10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 _________________________________________

FORM 10-Q

 _________________________________________

(Mark One)

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

For the quarterly period ended June 30, 2022

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

Commission File Number 001-31225

 _________________________________________ 

ENPRO INDUSTRIES, INC.

(Exact name of registrant, as specified in its charter)

_____________________________________  

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)

(704) 731-1500

(Registrant’s telephone number, including area code)

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

__________________________________________

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	NPO	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨

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

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ý

As of July 28, 2022, there were 20,801,544 shares of common stock of the registrant outstanding, which does not include 179,833 shares of common stock held by a subsidiary of the registrant and accordingly are not entitled to be voted. There is only one class of common stock.

PART I

FINANCIAL INFORMATION

 Item 1.    Financial Statements

ENPRO INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Six Months Ended June 30, 2022 and 2021

(in millions, except per share amounts)

	Quarters Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net sales	$	333.3	$	298.6	$	662.0	$	577.9
Cost of sales	202.8		181.6		416.9		351.5
Gross profit	130.5		117.0		245.1		226.4
Operating expenses:
Selling, general and administrative	79.9		82.7		165.6		163.0
Other	0.9		2.4		2.4		4.3
Total operating expenses	80.8		85.1		168.0		167.3
Operating income	49.7		31.9		77.1		59.1
Interest expense	(7.7)		(4.0)		(14.8)		(8.0)
Interest income	—		0.2		0.2		0.4
Other income (expense)	(2.7)		1.9		(2.0)		1.8
Income before income taxes	39.3		30.0		60.5		53.3
Income tax expense	(6.3)		(0.8)		(11.0)		(6.0)
Net income	33.0		29.2		49.5		47.3
Less: net income (loss) attributable to redeemable non-controlling interests	(0.1)		(0.1)		0.2		—
Net income attributable to EnPro Industries, Inc.	$	33.1	$	29.3	$	49.3	$	47.3
Comprehensive income	$	17.0	$	41.6	$	20.7	$	51.4
Less: comprehensive income (loss) attributable to redeemable non-controlling interests	(1.2)		0.5		(2.0)		0.2
Comprehensive income attributable to EnPro Industries, Inc.	$	18.2	$	41.1	$	22.7	$	51.2
Basic earnings per share attributable to EnPro Industries, Inc.	$	1.59	$	1.42	$	2.37	$	2.30
Diluted earnings per share attributable to EnPro Industries, Inc.	$	1.59	$	1.41	$	2.36	$	2.28

See notes to consolidated financial statements (unaudited).

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ENPRO INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended June 30, 2022 and 2021

(in millions)

	2022		2021
OPERATING ACTIVITIES
Net income	$	49.5	$	47.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	16.1		13.8
Amortization	39.9		23.7
Deferred income taxes	(1.4)		(2.2)
Stock-based compensation	3.1		3.3
Other non-cash adjustments	6.9		4.0
Change in assets and liabilities, net of effects of divestitures of businesses:
Accounts receivable, net	(17.2)		(24.3)
Inventories	(11.0)		(10.6)
Accounts payable	11.1		16.7
Income taxes, net	(12.1)		(10.6)
Other current assets and liabilities	(22.8)		(0.9)
Other non-current assets and liabilities	5.0		(1.7)
Net cash provided by operating activities	67.1		58.5
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(8.5)		(10.2)
Proceeds from (payments for) sale of businesses, net	0.4		(2.3)
Acquisitions, net of cash acquired	2.9		—
Other	(0.3)		0.5
Net cash used in investing activities	(5.5)		(12.0)
FINANCING ACTIVITIES
Proceeds from debt	26.6		—
Repayments of debt	(162.5)		(2.0)
Dividends paid	(11.7)		(11.3)
Other	(6.8)		(1.5)
Net cash used in financing activities	(154.4)		(14.8)
Effect of exchange rate changes on cash and cash equivalents	(23.2)		0.7
Net increase (decrease) in cash and cash equivalents	(116.0)		32.4
Cash and cash equivalents at beginning of period	338.1		229.5
Cash and cash equivalents at end of period	$	222.1	$	261.9
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net	$	13.4	$	7.5
Income taxes, net	$	26.1	$	18.1
Non-cash investing and financing activities:
Non-cash acquisitions of property, plant, and equipment	$	0.3	$	1.1

See notes to consolidated financial statements (unaudited).

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ENPRO INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share amounts)

	June 30, 2022		December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	222.1	$	338.1
Accounts receivable, net	185.7		177.0
Inventories	168.0		160.0
Prepaid expenses and other current assets	53.2		37.9
Total current assets	629.0		713.0
Property, plant and equipment, net	224.1		236.7
Goodwill	943.5		953.2
Other intangible assets, net	861.2		913.4
Other assets	156.9		153.5
Total assets	$	2,814.7	$	2,969.8
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt	$	14.5	$	12.7
Short-term debt	99.7		149.3
Accounts payable	91.6		81.9
Accrued expenses	124.3		135.2
Total current liabilities	330.1		379.1
Long-term debt	876.7		963.9
Deferred taxes and non-current income taxes payable	158.5		167.3
Other liabilities	126.3		142.8
Total liabilities	1,491.6		1,653.1
Commitments and contingencies
Redeemable non-controlling interests	48.1		50.1
Shareholders’ equity
Common stock – $.01 par value; 100,000,000 shares authorized; issued, 20,981,131 shares in 2022 and 20,915,793 shares in 2021	0.2		0.2
Additional paid-in capital	301.0		303.6
Retained earnings	987.0		949.4
Accumulated other comprehensive income (loss)	(12.0)		14.6
Common stock held in treasury, at cost – 180,257 shares in 2022 and 180,848 shares in 2021	(1.2)		(1.2)
Total shareholders’ equity	1,275.0		1,266.6
Total liabilities and equity	$	2,814.7	$	2,969.8

See notes to consolidated financial statements (unaudited).

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ENPRO INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.    Overview and Basis of Presentation

Overview

EnPro Industries, Inc. (“we,” “us,” “our,” “EnPro,” or the “Company”) is a leader in designing, developing, manufacturing, servicing, and marketing proprietary engineered industrial products and serves a wide variety of customers in diverse industries around the world. Over the past several years, we have executed several strategic initiatives to change the portfolio of businesses that we operate to focus on industrial technology-related businesses with leading technologies, compelling margins, strong cash flow, and high levels of recurring revenue that serve markets with favorable secular tailwinds. These initiatives have increased our ability to provide solutions to the semiconductor, life sciences, and other technology industries.

Basis of Presentation

The accompanying interim consolidated financial statements are unaudited, and certain related information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in accordance with Rule 10-01 of Regulation S-X. They were prepared following the same policies and procedures used in the preparation of our annual financial statements and reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of results for the periods presented. The Consolidated Balance Sheet as of December 31, 2021 was derived from the audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2021. The results of operations for the interim periods are not necessarily indicative of the results for the fiscal year. These consolidated financial statements should be read in conjunction with our annual consolidated financial statements for the year ended December 31, 2021 included within our annual report on Form 10-K.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount 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.

All intercompany accounts and transactions between our consolidated operations have been eliminated.

In the second quarter of 2022, we determined the performance of our Alluxa reporting unit to be a triggering event for a goodwill impairment test and, as a result, we performed an interim assessment. The fair value of our Alluxa reporting unit, which is included in our Advanced Surface Technologies segment, and is allocated $126.0 million of goodwill as of June 30, 2022, exceeded its carrying value by an estimated 21% as of the interim testing date. If the weighted-average cost of capital used in this assessment were increased by one percentage point, then the fair value of the Alluxa reporting unit would exceed its carrying value by approximately 12%. A change in assumptions used in the testing of Alluxa's goodwill for impairment, such as a change in discount rate, inability to meet financial forecasts used in the test, or a shift in the market multiples could result in Alluxa's fair value dropping below the carrying value of its assets, resulting in impairment. We will continue to monitor the performance of Alluxa in relation to its forecast and perform an interim test if we determine a triggering event has occurred.

We will conduct our annual goodwill impairment assessment of all reporting units on November 1, 2022, unless facts and circumstances arise prior to then that would trigger another interim assessment.

2.    Acquisition

On December 17, 2021, our subsidiary, EnPro Holdings, Inc. ("EnPro Holdings"), completed the acquisition of all issued and outstanding membership interests of TCFII NxEdge LLC (“NxEdge”). Based in Boise, Idaho, NxEdge serves customers across the semiconductor supply chain, including top tier global integrated device manufacturers and original equipment manufacturers from six main facilities located in Idaho and California. With vertically integrated capabilities across the semiconductor value chain, including a robust aftermarket business, NxEdge is a leading supplier offering a set of integrated capabilities with unique processes resulting in a broad range of qualifications at top customers. NxEdge is included in our Advanced Surface Technologies segment.

The following pro forma condensed consolidated financial results of operations for EnPro are presented as if the acquisition had been completed prior to 2021:

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	Quarters Ended June 30,				Six Months Ended June 30,
(in millions)	2022		2021		2022		2021
Pro forma net sales	$	333.3	$	343.8	$	662.0	$	666.0
Pro forma net income	$	34.5	$	35.7	$	59.3	$	57.8

These amounts have been calculated after applying our accounting policies and adjusting the results of NxEdge to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to inventory, property, plant and equipment and intangible assets had been applied prior to 2021 as well as additional interest expense to reflect financing required, together with the corresponding tax effects. The supplemental pro forma net income for the quarter and six months ended June 30, 2022 was adjusted to exclude $2.0 million and $13.1 million, respectively, of pre-tax costs related to the amortization of the backlog intangible asset, the amortization of the fair-value adjustment to acquisition date inventory and additional transaction-related expenses incurred during the period. These pro forma financial results have been prepared for comparative purposes only and do not reflect the effect of synergies that would have been expected to result from the integration of this acquisition. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred prior to 2021, or of future results of the consolidated entities.

We continue to evaluate the purchase price allocation of this acquisition, primarily the value of certain tangible and intangible assets and the related tax impacts, and, in accordance with applicable accounting guidance, we may revise the amounts recognized until these estimates are final. We expect to finalize these estimates no later than the fourth quarter of 2022.

3.    Income Taxes

Our income tax expense and resulting effective tax rate are based upon the estimated annual effective tax rates applicable for the respective periods adjusted for the effect of items required to be treated as discrete in the interim periods. This estimated annual effective tax rate is affected by the relative proportions of earnings and income before taxes in the jurisdictions in which we operate. Based on the geographical mix of earnings, our annual effective tax rate fluctuates based on the portion of our profits earned in each jurisdiction.

The effective tax rates for the quarters ended June 30, 2022 and 2021 were 16.0% and 2.6%, respectively. The effective tax rate for the quarter ended June 30, 2022 is primarily driven by a legal entity conversion in Taiwan, an intercompany sale of assets and foreign currency effects on dividends, partially offset by higher tax rates in most foreign jurisdictions.

The effective tax rates for the six months ended June 30, 2022 and 2021 were 18.2% and 11.2%, respectively. The effective tax rate for the six months ended June 30, 2022 is primarily driven by a legal entity conversion in Taiwan, an intercompany sale of assets and foreign currency effects on dividends, partially offset by higher tax rates in most foreign jurisdictions. The effective tax rate for the six months ended June 30, 2021 is primarily the result of the reduction of a valuation allowance on certain foreign net operating losses, the favorable conclusion of an IRS examination, and reduction in the liability for certain uncertain tax positions, partially offset by higher tax rates in most foreign jurisdictions.

4.    Earnings Per Share

	Quarters Ended     June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions, except per share amounts)
Numerator (basic and diluted):
Net income	$	33.0	$	29.2	$	49.5	$	47.3
Less: net income (loss) attributable to redeemable non-controlling interests	(0.1)		(0.1)		0.2		—
Net income attributable to EnPro Industries, Inc.	$	33.1	$	29.3	$	49.3	$	47.3
Denominator:
Weighted-average shares – basic	20.8		20.6		20.8		20.6
Share-based awards	—		0.2		—		0.2
Weighted-average shares – diluted	20.8		20.8		20.8		20.8
Basic earnings per share attributable to EnPro Industries, Inc.	$	1.59	$	1.42	$	2.37	$	2.30
Diluted earnings per share attributable to EnPro Industries, Inc.	$	1.59	$	1.41	$	2.36	$	2.28

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The calculation of diluted earnings per share for the quarter ended June 30, 2022 excluded 0.1 million of potentially dilutive stock options because they were out-of-the-money and their inclusion would be anti-dilutive. We also excluded an immaterial amount of anti-dilutive stock options in the calculation of diluted earnings per share for the six months ended June 30, 2022.

5.    Inventories

	June 30, 2022		December 31, 2021
	(in millions)
Finished products	$	60.0	$	56.8
Work in process	35.6		41.8
Raw materials and supplies	79.7		66.2
	175.3		164.8
Reserve to reduce certain inventories to LIFO basis	(7.3)		(4.8)
Total inventories	$	168.0	$	160.0

We use the last-in, first-out (“LIFO”) method of valuing certain of our inventories. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs, which are subject to change until the final year-end LIFO inventory valuation.

6.    Goodwill and Other Intangible Assets

The changes in the net carrying value of goodwill by reportable segment for the six months ended June 30, 2022, are as follows:

	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
	(in millions)
Goodwill as of December 31, 2021	279.4		668.7		5.1		$	953.2
Acquisition of business	—		1.6		—		1.6
Foreign currency translation	(3.6)		(7.7)		—		(11.3)
Goodwill as of June 30, 2022	$	275.8	$	662.6	$	5.1	$	943.5

The goodwill balances reflected above are net of accumulated impairment losses of $27.8 million for the Sealing Technologies segment and $108.7 million for the Engineered Materials segment as of June 30, 2022 and December 31, 2021.

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Identifiable intangible assets are as follows:

	As of June 30, 2022				As of December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(in millions)
Amortized:
Customer relationships	$	522.6	$	177.6	$	536.5	$	166.0
Existing technology	479.8		66.9		480.8		49.5
Trademarks	69.8		26.9		70.9		24.9
Other	41.1		27.1		41.4		22.4
	1,113.3		298.5		1,129.6		262.8
Indefinite-Lived:
Trademarks	46.4		—		46.6		—
Total	$	1,159.7	$	298.5	$	1,176.2	$	262.8

Amortization for the quarters and six months ended June 30, 2022 and 2021 were $19.6 million, $11.3 million, $39.4 million, and $22.6 million , respectively.

7.    Accrued Expenses

	June 30, 2022		December 31, 2021
	(in millions)
Salaries, wages and employee benefits	$	44.5	$	60.5
Interest	4.9		4.9
Environmental	17.1		11.3
Income taxes	13.5		10.6
Taxes other than income taxes	9.4		9.4
Operating lease liabilities	9.7		10.0
Other	25.2		28.5
	$	124.3	$	135.2

8.     Long-Term Debt

Senior Secured Credit Facilities

On December 17, 2021, we entered into a Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”) among the Company and EnPro Holdings, as borrowers, certain foreign subsidiaries of the Company from time to time party thereto, as designated borrowers, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. The Amended Credit Agreement amends, restates and replaces the Second Amended and Restated Credit Agreement dated as of June 28, 2018, as amended, among the Company and EnPro Holdings as borrowers, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

The Amended Credit Agreement provides for credit facilities in the initial aggregate principal amount of $1,007.5 million, consisting of a five-year, senior secured revolving credit facility of $400.0 million (the “Revolving Credit Facility”), a $142.5 million senior secured term loan facility in replacement of our existing senior secured term loan facility, maturing September 25, 2024 (the “Term Loan A-1 Facility”), a five-year, senior secured term loan facility of $315.0 million (the “Term Loan A-2 Facility”) and a 364-day, senior secured term loan facility of $150.0 million (the “364-Day Facility” and together with the Revolving Credit Facility, the Term Loan A-1 Facility and the Term Loan A-2 Facility, the “Facilities”). The Amended Credit Agreement also provides that we may seek incremental term loans and/or additional revolving credit commitments in an amount equal to the greater of $275.0 million and 100% of consolidated EBITDA for the most recently ended four-quarter period for which we have reported financial results, plus additional amounts based on a consolidated senior secured leverage ratio. The Amended Credit Agreement became effective on December 17, 2021.

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Initially, borrowings under the Facilities (other than the 364-Day Facility) bear interest at an annual rate of LIBOR plus 1.75% or base rate plus 0.75%, although these interest rates are subject to incremental increase or decrease based on a consolidated total net leverage ratio. Borrowings under the 364-Day Facility bear interest at an annual rate of LIBOR plus 1.50% or base rate plus 0.50%. In addition, a commitment fee accrues with respect to the unused amount of the Revolving Credit Facility at an annual rate of 0.225%, which rate is also subject to incremental increase or decrease based on a consolidated total net leverage ratio. The Amended Credit Agreement contains customary LIBOR replacement provisions.

The Term Loan A-1 Facility amortizes on a quarterly basis in an annual amount equal to 2.50% of the original principal amount of the Term Loan A-1 Facility ($150.0 million) in year one after the closing, 5.00% of such original principal amount in year two and 1.25% of such original principal amount in each of the first three quarters of year three, with the remaining outstanding principal amount payable at maturity. The Term Loan A-2 Facility amortizes on a quarterly basis in an annual amount equal to 2.5% of the original principal amount of the Term Loan A-2 Facility in each of years one through three, 5.0% of such original principal amount in year four and 1.25% of such original principal amount in each of the first three quarters of year five, with the remaining outstanding principal amount payable at maturity. The 364-Day Facility does not amortize and will be payable in full at maturity. The Facilities are subject to prepayment with the net cash proceeds of certain asset sales, casualty or condemnation events and non-permitted debt issuances.

The Company and EnPro Holdings are the permitted borrowers under the Facilities. The Company may also from time to time designate any of its wholly owned foreign subsidiaries as a borrower under the Revolving Credit Facility. Each of the Company’s domestic subsidiaries (other than any subsidiaries that may be designated as “unrestricted” by the Company from time to time, and inactive subsidiaries) is required to guarantee the obligations of the borrowers under the Facilities, and each of the Company’s existing domestic subsidiaries (other than inactive subsidiaries) has entered into the Amended Credit Agreement to provide such a guarantee.

Borrowings under the Facilities are secured by a first-priority pledge of certain assets. The Amended Credit Agreement contains certain financial covenants and required financial ratios including a maximum consolidated total net leverage and a minimum consolidated interest coverage as defined in the Amended Credit Agreement. We were in compliance with all covenants of the Amended Credit Agreement as of June 30, 2022.

The borrowing availability under our Revolving Credit Facility at June 30, 2022 was $294.2 million after giving consideration to $10.8 million of outstanding letters of credit and $95.0 million of outstanding borrowings. The outstanding principal balance of the Term Loan A-1 Facility, Term Loan A-2 Facility and 364-Day Facility at June 30, 2022 was $139.7 million, $311.1 million and $100.0 million, respectively.

Senior Notes

On October 17, 2018, we completed the offering of $350.0 million aggregate principal amount of 5.75% Senior Notes due 2026 (the "Senior Notes") and applied the net proceeds of that offering, together with borrowings under the Revolving Credit Facility, to redeem on October 31, 2018 the full $450.0 million aggregate outstanding principal amount of the 5.875% Senior Notes due 2022.

The Senior Notes were issued to investors at 100% of the principal amount thereof. The Senior Notes are unsecured, unsubordinated obligations of EnPro and mature on October 15, 2026. Interest on the Senior Notes accrues at a rate of 5.75% per annum and is payable semi-annually in cash in arrears on April 15 and October 15 of each year. 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 October 15, 2021, 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. Each holder of the Senior Notes may require us to repurchase some or all of the Senior Notes held by such holder 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, paying dividends and repurchasing shares of our common stock, subject in each case to specified exceptions and qualifications set forth in the indenture. The indenture further requires us to apply the net cash proceeds of certain asset sales not reinvested in acquisitions, or used to repay or otherwise reduce specified indebtedness within

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a specified period, in the event of the net proceeds exceeding a specified amount, to offer to repurchase the Senior Notes at a price equal to 100.0% of the principal amount thereof plus accrued and unpaid interest.

9.    Pensions

The components of net periodic benefit cost for our U.S. and foreign defined benefit pension plans for the quarters and six months ended June 30, 2022 and 2021, are as follows:

	Quarters Ended June 30,				Six Months Ended June 30,
	Pension Benefits				Pension Benefits
	2022		2021		2022		2021
	(in millions)
Service cost	$	0.3	$	0.4	$	0.7	$	0.8
Interest cost	2.5		2.2		4.9		4.5
Expected return on plan assets	(3.3)		(4.6)		(6.6)		(9.1)
Amortization of prior service cost	—		0.1		—		0.1
Amortization of net loss	0.2		0.2		0.3		0.3
Net periodic benefit cost (benefit)	$	(0.3)	$	(1.7)	$	(0.7)	$	(3.4)

No contributions were made in the six months ended June 30, 2022 to our U.S. defined benefit pension plans and we do not anticipate making contributions in 2022 to these plans.

10.    Shareholders' Equity

Changes in shareholders' equity for the six months ended June 30, 2022 are as follows:

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (loss)		Treasury Stock		Total Shareholders' Equity		Redeemable Non-controlling Interests
(in millions, except per share data)	Shares	Amount
Balance, December 31, 2021	20.7	$	0.2	$	303.6	$	949.4	$	14.6	$	(1.2)	$	1,266.6	$	50.1
Net income	—	—		—		16.2		—		—		16.2		0.3
Other comprehensive loss	—	—		—		—		(11.7)		—		(11.7)		(1.0)
Dividends ($0.28 per share)	—	—		—		(5.8)		—		—		(5.8)		—
Incentive plan activity	0.1	—		(4.1)		—		—		—		(4.1)		—
Other	—	—		0.1		—		—		—		0.1		(0.1)
Balance, March 31, 2022	20.8	0.2		299.6		959.8		2.9		(1.2)		1,261.3		49.3
Net income	—	—		—		33.1		—		—		33.1		(0.1)
Other comprehensive income	—	—		—		—		(14.9)		—		(14.9)		(1.1)
Dividends ($0.28 per share)	—	—		—		(5.9)				—		(5.9)		—
Incentive plan activity	—	—		1.4		—		—		—		1.4		—
Balance, June 30, 2022	20.8	$	0.2	$	301.0	$	987.0	$	(12.0)	$	(1.2)	$	1,275.0	$	48.1

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Changes in shareholders' equity for the six months ended June 30, 2021 are as follows:

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Shareholders' Equity		Redeemable Non-controlling Interests
(in millions, except per share data)	Shares	Amount
Balance, December 31, 2020	20.5	$	0.2	$	289.6	$	794.8	$	(4.9)	$	(1.2)	$	1,078.5	$	48.4
Net income	—	—		—		18.0		—		—		18.0		0.1
Other comprehensive loss	—	—		—		—		(7.9)		—		(7.9)		(0.5)
Dividends ($0.27 per share)	—	—		—		(5.7)		—		—		(5.7)		—
Incentive plan activity	0.1	—		1.2		—		—		—		1.2		—
Other	—	—		(0.1)		(3.1)		—		—		(3.2)		3.2
Balance, March 31, 2021	20.6	0.2		290.7		804.0		(12.8)		(1.2)		1,080.9		51.2
Net income (loss)	—	—		—		29.3		—		—		29.3		(0.1)
Other comprehensive income	—	—		—		—		11.8		—		11.8		0.6
Dividends ($0.27 per share)	—	—		—		(5.6)				—		(5.6)		—
Incentive plan activity	—	—		1.6		—		—		—		1.6		—
Other	—	—		(0.1)		0.2		—		—		0.1		(0.1)
Balance, June 30, 2021	20.6	$	0.2	$	292.2	$	827.9	$	(1.0)	$	(1.2)	$	1,118.1	$	51.6

We intend to declare regular quarterly cash dividends on our common stock, as determined by our board of directors, after taking into account our current and projected cash flows, earnings, financial position, debt covenants and other relevant factors. In accordance with the board of directors' declaration, total dividend payments of $11.7 million were made during the six months ended June 30, 2022.

In July 2022, our board of directors declared a dividend of $0.28 per share, payable on September 14, 2022 to all shareholders of record as of August 31, 2022.

In October 2020, our board of directors authorized the expenditure of up to $50.0 million for the repurchase of our outstanding common shares through October 2022. We have not made any repurchases under this authorization.

In February 2022, we issued stock options to certain key executives for 0.1 million common shares with an exercise price of $106.54 per share. The options vest pro-rata on the first, second and third anniversaries of the grant date, subject to continued employment. No options have a term greater than 10 years.

We determine the fair value of stock options using the Black-Scholes option pricing formula as of the grant date. Key inputs into this formula include expected term, expected volatility, expected dividend yield, and the risk-free interest rate. This fair value is amortized on a straight line basis over the vesting period.

The expected term represents the period that our stock options are expected to be outstanding, and is determined based on historical experience of similar awards, given the contractual terms of the awards, vesting schedules, and expectations of future employee behavior. The fair value of stock options reflects a volatility factor calculated using historical market data for EnPro's common stock. The time frame used was approximated as a six-year period from the grant date for the awards. The dividend assumption is based on our expectations as of the grant date. We base the risk-free interest rate on the yield to maturity at the time of the stock option grant on zero-coupon U.S. government bonds having a remaining life equal to the option's expected life.

