Supplemental Guarantor Financial Information

9 Months Ended

Sep. 30, 2019

Condensed Financial Information Disclosure [Abstract]

Supplemental Guarantor Financial Information

The following tables present condensed consolidating financial information for EnPro Industries, Inc. (the "Parent"), the Guarantor Subsidiaries on a combined basis, the Non-Guarantor Subsidiaries on a combined basis and the eliminations necessary to arrive at our consolidated results. The consolidating financial information reflects our investments in subsidiaries using the equity method of accounting. These tables are not intended to present our results of operations, cash flows or financial condition for any purpose other than to comply with the specific requirements for subsidiary guarantor reporting.

ENPRO INDUSTRIES, INC.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)

Quarter Ended September 30, 2019

(in millions)



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	266.3		$	143.4		$	(36.7	)	$	373.0
Cost of sales	—			197.7			97.0			(36.7		)	258.0
Gross profit	—			68.6			46.4			—			115.0
Operating expenses:
Selling, general and administrative	11.5			45.1			27.5			—			84.1
Other	—			1.4			0.9			—			2.3
Total operating expenses	11.5			46.5			28.4			—			86.4
Operating income (loss)	(11.5		)	22.1			18.0			—			28.6
Interest income (expense), net	(3.0		)	(1.0		)	0.2			—			(3.8		)
Other expense	—			(24.5		)	(0.1		)	—			(24.6		)
Income (loss) before income taxes	(14.5		)	(3.4		)	18.1			—			0.2
Income tax benefit (expense)	—			4.3			(6.0		)	—			(1.7		)
Income (loss) before equity in earnings of subsidiaries	(14.5		)	0.9			12.1			—			(1.5		)
Equity in earnings of subsidiaries, net of tax	13.0			12.1			—			(25.1		)	—
Net income (loss)	$	(1.5	)	$	13.0		$	12.1		$	(25.1	)	$	(1.5	)
Comprehensive income	$	3.7		$	8.0		$	5.8		$	(13.8	)	$	3.7

ENPRO INDUSTRIES, INC.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)

Quarter Ended September 30, 2018

(in millions)



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	279.3		$	153.2		$	(44.3	)	$	388.2
Cost of sales	—			203.6			104.8			(44.3		)	264.1
Gross profit	—			75.7			48.4			—			124.1
Operating expenses:
Selling, general and administrative	11.3			39.1			28.5			—			78.9
Other	(0.1		)	0.8			0.3			—			1.0
Total operating expenses	11.2			39.9			28.8			—			79.9
Operating income (loss)	(11.2		)	35.8			19.6			—			44.2
Interest income (expense), net	(5.4		)	(0.6		)	0.1			—			(5.9		)
Other expense	—			(13.7		)	(0.1		)	—			(13.8		)
Income (loss) before income taxes	(16.6		)	21.5			19.6			—			24.5
Income tax benefit (expense)	2.6			2.2			(5.1		)	—			(0.3		)
Income (loss) before equity in earnings of subsidiaries	(14.0		)	23.7			14.5			—			24.2
Equity in earnings of subsidiaries, net of tax	38.2			14.5			—			(52.7		)	—
Net income	$	24.2		$	38.2		$	14.5		$	(52.7	)	$	24.2
Comprehensive income	$	36.0		$	51.7		$	19.2		$	(70.9	)	$	36.0

ENPRO INDUSTRIES, INC.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)

Nine Months Ended September 30, 2019

(in millions)



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	799.8		$	440.2		$	(119.7	)	$	1,120.3
Cost of sales	—			587.4			299.4			(119.7		)	767.1
Gross profit	—			212.4			140.8			—			353.2
Operating expenses:
Selling, general and administrative	35.7			134.3			85.7			—			255.7
Other	0.4			2.0			2.3			—			4.7
Total operating expenses	36.1			136.3			88.0			—			260.4
Operating income (loss)	(36.1		)	76.1			52.8			—			92.8
Interest income (expense), net	(9.4		)	(3.9		)	0.8			—			(12.5		)
Other expense	—			(27.1		)	(0.2		)	—			(27.3		)
Income (loss) before income taxes	(45.5		)	45.1			53.4			—			53.0
Income tax benefit (expense)	3.8			(4.1		)	(17.2		)	—			(17.5		)
Income (loss) before equity in earnings of subsidiaries	(41.7		)	41.0			36.2			—			35.5
Equity in earnings of subsidiaries, net of tax	77.2			36.2			—			(113.4		)	—
Net income	$	35.5		$	77.2		$	36.2		$	(113.4	)	$	35.5
Comprehensive income	$	44.9		$	73.2		$	32.6		$	(105.8	)	$	44.9

