increases, fluctuations in exchange rates, fluctuations in price and availability of key raw materials, future operating efficiencies and, as it pertains to discount rates, the volatility in interest rates and costs of equity.
Refer to Note 12 for more information regarding goodwill.
Subsequent Measurement of Indefinite-Lived Intangible Assets
As discussed above, indefinite-lived intangible assets are recognized and recorded at their acquisition-date fair value. Intangible assets with indefinite useful lives are not amortized but are tested annually at the appropriate unit of account, which generally equals the individual asset, or more often if impairment indicators are present. Indefinite-lived intangible assets are tested for impairment via a one-step process by comparing the fair value of the intangible asset with its carrying value. We recognize an impairment charge for the amount by which the carrying amount exceeds the intangible asset's fair value. We generally estimate the fair value of our indefinite-lived intangible assets consistent with the techniques noted above using our expectations about future cash flows, discount rates and royalty rates for purposes of the annual test. We monitor for significant changes in those assumptions during interim reporting periods. We also periodically re-assess indefinite-lived intangible assets as to whether its useful lives can be determined, and if so, we would begin amortizing any applicable intangible asset.
Annual Impairment Test
EffectiveNovember 1, 2021 , we changed our indefinite-lived intangible assets impairment test fromOctober 1 to November 1 to better align with our annual budgeting and forecasting process. For 2021 this resulted in us 28
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performing two separate impairment tests as ofOctober 1, 2021 andNovember 1, 2021 . For theOctober 1 andNovember 1, 2021 impairment tests, the CCM indefinite-lived intangible assets were tested for impairment using a qualitative approach. The CIT AD&I, CIT Medical and CFT indefinite-lived intangible assets were tested for impairment using the quantitative approach described above, resulting in fair values that substantially exceeded the carrying values, with the exception of two trade names with an aggregate carrying value of$43.3 million that exceeded their carrying amounts by less than 10%. We will continue to closely monitor actual results versus expectations as well as whether and to what extent any significant changes in current events or conditions, including changes to the impacts of COVID-19 on our business, result in corresponding changes to our expectations about future estimated revenues and discount rates.
Refer to Note 12 for more information regarding intangible assets.
Valuation of Long-Lived Assets
Long-lived assets or asset groups, including amortizable intangible assets, are tested for recoverability whenever events or circumstances indicate that the undiscounted future cash flows do not exceed the carrying amount of the asset or asset group. For purposes of testing for impairment, we group our long-lived assets classified as held and used at the lowest level for which identifiable cash flows are largely independent of the cash flows from other assets and liabilities, which means that in many cases multiple assets are tested for recovery as a group. Our asset groupings vary based on the related business in which the long-lived assets are employed and the interrelationship between those long-lived assets in producing net cash flows; for example, multiple manufacturing facilities may work in concert with one another or may work on a stand-alone basis to produce net cash flows. We utilize our long-lived assets in multiple industries and economic environments and our asset groupings reflect these various factors. We monitor the operating and cash flow results of our long-lived assets or asset groups classified as held and used to identify whether events and circumstances indicate the remaining useful lives of those assets should be adjusted, or if the carrying value of those assets or asset groups may not be recoverable. Undiscounted estimated future cash flows are compared to the carrying value of the long-lived asset or asset group in the event indicators of impairment are identified. In developing our estimates of future undiscounted cash flows, we utilize our internal estimates of future revenues, costs and other net cash flows from operating the long-lived asset or asset group over the life of the asset or primary asset, if an asset group. This requires us to make judgments about future levels of sales volume, pricing, raw material costs and other operating expenses. If the undiscounted estimated future cash flows are less than the carrying amount, we determine the fair value of the asset or asset group and record an impairment charge in current earnings to the extent carrying value exceeds fair value. Fair values may be determined based on estimated discounted cash flows, by prices for like or similar assets in similar markets or a combination of both. All of our asset groups were recoverable as ofDecember 31, 2021 . Long-lived assets or asset groups that are part of a disposal group that meets the criteria to be classified as held for sale are not assessed for impairment, but rather a loss on sale is recorded against the disposal group if fair value, less cost to sell, of the disposal group is less than its carrying value. If the disposal group's fair value exceeds its carrying value, we record a gain, assuming all other criteria for a sale are met, when the transaction closes.