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The option awards issued in 2022 had a fair value of $39.07 per share at their grant date. The following assumptions were used to estimate the fair value of the 2022 option awards:

Average expected term	6 years
Expected volatility	39.88	%
Risk-free interest rate	1.89	%
Expected dividend yield	1.05	%

11.    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 Technologies segment designs, manufactures and sells sealing products, including: metallic, non-metallic and composite material gaskets, dynamic seals, compression packing, resilient metal seals, elastomeric seals, custom-engineered mechanical seals for applications in the aerospace industry and other markets, hydraulic components, expansion joints, sanitary gaskets, hoses and fittings for the hygienic process industries, fluid transfer products for the pharmaceutical and biopharmaceutical industries, and heavy-duty commercial vehicle parts used in wheel-end and suspension components. These products are used in a variety of industries, including chemical and petrochemical processing, pulp and paper processing, power generation, food and pharmaceutical processing, primary metal manufacturing, mining, water and waste treatment, heavy-duty trucking, aerospace, medical, filtration and semiconductor fabrication. In many of these industries, performance and durability are vital for safety and environmental protection. Many of our products are used in highly demanding applications, e.g., where extreme temperatures, extreme pressures, corrosive environments, strict tolerances, and/or worn equipment create challenges for product performance.

Our Advanced Surface Technologies segment applies proprietary technologies, processes, and capabilities to deliver highly differentiated suites of products and services for the most challenging applications in high growth markets. The segment’s products and services are used in highly demanding environments requiring performance, precision and repeatability, with a low tolerance for failure. The segment’s services include cleaning, coating, testing, refurbishment and verification services for critical components and assemblies used in state-of-the-art advanced node semiconductor manufacturing equipment. It designs, manufactures, and sells specialized optical filters and thin-film coatings for the most challenging applications in the industrial technology, life sciences, and semiconductor markets and complex front-end wafer processing sub-systems, new and refurbished electrostatic chuck pedestals, thin film coatings, and edge-welded metal bellows for the semiconductor equipment industry and for critical applications in the space, aerospace and defense markets.

Our Engineered Materials segment includes operations that design, manufacture and sell self-lubricating, non-rolling metal-polymer, engineered plastics, and fiber reinforced composite bearing products, critical service flange gaskets, seals and electrical flange isolation kits used in high-pressure wellhead equipment, flow lines, water injection lines, sour hydrocarbon process applications, and crude oil and natural gas pipeline/transmission line applications. These products are used in a wide range of applications, including the automotive, aerospace, pharmaceutical, pulp and paper, natural gas, health, power generation, machine tools, air treatment, refining, petrochemical and general industrial markets.

We measure operating performance based on segment earnings before interest, income taxes, depreciation, amortization, and other selected items ("Adjusted Segment EBITDA"), which is segment revenue reduced by operating expenses and other costs identifiable with the segment, excluding acquisition and divestiture expenses, restructuring costs, impairment charges, non-controlling interest compensation, amortization of the fair value adjustment to acquisition date inventory, and depreciation and amortization. Adjusted Segment EBITDA is not defined under GAAP and may not be comparable to similarly-titled measures used by other companies. 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 Adjusted Segment EBITDA. The accounting policies of the reportable segments are the same as those for EnPro.

Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa being subject to reduction for certain types of employment terminations of the sellers. This expense is recorded in selling, general, and administrative expenses on our Consolidated Statements of Operations and is directly related to the terms of the acquisitions. This expense will continue to be recognized as

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compensation expense over the term of the put and call options associated with the acquisitions unless certain employment terminations have occurred.

Segment operating results and other financial data for the quarters and six months ended June 30, 2022 and 2021 were as follows:

	Quarters Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
Sales
Sealing Technologies	$	155.9	$	162.5	$	309.5	$	309.0
Advanced Surface Technologies	121.5		59.2		238.2		113.9
Engineered Materials	56.5		80.0		115.5		160.4
	333.9		301.7		663.2		583.3
Intersegment sales	(0.6)		(3.1)		(1.2)		(5.4)
Total sales	$	333.3	$	298.6	$	662.0	$	577.9
Adjusted Segment EBITDA
Sealing Technologies	$	42.5	$	42.4	$	76.0	$	76.4
Advanced Surface Technologies	37.8		15.6		72.7		32.9
Engineered Materials	9.5		13.0		18.7		25.6
	$	89.8	$	71.0	$	167.4	$	134.9
Reconciliation of Adjusted Segment EBITDA to income before income taxes
Adjusted Segment EBITDA	$	89.8	$	71.0	$	167.4	$	134.9
Acquisition and divestiture expenses	(0.3)		—		(0.4)		(0.1)
Non-controlling interest compensation allocation	(1.4)		(1.3)		(0.5)		(2.9)
Amortization of fair value adjustment to acquisition date inventory	(1.0)		(2.3)		(11.3)		(4.8)
Restructuring and impairment expense	(0.9)		(2.7)		(1.3)		(4.5)
Depreciation and amortization expense	(27.9)		(18.5)		(55.9)		(37.4)
Corporate expenses	(9.5)		(12.8)		(22.9)		(24.3)
Interest expense, net	(7.7)		(3.8)		(14.6)		(7.6)
Other income (expense), net	(1.8)		0.4		—		—
Income before income taxes	$	39.3	$	30.0	$	60.5	$	53.3

Segment assets are as follows:

	June 30, 2022		December 31, 2021
	(in millions)
Sealing Technologies	$	696.0	$	697.5
Advanced Surface Technologies	1,624.4		1,686.5
Engineered Materials	166.4		160.3
Corporate	327.9		425.5
	$	2,814.7	$	2,969.8

 

Backlog

As of June 30, 2022, the aggregate amount of transaction price of remaining performance obligations, or backlog, on a consolidated basis was $429.4 million. Approximately 94% of these obligations are expected to be satisfied within one year.

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There is no certainty these orders will result in actual sales at the times or in the amounts ordered. In addition, for most of our business, this total is not particularly predictive of future performance because of our short lead times and some seasonality.

Revenue by End Market

Due to the diversified nature of our business and the wide array of products that we offer, we sell into a number of end markets. Underlying economic conditions within these markets are a major driver of our segments' sales performance. Below is a summary of our third-party sales by major end market with which we did business for the quarters and six months ended June 30, 2022 and 2021:

	Quarter Ended June 30, 2022
(in millions)	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
Aerospace	$	10.7	$	1.1	$	3.9	$	15.7
Automotive	0.4		0.6		14.8		15.8
Chemical and material processing	19.7		—		—		19.7
Food and pharmaceutical	18.5		—		—		18.5
General industrial	41.5		7.9		28.2		77.6
Medium-duty/heavy-duty truck	43.4		—		2.4		45.8
Oil and gas	5.5		1.1		5.9		12.5
Power generation	12.5		—		0.9		13.4
Semiconductors	1.2		110.3		—		111.5
Other	2.2		0.6		—		2.8
Total third-party sales	$	155.6	$	121.6	$	56.1	$	333.3

	Quarter Ended June 30, 2021
(in millions)	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
Aerospace	$	8.3	$	3.0	$	1.5	$	12.8
Automotive	0.6		0.2		16.3		17.1
Chemical and material processing	19.0		—		11.4		30.4
Food and pharmaceutical	16.6		—		0.3		16.9
General industrial	44.9		5.8		30.6		81.3
Medium-duty/heavy-duty truck	47.6		—		2.7		50.3
Oil and gas	5.4		1.7		15.8		22.9
Power generation	9.6		—		0.9		10.5
Semiconductors	5.4		47.9		—		53.3
Other	2.3		0.5		0.3		3.1
Total third-party sales	$	159.7	$	59.1	$	79.8	$	298.6

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	Six Months Ended June 30, 2022
(in millions)	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
Aerospace	$	18.8	$	3.1	$	7.1	$	29.0
Automotive	1.1		0.8		30.2		32.1
Chemical and material processing	40.0		—		—		40.0
Food and pharmaceutical	37.5		—		—		37.5
General industrial	83.5		14.4		59.3		157.2
Medium-duty/heavy-duty truck	88.2		—		4.6		92.8
Oil and gas	10.6		1.7		12.0		24.3
Power generation	22.9		0.1		1.6		24.6
Semiconductors	2.5		216.3		—		218.8
Other	4.0		1.7		—		5.7
Total third-party sales	$	309.1	$	238.1	$	114.8	$	662.0

	Six Months Ended June 30, 2021
(in millions)	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
Aerospace	$	15.0	$	4.5	$	2.8	$	22.3
Automotive	1.0		0.5		35.0		36.5
Chemical and material processing	36.6		—		21.9		58.5
Food and pharmaceutical	33.0		—		0.8		33.8
General industrial	87.6		12.2		60.8		160.6
Medium-duty/heavy-duty truck	86.5		—		5.5		92.0
Oil and gas	9.6		2.4		30.7		42.7
Power generation	20.7		—		1.8		22.5
Semiconductors	10.1		92.8		—		102.9
Other	4.1		1.4		0.6		6.1
Total third-party sales	$	304.2	$	113.8	$	159.9	$	577.9

12.    Derivatives and Hedging

In September 2018, we entered into cross-currency swap agreements (the "Original Swap") with a notional amount of $200.0 million to manage foreign currency risk by effectively converting a portion of the interest payments related to our fixed-rate U.S. Dollar (“USD”)-denominated Senior Notes, including the semi-annual interest payments thereunder, to interest payments on fixed-rate Euro-denominated debt of 172.8 million EUR with a weighted average interest rate of 2.8%, with interest payment dates of March 15 and September 15 of each year. The Original Swap agreement matures on September 15, 2022.

In May 2019, we entered into additional cross-currency swap agreements (the "Additional Swap") with a notional amount of $100.0 million to manage an increased portion of our foreign currency risk by effectively converting a portion of the interest payments related to our fixed-rate USD-denominated Senior Notes, including the semi-annual interest payments thereunder, to interest payments on fixed-rate Euro-denominated debt of 89.6 million EUR with a weighted average interest rate of 3.5%, with interest payment dates of April 15 and October 15 of each year. The Additional Swap agreement matures on October 15, 2026.

During the term of the swap agreements, we will receive semi-annual payments from the counterparties due to the difference between the interest rate on the Senior Notes and the interest rate on the Euro debt underlying each of the swaps. There was no principal exchange at the inception of the arrangements, and there will be no exchange at maturity. At maturity (or earlier at our option), we and the counterparties will settle the swap agreements at their fair value in cash based on the aggregate notional amount and the then-applicable currency exchange rate compared to the exchange rate at the time the swap agreements were entered into.

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We have designated these cross-currency swaps as qualifying hedging instruments and are accounting for them as a net investment hedge. At June 30, 2022, the fair value of the Swap and the Additional Swap equaled $21.9 million and $9.5 million and were recorded within our other current assets and other (non-current) assets, respectively, on the Consolidated Balance Sheet. The gains and losses resulting from fair value adjustments to the cross currency-swap agreements, excluding interest accruals related to the above receipts, are recorded in accumulated other comprehensive income within our cumulative foreign currency translation adjustment, as the swaps are effective in hedging the designated risk. Cash flows related to the cross-currency swaps are included in operating activities in the Consolidated Statements of Cash Flows, aside from the ultimate settlement with the counterparties, which will be included in investing activities.

13.    Fair Value Measurements

Assets and liabilities measured at fair value on a recurring basis are summarized as follows:

	Fair Value Measurements as of
	June 30, 2022		December 31, 2021
	(in millions)
Assets
Foreign currency derivatives	31.4		8.7
Deferred compensation assets	11.3		10.9
	$	42.7	$	19.6
Liabilities
Deferred compensation liabilities	$	11.6	$	11.4

Our deferred compensation assets and liabilities are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. Our foreign currency derivatives are classified as Level 2 since their value is calculated based upon observable inputs including market USD/Euro exchange rates and market interest rates.

The carrying values of our significant financial instruments reflected in the Consolidated Balance Sheets approximated their respective fair values except for the following instruments:

	June 30, 2022				December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in millions)
Long-term debt	$	891.2	$	885.5	$	976.6	$	998.3

The fair values for long-term debt are based on quoted market prices for identical liabilities, but these are considered Level 2 computations because the market is not active.

14.    Accumulated Other Comprehensive Income (Loss)                                        

Changes in accumulated other comprehensive income (loss) by component (after tax) for the quarter ended June 30, 2022 are as follows:

(in millions)	Unrealized Translation Adjustments		Pension and Other Postretirement Plans		Total
Beginning balance	$	34.9	$	(32.0)	$	2.9
Other comprehensive loss before reclassifications	(16.1)		—		(16.1)
Amounts reclassified from accumulated other comprehensive loss	—		0.1		0.1
Net current-period other comprehensive income (loss)	(16.1)		0.1		(16.0)
Less: other comprehensive income attributable to redeemable non-controlling interests	(1.1)		—		(1.1)
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc.	(15.0)		0.1		(14.9)
Ending balance	$	19.9	$	(31.9)	$	(12.0)

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    Changes in accumulated other comprehensive income (loss) by component (after tax) for the quarter ended June 30, 2021 are as follows:

(in millions)	Unrealized Translation Adjustments		Pension and Other Postretirement Plans		Total
Beginning balance	$	23.7	$	(36.5)	$	(12.8)
Other comprehensive income before reclassifications	12.2		—		12.2
Amounts reclassified from accumulated other comprehensive loss	—		0.2		0.2
Net current-period other comprehensive income	12.2		0.2		12.4
Less: other comprehensive income attributable to redeemable non-controlling interests	0.6		—		0.6
Net current-period other comprehensive income attributable to EnPro Industries, Inc.	11.6		0.2		11.8
Ending balance	$	35.3	$	(36.3)	$	(1.0)

Changes in accumulated other comprehensive income (loss) by component (after tax) for the six months ended June 30, 2022 are as follows:

(in millions)	Unrealized Translation Adjustments		Pension and Other Postretirement Plans		Total
Beginning balance	$	46.7	$	(32.1)	$	14.6
Other comprehensive loss before reclassifications	(29.0)		—		(29.0)
Amounts reclassified from accumulated other comprehensive income	—		0.2		0.2
Net current-period other comprehensive income (loss)	(29.0)		0.2		(28.8)
Less: other comprehensive loss attributable to redeemable non-controlling interests	(2.2)		—		(2.2)
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc.	(26.8)		0.2		(26.6)
Ending balance	$	19.9	$	(31.9)	$	(12.0)

Changes in accumulated other comprehensive income (loss) by component (after tax) for the six months ended June 30, 2021 are as follows:

(in millions)	Unrealized Translation Adjustments		Pension and Other Postretirement Plans		Total
Beginning balance	$	31.7	$	(36.6)	$	(4.9)
Other comprehensive loss before reclassifications	3.8		—		3.8
Amounts reclassified from accumulated other comprehensive loss	—		0.3		0.3
Net current-period other comprehensive income (loss)	3.8		0.3		4.1
Less: other comprehensive loss attributable to redeemable non-controlling interests	0.2		—		0.2
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc.	3.6		0.3		3.9
Ending balance	$	35.3	$	(36.3)	$	(1.0)

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Reclassifications out of accumulated other comprehensive income (loss) for the six months ended June 30, 2022 and 2021 are as follows:

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)								Affected Statement of Operations Caption
	Quarters Ended     June 30,				Six Months Ended   June 30,
(in millions)	2022		2021		2022		2021
Pension and other postretirement plans adjustments:
Actuarial losses	$	0.2	$	0.2	$	0.3	$	0.3	(1)
Prior service costs	—		0.1		—		0.1		(1)
Total before tax	0.2		0.3		0.3		0.4		Income before income taxes
Tax benefit	(0.1)		(0.1)		(0.1)		(0.1)		Income tax expense
Net of tax	$	0.1	$	0.2	$	0.2	$	0.3	Net income

(1)These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost. As these are components of net periodic pension cost other than service cost, the affected Statement of Operations captions are other income (expense) (See Note 9, “Pensions"” for additional details).

15.    Commitments and Contingencies

General

A description of certain environmental 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 laws and regulations of the U.S. and foreign countries. We take a proactive approach in our efforts to comply with these laws and regulations 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 or an investigation to determine responsibility for environmental conditions at 19 sites. At 12 of these sites, the future cost per site for us or our subsidiary is expected to exceed $100,000. Of these 19 sites, 17 are sites where we or one or more of our subsidiaries formerly conducted business operations but no longer do, and 2 are sites where we conduct manufacturing operations. Investigations have been completed for 16 sites and are in progress at 3 sites. An investigation to determine responsibility for environmental conditions is ongoing at one site.

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. For sites with multiple future projected cost scenarios for identified feasible investigation and remediation options where no one estimate is more likely than all the others, our policy is to accrue the lowest estimate among the range of estimates. 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 the remediation of similar contaminated sites. Liabilities are established for all sites based on these factors. As assessments and remediation progress at individual sites, these liabilities are reviewed and adjusted to reflect additional technical data and legal information. As of June 30, 2022 and December 31, 2021, we had established liabilities aggregating $45.2 million and $46.6 million, respectively, for estimated future expenditures relating to environmental contingencies. The current portion of our aggregate environmental liability at June 30, 2022 was $17.1 million. 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 fully or partially 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.

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We believe that our accruals for specific environmental liabilities are adequate based on currently available information. Based upon limited information regarding any incremental remediation or other actions that may be required at these sites, we cannot estimate any further loss or a reasonably possible range of loss related to these matters. 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.

Lower Passaic River Study Area

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 19 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 a predecessor of EnPro Holdings when it sold a majority interest in Crucible Materials Corporation (the successor of Crucible) in 1985. The United States Environmental Protection Agency (the “EPA”) notified our subsidiary in September 2003 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.

EnPro Holdings 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. In September 2018, EnPro Holdings withdrew from the Cooperating Parties Group but remains a party to the May 2007 Administrative Order on Consent. 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 $1.73 billion, although estimates of the costs and the timing of costs are inherently imprecise. On March 3, 2016, the EPA issued the final Record of Decision (ROD) as to the remedy for the lower eight miles of the Lower Passaic River Study Area, with the maximum estimated cost being reduced by the EPA from $1.73 billion to $1.38 billion, primarily due to a reduction in the amount of cubic yards of material that will be dredged. In October 2016, Occidental Chemical Corporation, the successor to the entity that operated the Diamond Alkali chemical manufacturing facility, reached an agreement with the EPA to develop the design for this proposed remedy at an estimated cost of $165 million. The EPA has estimated that it will take approximately four years to develop this design. On June 30, 2018, Occidental Chemical Corporation sued over 120 parties, including the Company, in the United States District Court for New Jersey seeking recovery of response costs under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA").

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.

On April 14, 2021, the EPA issued its proposed remedy for the upper nine miles of the river, with an estimated present value cost of approximately $441 million. The proposed remedy would involve dredging and capping of the river sediment as an interim remedy followed by a period of monitoring to evaluate the response of the river system to the interim remedy.

When the EPA initiated the allocation process in 2017, it explained that a fair, carefully structured, information-based allocation was necessary to promote settlements. With the completion of the allocation process, in the second quarter of 2021 the EPA began settlement negotiations with the parties that participated in the allocation process, including EnPro Holdings. Our reserve for this site at June 30, 2022 was $6.6 million. Further adjustments to our reserve for this site are possible as further information is developed in the course of these discussions.

Arizona Uranium Mines

EnPro Holdings has received notices from the EPA asserting that it is a potentially responsible party under the CERCLA as the successor to a former operator of eight uranium mines in Arizona. The former operator conducted operations at the mines from 1954 to 1957. In the 1990s, remediation work performed by others at these sites consisted of capping the exposed areas of the mines. We have previously reserved amounts of probable loss associated with these mines, principally including the cost of the investigative work to be conducted at such mines. We entered into an Administrative Settlement Agreement and Order on Consent for Interim Removal Action with the EPA effective November 7, 2017 for the performance of this work. We entered into a First Modification of Original Administrative Settlement Agreement and Order on Consent effective July 8, 2022 for the performance of Engineering Evaluations and Cost Analyses of potential remedial options at each of the sites. In 2020, EPA

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initiated group discussions with EnPro Holdings and other potentially responsible parties to resolve various technical issues, including the development of cleanup standards. Based on these discussions and subsequent discussions with other responsible parties with similar sites, we have concluded that further remedial work beyond maintenance of and minor repairs to the existing caps is probable, and we have evaluated the feasibility of various remediation scenarios. Our reserve at June 30, 2022 for this site was $13.3 million, which reflects the low end of the range of our reasonably likely liability with respect to these sites. We are not able at this time to estimate the upper end of a range of liability with respect to these sites.

On October 18, 2021, the United States District Court for the District of Arizona approved and entered a Consent Decree pursuant to which the U.S government will reimburse the Company for 35% of necessary costs of response, as defined in 42 U.S.C. section 9601(25), previously or to be in the future incurred by the Company which arise out of or in connection with releases or threatened releases of hazardous substances at or emanating from the mine sites. We expect future contributions of $3.4 million from the U.S. government towards remediation of the site. This amount was included in other assets in the accompanying consolidated balance sheet at June 30, 2022.

Except with respect to 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.

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 EnPro Holdings until 1983 when its assets and liabilities were distributed to a new subsidiary, Crucible Materials Corporation. EnPro Holdings 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 and is no longer conducting 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 EnPro Holdings' period of ownership of Crucible. Based on EnPro Holdings' 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, historical experience, and trends result in changes to our estimate.

Changes in the product warranty liability for the six months ended June 30, 2022 and 2021 are as follows:

	2022		2021
	(in millions)
Balance at beginning of year	$	4.9	$	6.7
Net charges to expense	0.7		1.0
Settlements made	(0.5)		(1.5)
Balance at end of period	$	5.1	$	6.2

Asbestos Insurance Receivables

Asbestos litigation claims against certain of our subsidiaries, including Garlock Sealing Technologies, LLC ("GST"), were resolved pursuant to the joint plan of reorganization (the "Joint Plan") filed in proceedings under Chapter 11 of the United States Bankruptcy Code that was consummated on July 29, 2017. Under the Joint Plan, GST and EnPro Holdings retained their rights to seek reimbursement under insurance policies for any amounts they have paid in the past to resolve asbestos claims, including contributions made to the asbestos claims resolution trust established under the Joint Plan (the "Trust"). These policies include a number of primary and excess general liability insurance policies that were purchased by EnPro Holdings and were in effect prior to January 1, 1976 (the “Pre-GST Coverage Block”). The policies provide coverage for “occurrences” happening during the policy periods and cover losses associated with product liability claims against EnPro Holdings and

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certain of its subsidiaries. Asbestos claims against GST are not covered under these policies because GST was not a subsidiary of EnPro Holdings prior to 1976. The Joint Plan provides that EnPro Holdings may retain the first $25 million of any settlements and judgments collected for non-GST asbestos claims related to insurance policies in the Pre-GST Coverage Block and EnPro Holdings and the Trust will share equally in any settlements and judgments EnPro Holdings may collect in excess of $25 million. To date, EnPro Holdings has collected almost $22 million in settlements for non-GST asbestos claims related to the Pre-GST Coverage Block and anticipates further possible collections when and if the Trust begins making claims payments on non-GST Claims. Under such circumstances, we believe that EnPro Holdings could potentially bill and collect over time, as much as $10 million of insurance proceeds for non-GST asbestos claims to reimburse it for such Trust payments to non-GST Trust claimants. After EnPro Holdings collects the next approximately $3 million of that coverage, remaining collections for non-GST asbestos claims from the Pre-GST Coverage Block would be shared equally with the Trust. We received payments of $2.2 million from an insurer in the GST Coverage Block in the first quarter of 2022.

In the second quarter of 2022, based on our analysis and projection of expected future probable collections from both the Pre-GST Coverage Block as well as insurance recoveries from insolvent carriers, we lowered our asbestos receivable balance, resulting in the recognition of $2.8 million in expense in the second quarter of 2022, which is included in Other Expense on our Consolidated Statement of Operations. At June 30, 2022 we have a receivable of $2.4 million related to these recoveries recorded on our Consolidated Balance Sheet, of which $1.0 million was included in Other Current Assets with the remaining balance in Other Assets.

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

The following is management’s discussion and analysis of certain significant factors that have affected our financial condition, cash flows and operating results during the periods included in the accompanying unaudited consolidated financial statements and the related notes. You should read this in conjunction with those financial statements and the audited consolidated financial statements and related notes included in our annual report on Form 10-K for the fiscal year ended December 31, 2021.

Forward-Looking Information

This quarterly report on Form 10-Q includes statements that reflect projections or expectations of the future financial condition, results of operations and business of EnPro that are subject to risk and uncertainty. We believe those statements to be “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this report, the words “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” and other expressions generally identify forward-looking statements.

We cannot guarantee actual results or events will not differ materially from those projected, estimated, assigned or anticipated in any of the forward-looking statements contained in this report. Important factors that could result in those differences include those specifically noted in the forward-looking statements and those identified in Item 1A, “Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2021, which include:

•impacts from the coronavirus (or COVID-19) pandemic and governmental responses to limit the further spread of COVID-19, including impacts on our company’s operations, and the operations and businesses of our customers and vendors, including whether our operations and those of our customers and vendors will continue to be treated as “essential” operations under government orders restricting business activities or, even if so treated, whether site-specific health and safety concerns might otherwise require certain of our operations to be halted for some period of time;

•uncertainty with respect to the duration and severity of these impacts from the COVID-19 pandemic, including impacts on the general economy, the markets served by our customers (including international markets that may not recover at the same pace as markets in the United States), and consequent reductions in the demand for our products and services, which could result in additional intangible asset impairment charges;

•general economic conditions in the markets served by our businesses and the businesses of our customers, some of which are cyclical and experience periodic downturns;

•the impact of geopolitical activity on those markets, including instabilities associated with the armed conflict in Ukraine and any conflict or threat of conflict that may affect Taiwan;

•prices and availability of raw materials, including as a result of the COVID-19 pandemic or governmental sanctions imposed in response to the commencement or continuation of armed hostilities;

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•uncertainties with respect to our ability to achieve anticipated growth within the semiconductor, life sciences, and other technology-enabled markets;

•the impact of fluctuations in relevant foreign currency exchange rates or unanticipated increases in applicable interest rates;

•unanticipated delays or problems in introducing new products;

•the impact of any labor disputes

•announcements by competitors of new products, services or technological innovations;

•changes in our pricing policies or the pricing policies of our competitors; and

•the amount of any payments required to satisfy contingent liabilities, including those related to discontinued operations, other divested businesses and discontinued operations of our predecessors, including liabilities for certain products, environmental matters, employee benefit and statutory severance obligations and other matters.