ENPRO INDUSTRIES, INC.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)

Nine Months Ended September 30, 2018

(in millions)



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	810.9		$	465.0		$	(125.3	)	$	1,150.6
Cost of sales	—			603.4			307.5			(125.3		)	785.6
Gross profit	—			207.5			157.5			—			365.0
Operating expenses:
Selling, general and administrative	34.7			134.7			91.0			—			260.4
Other	—			5.5			0.8			—			6.3
Total operating expenses	34.7			140.2			91.8			—			266.7
Operating income (loss)	(34.7		)	67.3			65.7			—			98.3
Interest income (expense), net	(17.6		)	(3.7		)	0.5			—			(20.8		)
Other expense	—			(14.1		)	(0.3		)	—			(14.4		)
Income (loss) before income taxes	(52.3		)	49.5			65.9			—			63.1
Income tax benefit (expense)	10.2			(8.0		)	(18.6		)	—			(16.4		)
Income (loss) before equity in earnings of subsidiaries	(42.1		)	41.5			47.3			—			46.7
Equity in earnings of subsidiaries, net of tax	88.8			47.3			—			(136.1		)	—
Net income	$	46.7		$	88.8		$	47.3		$	(136.1	)	$	46.7
Comprehensive income	$	58.4		$	96.2		$	43.8		$	(140.0	)	$	58.4

ENPRO INDUSTRIES, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended September 30, 2019

(in millions)



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	83.1		$	30.2		$	55.9		$	(18.5	)	$	150.7
INVESTING ACTIVITIES
Purchases of property, plant and equipment	—			(17.0		)	(6.8		)	—			(23.8		)
Proceeds from sale of business	—			3.6			—			—			3.6
Acquisitions, net of cash acquired	—			(271.2		)	(39.2		)	—			(310.4		)
Proceeds from sale of property, plant, and equipment				0.4			0.4			—			0.8
Other	—			(2.6		)	(0.3		)	—			(2.9		)
Net cash used in investing activities	—			(286.8		)	(45.9		)	—			(332.7		)
FINANCING ACTIVITIES
Net payments on loans between subsidiaries	(47.4		)	52.5			(5.1		)	—			—
Intercompany dividends	—			—			(18.5		)	18.5
Proceeds from debt	—			566.9			—			—			566.9
Repayments of debt	—			(365.1		)	—			—			(365.1		)
Repurchase of common stock	(15.0		)							—			(15.0		)
Dividends paid	(15.7		)							—			(15.7		)
Other	(5.0		)	—			—			—			(5.0		)
Net cash provided by (used in) financing activities	(83.1		)	254.3			(23.6		)	18.5			166.1
Effect of exchange rate changes on cash and cash equivalents	—			—			(1.6		)	—			(1.6		)
Net decrease in cash and cash equivalents	—			(2.3		)	(15.2		)	—			(17.5		)
Cash and cash equivalents at beginning of period	—			2.3			127.3			—			129.6
Cash and cash equivalents at end of period	$	—		$	—		$	112.1		$	—		$	112.1

ENPRO INDUSTRIES, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended September 30, 2018

(in millions)



				Guarantor			Non-guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	69.5		$	145.6		$	57.6		$	(114.3	)	$	158.4
INVESTING ACTIVITIES
Purchases of property, plant and equipment	—			(37.5		)	(8.2		)	—			(45.7		)
Receipts from derivative contracts	9.3			—			—			—			9.3
Proceeds from sale of property, plant and equipment	—			26.0			0.6			—			26.6
Other	—			(1.8		)	(0.2		)	—			(2.0		)
Net cash provided by (used in) investing activities	9.3			(13.3		)	(7.8		)	—			(11.8		)
FINANCING ACTIVITIES
Net payments on loans between subsidiaries	(8.0		)	8.4			(0.4		)	—			—
Intercompany dividends	—			—			(114.3		)	114.3			—
Proceeds from debt	—			454.9			—			—			454.9
Repayments of debt	—			(594.4		)	—			—			(594.4		)
Repurchase of common stock	(50.0		)	—			—			—			(50.0		)
Dividends paid	(15.3		)	—			—			—			(15.3		)
Other	(5.5		)	(1.2		)	—			—			(6.7		)
Net cash used in financing activities	(78.8		)	(132.3		)	(114.7		)	114.3			(211.5		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(4.5		)	—			(4.5		)
Net decrease in cash and cash equivalents	—			—			(69.4		)	—			(69.4		)
Cash and cash equivalents at beginning of period	—			—			189.3			—			189.3
Cash and cash equivalents at end of period	$	—		$	—		$	119.9		$	—		$	119.9

