EnPro Industries Reports Results for the First Quarter of 2017

EnPro Industries, Inc. (NYSE: NPO) today announced its financial results
for the three-month period ended March 31, 2017.

Consolidated and Pro Forma Financial Highlights
(Amounts in
millions except per share data and percentages)

Consolidated Financial Results 1				Quarters Ended March 31
Excludes Garlock Sealing Technologies LLC				2017					2016					% ∆
Net Sales				$	295.8				$	294.9				0.3	%
Segment Profit				$	36.0				$	18.0				100.0	%
Segment Margin					12.2	%				6.1	%
Net Income (Loss)				$	6.4				$	(46.8	)			nm
Diluted Earnings (Loss) Per Share				$	0.30				$	(2.15	)			nm
Adjusted Net Income (Loss) 2				$	9.5				$	(0.2	)			nm
Adjusted Diluted Earnings (Loss) Per Share 2				$	0.44				$	(0.01	)			nm
Adjusted EBITDA 2				$	42.7				$	26.8				59.3	%
Adjusted EBITDA Margin 2					14.4	%				9.1	%

Pro Forma Financial Information				Quarters Ended March 31
Includes Garlock Sealing Technologies LLC 3				2017					2016					% ∆
Pro Forma Net Sales 2				$	337.9				$	334.7				1.0	%
Pro Forma Segment Profit 2				$	44.2				$	24.0				84.2	%
Pro Forma Segment Margin 2					13.1	%				7.2	%
Pro Forma Adjusted Net Income 2				$	20.1				$	8.6				133.7	%
Pro Forma Adjusted EBITDA 2				$	53.9				$	36.0				49.7	%
Pro Forma Adjusted EBITDA Margin 2					16.0	%				10.8	%

1 Consolidated results for the first quarters of 2017 and 2016 reflect the deconsolidation of Garlock Sealing Technologies LLC ("GST") and its subsidiaries, effective June 5, 2010, when GST filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code to begin a process (the Asbestos Claims Resolutions Process, or "ACRP") in pursuit of an efficient and permanent resolution to all current and future asbestos claims against it and the deconsolidation of OldCo, LLC ("OldCo") effective January 30, 2017 when it filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code in furtherance of the Asbestos Claims Resolution Process.

2 See attached schedules for adjustments and reconciliations to GAAP numbers.

3 Pro forma financial information in these tables and throughout this press release is presented as if GST and OldCo were reconsolidated with EnPro based on confirmation and consummation of the joint plan of reorganization filed pursuant to the comprehensive settlement announced on March 17, 2016. See attached unaudited condensed consolidated pro forma statements of operations.

Business Highlights

• Consolidated adjusted net income increased $9.7 million and pro
  forma adjusted net income increased $11.5 million in the first quarter
  compared to the same period in 2016.
• Capital allocation highlights:
  • The company purchased 60,800 shares for $4.0 million in the
    first quarter as part of the share repurchase program authorized
    in October 2015.
  • The company paid a $0.22 per share dividend with a total value
    of $4.7 million.
• The ACRP is proceeding towards plan confirmation according to the
  expected timeline. The confirmation hearing with the Bankruptcy Court
  is scheduled for the week of May 15th.

“The first quarter of this year was a breath of fresh air after nearly
two years of persistent market headwinds,” said Steve Macadam, EnPro
Industries President and CEO. “We experienced modestly strengthening
conditions in many of the markets that we serve. Excluding the impact of
foreign exchange translation, acquisitions and divestitures, our Sealing
Products and Engineered Products segments grew consolidated sales by
3.1% and 4.4%, respectively, and pro forma sales by 3.2% and 4.1%,
respectively, versus the first quarter of last year. While Power Systems
sales declined year-over-year due to lower engine sales, cost reductions
and strong aftermarket services sales resulted in an increase in segment
profit. Across all of our segments, we maintained and benefited from our
focus on disciplined cost management. We also continued to make progress
on our plan to finalize the ACRP, and assuming timely receipt of the
necessary court approvals and the absence of any appeals or other
unanticipated delays, we expect consummation of the joint plan of
reorganization and reconsolidation of GST and OldCo into EnPro to occur
in the third quarter of this year. I am pleased that we are seeing
positive results from our efforts over the past several years to
strengthen our core businesses and create new growth opportunities,
while entering the final stages of resolving the asbestos burden.”

Mr. Macadam continued, “We remain committed to our strategy to create
shareholder value through earnings growth and balanced capital
allocation, including disciplined investments for organic growth and
innovation, strategic bolt-on acquisitions, and returning capital to
shareholders through dividends and share repurchases. We continued to
execute on this strategy in the first quarter through cost control, R&D
investments in Power Systems and Sealing Products, a $4.0 million
repurchase of shares and a $0.22 per share dividend.”

