ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
North Carolina | 01-0573945 | |
(State or other jurisdiction of incorporation) | (I.R.S. employer identification no.) | |
5605 Carnegie Boulevard, Suite 500 Charlotte, North Carolina | 28209 | |
(Address of principal executive offices) | (Zip code) |
Title of each class | Name of each exchange on which registered | |
Common stock, $0.01 par value | New York Stock Exchange |
Large accelerated filer | ý | Accelerated filer | ¨ | |
Non-accelerated filer | o | (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Page | ||
Item 1 | ||
Item 1A | ||
Item 1B | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
Item 5 | ||
Item 6 | ||
Item 7 | ||
Item 7A | ||
Item 8 | ||
Item 9 | ||
Item 9A | ||
Item 9B | ||
Item 10 | ||
Item 11 | ||
Item 12 | ||
Item 13 | ||
Item 14 | ||
Item 15 | ||
ITEM 1. | BUSINESS |
2015 | 2014 | 2013 | |||||||||
(in millions) | |||||||||||
United States | $ | 696.2 | $ | 674.1 | $ | 620.3 | |||||
Europe | 289.5 | 315.9 | 308.6 | ||||||||
Other | 218.7 | 229.3 | 215.3 | ||||||||
Total | $ | 1,204.4 | $ | 1,219.3 | $ | 1,144.2 |
2015 | 2014 | 2013 | |||||||||
(in millions) | |||||||||||
United States | $ | 114.9 | $ | 125.9 | $ | 122.8 | |||||
Europe | 11.4 | 14.6 | 21.2 | ||||||||
Other | 91.3 | 100.1 | 100.8 | ||||||||
Total | $ | 217.6 | $ | 240.6 | $ | 244.8 |
ITEM 1A. | RISK FACTORS |
• | possible changes in the value of the deconsolidated subsidiaries reflected in our financial statements. Our investment in GST is subject to periodic reviews for impairment. To estimate the fair value, the Company considers many factors and uses both discounted cash flow and market valuation approaches. The asbestos claims value is an important part of the value of that investment. The actual value will be determined in the Chapter 11 process, either through negotiations with claimant representatives or, absent a negotiated resolution, by the Bankruptcy Court after contested proceedings, and accordingly adverse developments with respect to the terms of the resolution of such claims may materially adversely affect the value of our investment in GST; |
• | the uncertainty of the number and per claim value of pending and potential future asbestos claims. On the Petition Date, according to Garrison, there were more than 90,000 total asbestos claims pending against GST LLC, of which approximately 5,800 were claims alleging the disease mesothelioma. Based on discovery in the Chapter 11 proceedings, GST has learned that more than 1,900 of those claims were not, in fact, pending mesothelioma claims. As a result of the initiation of the Chapter 11 proceedings, the resolution of asbestos claims is subject to the jurisdiction of the Bankruptcy Court and the filing of the Chapter 11 cases automatically stayed the prosecution of pending asbestos bodily injury and wrongful death lawsuits, and initiation of new such lawsuits, against GST. An estimation trial for the purpose of estimating the number and value of allowed mesothelioma claims for plan feasibility purposes commenced on July 22, 2013 and concluded on August 22, 2013. GST, on the one hand, and the claimants’ representatives, on the other hand, proposed different approaches to estimating allowed asbestos personal injury claims against GST, and the Bankruptcy Court ruled that each could present its proposed approach. GST offered a merits-based approach that focused on its legal defenses to liability and took account of claimants’ recoveries from other sources, including trusts established in Chapter 11 cases filed by GST’s co-defendants, in estimating potential future recoveries by claimants from GST. The claimants’ representatives offered a settlement-based theory of estimation. On January 10, 2014, Bankruptcy Judge George Hodges announced his estimation decision. Citing with approval the methodology put forth by GST at trial, the judge determined that $125 million is the amount sufficient to satisfy GST's liability for present and future mesothelioma claims. The judge's liability determination is for mesothelioma claims only. The court has not yet determined amounts for GST's liability for other asbestos claims and for administrative costs that would be required to review and process claims and payments, which will increase that $125 million amount. Our recorded asbestos liability as of the Petition Date was $472.1 million. Until the second quarter of 2014, neither we nor GST endeavored to update the estimate since the Petition Date except as necessary to reflect payments of accrued fees and the disposition of cases on appeal. As a result of those necessary updates, the liability estimate as of December 31, 2013 was $466.8 million. On May 29, 2014, GST filed an amended proposed plan of reorganization and a proposed disclosure statement. That amended plan provided $275 million in total funding for (a) present and future asbestos claims against GST that have not been resolved by settlement or verdict prior to the Petition Date, and (b) administrative and litigation costs. The $275 million amount was determined based on an economic analysis of the feasibility of the proposed plan. The amended plan also provided that GST would pay in full unpaid claims that had been resolved by settlement or verdict prior to the Petition Date. GST estimates its aggregate liability for settled asbestos claims to be no more than $10 million. Given the decision of the Bankruptcy Court in January 2014 with respect to its estimate of GST’s liability for present and future mesothelioma claims at $125 million and GST’s filing of an amended plan of reorganization setting out its intention to fund a plan with total consideration of $285 million in May 2014, GST at that time believed that its ultimate expenditures to resolve all present and future asbestos claims against it would be no less than the $285 million set out in its proposed plan. Similarly, while GST believed it to be an unlikely worst case scenario, GST believes its ultimate costs to resolve all asbestos claims against it could be no more |
• | the financial viability of our subsidiaries’ insurance carriers and their reinsurance carriers, and our subsidiaries’ ability to collect on claims from them. Agreements with certain of these insurance carriers and the terms of applicable policies define specific annual amounts to be paid or limit the amount that can be recovered in any one year, and accordingly substantial insurance payments for submitted claims have been deferred and are payable in installments through 2018, and an additional $38.0 million of other insurance payments may be payable only upon the conclusion of the bankruptcy process; |
• | the potential for asbestos exposure to extend beyond the filed entities arising from corporate veil piercing efforts or other claims by asbestos plaintiffs. During the course of the proceedings before the Bankruptcy Court, the claimant representatives have asserted that affiliates of GST, including the Company and Coltec, should be held responsible for the asbestos liabilities of GST under various theories of derivative corporate responsibility including veil-piercing and alter ego. Claimant representatives filed a motion with the bankruptcy court asking for permission to sue us based on those theories. In a decision dated June 7, 2012, the Bankruptcy Court denied the claimant representatives’ motion without prejudice, thereby potentially allowing the representatives to re-file the motion. Under GST’s second amended plan of reorganization and pursuant to an agreement that we have reached with GST, all claims against affiliates based on GST asbestos claims, including any corporate veil piercing, alter ego or other derivative claims, are settled in exchange for the payment of $30 million by Coltec and other consideration under the plan; and |
• | the costs of the bankruptcy proceeding and the length of time necessary to resolve the case, either through settlement or various court proceedings. Through December 31, 2015, GST has recorded Chapter 11 case-related fees and expenses totaling $144.1 million. We have recorded an additional $9.0 million in case-related fees and expenses incurred directly by EnPro and Coltec. |
• | unfavorable fluctuations in foreign currency exchange rates, including long-term contracts denominated in foreign currencies; |
• | adverse changes in foreign tax, legal and regulatory requirements; |
• | difficulty in protecting intellectual property; |
• | trade protection measures and import or export licensing requirements; |
• | cultural norms and expectations that may sometimes be inconsistent with our Code of Conduct and our requirements about the manner in which our employees, agents and distributors conduct business; |
• | differing labor regulations; |
• | political and economic instability, including instabilities associated with European sovereign debt uncertainties and the future continuity of membership of the European Union; and |
• | acts of hostility, terror or war. |
• | demand for our products; |
• | the timing and execution of customer contracts; |
• | the timing of sales of our products; |
• | increases in manufacturing costs due to equipment or labor issues; |
• | changes in foreign currency exchange rates; |
• | changes in applicable tax rates; |
• | an impairment in the value of our investment in GST; |
• | an impairment of goodwill at one of our reporting units; |
• | unanticipated delays or problems in introducing new products; |
• | the incurrence of contractual penalties for the late delivery of long lead-time products; |
• | announcements by competitors of new products, services or technological innovations; |
• | changes in our pricing policies or the pricing policies of our competitors; |
• | increased expenses, whether related to sales and marketing, raw materials or supplies, product development or administration; |
• | major changes in the level of economic activity in major regions of the world in which we do business; |
• | costs related to possible future acquisitions or divestitures of technologies or businesses; |
• | an increase in the number or magnitude of product liability or environmental claims; |
• | our ability to expand our operations and the amount and timing of expenditures related to expansion of our operations, particularly outside the U.S.; and |
• | economic assumptions and market factors used to determine post-retirement benefits and pension liabilities. |
• | require a supermajority shareholder vote to approve any business combination transaction with an owner of 5% or more of our shares unless the transaction is recommended by disinterested directors; |
• | limit the right of shareholders to remove directors and fill vacancies; |
• | regulate how shareholders may present proposals or nominate directors for election at shareholders’ meetings; and |
• | authorize our board of directors to issue preferred stock in one or more series, without shareholder approval. |
ITEM 1B. | UNRESOLVED STAFF COMMENTS |
ITEM 2. | PROPERTIES |
Location | Segment | Owned/ Leased | Size (Square Feet) | |
U.S. | ||||
Palmyra, New York* | Sealing Products | Owned | 690,000 | |
Berea, Kentucky | Sealing Products | Owned | 240,000 | |
Longview, Texas | Sealing Products | Owned | 219,000 | |
Rome, Georgia | Sealing Products | Leased | 160,000 | |
Chattanooga, Tennessee | Sealing Products | Owned | 117,000 | |
Thorofare, New Jersey | Engineered Products | Owned | 171,000 | |
Beloit, Wisconsin | Power Systems | Owned | 433,000 | |
Foreign | ||||
San Luis Potosi, Mexico | Sealing Products | Owned | 387,250 | |
Mexico City, Mexico* | Sealing Products | Owned | 131,000 | |
Neuss, Germany | Sealing Products | Leased | 146,000 | |
Saint Etienne, France | Sealing Products | Owned | 108,000 | |
Annecy, France | Engineered Products | Owned | 196,000 | |
Heilbronn, Germany | Engineered Products | Owned | 127,000 | |
Sucany, Slovakia | Engineered Products | Owned | 109,000 |
* | These facilities are owned by GST LLC or one of its subsidiaries, which were deconsolidated from our Consolidated Financial Statements on the Petition Date. |
ITEM 3. | LEGAL PROCEEDINGS |
ITEM 4. | MINE SAFETY DISCLOSURES |
Name | Age | Position | ||
Stephen E. Macadam | 55 | President, Chief Executive Officer and Director | ||
J. Milton Childress II | 58 | Senior Vice President and Chief Financial Officer | ||
Kenneth D. Walker | 46 | Senior Vice President and Chief Operating Officer | ||
Todd L. Anderson | 46 | President, Stemco | ||
Steven R. Bower | 57 | Vice President, Controller and Chief Accounting Officer | ||
David S. Burnett | 49 | Vice President, Treasury and Tax | ||
Jon A. Cox | 49 | Chief Innovation and Information Officer | ||
William A. Favenesi | 52 | President, CPI | ||
Gilles Hudon | 55 | President, Technetics Group | ||
Robert S. McLean | 51 | General Counsel, Chief Administrative Officer and Secretary | ||
William C. O'Neal | 40 | Vice President, Strategy and Corporate Development | ||
Marvin A. Riley | 41 | President, Fairbanks Morse | ||
William L. Sparks | 47 | Vice President, Talent | ||
Susan E. Sweeney | 52 | President, GGB | ||
Eric A. Vaillancourt | 52 | President, Garlock |
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Low Sale Price | High Sale Price | Dividend | |||||||||
Fiscal 2015: | |||||||||||
Fourth Quarter | $ | 38.20 | $ | 52.90 | $ | 0.20 | |||||
Third Quarter | 38.08 | 57.84 | 0.20 | ||||||||
Second Quarter | 56.87 | 69.26 | 0.20 | ||||||||
First Quarter | 58.99 | 70.23 | 0.20 | ||||||||
Fiscal 2014: | |||||||||||
Fourth Quarter | $ | 57.15 | $ | 67.78 | $ | — | |||||
Third Quarter | 60.32 | 75.08 | — | ||||||||
Second Quarter | 66.59 | 75.78 | — | ||||||||
First Quarter | 56.30 | 80.00 | — |
Period | (a) Total Number of Shares (or Units) Purchased | (b) Average Price Paid per Share (or Unit) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2) | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (2) | ||||||||
October 1 – October 31, 2015 | — | — | — | — | ||||||||
November 1 – November 30, 2015 | 25,250 | (1) | $49.43 | (1) | 25,250 | (1) | 48,752,471 | (1) | ||||
December 1 – December 31, 2015 | 87,944 | (1)(2) | $46.35 | (1)(2) | 86,850 | (1) | 44,724,773 | (1) | ||||
Total | 113,194 | (1)(2) | $47.03 | (1)(2) | 112,100 | (1) | 44,724,773 | (1) |
(1) | On October 29, 2015, we announced that our Board of Directors had authorized the purchase, from time to time, of up to $50.0 million of our outstanding common stock. Pursuant to this authorization, we purchased 25,250 shares at an average purchase price of $49.43 per share in November 2015 and 86,850 shares at an average purchase price of $47.00 per share in December 2015. The share purchase authorization expires on October 28, 2017. |
(2) | A total of 1,094 shares were transferred to a rabbi trust that we established in connection with our Deferred Compensation Plan for Non-Employee Directors, pursuant to which non-employee directors may elect to defer directors’ fees into common stock units. Coltec furnished these shares in exchange for management and other services provided by EnPro. 172 of these shares were valued at a price of $45.07, the average of the high and low trading price of our |
ITEM 6. | SELECTED FINANCIAL DATA |
Year Ended December 31, | |||||||||||||||||||
2015 (1) | 2014 (1), (3) | 2013 (1), (3) | 2012 (1), (3) | 2011 (2), (3) | |||||||||||||||
(as adjusted, in millions, except per share data) | |||||||||||||||||||
Statement of Operations Data: | |||||||||||||||||||
Net sales | $ | 1,204.4 | $ | 1,219.3 | $ | 1,144.2 | $ | 1,184.2 | $ | 1,105.5 | |||||||||
Net income (loss) | $ | (20.9 | ) | $ | 22.0 | $ | 27.4 | $ | 41.0 | $ | 44.2 | ||||||||
Balance Sheet Data: | |||||||||||||||||||
Total assets | $ | 1,503.5 | $ | 1,602.7 | $ | 1,397.0 | $ | 1,357.3 | $ | 1,238.5 | |||||||||
Long-term debt (including current portion) | $ | 361.0 | $ | 321.1 | $ | 165.1 | $ | 185.3 | $ | 150.2 | |||||||||
Notes payable to GST | $ | 283.2 | $ | 271.0 | $ | 259.3 | $ | 248.1 | $ | 237.4 | |||||||||
Per Common Share Data – Basic: | |||||||||||||||||||
Net income (loss) | $ | (0.93 | ) | $ | 0.95 | $ | 1.31 | $ | 1.99 | $ | 2.15 | ||||||||
Per Common Share Data – Diluted: | |||||||||||||||||||
Net income (loss) | $ | (0.93 | ) | $ | 0.85 | $ | 1.17 | $ | 1.90 | $ | 2.06 |
(1) | For a discussion of acquisitions and divestitures in the fiscal years ended December 31, 2015, 2014, 2013 and 2012, see Item 1. Business-Acquisitions and Dispositions. |
(2) | In August 2011, we acquired certain assets and assumed certain liabilities of PI Bearing Technologies, a privately held manufacturer of bearing blocks and other bearing products used in fluid power applications, and a distributor of high performance plain bearing products used in industrial applications. The business is part of our Engineered Products segment. In July 2011, we acquired Tara Technologies, a privately-held company that offers highly engineered products and solutions to the semiconductor, aerospace, energy and medical markets. The business is part of our Sealing Products segment. In February 2011, we acquired the Mid Western group of companies, a privately-owned business primarily serving the oil and gas drilling, production and processing industries of western Canada. Mid Western services and rebuilds reciprocating compressors, designs and installs lubrication systems, and services and repairs a variety of other equipment used in the oil and gas industry. The business is part of our Engineered Products segment. In February 2011, we acquired the business of PSI, a privately-owned group of companies that manufacture products for the safe flow of fluids through pipeline transmission and distribution systems worldwide. The PSI business primarily serves the global oil and gas industry and water and wastewater infrastructure markets. The business’s products include flange sealing and flange isolation products; pipeline casing spacers/isolators; casing end seals; the original Link-Seal® modular sealing system for sealing pipeline penetrations into walls, floors, ceilings and bulkheads; hole forming products; manhole infiltration sealing systems; and safety-related signage for pipelines. The business is part of our Sealing Products Segment. In January 2011, we acquired certain assets and assumed certain liabilities of Rome Tool & Die, Inc., a leading supplier of steel brake shoes to the North American heavy-duty truck market. The business is part of our Sealing Products segment. We paid for the acquisitions completed during 2011 with $228.2 million in cash, which included $99.2 million for the purchase of PSI. Additionally, there were approximately $2.2 million of acquisition-related costs recorded during 2011. |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(in millions) | |||||||||||
Sales | |||||||||||
Sealing Products | $ | 705.6 | $ | 664.3 | $ | 622.9 | |||||
Engineered Products | 297.8 | 357.6 | 356.4 | ||||||||
Power Systems | 204.6 | 200.1 | 167.6 | ||||||||
1,208.0 | 1,222.0 | 1,146.9 | |||||||||
Intersegment sales | (3.6 | ) | (2.7 | ) | (2.7 | ) | |||||
Total sales | $ | 1,204.4 | $ | 1,219.3 | $ | 1,144.2 | |||||
Segment Profit | |||||||||||
Sealing Products | $ | 84.3 | $ | 85.6 | $ | 97.1 | |||||
Engineered Products | 6.4 | 26.8 | 17.6 | ||||||||
Power Systems | 27.1 | 28.5 | 14.0 | ||||||||
Total segment profit | 117.8 | 140.9 | 128.7 | ||||||||
Corporate expenses | (28.2 | ) | (42.9 | ) | (33.3 | ) | |||||
Asbestos settlement | — | (30.0 | ) | — | |||||||
Goodwill and other intangible asset impairment | (47.0 | ) | — | — | |||||||
Interest expense, net | (52.1 | ) | (44.1 | ) | (44.3 | ) | |||||
Other income (expense), net | (9.1 | ) | 8.7 | (15.3 | ) | ||||||
Income (loss) before income taxes | $ | (18.6 | ) | $ | 32.6 | $ | 35.8 |
Sales | Percent Change 2015 vs. 2014 | ||||||||||||||
increase/(decrease) | Acquisitions | Divestiture | Foreign Currency | Organic | Total | ||||||||||
EnPro Industries, Inc. | 8 | % | (3 | )% | (5 | )% | (1 | )% | (1 | )% | |||||
Sealing Products | 15 | % | (5 | )% | (3 | )% | (1 | )% | 6 | % | |||||
Engineered Products | — | % | — | % | (10 | )% | (7 | )% | (17 | )% | |||||
Power Systems | — | % | — | % | — | % | 2 | % | 2 | % |
• | Challenging economic headwinds in many markets, particularly oil and gas |
• | Unfavorable effect of foreign currency in the Sealing and Engineered Products segments |
• | The acquisitions in 2015 included in the Sealing Products segment |
Sales | Percent Change 2014 vs. 2013 | ||||||||||||||
increase/(decrease) | Acquisitions | Divestiture | Foreign Currency | Organic | Total | ||||||||||
EnPro Industries, Inc. | 1 | % | — | % | — | % | 6 | % | 7 | % | |||||
Sealing Products | 1 | % | — | % | — | % | 6 | % | 7 | % | |||||
Engineered Products | — | % | — | % | — | % | — | % | — | % | |||||
Power Systems | — | % | — | % | — | % | 19 | % | 19 | % |
• | Increased organic sales in the Sealing Products and Power Systems segments |
• | Increased engine sales in the Power Systems segment |
• | The acquisitions in 2014 included in the Sealing Products segment |
• | a maximum consolidated total net leverage ratio of not more than 4.0 to 1.0 (with total debt, for the purposes of such ratio, to exclude the intercompany notes payable to GST LLC and to be net of up to $75 million of unrestricted cash of EnPro Industries, Inc. and its domestic, consolidated subsidiaries); and |
• | a minimum consolidated interest coverage ratio of at least 2.5 to 1.0. |
• | grant liens on our assets; |
• | incur additional indebtedness (including guarantees and other contingent obligations); |
• | make certain investments (including loans and advances); |
• | merge or make other fundamental changes; |
• | sell or otherwise dispose of property or assets; |
• | pay dividends and other distributions and prepay certain indebtedness; |
• | make changes in the nature of our business; |
• | enter into transactions with our affiliates; |
• | enter into burdensome contracts; |
• | make certain capital expenditures; and |
• | modify or terminate documents related to certain indebtedness |
Payments Due by Period (in millions) | |||||||||||||||||||
Contractual Obligations | Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | ||||||||||||||
Long-term debt | $ | 363.0 | $ | 0.1 | $ | 0.3 | $ | 62.5 | $ | 300.1 | |||||||||
Notes payable to GST | 309.2 | — | 309.2 | — | — | ||||||||||||||
Interest on long-term debt | 120.0 | 19.0 | 35.4 | 35.4 | 30.2 | ||||||||||||||
Interest on notes payable to GST | 37.7 | 18.4 | 19.3 | — | — | ||||||||||||||
Operating leases | 44.7 | 10.2 | 16.8 | 13.0 | 4.7 | ||||||||||||||
Other liabilities | 23.1 | 2.7 | 6.3 | 4.9 | 9.2 | ||||||||||||||
Total | $ | 897.7 | $ | 50.4 | $ | 387.3 | $ | 115.8 | $ | 344.2 |
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total | Fair Value | ||||||||||||||||||||||||
Fixed rate debt | $ | 0.1 | $ | 283.4 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 300.1 | $ | 583.9 | $ | 579.8 | |||||||||||||||
Average interest rate | 4.4 | % | 11.0 | % | 4.4 | % | 4.4 | % | 4.4 | % | 5.9 | % | 8.4 | % |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
Page | |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. | CONTROLS AND PROCEDURES |
ITEM 9B. | OTHER INFORMATION |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
ITEM 11. | EXECUTIVE COMPENSATION |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | ||||||||
(a) | (b) | (c) | |||||||||
Equity compensation plans approved by security holders | 734,482(1) | $35.96(2) | 222,780 | ||||||||
Equity compensation plans not approved by security holders | — | — | — | ||||||||
Total | 734,482(1) | $35.96(2) | 222,780 |
(1) | Includes shares issuable under restricted share unit awards and performance shares awarded under our Amended and Restated 2002 Equity Compensation Plan at the level paid for the 2013 – 2015 performance cycle and at the maximum levels payable for the 2014 – 2016 and 2015 – 2017 performance cycles. |
(2) | The weighted average exercise price does not take into account awards of performance shares, phantom shares or restricted share units. Information with respect to these awards is incorporated by reference to the information appearing under the captions “Corporate Governance Policies and Practices – Director Compensation” and “Executive Compensation – Grants of Plan Based Awards – LTIP Awards” in our definitive proxy statement for the 2016 annual meeting of shareholders. |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
(a) | The following documents are filed as part of this report: |
1. | Financial Statements |
2. | Financial Statement Schedule |
3. | Exhibits |
ENPRO INDUSTRIES, INC. | |
By: | /s/ Robert S. McLean |
Robert S. McLean | |
Chief Administrative Officer, General Counsel and Secretary | |
By: | /s/ Steven R. Bower |
Steven R. Bower | |
Vice President, Controller and Chief Accounting Officer | |
(Principal Accounting Officer) |
Signatures | Title | Date | ||
/s/ Stephen E. Macadam | President and Chief Executive Officer (Principal Executive Officer) and Director | February 26, 2016 | ||
Stephen E. Macadam | ||||
/s/ J. Milton Childress II | Senior Vice President and Chief Financial Officer (Principal Financial Officer) | February 26, 2016 | ||
J. Milton Childress II | ||||
/s/ Gordon D. Harnett | Chairman of the Board and Director | February 26, 2016 | ||
Gordon D. Harnett* | ||||
/s/ Thomas M. Botts | Director | February 26, 2016 | ||
Thomas M. Botts* | ||||
/s/ Felix M. Brueck | Director | February 26, 2016 | ||
Felix M. Brueck* | ||||
/s/ B. Bernard Burns, Jr. | Director | February 26, 2016 | ||
B. Bernard Burns, Jr.* | ||||
/s/ Diane C. Creel | Director | February 26, 2016 | ||
Diane C. Creel* | ||||
/s/ Kees van der Graaf | Director | February 26, 2016 | ||
Kees van der Graaf* | ||||
/s/ David L. Hauser | Director | February 26, 2016 | ||
David L. Hauser* | ||||
/s/ John Humphrey | Director | February 26, 2016 | ||
John Humphrey* |
* By: | /s/ Robert S. McLean | |
Robert S. McLean, Attorney-in-Fact |
2.1** | Asset and Share Purchase Agreement dated as of June 22, 2015 among Veyance de Mexico, S. de R.L. de C.V., Veyance de Chihuahua, S. de R.L. de C.V., Veyance Technologies Canada, Inc. and Veyance Technologies, Inc. as the Sellers and EnPro Industries, Inc., Garlock of Canada Ltd., STEMCO Kaiser Incorporated, EnPro Luxembourg Holding Company SarL, and Stempro Mexico Acquisition Co., S de R.L. de C.V. as the Buyers (incorporated by reference to Exhibit 2.1 to the Form 8-K filed on July 2, 2015 by EnPro Industries, Inc. (File No. 001-31225)) |
3.1 | Restated Articles of Incorporation of EnPro Industries, Inc. (incorporated by reference to Exhibit 3.1 to the Form 10-Q for the period ended June 30, 2008 filed by EnPro Industries, Inc. (File No. 001-31225)) |
3.2 | Amended Bylaws of EnPro Industries, Inc. (incorporated by reference to Exhibit 3.1 to the Form 8-K dated October 31, 2014 filed by EnPro Industries, Inc. (File No. 001-31225)) |
4.1 | Form of certificate representing shares of common stock, par value $0.01 per share, of EnPro Industries, Inc. (incorporated by reference to Amendment No. 4 of the Registration Statement on Form 10 of EnPro Industries, Inc. (File No. 001-31225)) |
4.2 | Indenture dated as of September 16, 2014 among EnPro Industries, Inc., the Guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Form 8-K filed on September 16, 2014 by EnPro Industries, Inc. (File No. 001-31225)) |
4.3 | Indenture dated as of October 26, 2005 between EnPro Industries, Inc. and Wachovia Bank, National Association, as trustee (incorporated by reference to Exhibit 10.1 to the Form 8-K dated October 26, 2005 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.1 | Amended and Restated Credit Agreement dated as of August 28, 2014 among EnPro Industries, Inc., Coltec Industries Inc, the Guarantors party thereto, the Lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on August 28, 2014 by EnPro Industries, Inc. (File No. 001-31225)) |
10.2 | Registration Rights Agreement dated as of September 16, 2014 between EnPro Industries, Inc., Applied Surface Technology, Inc., Belfab, Inc., Best Holdings I, Inc., Coltec Industries Inc, Coltec International Services Co., Compressor Products International LLC, EnPro Associates, LLC, Garlock Pipeline Technologies, Inc., GGB LLC, GGB, Inc., Kenlee Daytona LLC, SD Friction, LLC, Stemco Holdings, Inc., STEMCO Kaiser Incorporated, Stemco LP, Stemco Products, Inc., Technetics Group Daytona, Inc., Technetics Group LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the Initial Purchasers (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on September 16, 2014 by EnPro Industries, Inc. (File No. 001-31225)) |
10.3 | Form of Indemnification Agreement for directors and officers (incorporated by reference to Exhibit 10.5 to Amendment No. 3 of the Registration Statement on Form 10 of EnPro Industries, Inc. (File No. 001-31225)) |
10.4+* | EnPro Industries, Inc. 2002 Equity Compensation Plan (2015 Amendment and Restatement) |
10.5+ | EnPro Industries, Inc. Senior Executive Annual Performance Plan (2012 Amendment and Restatement) (incorporated by reference to Appendix B to the Proxy Statement on Schedule 14A dated March 20, 2012 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.6+* | EnPro Industries, Inc. Long-Term Incentive Plan (2015 Amendment and Restatement) |
10.7+ | EnPro Industries, Inc. Management Purchase Stock Deferral Plan (incorporated by reference to Exhibit 10.1 to the Form 8-K dated November 2, 2012 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.8+ | Form of EnPro Industries, Inc. Phantom Shares Award Grant for Outside Directors (2009 Amendment and Restatement) (incorporated by reference to Exhibit 10.7 to the Form 10-K for the year ended December 31, 2012 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.9+ | Form of EnPro Industries, Inc. Restricted Share Award Agreement (incorporated by reference to Exhibit 10.1 to the Form 8-K dated February 14, 2008 filed with EnPro Industries, Inc. (File No. 001-31225)) |
10.10+* | Form of EnPro Industries, Inc. Restricted Share Units Award Agreement |
10.11+* | Form of EnPro Industries, Inc. Restricted Share Units Award Agreement for Management Stock Purchase Deferral Plan |
10.12+* | Form of EnPro Industries, Inc. Long-Term Incentive Plan Award Agreement (Performance Shares) |
10.13+* | Form of EnPro Industries, Inc. Long-Term Incentive Plan Award Agreement (Cash) |
10.14+ | Form of EnPro Industries, Inc. Long-Term Incentive Plan Award Agreement (Performance Shares) (incorporated by reference to Exhibit 10.11 to the Form 10-K for the year ended December 31, 2012 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.15+ | Form of EnPro Industries, Inc. Long-Term Incentive Plan Award Agreement (Cash) (incorporated by reference to Exhibit 10.12 to the Form 10-K for the year ended December 31, 2012 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.16+ | EnPro Industries, Inc. Defined Benefit Restoration Plan (amended and restated effective as of January 1, 2007) (incorporated by reference to Exhibit 10.25 to the Form 10-K for the year ended December 31, 2006 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.17+ | EnPro Industries, Inc. Deferred Compensation Plan (as amended and restated effective January 1, 2010) (incorporated by reference to Exhibit 10.16 to the Form 10-K for the year ended December 31, 2013 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.18+ | Amendment dated December 12, 2014 to EnPro Industries, Inc. Deferred Compensation Plan (as amended and restated effective January 1, 2010) (incorporated by reference to Exhibit 10.17 to the Form 10-K for the year ended December 31, 2014 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.19+* | EnPro Industries, Inc. Deferred Compensation Plan for Non-Employee Directors (as amended and restated effective January 1, 2016) |
10.20+ | EnPro Industries, Inc. Outside Directors’ Phantom Share Plan (incorporated by reference to Exhibit 10.14 to the Form 10-K for the year ended December 31, 2002 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.21+ | Executive Employment Agreement dated March 10, 2008 between EnPro Industries, Inc. and Stephen E. Macadam (incorporated by reference to Exhibit 10.1 to the Form 8-K dated March 10, 2008 filed by EnPro Industries, Inc., (File No. 001-31225)) |
10.22+ | Amendment to Executive Employment Agreement dated as of August 4, 2010 between EnPro Industries, Inc. and Stephen E. Macadam incorporated by reference to Exhibit 10.1 to the Form 10-Q for the period ended September 30, 2010 filed by EnPro Industries, Inc., (File No. 001-31225)) |
10.23+ | Management Continuity Agreement dated as of April 14, 2008 between EnPro Industries, Inc. and Stephen E. Macadam (incorporated by reference to Exhibit 10.13 to the Form 10-K for the year ended December 31, 2008 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.24+ | Management Continuity Agreement dated as of January 30, 2006 between EnPro Industries, Inc. and J. Milton Childress II (incorporated by reference to Exhibit 10.28 to the Form 10-K for the year ended December 31, 2005 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.25+ | Management Continuity Agreement dated as of February 7, 2012 between EnPro Industries, Inc. and David S. Burnett (incorporated by reference to Exhibit 10.1 to the Form 10-Q for the period ended March 31, 2012 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.26+ | Management Continuity Agreement dated as of May 5, 2010 between EnPro Industries, Inc. and Robert S. McLean (incorporated by reference to Exhibit 10.1 to the Form 10-Q for the period ended June 30, 2010 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.27+ | Management Continuity Agreement dated as of December 15, 2011 between EnPro Industries, Inc. and Marvin A. Riley (incorporated by reference to Exhibit 10.28 to the Form 10-K for the year ended December 31, 2011 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.28+ | Management Continuity Agreement dated as of May 1, 2013 between EnPro Industries, Inc. and Eric A. Vaillancourt (incorporated by reference to Exhibit 10.2 to the Form 10-Q for the quarter ended June 30, 2013 filed by EnPro Industries, Inc. (File No. 001-31225)) (This exhibit is substantially identical to Management Continuity Agreements between EnPro Industries, Inc. and the following executives entered into on the dates indicated: Jon A. Cox, August 3, 2011; Gilles Hudon, August 3 2011; Ken Walker, August 3, 2011) |
10.29+ | Management Continuity Agreement dated as of February 10, 2014 between EnPro Industries, Inc. and Todd L. Anderson (incorporated by reference to Exhibit 10.1 to the Form 10-Q for the quarter ended March 31, 2014 filed by EnPro Industries, Inc. (File No. 001-31225)) (This exhibit is substantially identical to Management Continuity Agreement between EnPro Industries, Inc. and Susan E. Sweeney entered into on February 10, 2014.) |
10.30+ | Management Continuity Agreement dated as of March 31, 2015 between EnPro Industries, Inc. and Steven R. Bower (incorporated by reference to Exhibit 10.2 to the Form 10-Q for the quarter ended March 31, 2015 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.31+ | Management Continuity Agreement dated as of July 31, 2015 between EnPro Industries, Inc. and William A. Favenesi (incorporated by reference to Exhibit 10.1 to the Form 10-Q for the quarter ended September 30, 2015 filed by EnPro Industries, Inc. (File No. 001-31225)) (this exhibit is substantially identical to Management Continuity Agreements between EnPro Industries, Inc. and William L. Sparks entered into on July 31, 2015 and William C. O'Neal entered into on July 28, 2015) |
10.32+ | Special Exit Benefit Agreement and Release dated as of November 6, 2014 between EnPro Industries, Inc. and Dale A. Herold (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on November 10, 2014 by EnPro Industries, Inc. (File No. 001-31225)) |
10.33+ | EnPro Industries, Inc. Senior Officer Severance Plan (effective as of August 4, 2010) (incorporated by reference to Exhibit 10.34 to the Form 10-K for the year ended December 31, 2010 filed by EnPro Industries, Inc. (File No. 001-31225)) |
10.34+* | Summary of Executive and Director Compensation Arrangements |
10.35+ | Transition Agreement dated February 13, 2015 between Alexander W. Pease and EnPro Industries, Inc. (incorporated by reference to Exhibit 10.1 to the Form 10-Q for the quarter ended March 31, 2015 filed by EnPro Industries, Inc. (File No. 001-31225)) |
21* | List of Subsidiaries |
23.1* | Consent of PricewaterhouseCoopers LLP |
23.2* | Consent of Bates White, LLC |
24.1* | Power of Attorney from Thomas M. Botts |
24.2* | Power of Attorney from Felix M. Brueck |
24.3* | Power of Attorney from B. Bernard Burns, Jr. |
24.4* | Power of Attorney from Diane C. Creel |
24.5* | Power of Attorney from Kees van der Graaf |
24.6* | Power of Attorney from Gordon D. Harnett |
24.7* | Power of Attorney from David L. Hauser |
24.8* | Power of Attorney from John Humphrey |
31.1* | Certification of Chief Executive Officer pursuant to Rule 13a – 14(a)/15d – 14(a) |
31.2* | Certification of Chief Financial Officer pursuant to Rule 13a – 14(a)/15d – 14(a) |
32* | Certification pursuant to Section 1350 |
101.INS* | XBRL Instance Document |
101.SCH* | XBRL Taxonomy Extension Schema Document |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* | XBRL Taxonomy Extension Definitions Linkbase Document |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Items marked with an asterisk are filed herewith. |
** | Does not include the disclosure schedules and exhibit documents identified and referenced therein. The Company agrees to furnish supplementally a copy of any such omitted schedule or exhibit to the Securities and Exchange Commission upon request. |
+ | Management contract or compensatory plan required to be filed under Item 15(c) of this report and Item 601 of Regulation S-K of the Securities and Exchange Commission. |
2015 | 2014 | 2013 | |||||||||
Net sales | $ | 1,204.4 | $ | 1,219.3 | $ | 1,144.2 | |||||
Cost of sales | 808.9 | 802.6 | 762.9 | ||||||||
Gross profit | 395.5 | 416.7 | 381.3 | ||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 302.8 | 319.5 | 285.8 | ||||||||
Goodwill and other intangible asset impairment | 47.0 | — | — | ||||||||
Asbestos settlement | — | 30.0 | — | ||||||||
Other | 8.1 | 3.8 | 9.1 | ||||||||
Total operating expenses | 357.9 | 353.3 | 294.9 | ||||||||
Operating income | 37.6 | 63.4 | 86.4 | ||||||||
Interest expense | (52.8 | ) | (45.1 | ) | (45.1 | ) | |||||
Interest income | 0.7 | 1.0 | 0.8 | ||||||||
Other income (expense), net | (4.1 | ) | 13.3 | (6.3 | ) | ||||||
Income (loss) before income taxes | (18.6 | ) | 32.6 | 35.8 | |||||||
Income tax expense | (2.3 | ) | (10.6 | ) | (8.4 | ) | |||||
Net income (loss) | $ | (20.9 | ) | $ | 22.0 | $ | 27.4 | ||||
Basic earnings (loss) per share | $ | (0.93 | ) | $ | 0.95 | $ | 1.31 | ||||
Diluted earnings (loss) per share | $ | (0.93 | ) | $ | 0.85 | $ | 1.17 |
2015 | 2014 | 2013 | |||||||||
Net income (loss) | $ | (20.9 | ) | $ | 22.0 | $ | 27.4 | ||||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustments | (21.9 | ) | (25.6 | ) | 1.0 | ||||||
Pension and post-retirement benefits adjustment (excluding amortization) | (3.4 | ) | (39.9 | ) | 47.6 | ||||||
Amortization of pension and post-retirement benefits included in net income (loss) | 7.1 | 2.6 | 9.7 | ||||||||
Realized loss from settled cash flow hedges included in net income | — | — | 1.0 | ||||||||
Other comprehensive income (loss), before tax | (18.2 | ) | (62.9 | ) | 59.3 | ||||||
Income tax benefit (expense) related to items of other comprehensive income (loss) | (1.8 | ) | 14.4 | (21.9 | ) | ||||||
Other comprehensive income (loss), net of tax | (20.0 | ) | (48.5 | ) | 37.4 | ||||||
Comprehensive income (loss) | $ | (40.9 | ) | $ | (26.5 | ) | $ | 64.8 |
2015 | 2014 | 2013 | |||||||||
OPERATING ACTIVITIES | |||||||||||
Net income (loss) | $ | (20.9 | ) | $ | 22.0 | $ | 27.4 | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation | 30.3 | 29.9 | 29.6 | ||||||||
Amortization | 27.8 | 27.6 | 27.0 | ||||||||
Loss on exchange and repurchase of convertible debentures | 2.8 | 10.0 | — | ||||||||
Goodwill and other intangible asset impairment | 47.0 | — | — | ||||||||
Gain on sale of business | — | (27.7 | ) | — | |||||||
Deferred income taxes | (1.1 | ) | (3.3 | ) | 1.7 | ||||||
Stock-based compensation | 4.1 | 9.8 | 6.0 | ||||||||
Other non-cash adjustments | 3.7 | 6.0 | 4.0 | ||||||||
Change in assets and liabilities, net of effects of acquisition and sale of businesses: | |||||||||||
Accounts receivable, net | 7.3 | (14.6 | ) | (4.7 | ) | ||||||
Inventories | (14.7 | ) | (11.4 | ) | (17.2 | ) | |||||
Accounts payable | 3.5 | 1.3 | 2.4 | ||||||||
Other current assets and liabilities | 19.3 | 10.7 | 8.2 | ||||||||
Other non-current assets and liabilities | (22.6 | ) | (28.1 | ) | (14.5 | ) | |||||
Net cash provided by operating activities | 86.5 | 32.2 | 69.9 | ||||||||
INVESTING ACTIVITIES | |||||||||||
Purchases of property, plant and equipment | (36.8 | ) | (41.8 | ) | (30.7 | ) | |||||
Payments for capitalized internal-use software | (4.6 | ) | (10.5 | ) | (9.2 | ) | |||||
Proceeds from sale of business | — | 39.3 | — | ||||||||
Acquisitions, net of cash acquired | (45.5 | ) | (61.9 | ) | (2.0 | ) | |||||
Other | 0.4 | 0.2 | 0.4 | ||||||||
Net cash used in investing activities | (86.5 | ) | (74.7 | ) | (41.5 | ) | |||||
FINANCING ACTIVITIES | |||||||||||
Proceeds from debt | 230.8 | 641.8 | 201.4 | ||||||||
Repayments of debt | (189.0 | ) | (400.4 | ) | (216.3 | ) | |||||
Debt issuance costs | — | (7.3 | ) | — | |||||||
Repurchase of common stock | (85.3 | ) | — | — | |||||||
Dividends paid | (18.0 | ) | — | — | |||||||
Repurchase of convertible debentures conversion option | (21.6 | ) | (53.6 | ) | — | ||||||
Other | (2.1 | ) | (3.5 | ) | (4.6 | ) | |||||
Net cash provided by (used in) financing activities | (85.2 | ) | 177.0 | (19.5 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | (5.6 | ) | (4.7 | ) | 1.6 | ||||||
Net increase (decrease) in cash and cash equivalents | (90.8 | ) | 129.8 | 10.5 | |||||||
Cash and cash equivalents at beginning of year | 194.2 | 64.4 | 53.9 | ||||||||
Cash and cash equivalents at end of year | $ | 103.4 | $ | 194.2 | $ | 64.4 | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the year for: | |||||||||||
Interest | $ | 36.4 | $ | 22.9 | $ | 25.1 | |||||
Income taxes, net of refunds received | $ | 20.4 | $ | 50.3 | $ | 19.6 |
2015 | 2014 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 103.4 | $ | 194.2 | |||
Accounts receivable, less allowance for doubtful accounts of $5.4 in 2015 and of $7.0 in 2014 | 212.5 | 205.2 | |||||
Inventories | 178.4 | 159.7 | |||||
Prepaid expenses and other current assets | 23.6 | 44.0 | |||||
Total current assets | 517.9 | 603.1 | |||||
Property, plant and equipment, net | 211.5 | 199.3 | |||||
Goodwill | 195.9 | 232.4 | |||||