We caution our shareholders not to place undue reliance on our forward-looking statements, which speak only as of the date on which such statements were made.

Whenever you read or hear any subsequent written or oral forward-looking statements attributed to us or any person acting on our behalf, you should keep in mind the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Information

In our discussion of our outlook and results of operations, we utilize financial measures that have not been prepared in conformity with generally accepted accounting principles in the United States ("GAAP"). They include adjusted net income attributable to EnPro Industries, Inc., adjusted diluted earnings per share attributable to EnPro Industries, Inc., adjusted earnings before interest, taxes, depreciation, and amortization ("adjusted EBITDA"), and total adjusted segment EBITDA. Tables showing the reconciliation of these non-GAAP financial measures to the comparable GAAP measures are included in "—Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Measures"

We believe non-GAAP metrics are commonly used financial measures for investors to evaluate our operating performance and, when read in conjunction with our consolidated financial statements, present a useful tool to evaluate our ongoing operations and performance from period to period. In addition, these non-GAAP measures are some of the factors we use in internal evaluations of the overall performance of our businesses. We acknowledge that there are many items that impact our reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results. In addition, the non-GAAP measures we use are not necessarily comparable to similarly titled measures used by other companies.

Overview

Overview. We design, develop, manufacture, service and market proprietary engineered industrial products. We have 19 primary manufacturing and service facilities located in 7 countries, including the United States. Over the past several years, we have executed strategic initiatives to enhance the portfolio of businesses that we operate to focus on industrial technology-related businesses with leading technologies, compelling margins, strong cash flow, and high levels of recurring revenue that serve markets with favorable secular tailwinds. These initiatives have increased our ability to provide solutions to the semiconductor, life sciences, and other technology-related industries.

We manage our business as three segments: a Sealing Technologies segment, an Advanced Surface Technologies segment, and an Engineered Materials segment.

Our Sealing Technologies segment designs, manufactures and sells sealing products, including: metallic, non-metallic and composite material gaskets, dynamic seals, compression packing, resilient metal seals, elastomeric seals, custom-engineered mechanical seals for applications in the aerospace industry and other markets, hydraulic components, expansion joints, sanitary gaskets, hoses and fittings for the hygienic process industries, fluid transfer products for the pharmaceutical and biopharmaceutical industries, and heavy-duty commercial vehicle parts used in wheel-end and suspension components. These products are used in a variety of industries, including chemical and petrochemical processing, pulp and paper processing, power generation, food and pharmaceutical processing, primary metal manufacturing, mining, water and waste treatment, heavy-duty trucking, aerospace, medical, filtration and semiconductor fabrication. In many of these industries, performance and durability

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are vital for safety and environmental protection. Many of our products are used in highly demanding applications, e.g., where extreme temperatures, extreme pressures, corrosive environments, strict tolerances, and/or worn equipment create challenges for product performance.

Our Advanced Surface Technologies segment applies proprietary technologies, processes, and capabilities to deliver highly differentiated suites of products and services for the most challenging applications in high growth markets. The segment’s products and services are used in highly demanding environments requiring performance, precision and repeatability, with a low tolerance for failure. The segment’s solutions include cleaning, coating, testing, refurbishment and verification services for critical components and assemblies used in state-of-the-art advanced node semiconductor manufacturing equipment. The segment also designs, manufactures and sells specialized optical filters and thin-film coatings for the most challenging applications in the industrial technology, life sciences, and semiconductor markets and complex front-end wafer processing sub-systems, new and refurbished electrostatic chuck pedestals, and edge-welded metal bellows for the semiconductor equipment industry and for critical applications in the space, aerospace and defense markets.

Our Engineered Materials segment includes operations that design, manufacture and sell self-lubricating, non-rolling metal-polymer, engineered plastics, and fiber reinforced composite bearing products, critical service flange gaskets, seals and electrical flange isolation kits used in high-pressure wellhead equipment, flow lines, water injection lines, sour hydrocarbon process applications, and crude oil and natural gas pipeline/transmission line applications. These products are used in a wide range of applications, including the automotive, aerospace, pharmaceutical, pulp and paper, natural gas, health, power generation, machine tools, air treatment, refining, petrochemical and general industrial markets.

COVID-19 Impacts. COVID-19 continues to significantly impact the health and economic environment around the world. Our customers are principally global manufacturers and the impact of the COVID-19 pandemic on general economic conditions, and more deleterious effects on certain markets, have had and may continue to have negative implications on demand for their goods and consequently on their demand for our products and services. Because of uncertainties with respect to the continuing severity and duration of the COVID-19 outbreak, which may vary significantly in different regions of the world and could be impacted by new variants, the duration and terms of related governmental orders restricting activities, and the timing and pace of any economic recovery as COVID-19 impacts abate in different regions, we cannot predict with precision the extent and duration of any future changes in demand for our products and services due to COVID-19 impacts and the consequent impact on our business and financial results.

All of our primary manufacturing facilities are currently open and generally have not experienced significant supply chain disruptions. Certain operations are experiencing upstream supply chain challenges for raw materials, including certain metals and rubber-related chemicals, as raw material supply, which was reduced in response to the economic slowdown related to the COVID-19 pandemic, has not sufficiently increased to address increasing demand, including inventory restocking, as general economic activity has improved. Additionally, each of our businesses has developed continuity and contingency plans, based on various scenarios in preparation for potential operational disruptions, to permit us to adjust production levels to demand. We cannot predict if and when closures or production changes may arise as a result of implications related to the COVID-19 pandemic.  

Highlights. Financial highlights for the quarters and six months ended June 30, 2022 and 2021 are as follows:

	Quarters Ended     June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions, except per share data)
Net sales	$	333.3	$	298.6	$	662.0	$	577.9
Net income attributable to EnPro Industries, Inc.	$	33.1	$	29.3	$	49.3	$	47.3
Diluted earnings per share attributable to EnPro Industries, Inc.	$	1.59	$	1.41	$	2.36	$	2.28
Adjusted net income attributable to EnPro Industries, Inc.1	$	48.2	$	32.4	$	86.5	$	60.7
Adjusted diluted earnings per share attributable to EnPro Industries, Inc.1	$	2.32	$	1.56	$	4.15	$	2.92
Adjusted EBITDA 1	$	82.0	$	57.2	$	150.0	$	109.3

1 A reconciliation of non-GAAP measures to their respective GAAP measure is located in the Reconciliation of Non-GAAP Financial Measures to the Comparable GAAP Measure at the end of this section.

Our strong sales results in 2022 were driven by organic growth across all three segments and contribution from the NxEdge acquisition despite inflationary cost pressures, ongoing supply chain challenges, and heightened macroeconomic uncertainty. Our results were driven by continued momentum in semiconductor, aerospace, food & pharmaceutical, oil and gas,

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and power generation markets with general industrial markets remaining firm year-over-year. Demand for our leading industrial technology applications remains high.

Our increased adjusted EBITDA compared to the prior-year period was driven primarily by the addition of NxEdge, pricing initiatives, and operating leverage on organic sales growth, partially offset by inflationary raw material costs, rising labor expenses, and the impact of divestitures completed in 2021.

In connection with our growth strategy, we will continue to evaluate making additional acquisitions to take advantage of opportunities that arise. We will consider making additional divestitures over time, and under the right circumstances, to further our long-term strategic goals of refocusing our portfolio on businesses with leading technology, compelling margins, strong cash flow, and high levels of recurring revenue that serve markets with favorable secular tailwinds.

Results of Operations

	Quarters Ended     June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
Sales
Sealing Technologies	$	155.9	$	162.5	$	309.5	$	309.0
Advanced Surface Technologies	121.5		59.2		238.2		113.9
Engineered Materials	56.5		80.0		115.5		160.4
	333.9		301.7		663.2		583.3
Intersegment sales	(0.6)		(3.1)		(1.2)		(5.4)
Net sales	$	333.3	$	298.6	$	662.0	$	577.9
Net income attributable to EnPro Industries, Inc.	$	33.1	$	29.3	$	49.3	$	47.3
Adjusted Segment EBITDA
Sealing Technologies	$	42.5	$	42.4	$	76.0	$	76.4
Advanced Surface Technologies	37.8		15.6		72.7		32.9
Engineered Materials	9.5		13.0		18.7		25.6
Total Adjusted Segment EBITDA	$	89.8	$	71.0	$	167.4	$	134.9
Reconciliation of Adjusted Segment EBITDA to net income attributable to EnPro Industries, Inc.
Adjusted Segment EBITDA	$	89.8	$	71.0	$	167.4	$	134.9
Acquisition and divestiture expenses	(0.3)		—		(0.4)		(0.1)
Non-controlling interest compensation allocation	(1.4)		(1.3)		(0.5)		(2.9)
Amortization of fair value adjustment to acquisition date inventory	(1.0)		(2.3)		(11.3)		(4.8)
Restructuring and impairment expense	(0.9)		(2.7)		(1.3)		(4.5)
Depreciation and amortization expense	(27.9)		(18.5)		(55.9)		(37.4)
Corporate expenses	(9.5)		(12.8)		(22.9)		(24.3)
Interest expense, net	(7.7)		(3.8)		(14.6)		(7.6)
Other income (expense), net	(1.8)		0.4		—		—
Income before income taxes	39.3		30.0		60.5		53.3
Income tax expense	(6.3)		(0.8)		(11.0)		(6.0)
Net income	33.0		29.2		49.5		47.3
Less: net income (loss) attributable to redeemable non-controlling interests	(0.1)		(0.1)		0.2		—
Net income attributable to EnPro Industries, Inc.	$	33.1	$	29.3	$	49.3	$	47.3

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We measure operating performance based on segment earnings before interest, income taxes, depreciation, amortization, and other selected items ("Adjusted Segment EBITDA" or "Segment AEBITDA"), which is segment revenue reduced by operating expenses and other costs identifiable with the segment, excluding acquisition and divestiture expenses, restructuring costs, impairment charges, non-controlling interest compensation, amortization of the fair value adjustment to acquisition date inventory, and depreciation and amortization. Adjusted Segment EBITDA is not defined under GAAP and may not be comparable to similarly-titled measures used by other companies. 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 Adjusted Segment EBITDA. The accounting policies of the reportable segments are the same as those for EnPro.

Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa being subject to reduction for certain types of employment terminations of the sellers. This expense is recorded in selling, general, and administrative expenses on our Consolidated Statements of Operations and is directly related to the terms of the acquisitions. This expense will continue to be recognized as compensation expense over the term of the put and call options associated with each of these acquisitions unless certain employment terminations have occurred.

Other income (expense), net in the table above contains all items included in other (operating) expense and other income (expense) (non-operating) on our Consolidated Statements of Operations for the quarters and six months ended June 30, 2022 and 2021 with the exception of $0.9 million, $2.7 million, $2.3 million, and $4.5 million respectively, of restructuring costs. As noted previously, restructuring costs are excluded from Adjusted Segment EBITDA. Additionally, other income (expense), net in the table above for the quarter and six months ended June 30, 2022 and 2021 includes $(0.9) million, $1.8 million, $(2.1) million, and $2.0 million respectively, of miscellaneous expenses (income) that are either not associated with a particular segment or a segment's continuing product lines and is not considered part of administering the corporate functions. These expenses are included in selling, general and administrative expense on our Consolidated Statements of Operations.

Second Quarter of 2022 Compared to the Second Quarter of 2021

Sales of $333.3 million in the second quarter of 2022 increased 11.6% from $298.6 million in the second quarter of 2021. The following table summarizes the impact of acquisitions, divestitures, and foreign currency on sales by segment:

Sales	Percent Change Second Quarter 2022 vs. Second Quarter 2021
increase/(decrease)	Acquisitions and Divestitures		Foreign Currency		Organic		Total
EnPro Industries, Inc.	5.1	%	(3.0)	%	9.5	%	11.6	%
Sealing Technologies	(7.1)	%	(3.3)	%	6.3	%	(4.1)	%
Advanced Surface Technologies	87.5	%	(1.4)	%	19.1	%	105.2	%
Engineered Materials	(33.2)	%	(3.8)	%	7.6	%	(29.4)	%

Following are the key effects of acquisitions and divestitures on sales for the second quarter of 2022 compared to the same period in 2021:

•Acquisition of NxEdge (Advanced Surface Technologies) in December 2021

•Divestiture of Compressor Products International (Engineered Materials) in December 2021

•Divestiture of the polymer components business unit (Sealing Technologies), which was principally located in Houston, Texas in September 2021

Following is a discussion of operating results for each segment during the second quarter of 2022:

Sealing Technologies. Sales of $155.9 million in the second quarter of 2022 reflect a 4.1% decrease compared to the $162.5 million reported in the same period of 2021. Excluding the unfavorable foreign exchange translation ($5.3 million) and the sales from businesses that have since been divested ($10.9 million) from 2021 results, sales were up 6.3%, or $9.5 million. This increase was driven by stronger demand in aerospace, power generation, and food and pharmaceutical markets.

Adjusted Segment EBITDA of $42.5 million in the second quarter of 2022 increased 0.2% from $42.4 million reported in the same period of 2021. Segment AEBITDA margins for the segment increased from 26.1% in the second quarter of 2021 to 27.3% for the second quarter of 2022. Excluding the unfavorable foreign exchange translation ($1.6 million) and the

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Segment AEBITDA earned from businesses that have since been divested ($2.4 million) from 2021 results, Adjusted Segment EBITDA increased 10.0%, or $4.0 million, to $44.0 million. The increase in Segment AEBITDA was driven primarily by higher sales pricing ($10.1 million), favorable foreign exchange transactions ($1.1 million), and decreased incentive related expenses ($1.0 million) partially offset by increased manufacturing costs due to rising material and labor costs ($5.1 million), unfavorable volume and mix ($2.2 million), and higher travel and selling, general and administrative costs ($0.9 million).

Advanced Surface Technologies. Sales of $121.5 million in the second quarter of 2022 reflect a 105.2% increase compared to the $59.2 million reported in the same period of 2021. Excluding the unfavorable foreign exchange translation ($0.7 million) and the sales from a recent acquisition ($51.7 million) from 2022 results, sales were up 19.1% or $11.3 million. This increase was driven primarily by strong demand in the semiconductor market.

Adjusted Segment EBITDA of $37.8 million in the second quarter of 2022 increased 142.3% from $15.6 million reported in the same period of 2021. Segment AEBITDA margins increased from 26.4% in the second quarter of 2021 to 31.1% in the second quarter of 2022. Excluding the unfavorable foreign exchange translation ($0.5 million) and the Segment AEBITDA contributed from a business recently acquired ($17.4 million) from our 2021 results, Adjusted Segment EBITDA increased 33.3%, or $5.2 million, to $20.8 million. This increase in Adjusted Segment EBITDA was driven primarily by higher sales volume due to increased demand ($6.0 million), increased pricing ($1.4 million), and favorable foreign exchange transactions ($1.1 million) offset by increased manufacturing costs ($1.7 million), higher selling, general, and administrative and travel costs ($1.5 million).

Engineered Materials. Sales in the second quarter of 2022 decreased 29.4% to $56.5 million from $80.0 million reported in the same period of 2021. Excluding the impact of unfavorable foreign exchange translation ($3.1 million) and the sales from a business that has since been divested ($24.7 million), sales were up 7.6% or $4.2 million driven by strength in domestic automotive, aerospace and oil and gas markets partially offset by lower demand in European automotive markets.

Adjusted Segment EBITDA in the second quarter of 2022 was $9.5 million compared to Segment EBITDA of $13.0 million in the same period of 2021, a decrease of $3.5 million, or 26.9%. Adjusted Segment EBITDA margins for the segment were 16.8%, which was an increase from 16.3% in the second quarter of 2021. Excluding the impact of unfavorable foreign exchange transactions ($0.7 million) and the Segment AEBITDA contributed from a business that has since been divested ($4.0 million), Segment AEBITDA increased $1.2 million, or 13.6%. This increase in Adjusted Segment EBITDA was driven by increased pricing ($2.0 million), sales volume net of product mix ($0.7 million), and decreased incentive compensation expense ($0.8 million), partially offset by increased manufacturing costs due to higher material, labor, and overhead costs ($2.4 million).

Corporate expenses for the second quarter of 2022 decreased $3.3 million as compared to the same period in 2021. The decrease was driven primarily by decreased incentive compensation expense ($3.1 million).

Interest expense, net in the second quarter of 2022 increased $3.9 million as compared to the same period of 2021 primarily due to increased outstanding debt in 2022 as a result of indebtedness incurred to fund the recent NxEdge acquisition.

Other expense, net in the second quarter of 2022 increased by $2.2 million as compared to the same period of 2021, primarily due to an asbestos receivable adjustment ($2.8 million), decreased pension income from non-service costs ($1.5 million), increased insurance costs related to previously disposed businesses ($0.4 million), partially offset by year-over-year increased foreign exchange gains ($3.2 million).

The effective tax rates for the quarters ended June 30, 2022 and 2021 were 16.0% and 2.6%, respectively. The effective tax rate for the three months ended June 30, 2022 is primarily driven by a legal entity conversion in Taiwan, an intercompany sale of assets and favorable foreign currency effects on dividends, partially offset by higher tax rates in most foreign jurisdictions.

Net income attributable to EnPro Industries, Inc. was $33.1 million, or $1.59 per share, in the second quarter of 2022 compared to net income of $29.3 million, or $1.41 per share, in the same period of 2021. Earnings per share is expressed on a diluted basis.

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Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021

Sales of $662.0 million in the first six months of 2022 increased 14.6% from $577.9 million in the first six months of 2021. The following table summarizes the impact of acquisitions, divestitures, and foreign currency on sales by segment:

Sales	Percent Change Six Months Ended June 30, 2022 vs. Six Months Ended June 30, 2021
increase/(decrease)	Acquisitions and Divestitures		Foreign Currency		Organic		Total
EnPro Industries, Inc.	5.5	%	(2.3)	%	11.4	%	14.6	%
Sealing Technologies	(7.1)	%	(2.6)	%	9.9	%	0.2	%
Advanced Surface Technologies	90.2	%	(0.5)	%	19.4	%	109.1	%
Engineered Materials	(32.0)	%	(3.0)	%	7.0	%	(28.0)	%

Following are the key effects of acquisitions and divestitures on sales for the first six months of 2022 compared to the same period in 2021:

•Acquisition of NxEdge (Advanced Surface Technologies) in December 2021

•Divestiture of Compressor Products International (Engineered Materials) in December 2021

•Divestiture of the polymer components business unit (Sealing Technologies), which was principally located in Houston, Texas, in September 2021

Following is a discussion of operating results for each segment during the first six months of 2022:

Sealing Technologies. Sales of $309.5 million in the first six months of 2022 reflect a 0.2% increase compared to the $309.0 million reported in the same period of 2021. Excluding the unfavorable foreign exchange translation ($8.1 million) on our 2022 sales and the sales from businesses that have since been divested ($20.2 million) from 2021 results, sales were up 9.9% or $28.7 million. This increase was driven by sales price actions and strong demand from aerospace, power generation, and food and pharmaceutical, partially offset by a decline in general industrial markets.

Adjusted Segment EBITDA of $76.0 million in the first six months of 2022 decreased 0.5% from $76.4 million reported in the same period of 2021. Segment AEBITDA margins for the segment decreased from 24.7% in the first six months of 2021 to 24.6% in the first six months of 2022. Excluding the unfavorable foreign exchange translation ($2.2 million) and the Segment AEBITDA earned from businesses that have since been divested ($4.1 million) from 2021 results, Adjusted Segment EBITDA increased 8.2%, or $5.9 million, to $78.2 million. The increase in Segment AEBITDA was primarily driven by higher pricing ($17.7 million) and increased sales volume, net of unfavorable product mix ($2.9 million), partially offset by increased manufacturing costs ($12.6 million) mainly due to steel and other material costs increases in our heavy-duty trucking business, higher personnel costs in selling, general, and administrative costs ($2.1 million).

Advanced Surface Technologies. Sales of $238.2 million in the first six months of 2022 reflect a 109.1% increase compared to the $113.9 million reported in the same period of 2021. Excluding the unfavorable foreign exchange translation ($0.6 million) and the sales from a recent acquisition ($102.9 million) from the result of the first six months of 2022, sales were up 19.4% or $22.1 million. This increase was driven primarily by strong demand in the semiconductor market.

Adjusted Segment EBITDA of $72.7 million in the first six months of 2022 increased 121.0% from $32.9 million reported in the comparable period of 2021. Segment AEBITDA margins for the segment increased from 28.9% in the first six months of 2021 to 30.5% in the first six months of 2022. Excluding the unfavorable foreign exchange translation ($0.4 million) the Segment AEBITDA contributed from a business recently acquired ($35.6 million) from our 2022 results, Adjusted Segment EBITDA increased $4.7 million, or 14.3%, to $37.6 million. The increase in Adjusted Segment EBITDA was driven by higher sales volume ($9.3 million), increased pricing ($2.4 million), and favorable foreign currency transactions ($1.4 million) partially offset by increased operating expenses related to growth investments in semiconductor supporting capacity expansion in both the United States and Taiwan, the development of advanced optical filter applications, as well as increased material prices ($8.6 million).

Engineered Materials. Sales in the first six months of 2022 decreased 28.0% to $115.5 million from $160.4 million reported in the same period of 2021. Excluding the impact of unfavorable foreign exchange translation ($4.7 million) and the sales from a business that has since been divested ($48.1 million), sales were up 7.0% or $7.9 million, driven by firm demand in the general industrial market and strength in aerospace and oil and gas markets, partially offset by lower demand in European automotive markets resulting from ongoing supply chain challenges in that market.

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Adjusted Segment EBITDA in the first six months of 2022 was $18.7 million compared to Segment EBITDA of $25.6 million in the first six months of 2021, a decrease of $6.9 million, or 27.0%. Adjusted Segment EBITDA margins for the segment were 16.2%, up slightly from 16.0% in the first six months of 2021. Excluding the impact of unfavorable foreign exchange translation ($1.0 million) and the Segment AEBITDA contributed from a business that has since been divested ($6.7 million), Segment AEBITDA increased $0.8 million, or 4.3%, primarily to due favorable pricing ($3.8 million), increased volume net of product mix ($0.8 million), and decreased selling, general and administrative and incentive compensation costs ($1.8 million), partially offset by increased manufacturing costs driven by higher material prices ($5.5 million).

Corporate expenses for the first six months of 2022 decreased $1.4 million as compared to the same period in 2021. The decrease was driven primarily by decreased incentive compensation ($4.3 million) and professional fees due to the CEO transition in 2021 and was mostly offset by increased M&A and restructuring costs ($2.8 million), travel, and medical expense.

Interest expense, net in the first six months of 2022 increased $7.0 million from 2021 primarily due to increased outstanding debt in 2022 as a result of indebtedness incurred to fund the recent NxEdge acquisition.

Other income, net in the first six months of 2022 remained flat as compared to other expense reported in the same period of 2021, driven by an asbestos receivable adjustment in 2022 ($2.8 million) and decreased pension income from non-service costs ($2.9 million), increased miscellaneous expenses that are not associated with a particular segment or a segment's continuing product lines ($0.5 million), and higher costs related to previously disposed of businesses ($0.3 million) offset by increased year-over-year foreign exchange gains ($4.6 million) and decreased loss on sale of business ($1.9 million).

The effective tax rates for the six months ended June 30, 2022 and 2021 were 18.2% and 11.2%, respectively. The effective tax rate for the six months ended June 30, 2022 is primarily driven by a legal entity conversion in Taiwan, an intercompany sale of assets and favorable foreign currency effects on dividends, partially offset by higher tax rates in most foreign jurisdictions. The effective tax rate for the six months ended June 30, 2021 is primarily the result of the reduction of a valuation allowance on certain foreign net operating losses, the favorable conclusion of an IRS examination, and reduction in the liability for certain uncertain tax positions, partially offset by higher tax rates in most foreign jurisdictions.

Net income attributable to EnPro Industries, Inc. was $49.3 million, or $2.36 per share, in the first six months of 2022 compared to net income attributable to EnPro Industries, Inc. of $47.3 million, or $2.28 per share, in the same period of 2021. Earnings per share is expressed on a diluted basis.

Liquidity and Capital Resources

Cash requirements for, but not limited to, working capital, capital expenditures, acquisitions, and debt repayments have been funded from cash balances on hand. We continue to consider acquisition opportunities that align with our long-term strategic goals of refocusing our portfolio on businesses with compelling margins, leading technology, high cash flow return on investment, and favorable secular tailwinds. It is possible our cash requirements for one or more acquisition opportunities could exceed our available cash balance at the time of closing. Should we need additional capital, we believe we will have access to necessary resources, including the resources discussed in this section under the heading “Capital Resources.”

As of June 30, 2022, we held $203.7 million of our $222.1 million cash and cash equivalents outside of the United States. Because of the transition tax and tax on the global intangible low-taxed income provisions of the U. S. Tax Cuts and Jobs Act, undistributed earnings of our foreign subsidiaries totaling $224.6 million at June 30, 2022 have been subjected to U.S. income tax.

During the first six months of 2022 we repatriated $118.7 million which was utilized to paydown our U.S.-based indebtedness and reduce our interest expense. We have targeted the repatriation of an additional $100 million by December 31, 2022 for further unscheduled paydowns of our indebtedness.