Semiconductor, food & pharma and aerospace continued to be strong, oil &
gas and automotive improved, while industrial gas turbines, general
industrial and nuclear demand remained flat. This positive momentum was
partially offset by modest weakness in heavy-duty trucking. Net of
divestitures, acquisitions contributed 1.1% sales growth on a
consolidated basis and 1.0% sales growth on a pro forma basis, while
foreign exchange had a negative impact of 1.1% on a consolidated basis
and 1.0% on a pro forma basis. GST, which is the deconsolidated entity
included in the pro forma results, benefited from small improvements in
demand across the refining, steel and mining markets.

Segment profit in the first quarter was up year-over-year due to a
variety of factors. Demand in Sealing Products and Engineered Products
was positive compared to the same period a year ago. Power Systems
benefited from a $0.5 million favorable accounting adjustment related to
the EDF engine contract. The adjustment was driven by the weakening of
the U.S. Dollar to Euro foreign exchange rate, net of an increase in the
cost to complete the contract. Further, the year-over-year comparison
for Power Systems was affected by $3.0 million of legal costs that Power
Systems incurred to settle a lawsuit with AVL in the first quarter of
2016. The company-wide cost-reduction initiatives and general
restructuring activities that occurred throughout the course of 2016
also positively affected profitability. Excluding the impact of the
Rubber Fab acquisition, divestitures, restructuring, foreign exchange
translation and the impact of reflecting the total projected loss on the
long-term EDF contract in proportion to the percentage of completion of
the contract, as is the accounting practice for positive gross margin
long-term contracts, consolidated segment profit was 60.2% higher and
pro forma segment profit was 55.9% higher compared to the first quarter
of 2016.

Excluding restructuring costs, legal costs related to the AVL lawsuit in
the first quarter of 2016, and SG&A costs associated with acquisitions
and divestitures, segment SG&A in the first quarter was $8.2 million
lower on a consolidated basis and $8.5 million lower on a pro forma
basis versus the same period of 2016. The company-wide cost-reduction
effort and the restructuring in the Sealing Products and Engineered
Products segments completed during 2016 contributed to the
year-over-year improvement. Restructuring charges for the quarter were
$0.8 million on a consolidated and pro forma basis.

The company’s average diluted share count in the first quarter of 2017
was 21.8 million shares, which was roughly flat from the same period a
year ago. Since the company’s net income in the first quarter of 2016
was negative, the share count for that quarter did not include 0.2
million potentially dilutive shares related to stock compensation.
Treating those shares as if the company had positive net income in the
first quarter of 2016, the company’s average diluted share count
declined by 0.2 million, or 1.0%. The decrease was due to share
repurchases in connection with the $50 million repurchase program
authorized in October 2015, more than offsetting the effect of stock
compensation award grants. During the first quarter, the company
purchased 60,800 shares at a total cost of $4.0 million. Through the end
of the first quarter, the company had purchased a total of 787,957
shares as part of the program, at a total investment of $39.6 million.

Corporate Expenses

Corporate expenses were $7.5 million in the first quarter of 2017
compared to $9.0 million in the same period last year. The
year-over-year decrease was driven primarily by lower professional fees
and administrative costs, and lower employee costs as a result of
workforce reductions implemented in 2016.

Outlook

“We are encouraged by the positive performance to start the year, which
was driven by improved volumes in Sealing Products and Engineered
Products and a significant year-over-year reduction in SG&A costs. SG&A
costs in the first quarter of 2016 were the highest of the year, with
costs moderating considerably in the second through fourth quarters. We
do not expect significant benefits from year-over-year SG&A cost
comparisons for the rest of 2017, and therefore expect market growth,
product mix and cost discipline to be the key drivers of our performance
during the balance of the year. Given our first quarter results, current
macroeconomic forecasts, order patterns and customer feedback, we are
increasing our guidance for our 2017 pro forma adjusted EBITDA.
Excluding the future impact of acquisitions, changes in foreign
exchange, and any litigation or environmental charges, we are increasing
our previous pro forma adjusted EBITDA estimated range of $188 million
to $193 million to a revised estimated range of $193 million to $198
million,” said Mr. Macadam.

Pro Forma Results Including Deconsolidated Subsidiaries

To aid comparisons of year-over-year data, the company has included
information in this press release showing key operating metrics for
EnPro and its deconsolidated subsidiaries, GST and OldCo, on a pro forma
reconsolidated basis. These metrics are derived from tables attached to
this press release that illustrate, on a pro forma basis, total
financial results for the first quarters of 2017 and 2016 as if GST and
OldCo were reconsolidated with EnPro based on confirmation and
consummation of the joint plan of reorganization filed pursuant to the
consensual comprehensive settlement announced on March 17, 2016. The
narrative preceding those tables includes an important discussion of the
risks and uncertainties applicable to confirmation and consummation of
the joint plan of reorganization. In response to requests from
investors, we are providing the pro forma financial information in this
release as supplemental information as it reflects the performance of
all of our subsidiaries.