Other intangible assets, net | 190.4 | 202.8 | |||||
Investment in GST | 236.9 | 236.9 | |||||
Deferred income taxes and income tax receivable | 109.3 | 79.0 | |||||
Other assets | 41.6 | 49.2 | |||||
Total assets | $ | 1,503.5 | $ | 1,602.7 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities | |||||||
Short-term borrowings from GST | $ | 24.3 | $ | 23.6 | |||
Notes payable to GST | 12.2 | 11.7 | |||||
Current maturities of long-term debt | 0.1 | 22.5 | |||||
Accounts payable | 101.5 | 87.8 | |||||
Accrued expenses | 140.6 | 131.6 | |||||
Total current liabilities | 278.7 | 277.2 | |||||
Long-term debt | 360.9 | 298.6 | |||||
Notes payable to GST | 271.0 | 259.3 | |||||
Other liabilities | 133.1 | 142.8 | |||||
Total liabilities | 1,043.7 | 977.9 | |||||
Commitments and contingencies | |||||||
Temporary equity | — | 1.0 | |||||
Shareholders’ equity | |||||||
Common stock – $.01 par value; 100,000,000 shares authorized; issued 22,046,647 shares at December 31, 2015 and 24,172,716 shares at December 31, 2014 | 0.2 | 0.2 | |||||
Additional paid-in capital | 372.5 | 477.3 | |||||
Retained earnings | 142.5 | 181.7 | |||||
Accumulated other comprehensive loss | (54.1 | ) | (34.1 | ) | |||
Common stock held in treasury, at cost – 196,593 shares at December 31, 2015 and 200,022 shares at December 31, 2014 | (1.3 | ) | (1.3 | ) | |||
Total shareholders’ equity | 459.8 | 623.8 | |||||
Total liabilities and equity | $ | 1,503.5 | $ | 1,602.7 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Shareholders’ Equity | |||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||
Balance, December 31, 2012 as previously reported | 20.7 | $ | 0.2 | $ | 425.4 | $ | 145.9 | $ | (23.0 | ) | $ | (1.4 | ) | $ | 547.1 | |||||||||||
Prior period adjustment - error in income tax provision | — | — | — | (13.6 | ) | — | — | (13.6 | ) | |||||||||||||||||
Balance, December 31, 2012 as revised | 20.7 | 0.2 | 425.4 | 132.3 | (23.0 | ) | (1.4 | ) | 533.5 | |||||||||||||||||
Net income | — | — | — | 27.4 | — | — | 27.4 | |||||||||||||||||||
Other comprehensive income | — | — | — | — | 37.4 | — | 37.4 | |||||||||||||||||||
Reclassification to temporary equity | — | — | (15.9 | ) | — | — | — | (15.9 | ) | |||||||||||||||||
Incentive plan activity | 0.3 | — | 1.4 | — | — | 0.1 | 1.5 | |||||||||||||||||||
Balance, December 31, 2013, as revised | 21.0 | 0.2 | 410.9 | 159.7 | 14.4 | (1.3 | ) | 583.9 | ||||||||||||||||||
Net income | — | — | — | 22.0 | — | — | 22.0 | |||||||||||||||||||
Other comprehensive loss | — | — | — | — | (48.5 | ) | — | (48.5 | ) | |||||||||||||||||
Exchanges of Convertible Debentures | 2.9 | — | 97.8 | — | — | — | 97.8 | |||||||||||||||||||
Repurchase of Convertible Debentures | — | — | (52.8 | ) | — | — | — | (52.8 | ) | |||||||||||||||||
Accretion of Convertible Debentures from temporary equity | — | — | 14.9 | — | — | — | 14.9 | |||||||||||||||||||
Incentive plan activity | 0.1 | — | 6.5 | — | — | — | 6.5 | |||||||||||||||||||
Balance, December 31, 2014, as revised | 24.0 | 0.2 | 477.3 | 181.7 | (34.1 | ) | (1.3 | ) | 623.8 | |||||||||||||||||
Net loss | — | — | — | (20.9 | ) | — | — | (20.9 | ) | |||||||||||||||||
Other comprehensive loss | — | — | — | — | (20.0 | ) | — | (20.0 | ) | |||||||||||||||||
Dividends paid | — | — | — | (18.0 | ) | — | — | (18.0 | ) | |||||||||||||||||
Repurchase of Convertible Debentures, including call option settlement | (0.9 | ) | — | (21.6 | ) | — | — | — | (21.6 | ) | ||||||||||||||||
Accretion of Convertible Debentures from temporary equity | — | — | 1.0 | — | — | — | 1.0 | |||||||||||||||||||
Share repurchases | (1.3 | ) | — | (86.0 | ) | — | — | — | (86.0 | ) | ||||||||||||||||
Incentive plan activity | 0.1 | — | 1.8 | (0.3 | ) | — | — | 1.5 | ||||||||||||||||||
Balance, December 31, 2015 | 21.9 | $ | 0.2 | $ | 372.5 | $ | 142.5 | $ | (54.1 | ) | $ | (1.3 | ) | $ | 459.8 |
1. | Overview, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Guidance |
December 31, 2014 | ||||||||||||
As previously reported | Adjustment | As revised | ||||||||||
Deferred income taxes and income tax receivable | $ | 80.3 | $ | (1.3 | ) | $ | 79.0 | |||||
Total assets | $ | 1,604.0 | $ | (1.3 | ) | $ | 1,602.7 | |||||
Other liabilities (1) | $ | 130.5 | $ | 12.3 | $ | 142.8 | ||||||
Total liabilities | $ | 965.6 | $ | 12.3 | $ | 977.9 | ||||||
Retained earnings | $ | 195.3 | $ | (13.6 | ) | $ | 181.7 | |||||
Total shareholders' equity | $ | 637.4 | $ | (13.6 | ) | $ | 623.8 | |||||
Total liabilities and equity | $ | 1,604.0 | $ | (1.3 | ) | $ | 1,602.7 | |||||
(1) Note that Other liabilities as previously reported is the sum of the balance sheet totals for Pension liability, Asbestos settlement, and Other liabilities in our 2014 Form 10-K |
• | Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. |
• | Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. |
• | Level 3: Unobservable inputs that reflect our own assumptions. |
2. | Acquisitions |
(in millions) | |||
Accounts receivable | $ | 21.7 | |
Inventories | 10.4 | ||
Property, plant and equipment | 8.6 | ||
Goodwill | 12.8 | ||
Other intangible assets | 14.7 | ||
Other assets | 6.5 | ||
Liabilities assumed | (29.2 | ) | |
$ | 45.5 |
3. | Other Income (Expense) |
Balance December 31, 2014 | Provision | Payments | Balance December 31, 2015 | ||||||||||||
(in millions) | |||||||||||||||
Personnel-related costs | $ | 1.1 | $ | 3.0 | $ | (3.8 | ) | $ | 0.3 | ||||||
Facility relocation and closure costs | 0.7 | 0.9 | (1.6 | ) | — | ||||||||||
$ | 1.8 | $ | 3.9 | $ | (5.4 | ) | $ | 0.3 |
Balance December 31, 2013 | Provision | Payments | Balance December 31, 2014 | ||||||||||||
(in millions) | |||||||||||||||
Personnel-related costs | $ | 2.5 | $ | 1.3 | $ | (2.7 | ) | $ | 1.1 | ||||||
Facility relocation and closure costs | 0.7 | 1.0 | (1.0 | ) | 0.7 | ||||||||||
$ | 3.2 | $ | 2.3 | $ | (3.7 | ) | $ | 1.8 |
Balance, December 31, 2012 | Provision | Payments | Balance December 31, 2013 | ||||||||||||
(in millions) | |||||||||||||||
Personnel-related costs | $ | 0.1 | $ | 5.2 | $ | (2.8 | ) | $ | 2.5 | ||||||
Facility relocation and closure costs | 0.8 | 1.5 | (1.6 | ) | 0.7 | ||||||||||
$ | 0.9 | $ | 6.7 | $ | (4.4 | ) | $ | 3.2 |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(in millions) | |||||||||||
Sealing Products | $ | 0.4 | $ | 2.4 | $ | 0.9 | |||||
Engineered Products | 6.2 | (0.1 | ) | 3.7 | |||||||
Power Systems | — | — | 2.1 | ||||||||
$ | 6.6 | $ | 2.3 | $ | 6.7 |
4. | Income Taxes |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(in millions) | |||||||||||
Domestic | $ | (3.0 | ) | $ | (2.4 | ) | $ | (4.3 | ) | ||
Foreign | (15.6 | ) | 35.0 | 40.1 | |||||||
Total | $ | (18.6 | ) | $ | 32.6 | $ | 35.8 |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(in millions) | |||||||||||
Current: | |||||||||||
Federal | $ | (4.0 | ) | $ | 1.3 | $ | (3.7 | ) | |||
Foreign | 9.8 | 9.7 | 10.0 | ||||||||
State | (2.4 | ) | 2.9 | 0.4 | |||||||
3.4 | 13.9 | 6.7 | |||||||||
Deferred: | |||||||||||
Federal | 3.6 | (2.6 | ) | 3.3 | |||||||
Foreign | (6.0 | ) | (0.5 | ) | (1.5 | ) | |||||
State | 1.3 | (0.2 | ) | (0.1 | ) | ||||||
(1.1 | ) | (3.3 | ) | 1.7 | |||||||
Total | $ | 2.3 | $ | 10.6 | $ | 8.4 |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(in millions) | |||||||||||
Stock options exercised and restricted stock units vested | $ | (1.8 | ) | $ | (0.5 | ) | $ | (3.0 | ) | ||
Reacquisition of Convertible Debentures | — | (2.2 | ) | — | |||||||
$ | (1.8 | ) | $ | (2.7 | ) | $ | (3.0 | ) |
2015 | 2014 | ||||||
(in millions) | |||||||
Deferred income tax assets: | |||||||
Net operating losses and tax credits | $ | 10.9 | $ | 11.9 | |||
Accrual for post-retirement benefits other than pensions | 3.2 | 4.3 | |||||
Environmental reserves | 6.4 | 7.0 | |||||
Retained liabilities of previously owned businesses | 2.4 | 3.7 | |||||
Accruals and reserves | 6.4 | 5.3 | |||||
Pension obligations | 12.6 | 16.7 | |||||
Inventories | 5.6 | 5.9 | |||||
Asbestos settlement | 11.3 | 11.9 | |||||
Interest | 9.4 | 9.1 | |||||
Compensation and benefits | 13.7 | 11.7 | |||||
Gross deferred income tax assets | 81.9 | 87.5 | |||||
Valuation allowance | (17.6 | ) | (19.9 | ) | |||
Total deferred income tax assets | 64.3 | 67.6 | |||||
Deferred income tax liabilities: | |||||||
Depreciation and amortization | (44.9 | ) | (45.1 | ) | |||
GST deconsolidation gain | (21.4 | ) | (21.4 | ) | |||
Total deferred income tax liabilities | (66.3 | ) | (66.5 | ) | |||
Net deferred tax assets (liabilities) | $ | (2.0 | ) | $ | 1.1 |
2015 | 2014 | ||||||
(in millions) | |||||||
Prepaid expenses and other current assets | $ | — | $ | 16.8 | |||
Deferred income taxes and income tax receivable | 8.7 | 6.0 | |||||
Accrued expenses | — | (0.2 | ) | ||||
Other liabilities (non-current) | (10.7 | ) | (21.5 | ) | |||
Net deferred tax assets (liabilities) | $ | (2.0 | ) | $ | 1.1 |
Percent of Pretax Income Years Ended December 31, | ||||||||
2015 | 2014 | 2013 | ||||||
Statutory federal income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
U.S. taxation of foreign profits, net of foreign tax credits | 1.1 | 5.8 | 3.0 | |||||
Research and employment tax credits | 7.7 | (4.0 | ) | (7.2 | ) | |||
State and local taxes | 4.1 | 5.5 | 7.5 | |||||
Domestic production activities | 5.5 | (4.8 | ) | — | ||||
Nondeductible goodwill impairment | (48.6 | ) | — | — | ||||
Foreign tax rate differences | (10.2 | ) | (5.9 | ) | (8.5 | ) | ||
Uncertain tax positions | 4.3 | (2.7 | ) | (5.5 | ) | |||
Statutory changes in tax rates | 1.4 | — | (1.3 | ) | ||||
Valuation allowance | (2.1 | ) | (0.5 | ) | (6.0 | ) | ||
Nondeductible expenses | (6.6 | ) | 4.5 | 3.5 | ||||
Other items, net | (3.9 | ) | (0.5 | ) | 2.9 | |||
Effective income tax rate | (12.3 | )% | 32.4 | % | 23.4 | % |
(in millions) | 2015 | 2014 | 2013 | ||||||||
Balance at beginning of year | $ | 3.1 | $ | 5.9 | $ | 6.3 | |||||
Additions based on tax positions related to the current year | 0.3 | 0.4 | 1.0 | ||||||||
Additions for tax positions of prior years | 0.2 | — | 2.6 | ||||||||
Reductions for tax positions of prior years | — | (1.5 | ) | (0.8 | ) | ||||||
Reductions as a result of a lapse in the statute of limitations | (2.0 | ) | (0.2 | ) | (3.4 | ) | |||||
Reductions as a result of audit settlements | — | (1.0 | ) | — | |||||||
Changes due to fluctuations in foreign currency | (0.1 | ) | (0.5 | ) | 0.2 | ||||||
Balance at end of year | $ | 1.5 | $ | 3.1 | $ | 5.9 |
5. | Earnings (Loss) Per Share |
2015 | 2014 | 2013 | |||||||||
Numerator (basic and diluted): | |||||||||||
Net income (loss) | $ | (20.9 | ) | $ | 22.0 | $ | 27.4 | ||||
Denominator: | |||||||||||
Weighted-average shares – basic | 22.5 | 23.1 | 20.9 | ||||||||
Share-based awards | — | 0.1 | 0.2 | ||||||||
Convertible debentures and related warrants | — | 2.6 | 2.4 | ||||||||
Weighted-average shares – diluted | 22.5 | 25.8 | 23.5 | ||||||||
Earnings (loss) per share: | |||||||||||
Basic | $ | (0.93 | ) | $ | 0.95 | $ | 1.31 | ||||
Diluted | $ | (0.93 | ) | $ | 0.85 | $ | 1.17 |
6. | Inventories |
As of December 31, | |||||||
2015 | 2014 | ||||||
(in millions) | |||||||
Finished products | $ | 110.2 | $ | 101.2 | |||
Work in process | 25.6 | 22.1 | |||||
Raw materials and supplies | 49.0 | 45.7 | |||||
184.8 | 169.0 | ||||||
Reserve to reduce certain inventories to LIFO basis | (11.3 | ) | (12.8 | ) | |||
Manufacturing inventories | 173.5 | 156.2 | |||||
Incurred costs related to long-term contracts | 10.9 | 9.1 | |||||
Progress payments related to long-term contracts | (6.0 | ) | (5.6 | ) | |||
Net balance associated with completed-contract inventories | 4.9 | 3.5 | |||||
Total inventories | $ | 178.4 | $ | 159.7 |
7. | Long-Term Contracts |
As of December 31, | |||||||
2015 | 2014 | ||||||
(in millions) | |||||||
Cumulative revenues recognized on uncompleted POC contracts | $ | 215.0 | $ | 198.6 | |||
Cumulative billings on uncompleted POC contracts | 198.2 | 200.0 | |||||
$ | 16.8 | $ | (1.4 | ) |
As of December 31, | |||||||
2015 | 2014 | ||||||
(in millions) | |||||||
Accounts receivable (POC revenue recognized in excess of billings) | $ | 23.5 | $ | 6.3 | |||
Accrued expenses (billings in excess of POC revenue recognized) | (6.7 | ) | (7.7 | ) | |||
$ | 16.8 | $ | (1.4 | ) |
As of December 31, | |||||||
2015 | 2014 | ||||||
(in millions) | |||||||
Incurred costs relating to long-term contracts | $ | 0.1 | $ | 5.9 | |||
Progress payments related to long-term contracts | (1.0 | ) | (10.5 | ) | |||
Net balance associated with completed-contract inventories | $ | (0.9 | ) | $ | (4.6 | ) |
8. | Property, Plant and Equipment |
As of December 31, | |||||||
2015 | 2014 | ||||||
(in millions) | |||||||
Land | $ | 11.1 | $ | 9.0 | |||
Buildings and improvements | 100.0 | 91.6 | |||||
Machinery and equipment | 362.6 | 358.7 | |||||
Construction in progress | 30.1 | 35.0 | |||||
503.8 | 494.3 | ||||||
Less accumulated depreciation | (292.3 | ) | (295.0 | ) | |||
Total | $ | 211.5 | $ | 199.3 |
9. | Goodwill and Other Intangible Assets |
Sealing Products | Engineered Products | Power Systems | Total | ||||||||||||
(in millions) | |||||||||||||||
Goodwill as of December 31, 2013 | $ | 153.7 | $ | 59.4 | $ | 7.1 | $ | 220.2 | |||||||
Foreign currency translation | (2.7 | ) | (3.1 | ) | — | (5.8 | ) | ||||||||
Sale of business | (9.0 | ) | — | — | (9.0 | ) | |||||||||
Acquisitions | 27.0 | — | — | 27.0 | |||||||||||
Goodwill as of December 31, 2014 | 169.0 | 56.3 | 7.1 | 232.4 | |||||||||||
Foreign currency translation | (2.1 | ) | (1.1 | ) | — | (3.2 | ) | ||||||||
Impairment | — | (46.1 | ) | — | (46.1 | ) | |||||||||
Acquisitions | 12.8 | — | — | 12.8 | |||||||||||
Goodwill as of December 31, 2015 | $ | 179.7 | $ | 9.1 | $ | 7.1 | $ | 195.9 |
As of December 31, 2015 | As of December 31, 2014 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
(in millions) | |||||||||||||||
Amortized: | |||||||||||||||
Customer relationships | $ | 212.5 | $ | 112.0 | $ | 213.6 | $ | 98.2 | |||||||
Existing technology | 63.0 | 26.9 | 53.7 | 22.7 | |||||||||||
Trademarks | 35.3 | 18.4 | 33.8 | 16.7 | |||||||||||
Other | 24.1 | 21.9 | 24.0 | 20.8 | |||||||||||
334.9 | 179.2 | 325.1 | 158.4 | ||||||||||||
Indefinite-Lived: | |||||||||||||||
Trademarks | 34.7 | — | 36.1 | — | |||||||||||
Total | $ | 369.6 | $ | 179.2 | $ | 361.2 | $ | 158.4 |
2016 | $ | 19.9 | |
2017 | $ | 19.3 | |
2018 | $ | 18.4 | |
2019 | $ | 17.6 | |
2020 | $ | 17.1 |
10. | Accrued Expenses |
As of December 31, | |||||||
2015 | 2014 | ||||||
(in millions) | |||||||
Salaries, wages and employee benefits | $ | 42.8 | $ | 43.0 | |||
Interest | 36.7 | 35.3 | |||||
Customer advances | 8.9 | 13.5 | |||||
Income and other taxes | 10.3 | 8.7 | |||||
Other | 41.9 | 31.1 | |||||
$ | 140.6 | $ | 131.6 |
11. | Related Party Transactions |
Consolidated Statements of Operations Caption | Years Ended December 31, | |||||||||||||
Description | 2015 | 2014 | 2013 | |||||||||||
(in millions) | ||||||||||||||
Sales to GST | Net sales | $ | 30.6 | $ | 31.1 | $ | 24.4 | |||||||
Purchases from GST | Cost of sales | $ | 20.7 | $ | 24.7 | $ | 26.5 | |||||||
Interest expense to GST | Interest expense | $ | 31.6 | $ | 30.5 | $ | 29.1 |
Consolidated Balance Sheets Caption | As of December 31, | |||||||||
Description | 2015 | 2014 | ||||||||
(in millions) | ||||||||||
Due from GST | Accounts receivable | $ | 16.5 | $ | 18.5 | |||||
Income tax receivable from GST | Deferred income taxes and income tax receivable | $ | 100.6 | $ | 73.0 | |||||
Due from GST | Other assets | $ | 1.3 | $ | 1.1 | |||||
Due to GST | Accounts payable | $ | 8.0 | $ | 7.5 | |||||
Accrued interest to GST | Accrued expenses | $ | 31.2 | $ | 29.8 |
12. | Long-Term Debt |
As of December 31, | |||||||
2015 | 2014 | ||||||
(in millions) | |||||||
Convertible Debentures | $ | — | $ | 22.4 | |||
Senior Notes | 298.0 | 297.7 | |||||
Revolving debt | 62.2 | — | |||||
Other notes payable | 0.8 | 1.0 | |||||
361.0 | 321.1 | ||||||
Less current maturities of long-term debt | 0.1 | 22.5 | |||||
$ | 360.9 | $ | 298.6 |
(in millions) | |||
2016 | $ | 0.1 | |
2017 | 0.2 | ||
2018 | 0.2 | ||
2019 | 62.3 | ||
2020 | 0.1 | ||
Thereafter | 300.1 | ||
$ | 363.0 |
13. | Fair Value Measurements |
Fair Value Measurements as of | |||||||
December 31, 2015 | December 31, 2014 | ||||||
(in millions) | |||||||
Assets | |||||||
Cash equivalents: | |||||||
Money market | $ | — | $ | 117.7 | |||
Time deposits | 24.2 | 22.8 | |||||
24.2 | 140.5 | ||||||
Deferred compensation assets | 5.4 | 5.6 | |||||
$ | 29.6 | $ | 146.1 | ||||
Liabilities | |||||||
Deferred compensation liabilities | $ | 6.6 | $ | 7.9 | |||
$ | 6.6 | $ | 7.9 |
December 31, 2015 | December 31, 2014 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(in millions) | |||||||||||||||
Long-term debt | $ | 361.0 | $ | 360.3 | $ | 321.1 | $ | 345.3 | |||||||
Notes payable to GST | $ | 283.2 | $ | 281.7 | $ | 271.0 | $ | 278.3 |
14. | Pensions and Postretirement Benefits |
Pension Benefits | Other Benefits | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(in millions) | |||||||||||||||
Change in Projected Benefit Obligations | |||||||||||||||
Projected benefit obligations at beginning of year | $ | 291.5 | $ | 246.2 | $ | 3.0 | $ | 4.7 | |||||||
Service cost | 4.9 | 5.2 | 0.1 | 0.1 | |||||||||||
Interest cost | 12.0 | 11.8 | 0.2 | 0.1 | |||||||||||
Actuarial loss (gain) | (18.1 | ) | 46.0 | (0.4 | ) | (0.2 | ) | ||||||||
Amendments | — | — | 0.6 | — | |||||||||||
Benefits paid | (9.9 | ) | (16.1 | ) | (0.1 | ) | (1.7 | ) | |||||||
Benefit obligations assumed in business combination | 5.2 | — | — | — | |||||||||||
Other | (2.2 | ) | (1.6 | ) | — | — | |||||||||
Projected benefit obligations at end of year | 283.4 | 291.5 | 3.4 | 3.0 |
Change in Plan Assets | |||||||||
Fair value of plan assets at beginning of year | 253.1 | 198.6 | |||||||
Actual return on plan assets | (3.8 | ) | 22.3 | ||||||
Administrative expenses | (0.5 | ) | (0.6 | ) | |||||
Benefits paid | (9.9 | ) | (16.1 | ) | |||||
Company contributions | 0.7 | 48.9 | |||||||
Plan assets acquired in business combination | 2.9 | — | |||||||
Fair value of plan assets at end of year | 242.5 | 253.1 |
Underfunded Status at End of Year | $ | (40.9 | ) | $ | (38.4 | ) | $ | (3.4 | ) | $ | (3.0 | ) |
Amounts Recognized in the Consolidated Balance Sheets | |||||||||||||||
Current liabilities | $ | (0.2 | ) | $ | (0.3 | ) | $ | (0.1 | ) | $ | (0.1 | ) | |||
Long-term liabilities | (40.7 | ) | (38.1 | ) | (3.3 | ) | (2.9 | ) | |||||||
$ | (40.9 | ) | $ | (38.4 | ) | $ | (3.4 | ) | $ | (3.0 | ) |
Pension Benefits | Other Benefits | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(in millions) | |||||||||||||||
Net actuarial (gain) loss | $ | 77.1 | $ | 80.7 | $ | (0.5 | ) | $ | (0.1 | ) | |||||
Prior service cost | 1.4 | 1.6 | 0.7 | 0.1 | |||||||||||
$ | 78.5 | $ | 82.3 | $ | 0.2 | $ | — |
Pension Benefits | Other Benefits | ||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Net Periodic Benefit Cost | |||||||||||||||||||||||
Service cost | $ | 4.9 | $ | 5.2 | $ | 6.3 | $ | 0.1 | $ | 0.1 | $ | 0.4 | |||||||||||
Interest cost | 12.0 | 11.8 | 10.6 | 0.2 | 0.1 | 0.2 | |||||||||||||||||
Expected return on plan assets | (18.2 | ) | (16.3 | ) | (13.2 | ) | — | — | — | ||||||||||||||
Amortization of prior service cost | 0.2 | 0.1 | 0.2 | — | — | 0.1 | |||||||||||||||||
Amortization of net loss | 6.9 | 2.5 | 9.4 | — | — | — | |||||||||||||||||
Settlement | — | — | — | — | — | 0.1 | |||||||||||||||||
Deconsolidation of GST | (0.7 | ) | (0.3 | ) | (1.8 | ) | — | — | — | ||||||||||||||
Net periodic benefit cost | 5.1 | 3.0 | 11.5 | 0.3 | 0.2 | 0.8 |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income | |||||||||||||||||||||||
Net loss (gain) | 3.3 | 39.9 | (46.5 | ) | (0.4 | ) | (0.2 | ) | (1.0 | ) | |||||||||||||
Prior service cost | — | 0.5 | — | 0.6 | — | — | |||||||||||||||||
Amortization of net loss | (6.9 | ) | (2.5 | ) | (9.4 | ) | — | — | — | ||||||||||||||
Amortization of prior service cost | (0.2 | ) | (0.1 | ) | (0.2 | ) | — | — | (0.1 | ) | |||||||||||||
Other adjustment | (0.1 | ) | (0.3 | ) | — | — | — | (0.1 | ) | ||||||||||||||
Total recognized in other comprehensive income | (3.9 | ) | 37.5 | (56.1 | ) | 0.2 | (0.2 | ) | (1.2 | ) | |||||||||||||
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income | $ | 1.2 | $ | 40.5 | $ | (44.6 | ) | $ | 0.5 | $ | — | $ | (0.4 | ) |
Pension Benefits | Other Benefits | ||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||
Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31 | |||||||||||||||||
Discount rate | 4.63 | % | 4.25 | % | 5.0 | % | 4.63 | % | 4.25 | % | 5.0 | % | |||||
Rate of compensation increase | 3.0 | % | 3.0 | % | 3.0 | % | 4.0 | % | 4.0 | % | N/A | ||||||
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31 | |||||||||||||||||
Discount rate | 4.25 | % | 5.0 | % | 4.0 | % | 4.25 | % | 5.0 | % | 4.0 | % | |||||
Expected long-term return on plan assets | 7.25 | % | 8.0 | % | 8.0 | % | — | — | — | ||||||||
Rate of compensation increase | 3.0 | % | 3.0 | % | 3.0 | % | 4.0 | % | 4.0 | % | 4.0 | % |
Assumed Health Care Cost Trend Rates at December 31 | 2015 | 2014 | |||
Health care cost trend rate assumed for next year | 6.7 | % | 6.9 | % | |
Rate to which the cost trend rate is assumed to decline (the ultimate rate) | 5.0 | % | 5.0 | % | |
Year that the rate reaches the ultimate trend rate | 2025 | 2024 |
Target Allocation | Plan Assets at December 31, | |||||||
2016 | 2015 | 2014 | ||||||
Asset Category | ||||||||
Equity securities | 40 | % | 39 | % | 39 | % | ||
Fixed income | 60 | % | 61 | % | 61 | % | ||
100 | % | 100 | % | 100 | % |
2015 | 2014 | ||||||
(in millions) | |||||||
Mutual funds – U.S. equity | $ | 63.5 | $ | 66.8 | |||
Fixed income treasury and money market | 146.4 | 152.5 | |||||
Mutual funds – international equity | 31.8 | 33.0 | |||||
Cash equivalents | 0.8 | 0.8 | |||||
$ | 242.5 | $ | 253.1 |
Pension Benefits | Other Benefits | ||||||
(in millions) | |||||||
2016 | $ | 11.5 | $ | 0.2 | |||
2017 | 12.4 | 0.2 | |||||
2018 | 13.3 | 0.2 | |||||
2019 | 14.2 | 0.3 | |||||
2020 | 15.2 | 1.0 | |||||
Years 2021 – 2025 | 87.9 | 0.9 |
15. | Shareholders' Equity |
16. | Accumulated Other Comprehensive Income (Loss) |
(in millions) | Unrealized Translation Adjustments | Pension and Other Postretirement Plans | Gains and Losses on Cash Flow Hedges | Total | |||||||||||
Balance at December 31, 2012 | $ | 41.6 | $ | (64.0 | ) | $ | (0.6 | ) | $ | (23.0 | ) | ||||
Other comprehensive income before reclassifications | 1.0 | 29.7 | — | 30.7 | |||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | 6.1 | 0.6 | 6.7 | |||||||||||
Net current-period other comprehensive income | 1.0 | 35.8 | 0.6 | 37.4 | |||||||||||
Balance at December 31, 2013 | 42.6 | (28.2 | ) | — | 14.4 | ||||||||||
Other comprehensive loss before reclassifications | (25.6 | ) | (24.5 | ) | — | (50.1 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | 1.6 | — | 1.6 | |||||||||||
Net current-period other comprehensive loss | (25.6 | ) | (22.9 | ) | — | (48.5 | ) | ||||||||
Balance at December 31, 2014 | 17.0 | (51.1 | ) | — | (34.1 | ) | |||||||||
Other comprehensive loss before reclassifications | (21.9 | ) | (1.8 | ) | — | (23.7 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | 3.7 | — | 3.7 | |||||||||||
Net current-period other comprehensive income (loss) | (21.9 | ) | 1.9 | — | (20.0 | ) | |||||||||
Balance at December 31, 2015 | $ | (4.9 | ) | $ | (49.2 | ) | $ | — | $ | (54.1 | ) |
Details about Accumulated Other Comprehensive Income (Loss) Components | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Affected Statement of Operations Caption | |||||||||||
Years Ended December 31, | |||||||||||||
2015 | 2014 | 2013 | |||||||||||
(in millions) | |||||||||||||
Amortization of pension and other postretirement plans: | |||||||||||||
Actuarial losses | $ | 6.9 | $ | 2.5 | $ | 9.4 | (1) | ||||||
Prior service costs | 0.2 | 0.1 | 0.3 | (1) | |||||||||
Total before tax | 7.1 | 2.6 | 9.7 | ||||||||||
Tax benefit | (3.4 | ) | (1.0 | ) | (3.6 | ) | Income tax expense | ||||||
Net of tax | $ | 3.7 | $ | 1.6 | $ | 6.1 | |||||||
Gains and losses on cash flow hedges: | |||||||||||||
Foreign exchange contracts | $ | — | $ | — | $ | 1.0 | Cost of sales | ||||||
Tax benefit | — | — | (0.4 | ) | Income tax expense | ||||||||
Net of tax | $ | — | $ | — | $ | 0.6 |
(1) | These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost. (See Note 14, "Pensions and Postretirement Benefits" for additional details). |
17. | Equity Compensation Plan |
Restricted Share Units | Performance Shares | Restricted Stock | ||||||||||||||||||
Shares | Weighted- Average Grant Date Fair Value | Shares | Weighted- Average Grant Date Fair Value | Shares | Weighted- Average Grant Date Fair Value | |||||||||||||||
Nonvested at December 31, 2012 | 302,487 | $ | 29.43 | 219,202 | $ | 39.52 | 40,584 | $ | 37.27 | |||||||||||
Granted | 99,174 | 44.97 | 169,872 | 44.63 | 11,330 | 55.09 | ||||||||||||||
Vested | (141,985 | ) | 20.93 | (70,381 | ) | 42.30 | (21,834 | ) | 34.04 | |||||||||||
Forfeited | (24,651 | ) | 41.24 | (40,930 | ) | 41.38 | — | — | ||||||||||||
Achievement level adjustment | — | — | (10,985 | ) | 37.65 | — | — | |||||||||||||
Shares settled for cash | (18,709 | ) | 47.13 | — | — | — | — | |||||||||||||
Nonvested at December 31, 2013 | 216,316 | 41.77 | 266,778 | 41.62 | 30,080 | 46.32 | ||||||||||||||
Granted | 127,054 | 71.83 | 102,060 | 71.83 | — | — | ||||||||||||||
Vested | (35,142 | ) | 42.14 | (31,091 | ) | 37.65 | (3,750 | ) | 39.25 | |||||||||||
Forfeited | (19,545 | ) | 57.19 | (32,144 | ) | 51.90 | (15,000 | ) | 41.47 | |||||||||||
Achievement level adjustment | — | — | (78,383 | ) | 37.65 | — | — | |||||||||||||
Shares settled for cash | (19,098 | ) | 42.83 | — | — | — | — | |||||||||||||
Nonvested at December 31, 2014 | 269,585 | 54.60 | 227,220 | 55.65 | 11,330 | 55.09 | ||||||||||||||
Granted | 94,623 | 63.98 | 115,197 | 68.31 | — | — | ||||||||||||||
Vested | (38,457 | ) | 37.67 | (98,230 | ) | 44.63 | — | — | ||||||||||||
Forfeited | (34,157 | ) | 59.34 | (3,398 | ) | 60.09 | — | — | ||||||||||||
Achievement level adjustment | — | — | (42,387 | ) | 44.63 | — | — | |||||||||||||
Shares settled for cash | (27,563 | ) | 37.65 | — | — | — | — | |||||||||||||
Nonvested at December 31, 2015 | 264,031 | $ | 61.74 | 198,402 | $ | 67.22 | 11,330 | $ | 55.09 |
Range of Exercise Price | Stock Options Outstanding | Stock Options Exercisable | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | |||||||
Under $40.00 | 91,318 | 91,318 | $ | 34.55 | 2.3 | ||||||
Over $40.00 | 20,554 | 12,125 | $ | 42.24 | 5.1 | ||||||
Total | 111,872 | 103,443 | $ | 35.45 | 2.6 |
Share Options Outstanding | Weighted Average Exercise Price | |||||
Balance at December 31, 2014 | 114,239 | $ | 36.09 | |||
Exercised | (2,367 | ) | 42.24 | |||
Balance at December 31, 2015 | 111,872 | $ | 35.96 |
As of and for the Years Ended December 31, | |||||||||||
(in millions) | 2015 | 2014 | 2013 | ||||||||
Options outstanding | $ | 0.9 | $ | 3.0 | $ | 2.7 | |||||
Options exercisable | $ | 0.9 | $ | 2.7 | $ | 2.3 | |||||
Options exercised | $ | 0.1 | $ | 0.4 | $ | — |
Years Ended December 31, | |||||||||||
(in millions) | 2015 | 2014 | 2013 | ||||||||
Compensation expense | $ | 4.1 | $ | 9.8 | $ | 6.0 | |||||
Related income tax benefit | $ | 1.5 | $ | 3.7 | $ | 2.2 |
18. | Business Segment Information |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(in millions) | |||||||||||
Sales | |||||||||||
Sealing Products | $ | 705.6 | $ | 664.3 | $ | 622.9 | |||||
Engineered Products | 297.8 | 357.6 | 356.4 | ||||||||
Power Systems | 204.6 | 200.1 | 167.6 | ||||||||
1,208.0 | 1,222.0 | 1,146.9 | |||||||||
Intersegment sales | (3.6 | ) | (2.7 | ) | (2.7 | ) | |||||
Total sales | $ | 1,204.4 | $ | 1,219.3 | $ | 1,144.2 | |||||
Segment Profit | |||||||||||
Sealing Products | $ | 84.3 | $ | 85.6 | $ | 97.1 | |||||
Engineered Products | 6.4 | 26.8 | 17.6 | ||||||||
Power Systems | 27.1 | 28.5 | 14.0 | ||||||||
Total segment profit | 117.8 | 140.9 | 128.7 | ||||||||
Corporate expenses | (28.2 | ) | (42.9 | ) | (33.3 | ) | |||||
Goodwill and other intangible asset impairment | (47.0 | ) | — | — | |||||||
Asbestos settlement | — | (30.0 | ) | — | |||||||
Interest expense, net | (52.1 | ) | (44.1 | ) | (44.3 | ) | |||||
Other income (expense), net | (9.1 | ) | 8.7 | (15.3 | ) | ||||||
Income (loss) before income taxes | $ | (18.6 | ) | $ | 32.6 | $ | 35.8 |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
(in millions) | |||||||||||
Capital Expenditures | |||||||||||
Sealing Products | $ | 17.0 | $ | 19.7 | $ | 14.3 | |||||
Engineered Products | 14.8 | 11.8 | 14.0 | ||||||||
Power Systems | 4.9 | 10.2 | 2.4 | ||||||||
Corporate | 0.1 | 0.1 | — | ||||||||
Total capital expenditures | $ | 36.8 | $ | 41.8 | $ | 30.7 | |||||
Depreciation and Amortization Expense | |||||||||||
Sealing Products | $ | 34.3 | $ | 31.0 | $ | 30.4 | |||||
Engineered Products | 19.4 | 22.5 | 22.4 | ||||||||
Power Systems | 4.1 | 3.7 | 3.6 | ||||||||
Corporate | 0.3 | 0.3 | 0.2 | ||||||||
Total depreciation and amortization | $ | 58.1 | $ | 57.5 | $ | 56.6 |
Net Sales by Geographic Area | |||||||||||
United States | $ | 696.2 | $ | 674.1 | $ | 620.3 | |||||
Europe | 289.5 | 315.9 | 308.6 | ||||||||
Other foreign | 218.7 | 229.3 | 215.3 | ||||||||
Total | $ | 1,204.4 | $ | 1,219.3 | $ | 1,144.2 |
As of December 31, | |||||||
2015 | 2014 | ||||||
(in millions) | |||||||
Assets | |||||||
Sealing Products | $ | 631.7 | $ | 578.3 | |||
Engineered Products | 231.5 | 308.7 | |||||
Power Systems | 162.2 | 145.6 | |||||
Corporate | 478.1 | 570.1 | |||||
$ | 1,503.5 | $ | 1,602.7 |
Long-Lived Assets | |||||||
United States | $ | 135.2 | $ | 130.6 | |||
France | 24.6 | 27.3 | |||||
Other Europe | 24.2 | 28.5 | |||||
Other foreign | 27.5 | 12.9 | |||||
Total | $ | 211.5 | $ | 199.3 |
19. | Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. |
• | Garlock's products resulted in a relatively low exposure to asbestos to a limited population, and its legal responsibility for causing mesothelioma is relatively de minimis. |
• | Chrysotile, the asbestos fiber type used in almost all of Garlock's asbestos products, is far less toxic than other forms of asbestos. The court found reliable and persuasive Garlock's expert epidemiologist, who testified that there is no statistically significant association between low dose chrysotile exposure and mesothelioma. |
• | The population that was exposed to Garlock's products was necessarily exposed to far greater quantities of higher potency asbestos from the products of others. |
• | The estimates of Garlock's aggregate liability that are based on its historic settlement values are not reliable because those values are infected with the impropriety of some law firms and inflated by the cost of defense. |
2015 | 2014 | 2013 | |||||||||
Net sales | $ | 217.6 | $ | 240.6 | $ | 244.8 | |||||
Cost of sales | 137.1 | 146.5 | 145.3 | ||||||||
Gross profit | 80.5 | 94.1 | 99.5 | ||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 43.5 | 47.5 | 41.7 | ||||||||
Asbestos-related | 0.6 | (127.2 | ) | 2.3 | |||||||
Other | 0.3 | 1.6 | 0.5 | ||||||||
Total operating expenses | 44.4 | (78.1 | ) | 44.5 | |||||||
Operating income | 36.1 | 172.2 | 55.0 | ||||||||
Interest income, net | 32.1 | 31.0 | 29.7 | ||||||||
Income before reorganization expenses and income taxes | 68.2 | 203.2 | 84.7 | ||||||||
Reorganization expenses | (25.6 | ) | (16.5 | ) | (44.6 | ) | |||||
Income before income taxes | 42.6 | 186.7 | 40.1 | ||||||||
Income tax expense | (16.2 | ) | (72.9 | ) | (18.7 | ) | |||||
Net income | $ | 26.4 | $ | 113.8 | $ | 21.4 | |||||
Comprehensive income | $ | 17.0 | $ | 101.9 | $ | 20.8 |
2015 | 2014 | 2013 | |||||||||
Net cash flows from operating activities | $ | 57.7 | $ | 63.0 | $ | 48.2 | |||||
Investing activities | |||||||||||
Purchases of property, plant and equipment | (5.3 | ) | (7.0 | ) | (8.7 | ) | |||||
Net payments from loans to affiliates | (5.2 | ) | (3.4 | ) | (12.8 | ) | |||||
Net purchases of held-to-maturity securities | (36.7 | ) | (28.3 | ) | (25.0 | ) | |||||
Other | (0.7 | ) | 1.3 | (0.2 | ) | ||||||
Net cash used in investing activities | (47.9 | ) | (37.4 | ) | (46.7 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | (3.9 | ) | (2.4 | ) | (2.3 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 5.9 | 23.2 | (0.8 | ) | |||||||
Cash and cash equivalents at beginning of year | 66.0 | 42.8 | 43.6 | ||||||||
Cash and cash equivalents at end of year | $ | 71.9 | $ | 66.0 | $ | 42.8 |
2015 | 2014 | ||||||
Assets: | |||||||
Current assets | $ | 406.1 | $ | 370.9 | |||
Asbestos insurance receivable | 62.0 | 80.7 | |||||
Deferred income taxes | 105.6 | 85.6 | |||||
Notes receivable from affiliate | 271.0 | 259.3 | |||||
Other assets | 67.8 | 73.5 | |||||
Total assets | $ | 912.5 | $ | 870.0 | |||
Liabilities and Shareholder’s Equity: | |||||||
Current liabilities | $ | 40.5 | $ | 42.7 | |||
Other liabilities | 114.4 | 86.6 | |||||
Liabilities subject to compromise (A) | 339.1 | 339.1 | |||||
Total liabilities | 494.0 | 468.4 | |||||
Shareholder’s equity | 418.5 | 401.6 | |||||
Total liabilities and shareholder’s equity | $ | 912.5 | $ | 870.0 |
(A) | Liabilities subject to compromise include pre-petition unsecured claims which may be resolved at amounts different from those recorded in the condensed combined balance sheets. Liabilities subject to compromise consist principally of asbestos-related claims. GST has undertaken to project the number and ultimate cost of all present and future bodily injury claims expected to be asserted, based on actuarial principles, and to measure probable and estimable liabilities under generally accepted accounting principles. GST has accrued $337.5 million as of December 31, 2015 for asbestos related claims. The accrual consists of total funding consisting of (a) $327.5 million for present and future asbestos claims against GST that have not been resolved by settlement prior to the Petition Date plus litigation and administrative expenses, and (b) $10.0 million for claims resolved by enforceable settlement and were not paid prior to the Petition Date and contributions by GST to the settlement facility under the second amended plan to the extent such claims are less than $10.0 million. See Note 20, “Commitments and Contingencies – Asbestos.” |
20. | Commitments and Contingencies |
2015 | 2014 | ||||||
(in millions) | |||||||
Balance at beginning of year | $ | 3.5 | $ | 3.8 | |||
Charges to expense | 3.3 | 2.9 | |||||
Settlements made | (2.0 | ) | (3.2 | ) | |||
Balance at end of year | $ | 4.8 | $ | 3.5 |
2016 | $ | 10.2 | |
2017 | 9.0 | ||
2018 | 7.8 | ||
2019 | 6.7 | ||
2020 | 6.3 | ||
Thereafter | 4.7 | ||
Total minimum payments | $ | 44.7 |
21. | Supplemental Guarantor Financial Information |
Guarantor | Non-guarantor | ||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | 837.8 | $ | 428.1 | $ | (61.5 | ) | $ | 1,204.4 | ||||||||
Cost of sales | — | 591.6 | 278.8 | (61.5 | ) | 808.9 | |||||||||||||
Gross profit | — | 246.2 | 149.3 | — | 395.5 | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | 27.6 | 157.1 | 118.1 | — | 302.8 | ||||||||||||||
Goodwill and other intangible asset impairment | — | 5.6 | 41.4 | — | 47.0 | ||||||||||||||
Other | 1.8 | 1.2 | 5.1 | — | 8.1 | ||||||||||||||
Total operating expenses | 29.4 | 163.9 | 164.6 | — | 357.9 | ||||||||||||||
Operating income (loss) | (29.4 | ) | 82.3 | (15.3 | ) | — | 37.6 | ||||||||||||
Interest expense, net | (13.1 | ) | (38.8 | ) | (0.2 | ) | — | (52.1 | ) | ||||||||||
Other expense, net | (2.8 | ) | (1.3 | ) | — | — | (4.1 | ) | |||||||||||
Income (loss) before income taxes | (45.3 | ) | 42.2 | (15.5 | ) | — | (18.6 | ) | |||||||||||
Income tax benefit (expense) | 12.1 | (9.5 | ) | (4.9 | ) | — | (2.3 | ) | |||||||||||
Income (loss) before equity in earnings of subsidiaries | (33.2 | ) | 32.7 | (20.4 | ) | — | (20.9 | ) | |||||||||||
Equity in earnings of subsidiaries, net of tax | 12.3 | (20.4 | ) | — | 8.1 | — | |||||||||||||
Net income (loss) | $ | (20.9 | ) | $ | 12.3 | $ | (20.4 | ) | $ | 8.1 | $ | (20.9 | ) |
Guarantor | Non-guarantor | ||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income | $ | (20.9 | ) | $ | 12.3 | $ | (20.4 | ) | $ | 8.1 | $ | (20.9 | ) | ||||||
Other comprehensive income (loss): | |||||||||||||||||||
Foreign currency translation adjustments | (21.9 | ) | (21.9 | ) | (21.9 | ) | 43.8 | (21.9 | ) | ||||||||||
Pension and post-retirement benefits adjustment (excluding amortization) | (3.4 | ) | (3.6 | ) | 0.5 | 3.1 | (3.4 | ) | |||||||||||
Amortization of pension and post-retirement benefits included in net income | 7.1 | 7.1 | 0.2 | (7.3 | ) | 7.1 | |||||||||||||
Other comprehensive loss, before tax | (18.2 | ) | (18.4 | ) | (21.2 | ) | 39.6 | (18.2 | ) | ||||||||||
Income tax expense related to items of other comprehensive loss | (1.8 | ) | (1.7 | ) | (0.2 | ) | 1.9 | (1.8 | ) | ||||||||||
Other comprehensive loss, net of tax | (20.0 | ) | (20.1 | ) | (21.4 | ) | 41.5 | (20.0 | ) | ||||||||||
Comprehensive loss | $ | (40.9 | ) | $ | (7.8 | ) | $ | (41.8 | ) | $ | 49.6 | $ | (40.9 | ) |
Guarantor | Non-guarantor | ||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | 801.4 | $ | 456.3 | $ | (38.4 | ) | $ | 1,219.3 | ||||||||
Cost of sales | — | 555.5 | 285.5 | (38.4 | ) | 802.6 | |||||||||||||
Gross profit | — | 245.9 | 170.8 | — | 416.7 | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | 41.1 | 144.5 | 133.9 | — | 319.5 | ||||||||||||||
Asbestos settlement | — | 30.0 | — | — | 30.0 | ||||||||||||||
Other | 0.8 | 1.2 | 1.8 | — | 3.8 | ||||||||||||||
Total operating expenses | 41.9 | 175.7 | 135.7 | — | 353.3 | ||||||||||||||
Operating income (loss) | (41.9 | ) | 70.2 | 35.1 | — | 63.4 | |||||||||||||
Interest income (expense), net | 6.6 | (50.6 | ) | (0.1 | ) | — | (44.1 | ) | |||||||||||
Other income (expense) | (10.0 | ) | 23.3 | — | — | 13.3 | |||||||||||||
Income (loss) before income taxes | (45.3 | ) | 42.9 | 35.0 | — | 32.6 | |||||||||||||
Income tax benefit (expense) | 15.3 | (16.6 | ) | (9.3 | ) | — | (10.6 | ) | |||||||||||
Income (loss) before equity in earnings of subsidiaries | (30.0 | ) | 26.3 | 25.7 | — | 22.0 | |||||||||||||
Equity in earnings of subsidiaries, net of tax | 52.0 | 25.7 | — | (77.7 | ) | — | |||||||||||||
Net income | $ | 22.0 | $ | 52.0 | $ | 25.7 | $ | (77.7 | ) | $ | 22.0 |
Guarantor | Non-guarantor | ||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income | $ | 22.0 | $ | 52.0 | $ | 25.7 | $ | (77.7 | ) | $ | 22.0 | ||||||||
Other comprehensive income (loss): | |||||||||||||||||||
Foreign currency translation adjustments | (25.6 | ) | (25.6 | ) | (25.6 | ) | 51.2 | (25.6 | ) | ||||||||||
Pension and post-retirement benefits adjustment (excluding amortization) | (39.9 | ) | (39.9 | ) | (2.4 | ) | 42.3 | (39.9 | ) | ||||||||||
Amortization of pension and post-retirement benefits included in net income | 2.6 | 2.6 | 0.1 | (2.7 | ) | 2.6 | |||||||||||||
Other comprehensive loss, before tax | (62.9 | ) | (62.9 | ) | (27.9 | ) | 90.8 | (62.9 | ) | ||||||||||
Income tax benefit related to items of other comprehensive income | 14.4 | 14.3 | 0.8 | (15.1 | ) | 14.4 | |||||||||||||
Other comprehensive loss, net of tax | (48.5 | ) | (48.6 | ) | (27.1 | ) | 75.7 | (48.5 | ) | ||||||||||
Comprehensive income | $ | (26.5 | ) | $ | 3.4 | $ | (1.4 | ) | $ | (2.0 | ) | $ | (26.5 | ) |
Guarantor | Non-guarantor | ||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | 739.2 | $ | 436.7 | $ | (31.7 | ) | $ | 1,144.2 | ||||||||
Cost of sales | — | 517.5 | 277.1 | (31.7 | ) | 762.9 | |||||||||||||
Gross profit | — | 221.7 | 159.6 | — | 381.3 | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administrative | 31.5 | 136.4 | 117.9 | — | 285.8 | ||||||||||||||
Other | — | 6.6 | 2.5 | — | 9.1 | ||||||||||||||
Total operating expenses | 31.5 | 143.0 | 120.4 | — | 294.9 | ||||||||||||||
Operating income (loss) | (31.5 | ) | 78.7 | 39.2 | — | 86.4 | |||||||||||||
Interest income (expense), net | 5.8 | (49.2 | ) | (0.9 | ) | — | (44.3 | ) | |||||||||||
Other expense | — | (6.3 | ) | — | — | (6.3 | ) | ||||||||||||
Income (loss) before income taxes | (25.7 | ) | 23.2 | 38.3 | — | 35.8 | |||||||||||||
Income tax benefit (expense) | 7.5 | (7.5 | ) | (8.4 | ) | — | (8.4 | ) | |||||||||||
Income (loss) before equity in earnings of subsidiaries | (18.2 | ) | 15.7 | 29.9 | — | 27.4 | |||||||||||||
Equity in earnings of subsidiaries, net of tax | 45.6 | 29.9 | — | (75.5 | ) | — | |||||||||||||
Net income | $ | 27.4 | $ | 45.6 | $ | 29.9 | $ | (75.5 | ) | $ | 27.4 |
Guarantor | Non-guarantor | ||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income | $ | 27.4 | $ | 45.6 | $ | 29.9 | $ | (75.5 | ) | $ | 27.4 | ||||||||
Other comprehensive income (loss): | |||||||||||||||||||
Foreign currency translation adjustments | 1.0 | 1.0 | 9.5 | (10.5 | ) | 1.0 | |||||||||||||
Pension and post-retirement benefits adjustment (excluding amortization) | 47.6 | 46.9 | 1.3 | (48.2 | ) | 47.6 | |||||||||||||
Amortization of pension and post-retirement benefits included in net income | 9.7 | 9.7 | — | (9.7 | ) | 9.7 | |||||||||||||
Realized income from settled cash flow hedges included in net income | 1.0 | 1.0 | — | (1.0 | ) | 1.0 | |||||||||||||
Other comprehensive income, before tax | 59.3 | 58.6 | 10.8 | (69.4 | ) | 59.3 | |||||||||||||
Income tax expense related to items of other comprehensive income | (21.9 | ) | (21.6 | ) | (0.5 | ) | 22.1 | (21.9 | ) | ||||||||||
Other comprehensive income, net of tax | 37.4 | 37.0 | 10.3 | (47.3 | ) | 37.4 | |||||||||||||
Comprehensive income | $ | 64.8 | $ | 82.6 | $ | 40.2 | $ | (122.8 | ) | $ | 64.8 |
Guarantor | Non-guarantor | ||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ | (25.6 | ) | $ | 77.5 | $ | 35.1 | $ | (0.5 | ) | $ | 86.5 | |||||||
INVESTING ACTIVITIES | |||||||||||||||||||
Purchases of property, plant and equipment | — | (23.0 | ) | (13.8 | ) | — | (36.8 | ) | |||||||||||
Payments for capitalized internal-use software | — | (4.6 | ) | — | — | (4.6 | ) | ||||||||||||
Acquisitions, net of cash acquired | — | (42.4 | ) | (3.1 | ) | — | (45.5 | ) | |||||||||||
Other | — | 0.1 | 0.3 | — | 0.4 | ||||||||||||||
Net cash used in investing activities | — | (69.9 | ) | (16.6 | ) | — | (86.5 | ) | |||||||||||
FINANCING ACTIVITIES | |||||||||||||||||||
Net payments between subsidiaries | 178.1 | (183.9 | ) | 5.8 | — | — | |||||||||||||
Intercompany dividends | — | — | (0.5 | ) | 0.5 | — | |||||||||||||
Proceeds from debt | — | 225.0 | 5.8 | — | 230.8 | ||||||||||||||
Repayments of debt | (25.5 | ) | (162.9 | ) | (0.6 | ) | — | (189.0 | ) | ||||||||||
Repurchase of common stock | (85.3 | ) | — | — | — | (85.3 | ) | ||||||||||||
Dividends paid | (18.0 | ) | — | — | — | (18.0 | ) | ||||||||||||
Repurchase of convertible debentures conversion option | (21.6 | ) | — | — | — | (21.6 | ) | ||||||||||||
Other | (2.1 | ) | — | — | — | (2.1 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 25.6 | (121.8 | ) | 10.5 | 0.5 | (85.2 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (5.6 | ) | — | (5.6 | ) | ||||||||||||