At maturity, on September 15, 2022, our Original Swap with a notional amount of $200.0 million entered into in September 2018 is to be settled at the fair value in cash based on the aggregate notional amount and the then-applicable currency exchange rate compared to the exchange rate at the time the Original Swap was entered into. The fair value of the Original Swap at June 30, 2022 was $21.9 million and included in Other Current Assets on our Consolidated Balance Sheet.

Cash Flows

Operating activities provided $67.1 million of cash in the first six months of 2022 and $58.5 million of cash in the first six months of 2021. The year-over-year increase was primarily driven by increased net income and increased insurance receipts in the first three months of 2022 related to legacy claims, partially offset by higher cash tax payments.

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Investing activities used $5.5 million of cash in the first six months of 2022 compared to $12.0 million of cash used during the first six months of 2021. This change is driven by cash proceeds in the current year as the result of net working capital adjustments from recent acquisitions and divestitures, as well as lower capital expenditures.

Financing activities used $154.4 million of cash in the first six months of 2022, primarily from $135.9 million in net repayments of debt, primarily related to payments on our revolving credit facility and 364-Day senior secured term loan facility, and $11.7 million used for dividends paid. Financing activities in the first six months of 2021 used $14.8 million, primarily from $11.3 million used for dividends paid and $2.0 million in repayments of debt.

Capital Resources

Senior Secured Credit Facilities. On December 17, 2021, we entered into a Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”) among the Company and EnPro Holdings, as borrowers, certain foreign subsidiaries of the Company from time to time party thereto, as designated borrowers, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. The Amended Credit Agreement amends, restates and replaces the Second Amended and Restated Credit Agreement dated as of June 28, 2018, as amended, among the Company and EnPro Holdings as borrowers, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

The Amended Credit Agreement provides for credit facilities in the initial aggregate principal amount of $1,007.5 million, consisting of a five-year, senior secured revolving credit facility of $400.0 million (the “Revolving Credit Facility”), a $142.5 million senior secured term loan facility in replacement of the our existing senior secured term loan facility, maturing September 25, 2024 (the “Term Loan A-1 Facility”), a five-year, senior secured term loan facility of $315.0 million (the “Term Loan A-2 Facility”) and a 364-day, senior secured term loan facility of $150.0 million (the “364-Day Facility” and together with the Revolving Credit Facility, the Term Loan A-1 Facility and the Term Loan A-2 Facility, the “Facilities”). The Amended Credit Agreement also provides that we may seek incremental term loans and/or additional revolving credit commitments in an amount equal to the greater of $275.0 million and 100% of consolidated EBITDA for the most recently ended four-quarter period for which the we have reported financial results, plus additional amounts based on a consolidated senior secured leverage ratio. The Amended Credit Agreement became effective on December 17, 2021.

Initially, borrowings under the Facilities (other than the 364-Day Facility) bear interest at an annual rate of LIBOR plus 1.75% or base rate plus 0.75%, although these interest rates are subject to incremental increase or decrease based on a consolidated total net leverage ratio. Borrowings under the 364-Day Facility bear interest at an annual rate of LIBOR plus 1.50% or base rate plus 0.50%. In addition, a commitment fee accrues with respect to the unused amount of the Revolving Credit Facility at an annual rate of 0.225%, which rate is also subject to incremental increase or decrease based on a consolidated total net leverage ratio. The Amended Credit Agreement contains customary LIBOR replacement provisions.

The Term Loan A-1 Facility amortizes on a quarterly basis in an annual amount equal to 2.50% of the original principal amount of the Term Loan A-1 Facility ($150.0 million) in year one after the closing, 5.00% of such original principal amount in year two and 1.25% of such original principal amount in each of the first three quarters of year three, with the remaining outstanding principal amount payable at maturity. The Term Loan A-2 Facility amortizes on a quarterly basis in an annual amount equal to 2.5% of the original principal amount of the Term Loan A-2 Facility in each of years one through three, 5.0% of such original principal amount in year four and 1.25% of such original principal amount in each of the first three quarters of year five, with the remaining outstanding principal amount payable at maturity. The 364-Day Facility does not amortize and will be payable in full at maturity. The Facilities are subject to prepayment with the net cash proceeds of certain asset sales, casualty or condemnation events and non-permitted debt issuances.

The Company and EnPro Holdings are the permitted borrowers under the Facilities. The Company may also from time to time designate any of its wholly owned foreign subsidiaries as a borrower under the Revolving Credit Facility. Each of the Company’s domestic subsidiaries (other than any subsidiaries that may be designated as “unrestricted” by the Company from time to time, and inactive subsidiaries) is required to guarantee the obligations of the borrowers under the Facilities, and each of the Company’s existing domestic subsidiaries (other than inactive subsidiaries) has entered into the Amended Credit Agreement to provide such a guarantee.

The Facilities are subject to prepayment with the net cash proceeds of certain asset sales, casualty or condemnation events, and non-permitted debt issuances.

Borrowings under the Facilities are secured by a first-priority pledge of the following assets:

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•100% of the capital stock of each domestic subsidiary of the Company (other than unrestricted or inactive subsidiaries);

•65% of the capital stock of any first tier foreign subsidiary of the Company and its domestic subsidiaries (other than unrestricted or inactive subsidiaries); and

•substantially all of the assets (including, without limitation, machinery and equipment, inventory and other goods, accounts receivable, bank accounts, general intangibles, financial assets, investment property, license rights, patents, trademarks, trade names, copyrights, chattel paper, insurance proceeds, contract rights, hedge agreements, documents, instruments, indemnification rights, tax refunds and cash, but excluding real estate interests) of the Company and its domestic, consolidated subsidiaries (other than unrestricted or inactive subsidiaries)

The Amended Credit Agreement contains certain financial covenants and required financial ratios, including:

•a maximum consolidated total net leverage ratio of not more than 4.75 to 1.0 (with total debt, for the purposes of such ratio, to be net of up to $150 million of unrestricted cash of EnPro Industries, Inc. and its consolidated subsidiaries), which ratio will decrease to 4.5 to 1.0 for each fiscal quarter beginning with the fiscal quarter ending March 31, 2022 and ending with the fiscal quarter ending December 31, 2022, and to 4.0 to 1.0 for each quarter thereafter; and, once so decrease, may be increased (up to three times) at the borrowers' option to not more than 4.5 to 1.0 for the for-quarter period following a significant acquisition; and

•a minimum consolidated interest coverage ratio of at least 2.5 to 1.0.

The Amended Credit Agreement contains affirmative and negative covenants (subject, in each case, to customary exceptions and qualifications), including covenants that limit our ability to, among other things:

•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; and

•modify or terminate documents related to certain indebtedness.

We were in compliance with all covenants the Amended Credit Agreement as of June 30, 2022.

The borrowing availability under our Revolving Credit Facility at June 30, 2022 was $294.2 million after giving consideration to $10.8 million of outstanding letters of credit and $95.0 million of outstanding borrowings. The outstanding principal balance of the Term Loan A-1 Facility, Term Loan A-2 Facility and 364-Day Facility at June 30, 2022 was $139.7 million, $311.1 million and $100.0 million, respectively.

Senior Notes. In October 2018, we completed the offering of $350.0 million aggregate principal amount of 5.75% Senior Notes due 2026 (the "Senior Notes").

The Senior Notes were issued to investors at 100% of the principal amount thereof. The Senior Notes are unsecured, unsubordinated obligations of EnPro and mature on October 15, 2026. Interest on the Senior Notes accrues at a rate of 5.75% per annum and is payable semi-annually in cash in arrears on April 15 and October 15 of each year, commencing April 15, 2019. 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.

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.

Each holder of the Senior Notes may require us to repurchase some or all of the Senior Notes held by such holder for cash upon the occurrence of a defined “change of control” event.

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The indenture governing the Senior Notes includes covenants that restrict our ability to engage in certain activities, including incurring additional indebtedness, paying dividends and repurchasing shares of our common stock, subject in each case to specified exceptions and qualifications set forth in the indenture.

At June 30, 2022, we were in compliance with all of the covenants of the indenture governing the Senior Notes.

Share Repurchase Program. In October 2020, our board of directors authorized the expenditure of up to $50 million for the repurchase of our outstanding common shares through October 2022. No repurchases have been made under this program.

Critical Accounting Estimates

Please refer to "Critical Accounting Estimates" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our annual report on Form 10-K for the fiscal year ended December 31, 2021, for a discussion of our critical accounting estimates, which is incorporated here by reference

Contingencies

A description of our contingencies is included in Note 15 to the Consolidated Financial Statements in this report, which is incorporated herein by reference.

Supplemental Guarantor Financial Information

On October 17, 2018, we completed the offering of the Senior Notes. The Senior Notes are fully and unconditionally guaranteed on an unsecured, unsubordinated, joint and several basis by our wholly owned direct and indirect domestic subsidiaries, that are each guarantors of our Revolving Credit Facility, including subsidiaries that were wholly owned at the time they provided the guarantee but thereafter became majority owned subsidiaries (collectively, the “Guarantor Subsidiaries”).  The Guarantor Subsidiaries at June 30, 2022 comprise all of our consolidated domestic subsidiaries at that date. Our subsidiaries organized outside of the United States (collectively, the “Non-Guarantor Subsidiaries”) do not guarantee the Senior Notes.

The Guarantor Subsidiaries jointly and severally guarantee on an unsecured, unsubordinated basis the performance and punctual payment when due, whether at stated maturity of the Senior Notes, by acceleration or otherwise, all of our obligations under the Senior Notes and the indenture governing the Senior Notes (the “Indenture”), whether for payment of principal of, premium, if any, or interest on the Senior Notes, expenses, indemnification or otherwise (all such obligations guaranteed by the Guarantor Subsidiaries are referred to as the “Guaranteed Obligations”). The Guarantor Subsidiaries have jointly and severally agreed to pay, in addition to the obligations stated above, any and all expenses (including reasonable counsel fees and expenses) incurred by the trustee (the “Trustee”) under the Indenture in enforcing any rights under their guarantees of the Guaranteed Obligations.

Each guarantee of a Guarantor Subsidiary is limited to an amount not to exceed the maximum amount that can be guaranteed by it without rendering the guarantee, as it relates to such Guarantor Subsidiary, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. Each guarantee of a Guarantor Subsidiary is a continuing guarantee and shall inure to the benefit of and be enforceable by the Trustee, the holders of the Senior Notes and their successors, transferees and assigns and, subject to the provisions described in the following sentence, remains in full force and effect until payment in full of all of the Guaranteed Obligations of such Guarantor Subsidiary and is binding upon such Guarantor Subsidiary and its successors. A guarantee of the Senior Notes by a Guarantor Subsidiary is subject to release in the following circumstances: (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; (ii) the designation of the subsidiary as an “Unrestricted Subsidiary” under the Indenture; (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 our subsidiary 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 summarized financial information for EnPro Industries, Inc. (the "Parent") and the Guarantor Subsidiaries on a combined basis after intercompany eliminations.

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The summarized results of operations for the six months ended June 30, 2022 were as follows:

(in millions)	Parent and Guarantor Subsidiaries
Net sales	$	449.0
Gross profit	138.5
Net loss attributable to EnPro Industries, Inc.	(6.7)
Comprehensive income attributable to EnPro Industries, Inc.	$	12.8

The summarized balance sheet at June 30, 2022 was as follows:

(in millions)	Parent and Guarantor Subsidiaries
ASSETS
Current assets	$	298.4
Non-current assets	1,663.9
Total assets	$	1,962.3
LIABILITIES AND EQUITY
Current liabilities	$	261.4
Non-current liabilities	1,093.0
Total liabilities	1,354.4
Redeemable non-controlling interests	48.1
Shareholders’ equity	559.8
Total liabilities and equity	$	1,962.3

The table above reflects $12.5 million of current intercompany receivables due to the Guarantor Subsidiaries from the Non-Guarantor Subsidiaries and $10.6 million of current intercompany payables due to the Non-Guarantor Subsidiaries from the Guarantor Subsidiaries within current assets and liabilities.

The summarized results of operations for the year ended December 31, 2021 were as follows:

(in millions)	Parent and Guarantor Subsidiaries
Net sales	$	679.1
Gross profit	210.9
Net income attributable to EnPro Industries, Inc.	26.0
Comprehensive income attributable to EnPro Industries, Inc.	$	42.7

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The summarized balance sheet at December 31, 2021 was as follows:

(in millions)	Parent and Guarantor Subsidiaries
ASSETS
Current assets	$	286.7
Non-current assets	1,711.1
Total assets	$	1,997.8
LIABILITIES AND EQUITY
Current liabilities	$	299.9
Non-current liabilities	1,191.9
Total liabilities	1,491.8
Redeemable non-controlling interests	50.1
Shareholders’ equity	455.9
Total liabilities and equity	$	1,997.8

The table above reflects $11.2 million of current intercompany receivables due to the Guarantor Subsidiaries from the Non-Guarantor Subsidiaries and $3.2 million of current intercompany payables due to the Non-Guarantor Subsidiaries from the Guarantor Subsidiaries within current assets and liabilities.

The Senior Notes are structurally subordinated to the indebtedness and other liabilities of the Non-Guarantor Subsidiaries. The Non-Guarantor Subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to the Senior Notes or the Indenture, or to make any funds available therefor, whether by dividends, loans, distributions or other payments. Any right that the Company or the Guarantor Subsidiaries have to receive any assets of any of the Non-Guarantor Subsidiaries upon the liquidation or reorganization of any Non-Guarantor Subsidiary, and the consequent rights of holders of Senior Notes to realize proceeds from the sale of any of a Non-Guarantor Subsidiary’s assets, would be effectively subordinated to the claims of such Non-Guarantor Subsidiary’s creditors, including trade creditors and holders of preferred equity interests, if any, of such Non-Guarantor Subsidiary. Accordingly, in the event of a bankruptcy, liquidation or reorganization of any of the Non-Guarantor Subsidiaries, the Non-Guarantor Subsidiaries will pay the holders of their debts, holders of preferred equity interests, if any, and their trade creditors before they will be able to distribute any of their assets to the Company or any Guarantor Subsidiaries.

If a Guarantor Subsidiary were to become a debtor in a case under the U.S. Bankruptcy Code or encounter other financial difficulty, under federal or state fraudulent transfer or conveyance law, a court may avoid, subordinate or otherwise decline to enforce its guarantee of the Senior Notes. A court might do so if it is found that when such Guarantor Subsidiary entered into its guarantee of the Senior Notes, or in some states when payments became due under the Senior Notes, such Guarantor Subsidiary received less than reasonably equivalent value or fair consideration and either:

•was insolvent or rendered insolvent by reason of such incurrence;

•was left with unreasonably small or otherwise inadequate capital to conduct our business; or

•believed or reasonably should have believed that it would incur debts beyond its ability to pay.

The court might also avoid the guarantee of the Senior Notes without regard to the above factors, if the court found that the Guarantor Subsidiary entered into its guarantee with actual intent to hinder, delay or defraud our creditors.

A court would likely find that a Guarantor Subsidiary did not receive reasonably equivalent value or fair consideration for its guarantee of the Senior Notes, if such Guarantor Subsidiary did not substantially benefit directly or indirectly from the funding made available by the issuance of the Senior Notes. If a court were to avoid a guarantee of the Senior Notes provided by a Guarantor Subsidiary, holders of the Senior Notes would no longer have any claim against such Guarantor Subsidiary. The measures of insolvency for purposes of these fraudulent transfer or conveyance laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer or conveyance has occurred, such that we cannot predict what standards a court would use to determine whether or not a Guarantor Subsidiary was solvent at the relevant time or, regardless of the standard that a court uses, that the guarantee of a Guarantor Subsidiary would not be subordinated to such Guarantor Subsidiary’s other debt. As noted above, each guarantee provided by a Guarantor Subsidiary includes a provision intended to limit the Guarantor Subsidiary’s liability to the maximum amount that it could incur without causing the incurrence of

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obligations under its guarantee to be a fraudulent transfer or conveyance. This provision may not be effective to protect those guarantees from being avoided under fraudulent transfer or conveyance law, or it may reduce that Guarantor Subsidiary’s obligation to an amount that effectively makes its guarantee worthless, and we cannot predict whether a court will ultimately find it to be effective.

On the basis of historical financial information, operating history and other factors, we believe that each of the Guarantor Subsidiaries, after giving effect to the issuance of its guarantee of the Senior Notes when such guarantee was issued, was not insolvent, did not have unreasonably small capital for the business in which it engaged and did not and has not incurred debts beyond its ability to pay such debts as they mature. We cannot assure you, however, as to what standard a court would apply in making these determinations or that a court would agree with our conclusions in this regard.

Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Measures

We believe that it would be helpful to the readers of the financial statements to understand the impact of certain selected items on our reported net income attributable to EnPro Industries, Inc., diluted earnings per share attributable to EnPro Industries, Inc., and total adjusted segment EBITDA, including items that may recur from time to time. The items adjusted for in these non-GAAP financial measures are those that are excluded by management in budgeting or projecting for performance in future periods, as they typically relate to events specific to the period in which they occur. Accordingly, these are some of the factors the company uses in internal evaluations of the overall performance of its businesses. In addition, management believes these non-GAAP financial measures are commonly used financial measures for investors to evaluate the company’s operating performance and, when read in conjunction with the company’s consolidated financial statements, present a useful tool to evaluate the company’s ongoing operations and performance from period to period. Management acknowledges that there are many items that impact a company’s reported results and the adjustments reflected in these non-GAAP financial measures are not intended to present all items that may have impacted these results. In addition, these non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies.

The following presents a reconciliation of (i) net income attributable to EnPro Industries, Inc. to adjusted net income attributable to EnPro Industries, Inc. and adjusted diluted earnings per share and (ii) net income attributable to EnPro Industries, Inc. to adjusted EBITDA for the six months ended June 30, 2022 and 2021.

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Reconciliation of Net Income Attributable to EnPro Industries, Inc. to Adjusted Net Income Attributable to EnPro Industries, Inc. and Adjusted Diluted Earnings Per Share

(in millions, except per share data)	Quarters Ended June 30,
	2022						2021
	$		Average common shares outstanding, diluted (millions)	Per Share			$		Average common shares outstanding, diluted (millions)	Per Share
Net income attributable to EnPro Industries, Inc.	$	33.1	20.8	$	1.59		$	29.3	20.8	$	1.41
Net loss from redeemable non-controlling interests	(0.1)						(0.1)
Income tax expense	6.3						0.8
Income before income taxes	39.3						30.0
Adjustments from selling, general, and administrative:
Acquisition and divestiture expenses	1.2						0.7
Non-controlling interest compensation allocations2	1.4						1.3
Amortization of acquisition-related intangible assets	19.6						11.3
Adjustments from other operating expense and cost of sales:
Restructuring and impairment expense	0.8						2.7
Amortization of the fair value adjustment to acquisition date inventory	1.0						2.3
Adjustments from other non-operating expense:
Asbestos receivable adjustment	2.8						—
Costs associated with previously disposed businesses	0.5						0.1
Net loss on sale of businesses	—						0.1
Pension income (non-service cost)	(0.6)						(2.1)
Other adjustments:
Other3	(0.1)						(0.3)
Adjusted income from continuing operations before income taxes	65.9						46.1
Adjusted income tax expense4	(17.8)						(13.8)
Net loss from redeemable non-controlling interest	0.1						0.1
Adjusted net income attributable to EnPro Industries, Inc.	$	48.2	20.8	$	2.32	1	$	32.4	20.8	$	1.56	1

34

	Six Months Ended June 30,
	2022						2021
	$		Average common shares outstanding, diluted (millions)	Per Share			$		Average common shares outstanding, diluted (millions)	Per Share
Net income attributable to EnPro Industries, Inc.	$	49.3	20.8	$	2.36		$	47.3	20.8	$	2.28
Net income from redeemable non-controlling interests	0.2						—
Income tax expense	11.0						6.0
Income before income taxes	60.5						53.3
Adjustments from selling, general, and administrative:
Acquisition and divestiture expenses	2.8						0.7
Non-controlling interest compensation allocations2	0.5						2.9
Amortization of acquisition-related intangible assets	39.4						22.5
Adjustments from other operating expense and cost of sales:
Restructuring and impairment expense	2.3						4.5
Amortization of the fair value adjustment to acquisition date inventory	11.3						4.8
Adjustments from other non-operating expense:
Environmental reserve adjustment	(0.3)						—
Asbestos receivable adjustment	2.8						—
Costs associated with previously disposed businesses	0.7						0.4
Net loss on sale of businesses	0.1						2.0
Pension income (non-service cost)	(1.3)						(4.2)
Other adjustments:
Other3	—						(0.2)
Adjusted income before income taxes	118.8						86.7
Adjusted income tax expense4	(32.1)						(26.0)
Net income from redeemable non-controlling interests	(0.2)						—
Adjusted net income attributable to EnPro Industries, Inc.	$	86.5	20.8	$	4.15	1	$	60.7	20.8	$	2.92	1

1 Adjusted diluted earnings per share attributable to EnPro Industries, Inc. Per share amounts were calculated by dividing by the weighted-average shares of diluted common stock outstanding during the periods.

2 Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa that is subject to reduction for certain types of employment terminations of the LeanTeq and Alluxa sellers and is directly related to the terms of the respective acquisitions. This expense will continue to be recognized as compensation expense over the term of the put and call options associated with the acquisitions unless certain employment terminations have occurred.

3Other adjustments are included in selling, general, and administrative and other operating expenses on the consolidated statements of operations.

4 The adjusted income tax expense presented above is calculated using a normalized company-wide effective tax rate excluding discrete items of 27.0% in 2022 and 30.0% rate in 2021.

35

Reconciliation of Net Income Attributable to EnPro Industries, Inc. to Adjusted EBITDA

(in millions, except per share data)
	Quarters Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Net income attributable to EnPro Industries, Inc.	$	33.1	$	29.3	$	49.3	$	47.3
Net income (loss) attributable to redeemable non-controlling interests	(0.1)		(0.1)		0.2		—
Net income	33.0		29.2		49.5		47.3
Adjustments to arrive at earnings before interest, income taxes, depreciation, amortization, and other selected items (Adjusted EBITDA):
Interest expense, net	7.7		3.8		14.6		7.6
Income tax expense	6.3		0.8		11.0		6.0
Depreciation and amortization expense	28.0		18.6		56.0		37.5
Restructuring and impairment expense	0.8		2.7		2.3		4.5
Environmental reserve adjustments	—		—		(0.3)		—
Asbestos receivable adjustment	2.8		—		2.8		—
Costs associated with previously disposed businesses	0.5		0.1		0.7		0.4
Net loss on sale of businesses	—		0.1		0.1		2.0
Acquisition and divestiture expenses	1.2		0.7		2.8		0.7
Pension income (non-service cost)	(0.6)		(2.1)		(1.3)		(4.2)
Non-controlling interest compensation allocation1	1.4		1.3		0.5		2.9
Amortization of the fair value adjustment to acquisition date inventory	1.0		2.3		11.3		4.8
Other	(0.1)		(0.3)		—		(0.2)
Adjusted EBITDA	$	82.0	$	57.2	$	150.0	$	109.3

1 Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa that is subject to reduction for certain types of employment terminations of the LeanTeq and Alluxa sellers and is directly related to the terms of the respective acquisitions. This expense will continue to be recognized as compensation expense over the term of the put and call options associated with the acquisitions unless certain employment terminations have occurred.

Adjusted EBITDA as presented in the table above also represents the amount defined as "EBITDA" under the Indenture.

Item 3.     Quantitative and Qualitative Disclosures About Market Risk

We are exposed to certain market risks as part of our ongoing business operations, including risks from changes in foreign currency exchange rates and interest rates that could impact our financial condition, results of operations and cash flows. We manage our exposure to these and other market risks through regular operating and financing activities and through the use of derivative financial instruments. We intend to use derivative financial instruments as risk management tools and not for speculative investment purposes. For information about our interest rate risk, see “Quantitative and Qualitative Disclosures about Market Risk – Interest Rate Risk” in our annual report on Form 10-K for the year ended December 31, 2021.

Foreign Currency Risk

We are exposed to foreign currency risks that arise from normal business operations. These risks include the translation of local currency balances of our foreign subsidiaries, intercompany loans with foreign subsidiaries and transactions denominated in foreign currencies. Our objective is to control our exposure to these risks and limit the volatility in our reported earnings due to foreign currency fluctuations through our normal operating activities and, where appropriate, through foreign currency forward contracts and option contracts. The notional amount of foreign exchange contracts hedging foreign currency transactions was $5.0 million and $3.3 million at June 30, 2022 and December 31, 2021, respectively.

36

In September 2018, we entered into cross-currency swap agreements with a notional amount of $200.0 million to manage foreign currency risk by effectively converting a portion of the interest payments related to our fixed-rate U.S. Dollar (“USD”)-denominated Senior Notes, including the semi-annual interest payments thereunder, to interest payments on fixed-rate Euro-denominated debt of 172.8 million EUR with a weighted average interest rate of 2.8%, with interest payment dates of March 15 and September 15 of each year. The swap agreement matures on September 15, 2022.

In May 2019, we entered into additional cross-currency swap agreements with a notional amount of $100.0 million to manage foreign currency risk by effectively converting a portion of the interest payments related to our fixed-rate USD-denominated Senior Notes, including the semi-annual interest payments thereunder, to interest payments on fixed-rate Euro-denominated debt of 89.6 million EUR with a weighted average interest rate of 3.5%, with interest payment dates of April 15 and October 15 of each year. The additional swap agreement matures on October 15, 2026.

During the term of the swap agreements, we will receive semi-annual payments from the counterparties due to the difference between the interest rate on the Senior Notes and the interest rate on the Euro debt underlying the swap. There was no principal exchange at the inception of the arrangements, and there will be no exchange at maturity. At maturity (or earlier at our option), we and the counterparties will settle the swap agreements at their fair value in cash based on the aggregate notional amount and the then-applicable currency exchange rate compared to the exchange rate at the time the swap agreements were entered into.