Conference Call and Webcast Information

EnPro will hold a conference call tomorrow, May 2, at 10:00 a.m. Eastern
Time to discuss first quarter 2017 results. Investors who wish to
participate in the call should dial 1-800-851-4704 approximately 10
minutes before the call begins and provide conference ID number
53479821. A live audio webcast of the call and accompanying slide
presentation will be accessible from the company’s website, http://www.enproindustries.com.
To access the presentation, log on to the webcast by clicking the link
on the company’s home page.

Non-GAAP Financial Information

This press release contains financial measures that have not been
prepared in accordance with GAAP. They include adjusted net income,
adjusted diluted earnings per share, pro forma adjusted net income,
adjusted EBITDA, pro forma adjusted EBITDA, adjusted EBITDA margin and
pro forma adjusted EBITDA margin, as well as segment adjusted EBITDA,
segment adjusted EBITDA margin, pro forma segment adjusted EBITDA and
pro forma segment adjusted EBITDA margin. Tables showing the effect of
these non-GAAP financial measures for the first quarters of 2017 and
2016 are attached to the release. Adjusted EBITDA anticipated for 2017
is calculated in a manner consistent with the presentation of adjusted
EBITDA in the attached tables. Because of the forward-looking nature of
this estimate of adjusted EBITDA, it is impractical to present a
quantitative reconciliation of such measure to a comparable GAAP
measure, and accordingly no such GAAP measure is being presented.

Forward-Looking Statements

Statements in this press release that express a belief, expectation or
intention, as well as those that are not historical fact, are
forward-looking statements under the Private Securities Litigation
Reform Act of 1995. They involve a number of risks and uncertainties
that may cause actual events and results to differ materially from such
forward-looking statements. These risks and uncertainties include, but
are not limited to: general economic conditions in the markets served by
our businesses, some of which are cyclical and experience periodic
downturns; prices and availability of raw materials; and the amount of
any payments required to satisfy contingent liabilities related to
discontinued operations of our predecessors, including liabilities for
certain products, environmental matters, employee benefit obligations
and other matters. In addition, there are risks and uncertainties that
may affect matters involving the voluntary petitions filed by certain of
our subsidiaries in U.S. Bankruptcy Court to establish a trust that
would resolve all current and future asbestos claims, which risks and
uncertainties include, but are not limited to the risk that the joint
plan of reorganization may not obtain necessary court approval,
uncertainties related to pending objections to the joint plan, including
any changes implemented in the resolutions of such objections, the
actions and decisions of creditors, insurers and other third parties
that have an interest in the bankruptcy proceedings, the terms and
conditions of any reorganization plan that is ultimately approved by the
Bankruptcy Court, including any changes implemented in the resolutions
of objections, delays in the confirmation or consummation of the joint
plan, including as a result of any appeals, and risks and uncertainties
affecting the ability to fund anticipated contributions under the joint
plan as a result of adverse changes in results of operations, financial
condition and capital resources, including as a result of economic
factors beyond EnPro’s control. Our filings with the Securities and
Exchange Commission, including the Form 10-K for the year ended December
31, 2016, describe these and other risks and uncertainties in more
detail. We do not undertake to update any forward-looking statements
made in this press release to reflect any change in management's
expectations or any change in the assumptions or circumstances on which
such statements are based.

About EnPro Industries

EnPro Industries, Inc. is a leader in sealing products, metal polymer
and filament wound bearings, components and service for reciprocating
compressors, diesel and dual-fuel engines and other engineered products
for use in critical applications by industries worldwide. For more
information about EnPro, visit the company’s website at http://www.enproindustries.com.

APPENDICES

Highlights of Segment Results: First Quarter of 2017

Consolidated Financial Information and Reconciliations

Introduction of Unaudited Pro Forma Financial Information

Pro Forma Financial Information and Reconciliations

Sealing Products Segment

				Quarters Ended March 31
($ Millions)				2017					2016					% ∆
Consolidated Sales				$	179.3				$	172.2				4.1	%
Consolidated Segment Profit				$	20.3				$	14.7				38.1	%
Consolidated Segment Margin					11.3	%				8.5	%
Consolidated Adjusted EBITDA 1				$	29.3				$	24.8				18.1	%
Consolidated Adjusted EBITDA Margin 1					16.3	%				14.4	%
Pro Forma Sales 2				$	219.4				$	211.1				3.9	%
Pro Forma Segment Profit 2				$	27.6				$	20.4				35.3	%
Pro Forma Segment Margin 2					12.6	%				9.7	%
Pro Forma Adjusted EBITDA 1, 2				$	39.9				$	33.9				17.7	%
Pro Forma Adjusted EBITDA Margin 1, 2					18.2	%				16.1	%

1 See attached schedules for adjustments and reconciliations to GAAP numbers.
2 See attached unaudited condensed consolidated pro forma statements of operations.