Net increase (decrease) in cash and cash equivalents | — | (114.2 | ) | 23.4 | — | (90.8 | ) | ||||||||||||
Cash and cash equivalents at beginning of year | — | 114.9 | 79.3 | — | 194.2 | ||||||||||||||
Cash and cash equivalents at end of year | $ | — | $ | 0.7 | $ | 102.7 | $ | — | $ | 103.4 |
Guarantor | Non-guarantor | ||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ | (25.6 | ) | $ | 20.3 | $ | 38.7 | $ | (1.2 | ) | $ | 32.2 | |||||||
INVESTING ACTIVITIES | |||||||||||||||||||
Purchases of property, plant and equipment | (0.1 | ) | (30.0 | ) | (11.7 | ) | — | (41.8 | ) | ||||||||||
Payments for capitalized internal-use software | (0.1 | ) | (5.4 | ) | (5.0 | ) | — | (10.5 | ) | ||||||||||
Proceeds from sale of business | — | 39.3 | — | — | 39.3 | ||||||||||||||
Acquisitions, net of cash acquired | — | (59.5 | ) | (2.4 | ) | — | (61.9 | ) | |||||||||||
Other | — | — | 0.2 | — | 0.2 | ||||||||||||||
Net cash used in investing activities | (0.2 | ) | (55.6 | ) | (18.9 | ) | — | (74.7 | ) | ||||||||||
FINANCING ACTIVITIES | |||||||||||||||||||
Net payments between subsidiaries | (157.3 | ) | 159.7 | (2.4 | ) | — | — | ||||||||||||
Intercompany dividends | — | — | (1.2 | ) | 1.2 | — | |||||||||||||
Proceeds from debt | 297.6 | 339.4 | 4.8 | — | 641.8 | ||||||||||||||
Repayments of debt | (52.0 | ) | (347.0 | ) | (1.4 | ) | — | (400.4 | ) | ||||||||||
Debt issuance costs | (5.4 | ) | (1.9 | ) | — | — | (7.3 | ) | |||||||||||
Repurchase of convertible debentures conversion option | (53.6 | ) | — | — | — | (53.6 | ) | ||||||||||||
Other | (3.5 | ) | — | — | — | (3.5 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 25.8 | 150.2 | (0.2 | ) | 1.2 | 177.0 | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (4.7 | ) | — | (4.7 | ) | ||||||||||||
Net increase in cash and cash equivalents | — | 114.9 | 14.9 | — | 129.8 | ||||||||||||||
Cash and cash equivalents at beginning of year | — | — | 64.4 | — | 64.4 | ||||||||||||||
Cash and cash equivalents at end of year | $ | — | $ | 114.9 | $ | 79.3 | $ | — | $ | 194.2 |
Guarantor | Non-guarantor | ||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ | (17.8 | ) | $ | 61.5 | $ | 29.4 | $ | (3.2 | ) | $ | 69.9 | |||||||
INVESTING ACTIVITIES | |||||||||||||||||||
Purchases of property, plant and equipment | — | (15.4 | ) | (15.3 | ) | — | (30.7 | ) | |||||||||||
Payments for capitalized internal-use software | — | (6.5 | ) | (2.7 | ) | — | (9.2 | ) | |||||||||||
Acquisitions, net of cash acquired | — | — | (2.0 | ) | — | (2.0 | ) | ||||||||||||
Other | — | 0.1 | 0.3 | — | 0.4 | ||||||||||||||
Net cash used in investing activities | — | (21.8 | ) | (19.7 | ) | — | (41.5 | ) | |||||||||||
FINANCING ACTIVITIES | |||||||||||||||||||
Net payments between subsidiaries | 22.4 | (13.1 | ) | (9.3 | ) | — | — | ||||||||||||
Intercompany dividends | — | — | (3.2 | ) | 3.2 | — | |||||||||||||
Proceeds from debt | — | 187.7 | 13.7 | — | 201.4 | ||||||||||||||
Repayments of debt | — | (214.3 | ) | (2.0 | ) | — | (216.3 | ) | |||||||||||
Other | (4.6 | ) | — | — | — | (4.6 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 17.8 | (39.7 | ) | (0.8 | ) | 3.2 | (19.5 | ) | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 1.6 | — | 1.6 | ||||||||||||||
Net increase in cash and cash equivalents | — | — | 10.5 | — | 10.5 | ||||||||||||||
Cash and cash equivalents at beginning of year | — | — | 53.9 | — | 53.9 | ||||||||||||||
Cash and cash equivalents at end of year | $ | — | $ | — | $ | 64.4 | $ | — | $ | 64.4 |
Guarantor | Non-guarantor | ||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
ASSETS | |||||||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 0.7 | $ | 102.7 | $ | — | $ | 103.4 | |||||||||
Accounts receivable, net | 0.1 | 153.2 | 59.2 | — | 212.5 | ||||||||||||||
Intercompany receivables | — | 8.1 | 11.7 | (19.8 | ) | — | |||||||||||||
Inventories | — | 126.4 | 52.0 | — | 178.4 | ||||||||||||||
Prepaid expenses and other current assets | 13.6 | 11.2 | 9.9 | (11.1 | ) | 23.6 | |||||||||||||
Total current assets | 13.7 | 299.6 | 235.5 | (30.9 | ) | 517.9 | |||||||||||||
Property, plant and equipment, net | 0.1 | 135.1 | 76.3 | — | 211.5 | ||||||||||||||
Goodwill | — | 167.6 | 28.3 | — | 195.9 | ||||||||||||||
Other intangible assets, net | — | 162.6 | 27.8 | — | 190.4 | ||||||||||||||
Investment in GST | — | 236.9 | — | — | 236.9 | ||||||||||||||
Intercompany receivables | 65.8 | 12.7 | 1.4 | (79.9 | ) | — | |||||||||||||
Investment in subsidiaries | 693.0 | 241.8 | — | (934.8 | ) | — | |||||||||||||
Other assets | 19.5 | 122.0 | 19.3 | (9.9 | ) | 150.9 | |||||||||||||
Total assets | $ | 792.1 | $ | 1,378.3 | $ | 388.6 | $ | (1,055.5 | ) | $ | 1,503.5 | ||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||
Current liabilities | |||||||||||||||||||
Short-term borrowings from GST | $ | — | $ | — | $ | 24.3 | $ | — | $ | 24.3 | |||||||||
Notes payable to GST | — | 12.2 | — | — | 12.2 | ||||||||||||||
Current maturities of long-term debt | — | 0.1 | — | — | 0.1 | ||||||||||||||
Accounts payable | 2.3 | 59.3 | 39.9 | — | 101.5 | ||||||||||||||
Intercompany payables | — | 11.7 | 8.1 | (19.8 | ) | — | |||||||||||||
Accrued expenses | 17.7 | 89.6 | 44.4 | (11.1 | ) | 140.6 | |||||||||||||
Total current liabilities | 20.0 | 172.9 | 116.7 | (30.9 | ) | 278.7 | |||||||||||||
Long-term debt | 298.0 | 62.9 | — | — | 360.9 | ||||||||||||||
Notes payable to GST | — | 271.0 | — | — | 271.0 | ||||||||||||||
Intercompany payables | 4.2 | 66.1 | 9.6 | (79.9 | ) | — | |||||||||||||
Other liabilities | 10.1 | 112.4 | 20.5 | (9.9 | ) | 133.1 | |||||||||||||
Total liabilities | 332.3 | 685.3 | 146.8 | (120.7 | ) | 1,043.7 | |||||||||||||
Shareholders’ equity | 459.8 | 693.0 | 241.8 | (934.8 | ) | 459.8 | |||||||||||||
Total liabilities and equity | $ | 792.1 | $ | 1,378.3 | $ | 388.6 | $ | (1,055.5 | ) | $ | 1,503.5 |
Guarantor | Non-guarantor | ||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | |||||||||||||||
ASSETS | |||||||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 114.9 | $ | 79.3 | $ | — | $ | 194.2 | |||||||||
Accounts receivable, net | — | 139.1 | 66.1 | — | 205.2 | ||||||||||||||
Intercompany receivables | — | 6.3 | 2.1 | (8.4 | ) | — | |||||||||||||
Inventories | — | 103.6 | 56.1 | — | 159.7 | ||||||||||||||
Prepaid expenses and other current assets | 28.7 | 23.4 | 10.0 | (18.1 | ) | 44.0 | |||||||||||||
Total current assets | 28.7 | 387.3 | 213.6 | (26.5 | ) | 603.1 | |||||||||||||
Property, plant and equipment, net | 0.2 | 130.3 | 68.8 | — | 199.3 | ||||||||||||||
Goodwill | — | 159.4 | 73.0 | — | 232.4 | ||||||||||||||
Other intangible assets | — | 166.5 | 36.3 | — | 202.8 | ||||||||||||||
Investment in GST | — | 236.9 | — | — | 236.9 | ||||||||||||||
Intercompany receivables | 240.5 | 6.1 | 3.6 | (250.2 | ) | — | |||||||||||||
Investment in subsidiaries | 685.6 | 285.6 | — | (971.2 | ) | — | |||||||||||||
Other assets | 17.7 | 96.7 | 20.7 | (6.9 | ) | 128.2 | |||||||||||||
Total assets | $ | 972.7 | $ | 1,468.8 | $ | 416.0 | $ | (1,254.8 | ) | $ | 1,602.7 | ||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||
Current liabilities | |||||||||||||||||||
Short-term borrowings from GST | $ | — | $ | — | $ | 23.6 | $ | — | $ | 23.6 | |||||||||
Notes payable to GST | — | 11.7 | — | — | 11.7 | ||||||||||||||
Current maturities of long-term debt | 22.4 | 0.1 | — | — | 22.5 | ||||||||||||||
Accounts payable | 0.5 | 55.2 | 32.1 | — | 87.8 | ||||||||||||||
Intercompany payables | — | 2.1 | 6.3 | (8.4 | ) | — | |||||||||||||
Accrued expenses | 12.3 | 100.1 | 37.3 | (18.1 | ) | 131.6 | |||||||||||||
Total current liabilities | 35.2 | 169.2 | 99.3 | (26.5 | ) | 277.2 | |||||||||||||
Long-term debt | 297.7 | 0.7 | 0.2 | — | 298.6 | ||||||||||||||
Notes payable to GST | — | 259.3 | — | — | 259.3 | ||||||||||||||
Intercompany payables | 0.8 | 243.4 | 6.0 | (250.2 | ) | — | |||||||||||||
Other liabilities | 14.2 | 110.6 | 24.9 | (6.9 | ) | 142.8 | |||||||||||||
Total liabilities | 347.9 | 783.2 | 130.4 | (283.6 | ) | 977.9 | |||||||||||||
Temporary equity | 1.0 | — | — | — | 1.0 | ||||||||||||||
Shareholders’ equity | 623.8 | 685.6 | 285.6 | (971.2 | ) | 623.8 | |||||||||||||
Total liabilities and equity | $ | 972.7 | $ | 1,468.8 | $ | 416.0 | $ | (1,254.8 | ) | $ | 1,602.7 |
22. | Subsequent Events |
23. | Selected Quarterly Financial Data (Unaudited) |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||||||||||||||||||
(in millions, except per share data) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||
Net sales | $ | 277.5 | $ | 287.2 | $ | 298.4 | $ | 313.1 | $ | 306.6 | $ | 302.6 | $ | 321.9 | $ | 316.4 | |||||||||||||||
Gross profit | $ | 89.8 | $ | 96.5 | $ | 101.3 | $ | 108.1 | $ | 101.4 | $ | 106.2 | $ | 103.0 | $ | 105.9 | |||||||||||||||
Net income (loss) | $ | (1.6 | ) | $ | 1.3 | $ | (37.3 | ) | $ | 8.3 | $ | 11.4 | $ | 8.6 | $ | 6.6 | $ | 3.8 | |||||||||||||
Basic earnings (loss) per share | $ | (0.07 | ) | $ | 0.06 | $ | (1.66 | ) | $ | 0.36 | $ | 0.52 | $ | 0.36 | $ | 0.30 | $ | 0.16 | |||||||||||||
Diluted earnings (loss) per share | $ | (0.07 | ) | $ | 0.05 | $ | (1.66 | ) | $ | 0.32 | $ | 0.51 | $ | 0.33 | $ | 0.30 | $ | 0.15 |
Balance, Beginning of Year | Charge (credit) to Expense | Write-off of Receivables | Other (1) | Balance, End of Year | |||||||||||||||
2015 | $ | 7.0 | $ | (0.2 | ) | $ | (1.4 | ) | $ | — | $ | 5.4 | |||||||
2014 | $ | 6.0 | $ | 2.5 | $ | (1.1 | ) | $ | (0.4 | ) | $ | 7.0 | |||||||
2013 | $ | 5.7 | $ | 1.7 | $ | (1.4 | ) | $ | — | $ | 6.0 |
(1) | Consists primarily of the effect of changes in currency rates. |
Balance, Beginning of Year | Charge (credit) to Expense | Expiration of Net Operating Losses | Other (2) | Balance, End of Year | |||||||||||||||
2015 | $ | 19.9 | $ | 0.4 | $ | (0.1 | ) | $ | (2.6 | ) | $ | 17.6 | |||||||
2014 | $ | 17.6 | $ | 2.3 | $ | (0.4 | ) | $ | 0.4 | $ | 19.9 | ||||||||
2013 | $ | 17.7 | $ | (1.8 | ) | $ | (0.1 | ) | $ | 1.8 | $ | 17.6 |
(2) | Consists primarily of the effects of changes in currency rates and statutory changes in tax rates. |
• | Total sales |
• | Sales growth |
• | Sales growth excluding acquisitions |
• | Other specific revenue-based measures for particular products, product lines or product groups |
• | Net income |
• | Earnings per share |
• | EPS before or after asbestos and/or other selected items |
• | Net income before or after asbestos charges and/or other selected items |
• | Pretax income before or after asbestos charges and/or other selected items |
• | Consolidated operating income before or after asbestos charges and/or other selected items |
• | Pretax consolidated operating income before or after asbestos charges and/or other selected items |
• | Segment operating income before or after asbestos charges and/or other selected items |
• | Pretax segment operating income before or after asbestos charges and/or other selected items |
• | Earnings before interest and taxes (EBIT) before or after asbestos charges and/or other selected items |
• | EBITDA before or after asbestos charges and/or other selected items |
• | Free cash flow before or after asbestos charges and/or other selected items |
• | Pretax free cash flow before or after asbestos charges and/or other selected items |
• | Asbestos-related cash outflow (or changes in asbestos-related cash outflow) |
• | Pretax asbestos-related cash outflow (or pretax changes in asbestos-related cash outflow) |
• | New asbestos commitments (or changes in new asbestos commitments) |
• | Return on equity, assets, investment, invested capital, capital, total or net capital employed, or sales, before or after asbestos charges and/or other selected items |
• | Pretax return on equity, assets, investment, invested capital, capital, total or net capital employed, or sales, before or after asbestos charges and/or other selected items |
• | Total shareholder return |
• | Share price increase |
• | Total business return before or after asbestos charges and/or selected items |
• | Economic value added or similar “after cost of capital” measures |
• | Return on sales or margin rate, in total or for a particular product, product line or product group |
• | Cash flow return on investment |
• | Working capital (or any of its components or related metrics, e.g. DSO, DSI, DWC, working capital to sales ratio) |
• | Working capital improvement |
• | Market share |
• | Measures of customer satisfaction (including survey results or other measures of satisfaction) |
• | Safety (determined by reference to recordable or lost time rates, first aids, near misses or a combination of two or more such measures or other measures) |
• | Measures of operating efficiency, e.g. productivity, cost of non-conformance or cost of quality, on time delivery, efficiency ratio (controllable expenses divided by operating income or other efficiency metric) |
• | Strategic objectives with specifically identified areas of emphasis, e.g. cost reduction, acquisition assimilation synergies, acquisitions, organization restructuring |
• | The Committee will designate, within 90 days of the beginning of each Performance Period: |
• | The performance measures and calculation methods to be used for the Performance Period; |
• | A schedule for each performance measure relating achievement levels for the performance measure to incentive award levels as a percentage of Participants’ Target LTIP Awards; and |
• | The relative weightings of the performance measures for the Performance Period. |
Participant’s Target LTIP Award | × | Percentage of target award to be paid based on performance measure results | × | Relative weighting of performance measure | = | Amount of incentive award based on performance measure results |
(i) | The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company (other than by exercise of a conversion privilege), (B) any acquisition by the Company or any of its subsidiaries, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries or (D) any acquisition by any company with respect to which, following such acquisition, more than 70% of, respectively, the then outstanding shares of common stock of such company and the combined voting power of the then outstanding voting securities of such company entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such acquisition in substantially the same proportions as their ownership, solely in their capacity as shareholders of the Company, immediately prior to such acquisition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be; or |
(ii) | individuals who, as of the Effective Date, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest; or |
(iii) | consummation of a reorganization, merger or consolidation, in each case, with respect to which all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger or consolidation, do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, solely in their capacity as shareholders of the Company, more than 70% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the company resulting from such reorganization, merger or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be; or |
(iv) | consummation of (A) a complete liquidation or dissolution of the Company or (B) a sale or other disposition of all or substantially all of the assets of the Company, other than to a company, with respect to which following such sale or other disposition, more than 70% of, respectively, the then |
GRANTED TO | GRANT DATE | NUMBER OF UNITS | ||
[________________] | [_______] |
1. | Subject to the terms and conditions of the Plan and this Agreement, the Company awards to you the number of Restricted Share Units shown above (the “Units”). |
2. | You acknowledge having read the Prospectus and agree to be bound by all the terms and conditions of the Plan and this Agreement. |
3. | The Units are issued pursuant to this Agreement and shall vest on the date(s) shown on the enclosed Exhibit B. You shall not have the right to sell or otherwise dispose of the Units or any interest therein. |
4. | You shall have no right to vote any of the Units with respect to any matter presented for a vote of the holders of the Company’s Common Stock and, with respect to the Units, you shall not be entitled to receive any dividends on the Company’s Common Stock when such dividends are paid. |
5. | Upon the vesting of Units, you shall be entitled to receive from the Company either, at the Company’s election, (i) one share of Common Stock or (ii), if there are insufficient shares of Common Stock then available for issuance under the Plan, a cash payment in amount equal to the fair market value (as defined in the Plan) of one share of Common Stock on the date of vesting (the “Vesting Date”), plus, in either case (i) or (ii), a cash payment equal to the aggregate amount of cash dividends paid with respect to one share of Common Stock from the Grant Date to and including the Vesting Date. |
6. | You acknowledge and agree that upon your termination of employment with the Company and its subsidiaries prior to the Units becoming vested in accordance with paragraph 3 and Exhibit B of this Agreement or otherwise in accordance with the Plan, your right to receive payment on any such unvested Units shall automatically, without further act, terminate. |
7. | You agree that you shall comply with (or provide adequate assurance as to future compliance with) all applicable securities laws and income tax laws as determined by the Company as a condition precedent to the payment of any amount pursuant to this Agreement. In addition, you agree that, upon request, you will furnish a letter agreement providing that (i) you will not distribute or resell in violation of the Securities Act of 1933, as |
8. | By executing and returning the Beneficiary Designation Form attached as Exhibit C, you may designate a beneficiary to receive any payment to be made hereunder in the event of your death while in service with the Company. If you do not designate a beneficiary or if your designated beneficiary does not survive you, then your beneficiary will be your estate. |
9. | The existence of this award shall not affect in any way the right or power of the Company to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stocks ahead of or convertible into, or otherwise affecting the Company’s Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. |
10. | Any notice which either party hereto may be required or permitted to give to the other shall be in writing and may be delivered personally, by intraoffice mail, by fax, by electronic mail or other electronic means, or via a postal service, postage prepaid, to such electronic mail or postal address and directed to such person as the Company may notify you from time to time; and to you at your electronic mail or postal address as shown on the records of the Company from time to time, or at such other electronic mail or postal address as you, by notice to the Company, may designate in writing from time to time. |
11. | Regardless of any action the Company or your employer takes with respect to any or all income tax, payroll tax or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items owed by you is and remains your responsibility and that the Company and/or your employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this award, including the grant and vesting of the Units and the subsequent sale of any shares of Common Stock delivered in payment of any Units; and (ii) do not commit to structure the terms of the grant or any aspect of the Units to reduce or eliminate your liability for Tax-Related Items. |
12. | In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. This Agreement constitutes the final understanding between you and the Company regarding the Units. Any prior agreements, commitments or negotiations concerning the Units are superseded. Subject to the terms of the Plan, this Agreement may only be amended by a written instrument signed by both parties. |
ENPRO INDUSTRIES, INC. _______________________________________________ [___________________] | EMPLOYEE __________________________________________ [___________________] |
• | In no event may any individual receive awards under the Plan for a given calendar year covering in excess of 500,000 shares of our common stock; and |
• | We will not grant ISOs covering in the aggregate more than 1,000,000 shares of our common stock during the term of the Plan. |
GRANT DATE | NUMBER OF UNITS | |
[_________________] | [_____] |
Name and Address of Beneficiary | Social Security # | Relationship to Participant | ||
Employee's Name (Please print) | ||
Witness:______________________________________ | ||
Signature of Employee | ||
Date:_______________________________ | ||
By:__________________________________________ |
GRANTED TO | GRANT DATE | NUMBER OF UNITS | ||
[________________] | [_______] |
1. | Subject to the terms and conditions of the Plan and this Agreement, the Company awards to you the number of Restricted Share Units shown above (the “Units”), upon the grant date shown above (the “Grant Date”), in connection with your participation in the EnPro Industries, Inc. Management Stock Purchase Deferral Plan. |
2. | You acknowledge having read the Prospectus and agree to be bound by all the terms and conditions of the Plan and this Agreement. |
3. | The Units are issued pursuant to this Agreement and shall vest and become payable on the date(s) shown on the enclosed Exhibit B. You shall not have the right to sell or otherwise dispose of the Units or any interest therein. |
4. | You shall have no right to vote any of the Units with respect to any matter presented for a vote of the holders of the Company’s Common Stock and, with respect to the Units, you shall not be entitled to receive any dividends on the Company’s Common Stock when such dividends are paid. |
5. | Upon the vesting of Units, with respect to each vested Unit you shall be entitled to receive from the Company, on a deferred basis, either, at the Company’s election, (i) one share of Common Stock or (ii) a cash payment in amount equal to the fair market value (as defined in the Plan) of one share of Common Stock, to be paid upon the payment date to be determined in accordance with paragraph (d) of the enclosed Exhibit B (the “Payment Date”), plus, in either case (i) or (ii), a cash payment equal to the aggregate amount of cash dividends paid with respect to one share of Common Stock from the Grant Date to and including the Payment Date. |
6. | You acknowledge and agree that upon your termination of employment with the Company and its subsidiaries prior to the Units becoming vested in accordance with paragraph 3 and Exhibit B of this Agreement or otherwise in accordance with the Plan, your right to receive payment on any such unvested Units shall automatically, without further act, terminate. |
7. | You agree that you shall comply with (or provide adequate assurance as to future compliance with) all applicable securities laws and income tax laws as determined by the Company as a condition precedent to the payment of any amount pursuant to this Agreement. In addition, you agree that, upon request, you will furnish a letter agreement providing that (i) you will not distribute or resell in violation of the Securities Act of 1933, as amended, any of shares of the Company’s Common Stock delivered in payment of the Units (ii) you will indemnify and hold the Company harmless against all liability for any such violation and (iii) you will accept all liability for any such violation. |
8. | By executing and returning the Beneficiary Designation Form attached as Exhibit C, you may designate a beneficiary to receive any payment to be made hereunder in the event of your death while in service with the Company. If you do not designate a beneficiary or if your designated beneficiary does not survive you, then your beneficiary will be your estate. |
9. | The existence of this award shall not affect in any way the right or power of the Company to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stocks ahead of or convertible into, or otherwise affecting the Company’s Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. |
10. | Any notice which either party hereto may be required or permitted to give to the other shall be in writing and may be delivered personally, by intraoffice mail, by fax, by electronic mail or other electronic means, or via a postal service, postage prepaid, to such electronic mail or postal address and directed to such person as the Company may notify you from time to time; and to you at your electronic mail or postal address as shown on the records of the Company from time to time, or at such other electronic mail or postal address as you, by notice to the Company, may designate in writing from time to time. |
11. | Regardless of any action the Company or your employer takes with respect to any or all income tax, payroll tax or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items owed by you is and remains your responsibility and that the Company and/or your employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this award, including the grant, vesting and payment of the Units and the subsequent sale of any shares of Common Stock delivered in payment of any Units; and (ii) do not commit to structure the terms of the grant or any aspect of the Units to reduce or eliminate your liability for Tax-Related Items. |
12. | In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. This Agreement constitutes the final understanding between you and the Company regarding the Units. Any prior agreements, commitments or negotiations concerning the Units are superseded. Subject to the terms of the Plan, this Agreement may only be amended by a written instrument signed by both parties. |
ENPRO INDUSTRIES, INC. ________________________________________________ [___________________] | EMPLOYEE ___________________________________________ [___________________] |
• | In no event may any individual receive awards under the Plan for a given calendar year covering in excess of 500,000 shares of our common stock; and |
• | We will not grant ISOs covering in the aggregate more than 1,000,000 shares of our common stock during the term of the Plan. |
GRANT DATE | NUMBER OF UNITS | |
[_____] |
Name and Address of Beneficiary | Social Security # | Relationship to Participant | ||
Employee's Name (Please print) | ||
Witness:______________________________________ | ||
Signature of Employee | ||
Date:_______________________________ | ||
• | Performance Shares will not receive dividend equivalents accrued in cash. |
• | You will not earn any Performance Shares if the Company's performance during the 2016-2018 period is below minimum performance. |
• | If actual performance equals or exceeds minimum performance, the number of Performance Shares earned will range from 50% to 200% of your Target Performance Share award based on attainment against the performance goal. |
• | In order to receive any Performance Shares, you must remain employed with the Company through December 31, 2018, except in the case of death, disability, retirement or in connection with a Change in Control as discussed below. If your employment terminates prior to December 31, 2018 for any reason other than death, disability, retirement or in connection with a Change in Control, you will forfeit all Performance Shares. |
• | Performance Shares earned at the end of the Performance Cycle, if any, will be paid in actual shares of Company common stock, less the number of shares to satisfy applicable withholding taxes. Any Performance Shares earned will be issued as soon as practicable following the Compensation Committee’s certification of performance for the Performance Cycle. Notwithstanding the foregoing, the Company reserves the right in its sole discretion to pay the value of any Performance Shares in cash instead of issuing actual shares of Company common stock. |
• | If you become totally disabled under the Company's Long-Term Disability Plan or retire under the Company's Salaried Pension Plan (or a similar pension plan maintained by a subsidiary that is your employer) during the Performance Cycle, you will receive a pro rata payout at the end of the Performance Cycle, based upon the time portion of the cycle during which you were employed. The actual payout will not occur until after the end of the Performance Cycle, at which time the financial performance for the entire Performance Cycle will be used to determine the size of the award in that event. |
• | If you die during the Performance Cycle, any beneficiary you have designated by will (or, if you do not so designate a beneficiary or your designated beneficiary fails to survive you, your estate) will receive a pro rata payout based upon the financial results calculated for the portion of the Performance Cycle through the end of the fiscal quarter following your death. |
• | In the event of a Change in Control during the Performance Cycle, see Appendix D. |
• | The performance factors and weightings applicable to your award are determined based upon your position with the Company. |
• | “Net After-Tax Shares” (as defined below) acquired upon vesting and payment of the Performance Shares must be held by you until the first anniversary of the end of the Performance Cycle. For purposes hereof, “Net After-Tax Shares” means those shares, as determined by the Company, representing the total number of shares remaining after taking into account the amount of all applicable taxes with respect to the payment of the vested Performance Shares, assuming your maximum applicable federal, state and local tax rates for such purpose. |
• | The Compensation Committee retains the right in its sole discretion to reduce any award which would otherwise be payable, unless there has been a Change in Control, as defined in the Equity Compensation Plan. |
• | Any income you derive from a payout of Performance Shares will not be considered eligible earnings for Company or subsidiary pension plans, savings plans, profit sharing plans or other benefit plans. |
• | Total sales |
• | Sales growth |
• | Sales growth excluding acquisitions |
• | Other specific revenue-based measures for particular products, product lines or product groups |
• | Net income |
• | Earnings per share |
• | EPS before or after asbestos and/or other selected items |
• | Net income before or after asbestos charges and/or other selected items |
• | Pretax income before or after asbestos charges and/or other selected items |
• | Consolidated operating income before or after asbestos charges and/or other selected items |
• | Pretax consolidated operating income before or after asbestos charges and/or other selected items |
• | Segment operating income before or after asbestos charges and/or other selected items |
• | Pretax segment operating income before or after asbestos charges and/or other selected items |
• | Earnings before interest and taxes (EBIT) before or after asbestos charges and/or other selected items |
• | EBITDA before or after asbestos charges and/or other selected items |
• | Free cash flow before or after asbestos charges and/or other selected items |
• | Pretax free cash flow before or after asbestos charges and/or other selected items |
• | Asbestos-related cash outflow (or changes in asbestos-related cash outflow) |
• | Pretax asbestos-related cash outflow (or pretax changes in asbestos-related cash outflow) |
• | New asbestos commitments (or changes in new asbestos commitments) |
• | Return on equity, assets, investment, invested capital, capital, total or net capital employed, or sales, before or after asbestos charges and/or other selected items |
• | Pretax return on equity, assets, investment, invested capital, capital, total or net capital employed, or sales, before or after asbestos charges and/or other selected items |
• | Total shareholder return |
• | Share price increase |
• | Total business return before or after asbestos charges and/or selected items |
• | Economic value added or similar “after cost of capital” measures |
• | Return on sales or margin rate, in total or for a particular product, product line or product group |
• | Cash flow return on investment |
• | Working capital (or any of its components or related metrics, e.g. DSO, DSI, DWC, working capital to sales ratio) |
• | Working capital improvement |
• | Market share |
• | Measures of customer satisfaction (including survey results or other measures of satisfaction) |
• | Safety (determined by reference to recordable or lost time rates, first aids, near misses or a combination of two or more such measures or other measures) |
• | Measures of operating efficiency, e.g. productivity, cost of non-conformance or cost of quality, on time delivery, efficiency ratio (controllable expenses divided by operating income or other efficiency metric) |
• | Strategic objectives with specifically identified areas of emphasis, e.g. cost reduction, acquisition assimilation synergies, acquisitions, organization restructuring |
• | The Committee will designate, within 90 days of the beginning of each Performance Period: |
• | The performance measures and calculation methods to be used for the Performance Period; |
• | A schedule for each performance measure relating achievement levels for the performance measure to incentive award levels as a percentage of Participants’ Target LTIP Awards; and |
• | The relative weightings of the performance measures for the Performance Period. |
Participant’s Target LTIP Award | × | Percentage of target award to be paid based on performance measure results | × | Relative weighting of performance measure | = | Amount of incentive award based on performance measure results |
(i) | The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company (other than by exercise of a conversion privilege), (B) any acquisition by the Company or any of its subsidiaries, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries or (D) any acquisition by any company with respect to which, following such acquisition, more than 70% of, respectively, the then outstanding shares of common stock of such company and the combined voting power of the then outstanding voting securities of such company entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such acquisition in substantially the same proportions as their ownership, solely in their capacity as shareholders of the Company, immediately prior to such acquisition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be; or |
(ii) | individuals who, as of the Effective Date, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest; or |
(iii) | consummation of a reorganization, merger or consolidation, in each case, with respect to which all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger or consolidation, do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, solely in their capacity as shareholders of the Company, more than 70% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the company resulting from such reorganization, merger or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be; or |
(iv) | consummation of (A) a complete liquidation or dissolution of the Company or (B) a sale or other disposition of all or substantially all of the assets of the Company, other than to a company, with respect to which following such sale or other disposition, more than 70% of, respectively, the then outstanding shares of common stock of such company and the combined voting power of the then outstanding voting securities of such company entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities, solely in their capacity as shareholders of the Company, who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be. |
• | In no event may any individual receive awards under the Plan for a given calendar year covering in excess of 500,000 shares of our common stock; and |
• | We will not grant ISOs covering in the aggregate more than 1,000,000 shares of our common stock during the term of the Plan. |
a) | 1/3 restricted stock awards, cliff vesting 3 years from grant |
b) | 1/3 performance cash vesting based on performance against three-year average ROIC performance targets set at the beginning of cycle (includes goodwill and intangibles) |
c) | 1/3 performance shares vesting based on relative total shareholder return performance |
i) | Shares earned will vary from a target award based on EnPro’s TSR ranking compared to the SmallCap 600 Capital Goods industry group over the 3-year period beginning January 2016 and ending December 31, 2018 |
i) | To the extent the Performance Share award is assumed, converted or replaced by the resulting entity in the Change in Control, if within two years after the date of the Change in Control you have a termination of employment either (1) by the Company other than for “Cause” or (2) by you for “Good Reason” (each as defined below), then the target payout opportunities attainable under the award shall be deemed to have been earned as of the applicable termination of employment based upon the greater of: (A) an assumed achievement of all relevant performance goals at their “target” level, or (B) the actual level of achievement of all relevant performance goals against target as of the Company’s fiscal quarter end preceding the Change in Control. The award, as adjusted for such deemed performance, shall become vested in full and shall be paid as soon as administratively practicable (not more than 30 days) after the date of such termination of employment. |
ii) | To the extent the Performance Share award is not assumed, converted or replaced by the resulting entity in the Change in Control, then upon the Change in Control the target payout opportunities attainable under the award shall be deemed to have been earned as of the Change in Control based upon the greater of: (A) an assumed achievement of all relevant performance goals at their “target” level, or (B) the actual level of achievement of all relevant performance goals against target as of the Company’s fiscal quarter end preceding the Change in Control. The award, as adjusted for such deemed performance, shall become vested in full and shall be paid as soon as administratively practicable (not more than 30 days) after the date of the Change in Control. |
B. | For purposes of the Performance Share award, the following terms shall have the following meanings: |
i) | “Cause” shall be defined as that term is defined in your offer letter or other applicable employment or management continuity agreement; or, if there is no such definition, “Cause” means your termination of employment with the Company due to (A) the willful and continued failure by you to substantially perform your duties with the Company, which failure causes material and demonstrable injury to the Company (other than any such failure resulting from your incapacity due to physical or mental illness), after a demand for substantial performance is delivered to you by the Company which specifically identifies the manner in which the Company believes that you have not substantially performed your duties, and after you have been given a period (hereinafter known as the "Cure Period") of at least thirty (30) days to correct your performance, (B) the willful engaging by you in other gross misconduct materially and demonstrably injurious to the Company, (C) conviction of a felony or a misdemeanor involving moral turpitude, (D) your willful receipt of an improper personal benefit that demonstrably injures the Company, and (E) your willful and material violation of the Company’s written policies after being provided written notice of such violation and a Cure Period of at least thirty (30) days. For purposes hereof, no act, or failure to act, on your part shall be considered "willful" unless conclusively demonstrated to have been done, or omitted to be done, by you not in good faith and without reasonable belief that your action or omission was in the best interests of the Company. |
ii) | “Good Reason” shall be defined as that term is defined in your offer letter or other applicable employment or management continuity agreement; or, if there is no such definition, “Good Reason” means, provided that you have complied with the Good Reason Process, the occurrence of any of the following events without your consent: (A) a material diminution in your responsibility, authority or duty; (B) a material diminution in your base salary except for across-the-board salary reductions based on the Company and its Subsidiaries’ financial performance similarly affecting all or substantially all management employees of the Company and its Subsidiaries; or (C) the relocation of the office at which you were principally employed immediately prior to a Change in Control to a |
iii) | “Good Reason Process” means that (A) you reasonably determine in good faith that a Good Reason condition has occurred; (B) you notify the Company and its Subsidiaries in writing of the occurrence of the Good Reason condition within sixty (60) days of such occurrence; (C) you cooperate in good faith with the Company and its Subsidiaries’ efforts, for a period of not less than thirty (30) days following such notice (the “Cure Period”), to remedy the condition; (D) notwithstanding such efforts, the Good Reason condition continues to exist following the Cure Period; and (E) you terminate your employment for Good Reason within sixty (60) days after the end of the Cure Period. If the Company or its Subsidiaries cures the Good Reason condition during the Cure Period, and you terminate your employment with the Company and its Subsidiaries due to such condition (notwithstanding its cure), then you will not be deemed to have terminated your employment for Good Reason. |
Target Cash LTIP Award: | [____________] |
• | You will not earn any amount with respect to the Cash LTIP award if the Company's performance during the 2016-2018 period is below minimum performance. |
• | If actual performance equals or exceeds minimum performance, the amount you will earn with respect to the Cash LTIP will range from 50% to 200% of your Target Cash LTIP award based on attainment against the performance goal. |
• | In order to receive any amount with respect to the Cash LTIP award, you must remain employed with the Company through December 31, 2018, except in the case of death, disability, retirement or in connection with a Change in Control, as discussed below. If your employment terminates prior to December 31, 2018 for any reason other than death, disability, retirement or in connection with a Change in Control, you will forfeit the entire Cash LTIP award. |
• | The amount of the Cash LTIP award earned at the end of the Performance Cycle, if any, will also be reduced to satisfy applicable withholding taxes and will be paid as soon as practicable following the Compensation Committee’s certification of performance for the Performance Cycle. |