Revenue Recognition
Revenue is recognized when obligations under the terms of a contract with a customer are satisfied; generally, this occurs with the transfer of control of our products or services. Revenue is measured as the amount of total consideration expected to be received in exchange for transferring goods or providing services. Total expected consideration, in certain cases, is estimated at each reporting period, including interim periods, and is subject to change with variability dependent on future events, such as customer behavior related to future purchase volumes, returns, early payment discounts and other customer allowances. Estimates for rights of return, discounts and rebates to customers, and other adjustments for variable consideration are provided for at the time of sale as a deduction to revenue, based on an analysis of historical experience and actual sales data. Changes in these estimates are reflected as an adjustment to revenue in the period identified. Sales, value added and other taxes collected concurrently with revenue-producing activities are excluded from revenue. We receive 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. The term of these warranties ranges from five to 40 years. The weighted average life of the contracts as ofDecember 31, 2021 , is approximately 20 years. 29
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Additionally, critical judgments and estimates related to revenue recognition relative to certain customer contracts in our CIT and CFT segments, in which they are contract manufacturers or where they have entered into an agreement to provide both services (engineering and design) and products resulting from those services, include the following: •Determination of whether revenue is earned at a "point-in-time" or "over time": Where contracts provide for the manufacture of highly customized products with no alternative use and provide CIT or CFT the right to payment for work performed to date, including a normal margin for that effort, we have concluded those contracts require the recognition of revenue over time. •Measurement of revenue using the key inputs of expected gross margin and inventory in our possession. We utilize an estimate of expected gross margin based on historical margin patterns and management's experience, which vary based on the customers and end markets being evaluated. There are multiple unique customer contracts at CIT or CFT. Accordingly, the estimate of expected margin is done for each customer discretely. We review the margins for these categories as contracts, customers and product profiles change over time so that the margin expectations reflect the best available data for each category.
Income Taxes
Our income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management's best estimate of current and future taxes to be paid. We are subject to income taxes in theU.S. and numerous foreign jurisdictions. Significant judgments and estimates are required in the determination of the consolidated income tax expense. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and its reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In evaluating our ability to recover our deferred tax assets in the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies and results of recent operations. We believe that it is more likely than not that the benefit from certainU.S. federal, state and foreign net operating loss, and credit carryforwards will not be realized. In recognition of this risk, we have provided a valuation allowance of$29.7 million on the deferred tax assets related to these carryforwards. We (1) record unrecognized tax benefits as liabilities in accordance with Accounting Standards Codification 740, Income Taxes ("ASC 740") and (2) adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.
Extended Product Warranty Reserves
We offer extended warranty contracts on sales of certain products, the most
significant being those offered on our installed roofing systems within the CCM
segment. Current costs of services performed under these contracts are expensed
as incurred. We also record an additional loss and a corresponding reserve if
the total expected costs of providing services under the contract exceed
unamortized deferred revenues equal to such excess. We estimate total expected
warranty costs using actuarially derived estimates of future costs of servicing
the warranties. The key inputs that are utilized to develop these estimates
include historical claims experience by type of roofing membrane, location, and
labor and material costs. The estimates of the volume and severity of these
claims and associated costs are dependent upon the above assumptions and future
results could differ from our current expectations. We currently do not have any
material loss reserves recorded associated with our extended product warranties.
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Non-GAAP Financial Measures
EBIT, Adjusted EBIT, Adjusted EBITDA and Adjusted EBITDA Margin
Earnings before interest and taxes ("EBIT"), adjusted EBIT, adjusted earnings
before income, taxes, depreciation and amortization ("EBITDA") and adjusted
EBITDA margin are intended to provide investors and others with information
about the Company's and its 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 the Company's business and evaluate the
Company's performance relative to similarly-situated companies. This information
differs from net income and operating income determined in accordance with
accounting principles generally accepted in the United States of America
("GAAP") and should not be considered in isolation or as a substitute for
measures of performance determined in accordance with GAAP. The Company's and
its 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.