Commodity Risk

We source a wide variety of materials and components from a network of global suppliers. While such materials are typically available from numerous suppliers, commodity raw materials such as steel, engineered plastics, copper and polymers, are subject to price fluctuations (including increases due to new or increased tariffs), which could have a negative impact on our results. The impacts from the COVID-19 pandemic and geopolitical variables could further increase the risk of supply, pricing, and demand of necessary raw materials as well as drive further fluctuations in energy and natural gas costs. We strive to pass along commodity price increases to customers to avoid profit margin erosion and utilize lean initiatives to further mitigate the impact of commodity raw material price fluctuations as we achieve improved efficiencies. We do not hedge commodity risk with any market risk sensitive instruments.

Item 4.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)). The purpose of our disclosure controls and procedures is to provide reasonable assurance that information required to be disclosed in our reports filed under the Exchange Act, including this report, is recorded, processed, summarized and reported within the time periods specified, and that such information is accumulated and communicated to our management to allow timely decisions regarding disclosure.

Based on the controls evaluation, our chief executive officer and chief financial officer have concluded that at June 30, 2022 our disclosure controls and procedures were effective to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified, and that management will be timely alerted to material information required to be included in our periodic reports filed with the Securities and Exchange Commission.

In addition, no change in our internal control over financial reporting has occurred during the quarter ended June 30, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

37

PART II

OTHER INFORMATION

 Item 1.    Legal Proceedings.

A description of environmental and other legal matters is included in Note 15 to the Consolidated Financial Statements in this report, which is incorporated herein by reference. In addition to the matters noted and discussed in those sections of this report, 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 that 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.

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

The following table sets forth all purchases made by or on behalf of the Company or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act, of shares of our common stock during each month in the second quarter of 2022.

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	(d) Maximum Number (or Approximate Dollar Value) of Shares (or  Units) That May Yet Be Purchased Under the Plans or Programs
April 1 - April 30, 2022	—		—			—	$50,000,000	(1)
May 1 - May 31, 2022	—		—			—	$50,000,000	(1)
June 1 - June 30, 2022	424	(2)	$	83.10	(2)	—	$50,000,000	(1)
Total	424	(2)	$	83.10	(2)	—	$50,000,000	(1)

(1)In October of 2020, our board of directors authorized an expenditure program of up to $50.0 million for the repurchase of our outstanding common shares through October 2022. We have not made any repurchases under this authorization.

(2)In June 2022, a total of 424 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. EnPro Holdings furnished these shares in exchange for management and other services provided by EnPro. Of these shares, 89 shares were valued at a price of $87.50 per share, the closing trading price of our common stock on June 15, 2022, and 335 of these shares were valued at a price of $81.93 per share, the closing trading price of our common stock on June 30, 2022. Accordingly, the total 424 shares were valued at a weighted average price of $83.10. We do not consider the transfer of shares from EnPro Holdings in this context to be pursuant to a publicly announced plan or program.

Item 6.    Exhibits.

The exhibits to this report on Form 10-Q are listed in the following Exhibit Index.

38

EXHIBIT INDEX

2.1	Purchase and Sale Agreement dated as of November 4, 2021 among TCFII NxEdge Holdings, LLC, TCFII NxEdge LLC and EnPro Holdings, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8 K filed by EnPro Industries, Inc. on November 5, 2021 (File No. 001-31225))
2.2	Equity and Asset Purchase Agreement dated as of October 12, 2021 among EnPro Holdings, Inc., Compressor Products Holdings Limited (UK), EnPro Hong Kong Holdings Company Limited, Garlock GmbH, Coltec Industries France SAS, Compressor Products International Canada, Inc., Garlock of Canada Ltd., Granite US Holdings Corporation and Granite Holdings II B.V. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8 K filed by EnPro Industries, Inc. on October 12, 2021 (File No. 001-31225))
2.3	Put Option Agreement dated as of October 12, 2021 between EnPro Holdings, Inc., Coltec Industries France SAS and Granite US Holdings Corporation (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8 K filed by EnPro Industries, Inc. on October 12, 2021 (File No. 001-31225))
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.SCH†	InlineXBRL Taxonomy Extension Schema Document
101.CAL†	InlineXBRL Taxonomy Extension Calculation Linkbase Document
101.DEF†	InlineXBRL Taxonomy Extension Definitions Linkbase Document
101.LAB†	InlineXBRL Taxonomy Extension Label Linkbase Document
101.PRE†	InlineXBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibits 101.*)

    † Filed herewith

39

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Charlotte, North Carolina on this 2nd day of August, 2022.

ENPRO INDUSTRIES, INC.
By:	/s/ Robert S. McLean
	Robert S. McLean
	Executive Vice President, General Counsel and Secretary
By:	/s/ Steven R. Bower
	Steven R. Bower
	Senior Vice President, Chief Accounting Officer and Controller

40

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Eric A. Vaillancourt, certify that:

1. I have reviewed this Form 10-Q for the quarter ended June 30, 2022 of EnPro Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 2, 2022	/s/ Eric A. Vaillancourt
		Eric A. Vaillancourt
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, J. Milton Childress, certify that:

1. I have reviewed this Form 10-Q for the quarter ended June 30, 2022 of EnPro Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 2, 2022	/s/ J. Milton Childress
		J. Milton Childress
		Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION

The undersigned chief executive officer and chief financial officer of the registrant each certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge, this report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that to his knowledge, the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to EnPro Industries, Inc. and will be retained by EnPro Industries, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Date:	August 2, 2022	/s/ Eric A. Vaillancourt
		Eric A. Vaillancourt
		President and Chief Executive Officer
Date:	August 2, 2022	/s/ J. Milton Childress
		J. Milton Childress
		Executive Vice President and Chief Financial Officer

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2022	Jul. 28, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	001-31225
Entity Registrant Name	ENPRO INDUSTRIES, INC
Entity Incorporation, State or Country Code	NC
Entity Tax Identification Number	01-0573945
Entity Address, Street	5605 Carnegie Boulevard
Entity Address, Suite	Suite 500
Entity Address, City	Charlotte
Entity Address, State	NC
Entity Address, Postal Zip Code	28209
City Area Code	704
Local Phone Number	731-1500
Title of each class	Common stock, $0.01 par value
Trading Symbol(s)	NPO
Name of each exchange on which registered	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		20,801,544
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001164863
Current Fiscal Year End Date	--12-31

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Net sales	$ 333.3	$ 298.6	$ 662.0	$ 577.9
Cost of sales	202.8	181.6	416.9	351.5
Gross profit	130.5	117.0	245.1	226.4
Operating expenses:
Selling, general and administrative	79.9	82.7	165.6	163.0
Other	0.9	2.4	2.4	4.3
Total operating expenses	80.8	85.1	168.0	167.3
Operating income	49.7	31.9	77.1	59.1
Interest expense	(7.7)	(4.0)	(14.8)	(8.0)
Interest income	0.0	0.2	0.2	0.4
Other income (expense)	(2.7)	1.9	(2.0)	1.8
Income before income taxes	39.3	30.0	60.5	53.3
Income tax expense	(6.3)	(0.8)	(11.0)	(6.0)
Net income	33.0	29.2	49.5	47.3
Less: net income (loss) attributable to redeemable non-controlling interests	(0.1)	(0.1)	0.2	0.0
Net income attributable to EnPro Industries, Inc.	33.1	29.3	49.3	47.3
Comprehensive income	17.0	41.6	20.7	51.4
Less: comprehensive income (loss) attributable to redeemable non-controlling interests	(1.2)	0.5	(2.0)	0.2
Comprehensive income attributable to EnPro Industries, Inc.	$ 18.2	$ 41.1	$ 22.7	$ 51.2
Basic earnings per share attributable to EnPro Industries, Inc. (in dollars per share)	$ 1.59	$ 1.42	$ 2.37	$ 2.30
Diluted earnings per share attributable to EnPro Industries, Inc. (in dollars per share)	$ 1.59	$ 1.41	$ 2.36	$ 2.28

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
OPERATING ACTIVITIES
Net income (loss)	$ 49.5	$ 47.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	16.1	13.8
Amortization	39.9	23.7
Deferred income taxes	(1.4)	(2.2)
Stock-based compensation	3.1	3.3
Other non-cash adjustments	6.9	4.0
Change in assets and liabilities, net of effects of divestitures of businesses:
Accounts receivable, net	(17.2)	(24.3)
Inventories	(11.0)	(10.6)
Accounts payable	11.1	16.7
Income taxes, net	(12.1)	(10.6)
Other current assets and liabilities	(22.8)	(0.9)
Other non-current assets and liabilities	5.0	(1.7)
Net cash provided by operating activities	67.1	58.5
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(8.5)	(10.2)
Proceeds from (payments for) sale of businesses, net	0.4
Proceeds from (payments for) sale of businesses, net		(2.3)
Acquisitions, net of cash acquired	2.9	0.0
Other	(0.3)	0.5
Net cash used in investing activities	(5.5)	(12.0)
FINANCING ACTIVITIES
Proceeds from debt	26.6	0.0
Repayments of debt	(162.5)	(2.0)
Dividends paid	(11.7)	(11.3)
Other	(6.8)	(1.5)
Net cash used in financing activities	(154.4)	(14.8)
Effect of exchange rate changes on cash and cash equivalents	(23.2)	0.7
Net increase (decrease) in cash and cash equivalents	(116.0)	32.4
Cash and cash equivalents at beginning of period	338.1	229.5
Cash and cash equivalents at end of period	222.1	261.9
Cash paid during the period for:
Interest, net	13.4	7.5
Income taxes, net	26.1	18.1
Non-cash investing and financing activities:
Non-cash acquisitions of property, plant, and equipment	$ 0.3	$ 1.1

XML

CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 222.1	$ 338.1
Accounts receivable, net	185.7	177.0
Inventories	168.0	160.0
Prepaid expenses and other current assets	53.2	37.9
Total current assets	629.0	713.0
Property, plant and equipment, net	224.1	236.7
Goodwill	943.5	953.2
Other intangible assets, net	861.2	913.4
Other assets	156.9	153.5
Total assets	2,814.7	2,969.8
Current liabilities
Current maturities of long-term debt	14.5	12.7
Short-term debt	99.7	149.3
Accounts payable	91.6	81.9
Accrued expenses	124.3	135.2
Total current liabilities	330.1	379.1
Long-term debt	876.7	963.9
Deferred taxes and non-current income taxes payable	158.5	167.3
Other liabilities	126.3	142.8
Total liabilities	1,491.6	1,653.1
Commitments and contingencies
Redeemable non-controlling interests	48.1	50.1
Shareholders’ equity
Common stock – $.01 par value; 100,000,000 shares authorized; issued, 20,981,131 shares in 2022 and 20,915,793 shares in 2021	0.2	0.2
Additional paid-in capital	301.0	303.6
Retained earnings	987.0	949.4
Accumulated other comprehensive income (loss)	(12.0)	14.6
Common stock held in treasury, at cost – 180,257 shares in 2022 and 180,848 shares in 2021	(1.2)	(1.2)
Total shareholders’ equity	1,275.0	1,266.6
Total liabilities and equity	$ 2,814.7	$ 2,969.8

XML

CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Jun. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	20,981,131	20,915,793
Treasury Stock, Common, Shares (in shares)	180,257	180,848

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Overview and Basis of Presentation

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Overview and Basis of Presentation

Overview and Basis of Presentation

Overview

EnPro Industries, Inc. (“we,” “us,” “our,” “EnPro,” or the “Company”) is a leader in designing, developing, manufacturing, servicing, and marketing proprietary engineered industrial products and serves a wide variety of customers in diverse industries around the world. Over the past several years, we have executed several strategic initiatives to change the portfolio of businesses that we operate to focus on industrial technology-related businesses with leading technologies, compelling margins, strong cash flow, and high levels of recurring revenue that serve markets with favorable secular tailwinds. These initiatives have increased our ability to provide solutions to the semiconductor, life sciences, and other technology industries.

Basis of Presentation

The accompanying interim consolidated financial statements are unaudited, and certain related information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in accordance with Rule 10-01 of Regulation S-X. They were prepared following the same policies and procedures used in the preparation of our annual financial statements and reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of results for the periods presented. The Consolidated Balance Sheet as of December 31, 2021 was derived from the audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2021. The results of operations for the interim periods are not necessarily indicative of the results for the fiscal year. These consolidated financial statements should be read in conjunction with our annual consolidated financial statements for the year ended December 31, 2021 included within our annual report on Form 10-K.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount 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.

All intercompany accounts and transactions between our consolidated operations have been eliminated.

In the second quarter of 2022, we determined the performance of our Alluxa reporting unit to be a triggering event for a goodwill impairment test and, as a result, we performed an interim assessment. The fair value of our Alluxa reporting unit, which is included in our Advanced Surface Technologies segment, and is allocated $126.0 million of goodwill as of June 30, 2022, exceeded its carrying value by an estimated 21% as of the interim testing date. If the weighted-average cost of capital used in this assessment were increased by one percentage point, then the fair value of the Alluxa reporting unit would exceed its carrying value by approximately 12%. A change in assumptions used in the testing of Alluxa's goodwill for impairment, such as a change in discount rate, inability to meet financial forecasts used in the test, or a shift in the market multiples could result in Alluxa's fair value dropping below the carrying value of its assets, resulting in impairment. We will continue to monitor the performance of Alluxa in relation to its forecast and perform an interim test if we determine a triggering event has occurred.

We will conduct our annual goodwill impairment assessment of all reporting units on November 1, 2022, unless facts and circumstances arise prior to then that would trigger another interim assessment

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Acquisition

6 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisition

Acquisition

On December 17, 2021, our subsidiary, EnPro Holdings, Inc. ("EnPro Holdings"), completed the acquisition of all issued and outstanding membership interests of TCFII NxEdge LLC (“NxEdge”). Based in Boise, Idaho, NxEdge serves customers across the semiconductor supply chain, including top tier global integrated device manufacturers and original equipment manufacturers from six main facilities located in Idaho and California. With vertically integrated capabilities across the semiconductor value chain, including a robust aftermarket business, NxEdge is a leading supplier offering a set of integrated capabilities with unique processes resulting in a broad range of qualifications at top customers. NxEdge is included in our Advanced Surface Technologies segment.

The following pro forma condensed consolidated financial results of operations for EnPro are presented as if the acquisition had been completed prior to 2021:

	Quarters Ended June 30,				Six Months Ended June 30,
(in millions)	2022		2021		2022		2021
Pro forma net sales	$	333.3	$	343.8	$	662.0	$	666.0
Pro forma net income	$	34.5	$	35.7	$	59.3	$	57.8

These amounts have been calculated after applying our accounting policies and adjusting the results of NxEdge to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to inventory, property, plant and equipment and intangible assets had been applied prior to 2021 as well as additional interest expense to reflect financing required, together with the corresponding tax effects. The supplemental pro forma net income for the quarter and six months ended June 30, 2022 was adjusted to exclude $2.0 million and $13.1 million, respectively, of pre-tax costs related to the amortization of the backlog intangible asset, the amortization of the fair-value adjustment to acquisition date inventory and additional transaction-related expenses incurred during the period. These pro forma financial results have been prepared for comparative purposes only and do not reflect the effect of synergies that would have been expected to result from the integration of this acquisition. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred prior to 2021, or of future results of the consolidated entities.

We continue to evaluate the purchase price allocation of this acquisition, primarily the value of certain tangible and intangible assets and the related tax impacts, and, in accordance with applicable accounting guidance, we may revise the amounts recognized until these estimates are final. We expect to finalize these estimates no later than the fourth quarter of 2022.

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Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our income tax expense and resulting effective tax rate are based upon the estimated annual effective tax rates applicable for the respective periods adjusted for the effect of items required to be treated as discrete in the interim periods. This estimated annual effective tax rate is affected by the relative proportions of earnings and income before taxes in the jurisdictions in which we operate. Based on the geographical mix of earnings, our annual effective tax rate fluctuates based on the portion of our profits earned in each jurisdiction.

The effective tax rates for the quarters ended June 30, 2022 and 2021 were 16.0% and 2.6%, respectively. The effective tax rate for the quarter ended June 30, 2022 is primarily driven by a legal entity conversion in Taiwan, an intercompany sale of assets and foreign currency effects on dividends, partially offset by higher tax rates in most foreign jurisdictions.

The effective tax rates for the six months ended June 30, 2022 and 2021 were 18.2% and 11.2%, respectively. The effective tax rate for the six months ended June 30, 2022 is primarily driven by a legal entity conversion in Taiwan, an intercompany sale of assets and foreign currency effects on dividends, partially offset by higher tax rates in most foreign jurisdictions. The effective tax rate for the six months ended June 30, 2021 is primarily the result of the reduction of a valuation allowance on certain foreign net operating losses, the favorable conclusion of an IRS examination, and reduction in the liability for certain uncertain tax positions, partially offset by higher tax rates in most foreign jurisdictions.

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Earnings Per Share

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

	Quarters Ended     June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions, except per share amounts)
Numerator (basic and diluted):
Net income	$	33.0	$	29.2	$	49.5	$	47.3
Less: net income (loss) attributable to redeemable non-controlling interests	(0.1)		(0.1)		0.2		—
Net income attributable to EnPro Industries, Inc.	$	33.1	$	29.3	$	49.3	$	47.3
Denominator:
Weighted-average shares – basic	20.8		20.6		20.8		20.6
Share-based awards	—		0.2		—		0.2
Weighted-average shares – diluted	20.8		20.8		20.8		20.8
Basic earnings per share attributable to EnPro Industries, Inc.	$	1.59	$	1.42	$	2.37	$	2.30
Diluted earnings per share attributable to EnPro Industries, Inc.	$	1.59	$	1.41	$	2.36	$	2.28

The calculation of diluted earnings per share for the quarter ended June 30, 2022 excluded 0.1 million of potentially dilutive stock options because they were out-of-the-money and their inclusion would be anti-dilutive. We also excluded an immaterial amount of anti-dilutive stock options in the calculation of diluted earnings per share for the six months ended June 30, 2022.

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Inventories

6 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Inventories

Inventories

	June 30, 2022		December 31, 2021
	(in millions)
Finished products	$	60.0	$	56.8
Work in process	35.6		41.8
Raw materials and supplies	79.7		66.2
	175.3		164.8
Reserve to reduce certain inventories to LIFO basis	(7.3)		(4.8)
Total inventories	$	168.0	$	160.0

We use the last-in, first-out (“LIFO”) method of valuing certain of our inventories. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs, which are subject to change until the final year-end LIFO inventory valuation.

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The changes in the net carrying value of goodwill by reportable segment for the six months ended June 30, 2022, are as follows:

	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
	(in millions)
Goodwill as of December 31, 2021	279.4		668.7		5.1		$	953.2
Acquisition of business	—		1.6		—		1.6
Foreign currency translation	(3.6)		(7.7)		—		(11.3)
Goodwill as of June 30, 2022	$	275.8	$	662.6	$	5.1	$	943.5

The goodwill balances reflected above are net of accumulated impairment losses of $27.8 million for the Sealing Technologies segment and $108.7 million for the Engineered Materials segment as of June 30, 2022 and December 31, 2021.

Identifiable intangible assets are as follows:

	As of June 30, 2022				As of December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(in millions)
Amortized:
Customer relationships	$	522.6	$	177.6	$	536.5	$	166.0
Existing technology	479.8		66.9		480.8		49.5
Trademarks	69.8		26.9		70.9		24.9
Other	41.1		27.1		41.4		22.4
	1,113.3		298.5		1,129.6		262.8
Indefinite-Lived:
Trademarks	46.4		—		46.6		—
Total	$	1,159.7	$	298.5	$	1,176.2	$	262.8

Amortization for the quarters and six months ended June 30, 2022 and 2021 were $19.6 million, $11.3 million, $39.4 million, and $22.6 million , respectively.

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Accrued Expenses

6 Months Ended

Jun. 30, 2022

Payables and Accruals [Abstract]

Accrued Expenses

Accrued Expenses

	June 30, 2022		December 31, 2021
	(in millions)
Salaries, wages and employee benefits	$	44.5	$	60.5
Interest	4.9		4.9
Environmental	17.1		11.3
Income taxes	13.5		10.6
Taxes other than income taxes	9.4		9.4
Operating lease liabilities	9.7		10.0
Other	25.2		28.5
	$	124.3	$	135.2

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Long-Term Debt

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

Senior Secured Credit Facilities

On December 17, 2021, we entered into a Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”) among the Company and EnPro Holdings, as borrowers, certain foreign subsidiaries of the Company from time to time party thereto, as designated borrowers, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. The Amended Credit Agreement amends, restates and replaces the Second Amended and Restated Credit Agreement dated as of June 28, 2018, as amended, among the Company and EnPro Holdings as borrowers, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

The Amended Credit Agreement provides for credit facilities in the initial aggregate principal amount of $1,007.5 million, consisting of a five-year, senior secured revolving credit facility of $400.0 million (the “Revolving Credit Facility”), a $142.5 million senior secured term loan facility in replacement of our existing senior secured term loan facility, maturing September 25, 2024 (the “Term Loan A-1 Facility”), a five-year, senior secured term loan facility of $315.0 million (the “Term Loan A-2 Facility”) and a 364-day, senior secured term loan facility of $150.0 million (the “364-Day Facility” and together with the Revolving Credit Facility, the Term Loan A-1 Facility and the Term Loan A-2 Facility, the “Facilities”). The Amended Credit Agreement also provides that we may seek incremental term loans and/or additional revolving credit commitments in an amount equal to the greater of $275.0 million and 100% of consolidated EBITDA for the most recently ended four-quarter period for which we have reported financial results, plus additional amounts based on a consolidated senior secured leverage ratio. The Amended Credit Agreement became effective on December 17, 2021.

Initially, borrowings under the Facilities (other than the 364-Day Facility) bear interest at an annual rate of LIBOR plus 1.75% or base rate plus 0.75%, although these interest rates are subject to incremental increase or decrease based on a consolidated total net leverage ratio. Borrowings under the 364-Day Facility bear interest at an annual rate of LIBOR plus 1.50% or base rate plus 0.50%. In addition, a commitment fee accrues with respect to the unused amount of the Revolving Credit Facility at an annual rate of 0.225%, which rate is also subject to incremental increase or decrease based on a consolidated total net leverage ratio. The Amended Credit Agreement contains customary LIBOR replacement provisions.

The Term Loan A-1 Facility amortizes on a quarterly basis in an annual amount equal to 2.50% of the original principal amount of the Term Loan A-1 Facility ($150.0 million) in year one after the closing, 5.00% of such original principal amount in year two and 1.25% of such original principal amount in each of the first three quarters of year three, with the remaining outstanding principal amount payable at maturity. The Term Loan A-2 Facility amortizes on a quarterly basis in an annual amount equal to 2.5% of the original principal amount of the Term Loan A-2 Facility in each of years one through three, 5.0% of such original principal amount in year four and 1.25% of such original principal amount in each of the first three quarters of year five, with the remaining outstanding principal amount payable at maturity. The 364-Day Facility does not amortize and will be payable in full at maturity. The Facilities are subject to prepayment with the net cash proceeds of certain asset sales, casualty or condemnation events and non-permitted debt issuances.

The Company and EnPro Holdings are the permitted borrowers under the Facilities. The Company may also from time to time designate any of its wholly owned foreign subsidiaries as a borrower under the Revolving Credit Facility. Each of the Company’s domestic subsidiaries (other than any subsidiaries that may be designated as “unrestricted” by the Company from time to time, and inactive subsidiaries) is required to guarantee the obligations of the borrowers under the Facilities, and each of the Company’s existing domestic subsidiaries (other than inactive subsidiaries) has entered into the Amended Credit Agreement to provide such a guarantee.

Borrowings under the Facilities are secured by a first-priority pledge of certain assets. The Amended Credit Agreement contains certain financial covenants and required financial ratios including a maximum consolidated total net leverage and a minimum consolidated interest coverage as defined in the Amended Credit Agreement. We were in compliance with all covenants of the Amended Credit Agreement as of June 30, 2022.

The borrowing availability under our Revolving Credit Facility at June 30, 2022 was $294.2 million after giving consideration to $10.8 million of outstanding letters of credit and $95.0 million of outstanding borrowings. The outstanding principal balance of the Term Loan A-1 Facility, Term Loan A-2 Facility and 364-Day Facility at June 30, 2022 was $139.7 million, $311.1 million and $100.0 million, respectively.

Senior Notes

On October 17, 2018, we completed the offering of $350.0 million aggregate principal amount of 5.75% Senior Notes due 2026 (the "Senior Notes") and applied the net proceeds of that offering, together with borrowings under the Revolving Credit Facility, to redeem on October 31, 2018 the full $450.0 million aggregate outstanding principal amount of the 5.875% Senior Notes due 2022.

The Senior Notes were issued to investors at 100% of the principal amount thereof. The Senior Notes are unsecured, unsubordinated obligations of EnPro and mature on October 15, 2026. Interest on the Senior Notes accrues at a rate of 5.75% per annum and is payable semi-annually in cash in arrears on April 15 and October 15 of each year. 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 October 15, 2021, 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. Each holder of the Senior Notes may require us to repurchase some or all of the Senior Notes held by such holder 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, paying dividends and repurchasing shares of our common stock, subject in each case to specified exceptions and qualifications set forth in the indenture. The indenture further requires us to apply the net cash proceeds of certain asset sales not reinvested in acquisitions, or used to repay or otherwise reduce specified indebtedness within

a specified period, in the event of the net proceeds exceeding a specified amount, to offer to repurchase the Senior Notes at a price equal to 100.0% of the principal amount thereof plus accrued and unpaid interest.