• | If you become totally disabled under the Company's Long-Term Disability Plan or retire under the Company's Salaried Pension Plan (or a similar pension plan maintained by a subsidiary that is your employer) during the Performance Cycle, you will receive a pro rata payout at the end of the Performance Cycle, based upon the time portion of the cycle during which you were employed. The actual payout will not occur until after the end of the Performance Cycle, at which time the financial |
• | If you die during the Performance Cycle, any beneficiary you have designated by will (or, if you do not so designate a beneficiary or your designated beneficiary fails to survive you, your estate) will receive a pro rata payout based upon the financial results calculated for the portion of the Performance Cycle through the end of the fiscal quarter following your death. |
• | In the event of a Change in Control during the Performance Cycle, see Appendix C. |
• | The performance factors and weightings applicable to your award are determined based upon your position with the Company. |
• | The Compensation Committee retains the right in its sole discretion to reduce any award which would otherwise be payable, unless there has been a Change in Control, as defined in the Equity Compensation Plan. |
• | Any income you derive from a payout of the Cash LTIP award will not be considered eligible earnings for Company or subsidiary pension plans, savings plans, profit sharing plans or other benefit plans. |
• | Total sales |
• | Sales growth |
• | Sales growth excluding acquisitions |
• | Other specific revenue-based measures for particular products, product lines or product groups |
• | Net income |
• | Earnings per share |
• | EPS before or after asbestos and/or other selected items |
• | Net income before or after asbestos charges and/or other selected items |
• | Pretax income before or after asbestos charges and/or other selected items |
• | Consolidated operating income before or after asbestos charges and/or other selected items |
• | Pretax consolidated operating income before or after asbestos charges and/or other selected items |
• | Segment operating income before or after asbestos charges and/or other selected items |
• | Pretax segment operating income before or after asbestos charges and/or other selected items |
• | Earnings before interest and taxes (EBIT) before or after asbestos charges and/or other selected items |
• | EBITDA before or after asbestos charges and/or other selected items |
• | Free cash flow before or after asbestos charges and/or other selected items |
• | Pretax free cash flow before or after asbestos charges and/or other selected items |
• | Asbestos-related cash outflow (or changes in asbestos-related cash outflow) |
• | Pretax asbestos-related cash outflow (or pretax changes in asbestos-related cash outflow) |
• | New asbestos commitments (or changes in new asbestos commitments) |
• | Return on equity, assets, investment, invested capital, capital, total or net capital employed, or sales, before or after asbestos charges and/or other selected items |
• | Pretax return on equity, assets, investment, invested capital, capital, total or net capital employed, or sales, before or after asbestos charges and/or other selected items |
• | Total shareholder return |
• | Share price increase |
• | Total business return before or after asbestos charges and/or selected items |
• | Economic value added or similar “after cost of capital” measures |
• | Return on sales or margin rate, in total or for a particular product, product line or product group |
• | Cash flow return on investment |
• | Working capital (or any of its components or related metrics, e.g. DSO, DSI, DWC, working capital to sales ratio) |
• | Working capital improvement |
• | Market share |
• | Measures of customer satisfaction (including survey results or other measures of satisfaction) |
• | Safety (determined by reference to recordable or lost time rates, first aids, near misses or a combination of two or more such measures or other measures) |
• | Measures of operating efficiency, e.g. productivity, cost of non-conformance or cost of quality, on time delivery, efficiency ratio (controllable expenses divided by operating income or other efficiency metric) |
• | Strategic objectives with specifically identified areas of emphasis, e.g. cost reduction, acquisition assimilation synergies, acquisitions, organization restructuring |
• | The Committee will designate, within 90 days of the beginning of each Performance Period: |
• | The performance measures and calculation methods to be used for the Performance Period; |
• | A schedule for each performance measure relating achievement levels for the performance measure to incentive award levels as a percentage of Participants’ Target LTIP Awards; and |
• | The relative weightings of the performance measures for the Performance Period. |
Participant’s Target LTIP Award | × | Percentage of target award to be paid based on performance measure results | × | Relative weighting of performance measure | = | Amount of incentive award based on performance measure results |
(i) | The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company (other than by exercise of a conversion privilege), (B) any acquisition by the Company or any of its subsidiaries, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries or (D) any acquisition by any company with respect to which, following such acquisition, more than 70% of, respectively, the then outstanding shares of common stock of such company and the combined voting power of the then outstanding voting securities of such company entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such acquisition in substantially the same proportions as their ownership, solely in their capacity as shareholders of the Company, immediately prior to such acquisition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be; or |
(ii) | individuals who, as of the Effective Date, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest; or |
(iii) | consummation of a reorganization, merger or consolidation, in each case, with respect to which all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger or consolidation, do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, solely in their capacity as shareholders of the Company, more than 70% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the company resulting from such reorganization, merger or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be; or |
(iv) | consummation of (A) a complete liquidation or dissolution of the Company or (B) a sale or other disposition of all or substantially all of the assets of the Company, other than to a company, with respect to which following such sale or other disposition, more than 70% of, respectively, the then outstanding shares of common stock of such company and the combined voting power of the then outstanding voting securities of such company entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities, solely in their capacity as shareholders of the Company, who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be. |
a) | 1/3 restricted stock awards, cliff vesting 3 years from grant |
b) | 1/3 performance cash vesting based on performance against three-year average ROIC performance targets set at the beginning of cycle (includes goodwill and intangibles) |
c) | 1/3 performance shares vesting based on relative total shareholder return performance |
i) | Shares earned will vary from a target award based on EnPro’s TSR ranking compared to the SmallCap 600 Capital Goods industry group over the 3-year period beginning January 2016 and ending December 31, 2018 |
i) | To the extent the Cash LTIP award is assumed, converted or replaced by the resulting entity in the Change in Control, if within two years after the date of the Change in Control you have a termination of employment either (1) by the Company other than for “Cause” or (2) by you for “Good Reason” (each as defined below), then the target payout opportunities attainable under the award shall be deemed to have been earned as of the applicable termination of employment based upon the greater of: (A) an assumed achievement of all relevant performance goals at their “target” level, or (B) the actual level of achievement of all relevant performance goals against target as of the Company’s fiscal quarter end preceding the Change in Control. The award, as adjusted for such deemed performance, shall become vested in full and shall be paid as soon as administratively practicable (not more than 30 days) after the date of such termination of employment. |
ii) | To the extent the Cash LTIP award is not assumed, converted or replaced by the resulting entity in the Change in Control, then upon the Change in Control the target payout opportunities attainable under the award shall be deemed to have been earned as of the Change in Control based upon the greater of: (A) an assumed achievement of all relevant performance goals at their “target” level, or (B) the actual level of achievement of all relevant performance goals against target as of the Company’s fiscal quarter end preceding the Change in Control. The award, as adjusted for such deemed performance, shall become vested in full and shall be paid as soon as administratively practicable (not more than 30 days) after the date of the Change in Control. |
B. | For purposes of the Cash LTIP award, the following terms shall have the following meanings: |
i) | “Cause” shall be defined as that term is defined in your offer letter or other applicable employment or management continuity agreement; or, if there is no such definition, “Cause” means your termination of employment with the Company due to (A) the willful and continued failure by you to substantially perform your duties with the Company, which failure causes material and demonstrable injury to the Company (other than any such failure resulting from your incapacity due to physical or mental illness), after a demand for substantial performance is delivered to you by the Company which specifically identifies the manner in which the Company believes that you have not substantially performed your duties, and after you have been given a period (hereinafter known as the "Cure Period") of at least thirty (30) days to correct your performance, (B) the willful engaging by you in other gross misconduct materially and demonstrably injurious to the Company, (C) conviction of a felony or a misdemeanor involving moral turpitude, (D) your willful receipt of an improper personal benefit that demonstrably injures the Company, and (E) your willful and material violation of the Company’s written policies after being provided written notice of such violation and a Cure Period of at least thirty (30) days. For purposes hereof, no act, or failure to act, on your part shall be considered "willful" unless conclusively demonstrated to have been done, or omitted to be done, by you not in good faith and without reasonable belief that your action or omission was in the best interests of the Company. |
ii) | “Good Reason” shall be defined as that term is defined in your offer letter or other applicable employment or management continuity agreement; or, if there is no such definition, “Good Reason” means, provided that you have complied with the Good Reason Process, the occurrence of any of the following events without your consent: (A) a material diminution in your responsibility, authority or duty; (B) a material diminution in your base salary except for across-the-board salary reductions based on the Company and its Subsidiaries’ financial performance similarly affecting all or substantially all management employees of the Company and its Subsidiaries; or (C) the relocation of the office at which you were principally employed immediately prior to a Change in Control to a |
iii) | “Good Reason Process” means that (A) you reasonably determine in good faith that a Good Reason condition has occurred; (B) you notify the Company and its Subsidiaries in writing of the occurrence of the Good Reason condition within sixty (60) days of such occurrence; (C) you cooperate in good faith with the Company and its Subsidiaries’ efforts, for a period of not less than thirty (30) days following such notice (the “Cure Period”), to remedy the condition; (D) notwithstanding such efforts, the Good Reason condition continues to exist following the Cure Period; and (E) you terminate your employment for Good Reason within sixty (60) days after the end of the Cure Period. If the Company or its Subsidiaries cures the Good Reason condition during the Cure Period, and you terminate your employment with the Company and its Subsidiaries due to such condition (notwithstanding its cure), then you will not be deemed to have terminated your employment for Good Reason. |
Title: | Vice President, General Counsel and Secretary |
Named Executive Officer | Base Salary |
Stephen E. Macadam | $850,000 |
J. Milton Childress II | $375,000 |
Kenneth D. Walker | $420,000 |
Jon A. Cox | $345,000 |
Marvin A. Riley | $310,000 |
Consolidated Subsidiary Companies | Place of Incorporation | % of Voting Securities Owned |
EnPro Industries, Inc. | North Carolina | 100 |
Coltec Industries Inc | Pennsylvania | 100 |
Garlock Do Brasil Produtos Industriais Ltda. | Brazil | 89 |
Coltec Finance Company Limited | United Kingdom | 100 |
Coltec Industries Pacific Pte Ltd | Singapore | 100 |
CPI Service (Thailand) Ltd. | Thailand | 45 |
CPI Asia Co., Ltd. | Thailand | 100 |
CPI Service (Thailand) Ltd. | Thailand | 55 |
Garlock India Private Limited | India | 99.99999 |
Garlock Singapore Pte. Ltd. | Singapore | 100 |
Garlock Taiwan Corporation | Taiwan | 100 |
Link Seal Japan Ltd. | Japan | 50 |
Coltec International Services Co. | Delaware | 100 |
Garlock Do Brasil Produtos Industriais Ltda. | Brazil | 11 |
Stempro de Mexico, S. de R.L. de C.V. | Mexico | 25 |
Compressor Products Holdings, Limited | United Kingdom | 100 |
Compressor Products International Ltd. | United Kingdom | 100 |
Compressor Products International Ltda. | Brazil | 99 |
Indústria de Compressores Ltda. | Brazil | 100 |
CPI Investments Limited | United Kingdom | 100 |
Compressor Products International Ltda. | Brazil | 1 |
CPI Pacific Pty Limited | Australia | 100 |
Player & Cornish Limited | United Kingdom | 100 |
Robix Limited | United Kingdom | 100 |
Compressor Products International LLC | Delaware | 100 |
EnPro Associates, LLC | North Carolina | 100 |
EnPro Learning System, LLC | North Carolina | 100 |
EnPro Int’l Trade (Shanghai) Co., Ltd. | China | 100 |
EnPro Hong Kong Holdings Company Limited | Hong Kong | 100 |
Garlock Sealing Technologies (Shanghai) Co., Ltd. | China | 100 |
EnPro Corporate Management Consulting (Shanghai) Co. Ltd. | China | 100 |
Compressor Products Int’l (Shanghai) Co., Ltd. | China | 100 |
Stemco Vehicle Technology (Shanghai) Co. Ltd. | China | 100 |
GGB LLC | Delaware | 100 |
Garlock (Great Britain) Limited | United Kingdom | 100 |
Garlock Pipeline Technologies Limited | United Kingdom | 100 |
Technetics Group U.K. Ltd. | United Kingdom | 100 |
Technetics UK Limited | United Kingdom | 100 |
Pipeline Seal & Insulator Co. (Limited) | United Kingdom | 100 |
Garlock Pipeline Technologies, Inc. | Colorado | 100 |
Garlock Sealing Technologies LLC | North Carolina | 100 |
Garlock International Inc | Delaware | 100 |
Consolidated Subsidiary Companies | Place of Incorporation | % of Voting Securities Owned |
Garlock of Canada Ltd | Ontario, Canada | 100 |
Garlock de Mexico, S.A. de C.V. | Mexico | 99.62 |
Garlock Overseas Corporation | Delaware | 100 |
Garlock de Mexico, S.A. de C.V. | Mexico | 0.38 |
Garlock Pty Limited | Australia | 100 |
Garlock Valqua Japan, Inc. | Japan | 51 |
Garrison Litigation Management Group, Ltd. | North Carolina | 100 |
The Anchor Packing Company | North Carolina | 100 |
GGB Brasil Industria de Mancais E Componentes Ltda. | Brazil | 0.1 |
GGB, Inc. | Delaware | 100 |
EnPro Luxembourg Holding Company S.a.r.l. | Luxembourg | 100 |
GGB France E.U.R.L. | France | 100 |
Compressor Products International Canada, Inc. | Alberta, Canada | 100 |
Compressor Products Int'l Colombia S.A.S. | Colombia | 100 |
Stempro Mexico Acquisition Co., S. de R.L. de C.V. | Mexico | 99.99 |
STEMCO Productos Industriales, S. de R.L. de C.V. | Mexico | 0.01 |
EnPro German Holding GmbH | Germany | 100 |
GGB Heilbronn GmbH | Germany | 100 |
GGB Kunststoff-Technologie GmbH | Germany | 100 |
Garlock GmbH | Germany | 100 |
Compressor Products International GmbH | Germany | 100 |
Franken Plastiks GmbH | Germany | 100 |
PSI Products GmbH | Germany | 100 |
Garlock India Private Limited | India | 0.00001 |
Technetics Group Germany GmbH | Germany | 100 |
GGB Slovakia s.r.o. | Slovakia | 95.47 |
Coltec Industries France SAS | France | 100 |
CPI-LIARD SAS | France | 100 |
Technetics Group France SAS | France | 100 |
GGB Austria GmbH | Austria | 100 |
GGB Bearing Technology (Suzhou) Co., Ltd. | China | 100 |
GGB Brasil Industria de Mancais E Componentes Ltda. | Brazil | 99.9 |
GGB Italy s.r.l. | Italy | 100 |
GGB Real Estate GmbH | Germany | 100 |
GGB Slovakia s.r.o. | Slovakia | 4.53 |
GGB Tristar Suisse S.A. | Switzerland | 100 |
Fairbanks Morse Engine France E.U.R.L. | France | 100 |
Stemco Holdings, Inc. | Delaware | 100 |
Advanced Transit Dynamics, Inc. | Delaware | 100 |
Stemco Products, Inc. | Delaware | 100 |
Stemco LP | Texas | 99 |
Stemco LP | Texas | 1 |
Stempro de Mexico, S. de R.L. de C.V. | Mexico | 75 |
Stemco Kaiser Incorporated | Michigan | 100 |
SD Friction, LLC | Delaware | 100 |
Stempro Mexico Acquisition Co., S. de R.L. de C.V. | Mexico | .01 |
Consolidated Subsidiary Companies | Place of Incorporation | % of Voting Securities Owned |
STEMCO Productos Industriales, S. De R.L. de C.V. | Mexico | 99.99 |
Technetics Group LLC | North Carolina | 100 |
Technetics Group Oxford, Inc. | Delaware | 100 |
Technetics Group Daytona, Inc. | Delaware | 100 |
Applied Surface Technology, Inc. | California | 100 |
Belfab, Inc. | Delaware | 100 |
Technetics Group Singapore Pte. Ltd. | Singapore | 100 |
Date: | February 26, 2016 | /s/ Stephen E. Macadam |
Stephen E. Macadam | ||
President and Chief Executive Officer |
Date: | February 26, 2016 | /s/ J. Milton Childress II |
J. Milton Childress II | ||
Senior Vice President and Chief Financial Officer |
Date: | February 26, 2016 | /s/ Stephen E. Macadam |
Stephen E. Macadam | ||
President and Chief Executive Officer | ||
Date: | February 26, 2016 | /s/ J. Milton Childress II |
J. Milton Childress II | ||
Senior Vice President and Chief Financial Officer |
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Document and Entity Information - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015 |
Feb. 22, 2016 |
Jun. 30, 2015 |
Dec. 31, 2014 |
|
Document Document And Entity Information [Abstract] | ||||
Document Type | 10-K | |||
Amendment Flag | false | |||
Document Period End Date | Dec. 31, 2015 | |||
Document Fiscal Year Focus | 2015 | |||
Document Fiscal Period Focus | FY | |||
Trading Symbol | NPO | |||
Entity Registrant Name | ENPRO INDUSTRIES, INC | |||
Entity Central Index Key | 0001164863 | |||
Current Fiscal Year End Date | --12-31 | |||
Entity Well-known Seasoned Issuer | Yes | |||
Entity Current Reporting Status | Yes | |||
Entity Voluntary Filers | No | |||
Entity Filer Category | Large Accelerated Filer | |||
Entity Common Stock, Shares Outstanding | 21,945,954 | |||
Treasury Stock, Shares | 196,593 | 200,022 | ||
Entity Public Float | $ 1,237,418,320 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Statement [Abstract] | |||
Net sales | $ 1,204.4 | $ 1,219.3 | $ 1,144.2 |
Cost of sales | 808.9 | 802.6 | 762.9 |
Gross profit | 395.5 | 416.7 | 381.3 |
Operating expenses: | |||
Selling, general and administrative | 302.8 | 319.5 | 285.8 |
Goodwill and Other Intangible Asset Impairment | 47.0 | 0.0 | 0.0 |
Asbestos settlement | 0.0 | 30.0 | 0.0 |
Other | 8.1 | 3.8 | 9.1 |
Total operating expenses | 357.9 | 353.3 | 294.9 |
Operating income | 37.6 | 63.4 | 86.4 |
Interest expense | (52.8) | (45.1) | (45.1) |
Interest income | 0.7 | 1.0 | 0.8 |
Other income (expense), net | (4.1) | 13.3 | (6.3) |
Income (loss) before income taxes | (18.6) | 32.6 | 35.8 |
Income tax expense | (2.3) | (10.6) | (8.4) |
Net income (loss) | $ (20.9) | $ 22.0 | $ 27.4 |
Basic earnings per share: | |||
Basic earnings (loss) per share (in dollars per share) | $ (0.93) | $ 0.95 | $ 1.31 |
Diluted earnings per share: | |||
Diluted earnings (loss) per share (in dollars per share) | $ (0.93) | $ 0.85 | $ 1.17 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (20.9) | $ 22.0 | $ 27.4 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | (21.9) | (25.6) | 1.0 |
Pension and post-retirement benefits adjustment (excluding amortization) | (3.4) | (39.9) | 47.6 |
Amortization of pension and post-retirement benefits included in net income (loss) | 7.1 | 2.6 | 9.7 |
Realized loss from settled cash flow hedges included in net income | 0.0 | 0.0 | 1.0 |
Other comprehensive income (loss), before tax | (18.2) | (62.9) | 59.3 |
Income tax benefit (expense) related to items of other comprehensive income (loss) | (1.8) | 14.4 | (21.9) |
Other comprehensive income (loss), net of tax | (20.0) | (48.5) | 37.4 |
Comprehensive income (loss) | $ (40.9) | $ (26.5) | $ 64.8 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts and notes receivable, allowance for doubtful accounts | $ 5.4 | $ 7.0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares, issued | 22,046,647 | 24,172,716 |
Treasury stock, shares | 196,593 | 200,022 |
Overview, Significant Accounting Policies and Recently Issued Accounting Pronouncements |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Overview, Significant Accounting Policies and Recently Issued Accounting Pronouncements |
Overview EnPro Industries, Inc. (“we,” “us,” “our,” “EnPro” or the “Company”) is a leader in the design, development, manufacture and marketing of proprietary engineered industrial products that primarily include: sealing products; heavy-duty truck wheel-end component systems; self-lubricating, non-rolling bearing products; precision engineered components and lubrication systems for reciprocating compressors; and heavy-duty, medium-speed diesel, natural gas and dual fuel reciprocating engines, including parts and services. Basis of Presentation The Consolidated Financial Statements reflect the accounts of the Company and our majority-owned and controlled subsidiaries. All intercompany accounts and transactions between our consolidated operations have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the amounts of assets and liabilities and the disclosures regarding contingent assets and liabilities at period end and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Effective in the fourth quarter of 2015, we elected to early adopt amendments to authoritative guidance on the presentation of deferred taxes in the Consolidated Balance Sheet (see "Recently Issued Accounting Guidance" below) in order to simplify this presentation. Prior periods were not retrospectively adjusted. As of December 31, 2015 and December 31, 2014 we had purchased $5.7 million and $2.4 million, respectively, of property, plant and equipment for which cash payments had not yet been made. This is considered a noncash investing activity. In connection with the preparation of consolidated financial statements for the year ended December 31, 2015, we determined that we had overstated our net deferred tax assets in certain years prior to December 31, 2010. The errors related primarily to the computation of the deferred tax assets for the pension benefit obligation and the minimum pension liability. In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality”, we assessed the materiality of the adjustments and concluded that these errors were not material to any of our previously issued financial statements. However, the aggregate amount of prior period errors would have been material to our current year consolidated statement of income. Consequently, we have corrected these errors for all prior periods presented by revising the consolidated financial statements and other financial information included herein. Since all of the prior period errors that were assessed relate to periods prior to any presented herein, corrections to the financial statements were recorded as a $13.6 million decrease to opening retained earnings at January 1, 2013 as reflected on the Consolidated Statement of Changes in Shareholders' Equity. The adjustments had no impact on the Consolidated Statement of Operations, Consolidated Statement of Comprehensive Income, or Consolidated Statement of Cash Flows for the years ended December 31, 2014 or 2013. We concluded that the impact to the prior financial statements and other financial information was not material and therefore they will not be restated. However, periods not presented herein will be revised to include the effect of these errors, as applicable, as they are included in future filings. Accordingly the company, has revised the Consolidated Balance Sheet as of December 31, 2014 from amounts previously reported as follows:
In addition, we have revised our December 31, 2014 Condensed Consolidating Balance Sheet that is presented in our supplemental guarantor financial information. Refer to Note 21, "Supplemental Guarantor Financial Information" for more details about this revision. Summary of Significant Accounting Policies Revenue Recognition – For the Sealing Products and Engineered Products segments, revenue is recognized at the time title and risk of product ownership is transferred or when services are rendered, typically when product is shipped or delivered, depending on the terms of the sale agreement. Shipping costs billed to customers are recognized as revenue and expensed in cost of goods sold since they are fixed and determinable and collection is reasonably assured. We generally use the percentage-of-completion (“POC”) accounting method to account for our long-term contracts associated with the design, development, manufacture, or modification of complex engines under fixed price or cost plus contracts. During the third quarter of 2011, the Power Systems segment began using POC for prospective engine contracts. We made this change because, as a result of enhancements to our financial management and reporting systems, we are able to reasonably estimate the revenue, costs, and progress towards completion of engine builds. If we are not able to meet those conditions for a particular engine contract, we recognize revenues using the completed-contract method. Additionally, engines that were in production at June 30, 2011 will continue to be accounted for using the completed-contract method. Under POC, revenue is recognized based on the extent of progress towards completion of the long-term contract. We generally use the cost-to-cost measure for our long-term contracts unless we believe another method more clearly measures progress towards completion of the contract. Under the cost-to-cost measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the contract. Contract costs include labor, material and subcontracting costs, as well as an allocation of indirect costs. Revenues, including estimated fees or profits, are recorded as costs are incurred. Due to the nature of the work required to be performed on many of our contracts, the estimation of total revenue and cost at completion is complex and subject to many variables. Management must make assumptions and estimates regarding labor productivity, the complexity of the work to be performed, the availability of materials, the length of time to complete the contract (to estimate increases in wages and prices for materials and related support cost allocations), performance by our subcontractors and overhead cost rates, among other variables. A significant change in one or more of these estimates could affect the profitability of one or more of our contracts. Based on our analysis, any quarterly adjustments to net sales, cost of sales, and the related impact to operating income are recorded as necessary in the period they become known. These adjustments may result in an increase or a decrease in operating income. Changes in estimates of net sales, cost of sales, and the related impact to operating income are recognized quarterly on a cumulative catch-up basis, which recognizes in the current period the cumulative effect of the changes on current and prior periods based on a contract's percentage of completion. When estimates of total costs to be incurred on a contract exceed total estimates of revenue to be earned, a provision for the entire loss on the contract is recorded in the period the loss is determined. Contracts accounted for under the POC method represented revenues and margins of $67.3 million and $8.9 million, respectively, for the year ended December 31, 2015, $57.3 million and $3.1 million, respectively, for the year ended December 31, 2014, and $64.3 million and $9.0 million, respectively, for the year ended December 31, 2013. Foreign Currency Translation – The financial statements of those operations whose functional currency is a foreign currency are translated into U.S. dollars using the current rate method. Under this method, all assets and liabilities are translated into U.S. dollars using current exchange rates, and income statement activities are translated using average exchange rates. The foreign currency translation adjustment is included in accumulated other comprehensive loss in the Consolidated Balance Sheets. Gains and losses on foreign currency transactions are included in operating income. Foreign currency transaction gains totaled $1.8 million in 2015. Foreign currency transaction losses totaled $1.0 million, and $2.3 million for 2014, and 2013, respectively. Research and Development Expense – Costs related to research and development activities are expensed as incurred. We perform research and development primarily under Company-funded programs for commercial products. Net research and development expenditures in 2015, 2014, and 2013 were $22.5 million, $20.0 million, and $11.3 million, respectively, and are included in selling, general and administrative expenses in the Consolidated Statements of Operations. Income Taxes – We use the asset and liability method of accounting for income taxes. Temporary differences arising between the tax basis of an asset or liability and its carrying amount on the Consolidated Balance Sheet are used to calculate future income tax assets or liabilities. This method also requires the recognition of deferred tax benefits, such as net operating loss carryforwards. A valuation allowance is recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the taxable income (losses) in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A tax benefit from an uncertain tax position is recognized only if it is more likely than not that the position will be sustained on its technical merits. If the recognition threshold for the tax position is met, only the portion of the tax benefit that is greater than 50 percent likely to be realized is recorded. Cash and Cash Equivalents – Cash and cash equivalents include cash on hand, demand deposits and highly liquid investments with a maturity of three months or less at the time of purchase. Receivables – Accounts receivable are stated at the historical carrying amount net of write-offs and allowance for doubtful accounts. We establish an allowance for doubtful accounts receivable based on historical experience and any specific customer collection issues we have identified. Doubtful accounts receivable are written off when a settlement is reached for an amount less than the outstanding historical balance or when we have determined the balance will not be collected. The balances billed but not paid by customers pursuant to retainage provisions in long-term contracts and programs are due upon completion of the contracts and acceptance by the owner. At December 31, 2015, we had $0.6 million of retentions expected to be collected in 2016 recorded in accounts receivable and $0.9 million of retentions expected to be collected beyond 2016 recorded in other long-term assets in the Consolidated Balance Sheet. At December 31, 2014, we had $2.5 million of current retentions and $0.5 million of long-term retentions recorded in the Consolidated Balance Sheet. Inventories – Certain domestic inventories are valued by the last-in, first-out (“LIFO”) cost method. Inventories not valued by the LIFO method, other than inventoried costs relating to long-term contracts and programs, are valued using the first-in, first-out (“FIFO”) cost method, and are recorded at the lower of cost or market. Approximately 37% and 36% of inventories were valued by the LIFO method in 2015 and 2014, respectively. Inventoried costs relating to long-term contracts and programs are stated at the actual production cost incurred to date, including direct labor and factory overhead. Progress payments related to long-term contracts and programs accounted for under the completed-contract method of accounting are shown as a reduction of inventories. Initial program start-up costs and other nonrecurring costs are expensed as incurred. Property, Plant and Equipment – Property, plant and equipment are recorded at cost. Depreciation of plant and equipment is determined on the straight-line method over the following estimated useful lives of the assets: buildings and improvements, 5 to 25 years; machinery and equipment, 3 to 10 years. Goodwill and Other Intangible Assets – Goodwill represents the excess of the purchase price over the fair value of the net assets of acquired businesses. Goodwill is not amortized, but instead is subject to annual impairment testing conducted each year as of October 1. The goodwill asset impairment test involves comparing the fair value of a reporting unit to its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, a second step of comparing the implied fair value of the reporting unit’s goodwill to the carrying amount of that goodwill is required to measure the potential goodwill impairment loss. Interim tests may be required if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We completed our required annual impairment tests of goodwill as of October 1, 2014 and 2013. These assessments did not indicate any impairment of the goodwill. In our prior year annual impairment test of goodwill as of October 1, 2014, the estimated fair value of our Compressor Products International ("CPI") reporting unit exceeded its book value at that time. CPI is included in our Engineered Products segment. Through the first quarter of 2015, several initiatives were implemented to remove labor, facility and other costs from CPI’s cost structure and a customer-focused organizational realignment was implemented to identify price and volume opportunities to optimize sales and profitability in the weak oil and gas business environment. During the first quarter of 2015 new strategic options and opportunities to improve business performance were analyzed given the continuing weakness in demand. Additional strategic measures were planned to be implemented during the second half of 2015 and the expected benefits of these actions were taken into consideration in assessing the outlook for CPI. However, as more time passed, the benefits of strategic measures and initiatives being implemented were no longer expected to sufficiently compensate for the financial impacts of the prolonged and significant weakness in the oil and gas markets served by CPI. Taking this into account, the forecasted results for CPI were lowered significantly at the end of May 2015 to such an extent that we thought it likely that the fair value of CPI would be less than its carrying value which necessitated an interim impairment test for goodwill. The interim step one analysis we performed, using a combination of discounted cash flow and market value approaches to determine the fair value of CPI consistent with our annual impairment testing, indicated that the fair value of CPI was less than the carrying value of its net assets. The required step two valuation analysis performed as of May 31, 2015 and completed in July 2015 indicated that $46.1 million of the CPI goodwill balance was impaired. Accordingly, CPI goodwill in the amount of $46.1 million was written-off in the second quarter of 2015. The remaining CPI goodwill balance at December 31, 2015 is $4.0 million. We completed our required annual impairment test of goodwill as of October 1, 2015, which did not indicate any additional impairment of any of our goodwill. Other intangible assets are recorded at cost, or when acquired as a part of a business combination, at estimated fair value. These assets include customer relationships, patents and other technology agreements, trademarks, licenses and non-compete agreements. Intangible assets that have definite lives are amortized using a method that reflects the pattern in which the economic benefits of the assets are consumed or the straight-line method over estimated useful lives of 2 to 20 years. Intangible assets with indefinite lives are subject to at least annual impairment testing, which compares the fair value of the intangible asset with its carrying amount using the relief from royalty method. The results of our assessments did not indicate any impairment to our indefinite-lived intangible assets for the years presented. Investment in GST – The historical business operations of Garlock Sealing Technologies LLC (“GST LLC”) and The Anchor Packing Company (“Anchor”) have resulted in a substantial volume of asbestos litigation in which plaintiffs have alleged personal injury or death as a result of exposure to asbestos fibers. Those subsidiaries manufactured and/or sold industrial sealing products, predominately gaskets and packing, that contained encapsulated asbestos fibers. Anchor is an inactive and insolvent indirect subsidiary of Coltec Industries Inc (“Coltec”). Our subsidiaries’ exposure to asbestos litigation and their relationships with insurance carriers have been managed through another Coltec subsidiary, Garrison Litigation Management Group, Ltd. (“Garrison”). GST LLC, Anchor and Garrison are collectively referred to as “GST.” On June 5, 2010 (the “Petition Date”), GST LLC, Anchor and Garrison filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Western District of North Carolina in Charlotte (the “Bankruptcy Court”). GST’s financial results were included in our consolidated results through June 4, 2010, the day prior to the Petition Date. However, GAAP requires that an entity that files for protection under the U.S. Bankruptcy Code, whether solvent or insolvent, whose financial statements were previously consolidated with those of its parent, as GST and its subsidiaries were with EnPro, generally must be prospectively deconsolidated from the parent and the investment accounted for using the cost method. At deconsolidation, our investment was recorded at its estimated fair value on June 4, 2010. The cost method requires us to present our ownership interests in the net assets of GST at the Petition Date as an investment and to not recognize any income or loss from GST and subsidiaries in our results of operations during the reorganization period. The investment in GST is subject to periodic reviews for impairment. When GST emerges from the jurisdiction of the Bankruptcy Court, the subsequent accounting will be determined based upon the applicable facts and circumstances at such time, including the terms of any plan of reorganization. The ability of GST LLC and Garrison to continue as going concerns is dependent upon their ability to resolve their ultimate asbestos liability in the bankruptcy from their net assets, future cash flows, and available insurance proceeds, whether through the confirmation of a plan of reorganization or otherwise. As a result of the bankruptcy filing and related events, there can be no assurance the carrying values of the assets, including the carrying value of the business and the tax receivable, will be realized or that liabilities will be liquidated or settled for the amounts recorded. In addition, a plan of reorganization, or rejection thereof, could change the amounts reported in the GST LLC and Garrison financial statements and cause a material change in the carrying amount of our investment in GST. Debt – In October 2005, we issued $172.5 million in aggregate principal amount of 3.9375% Convertible Senior Debentures (the “Convertible Debentures”). Applicable authoritative accounting guidance required that the liability component of the Convertible Debentures be recorded at its fair value as of the issuance date. This resulted in us recording debt in the amount of $111.2 million as of the issuance date with the $61.3 million offset to the debt discount being recorded in equity on a net of tax basis. The debt discount was amortized through interest expense until the maturity date of October 15, 2015, resulting in an effective interest rate of approximately 9.5%. Interest expense related to the Convertible Debentures for the years ended December 31, 2015, 2014 and 2013 includes $0.4 million, $3.6 million and $6.8 million, respectively, of contractual interest coupon and $0.2 million, $4.2 million and $7.6 million, respectively, of debt discount amortization. Derivative Instruments – We use derivative financial instruments to manage our exposure to various risks. The use of these financial instruments modifies the exposure with the intent of reducing our risk. We do not use financial instruments for trading purposes, nor do we use leveraged financial instruments. The counterparties to these contractual arrangements are major financial institutions. We use multiple financial institutions for derivative contracts to minimize the concentration of credit risk. The current accounting rules require derivative instruments, excluding certain contracts that are issued and held by a reporting entity that are both indexed to its own stock and classified in shareholders’ equity, be reported in the Consolidated Balance Sheets at fair value and that changes in a derivative’s fair value be recognized currently in earnings unless specific hedge accounting criteria are met. We are exposed to foreign currency risks that arise from normal business operations. These risks include the translation of local currency balances on our foreign subsidiaries’ balance sheets, intercompany loans with foreign subsidiaries and transactions denominated in foreign currencies. We strive to control our exposure to these risks through our normal operating activities and, where appropriate, through derivative instruments. We have entered into contracts to hedge forecasted transactions occurring at various dates through June 2016 that are denominated in foreign currencies. The notional amount of foreign exchange contracts hedging foreign currency transactions was $4.6 million and $5.5 million at December 31, 2015 and 2014, respectively. Prior to 2013, we applied cash flow hedge accounting to certain of our foreign currency derivatives. We elected to discontinue this accounting treatment in the first quarter of 2013, consequently, all gains and losses that had been deferred in accumulated other comprehensive loss at December 31, 2012 were reclassified to income in the quarter ended March 31, 2013. See Note 16, "Accumulated Other Comprehensive Income (Loss)" for additional information. The notional amounts of all of our foreign exchange contracts were recorded at their fair market value as of December 31, 2015 with changes in market value recorded in income. The earnings impact of any foreign exchange contract that is specifically related to the purchase of inventory is recorded in cost of sales and the changes in market value of all other contracts are recorded in selling, general and administrative expense in the Consolidated Statements of Operations. The balances of derivative assets are recorded in other current assets and the balances of derivative liabilities are recorded in accrued expenses in the Consolidated Balance Sheets. Fair Value Measurements – Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