December 31,
(in millions) 2021 2020
Net income (GAAP) $ 421.7 $ 320.1
Less: income (loss) from discontinued operations (GAAP) 34.7 (5.6)
Income from continuing operations (GAAP) 387.0 325.7
Provision for income taxes 95.5 78.5
Interest expense, net 80.3 76.6
Interest income (1.2) (4.7)
EBIT 561.6 476.1
Exit and disposal, and facility rationalization costs 17.1 21.1
Inventory step-up amortization and acquisition costs 26.4 4.4
Impairment charges 5.0 6.0
Losses (gains) from acquisitions and disposals 4.7 4.0
Losses (gains) from insurance 0.4 (0.7)
Losses (gains) from litigation 0.4 -
Losses on extinguishment of debt - 8.8
Total non-comparable items 54.0 43.6
Adjusted EBIT 615.6 519.7
Depreciation 86.4 82.1
Amortization 131.5 120.6
Adjusted EBITDA $ 833.5 $ 722.4
Divided by:
Total revenues $ 4,810.3 $ 3,969.9
Adjusted EBITDA margin 17.3 % 18.2 %
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Year Ended December 31, 2021
Corporate and
(in millions) CCM CIT CFT unallocated
Operating income (loss) (GAAP) $ 684.3 $
(17.5)
2.1 (0.2) 1.6 2.4
EBIT 682.2 (17.3) 22.4 (125.7)
Exit and disposal, and facility
rationalization costs 0.5 15.5 0.9 0.2
Inventory step-up amortization and
acquisition costs 24.4 - 0.1 1.9
Impairment charges - 1.8 - 3.2
Losses (gains) from acquisitions and
disposals 2.2 0.4 0.2 1.9
Losses (gains) from insurance 0.7 - (0.3) -
Losses (gains) from litigation - 0.3 - 0.1
Losses on extinguishment of debt - - - -
Total non-comparable items 27.8 18.0 0.9 7.3
Adjusted EBIT 710.0 0.7 23.3 (118.4)
Depreciation 52.3 24.9 5.5 3.7
Amortization 61.7 50.2 17.6 2.0
Adjusted EBITDA $ 824.0 $ 75.8 $ 46.4 $ (112.7)
Divided by:
Total revenues $ 3,836.7 $ 687.8 $ 285.8 $ -
Adjusted EBITDA margin 21.5 % 11.0 % 16.2 % NM
(1)Includes other non-operating (income) expense, which may be presented in separate line items on the Consolidated Statements of Income.
Year ended
Corporate and
(in millions) CCM CIT CFT unallocated
Operating income (loss) (GAAP) $ 581.6 $
(2.1)
3.8 (0.2) (5.1) 13.2
EBIT 577.8 (1.9) 10.4 (110.2)
Exit and disposal, and facility
rationalization costs 1.0 16.4 3.7 -
Inventory step-up amortization and
acquisition costs 0.1 0.4 0.5 3.4
Impairment charges - 6.0 - -
Losses (gains) from acquisitions and
disposals 7.0 - (2.9) (0.1)
Losses (gains) from insurance (0.7) - - -
Losses (gains) from litigation - - - -
Losses on extinguishment of debt - - - 8.8
Total non-comparable items 7.4 22.8 1.3 12.1
Adjusted EBIT 585.2 20.9 11.7 (98.1)
Depreciation 48.2 25.2 5.6 3.1
Amortization 49.8 52.3 17.8 0.7
Adjusted EBITDA $ 683.2 $ 98.4 $ 35.1 $ (94.3)
Divided by:
Total revenues $ 2,995.6 $ 731.6 $ 242.7 $ -
Adjusted EBITDA margin 22.8 % 13.4 % 14.5 % NM
(1)Includes other non-operating (income) expense, which may be presented in separate line items on the Consolidated Statements of Income.
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Table of Contents Outlook Revenues
Our expectations for segment revenues in 2022 follows:
2022 Revenue Primary Drivers
Carlisle Construction Materials ~30% growth •Proactive pricing measures gaining traction
•Strong re-roofing demand and increasing demand for
energy-efficient building products
•Henry acquisition
Carlisle Interconnect ~10% growth •Growing backlog
Technologies
Carlisle Fluid Technologies ~10% growth •Focuson product introductions and price discipline
•Markets strengthening
Total Carlisle 25-30% growth
Cash Flows
Our priorities for the use of cash are to invest in growth and performance improvement opportunities for our existing businesses through capital expenditures, pursue strategic acquisitions that meet stockholder return criteria, pay dividends to stockholders and return value to stockholders through share repurchases.
Capital expenditures in 2022 are expected to be approximately
Forward-Looking Statements
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the potential or expected impacts of the global COVID-19 pandemic. 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: risks from the global COVID-19 pandemic, including, for example, expectations regarding the impact of the COVID-19 pandemic 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; 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 which cannot be recovered in product pricing; domestic and foreign governmental and public policy changes including environmental and industry regulations; threats associated with and efforts to combat terrorism; protection and validity of patent and other intellectual property rights; the 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; and the outcome of pending and future litigation and governmental proceedings; and the other factors discussed in the reports we file with or furnish to theSEC 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 interest rate and currency exchange rate fluctuations. Further, any conflict in the international arena 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. 33
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