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Pensions

6 Months Ended

Jun. 30, 2022

Retirement Benefits [Abstract]

Pensions

Pensions

The components of net periodic benefit cost for our U.S. and foreign defined benefit pension plans for the quarters and six months ended June 30, 2022 and 2021, are as follows:

	Quarters Ended June 30,				Six Months Ended June 30,
	Pension Benefits				Pension Benefits
	2022		2021		2022		2021
	(in millions)
Service cost	$	0.3	$	0.4	$	0.7	$	0.8
Interest cost	2.5		2.2		4.9		4.5
Expected return on plan assets	(3.3)		(4.6)		(6.6)		(9.1)
Amortization of prior service cost	—		0.1		—		0.1
Amortization of net loss	0.2		0.2		0.3		0.3
Net periodic benefit cost (benefit)	$	(0.3)	$	(1.7)	$	(0.7)	$	(3.4)

No contributions were made in the six months ended June 30, 2022 to our U.S. defined benefit pension plans and we do not anticipate making contributions in 2022 to these plans.

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Shareholders' Equity

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Shareholders' Equity

Shareholders' Equity

Changes in shareholders' equity for the six months ended June 30, 2022 are as follows:

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (loss)		Treasury Stock		Total Shareholders' Equity		Redeemable Non-controlling Interests
(in millions, except per share data)	Shares	Amount
Balance, December 31, 2021	20.7	$	0.2	$	303.6	$	949.4	$	14.6	$	(1.2)	$	1,266.6	$	50.1
Net income	—	—		—		16.2		—		—		16.2		0.3
Other comprehensive loss	—	—		—		—		(11.7)		—		(11.7)		(1.0)
Dividends ($0.28 per share)	—	—		—		(5.8)		—		—		(5.8)		—
Incentive plan activity	0.1	—		(4.1)		—		—		—		(4.1)		—
Other	—	—		0.1		—		—		—		0.1		(0.1)
Balance, March 31, 2022	20.8	0.2		299.6		959.8		2.9		(1.2)		1,261.3		49.3
Net income	—	—		—		33.1		—		—		33.1		(0.1)
Other comprehensive income	—	—		—		—		(14.9)		—		(14.9)		(1.1)
Dividends ($0.28 per share)	—	—		—		(5.9)				—		(5.9)		—
Incentive plan activity	—	—		1.4		—		—		—		1.4		—
Balance, June 30, 2022	20.8	$	0.2	$	301.0	$	987.0	$	(12.0)	$	(1.2)	$	1,275.0	$	48.1

Changes in shareholders' equity for the six months ended June 30, 2021 are as follows:

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Shareholders' Equity		Redeemable Non-controlling Interests
(in millions, except per share data)	Shares	Amount
Balance, December 31, 2020	20.5	$	0.2	$	289.6	$	794.8	$	(4.9)	$	(1.2)	$	1,078.5	$	48.4
Net income	—	—		—		18.0		—		—		18.0		0.1
Other comprehensive loss	—	—		—		—		(7.9)		—		(7.9)		(0.5)
Dividends ($0.27 per share)	—	—		—		(5.7)		—		—		(5.7)		—
Incentive plan activity	0.1	—		1.2		—		—		—		1.2		—
Other	—	—		(0.1)		(3.1)		—		—		(3.2)		3.2
Balance, March 31, 2021	20.6	0.2		290.7		804.0		(12.8)		(1.2)		1,080.9		51.2
Net income (loss)	—	—		—		29.3		—		—		29.3		(0.1)
Other comprehensive income	—	—		—		—		11.8		—		11.8		0.6
Dividends ($0.27 per share)	—	—		—		(5.6)				—		(5.6)		—
Incentive plan activity	—	—		1.6		—		—		—		1.6		—
Other	—	—		(0.1)		0.2		—		—		0.1		(0.1)
Balance, June 30, 2021	20.6	$	0.2	$	292.2	$	827.9	$	(1.0)	$	(1.2)	$	1,118.1	$	51.6

We intend to declare regular quarterly cash dividends on our common stock, as determined by our board of directors, after taking into account our current and projected cash flows, earnings, financial position, debt covenants and other relevant factors. In accordance with the board of directors' declaration, total dividend payments of $11.7 million were made during the six months ended June 30, 2022.

In July 2022, our board of directors declared a dividend of $0.28 per share, payable on September 14, 2022 to all shareholders of record as of August 31, 2022.

In October 2020, our board of directors authorized the expenditure of up to $50.0 million for the repurchase of our outstanding common shares through October 2022. We have not made any repurchases under this authorization.

In February 2022, we issued stock options to certain key executives for 0.1 million common shares with an exercise price of $106.54 per share. The options vest pro-rata on the first, second and third anniversaries of the grant date, subject to continued employment. No options have a term greater than 10 years.

We determine the fair value of stock options using the Black-Scholes option pricing formula as of the grant date. Key inputs into this formula include expected term, expected volatility, expected dividend yield, and the risk-free interest rate. This fair value is amortized on a straight line basis over the vesting period.

The expected term represents the period that our stock options are expected to be outstanding, and is determined based on historical experience of similar awards, given the contractual terms of the awards, vesting schedules, and expectations of future employee behavior. The fair value of stock options reflects a volatility factor calculated using historical market data for EnPro's common stock. The time frame used was approximated as a six-year period from the grant date for the awards. The dividend assumption is based on our expectations as of the grant date. We base the risk-free interest rate on the yield to maturity at the time of the stock option grant on zero-coupon U.S. government bonds having a remaining life equal to the option's expected life.

The option awards issued in 2022 had a fair value of $39.07 per share at their grant date. The following assumptions were used to estimate the fair value of the 2022 option awards:

Average expected term	6 years
Expected volatility	39.88	%
Risk-free interest rate	1.89	%
Expected dividend yield	1.05	%

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Business Segment Information

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Business Segment Information

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 Technologies segment designs, manufactures and sells sealing products, including: metallic, non-metallic and composite material gaskets, dynamic seals, compression packing, resilient metal seals, elastomeric seals, custom-engineered mechanical seals for applications in the aerospace industry and other markets, hydraulic components, expansion joints, sanitary gaskets, hoses and fittings for the hygienic process industries, fluid transfer products for the pharmaceutical and biopharmaceutical industries, and heavy-duty commercial vehicle parts used in wheel-end and suspension components. These products are used in a variety of industries, including chemical and petrochemical processing, pulp and paper processing, power generation, food and pharmaceutical processing, primary metal manufacturing, mining, water and waste treatment, heavy-duty trucking, aerospace, medical, filtration and semiconductor fabrication. In many of these industries, performance and durability are vital for safety and environmental protection. Many of our products are used in highly demanding applications, e.g., where extreme temperatures, extreme pressures, corrosive environments, strict tolerances, and/or worn equipment create challenges for product performance.

Our Advanced Surface Technologies segment applies proprietary technologies, processes, and capabilities to deliver highly differentiated suites of products and services for the most challenging applications in high growth markets. The segment’s products and services are used in highly demanding environments requiring performance, precision and repeatability, with a low tolerance for failure. The segment’s services include cleaning, coating, testing, refurbishment and verification services for critical components and assemblies used in state-of-the-art advanced node semiconductor manufacturing equipment. It designs, manufactures, and sells specialized optical filters and thin-film coatings for the most challenging applications in the industrial technology, life sciences, and semiconductor markets and complex front-end wafer processing sub-systems, new and refurbished electrostatic chuck pedestals, thin film coatings, and edge-welded metal bellows for the semiconductor equipment industry and for critical applications in the space, aerospace and defense markets.

Our Engineered Materials segment includes operations that design, manufacture and sell self-lubricating, non-rolling metal-polymer, engineered plastics, and fiber reinforced composite bearing products, critical service flange gaskets, seals and electrical flange isolation kits used in high-pressure wellhead equipment, flow lines, water injection lines, sour hydrocarbon process applications, and crude oil and natural gas pipeline/transmission line applications. These products are used in a wide range of applications, including the automotive, aerospace, pharmaceutical, pulp and paper, natural gas, health, power generation, machine tools, air treatment, refining, petrochemical and general industrial markets.

We measure operating performance based on segment earnings before interest, income taxes, depreciation, amortization, and other selected items ("Adjusted Segment EBITDA"), which is segment revenue reduced by operating expenses and other costs identifiable with the segment, excluding acquisition and divestiture expenses, restructuring costs, impairment charges, non-controlling interest compensation, amortization of the fair value adjustment to acquisition date inventory, and depreciation and amortization. Adjusted Segment EBITDA is not defined under GAAP and may not be comparable to similarly-titled measures used by other companies. 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 Adjusted Segment EBITDA. The accounting policies of the reportable segments are the same as those for EnPro.

Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa being subject to reduction for certain types of employment terminations of the sellers. This expense is recorded in selling, general, and administrative expenses on our Consolidated Statements of Operations and is directly related to the terms of the acquisitions. This expense will continue to be recognized as

compensation expense over the term of the put and call options associated with the acquisitions unless certain employment terminations have occurred.

Segment operating results and other financial data for the quarters and six months ended June 30, 2022 and 2021 were as follows:

	Quarters Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
Sales
Sealing Technologies	$	155.9	$	162.5	$	309.5	$	309.0
Advanced Surface Technologies	121.5		59.2		238.2		113.9
Engineered Materials	56.5		80.0		115.5		160.4
	333.9		301.7		663.2		583.3
Intersegment sales	(0.6)		(3.1)		(1.2)		(5.4)
Total sales	$	333.3	$	298.6	$	662.0	$	577.9
Adjusted Segment EBITDA
Sealing Technologies	$	42.5	$	42.4	$	76.0	$	76.4
Advanced Surface Technologies	37.8		15.6		72.7		32.9
Engineered Materials	9.5		13.0		18.7		25.6
	$	89.8	$	71.0	$	167.4	$	134.9
Reconciliation of Adjusted Segment EBITDA to income before income taxes
Adjusted Segment EBITDA	$	89.8	$	71.0	$	167.4	$	134.9
Acquisition and divestiture expenses	(0.3)		—		(0.4)		(0.1)
Non-controlling interest compensation allocation	(1.4)		(1.3)		(0.5)		(2.9)
Amortization of fair value adjustment to acquisition date inventory	(1.0)		(2.3)		(11.3)		(4.8)
Restructuring and impairment expense	(0.9)		(2.7)		(1.3)		(4.5)
Depreciation and amortization expense	(27.9)		(18.5)		(55.9)		(37.4)
Corporate expenses	(9.5)		(12.8)		(22.9)		(24.3)
Interest expense, net	(7.7)		(3.8)		(14.6)		(7.6)
Other income (expense), net	(1.8)		0.4		—		—
Income before income taxes	$	39.3	$	30.0	$	60.5	$	53.3

Segment assets are as follows:

	June 30, 2022		December 31, 2021
	(in millions)
Sealing Technologies	$	696.0	$	697.5
Advanced Surface Technologies	1,624.4		1,686.5
Engineered Materials	166.4		160.3
Corporate	327.9		425.5
	$	2,814.7	$	2,969.8

 

Backlog

As of June 30, 2022, the aggregate amount of transaction price of remaining performance obligations, or backlog, on a consolidated basis was $429.4 million. Approximately 94% of these obligations are expected to be satisfied within one year.

There is no certainty these orders will result in actual sales at the times or in the amounts ordered. In addition, for most of our business, this total is not particularly predictive of future performance because of our short lead times and some seasonality.

Revenue by End Market

Due to the diversified nature of our business and the wide array of products that we offer, we sell into a number of end markets. Underlying economic conditions within these markets are a major driver of our segments' sales performance. Below is a summary of our third-party sales by major end market with which we did business for the quarters and six months ended June 30, 2022 and 2021:

	Quarter Ended June 30, 2022
(in millions)	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
Aerospace	$	10.7	$	1.1	$	3.9	$	15.7
Automotive	0.4		0.6		14.8		15.8
Chemical and material processing	19.7		—		—		19.7
Food and pharmaceutical	18.5		—		—		18.5
General industrial	41.5		7.9		28.2		77.6
Medium-duty/heavy-duty truck	43.4		—		2.4		45.8
Oil and gas	5.5		1.1		5.9		12.5
Power generation	12.5		—		0.9		13.4
Semiconductors	1.2		110.3		—		111.5
Other	2.2		0.6		—		2.8
Total third-party sales	$	155.6	$	121.6	$	56.1	$	333.3

	Quarter Ended June 30, 2021
(in millions)	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
Aerospace	$	8.3	$	3.0	$	1.5	$	12.8
Automotive	0.6		0.2		16.3		17.1
Chemical and material processing	19.0		—		11.4		30.4
Food and pharmaceutical	16.6		—		0.3		16.9
General industrial	44.9		5.8		30.6		81.3
Medium-duty/heavy-duty truck	47.6		—		2.7		50.3
Oil and gas	5.4		1.7		15.8		22.9
Power generation	9.6		—		0.9		10.5
Semiconductors	5.4		47.9		—		53.3
Other	2.3		0.5		0.3		3.1
Total third-party sales	$	159.7	$	59.1	$	79.8	$	298.6

	Six Months Ended June 30, 2022
(in millions)	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
Aerospace	$	18.8	$	3.1	$	7.1	$	29.0
Automotive	1.1		0.8		30.2		32.1
Chemical and material processing	40.0		—		—		40.0
Food and pharmaceutical	37.5		—		—		37.5
General industrial	83.5		14.4		59.3		157.2
Medium-duty/heavy-duty truck	88.2		—		4.6		92.8
Oil and gas	10.6		1.7		12.0		24.3
Power generation	22.9		0.1		1.6		24.6
Semiconductors	2.5		216.3		—		218.8
Other	4.0		1.7		—		5.7
Total third-party sales	$	309.1	$	238.1	$	114.8	$	662.0

	Six Months Ended June 30, 2021
(in millions)	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
Aerospace	$	15.0	$	4.5	$	2.8	$	22.3
Automotive	1.0		0.5		35.0		36.5
Chemical and material processing	36.6		—		21.9		58.5
Food and pharmaceutical	33.0		—		0.8		33.8
General industrial	87.6		12.2		60.8		160.6
Medium-duty/heavy-duty truck	86.5		—		5.5		92.0
Oil and gas	9.6		2.4		30.7		42.7
Power generation	20.7		—		1.8		22.5
Semiconductors	10.1		92.8		—		102.9
Other	4.1		1.4		0.6		6.1
Total third-party sales	$	304.2	$	113.8	$	159.9	$	577.9

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Derivatives and Hedging

6 Months Ended

Jun. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging

Derivatives and Hedging

In September 2018, we entered into cross-currency swap agreements (the "Original Swap") with a notional amount of $200.0 million to manage foreign currency risk by effectively converting a portion of the interest payments related to our fixed-rate U.S. Dollar (“USD”)-denominated Senior Notes, including the semi-annual interest payments thereunder, to interest payments on fixed-rate Euro-denominated debt of 172.8 million EUR with a weighted average interest rate of 2.8%, with interest payment dates of March 15 and September 15 of each year. The Original Swap agreement matures on September 15, 2022.

In May 2019, we entered into additional cross-currency swap agreements (the "Additional Swap") with a notional amount of $100.0 million to manage an increased portion of our foreign currency risk by effectively converting a portion of the interest payments related to our fixed-rate USD-denominated Senior Notes, including the semi-annual interest payments thereunder, to interest payments on fixed-rate Euro-denominated debt of 89.6 million EUR with a weighted average interest rate of 3.5%, with interest payment dates of April 15 and October 15 of each year. The Additional Swap agreement matures on October 15, 2026.

During the term of the swap agreements, we will receive semi-annual payments from the counterparties due to the difference between the interest rate on the Senior Notes and the interest rate on the Euro debt underlying each of the swaps. There was no principal exchange at the inception of the arrangements, and there will be no exchange at maturity. At maturity (or earlier at our option), we and the counterparties will settle the swap agreements at their fair value in cash based on the aggregate notional amount and the then-applicable currency exchange rate compared to the exchange rate at the time the swap agreements were entered into.

We have designated these cross-currency swaps as qualifying hedging instruments and are accounting for them as a net investment hedge. At June 30, 2022, the fair value of the Swap and the Additional Swap equaled $21.9 million and $9.5 million and were recorded within our other current assets and other (non-current) assets, respectively, on the Consolidated Balance Sheet. The gains and losses resulting from fair value adjustments to the cross currency-swap agreements, excluding interest accruals related to the above receipts, are recorded in accumulated other comprehensive income within our cumulative foreign currency translation adjustment, as the swaps are effective in hedging the designated risk. Cash flows related to the cross-currency swaps are included in operating activities in the Consolidated Statements of Cash Flows, aside from the ultimate settlement with the counterparties, which will be included in investing activities.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Assets and liabilities measured at fair value on a recurring basis are summarized as follows:

	Fair Value Measurements as of
	June 30, 2022		December 31, 2021
	(in millions)
Assets
Foreign currency derivatives	31.4		8.7
Deferred compensation assets	11.3		10.9
	$	42.7	$	19.6
Liabilities
Deferred compensation liabilities	$	11.6	$	11.4

Our deferred compensation assets and liabilities are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. Our foreign currency derivatives are classified as Level 2 since their value is calculated based upon observable inputs including market USD/Euro exchange rates and market interest rates.

The carrying values of our significant financial instruments reflected in the Consolidated Balance Sheets approximated their respective fair values except for the following instruments:

	June 30, 2022				December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in millions)
Long-term debt	$	891.2	$	885.5	$	976.6	$	998.3

The fair values for long-term debt are based on quoted market prices for identical liabilities, but these are considered Level 2 computations because the market is not active.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2022

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)                                        

Changes in accumulated other comprehensive income (loss) by component (after tax) for the quarter ended June 30, 2022 are as follows:

(in millions)	Unrealized Translation Adjustments		Pension and Other Postretirement Plans		Total
Beginning balance	$	34.9	$	(32.0)	$	2.9
Other comprehensive loss before reclassifications	(16.1)		—		(16.1)
Amounts reclassified from accumulated other comprehensive loss	—		0.1		0.1
Net current-period other comprehensive income (loss)	(16.1)		0.1		(16.0)
Less: other comprehensive income attributable to redeemable non-controlling interests	(1.1)		—		(1.1)
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc.	(15.0)		0.1		(14.9)
Ending balance	$	19.9	$	(31.9)	$	(12.0)

    Changes in accumulated other comprehensive income (loss) by component (after tax) for the quarter ended June 30, 2021 are as follows:

(in millions)	Unrealized Translation Adjustments		Pension and Other Postretirement Plans		Total
Beginning balance	$	23.7	$	(36.5)	$	(12.8)
Other comprehensive income before reclassifications	12.2		—		12.2
Amounts reclassified from accumulated other comprehensive loss	—		0.2		0.2
Net current-period other comprehensive income	12.2		0.2		12.4
Less: other comprehensive income attributable to redeemable non-controlling interests	0.6		—		0.6
Net current-period other comprehensive income attributable to EnPro Industries, Inc.	11.6		0.2		11.8
Ending balance	$	35.3	$	(36.3)	$	(1.0)

Changes in accumulated other comprehensive income (loss) by component (after tax) for the six months ended June 30, 2022 are as follows:

(in millions)	Unrealized Translation Adjustments		Pension and Other Postretirement Plans		Total
Beginning balance	$	46.7	$	(32.1)	$	14.6
Other comprehensive loss before reclassifications	(29.0)		—		(29.0)
Amounts reclassified from accumulated other comprehensive income	—		0.2		0.2
Net current-period other comprehensive income (loss)	(29.0)		0.2		(28.8)
Less: other comprehensive loss attributable to redeemable non-controlling interests	(2.2)		—		(2.2)
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc.	(26.8)		0.2		(26.6)
Ending balance	$	19.9	$	(31.9)	$	(12.0)

Changes in accumulated other comprehensive income (loss) by component (after tax) for the six months ended June 30, 2021 are as follows:

(in millions)	Unrealized Translation Adjustments		Pension and Other Postretirement Plans		Total
Beginning balance	$	31.7	$	(36.6)	$	(4.9)
Other comprehensive loss before reclassifications	3.8		—		3.8
Amounts reclassified from accumulated other comprehensive loss	—		0.3		0.3
Net current-period other comprehensive income (loss)	3.8		0.3		4.1
Less: other comprehensive loss attributable to redeemable non-controlling interests	0.2		—		0.2
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc.	3.6		0.3		3.9
Ending balance	$	35.3	$	(36.3)	$	(1.0)

Reclassifications out of accumulated other comprehensive income (loss) for the six months ended June 30, 2022 and 2021 are as follows:

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)								Affected Statement of Operations Caption
	Quarters Ended     June 30,				Six Months Ended   June 30,
(in millions)	2022		2021		2022		2021
Pension and other postretirement plans adjustments:
Actuarial losses	$	0.2	$	0.2	$	0.3	$	0.3	(1)
Prior service costs	—		0.1		—		0.1		(1)
Total before tax	0.2		0.3		0.3		0.4		Income before income taxes
Tax benefit	(0.1)		(0.1)		(0.1)		(0.1)		Income tax expense
Net of tax	$	0.1	$	0.2	$	0.2	$	0.3	Net income

(1)These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost. As these are components of net periodic pension cost other than service cost, the affected Statement of Operations captions are other income (expense) (See Note 9, “Pensions"” for additional details).

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

General

A description of certain environmental 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 laws and regulations of the U.S. and foreign countries. We take a proactive approach in our efforts to comply with these laws and regulations 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 or an investigation to determine responsibility for environmental conditions at 19 sites. At 12 of these sites, the future cost per site for us or our subsidiary is expected to exceed $100,000. Of these 19 sites, 17 are sites where we or one or more of our subsidiaries formerly conducted business operations but no longer do, and 2 are sites where we conduct manufacturing operations. Investigations have been completed for 16 sites and are in progress at 3 sites. An investigation to determine responsibility for environmental conditions is ongoing at one site.

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. For sites with multiple future projected cost scenarios for identified feasible investigation and remediation options where no one estimate is more likely than all the others, our policy is to accrue the lowest estimate among the range of estimates. 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 the remediation of similar contaminated sites. Liabilities are established for all sites based on these factors. As assessments and remediation progress at individual sites, these liabilities are reviewed and adjusted to reflect additional technical data and legal information. As of June 30, 2022 and December 31, 2021, we had established liabilities aggregating $45.2 million and $46.6 million, respectively, for estimated future expenditures relating to environmental contingencies. The current portion of our aggregate environmental liability at June 30, 2022 was $17.1 million. 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 fully or partially 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.

We believe that our accruals for specific environmental liabilities are adequate based on currently available information. Based upon limited information regarding any incremental remediation or other actions that may be required at these sites, we cannot estimate any further loss or a reasonably possible range of loss related to these matters. 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.

Lower Passaic River Study Area

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 19 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 a predecessor of EnPro Holdings when it sold a majority interest in Crucible Materials Corporation (the successor of Crucible) in 1985. The United States Environmental Protection Agency (the “EPA”) notified our subsidiary in September 2003 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.

EnPro Holdings 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. In September 2018, EnPro Holdings withdrew from the Cooperating Parties Group but remains a party to the May 2007 Administrative Order on Consent. 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 $1.73 billion, although estimates of the costs and the timing of costs are inherently imprecise. On March 3, 2016, the EPA issued the final Record of Decision (ROD) as to the remedy for the lower eight miles of the Lower Passaic River Study Area, with the maximum estimated cost being reduced by the EPA from $1.73 billion to $1.38 billion, primarily due to a reduction in the amount of cubic yards of material that will be dredged. In October 2016, Occidental Chemical Corporation, the successor to the entity that operated the Diamond Alkali chemical manufacturing facility, reached an agreement with the EPA to develop the design for this proposed remedy at an estimated cost of $165 million. The EPA has estimated that it will take approximately four years to develop this design. On June 30, 2018, Occidental Chemical Corporation sued over 120 parties, including the Company, in the United States District Court for New Jersey seeking recovery of response costs under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA").

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.

On April 14, 2021, the EPA issued its proposed remedy for the upper nine miles of the river, with an estimated present value cost of approximately $441 million. The proposed remedy would involve dredging and capping of the river sediment as an interim remedy followed by a period of monitoring to evaluate the response of the river system to the interim remedy.

When the EPA initiated the allocation process in 2017, it explained that a fair, carefully structured, information-based allocation was necessary to promote settlements. With the completion of the allocation process, in the second quarter of 2021 the EPA began settlement negotiations with the parties that participated in the allocation process, including EnPro Holdings. Our reserve for this site at June 30, 2022 was $6.6 million. Further adjustments to our reserve for this site are possible as further information is developed in the course of these discussions.

Arizona Uranium Mines

EnPro Holdings has received notices from the EPA asserting that it is a potentially responsible party under the CERCLA as the successor to a former operator of eight uranium mines in Arizona. The former operator conducted operations at the mines from 1954 to 1957. In the 1990s, remediation work performed by others at these sites consisted of capping the exposed areas of the mines. We have previously reserved amounts of probable loss associated with these mines, principally including the cost of the investigative work to be conducted at such mines. We entered into an Administrative Settlement Agreement and Order on Consent for Interim Removal Action with the EPA effective November 7, 2017 for the performance of this work. We entered into a First Modification of Original Administrative Settlement Agreement and Order on Consent effective July 8, 2022 for the performance of Engineering Evaluations and Cost Analyses of potential remedial options at each of the sites. In 2020, EPA

initiated group discussions with EnPro Holdings and other potentially responsible parties to resolve various technical issues, including the development of cleanup standards. Based on these discussions and subsequent discussions with other responsible parties with similar sites, we have concluded that further remedial work beyond maintenance of and minor repairs to the existing caps is probable, and we have evaluated the feasibility of various remediation scenarios. Our reserve at June 30, 2022 for this site was $13.3 million, which reflects the low end of the range of our reasonably likely liability with respect to these sites. We are not able at this time to estimate the upper end of a range of liability with respect to these sites.