The fair value of intangible assets associated with acquisitions was determined using a discounted cash flow analysis. Projecting discounted future cash flows required us to make significant estimates regarding future revenues and expenses, projected capital expenditures, changes in working capital and the appropriate discount rate. This non-recurring fair value measurement would be classified as Level 3 due to the absence of quoted market prices or observable inputs for assets of a similar nature. Similarly, the fair value computations for the recurring impairment analyses of goodwill, indefinite-lived intangible assets and the investment in GST would be classified as Level 3 due to the absence of quoted market prices or observable inputs. The key assumptions used for the discounted cash flow approach include expected cash flows based on internal business plans, projected growth rates and discount rates. Significant changes in any of those inputs could result in a significantly different fair value measurement. Recently Issued Accounting Guidance In January 2016, a standard was issued that amends existing guidance around classification and measurement of certain financial assets and liabilities. Changes to the current GAAP model primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. Under the new guidance, all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value through earnings. For equity investments without readily determinable fair values, the cost method is also eliminated. However, most entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. The standard also requires that financial assets and liabilities be disclosed separately in the notes to the financial statements based on measurement principle and form of financial asset. The amendments in this guidance are effective for financial statements issued for interim and annual periods beginning after December 15, 2017. This standard is not expected to have a significant impact on our consolidated financial statements or disclosures. In November 2015, a standard was issued that simplifies the presentation of deferred income taxes through requiring that all deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by this standard. The amendments in this guidance are effective for financial statements issued for interim and annual periods beginning after December 15, 2016, with early adoption permitted for the beginning of an interim or annual period, and may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We have elected to adopt this standard effective for the fourth quarter of 2015 on a prospective basis. In September 2015, a standard was issued that simplifies the accounting for measurement period adjustments associated with a business combination by eliminating the requirement to restate prior period financial statements for measurement period adjustments when measurements were incomplete as of the end of the reporting period covering the business combination. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. It is effective for interim and annual periods beginning after December 15, 2015. This standard is not expected to have a significant impact on our consolidated financial statements or disclosures. In July 2015, a standard was issued that simplifies the measurement of inventory by requiring certain inventory to be measured at the lower of cost or net realizable value. This will not apply to the portion of our inventory that is measured using the last-in, first-out method. The amendments in this guidance are effective for fiscal years beginning after December 15, 2016 and for interim periods therein, but early application is permitted. This standard is not expected to have a significant impact on our consolidated financial statements or disclosures. In April 2015, a standard was issued that amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. This standard is not expected to have a significant impact on our consolidated financial statements or disclosures. In May 2014, a comprehensive new revenue recognition standard was issued that will supersede nearly all existing revenue recognition guidance. The new guidance introduces a five-step model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The new standard will become effective for us beginning with the first quarter 2018. We are currently evaluating the new guidance, including possible transition alternatives, to determine the impact it will have on our consolidated financial statements. |
Acquisitions |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions |
In February 2015, we acquired 100% of the stock of ATDynamics, Inc. ("ATDynamics"), a privately-held company offering innovative aerodynamic products to the commercial trucking industry. ATDynamics is managed as part of our Stemco division within the Sealing Products segment. ATDynamics, with operations in Texas and California, is a leading designer and manufacturer of a suite of aerodynamic products engineered to reduce fuel consumption in the global freight transportation industry. In July 2015, we purchased the Veyance North American air spring business (the "Air Spring Business") through the purchase of 100% of the stock of Veyance's Mexico business and of all of the assets of its U.S. business. The Air Spring Business is a manufacturer of air springs that are used in the suspension systems of commercial vehicles. Following the acquisition, it became part of our Stemco division within the Sealing Products segment. The Air Spring Business manufactures products in its facility in San Luis Potosi, Mexico with a commercial organization in the U.S., Canada and Mexico, and engineering, testing and administrative resources in Fairlawn, Ohio. The addition of the Air Spring Business significantly expands Stemco's presence and scale in the commercial vehicle suspension market. We paid $45.5 million, net of cash acquired, in 2015 for these businesses. The acquisition of ATDynamics includes an agreement that could require us to pay additional consideration based on the future gross profit of ATDynamics during the twelve months subsequent to the acquisition. The range of undiscounted amounts we could pay under the contingent consideration agreement is between $0 and $5.0 million. The fair value of the contingent consideration recognized on the acquisition date was $0.5 million. This amount was subsequently reduced to $0 as of December 31, 2015 based on projected attainment as of the end of the year. The following table presents the preliminary purchase price allocation of the 2015 acquisitions:
The purchase price allocations of the recently acquired businesses are subject to the completion of purchase price adjustments pursuant to the acquisition agreements. An additional amount of approximately $6 million is expected to be paid in 2016 based on the finalized and agreed-upon acquisition date balance sheet of the Air Spring Business. In December 2014, we acquired Fabrico, Inc. ("Fabrico"), a privately-held company offering mission-critical components for the combustion and hot path sections of industrial gas and steam turbines. The business is headquartered in Oxford, Massachusetts with additional facilities in Charlton, Massachusetts and Greenville, South Carolina. The addition of Fabrico significantly expands our presence and scale in the land-based turbine seal and combustion market. In March 2014, we acquired the remaining interest of the Stemco Crewson LLC joint venture. As a result, we own all of the ownership interests in Stemco Crewson LLC. The joint venture was formed in 2009 with joint venture partner Tramec, LLC to expand our brake product offering to include automatic brake adjusters. The purchase of the remaining interest in the joint venture allows us to accelerate investment in new product development and commercial strategies focused on market share growth for these products. In March 2014, we acquired the business of Strong-Tight Co. Ltd., a Taiwanese manufacturer and seller of gaskets and industrial sealing products, by acquiring certain assets and assuming certain liabilities of the business. This acquisition adds an established Asian marketing presence and manufacturing facilities from which we can serve the Asian market. All of the businesses acquired in 2014 are included in our Sealing Products segment. We paid $61.9 million in 2014, net of cash acquired, for these businesses. Additionally, the acquisition of Fabrico includes a contingent consideration arrangement that requires additional consideration to be paid based on the future gross profit of Fabrico during the two-years subsequent to the acquisition. The range of undiscounted amounts we could pay under the contingent consideration agreement is between $0 and $7.0 million. The fair value of the contingent consideration recognized on the acquisition date was $1.9 million which is included in other liabilities in the accompanying Consolidated Balance Sheet as of December 31, 2014. This amount was increased to $2.3 million as of December 31, 2015 based on projected attainment. In January 2013, we acquired certain assets and assumed certain liabilities of a small distributor of industrial seals in Singapore which is managed as part of the Garlock operations in the Sealing Products segment. The acquisition was paid for with $2.0 million of cash. Because the assets, liabilities and results of operations for the above acquisitions are not significant to our consolidated financial position or results of operations, pro forma financial information and additional disclosures are not presented. |
Other Income (Expense) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income (Expense) |
Operating We incurred $6.6 million, $2.3 million and $6.7 million of restructuring costs during the years ended December 31, 2015, 2014 and 2013, respectively. During 2015, we conducted a number of restructuring activities throughout our operations, the most significant of which was at our CPI business. In October 2015, we approved a plan to restructure certain operations of our CPI unit in light of the prolonged and significant weakness in the markets served by CPI, particularly the oil and gas markets. The restructuring plan contemplates the closing or sale of operations at the Fort St. John, Grand Prairie, Lac La Biche and Calgary facilities in western Canada, as well as facilities in Brazil, Colombia, New Smyrna Beach, Florida, Rifle, Colorado and other domestic and international sites. Workforce reductions announced as a result of our 2015 restructuring activities totaled 139 salaried administrative and hourly manufacturing positions, most of which had been terminated by December 31, 2015. In 2015 we incurred total expense related to the CPI restructuring plan of $3.8 million, including severance expense of $0.6 million, asset write-downs of $2.7 million, lease run-out costs of $0.1 million, and other associated costs of $0.4 million. These costs were incurred at our Engineered Products segment, and were reflected within other (operating) expense in our Consolidated Statements of Operations aside from inventory-related costs, which were reflected in cost of sales. We expect the balance of the costs, $2.7 million to $4.3 million, to be accrued in 2016. Restructuring reserves at December 31, 2015, as well as activity during the year, consisted of:
The above-mentioned asset write-downs at CPI did not affect the restructuring reserve liability. Restructuring reserves at December 31, 2014, as well as activity during the year, consisted of:
Restructuring reserves at December 31, 2013, as well as activity during the year, consisted of:
Restructuring costs by reportable segment are as follows:
Also included in other operating expense for the years ended December 31, 2015, 2014 and 2013 was $1.8 million, $1.5 million and $2.4 million, respectively, primarily consisting of legal fees related to the bankruptcy of certain subsidiaries discussed further in Note 19, "Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd." Non-Operating In March 2015, we entered into privately negotiated transactions with certain holders of our Convertible Debentures to purchase the debentures. We recognized a $2.8 million pre-tax loss on the transaction. Refer to Note 12, “Long-Term Debt – Convertible Debentures” for additional information about the transaction. In March 2014 and June 2014, we entered into privately negotiated transactions with certain holders of our Convertible Debentures to exchange them for shares of EnPro's common stock. Additionally, in September 2014, we completed a cash tender to purchase any and all of the remaining Convertible Debentures. These transactions resulted in a $10.0 million loss. During 2015, 2014 and 2013, we recorded expense of $1.4 million, $4.4 million and $6.3 million, respectively, due to environmental reserve increases based on additional information at several specific sites of previously owned businesses. Refer to Note 20, "Commitments and Contingencies - Environmental" for additional information about our environmental liabilities. In December 2014 we recorded a pre-tax gain of $27.7 million in connection with the sale of substantially all of the assets and transfer of certain liabilities of the GRT business unit. GRT, with a single manufacturing facility in Paragould, Arkansas, manufactures and sells conveyor belts and sheet rubber for many applications across a diversified array of end markets. It had previously been managed as part of the Garlock operations in the Sealing Products segment. The business was sold for $42.3 million, net of transaction expenses, of which $2.9 million is being held in an escrow account for 18 months to fund indemnification payments, if any, to the buyer under the agreement governing the sale. GRT reported net sales of $31.3 million and $30.1 million for the years ended December 31, 2014, and 2013, respectively. Additional disclosures are not presented since the assets, liabilities and results of operations for GRT are not significant to our consolidated financial position or results of operations. |
Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
Income (loss) before income taxes as shown in the Consolidated Statements of Operations consists of the following:
A summary of income tax expense in the Consolidated Statements of Operations is as follows:
Income tax benefits recorded directly to additional paid-in capital consist of the following:
Significant components of deferred income tax assets and liabilities at December 31, 2015 and 2014 are as follows:
We offset deferred tax assets and liabilities against one another only to the extent they relate to the same tax jurisdiction. If this condition is not satisfied, the balances are classified independently on the balance sheet. As discussed in Note 1, "Overview, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Guidance," we adopted authoritative guidance that simplifies the presentation of deferred income taxes through requiring that all deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet. This adoption was done on a prospective basis, and prior period presentation was not adjusted. The net deferred tax assets are reflected on the December 31, 2015 and 2014 Consolidated Balance Sheets as follows:
At December 31, 2015, we had $32.4 million of foreign tax net operating loss carryforwards (tax effect of $9.5 million) of which $12.2 million expire at various dates beginning in 2016, and $20.2 million have an indefinite carryforward period. We also had state tax net operating loss carryforwards with a tax effect of $0.5 million which expire at various dates between 2016 through 2033. These net operating loss carryforwards may be used to offset a portion of future taxable income and, thereby, reduce or eliminate our U.S. federal, state or foreign income taxes otherwise payable. We determined, based on the available evidence, that it is uncertain whether future taxable income of certain of our foreign subsidiaries will be significant enough or of the correct character to recognize certain of these deferred tax assets. As a result, valuation allowances of $17.6 million and $19.9 million have been recorded as of December 31, 2015 and 2014, respectively. Valuation allowances primarily relate to certain state and foreign net operating losses and other net deferred tax assets in jurisdictions where future taxable income is uncertain. A portion of the valuation allowance may be associated with deferred tax assets recorded in purchase accounting. In accordance with applicable accounting guidelines, any reversal of a valuation allowance that was recorded in purchase accounting reduces income tax expense. The effective income tax rate from operations varied from the statutory federal income tax rate as follows:
We have not provided for the federal and foreign withholding taxes on approximately $256 million of foreign subsidiaries’ undistributed earnings as of December 31, 2015, because such earnings are intended to be reinvested indefinitely. Upon repatriation, certain foreign countries impose withholding taxes. The amount of withholding tax that would be payable on remittance of the entire amount would be approximately $2.3 million. Although such earnings are intended to be reinvested indefinitely, any tax liability for undistributed earnings, including withholding taxes, would be negated by the availability of corresponding dividends received deductions and foreign tax credits. As of December 31, 2015 and 2014, we had $1.5 million and $3.1 million, respectively, of gross unrecognized tax benefits. Of the gross unrecognized tax benefit balances as of December 31, 2015 and 2014, $1.5 million and $3.1 million, respectively, would have an impact on our effective tax rate if ultimately recognized. We record interest and penalties related to unrecognized tax benefits in income tax expense. In addition to the gross unrecognized tax benefits above, we had $0.1 million and $0.3 million accrued for interest and penalties at December 31, 2015 and 2014, respectively. Income tax expense for the years ended December 31, 2015, 2014 and 2013, includes $0.1 million, $0.1 million and $0.1 million, respectively, for interest and penalties related to unrecognized tax benefits. The amounts listed above for accrued interest do not reflect the benefit of any tax deduction, which might be available if the interest were ultimately paid. A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits (excluding interest) is as follows:
US federal income tax returns after 2011 remain open to examination. We and our subsidiaries are also subject to income tax in multiple state and foreign jurisdictions. Various foreign and state tax returns are currently under examination. The most significant of these include France and Germany. Substantially all significant state, local and foreign income tax returns for the years 2010 and forward are open to examination. We expect that some of these examinations may conclude within the next twelve months, however, the final outcomes are not yet determinable. If these examinations are concluded or effectively settled within the next twelve months, it could reduce the associated gross unrecognized tax benefits by approximately $0.3 million. In addition, another $0.2 million in gross unrecognized tax benefits may be recognized within the next twelve months as the applicable statute of limitations expires. As discussed in Note 1, "Overview, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Guidance," the Company has corrected certain prior period errors by revising the relevant prior periods during the fourth quarter of 2015. Certain prior period balances included in this Note 4, "Income Taxes" are presented as corrected. |
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share |
Basic earnings per share is computed by dividing the net income by the applicable weighted-average number of common shares outstanding for the period. Diluted earnings per share is calculated using the weighted-average number of shares of common stock as adjusted for any potentially dilutive shares as of the balance sheet date. The computation of basic and diluted earnings per share is as follows (in millions, except per share data):
As discussed further in Note 12, "Long-Term Debt - Convertible Debentures," we previously issued Convertible Debentures. Under the terms of the Convertible Debentures, upon conversion, we settled the par amount of our obligations in cash and the remaining obligations in common shares. Pursuant to applicable accounting guidelines, we include the conversion option effect in diluted earnings per share during such periods when our average stock price exceeded the adjusted conversion price per share. As discussed further in Note 12, "Long-Term Debt - Convertible Debentures," we purchased a portion of our outstanding Convertible Debentures in a privately negotiated transaction in March 2015, and the remaining amount was converted in October 2015. We used a portion of the net proceeds from the original sale of the Convertible Debentures to enter into call options, consisting of hedge and warrant transactions, which entitled us to purchase shares of our stock from a financial institution at $33.79 per share and entitled the financial institution to purchase shares of our stock from us at $46.78 per share. The warrant transactions had a dilutive effect during such periods that the average price per share of our common stock exceeded the $46.78 per share strike price of the warrants. During the second quarter of 2015, we completed a previously announced agreement with this financial institution to effectively accelerate and offset settlement obligations of the parties under the call options which resulted in a net-share settlement of approximately 0.9 million shares being delivered to us. These shares were immediately retired and are no longer considered outstanding. In the year ended December 31, 2015, there was a loss attributable to common shares. There were 0.8 million of potentially dilutive shares excluded from the calculation of diluted earnings per share during those periods since they were antidilutive. |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
Incurred costs related to long-term contracts in the table above represent inventoried work in process and finished products related to engine contracts accounted for under the completed-contract method, where costs incurred exceed customer billings. Refer to Note 7, “Long-Term Contracts” for additional information about incurred costs and progress payments related to long-term contracts. |
Percentage-of-Completion Long-Term Contracts |
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Contractors [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage-of-Completion Long-Term Contracts |
See Note 1, "Revenue Recognition" for information regarding engine contracts accounted for under the POC method. Additional information regarding engine contracts accounted for under the POC method is as follows:
These amounts were included in the accompanying Consolidated Balance Sheets under the following captions:
Additional information regarding engine contracts accounted for under the completed-contract method is as follows:
Incurred costs related to long-term contracts in the table above represent inventoried work in process and finished products related to engine contracts accounted for under the completed-contract method, where customer billings exceed costs incurred. Progress payments related to long-term contracts in the table above are either advanced billings or milestone billings to the customer on contracts accounted for under the completed-contract method. Upon shipment of the completed engine, revenue associated with the engine is recognized, and the incurred inventoried costs and progress payments are relieved. At December 31, 2015 and 2014, progress payments related to long-term contracts shown above were in excess of incurred costs resulting in net liability balances. As such, the net liability balances are reflected in accrued expenses in the accompanying Consolidated Balance Sheets. Refer to Note 6, “Inventories” for additional information about incurred costs and progress payments related to long-term contracts for which the incurred costs exceeded the progress payments. In addition to inventoried costs, we also make deposits and progress payments to certain vendors for long lead time manufactured components associated with engine projects. At December 31, 2015 and 2014, deposits and progress payments for long lead time components totaled $1.8 million and $2.9 million. These deposits and progress payments are classified in prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets. |
Property, Plant and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment |
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets |
The changes in the net carrying value of goodwill by reportable segment for the years ended December 31, 2015 and 2014 are as follows:
The goodwill balances reflected above are net of accumulated impairment losses of $27.8 million for the Sealing Products segment as of December 31, 2015, 2014 and 2013, $154.8 million for the Engineered Products segment as of December 31, 2015, and $108.7 million of accumulated impairment losses for the Engineered Products segment as of December 31, 2014 and 2013. Identifiable intangible assets are as follows:
During the year ended December 31, 2015, we determined $0.9 million of amortized trademarks associated with CPI were impaired and therefore were written off. This amount is included in goodwill and other intangible asset impairment in the accompanying Consolidated Statement of Operations for the year ended December 31, 2015. Additionally, in connection with the restructuring activities discussed in Note 3, "Other Income (Expense) - Operating," $1.6 million of customer relationship intangible assets associated with the exited CPI businesses were written off. This amount is included in other (operating) expense in the accompanying Consolidated Statement of Operations for the year ended December 31, 2015. Amortization expense for the years ended December 31, 2015, 2014 and 2013 was $21.9 million, $23.0 million and $24.1 million, respectively. The estimated amortization expense for those intangible assets for the next five years is as follows (in millions):
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Accrued Expenses |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses |
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Related Party Transactions |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions |
The deconsolidation of GST from our financial results, discussed more fully in Note 1, "Summary of Significant Accounting Policies - Investment in GST" and Note 19, "Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd." required certain intercompany indebtedness described below to be reflected on our Consolidated Balance Sheets. As of December 31, 2015 and 2014, Coltec Finance Company Ltd., a wholly-owned subsidiary of Coltec, had aggregate, short-term borrowings of $24.3 million and $23.6 million, respectively, from GST’s subsidiaries in Mexico and Australia. These unsecured obligations were denominated in the currency of the lending party, and bear interest based on the applicable one-month interbank offered rate for each foreign currency involved. Effective as of January 1, 2010, Coltec entered into an original issue amount $73.4 million Amended and Restated Promissory Note due January 1, 2017 (the “Coltec Note”) in favor of GST LLC, and our subsidiary Stemco LP entered into an original issue amount $153.8 million Amended and Restated Promissory Note due January 1, 2017, in favor of GST LLC (the “Stemco Note”, and together with the Coltec Note, the “Notes Payable to GST”). The Notes Payable to GST amended and replaced promissory notes in the same principal amounts which were initially issued in March 2005, and which expired on January 1, 2010. The Notes Payable to GST bear interest at 11% per annum, of which 6.5% is payable in cash and 4.5% is added to the principal amount of the Notes Payable to GST as payment-in-kind (“PIK”) interest, with interest due on January 31 of each year. In conjunction with the interest payments in 2015 and 2014, $17.6 million and $16.9 million, respectively, was paid in cash and PIK interest of $12.2 million and $11.7 million, respectively, was added to the principal balance of the Notes Payable to GST. If GST LLC is unable to pay ordinary course operating expenses, under certain conditions, they can require Coltec and Stemco to pay in cash the accrued PIK interest necessary to meet such ordinary course operating expenses, subject to certain caps. The interest due under the Notes Payable to GST may be satisfied through offsets of amounts due under intercompany services agreements pursuant to which we provide certain corporate services, make available access to group insurance coverage to GST, make advances to third party providers related to payroll and certain benefit plans sponsored by GST, and permit employees of GST to participate in certain of our benefit plans. The Coltec Note is secured by Coltec’s pledge of certain of its equity ownership in specified U.S. subsidiaries. The Stemco Note is guaranteed by Coltec and secured by Coltec’s pledge of its interest in Stemco. The Notes Payable to GST are subordinated to any obligations under our senior secured revolving credit facility described in Note 12, "Long-Term Debt - Revolving Credit Facility". We regularly transact business with GST through the purchase and sale of products. We also provide services for GST including information technology, supply chain, treasury, accounting and tax administration, legal, and human resources under a support services agreement. GST is included in our consolidated U.S. federal income tax return and certain state combined income tax returns. As the parent of these consolidated tax groups, we are liable for, and pay, income taxes owed by the entire group. We have agreed with GST to allocate group taxes to GST based on the U.S. consolidated tax return regulations and current income tax accounting guidance. This method generally allocates taxes to GST as if it were a separate taxpayer. As a result, we carry an income tax receivable from GST related to this allocation. Amounts included in our consolidated financial statements arising from transactions with GST include the following:
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Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt |
Convertible Debentures In October 2005, we issued $172.5 million in aggregate principal amount of Convertible Debentures, net of an original issue discount of $61.3 million. The Convertible Debentures bore interest at the annual rate of 3.9375%, with interest due on April 15 and October 15 of each year, and matured on October 15, 2015. The Convertible Debentures were direct, unsecured and unsubordinated obligations and ranked equal in priority with all unsecured and unsubordinated indebtedness and senior in right of payment to all subordinated indebtedness. In March 2015, we purchased for cash approximately $21.3 million in aggregate principal amount of Convertible Debentures in a privately negotiated transaction. We paid $44.9 million to complete the transaction of which $23.3 million was allocated to the extinguishment of the liability component and the remaining $21.6 million was allocated to the reacquisition of the associated conversion option. We recognized a $2.8 million pre-tax loss on the transaction ($1.8 million net of tax) which is included in other income (expense), net in the accompanying Consolidated Statement of Operations for the year ended December 31, 2015. In the fourth quarter of 2015, we received conversion requests representing all $2.2 million of the remaining Convertible Debentures outstanding. Under the terms of the Debentures, each holder received a cash payment up to the par value of the Convertible Debentures being converted, plus a number of shares of our common stock, determined over a twenty (20) trading day settlement period. Accordingly, these holders received in November 2015 approximately $2.2 million in cash plus approximately 19,610 shares of our common stock, subject to stock price changes during the remaining settlement period. Senior Notes In September 2014, we issued $300.0 million aggregate principal amount of our 5.875% Senior Notes due 2022 (the “Senior Notes”). We issued the notes net of an original issue discount of $2.4 million. A portion of the net proceeds of the Senior Notes was used to repay outstanding borrowings under our senior secured revolving credit facility, including borrowings made to fund a purchase of the Convertible Debentures in 2014. The Senior Notes are unsecured, unsubordinated obligations of EnPro and mature on September 15, 2022. Interest on the Senior Notes accrues at a rate of 5.875% per annum and is payable semi-annually in cash in arrears on March 15 and September 15 of each year. The debt discount is being amortized through interest expense until the maturity date resulting in an effective interest rate of 6.0%. The Senior Notes are required to be guaranteed on a senior unsecured basis by each of EnPro’s existing and future direct and indirect domestic subsidiaries that is a borrower under, or guarantees, our indebtedness under the Revolving Credit Facility or guarantees any other Capital Markets Indebtedness (as defined in the indenture governing the Senior Notes) of EnPro or any of the guarantors. On or after September 15, 2017, we may, on any one or more occasions, redeem all or a part of the Senior Notes at specified redemption prices plus accrued and unpaid interest. In addition, we may redeem a portion of the aggregate principal amount of the Senior Notes before September 15, 2017 with the net cash proceeds from certain equity offerings at a specified redemption price plus accrued and unpaid interest, if any, to, but not including, the redemption date. We may also redeem some or all of the Senior Notes before September 15, 2017 at a redemption price of 100% of the principal amount, plus accrued and unpaid interest, if any, to, but not including, the redemption date, plus a “make whole” premium. Each holder of the Senior Notes may require us to repurchase some or all of the Senior Notes for cash upon the occurrence of a defined “change of control” event. Our ability to redeem the Senior Notes prior to maturity is subject to certain conditions, including in certain cases the payment of make-whole amounts. The indenture governing the Senior Notes includes covenants that restrict our ability to engage in certain activities, including incurring additional indebtedness and paying dividends, subject in each case to specified exceptions and qualifications set forth in the indenture. Revolving Credit Facility On August 28, 2014, we amended and restated the agreement governing our senior secured revolving credit facility (the “Credit Facility Amendment”). The Credit Facility Amendment provides for a five year, $300.0 million senior secured revolving credit facility (the “Revolving Credit Facility”). Borrowings under the Revolving Credit Facility bear interest at an annual rate of LIBOR plus 2.00% or base rate plus 1.00%, although the interest rates under the Revolving Credit Facility are subject to incremental increases based on a consolidated total leverage ratio. In addition, a commitment fee accrues with respect to the unused amount of the Revolving Credit Facility. EnPro and Coltec are the permitted borrowers under the Revolving Credit Facility. Each of our domestic, consolidated subsidiaries (other than GST and their respective subsidiaries, unless they elect to guarantee upon becoming consolidated subsidiaries in the future) are required to guarantee the obligations of the borrowers under the Revolving Credit Facility, and each of our existing domestic, consolidated subsidiaries (which does not include the domestic entities of GST) has entered into the Credit Facility Amendment to provide such a guarantee. Borrowings under the Revolving Credit Facility are secured by a first priority pledge of certain of our assets. The Credit Facility Amendment contains financial covenants and required financial ratios, including a maximum consolidated total net leverage and a minimum consolidated interest coverage as defined in the agreement. The Credit Facility Amendment contains affirmative and negative covenants which are subject to customary exceptions and qualifications. The borrowing availability under our Revolving Credit Facility at December 31, 2015 was $228.4 million after giving consideration to $9.4 million of outstanding letters of credit and $62.2 million of outstanding borrowings. Scheduled Principal Payments Future principal payments on long-term debt are as follows:
The payments for long-term debt shown in the table above reflect the contractual principal amount for the Senior Notes. In the Consolidated Balance Sheets, these amounts are shown net of debt discounts aggregating $2.0 million pursuant to applicable accounting rules. Debt Issuance Costs During 2014, we capitalized $7.3 million of debt issuance costs in connection with the amendment to the Revolving Credit Facility and the issuance of the Senior Notes. The capitalized debt issuance costs are amortized to interest expense over the respective lives of the debt instruments. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
Assets and liabilities measured at fair value on a recurring basis are summarized as follows:
Our cash equivalents and deferred compensation assets and liabilities are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The carrying values of our significant financial instruments reflected in the Consolidated Balance Sheets approximate their respective fair values, except for the following:
The fair values for long-term debt are based on quoted market prices, but this would be considered a Level 2 computation because the market is not active. The notes payable to GST computation would be considered Level 2 since it is based on rates available to us for debt with similar terms and maturities. |
Pensions and Postretirement Benefits |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pensions and Postretirement Benefits |
We have non-contributory defined benefit pension plans covering eligible employees in the United States and several European countries. Salaried employees’ benefit payments are generally determined using a formula that is based on an employee’s compensation and length of service. We closed our defined benefit pension plan for new salaried employees in the United States who joined the Company after January 1, 2006, and, effective January 1, 2007, benefits were frozen for all salaried employees who were not age 40 or older as of December 31, 2006. Hourly employees’ benefit payments are generally determined using stated amounts for each year of service. Our employees also participate in voluntary contributory retirement savings plans for salaried and hourly employees maintained by us. Under these plans, eligible employees can receive matching contributions up to the first 6% of their eligible earnings. Effective January 1, 2007, those employees whose defined benefit pension plan benefits were frozen receive an additional 2% company contribution each year. We recorded $9.2 million, $8.4 million and $7.4 million in expenses in 2015, 2014 and 2013, respectively, for matching contributions under these plans. Our general funding policy for qualified defined benefit pension plans historically has been to contribute amounts that are at least sufficient to satisfy regulatory funding standards. We made no contribution to our U.S. pension plans during 2015. During 2014 and 2013, we contributed $48.5 million and $22.5 million, respectively, in cash to our U.S. pension plans. The 2014 contribution fully funded expected regulatory contributions for 2014. This shift in contribution strategy was precipitated by an increase in the PBGC variable-rate premiums which are assessed on underfunded balances. We anticipate there will be no required funding in 2016 to our U.S. defined benefit pension plans. Additionally, we expect to make total contributions of approximately $0.4 million in 2016 to the foreign pension plans. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the defined benefit pension plans with accumulated benefit obligations in excess of plan assets were $283.4 million, $275.3 million and $242.5 million at December 31, 2015, and $291.5 million, $283.8 million and $253.1 million at December 31, 2014, respectively. We amortize prior service cost and unrecognized gains and losses using the straight-line basis over the average future service life of active participants. We provide, through non-qualified plans, supplemental pension benefits to a limited number of employees. Certain of our subsidiaries also sponsor unfunded postretirement plans that provide certain health-care and life insurance benefits to eligible employees. The health-care plans are contributory, with retiree contributions adjusted periodically, and contain other cost-sharing features, such as deductibles and coinsurance. The life insurance plans are generally noncontributory. The amounts included in “Other Benefits” in the following tables include the non-qualified plans and the other postretirement plans discussed above. The following table sets forth the changes in projected benefit obligations and plan assets of our defined benefit pension and other non-qualified and postretirement plans as of and for the years ended December 31, 2015 and 2014.