ENPRO INDUSTRIES, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS (UNAUDITED)

As of September 30, 2019

(in millions)



			Guarantor		Non-guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	—	$	—	$	112.1	$	—		$	112.1
Accounts receivable, net	0.2		200.3		86.6		—			287.1
Intercompany receivables	—		16.8		11.4		(28.2		)	—
Inventories	—		153.3		72.2		—			225.5
Income tax receivable	27.3		0.3		10.9		—			38.5
Prepaid expenses and other current assets	5.7		22.1		6.6		—			34.4
Total current assets	33.2		392.8		299.8		(28.2		)	697.6
Property, plant and equipment, net	—		195.6		89.3		—			284.9
Goodwill	—		291.1		193.9		—			485.0
Other intangible assets, net	—		232.7		261.6		—			494.3
Intercompany receivables	—		2.8		5.1		(7.9		)	—
Investment in subsidiaries	1,218.7		665.4		—		(1,884.1		)	—
Other assets	31.9		39.6		36.4		—			107.9
Total assets	$	1,283.8	$	1,820.0	$	886.1	$	(1,920.2	)	$	2,069.7
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt	$	—	$	0.4	$	—	$	—		$	0.4
Accounts payable	2.0		71.4		32.2		—			105.6
Intercompany payables	—		11.4		16.8		(28.2		)	—
Accrued expenses	20.5		112.9		67.4		—			200.8
Total current liabilities	22.5		196.1		116.4		(28.2		)	306.8
Long-term debt	345.2		320.4		0.3		—			665.9
Intercompany payables	3.7		1.4		2.8		(7.9		)	—
Other liabilities	36.0		55.4		101.2		—			192.6
Total liabilities	407.4		573.3		220.7		(36.1		)	1,165.3
Redeemable non-controlling interest	—		28.0		—		—			28.0
Shareholders’ equity	876.4		1,218.7		665.4		(1,884.1		)	876.4
Total liabilities and equity	$	1,283.8	$	1,820.0	$	886.1	$	(1,920.2	)	$	2,069.7

ENPRO INDUSTRIES, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS (UNAUDITED)

As of December 31, 2018

(in millions)



			Guarantor		Non-guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	—	$	2.3	$	127.3	$	—		$	129.6
Accounts receivable, net	—		210.3		76.3		—			286.6
Intercompany receivables	—		19.0		8.9		(27.9		)	—
Inventories	—		155.3		77.8		—			233.1
Income tax receivable	42.9		0.3		6.4		—			49.6
Prepaid expenses and other current assets	4.9		20.3		8.0		—			33.2
Total current assets	47.8		407.5		304.7		(27.9		)	732.1
Property, plant and equipment, net	2.2		209.7		89.3		—			301.2
Goodwill	—		261.0		72.7		—			333.7
Other intangible assets, net	—		242.2		55.1		—			297.3
Intercompany receivables	—		53.9		—		(53.9		)	—
Investment in subsidiaries	1,246.4		387.7		—		(1,634.1		)	—
Other assets	13.6		25.3		12.6		—			51.5
Total assets	$	1,310.0	$	1,587.3	$	534.4	$	(1,715.9	)	$	1,715.8
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt	$	2.1	$	0.3	$	—	$	—		$	2.4
Accounts payable	2.1		99.0		38.1		—			139.2
Intercompany payables	—		8.9		19.0		(27.9		)	—
Accrued expenses	13.9		82.8		53.7		—			150.4
Total current liabilities	18.1		191.0		110.8		(27.9		)	292.0
Long-term debt	345.0		117.5		—		—			462.5
Intercompany payables	51.1		—		2.8		(53.9		)	—
Other liabilities	38.1		32.4		33.1		—			103.6
Total liabilities	452.3		340.9		146.7		(81.8		)	858.1
Shareholders’ equity	857.7		1,246.4		387.7		(1,634.1		)	857.7
Total liabilities and equity	$	1,310.0	$	1,587.3	$	534.4	$	(1,715.9	)	$	1,715.8