On October 18, 2021, the United States District Court for the District of Arizona approved and entered a Consent Decree pursuant to which the U.S government will reimburse the Company for 35% of necessary costs of response, as defined in 42 U.S.C. section 9601(25), previously or to be in the future incurred by the Company which arise out of or in connection with releases or threatened releases of hazardous substances at or emanating from the mine sites. We expect future contributions of $3.4 million from the U.S. government towards remediation of the site. This amount was included in other assets in the accompanying consolidated balance sheet at June 30, 2022.

Except with respect to 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.

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 EnPro Holdings until 1983 when its assets and liabilities were distributed to a new subsidiary, Crucible Materials Corporation. EnPro Holdings 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 and is no longer conducting 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 EnPro Holdings' period of ownership of Crucible. Based on EnPro Holdings' 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, historical experience, and trends result in changes to our estimate.

Changes in the product warranty liability for the six months ended June 30, 2022 and 2021 are as follows:

	2022		2021
	(in millions)
Balance at beginning of year	$	4.9	$	6.7
Net charges to expense	0.7		1.0
Settlements made	(0.5)		(1.5)
Balance at end of period	$	5.1	$	6.2

Asbestos Insurance Receivables

Asbestos litigation claims against certain of our subsidiaries, including Garlock Sealing Technologies, LLC ("GST"), were resolved pursuant to the joint plan of reorganization (the "Joint Plan") filed in proceedings under Chapter 11 of the United States Bankruptcy Code that was consummated on July 29, 2017. Under the Joint Plan, GST and EnPro Holdings retained their rights to seek reimbursement under insurance policies for any amounts they have paid in the past to resolve asbestos claims, including contributions made to the asbestos claims resolution trust established under the Joint Plan (the "Trust"). These policies include a number of primary and excess general liability insurance policies that were purchased by EnPro Holdings and were in effect prior to January 1, 1976 (the “Pre-GST Coverage Block”). The policies provide coverage for “occurrences” happening during the policy periods and cover losses associated with product liability claims against EnPro Holdings and

certain of its subsidiaries. Asbestos claims against GST are not covered under these policies because GST was not a subsidiary of EnPro Holdings prior to 1976. The Joint Plan provides that EnPro Holdings may retain the first $25 million of any settlements and judgments collected for non-GST asbestos claims related to insurance policies in the Pre-GST Coverage Block and EnPro Holdings and the Trust will share equally in any settlements and judgments EnPro Holdings may collect in excess of $25 million. To date, EnPro Holdings has collected almost $22 million in settlements for non-GST asbestos claims related to the Pre-GST Coverage Block and anticipates further possible collections when and if the Trust begins making claims payments on non-GST Claims. Under such circumstances, we believe that EnPro Holdings could potentially bill and collect over time, as much as $10 million of insurance proceeds for non-GST asbestos claims to reimburse it for such Trust payments to non-GST Trust claimants. After EnPro Holdings collects the next approximately $3 million of that coverage, remaining collections for non-GST asbestos claims from the Pre-GST Coverage Block would be shared equally with the Trust. We received payments of $2.2 million from an insurer in the GST Coverage Block in the first quarter of 2022.In the second quarter of 2022, based on our analysis and projection of expected future probable collections from both the Pre-GST Coverage Block as well as insurance recoveries from insolvent carriers, we lowered our asbestos receivable balance, resulting in the recognition of $2.8 million in expense in the second quarter of 2022, which is included in Other Expense on our Consolidated Statement of Operations. At June 30, 2022 we have a receivable of $2.4 million related to these recoveries recorded on our Consolidated Balance Sheet, of which $1.0 million was included in Other Current Assets with the remaining balance in Other Assets.

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Overview and Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying interim consolidated financial statements are unaudited, and certain related information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in accordance with Rule 10-01 of Regulation S-X. They were prepared following the same policies and procedures used in the preparation of our annual financial statements and reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of results for the periods presented. The Consolidated Balance Sheet as of December 31, 2021 was derived from the audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2021. The results of operations for the interim periods are not necessarily indicative of the results for the fiscal year. These consolidated financial statements should be read in conjunction with our annual consolidated financial statements for the year ended December 31, 2021 included within our annual report on Form 10-K.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount 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.

All intercompany accounts and transactions between our consolidated operations have been eliminated.

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Acquisition (Tables)

6 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisition, Pro Forma Information

The following pro forma condensed consolidated financial results of operations for EnPro are presented as if the acquisition had been completed prior to 2021:

	Quarters Ended June 30,				Six Months Ended June 30,
(in millions)	2022		2021		2022		2021
Pro forma net sales	$	333.3	$	343.8	$	662.0	$	666.0
Pro forma net income	$	34.5	$	35.7	$	59.3	$	57.8

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Earnings Per Share

	Quarters Ended     June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions, except per share amounts)
Numerator (basic and diluted):
Net income	$	33.0	$	29.2	$	49.5	$	47.3
Less: net income (loss) attributable to redeemable non-controlling interests	(0.1)		(0.1)		0.2		—
Net income attributable to EnPro Industries, Inc.	$	33.1	$	29.3	$	49.3	$	47.3
Denominator:
Weighted-average shares – basic	20.8		20.6		20.8		20.6
Share-based awards	—		0.2		—		0.2
Weighted-average shares – diluted	20.8		20.8		20.8		20.8
Basic earnings per share attributable to EnPro Industries, Inc.	$	1.59	$	1.42	$	2.37	$	2.30
Diluted earnings per share attributable to EnPro Industries, Inc.	$	1.59	$	1.41	$	2.36	$	2.28

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Inventories (Tables)

6 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Schedule of Inventories

	June 30, 2022		December 31, 2021
	(in millions)
Finished products	$	60.0	$	56.8
Work in process	35.6		41.8
Raw materials and supplies	79.7		66.2
	175.3		164.8
Reserve to reduce certain inventories to LIFO basis	(7.3)		(4.8)
Total inventories	$	168.0	$	160.0

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2022

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 six months ended June 30, 2022, are as follows:

	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
	(in millions)
Goodwill as of December 31, 2021	279.4		668.7		5.1		$	953.2
Acquisition of business	—		1.6		—		1.6
Foreign currency translation	(3.6)		(7.7)		—		(11.3)
Goodwill as of June 30, 2022	$	275.8	$	662.6	$	5.1	$	943.5

Schedule of Finite-Lived Intangible Assets

Identifiable intangible assets are as follows:

	As of June 30, 2022				As of December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(in millions)
Amortized:
Customer relationships	$	522.6	$	177.6	$	536.5	$	166.0
Existing technology	479.8		66.9		480.8		49.5
Trademarks	69.8		26.9		70.9		24.9
Other	41.1		27.1		41.4		22.4
	1,113.3		298.5		1,129.6		262.8
Indefinite-Lived:
Trademarks	46.4		—		46.6		—
Total	$	1,159.7	$	298.5	$	1,176.2	$	262.8

Schedule of Indefinite-Lived Intangible Assets

Identifiable intangible assets are as follows:

	As of June 30, 2022				As of December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(in millions)
Amortized:
Customer relationships	$	522.6	$	177.6	$	536.5	$	166.0
Existing technology	479.8		66.9		480.8		49.5
Trademarks	69.8		26.9		70.9		24.9
Other	41.1		27.1		41.4		22.4
	1,113.3		298.5		1,129.6		262.8
Indefinite-Lived:
Trademarks	46.4		—		46.6		—
Total	$	1,159.7	$	298.5	$	1,176.2	$	262.8

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Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2022

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

	June 30, 2022		December 31, 2021
	(in millions)
Salaries, wages and employee benefits	$	44.5	$	60.5
Interest	4.9		4.9
Environmental	17.1		11.3
Income taxes	13.5		10.6
Taxes other than income taxes	9.4		9.4
Operating lease liabilities	9.7		10.0
Other	25.2		28.5
	$	124.3	$	135.2

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Pensions (Tables)

6 Months Ended

Jun. 30, 2022

Retirement Benefits [Abstract]

Schedule of Net Periodic Benefit Cost

The components of net periodic benefit cost for our U.S. and foreign defined benefit pension plans for the quarters and six months ended June 30, 2022 and 2021, are as follows:

	Quarters Ended June 30,				Six Months Ended June 30,
	Pension Benefits				Pension Benefits
	2022		2021		2022		2021
	(in millions)
Service cost	$	0.3	$	0.4	$	0.7	$	0.8
Interest cost	2.5		2.2		4.9		4.5
Expected return on plan assets	(3.3)		(4.6)		(6.6)		(9.1)
Amortization of prior service cost	—		0.1		—		0.1
Amortization of net loss	0.2		0.2		0.3		0.3
Net periodic benefit cost (benefit)	$	(0.3)	$	(1.7)	$	(0.7)	$	(3.4)

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Shareholders' Equity (Tables)

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Schedule of Stockholders Equity

Changes in shareholders' equity for the six months ended June 30, 2022 are as follows:

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (loss)		Treasury Stock		Total Shareholders' Equity		Redeemable Non-controlling Interests
(in millions, except per share data)	Shares	Amount
Balance, December 31, 2021	20.7	$	0.2	$	303.6	$	949.4	$	14.6	$	(1.2)	$	1,266.6	$	50.1
Net income	—	—		—		16.2		—		—		16.2		0.3
Other comprehensive loss	—	—		—		—		(11.7)		—		(11.7)		(1.0)
Dividends ($0.28 per share)	—	—		—		(5.8)		—		—		(5.8)		—
Incentive plan activity	0.1	—		(4.1)		—		—		—		(4.1)		—
Other	—	—		0.1		—		—		—		0.1		(0.1)
Balance, March 31, 2022	20.8	0.2		299.6		959.8		2.9		(1.2)		1,261.3		49.3
Net income	—	—		—		33.1		—		—		33.1		(0.1)
Other comprehensive income	—	—		—		—		(14.9)		—		(14.9)		(1.1)
Dividends ($0.28 per share)	—	—		—		(5.9)				—		(5.9)		—
Incentive plan activity	—	—		1.4		—		—		—		1.4		—
Balance, June 30, 2022	20.8	$	0.2	$	301.0	$	987.0	$	(12.0)	$	(1.2)	$	1,275.0	$	48.1

Changes in shareholders' equity for the six months ended June 30, 2021 are as follows:

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Shareholders' Equity		Redeemable Non-controlling Interests
(in millions, except per share data)	Shares	Amount
Balance, December 31, 2020	20.5	$	0.2	$	289.6	$	794.8	$	(4.9)	$	(1.2)	$	1,078.5	$	48.4
Net income	—	—		—		18.0		—		—		18.0		0.1
Other comprehensive loss	—	—		—		—		(7.9)		—		(7.9)		(0.5)
Dividends ($0.27 per share)	—	—		—		(5.7)		—		—		(5.7)		—
Incentive plan activity	0.1	—		1.2		—		—		—		1.2		—
Other	—	—		(0.1)		(3.1)		—		—		(3.2)		3.2
Balance, March 31, 2021	20.6	0.2		290.7		804.0		(12.8)		(1.2)		1,080.9		51.2
Net income (loss)	—	—		—		29.3		—		—		29.3		(0.1)
Other comprehensive income	—	—		—		—		11.8		—		11.8		0.6
Dividends ($0.27 per share)	—	—		—		(5.6)				—		(5.6)		—
Incentive plan activity	—	—		1.6		—		—		—		1.6		—
Other	—	—		(0.1)		0.2		—		—		0.1		(0.1)
Balance, June 30, 2021	20.6	$	0.2	$	292.2	$	827.9	$	(1.0)	$	(1.2)	$	1,118.1	$	51.6

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The option awards issued in 2022 had a fair value of $39.07 per share at their grant date. The following assumptions were used to estimate the fair value of the 2022 option awards:

Average expected term	6 years
Expected volatility	39.88	%
Risk-free interest rate	1.89	%
Expected dividend yield	1.05	%

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Business Segment Information (Tables)

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Schedule of Segment Operating Results and Other Financial Data

Segment operating results and other financial data for the quarters and six months ended June 30, 2022 and 2021 were as follows:

	Quarters Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
Sales
Sealing Technologies	$	155.9	$	162.5	$	309.5	$	309.0
Advanced Surface Technologies	121.5		59.2		238.2		113.9
Engineered Materials	56.5		80.0		115.5		160.4
	333.9		301.7		663.2		583.3
Intersegment sales	(0.6)		(3.1)		(1.2)		(5.4)
Total sales	$	333.3	$	298.6	$	662.0	$	577.9
Adjusted Segment EBITDA
Sealing Technologies	$	42.5	$	42.4	$	76.0	$	76.4
Advanced Surface Technologies	37.8		15.6		72.7		32.9
Engineered Materials	9.5		13.0		18.7		25.6
	$	89.8	$	71.0	$	167.4	$	134.9
Reconciliation of Adjusted Segment EBITDA to income before income taxes
Adjusted Segment EBITDA	$	89.8	$	71.0	$	167.4	$	134.9
Acquisition and divestiture expenses	(0.3)		—		(0.4)		(0.1)
Non-controlling interest compensation allocation	(1.4)		(1.3)		(0.5)		(2.9)
Amortization of fair value adjustment to acquisition date inventory	(1.0)		(2.3)		(11.3)		(4.8)
Restructuring and impairment expense	(0.9)		(2.7)		(1.3)		(4.5)
Depreciation and amortization expense	(27.9)		(18.5)		(55.9)		(37.4)
Corporate expenses	(9.5)		(12.8)		(22.9)		(24.3)
Interest expense, net	(7.7)		(3.8)		(14.6)		(7.6)
Other income (expense), net	(1.8)		0.4		—		—
Income before income taxes	$	39.3	$	30.0	$	60.5	$	53.3

Schedule of Total Assets Segment

Segment assets are as follows:

	June 30, 2022		December 31, 2021
	(in millions)
Sealing Technologies	$	696.0	$	697.5
Advanced Surface Technologies	1,624.4		1,686.5
Engineered Materials	166.4		160.3
Corporate	327.9		425.5
	$	2,814.7	$	2,969.8

Schedule of Disaggregation of Revenue

Below is a summary of our third-party sales by major end market with which we did business for the quarters and six months ended June 30, 2022 and 2021:

	Quarter Ended June 30, 2022
(in millions)	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
Aerospace	$	10.7	$	1.1	$	3.9	$	15.7
Automotive	0.4		0.6		14.8		15.8
Chemical and material processing	19.7		—		—		19.7
Food and pharmaceutical	18.5		—		—		18.5
General industrial	41.5		7.9		28.2		77.6
Medium-duty/heavy-duty truck	43.4		—		2.4		45.8
Oil and gas	5.5		1.1		5.9		12.5
Power generation	12.5		—		0.9		13.4
Semiconductors	1.2		110.3		—		111.5
Other	2.2		0.6		—		2.8
Total third-party sales	$	155.6	$	121.6	$	56.1	$	333.3

	Quarter Ended June 30, 2021
(in millions)	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
Aerospace	$	8.3	$	3.0	$	1.5	$	12.8
Automotive	0.6		0.2		16.3		17.1
Chemical and material processing	19.0		—		11.4		30.4
Food and pharmaceutical	16.6		—		0.3		16.9
General industrial	44.9		5.8		30.6		81.3
Medium-duty/heavy-duty truck	47.6		—		2.7		50.3
Oil and gas	5.4		1.7		15.8		22.9
Power generation	9.6		—		0.9		10.5
Semiconductors	5.4		47.9		—		53.3
Other	2.3		0.5		0.3		3.1
Total third-party sales	$	159.7	$	59.1	$	79.8	$	298.6

	Six Months Ended June 30, 2022
(in millions)	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
Aerospace	$	18.8	$	3.1	$	7.1	$	29.0
Automotive	1.1		0.8		30.2		32.1
Chemical and material processing	40.0		—		—		40.0
Food and pharmaceutical	37.5		—		—		37.5
General industrial	83.5		14.4		59.3		157.2
Medium-duty/heavy-duty truck	88.2		—		4.6		92.8
Oil and gas	10.6		1.7		12.0		24.3
Power generation	22.9		0.1		1.6		24.6
Semiconductors	2.5		216.3		—		218.8
Other	4.0		1.7		—		5.7
Total third-party sales	$	309.1	$	238.1	$	114.8	$	662.0

	Six Months Ended June 30, 2021
(in millions)	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total
Aerospace	$	15.0	$	4.5	$	2.8	$	22.3
Automotive	1.0		0.5		35.0		36.5
Chemical and material processing	36.6		—		21.9		58.5
Food and pharmaceutical	33.0		—		0.8		33.8
General industrial	87.6		12.2		60.8		160.6
Medium-duty/heavy-duty truck	86.5		—		5.5		92.0
Oil and gas	9.6		2.4		30.7		42.7
Power generation	20.7		—		1.8		22.5
Semiconductors	10.1		92.8		—		102.9
Other	4.1		1.4		0.6		6.1
Total third-party sales	$	304.2	$	113.8	$	159.9	$	577.9

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of 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:

	Fair Value Measurements as of
	June 30, 2022		December 31, 2021
	(in millions)
Assets
Foreign currency derivatives	31.4		8.7
Deferred compensation assets	11.3		10.9
	$	42.7	$	19.6
Liabilities
Deferred compensation liabilities	$	11.6	$	11.4

Schedule of Carrying Value of Financial Instruments

The carrying values of our significant financial instruments reflected in the Consolidated Balance Sheets approximated their respective fair values except for the following instruments:

	June 30, 2022				December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in millions)
Long-term debt	$	891.2	$	885.5	$	976.6	$	998.3

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2022

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Changes in Accumulated Other Comprehensive Income (Loss) by Component

Changes in accumulated other comprehensive income (loss) by component (after tax) for the quarter ended June 30, 2022 are as follows:

(in millions)	Unrealized Translation Adjustments		Pension and Other Postretirement Plans		Total
Beginning balance	$	34.9	$	(32.0)	$	2.9
Other comprehensive loss before reclassifications	(16.1)		—		(16.1)
Amounts reclassified from accumulated other comprehensive loss	—		0.1		0.1
Net current-period other comprehensive income (loss)	(16.1)		0.1		(16.0)
Less: other comprehensive income attributable to redeemable non-controlling interests	(1.1)		—		(1.1)
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc.	(15.0)		0.1		(14.9)
Ending balance	$	19.9	$	(31.9)	$	(12.0)

    Changes in accumulated other comprehensive income (loss) by component (after tax) for the quarter ended June 30, 2021 are as follows:

(in millions)	Unrealized Translation Adjustments		Pension and Other Postretirement Plans		Total
Beginning balance	$	23.7	$	(36.5)	$	(12.8)
Other comprehensive income before reclassifications	12.2		—		12.2
Amounts reclassified from accumulated other comprehensive loss	—		0.2		0.2
Net current-period other comprehensive income	12.2		0.2		12.4
Less: other comprehensive income attributable to redeemable non-controlling interests	0.6		—		0.6
Net current-period other comprehensive income attributable to EnPro Industries, Inc.	11.6		0.2		11.8
Ending balance	$	35.3	$	(36.3)	$	(1.0)

Changes in accumulated other comprehensive income (loss) by component (after tax) for the six months ended June 30, 2022 are as follows:

(in millions)	Unrealized Translation Adjustments		Pension and Other Postretirement Plans		Total
Beginning balance	$	46.7	$	(32.1)	$	14.6
Other comprehensive loss before reclassifications	(29.0)		—		(29.0)
Amounts reclassified from accumulated other comprehensive income	—		0.2		0.2
Net current-period other comprehensive income (loss)	(29.0)		0.2		(28.8)
Less: other comprehensive loss attributable to redeemable non-controlling interests	(2.2)		—		(2.2)
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc.	(26.8)		0.2		(26.6)
Ending balance	$	19.9	$	(31.9)	$	(12.0)

Changes in accumulated other comprehensive income (loss) by component (after tax) for the six months ended June 30, 2021 are as follows:

(in millions)	Unrealized Translation Adjustments		Pension and Other Postretirement Plans		Total
Beginning balance	$	31.7	$	(36.6)	$	(4.9)
Other comprehensive loss before reclassifications	3.8		—		3.8
Amounts reclassified from accumulated other comprehensive loss	—		0.3		0.3
Net current-period other comprehensive income (loss)	3.8		0.3		4.1
Less: other comprehensive loss attributable to redeemable non-controlling interests	0.2		—		0.2
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc.	3.6		0.3		3.9
Ending balance	$	35.3	$	(36.3)	$	(1.0)

Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Reclassifications out of accumulated other comprehensive income (loss) for the six months ended June 30, 2022 and 2021 are as follows:

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)								Affected Statement of Operations Caption
	Quarters Ended     June 30,				Six Months Ended   June 30,
(in millions)	2022		2021		2022		2021
Pension and other postretirement plans adjustments:
Actuarial losses	$	0.2	$	0.2	$	0.3	$	0.3	(1)
Prior service costs	—		0.1		—		0.1		(1)
Total before tax	0.2		0.3		0.3		0.4		Income before income taxes
Tax benefit	(0.1)		(0.1)		(0.1)		(0.1)		Income tax expense
Net of tax	$	0.1	$	0.2	$	0.2	$	0.3	Net income

(1)These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost. As these are components of net periodic pension cost other than service cost, the affected Statement of Operations captions are other income (expense) (See Note 9, “Pensions"” for additional details).

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Schedule of Changes in Carrying Amount of Product Warranty Liability

Changes in the product warranty liability for the six months ended June 30, 2022 and 2021 are as follows:

	2022		2021
	(in millions)
Balance at beginning of year	$	4.9	$	6.7
Net charges to expense	0.7		1.0
Settlements made	(0.5)		(1.5)
Balance at end of period	$	5.1	$	6.2

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Overview and Basis of Presentation - Additional Information (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
New Accounting Pronouncements or Change in Accounting Principle
Goodwill	$ 943.5	$ 953.2
Alluxa Inc
New Accounting Pronouncements or Change in Accounting Principle
Goodwill	$ 126.0
Percentage above carrying value (percent)	21.00%
Alluxa Inc | Maximum
New Accounting Pronouncements or Change in Accounting Principle
Percent increase in cost of capital On goodwill (Percent)	12.00%

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Acquisition - Proforma Results (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Business Acquisition, Pro Forma Information
Pro forma net sales	$ 333.3	$ 343.8	$ 662.0	$ 666.0
Pro forma net income	$ 34.5	$ 35.7	$ 59.3	$ 57.8

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Acquisition - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2022
Backlog
Business Acquisition
Acquisition cost	$ 2.0	$ 13.1

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Income Taxes (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Tax Disclosure [Abstract]
Effective tax rate (as a percent)	16.00%	2.60%	18.20%	11.20%

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Earnings Per Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Numerator (basic and diluted):
Net income	$ 33.0	$ 29.2	$ 49.5	$ 47.3
Less: net income (loss) attributable to redeemable non-controlling interests	(0.1)	(0.1)	0.2	0.0
Net income attributable to EnPro Industries, Inc.	33.1	29.3	49.3	47.3
Net income attributable to EnPro Industries, Inc.	$ 33.1	$ 29.3	$ 49.3	$ 47.3
Denominator:
Weighted-average shares – basic (in shares)	20.8	20.6	20.8	20.6
Share-based awards (in shares)	0.0	0.2	0.0	0.2
Weighted-average shares – diluted (in shares)	20.8	20.8	20.8	20.8
Basic earnings per share attributable to EnPro Industries, Inc. (in dollars per share)	$ 1.59	$ 1.42	$ 2.37	$ 2.30
Diluted earnings per share attributable to EnPro Industries, Inc. (in dollars per share)	$ 1.59	$ 1.41	$ 2.36	$ 2.28

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Earnings Per Share - Narrative (Details) shares in Millions	3 Months Ended
	Jun. 30, 2022 shares
Earnings Per Share [Abstract]
Antidilutive securities excluded (in shares)	0.1

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Inventories - Schedule of Inventories (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Finished products	$ 60.0	$ 56.8
Work in process	35.6	41.8
Raw materials and supplies	79.7	66.2
Gross inventories	175.3	164.8
Reserve to reduce certain inventories to LIFO basis	(7.3)	(4.8)
Total inventories	$ 168.0	$ 160.0

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Goodwill and Other Intangible Assets - Schedule of Changes in Net Carrying Value of Goodwill by Reportable Segment (Details) $ in Millions	6 Months Ended
	Jun. 30, 2022 USD ($)
Goodwill
Goodwill, beginning balance	$ 953.2
Acquisition of business	1.6
Foreign currency translation	(11.3)
Goodwill, ending balance	943.5
Sealing Technologies
Goodwill
Goodwill, beginning balance	279.4
Acquisition of business	0.0
Foreign currency translation	(3.6)
Goodwill, ending balance	275.8
Advanced Surface Technologies
Goodwill
Goodwill, beginning balance	668.7
Acquisition of business	1.6
Foreign currency translation	(7.7)
Goodwill, ending balance	662.6
Engineered Materials
Goodwill
Goodwill, beginning balance	5.1
Acquisition of business	0.0
Foreign currency translation	0.0
Goodwill, ending balance	$ 5.1

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Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Segment Reporting Information
Amortization expense	$ 19.6	$ 39.4	$ 11.3	$ 22.6
Sealing Technologies
Segment Reporting Information
Accumulated impairment losses	27.8		27.8		$ 27.8
Engineered Materials
Segment Reporting Information
Accumulated impairment losses	$ 108.7		$ 108.7		$ 108.7