Pre-tax charges recognized in accumulated other comprehensive loss as of December 31, 2015 and 2014 consist of:
The accumulated benefit obligation for all defined benefit pension plans was $275.3 million and $283.8 million at December 31, 2015 and 2014, respectively. The following table sets forth the components of net periodic benefit cost and other changes in plan assets and benefit obligations recognized in other comprehensive income for our defined benefit pension and other non-qualified and postretirement plans for the years ended December 31, 2015, 2014 and 2013.
The estimated net loss and prior service cost for the defined benefit pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year are $6.8 million and $0.1 million, respectively. The estimated net loss for the other defined benefit postretirement plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $0.1 million.
The discount rate reflects the current rate at which the pension liabilities could be effectively settled at the end of the year. The discount rate was determined using a model, which uses a theoretical portfolio of high quality corporate bonds specifically selected to produce cash flows closely related to how we would settle our retirement obligations. This produced a discount rate of 4.63% at December 31, 2015. As of the date of these financial statements, there are no known or anticipated changes in our discount rate assumption that will impact our pension expense in 2016. A 25 basis point decrease (increase) in our discount rate, holding constant our expected long-term return on plan assets and other assumptions, would increase (decrease) pension expense by approximately $1.2 million per year. The overall expected long-term rate of return on assets was determined based upon weighted-average historical returns over an extended period of time for the asset classes in which the plans invest according to EnPro's current investment policy. We use the RP-2014 mortality table with the MP-2015 projection scale to value our domestic pension liabilities.
A one percentage point change in the assumed health-care cost trend rate would have an insignificant impact on net periodic benefit cost and on benefit obligations. Plan Assets The asset allocation for pension plans at the end of 2015 and 2014, and the target allocation for 2016, by asset category are as follows:
Our investment goal is to maximize the return on assets, over the long term, by investing in equities and fixed income investments while diversifying investments within each asset class to reduce the impact of losses in individual securities. Equity investments include a mix of U.S. large capitalization equities, U.S. small capitalization equities and non-U.S. equities. Fixed income investments include a mix of treasury obligations and high-quality money market instruments. The asset allocation policy is reviewed and any significant variation from the target asset allocation mix is rebalanced periodically. The plans have no direct investments in EnPro common stock. The plans invest exclusively in mutual funds whose holdings are marketable securities traded on recognized markets and, as a result, would be considered Level 1 assets. The investment portfolios of the various funds at December 31, 2015 and 2014 are summarized as follows:
Estimated Future Benefit Payments The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
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Shareholders' Equity |
12 Months Ended | ||||||
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Dec. 31, 2015 | |||||||
Equity [Abstract] | |||||||
Stockholders' Equity |
In 2015, we adopted a policy under which we intend to declare regular quarterly cash dividends on our common stock, as determined by our board of directors, after taking into account our cash flows, earnings, financial position and other relevant matters. In accordance with this policy, total dividend payments of $18.0 million were made during year ended December 31, 2015. Cash dividends declared per common share were $0.80 for the year ended December 31, 2015. On February 24, 2016 our Board of Directors declared a cash dividend of $0.21 per share payable on March 23, 2016 to shareholders of record at the close of business on March 9, 2016 In February 2015, our board of directors authorized the repurchase of up to $80.0 million of our outstanding common shares. The repurchase plan was completed in April 2015 after purchasing 1.2 million shares at an average price of $66.76 per share. In October 2015, our board of directors authorized the purchase of up to $50.0 million of our outstanding common shares from time to time. During the remainder of 2015, we repurchased 0.1 million additional shares for $6.0 million. Of this amount, $5.3 million had settled as of December 31, 2015. The shares were retired upon purchase. Subsequent to December 31, 2015, the remaining repurchases noted above settled, and we repurchased an additional 0.2 million shares for $5.7 million. |
Accumulated Other Comprehensive Income (Loss) |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) |
Changes in accumulated other comprehensive income (loss) by component (after tax) are as follows:
Reclassifications out of accumulated other comprehensive income (loss) are as follows:
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Equity Compensation Plan |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Compensation Plan |
We have an equity compensation plan (the “Plan”) that provides for the delivery of up to 5.2 million shares pursuant to various market and performance-based incentive awards. As of December 31, 2015, there are 0.4 million shares available for future awards. Our policy is to issue new shares to satisfy share delivery obligations for awards made under the Plan. The Plan allows awards of restricted share units to be granted to executives and other key employees. Generally, all share units will vest in three years. Compensation expense related to the restricted share units is based upon the market price of the underlying common stock as of the date of the grant and is amortized over the applicable restriction period using the straight-line method. As of December 31, 2015, there was $6.6 million of unrecognized compensation cost related to restricted share units expected to be recognized over a weighted-average vesting period of 1.3 years. Under the terms of the Plan, performance share awards were granted to executives and other key employees during 2015, 2014 and 2013. Each grant will vest if EnPro achieves specific financial objectives at the end of each three-year performance period. Additional shares may be awarded if objectives are exceeded, but some or all shares may be forfeited if objectives are not met. Performance shares earned at the end of a performance period, if any, will be paid in actual shares of our common stock, less the number of shares equal in value to applicable withholding taxes if the employee chooses. During the performance period, a grantee receives dividend equivalents accrued (if any) in cash, and shares are forfeited if a grantee terminates employment. Compensation expense related to the performance shares is computed using the market price of the underlying common stock as of the date of the grant and the current achievement level of the specific financial objectives and is recorded using the straight-line method over the applicable performance period. As of December 31, 2015, there was $1.7 million of unrecognized compensation cost related to nonvested performance share awards that is expected to be recognized over a weighted-average vesting period of 1.5 years. Restricted shares, with three or four-year restriction periods from the initial grant date were issued in 2014 and 2013 to executives and other key employees. Compensation expense related to the restricted shares is based upon the market price of the underlying common stock as of the date of the grant and is amortized over the applicable restriction period using the straight-line method. As of December 31, 2015, there was $0.1 million of unrecognized compensation cost related to restricted shares that is expected to be recognized over a weighted-average vesting period of 0.6 years. A summary of award activity under these plans is as follows:
The number of nonvested performance share awards shown in the table above represents the maximum potential shares to be issued. Non-qualified and incentive stock options were granted in 2011 and 2008. No stock option has a term exceeding 10 years from the date of grant. All stock options were granted at not less than 100% of fair market value (as defined) on the date of grant. As of December 31, 2015, there was an insignificant amount of unrecognized compensation cost related to nonvested stock options. The following table provides certain information with respect to stock options as of December 31, 2015:
A summary of option activity under the Plan as of December 31, 2015, and changes during the year then ended, is presented below:
The year-end intrinsic value related to stock options is presented below:
We recognized the following equity-based employee compensation expenses and benefits related to our Plan activity:
Each non-employee director receives an annual grant of phantom shares equal in value to $90,000. With respect to certain phantom shares awarded in prior years, we will pay each non-employee director in cash the fair market value of the director's phantom shares upon termination of service as a member of the board of directors. The remaining phantom shares granted will be paid out in the form of one share of our common stock for each phantom share, with the value of any fractional phantom shares paid in cash. Expense recognized in the years ended December 31, 2015, 2014 and 2013 related to these phantom share grants was $0.7 million, $0.9 million and $1.3 million, respectively. Cash payments of $0.4 million were used to settle phantom shares during 2013. No cash payments were used to settle phantom shares in 2015 or 2014. |
Business Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segment Information |
We aggregate our operating businesses into three reportable segments. The factors considered in determining our reportable segments are the economic similarity of the businesses, the nature of products sold or services provided, the production processes and the types of customers and distribution methods. Our reportable segments are managed separately based on these differences. Our Sealing Products segment designs, manufactures and sells sealing products, including: metallic, non-metallic and composite material gaskets, dynamic seals, compression packing, resilient metal seals, elastomeric seals, hydraulic components, expansion joints, flange sealing and isolation products, pipeline casing spacers/isolators, casing end seals, modular sealing systems for sealing pipeline penetrations, hole forming products, manhole infiltration sealing systems, safety-related signage for pipelines, bellows and bellows assemblies, pedestals for semiconductor manufacturing, PTFE products, and heavy duty truck parts used in the wheel-end, braking, suspension, and tire & mileage optimization systems. Our Engineered Products segment includes operations that design, manufacture and sell self-lubricating, non-rolling metal-polymer, solid polymer and filament wound bearing products, aluminum blocks for hydraulic applications, and precision engineered components and lubrication systems for reciprocating compressors. Our Power Systems segment designs, manufactures, sells and services heavy-duty, medium-speed diesel, natural gas and dual fuel reciprocating engines. Segment profit is total segment revenue reduced by operating expenses, restructuring and other costs identifiable with the segment. Corporate expenses include general corporate administrative costs. Expenses not directly attributable to the segments, corporate expenses, net interest expense, gains and losses related to the sale of assets, and income taxes are not included in the computation of segment profit. The accounting policies of the reportable segments are the same as those for EnPro. Segment operating results and other financial data for the years ended December 31, 2015, 2014, and 2013 were as follows:
No customer accounted for 10% or more of net sales in 2015, 2014 or 2013.
Net sales are attributed to countries based on location of the customer.
Corporate assets include all of our cash and cash equivalents, investment in GST, and long-term deferred income taxes. Long-lived assets consist of property, plant and equipment. |
Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. |
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Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. |
On the Petition Date, GST LLC, Anchor and Garrison filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court (the "Bankruptcy Court"). The filings were the initial step in a claims resolution process, which is ongoing. The goal of the process is an efficient and permanent resolution of all pending and future asbestos claims through court approval of a plan of reorganization that will establish a facility to resolve and pay all GST asbestos claims. GST is seeking an order confirming a plan of reorganization that provides for the establishment of such a facility and repayment of creditors in full, and a confirmation hearing is scheduled for August 2016. GST's plan is supported by the court-appointed representative of future asbestos claimants (the "Future Claimants' Representative") but opposed by the official committee representing current asbestos claimants (the "Current Asbestos Claimants' Committee"). In November 2011, GST filed an initial proposed plan of reorganization with the Bankruptcy Court. GST's initial plan called for a trust to be formed, to which GST and affiliates would contribute $200 million and which would be the exclusive remedy for future asbestos personal injury claimants – those whose claims arise after confirmation of the plan. The initial proposed plan provided that each present asbestos personal injury claim (any pending claim or one that arises between the Petition Date and plan confirmation) would be assumed by reorganized GST and resolved either by settlement, pursuant to a matrix contained in the proposed plan or as otherwise agreed, or by payment in full of any final judgment entered after trial in federal court. The initial proposed plan was revised and replaced by GST's first amended proposed plan of reorganization filed in May 2014. On April 13, 2012, the Bankruptcy Court granted a motion by GST for the Bankruptcy Court to estimate the allowed amount of present and future asbestos claims against GST for mesothelioma, a rare cancer attributed to asbestos exposure, for purposes of determining the feasibility of a proposed plan of reorganization. The estimation trial began on July 22, 2013 and concluded on August 22, 2013. On January 10, 2014, Bankruptcy Judge George Hodges announced his estimation decision in a 65-page order. Citing with approval the methodology put forth by GST at trial, the judge determined that $125 million is the amount sufficient to satisfy GST's liability for present and future mesothelioma claims. Judge Hodges adopted GST's "legal liability" approach to estimation, focused on the merits of claims, and rejected asbestos claimant representatives' approach, which focused solely on GST's historical settlement history. The judge's liability determination is for mesothelioma claims only. The court has not yet determined amounts for GST's liability for other asbestos claims and for administrative costs that would be required to review and process claims and payments, which will add to the amount. In his opinion, Judge Hodges wrote, "The best evidence of Garlock's aggregate responsibility is the projection of its legal liability that takes into consideration causation, limited exposure and the contribution of exposures to other products." The decision validates the positions that GST has been asserting for the more than four years it had been in the Chapter 11 process. Following are several important findings in the opinion:
In June 2014, the Current Asbestos Claimants' Committee filed filed a motion with the Bankruptcy Court asking the court to re-open the estimation process for further discovery and alleging that GST misled the court in various respects during the estimation trial. On December 4, 2014, the Bankruptcy Court denied the Committee's motion to re-open. In May 2014, GST filed its first amended proposed plan of reorganization. The first amended plan provided $275 million in total funding for (a) present and future asbestos claims against GST that have not been resolved by settlement or verdict prior to the Petition Date, and (b) administrative and litigation costs. On January 14, 2015, we announced that GST and we had reached agreement with the Future Claimants' Representative that includes a second amended plan of reorganization. The second amended plan was filed with the Bankruptcy Court on January 14, 2015 and supersedes the prior plans filed by GST. If approved by the Bankruptcy Court and implemented, the second amended plan will provide certainty and finality to the expenditures necessary to resolve all current and future asbestos claims against GST and against its Garrison and Anchor Packing subsidiaries. The Future Claimants' Representative has agreed to support, recommend and vote in favor of the second amended plan, which provides payments to all claimants who have a compensable disease and had meaningful contact with GST asbestos containing products. GST believes that the second amended plan is sufficient to pay all valid claims in full. The second amended plan provides for the establishment of two facilities – a settlement facility (which would receive $220 million from GST and $30 million from Coltec upon consummation of the plan and additional contributions from GST aggregating $77.5 million over the seven years following consummation of the plan) and a litigation fund (which would receive $30 million from GST upon consummation of the plan) to fund the defense and payment of claims of claimants who elect to pursue litigation under the plan rather than accept the settlement option under the plan. Funds contained in the settlement facility and the litigation fund would provide the exclusive remedies for current and future GST asbestos claimants other than claimants whose claims had been resolved by settlement or verdict prior to the Petition Date and were not paid prior to the Petition Date. The plan provides that GST will pay in full claims that had been resolved by settlement or verdict prior to the Petition Date that were not paid prior to the Petition Date (with respect to claims resolved by verdict, such payment will be made only to the extent the verdict becomes final). The second amended plan provides that if the actual amount of claims that had been resolved by settlement or verdict prior to the Petition Date that were not paid prior to the Petition Date is less than $10.0 million GST will contribute the difference to the settlement facility. In addition, the second amended plan provides that, during the 40-year period following confirmation of the plan, GST would, if necessary, make supplementary annual contributions, subject to specified maximum annual amounts that decline over the period, to maintain a specified balance at specified dates of the litigation fund. The maximum aggregate amount of all such contingent supplementary contributions over that period is $132 million. GST, and we, believe that initial contributions to the litigation fund may likely be sufficient to permit the balance of that facility to exceed the specified thresholds over the 40-year period and, accordingly, that the low end of a range of reasonably possible loss associated with these contingent supplementary contributions is $0. Under the plan, EnPro would guarantee GST’s payment of the scheduled $77.5 million of deferred contributions plus accrued interest to the settlement facility and, to the extent they are required, the supplementary contributions to the litigation fund. Additional details of the second amended plan are described below in Note 20, “Commitments and Contingencies - Asbestos - GST’s Second Amended Proposed Plan of Reorganization.” The second amended plan incorporates the Bankruptcy Court’s determination in January 2014 that $125 million is sufficient to satisfy GST’s aggregate liability for present and future mesothelioma claims; however, it also provides additional funds to provide full payment for non-mesothelioma claims and to gain the support of the Future Claimants’ Representative of the plan. Under the terms of the plan, we would retain 100% of the equity interests of GST LLC. The plan also provides for the extinguishment of all derivative claims against us based on GST asbestos products and operations. We anticipate that payments under the plan to the settlement facility and litigation fund by GST, which will be paid primarily from GST cash balances and remaining insurance and the payment to the settlement facility by Coltec, will be deductible against U.S. taxes. We plan to seek an IRS determination to that effect. The Current Asbestos Claimants' Committee and their law firms continue to oppose the second amended plan of reorganization. On April 10, 2015, the Bankruptcy Court entered an order that approved the disclosure statement for the second amended plan of reorganization, established an asbestos claims bar date and approved procedures for voting and soliciting votes for the second amended plan. The Bankruptcy Court also approved the method for providing notice of the second amended plan and asbestos claims bar date to known and unknown claimants and the form and substances of the notices. Under such order, proofs of claim had to be filed on or before October 6, 2015 for all claims based on asbestos-related diseases diagnosed on or before August 1, 2014 for which lawsuits against any defendant or claims against any trusts were filed on or before August 1, 2014, or be subject to being forever barred, and claimants were required to submit ballots voting on the approval of the second amended plan by October 6, 2015. In addition, proofs of claim for claims arising after August 1, 2014 were permitted to be filed at the claimant's option. Proofs of claim for approximately 180,000 claims were filed by that date, including approximately 10,000 claims alleging mesothelioma. GST believes a large majority of the claims are without merit because GST believes that such claimants will not be able to demonstrate exposure to GST's products or any compensable disease. In addition, based on its preliminary analysis, GST believes that a significant number of the claims were resolved and paid by GST prior to the Petition Date, had been dismissed with prejudice prior to the Petition Date or are time-barred under applicable statutes of limitations, and are therefore invalid. Current claimants or their representatives who filed ballots by the October 6, 2015 voting deadline overwhelmingly voted against approval of the plan; the future claims representative voted in favor of approval of the plan. The Bankruptcy Court has scheduled the hearing on confirmation of the second amended plan of reorganization to commence on August 15, 2016. A hearing is scheduled to be held before the Bankruptcy Court commencing on March 10, 2016 to resolve certain motions for summary judgment filed by GST and the Current Asbestos Claimants’ Committee with regard to the second amended plan of reorganization. The motions address (i) whether compliance with Section 524(g) of the Bankruptcy Code, which includes the requirement that a plan of reorganization be approved by a vote of 75 percent of the asbestos claimants, is the exclusive means for the confirmation of a plan of reorganization that resolves current and future asbestos liability claims, (ii) whether the Future Claimants’ Representative has the authority to vote on behalf of future asbestos claimants on approval of the second amended plan, and (iii) whether asbestos claims are impaired under the second amended plan. A final determination adverse to GST on the first issue listed above or on both the second and third issues would preclude confirmation of the second amended plan. A final determination favorable to GST on these issues would clear this interim obstacle to potential confirmation of the second amended plan following the hearing on the plan scheduled for August 15, 2016. If the Bankruptcy Court confirms the second amended plan, all present and future asbestos claims against GST will be discharged and an injunction will be entered giving GST permanent protection from future asbestos litigation. Confirmation and consummation of the plan are subject to a number of risks and uncertainties, including the actions and decisions of creditors and other third parties who have an interest in the bankruptcy proceedings, decisions of the Bankruptcy Court, delays in the confirmation or effective date of a plan of reorganization due to factors beyond GST's or our control, which would result in greater costs and the impairment of value of GST, appeals and other challenges to the plan, and risks and uncertainties affecting GST and Coltec's ability to fund anticipated contributions under the plan as a result of adverse changes in their results of operations, financial condition and capital resources, including as a result of economic factors beyond their control. Accordingly, we cannot assure you that GST will be able to obtain Bankruptcy Court approval of its second amended plan of reorganization and the settlement and resolution of claims and related releases of liability embodied therein, and the time period for the resolution of the bankruptcy proceedings is not presently determinable. GST continues to seek a consensual resolution that will also be acceptable to representatives of current claimants, recognizing that an agreed settlement would provide the best path to certainty and finality through section 524(g) of the Bankruptcy Code, provide for faster and more efficient completion of the case, save significant future costs, and allow for the attainment of complete finality. In January 2016, GST was invited to participate in ongoing negotiations with the Future Claimants’ Representative and the Current Asbestos Claimants’ Committee to resolve the terms of claims resolution procedures that would be an integral part of any potential consensual settlement with both the Future Claimants’ Representative and the Current Asbestos Claimants’ Committee. To permit the parties to continue to focus on negotiation of a potential consensual settlement, GST, the Future Claimants’ Representative and the Current Asbestos Claimants’ Committee agreed to postpone to March 10, 2016 the hearing originally scheduled to be held on January 6, 2016 and re-scheduled to March 1, 2016. There can be no assurance that the current or any future negotiations will result in a settlement among GST and both the Future Claimants’ Representative and the Current Asbestos Claimant’ Committee. However, GST believes that its current course, pursuant to its second amended plan, can also result in a successful reorganization, without support of the Current Asbestos Claimants' Committee and despite the opposition of the current asbestos claimants demonstrated overwhelmingly in the balloting on the plan. Financial Results Condensed combined financial information for GST is set forth below, presented on a historical cost basis. GST (Debtor-in-Possession) Condensed Combined Statements of Operations Years Ended December 31, 2015, 2014 and 2013 (in millions)
GST (Debtor-in-Possession) Condensed Combined Statements of Cash Flows Years Ended December 31, 2015, 2014 and 2013 (in millions)
GST (Debtor-in-Possession) Condensed Combined Balance Sheets As of December 31, 2015 and 2014 (in millions)
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies |
General A description of environmental, asbestos and other legal matters relating to certain of our subsidiaries is included in this section. In addition to the matters noted herein, we are from time to time subject to, and are presently involved in, other litigation and legal proceedings arising in the ordinary course of business. We believe the outcome of such other litigation and legal proceedings will not have a material adverse effect on our financial condition, results of operations and cash flows. Expenses for administrative and legal proceedings are recorded when incurred. Environmental Our facilities and operations are subject to federal, state and local environmental and occupational health and safety requirements of the U.S. and foreign countries. We take a proactive approach in our efforts to comply with environmental, health and safety laws as they relate to our manufacturing operations and in proposing and implementing any remedial plans that may be necessary. We also regularly conduct comprehensive environmental, health and safety audits at our facilities to maintain compliance and improve operational efficiency. Although we believe past operations were in substantial compliance with the then applicable regulations, we or one or more of our subsidiaries are involved with various remediation activities at 14 sites where the future cost per site for us or our subsidiary is expected to exceed $100,000. Investigations have been completed for 10 sites and are in progress at the other 4 sites. Our costs at a majority of these sites relate to remediation projects for soil and groundwater contamination at former operating facilities that were sold or closed. Our policy is to accrue environmental investigation and remediation costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. The measurement of the liability is based on an evaluation of currently available facts with respect to each individual situation and takes into consideration factors such as existing technology, presently enacted laws and regulations and prior experience in remediation of contaminated sites. Liabilities are established for all sites based on these factors. As assessments and remediation progress at individual sites, these liabilities are reviewed periodically and adjusted to reflect additional technical data and legal information. As of December 31, 2015 and 2014, we had accrued liabilities of $16.8 million and $17.3 million, respectively, for estimated future expenditures relating to environmental contingencies. These amounts have been recorded on an undiscounted basis in the Consolidated Balance Sheets. Given the uncertainties regarding the status of laws, regulations, enforcement policies, the impact of other parties potentially being liable, technology and information related to individual sites, we do not believe it is possible to develop an estimate of the range of reasonably possible environmental loss in excess of our recorded liabilities. During 2013, we accrued a liability of $6.3 million related to environmental remediation costs associated with the pre-1983 site ownership and operation of the former Trent Tube facility in East Troy, Wisconsin. The Trent Tube facility was operated by Crucible Materials Corporation from 1983 until its closure in 1998. Crucible Materials Corporation commenced environmental remediation activities at the site in 1999. In connection with the bankruptcy of Crucible Materials Corporation, a trust was established to fund the remediation of the site. We have reviewed the trust's assets and valued them at $750,000 for our internal purposes in 2013. During 2013, the Wisconsin Department of Natural Resources first notified us of potential liability for remediation of the site as a potentially responsible party under Wisconsin's “Spill Act” which provides that potentially responsible parties may be jointly and severally liable for site remediation. On April 1, 2015, we entered into a Consent Order with the Wisconsin Department of Natural Resources regarding remediation and, based on our evaluation of the site, believe that the amounts previously reserved are adequate to fulfill our obligations under the order. Except as described below, we believe that our accruals for specific environmental liabilities are adequate for those liabilities based on currently available information. Actual costs to be incurred in future periods may vary from estimates because of the inherent uncertainties in evaluating environmental exposures due to unknown and changing conditions, changing government regulations and legal standards regarding liability. Based on our prior ownership of Crucible Steel Corporation a/k/a Crucible, Inc. (“Crucible”), we may have additional contingent liabilities in one or more significant environmental matters. One such matter, which is included in the 14 sites referred to above, is the Lower Passaic River Study Area of the Diamond Alkali Superfund Site in New Jersey. Crucible operated a steel mill abutting the Passaic River in Harrison, New Jersey from the 1930s until 1974, which was one of many industrial operations on the river dating back to the 1800s. Certain contingent environmental liabilities related to this site were retained by Coltec when Coltec sold a majority interest in Crucible Materials Corporation (the successor of Crucible) in 1985. The United States Environmental Protection Agency (the “EPA”) has notified Coltec that it is a potentially responsible party (“PRP”) for Superfund response actions in the lower 17-mile stretch of the Passaic River known as the Lower Passaic River Study Area. Coltec and approximately 70 of the numerous other PRPs, known as the Cooperating Parties Group, are parties to a May 2007 Administrative Order on Consent with the EPA to perform a Remedial Investigation/Feasibility Study (“RI/FS”) of the contaminants in the Lower Passaic River Study Area. The RI/FS was completed and submitted to the EPA at the end of April 2015. The RI/FS recommends a targeted dredge and cap remedy with monitored natural recovery and adaptive management for the Lower Passaic River Study Area. The cost of such remedy is estimated to be $726 million. Previously, on April 11, 2014, the EPA released its Focused Feasibility Study (the “FFS”) with its proposed plan for remediating the lower eight miles of the Lower Passaic River Study Area. The FFS calls for bank-to-bank dredging and capping of the riverbed of that portion of the river and estimates a range of the present value of aggregate remediation costs of approximately $953 million to approximately $1.731 billion, although estimates of the costs and the timing of costs are inherently imprecise. The FFS was subject to a 90-day public comment period, which expired on August 28, 2014, and potential revision, including the adoption of a less extensive remedy, in light of comments that were received. No final allocations of responsibility have been made among the numerous PRPs that have received notices from the EPA, there are numerous identified PRPs that have not yet received PRP notices from the EPA, and there are likely many PRPs that have not yet been identified. Based on our evaluation of the site, during the fourth quarter of 2014 we accrued a liability of $3.5 million related to environmental remediation costs associated with the lower eight miles of the Lower Passaic River Study Area, which is our estimate of the low end of a range of reasonably possible costs, with no estimate within the range being a better estimate than the minimum. Our actual remediation costs could be significantly greater than the $3.5 million we accrued. With respect to the upper nine miles of the Lower Passaic River Study Area, we are unable to estimate a range of reasonably possible costs. Another such matter involves the Onondaga Lake Superfund Site (the “Onondaga Site”) located near Syracuse, New York. Crucible operated a steel mill facility adjacent to Onondaga Lake from 1911 to 1983. The New York State Department of Environmental Conservation (“NYSDEC”) has notified the Company and Coltec, as well as other parties, demanding reimbursement of unquantified environmental response costs incurred by NYSDEC and the EPA at the Onondaga Site. NYSDEC and EPA have alleged that contamination from the Crucible facility contributed to the need for environmental response actions at the Onondaga Site. In addition, Honeywell International Inc. (“Honeywell”), which has undertaken certain remediation activities at the Onondaga Site under the supervision of NYSDEC and the EPA, has informed the Company that it had claims against Coltec related to investigation and remediation at the Onondaga Site. In addition, the Company has received notice from the Natural Resource Trustees for the Onondaga Lake Superfund Site (which are the U. S. Department of Interior, NYSDEC, and the Onondaga Nation) alleging that Coltec is considered to be a potentially responsible party for natural resource damages at the Onondaga Site. We have entered into tolling agreements with NYSDEC, the EPA and Honeywell. At this time, based on limited information we have with respect to estimated remediation costs and the respective allocation of responsibility for remediation among potentially responsible parties, we cannot estimate a reasonably possible range of loss associated with Crucible’s activities that may have affected the Onondaga Site. Except with respect to specific Crucible environmental matters for which we have accrued a portion of the liability set forth above, including the Lower Passaic River Study Area, we are unable to estimate a reasonably possible range of loss related to any other contingent environmental liability based on our prior ownership of Crucible. See the section entitled “Crucible Steel Corporation a/k/a Crucible, Inc.” in this footnote for additional information. In addition to the Crucible environmental matters discussed above, Coltec has received a notice from the EPA asserting that Coltec is a potentially responsible party under CERCLA as the successor to a former operator in 1954 and 1955 of two uranium mines in Arizona. On October 15, 2015, Coltec received another notice from the EPA asserting that Coltec is a potentially responsible party as the successor to the former operator of six additional uranium mines in Arizona. At this time, we have limited information regarding the sites, including confirmation as to whether a predecessor of Coltec operated mines at all of the sites identified by the EPA, and any potential remediation that may be required. As such, we cannot estimate a reasonably possible range of loss associated with cleanup at these sites, however, during the year ended December 31, 2015, we reserved $1.1 million for the minimum amount of probable loss associated with the matter, including the cost of the investigative work to be conducted at the first two sites identified by the EPA. Colt Firearms and Central Moloney We may have contingent liabilities related to divested businesses for which certain of our subsidiaries retained liability or are obligated under indemnity agreements. These contingent liabilities include, but are not limited to, potential product liability and associated claims related to firearms manufactured prior to March 1990 by Colt Firearms, a former operation of Coltec, and for electrical transformers manufactured prior to May 1994 by Central Moloney, another former Coltec operation. We believe that these potential contingent liabilities are not material to our financial condition, results of operation and cash flows. Coltec also has ongoing obligations, which are included in other liabilities in our Consolidated Balance Sheets, with regard to workers’ compensation, retiree medical and other retiree benefit matters that relate to Coltec’s periods of ownership of these operations. Crucible Steel Corporation a/k/a Crucible, Inc. Crucible, which was engaged primarily in the manufacture and distribution of high technology specialty metal products, was a wholly owned subsidiary of Coltec until 1983 when its assets and liabilities were distributed to a new Coltec subsidiary, Crucible Materials Corporation. Coltec sold a majority of the outstanding shares of Crucible Materials Corporation in 1985 and divested its remaining minority interest in 2004. Crucible Materials Corporation filed for Chapter 11 bankruptcy protection in May 2009. In conjunction with the closure of a Crucible plant in the early 1980s, Coltec was required to fund two trusts for retiree medical benefits for union employees at the plant. The first trust (the “ First Benefits Trust”) pays for these retiree medical benefits on an ongoing basis. Coltec has no ownership interest in the First Benefits Trust, and thus the assets and liabilities of this First Benefits Trust are not included in our Consolidated Balance Sheets. Because of the possibility there could be insufficient funds in the First Benefits Trust, Coltec was previously required to establish and make a contribution to a second trust (the “Back-Up Trust”). Under the terms of the First Benefits Trust agreement, the trustees retained an actuary to assess the adequacy of the assets in the Benefits Trust in 1995, 2005 and finally in 2015 and, if the actuary determined that the Benefits Trust assets were not adequate to fund the payment of future medical benefits, the Back-Up Trust would be required to contribute additional amounts to the Benefits Trust. All three reports detailed that there were adequate assets in the First Benefits Trust to fund the payment of future benefits, and as a result, the assets in the Back-up Trust reverted to Coltec in 2015. The assets of the First Benefits Trust will not revert to Coltec. In the third quarter of 2015, we recorded income in connection with a reassessment of the potential liability related to the above-described retiree medical benefits based on the actuarial determination that there is no longer potential liability for any shortfalls in the First Benefits Trust, and, accordingly, we reduced the potential liability by $2.9 million. The effect of this adjustment is reflected in other nonoperating income (expense) on the accompanying Consolidated Statements of Operations. We have certain ongoing obligations, which are included in other liabilities in our Consolidated Balance Sheets, including workers’ compensation, retiree medical and other retiree benefit matters, in addition to those mentioned previously related to Coltec’s period of ownership of Crucible. Based on Coltec’s prior ownership of Crucible, we may have certain additional contingent liabilities, including liabilities in one or more significant environmental matters included in the matters discussed in “Environmental” above. We are investigating these matters. Except with respect to those matters for which we have an accrued liability as discussed in "Environmental" above, we are unable to estimate a reasonably possible range of loss related to these contingent liabilities. Warranties We provide warranties on many of our products. The specific terms and conditions of these warranties vary depending on the product and the market in which the product is sold. We record a liability based upon estimates of the costs we may incur under our warranties after a review of historical warranty experience and information about specific warranty claims. Adjustments are made to the liability as claims data and historical experience necessitate. Changes in the carrying amount of the product warranty liability for the years ended December 31, 2015 and 2014 are as follows:
BorgWarner A subsidiary of BorgWarner Inc. (“BorgWarner”) has asserted claims against GGB France E.U.R.L. (“GGB France”) with respect to certain bearings supplied by GGB France to BorgWarner and used by BorgWarner in manufacturing hydraulic control units included in motor vehicle automatic transmission units. BorgWarner and GGB France are participating in a technical review before a panel of experts to determine, among other things, whether there were any defects in the bearings and whether any defect caused the damages claimed by BorgWarner, which technical review is a required predicate to the commencement of a legal proceeding for damages. On October 14, 2014, BorgWarner filed a writ of claims with the Commercial Court of Brive-la-Gaillarde in France seeking monetary damages. On December 19, 2014, BorgWarner initiated “fast track” proceedings, which is a French legal process typically used for uncontested claims. On January 30, 2015, GGB France filed a writ of response challenging BorgWarner’s attempt to use the “fast track” process and, on February 4, 2015, GGB France filed a writ of response seeking to stay the proceedings on the merits pending the completion of the technical review. On April 2, 2015, the Commercial Court at Brive-la-Gaillarde rejected BorgWarner's request for "fast track" proceedings. The final report of the expert panel is anticipated to be issued in or around the second quarter of 2016. We believe that GGB France has valid factual and legal defenses to these claims and we are vigorously defending these claims. At this point in the technical review process we are unable to estimate a reasonably possible range of loss related to these claims. AVL On December 17, 2014, AVL Powertrain Engineering, Inc. filed a lawsuit against Fairbanks Morse alleging damages in connection with a contract between AVL and Fairbanks Morse pursuant to which AVL conducted engine testing services for certain AVL customers at certain of Fairbanks Morse’s facilities in Beloit, Wisconsin. AVL claims that it was unable to conduct its desired level of engine testing and asserts alternative damages theories based on rescission and lost profits. A trial is scheduled to begin on April 25, 2016 in the United States District Court, Western District of Wisconsin. We are vigorously defending these claims and believe that Fairbanks Morse has valid factual and legal defenses to these claims. Asbestos Background on Asbestos-Related Litigation. The historical business operations of GST LLC and Anchor resulted in a substantial volume of asbestos litigation in which plaintiffs alleged personal injury or death as a result of exposure to asbestos fibers in products produced or sold by GST LLC or Anchor, together with products produced and sold by numerous other companies. GST LLC and Anchor manufactured and/or sold industrial sealing products that contained encapsulated asbestos fibers. Other of our subsidiaries that manufactured or sold equipment that may have at various times in the past contained asbestos-containing components have also been named in a number of asbestos lawsuits, but only GST LLC and Anchor have ever paid an asbestos claim. Since the first asbestos-related lawsuits were filed against GST LLC in 1975, GST LLC and Anchor have processed more than 900,000 claims to conclusion, and, together with insurers, have paid over $1.4 billion in settlements and judgments and over $400 million in fees and expenses. Our subsidiaries’ exposure to asbestos litigation and their relationships with insurance carriers have been managed through Garrison. Subsidiary Chapter 11 Filing and Effect. On the Petition Date, GST LLC, Garrison and Anchor filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code. The filings were the initial step in a claims resolution process, which is ongoing. See Note 19, "Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd." for additional information about this process and its impact on us. During the pendency of the Chapter 11 proceedings, certain actions proposed to be taken by GST not in the ordinary course of business are subject to approval by the Bankruptcy Court. As a result, during the pendency of these proceedings, we do not have exclusive control over these companies. Accordingly, as required by GAAP, GST was deconsolidated beginning on the Petition Date. As a result of the initiation of the Chapter 11 proceedings, the resolution of asbestos claims is subject to the jurisdiction of the Bankruptcy Court. The filing of the Chapter 11 cases automatically stayed the prosecution of pending asbestos bodily injury and wrongful death lawsuits, and initiation of new such lawsuits, against GST. Further, the Bankruptcy Court issued an order enjoining plaintiffs from bringing or further prosecuting asbestos products liability actions against affiliates of GST, including EnPro, Coltec and all their subsidiaries, during the pendency of the Chapter 11 proceedings, subject to further order. As a result, except as a result of the resolution of appeals from verdicts rendered prior to the Petition Date and the elimination of claims as a result of information obtained in the Chapter 11 proceedings, the numbers of asbestos claims pending against our subsidiaries have not changed since the Petition Date, and those numbers continue to be as reported in our 2009 Form 10-K and our quarterly reports for the first and second quarters of 2010. Pending Claims. On the Petition Date, according to Garrison's claim records, there were more than 90,000 total claims pending against GST LLC, of which approximately 5,800 were claims alleging the disease mesothelioma. Mesothelioma is a rare cancer of the protective lining of many of the body’s internal organs, principally the lungs. One cause of mesothelioma is believed to be exposure to asbestos. As a result of asbestos tort reform during the 2000s, most active asbestos-related lawsuits, and a large majority of the amount of payments made by our subsidiaries in the years immediately preceding the Petition Date, have been of claims alleging mesothelioma. In total, GST LLC has paid $563.2 million to resolve a total of 15,300 mesothelioma claims, and another 5,700 mesothelioma claims have been dismissed without payment. In order to estimate the allowed amount for mesothelioma claims against GST, the Bankruptcy Court approved a process whereby all current GST LLC mesothelioma claimants were required to respond to a questionnaire about their claims. Questionnaires were distributed to the mesothelioma claimants identified in Garrison’s claims database. Many of the 5,800 claimants (over 500) did not respond to the questionnaire at all; many others (more than 1,900) clarified that: claimants do not have mesothelioma, claimants cannot establish exposure to GST products, claims were dismissed, settled or withdrawn, claims were duplicates of other filed claims, or claims were closed or inactive. Still others responded to the questionnaire but their responses were deficient in some material respect. As a result of this process, less than 3,300 claimants presented questionnaires asserting mesothelioma claims against GST LLC as of the Petition Date and many of them either did not establish exposure to GST products or had claims that are otherwise deficient. Since the Petition Date, many asbestos-related lawsuits have been filed by claimants against other companies in state and federal courts, and many of those claimants might also have included GST LLC as a defendant but for the bankruptcy injunction. Claims Filed in GST Chapter 11. Proofs of claim involving approximately 180,000 claims were filed on or prior to October 6, 2015, the Claims Bar Date, in the GST Chapter 11 proceeding. All other potential claims based on asbestos-related diseases diagnosed on or before August 1, 2014 for which lawsuits against any defendant or claims against any trusts were filed on or before August 1, 2014, are subject to being forever barred by order of the Bankruptcy Court. Many of the more than 90,000 pre-petition claims are likely among the approximately 180,000 claims filed in the Chapter 11 case. Approximately 10,000 of the claims filed in the Chapter 11 case allege mesothelioma, many of the pre-petition mesothelioma claims likely among those claims. The claims filed are being analyzed and discovery will be conducted to determine more about the filed claims. Based on its preliminary analysis, GST believes that a significant number of such claims were resolved and paid by GST prior to the Petition Date, had been dismissed with prejudice prior to the Petition Date or are time-barred under applicable statutes of limitations, and are therefore invalid. Product Defenses. We believe that the asbestos-containing products manufactured or sold by GST could not have been a substantial contributing cause of any asbestos-related disease. The asbestos in the products was encapsulated, which means the asbestos fibers incorporated into the products during the manufacturing process were sealed in binders. The products were also nonfriable, which means they could not be crumbled by hand pressure. The U.S. Occupational Safety and Health Administration, which began generally requiring warnings on asbestos-containing products in 1972, has never required that a warning be placed on products such as GST LLC’s gaskets. Even though no warning label was required, GST LLC included one on all of its asbestos-containing products beginning in 1978. Further, gaskets such as those previously manufactured and sold by GST LLC are one of the few asbestos-containing products still permitted to be manufactured under regulations of the U.S. Environmental Protection Agency. Nevertheless, GST LLC discontinued all manufacture and distribution of asbestos-containing products in the U.S. during 2000 and worldwide in mid-2001. Appeals. GST LLC has a record of success in trials of asbestos cases, especially before the bankruptcies of many of the historically significant asbestos defendants that manufactured raw asbestos, asbestos insulation, refractory products or other dangerous friable asbestos products. However, it has on occasion lost jury verdicts at trial. GST has consistently appealed when it has received an adverse verdict and has had success in a majority of those appeals. GST LLC won reversals of adverse verdicts in one of three recent appellate decisions. In September 2011, the United States Court of Appeals for the Sixth Circuit overturned a $500,000 verdict against GST LLC that was handed down in 2009 by a Kentucky federal court jury. The federal appellate court found that GST LLC’s motion for judgment as a matter of law should have been granted because the evidence was not sufficient to support a determination of liability. The Sixth Circuit’s chief judge wrote that, “On the basis of this record, saying that exposure to Garlock gaskets was a substantial cause of [claimant’s] mesothelioma would be akin to saying that one who pours a bucket of water into the ocean has substantially contributed to the ocean’s volume.” In May 2011, a three-judge panel of the Kentucky Court of Appeals upheld GST LLC’s $700,000 share of a 2009 jury verdict, which included punitive damages, in a lung cancer case against GST LLC in Kentucky state court. This verdict, which was secured by a bond pending the appeal, was paid in June 2012. In a Kentucky appeal from a 2006 verdict against GST LLC, another Kentucky Court of Appeals panel upheld, in August 2014, GST LLC's share of the verdict and a $600,000 punitive damage award. The verdict against GST LLC totaled $874,000. This verdict and post-judgment interest were secured by a bond in the amount of $1.1 million. The plaintiff in the case agreed to resolve the case, including claims for post-judgment interest, for the amount of the bond and to forgo additional accrued interest on the verdict, and GST LLC agreed to discontinue further appeals. Because we were responsible to the bonding company for the bond amount, our Coltec subsidiary purchased the verdict from the plaintiff in September 2014 for the amount of the $1.1 million bond. As a result, Coltec has a claim against GST LLC for the amount of the judgment, including post-judgment interest. Insurance Coverage. At December 31, 2015, we had $80.0 million of insurance coverage we believe is available to cover current and future GST asbestos claims payments and certain expense payments. GST has collected insurance payments totaling $116.6 million since the Petition Date, including $21.2 million in 2015. We consider the $80.0 million of available insurance coverage remaining to be of high quality because the insurance policies are written or guaranteed by U.S.