Business Segment Information

12 Months Ended

Dec. 31, 2019



19.	Business Segment Information

We aggregate our operating businesses into two reportable segments. The factors considered in determining our reportable segments are the economic similarity of the businesses, the nature of products sold or services provided, the production processes and the types of customers and distribution methods. Our reportable segments are managed separately based on these differences.

Our Sealing Products segment designs, manufactures and sells sealing products, including: metallic, non-metallic and composite material gaskets, dynamic seals, compression packing, resilient metal seals, elastomeric seals, custom-engineered

mechanical seals for applications in the aerospace industry and other markets, hydraulic components, expansion joints, flange sealing and isolation products, pipeline casing spacers/isolators, casing end seals, modular sealing systems for sealing pipeline penetrations, sanitary gaskets, hoses and fittings for the hygienic process industries, fluid transfer products for the pharmaceutical and biopharmaceutical industries, hole forming products, manhole infiltration sealing systems, bellows and bellows assemblies, pedestals for semiconductor manufacturing, PTFE products, and heavy-duty commercial vehicle parts used in the wheel-end, braking, suspension, and tire and mileage optimization systems. In addition to these products, we also provide cleaning and refurbishment services for critical components and assemblies used in state-of-the-art semiconductor equipment. The equipment services is used to produce advanced microchips for smartphones, autonomous vehicles, high-speed wireless connectivity, artificial intelligence, and other applications.

Our Engineered Products segment includes operations that design, manufacture and sell self-lubricating, non-rolling metal-polymer, solid polymer and filament wound bearing products, aluminum blocks for hydraulic applications, and precision engineered components and lubrication systems for reciprocating compressors.

Segment profit is total segment revenue reduced by operating expenses, restructuring and other costs identifiable with the segment. Corporate expenses include general corporate administrative costs. Expenses not directly attributable to the segments, corporate expenses, net interest expense, asset impairments, gains and losses related to the sale of assets, and income taxes are not included in the computation of segment profit. The accounting policies of the reportable segments are the same as those for EnPro.

Segment operating results and other financial data for the years ended December 31, 2019, 2018, and 2017 were as follows:



	Years Ended December 31,
	2019			2018			2017
	(in millions)
Sales
Sealing Products	$	911.5		$	954.4		$	804.3
Engineered Products	298.3			323.9			301.1
	1,209.8			1,278.3			1,105.4
Intersegment sales	(4.1		)	(4.2		)	(4.0		)
Total sales	$	1,205.7		$	1,274.1		$	1,101.4
Segment Profit
Sealing Products	$	93.8		$	85.2		$	90.4
Engineered Products	29.3			40.1			30.1
Total segment profit	123.1			125.3			120.5
Corporate expenses	(36.4		)	(34.9		)	(36.3		)
Interest expense, net	(18.2		)	(27.3		)	(49.4		)
Gain on reconsolidation of GST and OldCo	—			—			534.4
Other expense, net	(64.2		)	(48.0		)	(23.2		)
Income from continuing operations before income taxes	$	4.3		$	15.1		$	546.0



	Years Ended December 31,
	2019		2018		2017
	(in millions)
Net Sales by Geographic Area
United States	$	630.2	$	736.2	$	588.5
Europe	301.2		278.6		266.1
Other foreign	274.3		259.3		246.8
Total	$	1,205.7	$	1,274.1	$	1,101.4

Net sales are attributed to countries based on location of the customer.

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 years ended December 31, 2019 and 2018:



	Year Ended December 31, 2019
	(in millions)
	Sealing Products		Engineered Products		Total
Aerospace	$	57.4	$	12.0	$	69.4
Automotive	7.0		81.5		88.5
Chemical and material processing	48.0		49.4		97.4
Food and pharmaceutical	38.8		0.7		39.5
General industrial	176.2		93.9		270.1
Medium-duty/heavy-duty truck	340.9		1.2		342.1
Oil and gas	62.4		43.5		105.9
Power generation	47.7		9.5		57.2
Semiconductors	115.7		—		115.7
Other	13.9		6.0		19.9
Total third party sales	$	908.0	$	297.7	$	1,205.7



	Year Ended December 31, 2018
	(in millions)
	Sealing Products		Engineered Products		Total
Aerospace	$	54.1	$	8.4	$	62.5
Automotive	5.3		97.3		102.6
Chemical and material processing	54.5		49.5		104.0
Food and pharmaceutical	37.1		1.0		38.1
General industrial	174.2		99.3		273.5
Medium-duty/heavy-duty truck	387.3		1.1		388.4
Oil and gas	53.9		46.8		100.7
Power generation	57.8		11.2		69.0
Semiconductors	113.7		—		113.7
Other	13.0		8.6		21.6
Total third party sales	$	950.9	$	323.2	$	1,274.1

No customer accounted for 10% or more of net sales in 2019, 2018 or 2017.



	Years Ended December 31,
	2019		2018		2017
	(in millions)
Capital Expenditures
Sealing Products	$	14.2	$	26.0	$	20.4
Engineered Products	7.4		10.1		9.9
Total capital expenditures	$	21.6	$	36.1	$	30.3

Depreciation and Amortization Expense
Sealing Products	$	53.1	$	50.7	$	41.8
Engineered Products	14.8		15.4		16.8
Total depreciation and amortization	$	67.9	$	66.1	$	58.6



	As of December 31,
	2019		2018
	(in millions)
Assets
Sealing Products	$	1,337.6	$	1,008.8
Engineered Products	238.3		220.6
Corporate	205.1		220.3
Discontinued operations	254.1		266.1
	$	2,035.1	$	1,715.8



Long-Lived Assets
United States	$	130.1	$	145.0
France	24.2		26.0
Other Europe	20.7		21.9
Other foreign	43.8		41.4
Total	$	218.8	$	234.3

Corporate assets include all of our cash and cash equivalents and long-term deferred income taxes. Long-lived assets consist of property, plant and equipment.