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Goodwill and Other Intangible Assets - Schedule of Identifiable Intangible Assets (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 1,113.3	$ 1,129.6
Accumulated Amortization	298.5	262.8
Total	1,159.7	1,176.2
Trademarks
Indefinite-lived Intangible Assets
Indefinite-Lived:	46.4	46.6
Customer relationships
Finite-Lived Intangible Assets
Gross Carrying Amount	522.6	536.5
Accumulated Amortization	177.6	166.0
Existing technology
Finite-Lived Intangible Assets
Gross Carrying Amount	479.8	480.8
Accumulated Amortization	66.9	49.5
Trademarks
Finite-Lived Intangible Assets
Gross Carrying Amount	69.8	70.9
Accumulated Amortization	26.9	24.9
Other
Finite-Lived Intangible Assets
Gross Carrying Amount	41.1	41.4
Accumulated Amortization	$ 27.1	$ 22.4

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Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Salaries, wages and employee benefits	$ 44.5	$ 60.5
Interest	4.9	4.9
Environmental	17.1	11.3
Income taxes	13.5	10.6
Taxes other than income taxes	9.4	9.4
Operating lease liabilities	9.7	10.0
Other	25.2	28.5
Accrued expenses	$ 124.3	$ 135.2

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Long-Term Debt (Details) - USD ($)			6 Months Ended
	Dec. 17, 2021	Oct. 17, 2018	Jun. 30, 2022	Dec. 31, 2021	Oct. 31, 2018
Line of Credit Facility
Long-term debt			$ 891,200,000	$ 976,600,000
Short-term debt			99,700,000	$ 149,300,000
364-Day Facility | Line of Credit
Line of Credit Facility
Line of credit facility, maximum borrowing capacity	$ 150,000,000
Short-term debt			$ 100,000,000
364-Day Facility | Line of Credit | LIBOR
Line of Credit Facility
Variable rate on debt (as a percent)			1.50%
364-Day Facility | Line of Credit | Base Rate
Line of Credit Facility
Variable rate on debt (as a percent)			0.50%
Line of Credit
Line of Credit Facility
Senior notes	1,007,500,000
Maximum borrowing capacity expansion threshold	$ 275,000,000
Maximum borrowing capacity expansion threshold, percent (as a percent)	100.00%
Line of Credit | Revolving Credit Facility
Line of Credit Facility
Credit facility maximum availability (in years)	5 years
Line of credit facility, maximum borrowing capacity	$ 400,000,000
Line of credit facility, unused capacity, commitment fee (as a percent)			0.225%
Credit facility borrowing capacity			$ 294,200,000
Letter of credit outstanding			10,800,000
Long-term debt			$ 95,000,000
Line of Credit | Revolving Credit Facility | LIBOR
Line of Credit Facility
Variable rate on debt (as a percent)			1.75%
Line of Credit | Revolving Credit Facility | Base Rate
Line of Credit Facility
Variable rate on debt (as a percent)			0.75%
Line of Credit | Term Loan | LIBOR
Line of Credit Facility
Variable rate on debt (as a percent)			1.75%
Line of Credit | Term Loan | Base Rate
Line of Credit Facility
Variable rate on debt (as a percent)			0.75%
Line of Credit | Term Loan A-1
Line of Credit Facility
Senior notes			$ 150,000,000
Line of credit facility, maximum borrowing capacity	$ 142,500,000
Debt instrument, periodic payment, years one to three, percentage of principal (as a percent)			2.50%
Debt instrument, periodic payment, years two, percentage of principal (as a percent)			5.00%
Debt instrument, periodic payment, years three, percentage of principal (as a percent)			1.25%
Long-term debt			$ 139,700,000
Line of Credit | Term Loan A-2
Line of Credit Facility
Credit facility maximum availability (in years)	5 years
Line of credit facility, maximum borrowing capacity	$ 315,000,000
Debt instrument, periodic payment, years one to three, percentage of principal (as a percent)			2.50%
Debt instrument, periodic payment, years two, percentage of principal (as a percent)			5.00%
Debt instrument, periodic payment, years three, percentage of principal (as a percent)			1.25%
Long-term debt			$ 311,100,000
Senior Notes
Line of Credit Facility
Senior notes		$ 350,000,000
Interest rate (as a percent)		5.75%			5.875%
Aggregate principal amount redeemed					$ 450,000,000
Senior Notes | Before October 15, 2021
Line of Credit Facility
Redemption price (as a percent)		100.00%

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Pensions - Schedule of Net Periodic Benefit Cost (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Pension Benefits
Defined Benefit Plan Disclosure
Service cost	$ 300,000	$ 400,000	$ 700,000	$ 800,000
Interest cost	2,500,000	2,200,000	4,900,000	4,500,000
Expected return on plan assets	(3,300,000)	(4,600,000)	(6,600,000)	(9,100,000)
Amortization of prior service cost	0	100,000	0	100,000
Amortization of net loss	200,000	200,000	300,000	300,000
Net periodic benefit cost (benefit)	$ (300,000)	$ (1,700,000)	(700,000)	$ (3,400,000)
U.S.
Defined Benefit Plan Disclosure
Contributions by employer			$ 0

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Shareholders' Equity - Changes in Shareholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2022	Jun. 30, 2021
Increase (Decrease) in Stockholders' Equity
Net income (loss)	$ 33.0		$ 29.2		$ 49.5	$ 47.3
Other Comprehensive income (loss)	$ (16.0)		$ 12.4		(28.8)	4.1
Cash dividends per share, declared (in dollars per share)	$ 0.28	$ 0.28	$ 0.27	$ 0.27
Total Shareholders' Equity
Increase (Decrease) in Stockholders' Equity
Beginning balance	$ 1,261.3	$ 1,266.6	$ 1,080.9	$ 1,078.5	1,266.6	1,078.5
Net income (loss)	33.1	16.2	29.3	18.0
Other Comprehensive income (loss)	(14.9)	(11.7)	11.8	(7.9)
Dividends	(5.9)	(5.8)	(5.6)	(5.7)
Incentive plan activity	1.4	(4.1)	1.6	1.2
Other		0.1	0.1	(3.2)
Ending balance	1,275.0	1,261.3	1,118.1	1,080.9	1,275.0	1,118.1
Common Stock
Increase (Decrease) in Stockholders' Equity
Beginning balance	$ 0.2	$ 0.2	$ 0.2	$ 0.2	$ 0.2	$ 0.2
Balance (in shares)	20.8	20.7	20.6	20.5	20.7	20.5
Incentive plan activity (in shares)		0.1		0.1
Ending balance	$ 0.2	$ 0.2	$ 0.2	$ 0.2	$ 0.2	$ 0.2
Balance (in shares)	20.8	20.8	20.6	20.6	20.8	20.6
Additional Paid-in Capital
Increase (Decrease) in Stockholders' Equity
Beginning balance	$ 299.6	$ 303.6	$ 290.7	$ 289.6	$ 303.6	$ 289.6
Incentive plan activity	1.4	(4.1)	1.6	1.2
Other		0.1	(0.1)	(0.1)
Ending balance	301.0	299.6	292.2	290.7	301.0	292.2
Retained Earnings
Increase (Decrease) in Stockholders' Equity
Beginning balance	959.8	949.4	804.0	794.8	949.4	794.8
Net income (loss)	33.1	16.2	29.3	18.0
Dividends	(5.9)	(5.8)	(5.6)	(5.7)
Other			0.2	(3.1)
Ending balance	987.0	959.8	827.9	804.0	987.0	827.9
Accumulated Other Comprehensive Income (Loss)
Increase (Decrease) in Stockholders' Equity
Beginning balance	2.9	14.6	(12.8)	(4.9)	14.6	(4.9)
Other Comprehensive income (loss)	(14.9)	(11.7)	11.8	(7.9)
Ending balance	(12.0)	2.9	(1.0)	(12.8)	(12.0)	(1.0)
Treasury Stock
Increase (Decrease) in Stockholders' Equity
Beginning balance	(1.2)	(1.2)	(1.2)	(1.2)	(1.2)	(1.2)
Ending balance	(1.2)	(1.2)	(1.2)	(1.2)	(1.2)	(1.2)
Redeemable Non-controlling Interests
Increase (Decrease) in Stockholders' Equity
Beginning balance	49.3	50.1	51.2	48.4	50.1	48.4
Net income (loss)	(0.1)	0.3	(0.1)	0.1
Other Comprehensive income (loss)	(1.1)	(1.0)	0.6	(0.5)
Other		(0.1)	(0.1)	3.2
Ending balance	$ 48.1	$ 49.3	$ 51.6	$ 51.2	$ 48.1	$ 51.6

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Shareholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions	1 Months Ended		3 Months Ended				6 Months Ended
	Jul. 31, 2022	Feb. 28, 2022	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2022	Jun. 30, 2021	Oct. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award
Dividends paid							$ 11,700,000	$ 11,300,000
Cash dividends per share, declared (in dollars per share)			$ 0.28	$ 0.28	$ 0.27	$ 0.27
Stock repurchase program, authorized amount (up to)									$ 50,000,000
Key Executives
Share-based Compensation Arrangement by Share-based Payment Award
Options issued (in shares)		0.1
Exercise price (in dollars per share)		$ 106.54
Option term (in years)		10 years
Employee Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Average expected term (in years)							6 years
Fair value (in dollars per share)							$ 39.07
Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award
Cash dividends per share, declared (in dollars per share)	$ 0.28

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Shareholders' Equity - Schedule of Assumptions Used (Details) - Employee Stock Options	6 Months Ended
	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award
Average expected term	6 years
Expected volatility	39.88%
Risk-free interest rate	1.89%
Expected dividend yield	1.05%

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Business Segment Information - Additional Information (Details) $ in Millions	6 Months Ended
	Jun. 30, 2022 USD ($) segment
Segment Reporting [Abstract]
Number of reportable segments | segment	3
Performance obligation | $	$ 429.4
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01
Segment Reporting Information
Remaining performance obligation, percentage (as a percent)	94.00%
Remaining performance obligation, expected timing (in years)	1 year

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Business Segment Information - Schedule of Segment Operating Results and Other Financial Data (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Segment Reporting Information
Net sales	$ 333.3	$ 298.6	$ 662.0	$ 577.9
Adjusted Segment EBITDA	89.8	71.0	167.4	134.9
Acquisition and divestiture expenses	(0.3)	0.0	(0.4)	(0.1)
Non-controlling interest compensation allocation	(1.4)	(1.3)	(0.5)	(2.9)
Amortization of fair value adjustment to acquisition date inventory	(1.0)	(2.3)	(11.3)	(4.8)
Restructuring and impairment expense	(0.9)	(2.7)	(1.3)	(4.5)
Depreciation and amortization expense	(27.9)	(18.5)	(55.9)	(37.4)
Interest expense, net	(7.7)	(3.8)	(14.6)	(7.6)
Other income (expense), net	(2.7)	1.9	(2.0)	1.8
Income before income taxes	39.3	30.0	60.5	53.3
Operating segments
Segment Reporting Information
Net sales	333.9	301.7	663.2	583.3
Intersegment sales
Segment Reporting Information
Net sales	(0.6)	(3.1)	(1.2)	(5.4)
Corporate
Segment Reporting Information
Corporate expenses	(9.5)	(12.8)	(22.9)	(24.3)
Segment Reconciling Items
Segment Reporting Information
Other income (expense), net	(1.8)	0.4	0.0	0.0
Sealing Technologies
Segment Reporting Information
Net sales	155.6	159.7	309.1	304.2
Sealing Technologies | Operating segments
Segment Reporting Information
Net sales	155.9	162.5	309.5	309.0
Adjusted Segment EBITDA	42.5	42.4	76.0	76.4
Advanced Surface Technologies
Segment Reporting Information
Net sales	121.6	59.1	238.1	113.8
Advanced Surface Technologies | Operating segments
Segment Reporting Information
Net sales	121.5	59.2	238.2	113.9
Adjusted Segment EBITDA	37.8	15.6	72.7	32.9
Engineered Materials
Segment Reporting Information
Net sales	56.1	79.8	114.8	159.9
Engineered Materials | Operating segments
Segment Reporting Information
Net sales	56.5	80.0	115.5	160.4
Adjusted Segment EBITDA	$ 9.5	$ 13.0	$ 18.7	$ 25.6

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Business Segment Information - Schedule of Assets and Long Lived Assets Segment (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Segment Reporting Information
Assets	$ 2,814.7	$ 2,969.8
Operating segments | Sealing Technologies
Segment Reporting Information
Assets	696.0	697.5
Operating segments | Advanced Surface Technologies
Segment Reporting Information
Assets	1,624.4	1,686.5
Operating segments | Engineered Materials
Segment Reporting Information
Assets	166.4	160.3
Corporate
Segment Reporting Information
Assets	$ 327.9	$ 425.5

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Business Segment Information - Revenue by End Market (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Disaggregation of Revenue
Net sales	$ 333.3	$ 298.6	$ 662.0	$ 577.9
Sealing Technologies
Disaggregation of Revenue
Net sales	155.6	159.7	309.1	304.2
Advanced Surface Technologies
Disaggregation of Revenue
Net sales	121.6	59.1	238.1	113.8
Engineered Materials
Disaggregation of Revenue
Net sales	56.1	79.8	114.8	159.9
Aerospace
Disaggregation of Revenue
Net sales	15.7	12.8	29.0	22.3
Aerospace | Sealing Technologies
Disaggregation of Revenue
Net sales	10.7	8.3	18.8	15.0
Aerospace | Advanced Surface Technologies
Disaggregation of Revenue
Net sales	1.1	3.0	3.1	4.5
Aerospace | Engineered Materials
Disaggregation of Revenue
Net sales	3.9	1.5	7.1	2.8
Automotive
Disaggregation of Revenue
Net sales	15.8	17.1	32.1	36.5
Automotive | Sealing Technologies
Disaggregation of Revenue
Net sales	0.4	0.6	1.1	1.0
Automotive | Advanced Surface Technologies
Disaggregation of Revenue
Net sales	0.6	0.2	0.8	0.5
Automotive | Engineered Materials
Disaggregation of Revenue
Net sales	14.8	16.3	30.2	35.0
Chemical and material processing
Disaggregation of Revenue
Net sales	19.7	30.4	40.0	58.5
Chemical and material processing | Sealing Technologies
Disaggregation of Revenue
Net sales	19.7	19.0	40.0	36.6
Chemical and material processing | Advanced Surface Technologies
Disaggregation of Revenue
Net sales	0.0	0.0	0.0	0.0
Chemical and material processing | Engineered Materials
Disaggregation of Revenue
Net sales	0.0	11.4	0.0	21.9
Food and pharmaceutical
Disaggregation of Revenue
Net sales	18.5	16.9	37.5	33.8
Food and pharmaceutical | Sealing Technologies
Disaggregation of Revenue
Net sales	18.5	16.6	37.5	33.0
Food and pharmaceutical | Advanced Surface Technologies
Disaggregation of Revenue
Net sales	0.0	0.0	0.0	0.0
Food and pharmaceutical | Engineered Materials
Disaggregation of Revenue
Net sales	0.0	0.3	0.0	0.8
General industrial
Disaggregation of Revenue
Net sales	77.6	81.3	157.2	160.6
General industrial | Sealing Technologies
Disaggregation of Revenue
Net sales	41.5	44.9	83.5	87.6
General industrial | Advanced Surface Technologies
Disaggregation of Revenue
Net sales	7.9	5.8	14.4	12.2
General industrial | Engineered Materials
Disaggregation of Revenue
Net sales	28.2	30.6	59.3	60.8
Medium-duty/heavy-duty truck
Disaggregation of Revenue
Net sales	45.8	50.3	92.8	92.0
Medium-duty/heavy-duty truck | Sealing Technologies
Disaggregation of Revenue
Net sales	43.4	47.6	88.2	86.5
Medium-duty/heavy-duty truck | Advanced Surface Technologies
Disaggregation of Revenue
Net sales	0.0	0.0	0.0	0.0
Medium-duty/heavy-duty truck | Engineered Materials
Disaggregation of Revenue
Net sales	2.4	2.7	4.6	5.5
Oil and gas
Disaggregation of Revenue
Net sales	12.5	22.9	24.3	42.7
Oil and gas | Sealing Technologies
Disaggregation of Revenue
Net sales	5.5	5.4	10.6	9.6
Oil and gas | Advanced Surface Technologies
Disaggregation of Revenue
Net sales	1.1	1.7	1.7	2.4
Oil and gas | Engineered Materials
Disaggregation of Revenue
Net sales	5.9	15.8	12.0	30.7
Power generation
Disaggregation of Revenue
Net sales	13.4	10.5	24.6	22.5
Power generation | Sealing Technologies
Disaggregation of Revenue
Net sales	12.5	9.6	22.9	20.7
Power generation | Advanced Surface Technologies
Disaggregation of Revenue
Net sales	0.0	0.0	0.1	0.0
Power generation | Engineered Materials
Disaggregation of Revenue
Net sales	0.9	0.9	1.6	1.8
Semiconductors
Disaggregation of Revenue
Net sales	111.5	53.3	218.8	102.9
Semiconductors | Sealing Technologies
Disaggregation of Revenue
Net sales	1.2	5.4	2.5	10.1
Semiconductors | Advanced Surface Technologies
Disaggregation of Revenue
Net sales	110.3	47.9	216.3	92.8
Semiconductors | Engineered Materials
Disaggregation of Revenue
Net sales	0.0	0.0	0.0	0.0
Other
Disaggregation of Revenue
Net sales	2.8	3.1	5.7	6.1
Other | Sealing Technologies
Disaggregation of Revenue
Net sales	2.2	2.3	4.0	4.1
Other | Advanced Surface Technologies
Disaggregation of Revenue
Net sales	0.6	0.5	1.7	1.4
Other | Engineered Materials
Disaggregation of Revenue
Net sales	$ 0.0	$ 0.3	$ 0.0	$ 0.6

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Derivatives and Hedging (Details) € in Millions	Jun. 30, 2022 USD ($)	May 31, 2019 USD ($)	May 31, 2019 EUR (€)	Sep. 30, 2018 USD ($)	Sep. 30, 2018 EUR (€)
Original Swap
Derivative
Derivative liability, notional amount				$ 200,000,000
Amount of hedged item | €					€ 172.8
Weighted average interest rate (as a percent)				2.80%	2.80%
Derivative asset, current	$ 21,900,000
Additional Swap
Derivative
Derivative liability, notional amount		$ 100,000,000
Amount of hedged item | €			€ 89.6
Weighted average interest rate (as a percent)		3.50%	3.50%
Derivative asset, noncurrent	$ 9,500,000

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Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Assets
Foreign currency derivatives	$ 31.4	$ 8.7
Deferred compensation assets	11.3	10.9
Assets	42.7	19.6
Liabilities
Deferred compensation liabilities	$ 11.6	$ 11.4

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Fair Value Measurements - Schedule of Carrying Value of Financial Instruments (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Fair Value Disclosures [Abstract]
Carrying Value	$ 891.2	$ 976.6
Fair Value	$ 885.5	$ 998.3

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Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income by Component (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2022	Jun. 30, 2021
Accumulated Other Comprehensive Income
Beginning balance		$ 1,266.6			$ 1,266.6
Other comprehensive income (loss) before reclassifications	$ (16.1)		$ 12.2		(29.0)	$ 3.8
Amounts reclassified from accumulated other comprehensive income (loss)	0.1		0.2		0.2	0.3
Net current-period other comprehensive income (loss)	(16.0)		12.4		(28.8)	4.1
Less: other comprehensive income (loss) attributable to redeemable non-controlling interests	(1.1)		0.6		(2.2)	0.2
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc.	(14.9)		11.8		(26.6)	3.9
Ending balance	1,275.0				1,275.0
Total
Accumulated Other Comprehensive Income
Beginning balance	2.9	14.6	(12.8)	$ (4.9)	14.6	(4.9)
Net current-period other comprehensive income (loss)	(14.9)	(11.7)	11.8	(7.9)
Ending balance	(12.0)	2.9	(1.0)	(12.8)	(12.0)	(1.0)
Unrealized Translation Adjustments
Accumulated Other Comprehensive Income
Beginning balance	34.9	46.7	23.7	31.7	46.7	31.7
Other comprehensive income (loss) before reclassifications	(16.1)		12.2		(29.0)	3.8
Amounts reclassified from accumulated other comprehensive income (loss)	0.0		0.0		0.0	0.0
Net current-period other comprehensive income (loss)	(16.1)		12.2		(29.0)	3.8
Less: other comprehensive income (loss) attributable to redeemable non-controlling interests	(1.1)		0.6		(2.2)	0.2
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc.	(15.0)		11.6		(26.8)	3.6
Ending balance	19.9	34.9	35.3	23.7	19.9	35.3
Pension and Other Postretirement Plans
Accumulated Other Comprehensive Income
Beginning balance	(32.0)	(32.1)	(36.5)	(36.6)	(32.1)	(36.6)
Other comprehensive income (loss) before reclassifications	0.0		0.0		0.0	0.0
Amounts reclassified from accumulated other comprehensive income (loss)	0.1		0.2		0.2	0.3
Net current-period other comprehensive income (loss)	0.1		0.2		0.2	0.3
Less: other comprehensive income (loss) attributable to redeemable non-controlling interests	0.0		0.0		0.0	0.0
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc.	0.1		0.2		0.2	0.3
Ending balance	$ (31.9)	$ (32.0)	$ (36.3)	$ (36.5)	$ (31.9)	$ (36.3)

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Accumulated Other Comprehensive Income (Loss) - Summary of Reclassifications Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Reclassification Adjustment out of Accumulated Other Comprehensive Income
Other income (expense)	$ (2.7)	$ 1.9	$ (2.0)	$ 1.8
Tax benefit	(6.3)	(0.8)	(11.0)	(6.0)
Net income	33.0	29.2	49.5	47.3
Reclassification out of accumulated other comprehensive income
Reclassification Adjustment out of Accumulated Other Comprehensive Income
Income before income taxes	0.2	0.3	0.3	0.4
Tax benefit	(0.1)	(0.1)	(0.1)	(0.1)
Net income	0.1	0.2	0.2	0.3
Reclassification out of accumulated other comprehensive income | Actuarial losses
Reclassification Adjustment out of Accumulated Other Comprehensive Income
Other income (expense)	0.2	0.2	0.3	0.3
Reclassification out of accumulated other comprehensive income | Prior service costs
Reclassification Adjustment out of Accumulated Other Comprehensive Income
Other income (expense)	$ 0.0	$ 0.1	$ 0.0	$ 0.1

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Commitments and Contingencies - Additional Information (Details)					1 Months Ended	3 Months Ended		6 Months Ended
	Apr. 14, 2021 USD ($) mi	Jun. 30, 2018 site	Mar. 03, 2016 USD ($)	Apr. 11, 2014 USD ($) mi	Oct. 31, 2016 USD ($)	Jun. 30, 2022 USD ($) site mine mi	Mar. 31, 2022 USD ($)	Jun. 30, 2022 USD ($) site potentiallyResponsibleParty mine mi	Dec. 31, 2021 USD ($)	Oct. 18, 2021	Apr. 30, 2015 USD ($)
Site Contingency
Number of sites subject to remediation (sites) | site						19		19
Number of sites, cost in excess of 100K (sites) | site						12		12
Cost per site minimis threshold								$ 100,000
Number of sites, discontinued operations (sites) | site						17		17
Number of sites, active operations (sites) | site						2		2
Number of sites, investigation completed (sites) | site						16		16
Number of sites investigation in progress (sites) | site						3		3
Environmental loss accrual						$ 45,200,000		$ 45,200,000	$ 46,600,000
Environmental						17,100,000		17,100,000	$ 11,300,000
Estimated insurance recoveries						25,000,000		25,000,000
Insurance recoveries to date								22,000,000
Estimated recovery for non-GST Trust claimants						10,000,000		10,000,000
Threshold of recovery before shared in trust						3,000,000		$ 3,000,000
Lower Passaic River
Site Contingency
Portion of site subject to remediation (miles) | mi				8
Number of other potentially responsible parties		120						70
Estimate of cost											$ 726,000,000
Estimate low end					$ 165,000,000
Estimated development time					4 years
Upper nine miles of the river
Site Contingency
Portion of site subject to remediation (miles) | mi	9
Site contingency, loss exposure in excess of accrual best estimate	$ 441,000,000
Lower eight miles of river
Site Contingency
Environmental loss accrual						6,600,000		$ 6,600,000
Arizona Uranium Mines
Site Contingency
Environmental loss accrual						$ 13,300,000		$ 13,300,000
Investigative sites notice from EPA | mine						8		8
Percentage of expenses reimbursable by the U.S.										35.00%
Future contributions from U.S.						$ 3,400,000		$ 3,400,000
Minimum | Lower Passaic River
Site Contingency
Site contingency, loss exposure in excess of accrual best estimate			$ 1,380,000,000	$ 953,000,000
Maximum | Lower Passaic River
Site Contingency
Site contingency, loss exposure in excess of accrual best estimate			$ 1,730,000,000
Asbestos Issue
Site Contingency
Insurance coverage received payment							$ 2,200,000
Other expenses						2,800,000
Insurance receivable						2,400,000		2,400,000
Asbestos Issue | Other Current Assets
Site Contingency
Insurance receivable						$ 1,000,000		$ 1,000,000
Affiliated Entity | Crucible Steel Corporation
Site Contingency
Number of sites subject to remediation (sites) | site						19		19
Portion of site subject to remediation (miles) | mi						17		17

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Commitments and Contingencies - Schedule of Changes in Carrying Amount of Product Warranty Liability (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Movement in Standard Product Warranty Accrual
Balance at beginning of year	$ 4.9	$ 6.7
Net charges to expense	0.7	1.0
Settlements made	(0.5)	(1.5)
Balance at end of year	$ 5.1	$ 6.2