-based carriers whose credit rating by S&P is investment grade (BBB-) or better, and whose AM Best rating is excellent (A-) or better. Of the $80.0 million, $43.9 million is allocated to claims that were paid by GST LLC prior to the initiation of the Chapter 11 proceedings and submitted to insurance companies for reimbursement, and the remainder is allocated to pending and estimated future claims. There are specific agreements in place with carriers covering $46.2 million of the remaining available coverage. Based on those agreements and the terms of the policies in place and prior decisions concerning coverage, we believe that all of the $80.0 million of insurance proceeds will ultimately be collected, although there can be no assurance that the insurance companies will make the payments as and when due. The $80.0 million is in addition to the $21.2 million collected in 2015. Based on those agreements and policies, some of which define specific annual amounts to be paid and others of which limit the amount that can be recovered in any one year, we anticipate that $38.0 million will become collectible at the conclusion of GST’s Chapter 11 proceeding and, assuming the insurers pay according to the agreements and policies, that the following amounts should be collected in the years set out below regardless of when the case concludes: 2016 – $18 million 2017 – $13 million 2018 – $11 million GST LLC has received $8.6 million of insurance recoveries from insolvent carriers since 2007, including $0.5 million in payments received in 2015, and may receive additional payments from insolvent carriers in the future. No anticipated insolvent carrier collections are included in the $80.0 million of anticipated collections. The insurance available to cover current and future asbestos claims is from comprehensive general liability policies that cover Coltec and certain of its other subsidiaries in addition to GST LLC for periods prior to 1985 and therefore could be subject to potential competing claims of other covered subsidiaries and their assignees. Liability Estimate. Our recorded asbestos liability as of the Petition Date was $472.1 million. We based that recorded liability on an estimate of probable and estimable expenditures to resolve asbestos personal injury claims under generally accepted accounting principles, made with the assistance of Garrison and an estimation expert, Bates White, retained by GST LLC’s counsel. The estimate developed was an estimate of the most likely point in a broad range of potential amounts that GST LLC might pay to resolve asbestos claims (by settlement in the majority of the cases except those dismissed or tried) over the ten-year period following the date of the estimate in the state court system, plus accrued but unpaid legal fees. The estimate, which was not discounted to present value, did not reflect GST LLC’s views of its actual legal liability. GST LLC has continuously maintained that its products could not have been a substantial contributing cause of any asbestos disease. Instead, the liability estimate reflected GST LLC’s recognition that most claims would be resolved more efficiently and at a significantly lower total cost through settlements without any actual liability determination. From the Petition Date through the first quarter of 2014, neither we nor GST endeavored to update the accrual except as necessary to reflect payments of accrued fees and the disposition of cases on appeal. In each asbestos-driven Chapter 11 case that has been resolved previously, the amount of the debtor’s liability has been determined as part of a consensual plan of reorganization agreed to by the debtor, its asbestos claimants and a legal representative for its potential future claimants. GST did not believe that there was a reliable process by which an estimate of such a consensual resolution could be made and therefore believed that there was no basis upon which it could revise the estimate last updated prior to the Petition Date. Given the Bankruptcy Court's January 2014 decision estimating GST's liability for present and future mesothelioma claims at $125 million and GST's filing in May 2014 of its first amended proposed plan of reorganization setting out its intention to fund a plan with total consideration of $275 million, GST undertook to revise its estimate of its ultimate expenditures to resolve all present and future asbestos claims against it to be no less than the amounts required under its amended proposed plan. Similarly, while GST believes it to be an unlikely worst case scenario, GST believed its ultimate expenditures to resolve all asbestos claims against it could be no more than the total value of GST. As a result, GST believed that its ultimate asbestos expenditures would be somewhere in that range between those two values and therefore revised its estimate to the low end of the range. Accordingly, at June 30, 2014, GST revised its estimate of its ultimate expenditures to resolve all present and future asbestos claims to $280.5 million, the amount of expenditures to resolve all asbestos claims under that amended plan. In light of the filing of the second amended proposed plan of reorganization by GST on January 14, 2015, GST undertook to further revise its estimate of ultimate costs to resolve all asbestos claims against it. Under the second amended plan, not less than $367.5 million will be required to fund the resolution of all GST asbestos claims, $30 million of which will be funded by Coltec. As a result, GST believes the low end of the range of values that will be necessary for it to fund to resolve all present and future claims is now $337.5 million. Accordingly, GST has revised its estimate of its ultimate asbestos expenditures to $337.5 million and has recorded its liability at December 31, 2015 at that amount. GST’s estimate of its ultimate asbestos expenditures of $337.5 million does not include any amount with respect to the contingent supplementary contributions to the litigation fund contemplated by the second amended plan because GST believes that initial contributions to the litigation fund may likely be sufficient to fund the litigation and, accordingly, that the low end of a range of reasonably possible loss associated with these contingent supplementary contributions is $0. GST's First Amended Proposed Plan of Reorganization. On May 29, 2014, GST filed its amended proposed plan of reorganization and a proposed disclosure statement for such amended plan. The plan provided $275 million in total funding for (a) present and future asbestos claims against GST that have not been resolved by settlement or verdict prior to the Petition Date, and (b) administrative and litigation costs. The $275 million was to be funded by GST ($245 million) and our subsidiary, Coltec Industries Inc ($30 million), through two facilities - a settlement facility and a litigation facility. Funds contained in the settlement facility and the litigation facility would have provided the exclusive remedies for current and future GST asbestos claimants, other than claimants whose claims had been resolved by settlement or verdict prior to the Petition Date and were not paid prior to the Petition Date. The $275 million amount was more than double the $125 million that the Bankruptcy Court found to be a reasonable and reliable measure of the amount sufficient to satisfy present and future mesothelioma claims against GST, and was determined based on an economic analysis of the feasibility of the proposed plan. This plan was superseded by GST's second amended proposed plan of reorganization, discussed below. GST's Second Amended Proposed Plan of Reorganization. On January 14, 2015, we announced that GST and we had reached agreement with the Future Claimants' Representative that includes a second amended proposed plan of reorganization. The Future Claimants' Representative agreed to support, vote for and help GST gain confirmation of the second amended plan of reorganization in exchange for an increase in the funds available for settlements, limited revisions to the criteria and procedures for settlements and a limited funding backstop to the litigation option that the plan offers to claimants who choose not to accept the plan’s settlement option. Terms of the second amended proposed plan of reorganization, including the $30 million contribution to be made by Coltec to the settlement facility under the second amended plan and our guarantee of GST's obligations to make contributions to the settlement facility and the litigation fund under the plan after the consummation of the plan, are described above in Note 19, "Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd." The second amended plan would establish two facilities to resolve unliquidated present and future asbestos claims – a settlement facility and a litigation fund. The settlement facility, administered by an independent trustee, will handle settlement offers under the plan. Claimants will be able to compute their offers from a matrix in the plan that contains objective criteria such as disease, age, whether the injured party left or will leave a spouse, and whether there are dependents. The amounts of the matrix values have been set based on an economic analysis and are designed to ensure that the funding provides future claimants the same recoveries as comparable current claimants. The settlement facility will provide claimants with both an expedited review option and an individual review option. Under expedited review, a claimant can receive a quick and efficient settlement once he or she provides required evidence of a compensable disease and meaningful exposure to GST asbestos products. Under individual review, a claimant can potentially receive a significantly higher settlement offer if he or she can demonstrate certain additional factors. In order to receive a higher amount than the expedited option offers, claimants or their representatives will have to certify to the claimants’ complete exposure histories and authorize Garrison to investigate and monitor both their tort and trust claims. Garrison, as reorganized under the plan, will receive a $30 million contribution from GST LLC to maintain and administer the litigation fund separate from the settlement facility. Garrison will manage the litigation of claims from claimants who reject settlement offers from the settlement facility and choose instead to pursue a remedy in court. A case management order will govern the way those claims can be pursued. Claimants who choose to litigate must file their claims in the Bankruptcy Court in North Carolina. The Bankruptcy Court will oversee discovery and other pre-trial matters before referring cases to the federal district court in Charlotte for trial under the Federal Rules of Evidence. The Charlotte federal court will have discretion about where to send each case for the actual trial. The case management order will also require that claimants identify and disclose all trust claims and provide authorization for Garrison to retrieve all their trust submissions directly from trusts. The second amended plan includes provisions referred to as the "Parent Settlement" for the resolution and extinguishment of any and all alleged derivative claims against us based on GST asbestos products and entry of an injunction permanently protecting us from the assertion of such claims. As consideration for the Parent Settlement, (a) Coltec will contribute $30 million of the amount proposed to be paid into the settlement facility to pay future claimants, (b) Coltec will fund Anchor’s costs of dissolution (up to $500,000), (c) EnPro will guarantee all contributions to the settlement facility and litigation fund by GST after the effective date of the second amended plan, and (d) Coltec and its affiliates will subordinate their interests in certain insurance coverage to GST’s obligations to make payments to the settlement facility and litigation fund after the effective date of the second amended plan. Those provisions are incorporated into the terms of the second amended plan only in the context of the specifics of the plan, which would result in the equity interests of GST LLC being retained by the reconsolidation of GST LLC into the Company and an injunction protecting us from future GST claims. As a result of Coltec’s agreement to fund a contribution of $30 million to the settlement facility pursuant to the second amended plan of reorganization, we recorded a $30.0 million charge to establish this liability in our 2014 results. Confirmation and consummation of the second amended plan are subject to a number of risks and uncertainties, including the actions and decisions of creditors and other third parties that have an interest in the bankruptcy proceedings, decisions of the Bankruptcy Court, delays in the confirmation or effective date of a plan of reorganization due to factors beyond GST's or our control, which would result in greater costs and the impairment of value of GST, challenges to confirmation of the plan, including appeals, and risks and uncertainties affecting GST and Coltec's ability to fund anticipated contributions under the plan as a result of adverse changes in their results of operations, financial condition and capital resources, including as a result of economic factors beyond their control. Accordingly, we cannot assure you that GST will be able to obtain final approval of its second amended plan of reorganization and the settlement and resolution of claims and related releases of liability embodied therein, and the time period for the resolution of the bankruptcy proceedings is not presently determinable. Other Commitments We have a number of operating leases primarily for real estate, equipment and vehicles. Operating lease arrangements are generally utilized to secure the use of assets if the terms and conditions of the lease or the nature of the asset makes the lease arrangement more favorable than a purchase. Future minimum lease payments by year and in the aggregate, under noncancelable operating leases with initial or remaining noncancelable lease terms in excess of one year, consisted of the following at December 31, 2015 (in millions):
Net rent expense was $14.3 million, $13.2 million and $15.0 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
Supplemental Guarantor Financial Information |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Guarantor Financial Information |
In September 2014, we completed the offering of our Senior Notes. The Senior Notes are fully and unconditionally guaranteed on an unsecured, unsubordinated, joint and several basis by our existing and future 100% owned direct and indirect domestic subsidiaries, which does not include GST and the domestic subsidiaries of GST, that are each guarantors of our Revolving Credit Facility (collectively, the “Guarantor Subsidiaries”). Our subsidiaries organized outside of the United States, (collectively, the “Non-Guarantor Subsidiaries”) do not guarantee the Senior Notes. A Guarantor Subsidiary's guarantee is subject to release in certain circumstances, including (i) the sale, disposition, exchange or other transfer (including through merger, consolidation, amalgamation or otherwise) of the capital stock of the subsidiary made in a manner not in violation of the indenture governing the Senior Notes; (ii) the designation of the subsidiary as an “Unrestricted Subsidiary” under the indenture governing the Senior Notes; (iii) the legal defeasance or covenant defeasance of the Senior Notes in accordance with the terms of the indenture; or (iv) the subsidiary ceasing to be a subsidiary of the Company as a result of any foreclosure of any pledge or security interest securing our Revolving Credit Facility or other exercise of remedies in respect thereof. The following tables present condensed consolidating financial information for EnPro Industries, Inc. (the "Parent"), the Guarantor Subsidiaries on a combined basis, the Non-Guarantor Subsidiaries on a combined basis and the eliminations necessary to arrive at our consolidated results. The consolidating financial information reflects our investments in subsidiaries using the equity method of accounting. These tables are not intended to present our results of operations, cash flows or financial condition for any purpose other than to comply with the specific requirements for subsidiary guarantor reporting. We have revised our December 31, 2014 Condensed Consolidating Balance Sheet that was presented in our Supplemental Guarantor Financial Information footnote in the SEC Form 10-K for the year ended December 31, 2014 and the SEC Forms 10-Q for the periods ending September 30, 2015, June 30, 2015, and March 31, 2015. The impact on the Parent's previously issued financial information is a decrease of $13.6 million to Investment in subsidiaries and Total shareholders' equity. The impact the Guarantor Subsidiaries' previously issued financial information, as well as the Consolidated column is (i) a $12.3 million increase to Other liabilities, (ii) a $1.3 million decrease to Other assets, and (iii) a $13.6 million decrease to Total shareholders' equity. The presentation of the Non-Guarantor Subsidiaries did not change. The adjustments had no impact on the Condensed Consolidating Statement of Operations, Condensed Consolidating Statement of Comprehensive Income or Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2014. Refer to Note 1, "Overview, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Guidance" for more information about this revision. ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS Year Ended December 31, 2015 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, 2015 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS Year Ended December 31, 2014 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, 2014 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS Year Ended December 31, 2013 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, 2013 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Year Ended December 31, 2015 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Year Ended December 31, 2014 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Year Ended December 31, 2013 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING BALANCE SHEETS December 31, 2015 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2014 (in millions)
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Subsequent Events |
12 Months Ended | ||||||
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Dec. 31, 2015 | |||||||
Subsequent Events [Abstract] | |||||||
Subsequent Events |
See Note 19 “Garlock Sealing Technologies LLC and Garrison Litigation Management Group Ltd.” regarding our unconsolidated subsidiary GST joining negotiations in January 2016 to seek a potential consensual settlement with both the Current Asbestos Claimants’ Committee and Future Claimants’ Representative to resolve asbestos claims. In order to permit these parties to continue to focus on negotiation of a potential consensual settlement, these parties agreed to a postponement to March 10, 2016 of a Bankruptcy Court hearing that had been scheduled to commence on March 1, 2016. On February 24, 2016 our Board of Directors declared a cash dividend of $0.21 per share payable on March 23, 2016 to shareholders of record at the close of business on March 9, 2016 |
Selected Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Data (Unaudited) |
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SCHEDULE II - Valuation and Qualifying Accounts |
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SCHEDULE II - Valuation and Qualifying Accounts | SCHEDULE II Valuation and Qualifying Accounts For the Years Ended December 31, 2015, 2014 and 2013 (in millions) Allowance for Doubtful Accounts
Deferred Income Tax Valuation Allowance
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Overview, Significant Accounting Policies and Recently Issued Accounting Pronouncements (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Revenue Recognition | Revenue Recognition – For the Sealing Products and Engineered Products segments, revenue is recognized at the time title and risk of product ownership is transferred or when services are rendered, typically when product is shipped or delivered, depending on the terms of the sale agreement. Shipping costs billed to customers are recognized as revenue and expensed in cost of goods sold since they are fixed and determinable and collection is reasonably assured. We generally use the percentage-of-completion (“POC”) accounting method to account for our long-term contracts associated with the design, development, manufacture, or modification of complex engines under fixed price or cost plus contracts. During the third quarter of 2011, the Power Systems segment began using POC for prospective engine contracts. We made this change because, as a result of enhancements to our financial management and reporting systems, we are able to reasonably estimate the revenue, costs, and progress towards completion of engine builds. If we are not able to meet those conditions for a particular engine contract, we recognize revenues using the completed-contract method. Additionally, engines that were in production at June 30, 2011 will continue to be accounted for using the completed-contract method. Under POC, revenue is recognized based on the extent of progress towards completion of the long-term contract. We generally use the cost-to-cost measure for our long-term contracts unless we believe another method more clearly measures progress towards completion of the contract. Under the cost-to-cost measure, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the contract. Contract costs include labor, material and subcontracting costs, as well as an allocation of indirect costs. Revenues, including estimated fees or profits, are recorded as costs are incurred. Due to the nature of the work required to be performed on many of our contracts, the estimation of total revenue and cost at completion is complex and subject to many variables. Management must make assumptions and estimates regarding labor productivity, the complexity of the work to be performed, the availability of materials, the length of time to complete the contract (to estimate increases in wages and prices for materials and related support cost allocations), performance by our subcontractors and overhead cost rates, among other variables. A significant change in one or more of these estimates could affect the profitability of one or more of our contracts. Based on our analysis, any quarterly adjustments to net sales, cost of sales, and the related impact to operating income are recorded as necessary in the period they become known. These adjustments may result in an increase or a decrease in operating income. Changes in estimates of net sales, cost of sales, and the related impact to operating income are recognized quarterly on a cumulative catch-up basis, which recognizes in the current period the cumulative effect of the changes on current and prior periods based on a contract's percentage of completion. When estimates of total costs to be incurred on a contract exceed total estimates of revenue to be earned, a provision for the entire loss on the contract is recorded in the period the loss is determined. Contracts accounted for under the POC method represented revenues and margins of $67.3 million and $8.9 million, respectively, for the year ended December 31, 2015, $57.3 million and $3.1 million, respectively, for the year ended December 31, 2014, and $64.3 million and $9.0 million, respectively, for the year ended December 31, 2013. |
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Foreign Currency Translation | Foreign Currency Translation – The financial statements of those operations whose functional currency is a foreign currency are translated into U.S. dollars using the current rate method. Under this method, all assets and liabilities are translated into U.S. dollars using current exchange rates, and income statement activities are translated using average exchange rates. The foreign currency translation adjustment is included in accumulated other comprehensive loss in the Consolidated Balance Sheets. Gains and losses on foreign currency transactions are included in operating income. Foreign currency transaction gains totaled $1.8 million in 2015. Foreign currency transaction losses totaled $1.0 million, and $2.3 million for 2014, and 2013, respectively. |
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Research and Development Expense | Research and Development Expense – Costs related to research and development activities are expensed as incurred. We perform research and development primarily under Company-funded programs for commercial products. Net research and development expenditures in 2015, 2014, and 2013 were $22.5 million, $20.0 million, and $11.3 million, respectively, and are included in selling, general and administrative expenses in the Consolidated Statements of Operations. |
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Income Taxes | Income Taxes – We use the asset and liability method of accounting for income taxes. Temporary differences arising between the tax basis of an asset or liability and its carrying amount on the Consolidated Balance Sheet are used to calculate future income tax assets or liabilities. This method also requires the recognition of deferred tax benefits, such as net operating loss carryforwards. A valuation allowance is recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the taxable income (losses) in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A tax benefit from an uncertain tax position is recognized only if it is more likely than not that the position will be sustained on its technical merits. If the recognition threshold for the tax position is met, only the portion of the tax benefit that is greater than 50 percent likely to be realized is recorded. |
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Cash and Cash Equivalents | Cash and Cash Equivalents – Cash and cash equivalents include cash on hand, demand deposits and highly liquid investments with a maturity of three months or less at the time of purchase. |
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Receivables | Receivables – Accounts receivable are stated at the historical carrying amount net of write-offs and allowance for doubtful accounts. We establish an allowance for doubtful accounts receivable based on historical experience and any specific customer collection issues we have identified. Doubtful accounts receivable are written off when a settlement is reached for an amount less than the outstanding historical balance or when we have determined the balance will not be collected. The balances billed but not paid by customers pursuant to retainage provisions in long-term contracts and programs are due upon completion of the contracts and acceptance by the owner. At December 31, 2015, we had $0.6 million of retentions expected to be collected in 2016 recorded in accounts receivable and $0.9 million of retentions expected to be collected beyond 2016 recorded in other long-term assets in the Consolidated Balance Sheet. At December 31, 2014, we had $2.5 million of current retentions and $0.5 million of long-term retentions recorded in the Consolidated Balance Sheet. |
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Inventories | Inventories – Certain domestic inventories are valued by the last-in, first-out (“LIFO”) cost method. Inventories not valued by the LIFO method, other than inventoried costs relating to long-term contracts and programs, are valued using the first-in, first-out (“FIFO”) cost method, and are recorded at the lower of cost or market. Approximately 37% and 36% of inventories were valued by the LIFO method in 2015 and 2014, respectively. Inventoried costs relating to long-term contracts and programs are stated at the actual production cost incurred to date, including direct labor and factory overhead. Progress payments related to long-term contracts and programs accounted for under the completed-contract method of accounting are shown as a reduction of inventories. Initial program start-up costs and other nonrecurring costs are expensed as incurred. |
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Property, Plant and Equipment | Property, Plant and Equipment – Property, plant and equipment are recorded at cost. Depreciation of plant and equipment is determined on the straight-line method over the following estimated useful lives of the assets: buildings and improvements, 5 to 25 years; machinery and equipment, 3 to 10 years. |
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Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets – Goodwill represents the excess of the purchase price over the fair value of the net assets of acquired businesses. Goodwill is not amortized, but instead is subject to annual impairment testing conducted each year as of October 1. The goodwill asset impairment test involves comparing the fair value of a reporting unit to its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, a second step of comparing the implied fair value of the reporting unit’s goodwill to the carrying amount of that goodwill is required to measure the potential goodwill impairment loss. Interim tests may be required if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We completed our required annual impairment tests of goodwill as of October 1, 2014 and 2013. These assessments did not indicate any impairment of the goodwill. In our prior year annual impairment test of goodwill as of October 1, 2014, the estimated fair value of our Compressor Products International ("CPI") reporting unit exceeded its book value at that time. CPI is included in our Engineered Products segment. Through the first quarter of 2015, several initiatives were implemented to remove labor, facility and other costs from CPI’s cost structure and a customer-focused organizational realignment was implemented to identify price and volume opportunities to optimize sales and profitability in the weak oil and gas business environment. During the first quarter of 2015 new strategic options and opportunities to improve business performance were analyzed given the continuing weakness in demand. Additional strategic measures were planned to be implemented during the second half of 2015 and the expected benefits of these actions were taken into consideration in assessing the outlook for CPI. However, as more time passed, the benefits of strategic measures and initiatives being implemented were no longer expected to sufficiently compensate for the financial impacts of the prolonged and significant weakness in the oil and gas markets served by CPI. Taking this into account, the forecasted results for CPI were lowered significantly at the end of May 2015 to such an extent that we thought it likely that the fair value of CPI would be less than its carrying value which necessitated an interim impairment test for goodwill. The interim step one analysis we performed, using a combination of discounted cash flow and market value approaches to determine the fair value of CPI consistent with our annual impairment testing, indicated that the fair value of CPI was less than the carrying value of its net assets. The required step two valuation analysis performed as of May 31, 2015 and completed in July 2015 indicated that $46.1 million of the CPI goodwill balance was impaired. Accordingly, CPI goodwill in the amount of $46.1 million was written-off in the second quarter of 2015. The remaining CPI goodwill balance at December 31, 2015 is $4.0 million. We completed our required annual impairment test of goodwill as of October 1, 2015, which did not indicate any additional impairment of any of our goodwill. Other intangible assets are recorded at cost, or when acquired as a part of a business combination, at estimated fair value. These assets include customer relationships, patents and other technology agreements, trademarks, licenses and non-compete agreements. Intangible assets that have definite lives are amortized using a method that reflects the pattern in which the economic benefits of the assets are consumed or the straight-line method over estimated useful lives of 2 to 20 years. Intangible assets with indefinite lives are subject to at least annual impairment testing, which compares the fair value of the intangible asset with its carrying amount using the relief from royalty method. The results of our assessments did not indicate any impairment to our indefinite-lived intangible assets for the years presented. |
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Investment in GST | Investment in GST – The historical business operations of Garlock Sealing Technologies LLC (“GST LLC”) and The Anchor Packing Company (“Anchor”) have resulted in a substantial volume of asbestos litigation in which plaintiffs have alleged personal injury or death as a result of exposure to asbestos fibers. Those subsidiaries manufactured and/or sold industrial sealing products, predominately gaskets and packing, that contained encapsulated asbestos fibers. Anchor is an inactive and insolvent indirect subsidiary of Coltec Industries Inc (“Coltec”). Our subsidiaries’ exposure to asbestos litigation and their relationships with insurance carriers have been managed through another Coltec subsidiary, Garrison Litigation Management Group, Ltd. (“Garrison”). GST LLC, Anchor and Garrison are collectively referred to as “GST.” On June 5, 2010 (the “Petition Date”), GST LLC, Anchor and Garrison filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Western District of North Carolina in Charlotte (the “Bankruptcy Court”). GST’s financial results were included in our consolidated results through June 4, 2010, the day prior to the Petition Date. However, GAAP requires that an entity that files for protection under the U.S. Bankruptcy Code, whether solvent or insolvent, whose financial statements were previously consolidated with those of its parent, as GST and its subsidiaries were with EnPro, generally must be prospectively deconsolidated from the parent and the investment accounted for using the cost method. At deconsolidation, our investment was recorded at its estimated fair value on June 4, 2010. The cost method requires us to present our ownership interests in the net assets of GST at the Petition Date as an investment and to not recognize any income or loss from GST and subsidiaries in our results of operations during the reorganization period. The investment in GST is subject to periodic reviews for impairment. When GST emerges from the jurisdiction of the Bankruptcy Court, the subsequent accounting will be determined based upon the applicable facts and circumstances at such time, including the terms of any plan of reorganization. The ability of GST LLC and Garrison to continue as going concerns is dependent upon their ability to resolve their ultimate asbestos liability in the bankruptcy from their net assets, future cash flows, and available insurance proceeds, whether through the confirmation of a plan of reorganization or otherwise. As a result of the bankruptcy filing and related events, there can be no assurance the carrying values of the assets, including the carrying value of the business and the tax receivable, will be realized or that liabilities will be liquidated or settled for the amounts recorded. In addition, a plan of reorganization, or rejection thereof, could change the amounts reported in the GST LLC and Garrison financial statements and cause a material change in the carrying amount of our investment in GST. |
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Debt | Debt – In October 2005, we issued $172.5 million in aggregate principal amount of 3.9375% Convertible Senior Debentures (the “Convertible Debentures”). Applicable authoritative accounting guidance required that the liability component of the Convertible Debentures be recorded at its fair value as of the issuance date. This resulted in us recording debt in the amount of $111.2 million as of the issuance date with the $61.3 million offset to the debt discount being recorded in equity on a net of tax basis. The debt discount was amortized through interest expense until the maturity date of October 15, 2015, resulting in an effective interest rate of approximately 9.5%. Interest expense related to the Convertible Debentures for the years ended December 31, 2015, 2014 and 2013 includes $0.4 million, $3.6 million and $6.8 million, respectively, of contractual interest coupon and $0.2 million, $4.2 million and $7.6 million, respectively, of debt discount amortization. |
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Derivative Instruments | Derivative Instruments – We use derivative financial instruments to manage our exposure to various risks. The use of these financial instruments modifies the exposure with the intent of reducing our risk. We do not use financial instruments for trading purposes, nor do we use leveraged financial instruments. The counterparties to these contractual arrangements are major financial institutions. We use multiple financial institutions for derivative contracts to minimize the concentration of credit risk. The current accounting rules require derivative instruments, excluding certain contracts that are issued and held by a reporting entity that are both indexed to its own stock and classified in shareholders’ equity, be reported in the Consolidated Balance Sheets at fair value and that changes in a derivative’s fair value be recognized currently in earnings unless specific hedge accounting criteria are met. We are exposed to foreign currency risks that arise from normal business operations. These risks include the translation of local currency balances on our foreign subsidiaries’ balance sheets, intercompany loans with foreign subsidiaries and transactions denominated in foreign currencies. We strive to control our exposure to these risks through our normal operating activities and, where appropriate, through derivative instruments. We have entered into contracts to hedge forecasted transactions occurring at various dates through June 2016 that are denominated in foreign currencies. The notional amount of foreign exchange contracts hedging foreign currency transactions was $4.6 million and $5.5 million at December 31, 2015 and 2014, respectively. Prior to 2013, we applied cash flow hedge accounting to certain of our foreign currency derivatives. We elected to discontinue this accounting treatment in the first quarter of 2013, consequently, all gains and losses that had been deferred in accumulated other comprehensive loss at December 31, 2012 were reclassified to income in the quarter ended March 31, 2013. See Note 16, "Accumulated Other Comprehensive Income (Loss)" for additional information. The notional amounts of all of our foreign exchange contracts were recorded at their fair market value as of December 31, 2015 with changes in market value recorded in income. The earnings impact of any foreign exchange contract that is specifically related to the purchase of inventory is recorded in cost of sales and the changes in market value of all other contracts are recorded in selling, general and administrative expense in the Consolidated Statements of Operations. The balances of derivative assets are recorded in other current assets and the balances of derivative liabilities are recorded in accrued expenses in the Consolidated Balance Sheets. |
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Fair Value Measurements | Fair Value Measurements – Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
The fair value of intangible assets associated with acquisitions was determined using a discounted cash flow analysis. Projecting discounted future cash flows required us to make significant estimates regarding future revenues and expenses, projected capital expenditures, changes in working capital and the appropriate discount rate. This non-recurring fair value measurement would be classified as Level 3 due to the absence of quoted market prices or observable inputs for assets of a similar nature. Similarly, the fair value computations for the recurring impairment analyses of goodwill, indefinite-lived intangible assets and the investment in GST would be classified as Level 3 due to the absence of quoted market prices or observable inputs. The key assumptions used for the discounted cash flow approach include expected cash flows based on internal business plans, projected growth rates and discount rates. Significant changes in any of those inputs could result in a significantly different fair value measurement. |
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Recently Issued Accounting Guidance | Recently Issued Accounting Guidance In January 2016, a standard was issued that amends existing guidance around classification and measurement of certain financial assets and liabilities. Changes to the current GAAP model primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. Under the new guidance, all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value through earnings. For equity investments without readily determinable fair values, the cost method is also eliminated. However, most entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. The standard also requires that financial assets and liabilities be disclosed separately in the notes to the financial statements based on measurement principle and form of financial asset. The amendments in this guidance are effective for financial statements issued for interim and annual periods beginning after December 15, 2017. This standard is not expected to have a significant impact on our consolidated financial statements or disclosures. In November 2015, a standard was issued that simplifies the presentation of deferred income taxes through requiring that all deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by this standard. The amendments in this guidance are effective for financial statements issued for interim and annual periods beginning after December 15, 2016, with early adoption permitted for the beginning of an interim or annual period, and may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We have elected to adopt this standard effective for the fourth quarter of 2015 on a prospective basis. In September 2015, a standard was issued that simplifies the accounting for measurement period adjustments associated with a business combination by eliminating the requirement to restate prior period financial statements for measurement period adjustments when measurements were incomplete as of the end of the reporting period covering the business combination. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. It is effective for interim and annual periods beginning after December 15, 2015. This standard is not expected to have a significant impact on our consolidated financial statements or disclosures. In July 2015, a standard was issued that simplifies the measurement of inventory by requiring certain inventory to be measured at the lower of cost or net realizable value. This will not apply to the portion of our inventory that is measured using the last-in, first-out method. The amendments in this guidance are effective for fiscal years beginning after December 15, 2016 and for interim periods therein, but early application is permitted. This standard is not expected to have a significant impact on our consolidated financial statements or disclosures. In April 2015, a standard was issued that amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. This standard is not expected to have a significant impact on our consolidated financial statements or disclosures. In May 2014, a comprehensive new revenue recognition standard was issued that will supersede nearly all existing revenue recognition guidance. The new guidance introduces a five-step model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The new standard will become effective for us beginning with the first quarter 2018. We are currently evaluating the new guidance, including possible transition alternatives, to determine the impact it will have on our consolidated financial statements. |
Overview, Significant Accounting Policies and Recently Issued Accounting Pronouncements (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Error Corrections and Prior Period Adjustments | Accordingly the company, has revised the Consolidated Balance Sheet as of December 31, 2014 from amounts previously reported as follows:
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Acquisitions (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition |
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Other Income (Expense) (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserves | Restructuring reserves at December 31, 2015, as well as activity during the year, consisted of:
The above-mentioned asset write-downs at CPI did not affect the restructuring reserve liability. Restructuring reserves at December 31, 2014, as well as activity during the year, consisted of:
Restructuring reserves at December 31, 2013, as well as activity during the year, consisted of:
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Schedule of Restructuring Costs By Reportable Segment | Restructuring costs by reportable segment are as follows:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income Before Income Tax Domestic and Foreign | Income (loss) before income taxes as shown in the Consolidated Statements of Operations consists of the following:
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Summary of Income Tax Expense in Consolidated Statements of Operations From Continuing Operations | A summary of income tax expense in the Consolidated Statements of Operations is as follows:
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Schedule of Income Tax Benefits Recorded in Additional Paid-in-Capital | Income tax benefits recorded directly to additional paid-in capital consist of the following:
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Schedule of Deferred Income Tax Assets and Liabilities | The net deferred tax assets are reflected on the December 31, 2015 and 2014 Consolidated Balance Sheets as follows:
Significant components of deferred income tax assets and liabilities at December 31, 2015 and 2014 are as follows:
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Reconciliation of Effective Tax Rate | The effective income tax rate from operations varied from the statutory federal income tax rate as follows:
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Schedule of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits (excluding interest) is as follows:
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Earnings Per Share (Tables) |
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Schedule of Computation of Basic and Diluted Earnings Per Share | The computation of basic and diluted earnings per share is as follows (in millions, except per share data):
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories |
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Percentage-of-Completion Long-Term Contracts (Tables) |
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Contractors [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Information Regarding Contracts Accounted for Under the Percentage-of-Completion Method | Additional information regarding engine contracts accounted for under the POC method is as follows:
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Schedule of Uncompleted Contracts Reflected in Consolidated Balance Sheets | These amounts were included in the accompanying Consolidated Balance Sheets under the following captions:
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Schedule of Completed-Contract Method Contracts | Additional information regarding engine contracts accounted for under the completed-contract method is as follows:
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Property, Plant and Equipment (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property Plant and Equipment |
|
Goodwill and Other Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Net Carrying Value of Goodwill by Reportable Segment | The changes in the net carrying value of goodwill by reportable segment for the years ended December 31, 2015 and 2014 are as follows:
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Schedule of Identifiable Intangible Assets | Identifiable intangible assets are as follows:
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Schedule of Estimated Amortization Expense of Intangible Assets | The estimated amortization expense for those intangible assets for the next five years is as follows (in millions):
|
Accrued Expenses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses |
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Related Party Transactions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amounts Included in Financial Statements Arising From Transactions with GST | Amounts included in our consolidated financial statements arising from transactions with GST include the following:
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Long-Term Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long Term Debt |
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Schedule of Future Principal Payments on Long Term Debt | Future principal payments on long-term debt are as follows:
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Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized as follows:
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Schedule of Carrying Value of Financial Instruments | The carrying values of our significant financial instruments reflected in the Consolidated Balance Sheets approximate their respective fair values, except for the following:
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Pensions and Postretirement Benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Change in Projected Benefit Obligations | The following table sets forth the changes in projected benefit obligations and plan assets of our defined benefit pension and other non-qualified and postretirement plans as of and for the years ended December 31, 2015 and 2014.
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Schedule of Change in Plan Assets |
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Schedule of Change in Plan Assets Underfunded Status at End of Year |
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Schedule Of Projected Benefit Obligations Amounts Recognized In Consolidated Balance Sheets |
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Schedule of Pre Tax Charges Recognized in Accumulated Other Comprehensive Income (Loss) | Pre-tax charges recognized in accumulated other comprehensive loss as of December 31, 2015 and 2014 consist of:
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Schedule Of Net Periodic Benefit Cost |
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Schedule of Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income |
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Schedule of Weighted Average Assumptions Used to Determine Benefit Obligations and Net Periodic Benefit Cost |
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Schedule of Assumed Health Care Cost Trend Rates | We use the RP-2014 mortality table with the MP-2015 projection scale to value our domestic pension liabilities.
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Schedule of Asset Allocation for Pension Plans and Target Allocation By Asset Category | The asset allocation for pension plans at the end of 2015 and 2014, and the target allocation for 2016, by asset category are as follows:
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Schedule of Fair Value of Plan Assets | The investment portfolios of the various funds at December 31, 2015 and 2014 are summarized as follows:
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Schedule of Benefit Payments Reflecting Expected Future Service as Appropriate Expected to Be Paid | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
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Accumulated Other Comprehensive Income (Loss) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (loss) by component (after tax) are as follows:
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Components Of Accumulated Other Comprehensive Income Loss | Reclassifications out of accumulated other comprehensive income (loss) are as follows:
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Equity Compensation Plan (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restricted Share Units Activity, Performance Share Activity and Restricted Stock Activity | A summary of award activity under these plans is as follows:
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Schedule of Information With Respect to Stock Options | The following table provides certain information with respect to stock options as of December 31, 2015:
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Summary of Option Activity Under Plan | A summary of option activity under the Plan as of December 31, 2015, and changes during the year then ended, is presented below:
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Schedule Of Intrinsic Value Related to stock Options | The year-end intrinsic value related to stock options is presented below:
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Schedule of Equity Based Compensation | We recognized the following equity-based employee compensation expenses and benefits related to our Plan activity:
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Business Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Operating Results and Other Financial Data | Segment operating results and other financial data for the years ended December 31, 2015, 2014, and 2013 were as follows:
No customer accounted for 10% or more of net sales in 2015, 2014 or 2013. |
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Schedule of Segment Related Capital Expenditure, Depreciation and Amortization on those Expenditures | No customer accounted for 10% or more of net sales in 2015, 2014 or 2013.
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Schedule of Net Sales by Geographical Area |
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Schedule of Total Assets Segment |
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Schedule of Long Lived Assets Segment |
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Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Subsidiary Condensed Combined Statements of Comprehensive Income | Condensed combined financial information for GST is set forth below, presented on a historical cost basis. GST (Debtor-in-Possession) Condensed Combined Statements of Operations Years Ended December 31, 2015, 2014 and 2013 (in millions)
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Schedule of Condensed Combined Statements of Cash Flows | GST (Debtor-in-Possession) Condensed Combined Statements of Cash Flows Years Ended December 31, 2015, 2014 and 2013 (in millions)
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Schedule of Condensed Combined Balance Sheets | GST (Debtor-in-Possession) Condensed Combined Balance Sheets As of December 31, 2015 and 2014 (in millions)
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Changes In Carrying Amount Of Product Warranty Liability | Changes in the carrying amount of the product warranty liability for the years ended December 31, 2015 and 2014 are as follows:
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Schedule Of Future Minimum Lease Payments | Future minimum lease payments by year and in the aggregate, under noncancelable operating leases with initial or remaining noncancelable lease terms in excess of one year, consisted of the following at December 31, 2015 (in millions):
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Supplemental Guarantor Financial Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Income Statement | ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS Year Ended December 31, 2015 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS Year Ended December 31, 2014 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS Year Ended December 31, 2013 (in millions)
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Condensed Statement of Comprehensive Income | ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, 2014 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, 2013 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, 2015 (in millions)
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Condensed Cash Flow Statement | ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Year Ended December 31, 2015 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Year Ended December 31, 2014 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Year Ended December 31, 2013 (in millions)
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Condensed Balance Sheet | ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING BALANCE SHEETS December 31, 2015 (in millions)
ENPRO INDUSTRIES, INC. CONDENSED CONSOLIDATING BALANCE SHEETS As of December 31, 2014 (in millions)
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Selected Quarterly Financial Data (Unaudited) (Tables) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Selected Quarterly Financial Data |
|
Acquisitions - Additional Information (Detail) - USD ($) $ in Millions |
1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jan. 31, 2013 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Jul. 15, 2015 |
|
Business Combinations [Abstract] | |||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 2.0 | $ 45.5 | $ 61.9 | $ 2.0 | |
Contingent Consideration Arrangements, Low Range | 0.0 | ||||
Contingent Consideration Arrangements, High Range | 5.0 | 7.0 | |||
Fair Value of Contingent Consideration | 0.0 | 1.9 | $ 0.5 | ||
Business Combination, Contingent Consideration, Liability | 2.3 | ||||
Accounts receivable | 21.7 | ||||
Inventories | 10.4 | ||||
Property, Plant, and Equipment | 8.6 | ||||
Goodwill | 12.8 | $ 27.0 | |||
Other Intangible Assets | 14.7 | ||||
Other Assets | 6.5 | ||||
Liabilities Assumed | $ (29.2) |
Acquisitions Subsequent Events (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Subsequent Events [Abstract] | |
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred | $ 6 |
Other Income (Expense) - Schedule of Restructuring Reserves (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Restructuring Cost and Reserve [Line Items] | |||
Beginning balance | $ 1.8 | $ 3.2 | $ 0.9 |
Provision | 3.9 | 2.3 | 6.7 |
Payments | (5.4) | (3.7) | (4.4) |
Ending balance | 0.3 | 1.8 | 3.2 |
Personnel-Related Costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Beginning balance | 1.1 | 2.5 | 0.1 |
Provision | 3.0 | 1.3 | 5.2 |
Payments | (3.8) | (2.7) | (2.8) |
Ending balance | 0.3 | 1.1 | 2.5 |
Facility Relocation And Closure Costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Beginning balance | 0.7 | 0.7 | 0.8 |
Provision | 0.9 | 1.0 | 1.5 |
Payments | (1.6) | (1.0) | (1.6) |
Ending balance | $ 0.0 | $ 0.7 | $ 0.7 |
Other Income (Expense) - Schedule of Restructuring Costs by Reportable Segment (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Expenses | $ 6.6 | $ 2.3 | $ 6.7 |
Sealing Products [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Expenses | 0.4 | 2.4 | 0.9 |
Engineered Products [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Expenses | 6.2 | (0.1) | 3.7 |
Power Systems [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Expenses | $ 0.0 | $ 0.0 | $ 2.1 |
Other Income (Expense) - Subsequent Events (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Subsequent Event [Line Items] | |
Restructuring Charges | $ 3.8 |
Minimum [Member] | |
Subsequent Event [Line Items] | |
Restructuring Charges | 2.7 |
Maximum [Member] | |
Subsequent Event [Line Items] | |
Restructuring Charges | $ 4.3 |
Income Taxes - Schedule of Income Before Income Tax Domestic and Foreign (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||
Domestic | $ (3.0) | $ (2.4) | $ (4.3) |
Foreign | (15.6) | 35.0 | 40.1 |
Income (loss) before income taxes | $ (18.6) | $ 32.6 | $ 35.8 |
Income Taxes - Summary of Income Tax Expense in Consolidated Statements of Operations from Continuing Operations (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||
Federal | $ (4.0) | $ 1.3 | $ (3.7) |
Foreign | 9.8 | 9.7 | 10.0 |
State | (2.4) | 2.9 | 0.4 |
Current income tax expense | 3.4 | 13.9 | 6.7 |
Federal | 3.6 | (2.6) | 3.3 |
Foreign | (6.0) | (0.5) | (1.5) |
State | 1.3 | (0.2) | (0.1) |
Deferred income tax expense | (1.1) | (3.3) | 1.7 |
Total | $ 2.3 | $ 10.6 | $ 8.4 |
Income Taxes - Tax Benefits Recorded to Additional Paid in Capital (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||
Stock options exercised and restricted stock units vested | $ (1.8) | $ (0.5) | $ (3.0) |
Reacquisition of Convertible Debentures | 0.0 | (2.2) | 0.0 |
Adjustments to additional paid in capital, income tax benefit | $ (1.8) | $ (2.7) | $ (3.0) |
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Detail) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Net operating losses and tax credits | $ 10.9 | $ 11.9 |
Accrual for post-retirement benefits other than pensions | 3.2 | 4.3 |
Environmental reserves | 6.4 | 7.0 |
Retained liabilities of previously owned businesses | 2.4 | 3.7 |
Accruals and reserves | 6.4 | 5.3 |
Pensions | 12.6 | 16.7 |
Inventories | 5.6 | 5.9 |
Asbestos settlement | 11.3 | 11.9 |
Interest | 9.4 | 9.1 |
Compensation and benefits | 13.7 | 11.7 |
Gross deferred income tax assets | 81.9 | 87.5 |
Valuation allowance | (17.6) | (19.9) |
Total deferred income tax assets | 64.3 | 67.6 |
Depreciation and amortization | (44.9) | (45.1) |
GST deconsolidation gain | (21.4) | (21.4) |
Total deferred income tax liabilities | (66.3) | (66.5) |
Net deferred tax assets | $ (2.0) | $ 1.1 |
Income Taxes - Net Deferred Tax Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Prepaid expenses and other current assets | $ 0.0 | $ 16.8 |
Deferred income taxes and income tax receivable | 8.7 | 6.0 |
Accrued expenses | 0.0 | (0.2) |
Other liabilities (non-current) | (10.7) | (21.5) |
Net deferred tax assets | $ (2.0) | $ 1.1 |
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
|
Income Tax Disclosure [Abstract] | ||||
Foreign Net Operating Loss Carryforwards, Tax Effect | $ 9.5 | |||
Foreign Net Operating Loss Carryforwards | 12.2 | |||
Net operating loss carryforwards during period | 32.4 | |||
Indefinite operating loss carryforwards | 20.2 | |||
State tax net operating loss carryforwards | 0.5 | |||
Deferred tax assets, valuation allowance | 17.6 | $ 19.9 | ||
Foreign subsidiaries undistributed earnings | 256.0 | |||
Amount of withholding tax that would be payable on remittance of the entire amount | 2.3 | |||
Gross unrecognized tax benefits | 1.5 | 3.1 | $ 5.9 | $ 6.3 |
Effective tax rate impact if ultimately recognized | 1.5 | 3.1 | ||
Amount accrued for interest and penalties | 0.1 | 0.3 | ||
Interest and penalties related to unrecognized tax benefits | 0.1 | $ 0.1 | $ 0.1 | |
Expected change in unrecognized tax benefits | (0.3) | |||
Unrecognized Tax Benefits, Expected to be Recognized, Next Twelve Months | $ 0.2 |
Income Taxes - Reconciliation of Effective Tax Rate (Detail) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% |
US taxation of foreign profits, net of foreign tax credits | 1.10% | 5.80% | 3.00% |
Research and employment tax credits | 7.70% | (4.00%) | (7.20%) |
State and local taxes | 4.10% | 5.50% | 7.50% |
Domestic production activities | 5.50% | (4.80%) | (0.00%) |
Nondeductible goodwill impairment | (48.60%) | ||
Foreign tax rate differences | (10.20%) | (5.90%) | (8.50%) |
Uncertain tax positions and prior adjustments | 4.30% | (2.70%) | (5.50%) |
Statutory changes in tax rates | 1.40% | 0.00% | (1.30%) |
Valuation allowance | (2.10%) | (0.50%) | (6.00%) |
Nondeductible expenses | (6.60%) | 4.50% | 3.50% |
Other items, net | (3.90%) | (0.50%) | 2.90% |
Effective income tax rate | (12.30%) | 32.40% | 23.40% |
Income Taxes - Schedule of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||
Balance at beginning of year | $ 3.1 | $ 5.9 | $ 6.3 |
Additions based on tax positions related to the current year | 0.3 | 0.4 | 1.0 |
Additions for tax positions of prior years | 0.2 | 0.0 | 2.6 |
Reductions for tax positions of prior years | 0.0 | (1.5) | (0.8) |
Reductions as a result of a lapse in the statute of limitations | (2.0) | (0.2) | (3.4) |
Reductions as a result of audit settlements | 0.0 | (1.0) | 0.0 |
Changes due to fluctuations in foreign currency | (0.1) | (0.5) | 0.2 |
Balance at end of year | $ 1.5 | $ 3.1 | $ 5.9 |
Earnings Per Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Earnings Per Share [Abstract] | |||||||||||
Net income (loss) | $ 6.6 | $ 11.4 | $ (37.3) | $ (1.6) | $ 3.8 | $ 8.6 | $ 8.3 | $ 1.3 | $ (20.9) | $ 22.0 | $ 27.4 |
Weighted-average shares - basic | 22.5 | 23.1 | 20.9 | ||||||||
Share-based awards | 0.0 | 0.1 | 0.2 | ||||||||
Convertible debentures and related warrants | 0.0 | 2.6 | 2.4 | ||||||||
Weighted-average shares - diluted | 22.5 | 25.8 | 23.5 | ||||||||
Basic (in usd per share) | $ 0.30 | $ 0.52 | $ (1.66) | $ (0.07) | $ 0.16 | $ 0.36 | $ 0.36 | $ 0.06 | $ (0.93) | $ 0.95 | $ 1.31 |
Diluted (in usd per share) | 0.30 | $ 0.51 | $ (1.66) | $ (0.07) | $ 0.15 | $ 0.33 | $ 0.32 | $ 0.05 | (0.93) | $ 0.85 | $ 1.17 |
Debt Instrument, Convertible, Conversion Price | 33.79 | 33.79 | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 46.78 | $ 46.78 | |||||||||
Stock Repurchased and Retired During Period, Shares | 0.9 | ||||||||||
Earnings Per Share, Potentially Dilutive Securities | .8 |
Inventories - Schedule of Inventories (Detail) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished products | $ 110.2 | $ 101.2 |
Work in process | 25.6 | 22.1 |
Raw materials and supplies | 49.0 | 45.7 |
Inventory Gross | 184.8 | 169.0 |
Reserve to reduce certain inventories to LIFO basis | (11.3) | (12.8) |
Manufacturing inventories | 173.5 | 156.2 |
Incurred costs related to long-term contracts | 10.9 | 9.1 |
Progress payments related to long-term contracts | (6.0) | (5.6) |
Net balance associated with completed-contract inventories | 4.9 | 3.5 |
Total inventories | $ 178.4 | $ 159.7 |
Long-Term Contracts Costs and Billings on Uncompleted Contracts - Schedule of Information Regarding Contracts Accounted for Under Percentage-of-Completion Method (Detail) - Acrrued Expenses [Member] - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Cumulative Revenues On Uncompleted POC Contracts | $ 215.0 | $ 198.6 |
Cumulative billings on Uncompleted POC Contracts | 198.2 | 200.0 |
Revenues Billings On Uncompleted Contracts | $ 16.8 | $ (1.4) |
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Detail) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Land | $ 11.1 | $ 9.0 |
Buildings and improvements | 100.0 | 91.6 |
Machinery and equipment | 362.6 | 358.7 |
Construction in progress | 30.1 | 35.0 |
Gross | 503.8 | 494.3 |
Less accumulated depreciation | (292.3) | (295.0) |
Total | $ 211.5 | $ 199.3 |
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Segment Reporting Information [Line Items] | |||
Goodwill, Impaired, Accumulated Impairment Loss | $ 154.8 | $ 108.7 | |
Amortization expense | 21.9 | 23.0 | $ 24.1 |
Sealing Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Goodwill, Impaired, Accumulated Impairment Loss | 27.8 | 27.8 | 27.8 |
Engineered Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Goodwill, Impaired, Accumulated Impairment Loss | 154.8 | $ 108.7 | $ 108.7 |
Trademarks [Member] | |||
Segment Reporting Information [Line Items] | |||
Impairment of Intangible Assets, Finite-lived | 0.9 | ||
Customer relationships [Member] | |||
Segment Reporting Information [Line Items] | |||
Impairment of Intangible Assets, Finite-lived | $ 1.6 |
Goodwill and Other Intangible Assets - Schedule of Estimated Amortization Expense of Intangible Assets (Detail) $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2016 | $ 19.9 |
2017 | 19.3 |
2018 | 18.4 |
2019 | 17.6 |
2020 | $ 17.1 |
Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Payables and Accruals [Abstract] | ||
Salaries, wages and employee benefits | $ 42.8 | $ 43.0 |
Interest | 36.7 | 35.3 |
Contract advances | 8.9 | 13.5 |
Income and other taxes | 10.3 | 8.7 |
Other | 41.9 | 31.1 |
Total accrued expenses | $ 140.6 | $ 131.6 |
Long-Term Debt - Schedule of Long Term Debt (Detail) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Long-term debt | $ 361.0 | $ 321.1 | |
Senior Notes | $ 300.0 | ||
Less current maturities of long-term debt | 0.1 | 22.5 | |
Long-term debt, net | 360.9 | 298.6 | |
Convertible Debentures [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0.0 | 22.4 | |
Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Senior Notes | 298.0 | 297.7 | |
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 62.2 | 0.0 | |
Other Notes Payables [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 0.8 | $ 1.0 |
Long Term Debt - Schedule of Future Principal Payments on Long-Term Debt (Detail) $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2016 | $ 0.1 |
2017 | 0.2 |
2018 | 0.2 |
2019 | 62.3 |
2020 | 0.1 |
Thereafter | 300.1 |
Total | $ 363.0 |
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ||
Cash equivalents | $ 24.2 | $ 140.5 |
Assets measured at fair value | 29.6 | 146.1 |
Liabilities measured at fair value | 6.6 | 7.9 |
Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ||
Cash equivalents | 0.0 | 117.7 |
Level 1 [Member] | Bank Time Deposits [Member] | ||
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ||
Cash equivalents | 24.2 | 22.8 |
Level 1 [Member] | Deferred Compensation [Member] | ||
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ||
Assets measured at fair value | 5.4 | 5.6 |
Liabilities measured at fair value | $ 6.6 | $ 7.9 |
Fair Value Measurements - Schedule of Carrying Value of Financial Instruments (Detail) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Long-term debt, Carrying Value | $ 361.0 | $ 321.1 |
Notes payable to GST, Carrying Value | 283.2 | 271.0 |
Long-term Debt, Fair Value | 360.3 | 345.3 |
Notes payable to GST, Fair Value | $ 281.7 | $ 278.3 |
Pensions and Postretirement Benefits - Schedule of Projected Benefit Obligations Amounts Recognized in Consolidated Balance Sheets (Detail) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Pension Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Current liabilities | $ (0.2) | $ (0.3) |
Long-term liabilities | (40.7) | (38.1) |
Amounts recognized in the consolidated balance sheets | (40.9) | (38.4) |
Other Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Current liabilities | (0.1) | (0.1) |
Long-term liabilities | (3.3) | (2.9) |
Amounts recognized in the consolidated balance sheets | $ (3.4) | $ (3.0) |
Pensions and Postretirement Benefits - Schedule of Pre-Tax Charges Recognized in Accumulated Other Comprehensive Income Loss (Detail) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Pension Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Net actuarial (gain) loss | $ 77.1 | $ 80.7 |
Prior service cost | 1.4 | 1.6 |
Pre-tax charges recognized in accumulated other comprehensive income (loss) | 78.5 | 82.3 |
Other Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Net actuarial (gain) loss | (0.5) | (0.1) |
Prior service cost | 0.7 | 0.1 |
Pre-tax charges recognized in accumulated other comprehensive income (loss) | $ 0.2 | $ 0.0 |
Pensions and Postretirement Benefits - Schedule of Weighted-Average Assumptions Used to Determine Benefit Obligations and Net Periodic Benefit Cost (Detail) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Pension Benefits [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Benefit Obligations, Discount rate | 4.60% | 4.30% | 5.00% |
Benefit Obligations, Rate of compensation increase | 3.00% | 3.00% | 3.00% |
Net Periodic Benefit Cost, Discount rate | 4.30% | 5.00% | 4.00% |
Net Periodic Benefit Cost, Expected long-term return on plan assets | 7.30% | 8.00% | 8.00% |
Net Periodic Benefit Cost, Rate of compensation increase | 3.00% | 3.00% | 3.00% |
Other Benefits [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Benefit Obligations, Discount rate | 4.60% | 4.25% | 5.00% |
Benefit Obligations, Rate of compensation increase | 4.00% | 4.00% | |
Net Periodic Benefit Cost, Discount rate | 4.30% | 5.00% | 4.00% |
Net Periodic Benefit Cost, Rate of compensation increase | 4.00% | 4.00% | 4.00% |
Pensions and Postretirement Benefits - Schedule of Assumed Health Care Cost Trend Rates (Detail) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Compensation and Retirement Disclosure [Abstract] | ||
Health care cost trend rate assumed for next year | 6.70% | 6.90% |
Rate to which the cost trend rate is assumed to decline (the ultimate rate) | 5.00% | 5.00% |
Year that the rate reaches the ultimate trend rate | 2025 | 2024 |
Pensions and Postretirement Benefits - Schedule of Asset Allocation for Pension Plans and Target Allocation by Asset Category (Detail) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Target Allocation | 100.00% | |
Plan Assets | 100.00% | 100.00% |
Equity Securities [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Target Allocation | 40.00% | |
Plan Assets | 39.00% | 39.00% |
Fixed Income [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Target Allocation | 60.00% | |
Plan Assets | 61.00% | 61.00% |
Pensions and Postretirement Benefits - Schedule of Fair Value of Plan Assets (Detail) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Defined benefit plan investment | $ 242.5 | $ 253.1 |
Mutual Funds - U.S. Equity [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Defined benefit plan investment | 63.5 | 66.8 |
Fixed Income Treasury And Money Market [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Defined benefit plan investment | 146.4 | 152.5 |
Mutual Funds - International Equity [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Defined benefit plan investment | 31.8 | 33.0 |
Cash Equivalents [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Defined benefit plan investment | $ 0.8 | $ 0.8 |
Pensions and Postretirement Benefits - Schedule of Benefit Payments Reflecting Expected Future Service as Appropriate Expected to be Paid (Detail) $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Pension Benefits [Member] | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
2015 | $ 11.5 |
2016 | 12.4 |
2017 | 13.3 |
2018 | 14.2 |
2019 | 15.2 |
Years 2020 - 2024 | 87.9 |
Other Benefits [Member] | |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |
2015 | 0.2 |
2016 | 0.2 |
2017 | 0.2 |
2018 | 0.3 |
2019 | 1.0 |
Years 2020 - 2024 | $ 0.9 |
Shareholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
2 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|---|
Feb. 24, 2016 |
Feb. 26, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Oct. 15, 2015 |
Mar. 31, 2015 |
|
Subsequent Event [Line Items] | |||||||||
Cash dividend declared (in dollars per share) | $ 0.80 | ||||||||
Stock Repurchased During Period, Shares | 0.1 | 1.2 | |||||||
Payments for Repurchase of Common Stock | $ 6.0 | $ 85.3 | $ 0.0 | $ 0.0 | |||||
Stock Repurchased and Retired During Period, Value | $ 5.3 | ||||||||
Payments of Ordinary Dividends, Common Stock | $ 18.0 | $ 0.0 | $ 0.0 | ||||||
Stock Repurchase Program, Authorized Amount | $ 50.0 | $ 80.0 | |||||||
Repurchase Average Price Per Share (in dollars per share) | $ 66.76 | ||||||||
Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Cash dividend declared (in dollars per share) | $ 0.21 | ||||||||
Stock Repurchased During Period, Shares | 0.2 | ||||||||
Payments for Repurchase of Common Stock | $ 5.7 |
Equity Compensation Plan - Summary of Option Activity Under Plan (Detail) |
12 Months Ended |
---|---|
Dec. 31, 2015
$ / shares
shares
| |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share Options Outstanding, Beginning Balance | shares | 114,239 |
Share Options Outstanding, Exercised | shares | (2,367) |
Share Options Outstanding, Ending Balance | shares | 111,872 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 36.09 |
Weighted Average Exercise Price, Exercised | $ / shares | 42.24 |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 35.96 |
Equity Compensation Plan - Schedule of Intrinsic Value Related to Stock Options (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Options outstanding | $ 0.9 | $ 3.0 | $ 2.7 |
Options exercisable | 0.9 | 2.7 | 2.3 |
Options exercised | $ 0.1 | $ 0.4 | $ 0.0 |
Equity Compensation Plan - Schedule of Equity Based Compensation (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Compensation expense | $ 4.1 | $ 9.8 | $ 6.0 |
Related income tax benefit | $ 1.5 | $ 3.7 | $ 2.2 |
Business Segment Information - Additional Information (Detail) - Segment |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Segment Reporting [Abstract] | |||
Percentage of net sales | 10.00% | 10.00% | 10.00% |
Number Of Operating Segments | 3 |
Business Segment Information - Schedule of Net Sales by Geographical Area (Detail) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Schedule Of Net Sales By Geographical Segment [Line Items] | |||||||||||
Net Sales by Geographic Area | $ 321.9 | $ 306.6 | $ 298.4 | $ 277.5 | $ 316.4 | $ 302.6 | $ 313.1 | $ 287.2 | $ 1,204.4 | $ 1,219.3 | $ 1,144.2 |
United States [Member] | |||||||||||
Schedule Of Net Sales By Geographical Segment [Line Items] | |||||||||||
Net Sales by Geographic Area | 696.2 | 674.1 | 620.3 | ||||||||
Europe [Member] | |||||||||||
Schedule Of Net Sales By Geographical Segment [Line Items] | |||||||||||
Net Sales by Geographic Area | 289.5 | 315.9 | 308.6 | ||||||||
Other Foreign [Member] | |||||||||||
Schedule Of Net Sales By Geographical Segment [Line Items] | |||||||||||
Net Sales by Geographic Area | $ 218.7 | $ 229.3 | $ 215.3 |
Business Segment Information - Schedule of Assets and Long Lived Assets Segment (Detail) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Schedule Of Assets By Segment [Line Items] | ||
Assets | $ 1,503.5 | $ 1,602.7 |
Long-Lived Assets | 211.5 | 199.3 |
United States [Member] | ||
Schedule Of Assets By Segment [Line Items] | ||
Long-Lived Assets | 135.2 | 130.6 |
France [Member] | ||
Schedule Of Assets By Segment [Line Items] | ||
Long-Lived Assets | 24.6 | 27.3 |
Other Europe [Member] | ||
Schedule Of Assets By Segment [Line Items] | ||
Long-Lived Assets | 24.2 | 28.5 |
Other Foreign [Member] | ||
Schedule Of Assets By Segment [Line Items] | ||
Long-Lived Assets | 27.5 | 12.9 |
Sealing Products [Member] | ||
Schedule Of Assets By Segment [Line Items] | ||
Assets | 631.7 | 578.3 |
Engineered Products [Member] | ||
Schedule Of Assets By Segment [Line Items] | ||
Assets | 231.5 | 308.7 |
Power Systems [Member] | ||
Schedule Of Assets By Segment [Line Items] | ||
Assets | 162.2 | 145.6 |
Corporate [Member] | ||
Schedule Of Assets By Segment [Line Items] | ||
Assets | $ 478.1 | $ 570.1 |
Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. - Schedule of Condensed Combined Statements of Comprehensive Income (Detail) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Other Items Net Interest And Other Financial Income [Line Items] | |||||||||||
Net sales | $ 321.9 | $ 306.6 | $ 298.4 | $ 277.5 | $ 316.4 | $ 302.6 | $ 313.1 | $ 287.2 | $ 1,204.4 | $ 1,219.3 | $ 1,144.2 |
Cost of sales | 808.9 | 802.6 | 762.9 | ||||||||
Gross profit | 103.0 | 101.4 | 101.3 | 89.8 | 105.9 | 106.2 | 108.1 | 96.5 | 395.5 | 416.7 | 381.3 |
Selling, general and administrative | 302.8 | 319.5 | 285.8 | ||||||||
Asbestos settlement | 0.0 | 30.0 | 0.0 | ||||||||
Other | 8.1 | 3.8 | 9.1 | ||||||||
Total operating expenses | 357.9 | 353.3 | 294.9 | ||||||||
Operating income | 37.6 | 63.4 | 86.4 | ||||||||
Interest income, net | (52.1) | (44.1) | (44.3) | ||||||||
Income (loss) before income taxes | (18.6) | 32.6 | 35.8 | ||||||||
Income tax expense | (2.3) | (10.6) | (8.4) | ||||||||
Net income (loss) | $ 6.6 | $ 11.4 | $ (37.3) | $ (1.6) | $ 3.8 | $ 8.6 | $ 8.3 | $ 1.3 | (20.9) | 22.0 | 27.4 |
Comprehensive income | (40.9) | (26.5) | 64.8 | ||||||||
Garlock Sealing Technologies [Member] | |||||||||||
Other Items Net Interest And Other Financial Income [Line Items] | |||||||||||
Net sales | 217.6 | 240.6 | 244.8 | ||||||||
Cost of sales | 137.1 | 146.5 | 145.3 | ||||||||
Gross profit | 80.5 | 94.1 | 99.5 | ||||||||
Selling, general and administrative | 43.5 | 47.5 | 41.7 | ||||||||
Asbestos settlement | 0.6 | (127.2) | 2.3 | ||||||||
Other | 0.3 | 1.6 | 0.5 | ||||||||
Total operating expenses | 44.4 | (78.1) | 44.5 | ||||||||
Operating income | 36.1 | 172.2 | 55.0 | ||||||||
Interest income, net | 32.1 | 31.0 | 29.7 | ||||||||
Income before reorganization expenses and income taxes | 68.2 | 203.2 | 84.7 | ||||||||
Reorganization expenses | (25.6) | (16.5) | (44.6) | ||||||||
Income (loss) before income taxes | 42.6 | 186.7 | 40.1 | ||||||||
Income tax expense | (16.2) | (72.9) | (18.7) | ||||||||
Net income (loss) | 26.4 | 113.8 | 21.4 | ||||||||
Comprehensive income | $ 17.0 | $ 101.9 | $ 20.8 |
Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. - Schedule of Condensed Combined Balance Sheets (Detail) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
||
---|---|---|---|---|---|---|
Current assets | $ 517.9 | $ 603.1 | ||||
Other assets | 41.6 | 49.2 | ||||
Total assets | 1,503.5 | 1,602.7 | ||||
Liabilities, Current | 278.7 | 277.2 | ||||
Other liabilities | 133.1 | 142.8 | ||||
Total liabilities | 1,043.7 | 977.9 | ||||
Shareholder's equity | 459.8 | 623.8 | $ 583.9 | $ 533.5 | ||
Liabilities and Equity | 1,503.5 | 1,602.7 | ||||
Garlock Sealing Technologies [Member] | ||||||
Current assets | 406.1 | 370.9 | ||||
Asbestos insurance receivable | 62.0 | 80.7 | ||||
Deferred income taxes | 105.6 | 85.6 | ||||
Notes receivable from affiliate | 271.0 | 259.3 | ||||
Other assets | 67.8 | 73.5 | ||||
Total assets | 912.5 | 870.0 | ||||
Liabilities, Current | 40.5 | 42.7 | ||||
Other liabilities | 114.4 | 86.6 | ||||
Liabilities subject to compromise | [1] | 339.1 | 339.1 | |||
Total liabilities | 494.0 | 468.4 | ||||
Shareholder's equity | 418.5 | 401.6 | ||||
Liabilities and Equity | $ 912.5 | $ 870.0 | ||||
|
Commitments and Contingencies - Schedule of Changes in Carrying Amount of Product Warranty Liability (Detail) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Balance at beginning of year | $ 3.5 | $ 3.8 |
Charges to expense | 3.3 | 2.9 |
Settlements made (primarily payments) | (2.0) | (3.2) |
Balance at end of period | $ 4.8 | $ 3.5 |
Commitments and Contingencies - Schedule of Future Insurance Proceeds (Detail) - Asbestos Issue [Member] $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Loss Contingency, Estimated Insurance Recoveries [Abstract] | |
Loss Contingency, Estimated Insurance Recoveries, Rolling Next Rolling Twelve Months | $ 18.0 |
Loss Contingency, Estimated Insurance Recoveries, Year Two | 13.0 |
Loss Contingency, Estimated Insurance Recoveries, Year Three | 11.0 |
Loss Contingency, Estimated Insurance Recoveries, after Year Five | $ 38.0 |
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Commitments and Contingencies Disclosure [Abstract] | |||
2016 | $ 10.2 | ||
2017 | 9.0 | ||
2018 | 7.8 | ||
2019 | 6.7 | ||
2020 | 6.3 | ||
Thereafter | 4.7 | ||
Total minimum payments | 44.7 | ||
Net rent expense | $ 14.3 | $ 13.2 | $ 15.0 |
Supplemental Guarantor Financial Information Additional Information (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2012 |
---|---|---|---|
Condensed Financial Statements, Captions [Line Items] | |||
Prepaid Expense and Other Assets | $ 13.6 | ||
Deferred Tax Liabilities, Other | $ 10.7 | $ 21.5 | |
Retained Earnings [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Prepaid Expense and Other Assets | 13.6 | ||
Deferred Tax Liabilities, Other | 12.3 | ||
Deferred Tax Assets, Other | $ 1.3 |
Subsequent Events (Details) - $ / shares |
12 Months Ended | |
---|---|---|
Feb. 24, 2016 |
Dec. 31, 2015 |
|
Subsequent Event [Line Items] | ||
Cash dividend declared (in dollars per share) | $ 0.80 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Cash dividend declared (in dollars per share) | $ 0.21 |
Selected Quarterly Financial Data - Schedule of Selected Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Selected Quarterly Financial Information [Abstract] | |||||||||||
Net sales | $ 321.9 | $ 306.6 | $ 298.4 | $ 277.5 | $ 316.4 | $ 302.6 | $ 313.1 | $ 287.2 | $ 1,204.4 | $ 1,219.3 | $ 1,144.2 |
Gross profit | 103.0 | 101.4 | 101.3 | 89.8 | 105.9 | 106.2 | 108.1 | 96.5 | 395.5 | 416.7 | 381.3 |
Net income (loss) | $ 6.6 | $ 11.4 | $ (37.3) | $ (1.6) | $ 3.8 | $ 8.6 | $ 8.3 | $ 1.3 | $ (20.9) | $ 22.0 | $ 27.4 |
Basic earnings (loss) per share (in dollars per share) | $ 0.30 | $ 0.52 | $ (1.66) | $ (0.07) | $ 0.16 | $ 0.36 | $ 0.36 | $ 0.06 | $ (0.93) | $ 0.95 | $ 1.31 |
Diluted earnings (loss) per share (in dollars per share) | $ 0.30 | $ 0.51 | $ (1.66) | $ (0.07) | $ 0.15 | $ 0.33 | $ 0.32 | $ 0.05 | $ (0.93) | $ 0.85 | $ 1.17 |
Schedule II - Valuation and Qualifying Accounts (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Allowance for Doubtful Accounts [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance, Beginning of Year | $ 7.0 | $ 6.0 | $ 5.7 |
Charge (Credit) to Expense | (0.2) | 2.5 | 1.7 |
Write-off of Receivables/Expiration of Net Operating Losses | (1.4) | (1.1) | (1.4) |
Other | 0.0 | (0.4) | 0.0 |
Balance, End of Year | 5.4 | 7.0 | 6.0 |
Deferred Income Tax Valuation Allowance [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance, Beginning of Year | 19.9 | 17.6 | 17.7 |
Charge (Credit) to Expense | 0.4 | 2.3 | (1.8) |
Write-off of Receivables/Expiration of Net Operating Losses | (0.1) | (0.4) | (0.1) |
Other | (2.6) | 0.4 | 1.8 |
Balance, End of Year | $ 17.6 | $ 19.9 | $ 17.6 |
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