Segment Highlights

• Consolidated sales in semiconductor, food & pharma and aerospace
  continued to be strong, oil & gas improved, while industrial gas
  turbines, general industrial and nuclear demand remained flat. This
  positive momentum was partially offset by modest weakness in
  heavy-duty trucking. Pro forma net sales were impacted by the above
  factors plus modest increases in demand in refining, steel and mining.
• Excluding the impact of acquisitions, divestitures and foreign
  exchange translation, consolidated sales increased 3.1% and pro forma
  sales increased 3.2% compared to the first quarter of 2016. Excluding
  the same items plus restructuring costs, consolidated segment profit
  increased 21.5% and pro forma segment profit increased 24.2%.
• Excluding restructuring costs and SG&A costs related to acquisitions
  and divestitures, segment SG&A costs in the first quarter were $5.2
  million lower on a consolidated basis and $5.3 million lower on a pro
  forma basis versus the same period of 2016.

Engineered Products Segment

				Quarters Ended March 31
($ Millions)				2017					2016					% ∆
Consolidated Sales				$	75.1				$	73.7				1.9	%
Consolidated Segment Profit				$	9.5				$	2.1				352.4	%
Consolidated Segment Margin					12.6	%				2.8	%
Consolidated Adjusted EBITDA 1				$	14.1				$	9.5				48.4	%
Consolidated Adjusted EBITDA Margin 1					18.8	%				12.9	%
Pro Forma Sales 2				$	75.2				$	74.0				1.6	%
Pro Forma Segment Profit 2				$	9.5				$	2.2				331.8	%
Pro Forma Segment Margin 2					12.6	%				3.0	%
Pro Forma Adjusted EBITDA 1, 2				$	14.1				$	9.6				46.9	%
Pro Forma Adjusted EBITDA Margin 1, 2					18.8	%				13.0	%

1 See attached schedules for adjustments and reconciliations to GAAP numbers.

2 See attached unaudited condensed consolidated pro forma statements of operations.

Segment Highlights

• Sales increased in the first quarter versus prior year due to strength
  in European automotive, North American oil & gas, and general demand
  in Asia. Sales to the general industrial market were relatively flat
  in the first quarter versus prior year. Excluding the impact of
  foreign exchange translation and divestitures, consolidated sales
  increased 4.4% and pro forma sales increased 4.1% in the first quarter
  versus the same period in 2016.
• Segment profit also increased in the first quarter versus prior year
  as a result of a combination of higher sales and cost improvements
  primarily from improved manufacturing efficiencies and the positive
  impacts from cost-reduction efforts and restructuring activities that
  occurred throughout 2016. Excluding the impact of restructuring costs,
  divestitures and foreign exchange translation, first quarter
  consolidated segment profit increased 103.0% and pro forma segment
  profit increased 98.0% from a year ago.
• Excluding restructuring charges, both consolidated and pro forma
  segment SG&A costs in the first quarter were $1.9 million lower versus
  the same period of 2016.

Power Systems Segment

				Quarters Ended March 31
($ Millions)				2017					2016					% ∆
Consolidated Sales				$	42.4				$	50.0				-15.2	%
Consolidated Segment Profit				$	6.2				$	1.2				416.7	%
Consolidated Segment Margin					14.6	%				2.4	%
Consolidated Adjusted EBITDA 1				$	7.3				$	2.3				217.4	%
Consolidated Adjusted EBITDA Margin 1					17.2	%				4.6	%
Pro Forma Sales 2				$	44.3				$	50.8				-12.8	%
Pro Forma Segment Profit 2				$	7.1				$	1.4				407.1	%
Pro Forma Segment Margin 2					16.0	%				2.8	%
Pro Forma Adjusted EBITDA 1, 2				$	8.2				$	2.5				228.0	%
Pro Forma Adjusted EBITDA Margin 1, 2					18.5	%				4.9	%

1 See attached schedules for adjustments and reconciliations to GAAP numbers.

2 See attached unaudited condensed consolidated pro forma statements of operations.

Segment Highlights

• Sales decreased in the first quarter versus the same period last year
  due to lower engine revenue.
• Segment profit was higher in the first quarter compared to the same
  period last year due to decreased operating costs attributable to
  prior-year cost-savings initiatives, lower warranty costs and the
  positive year-over-year impact of $3.0 million of legal costs incurred
  in the first quarter of 2016 for the AVL legal settlement.
  Additionally, Power Systems recorded a $0.5 million positive
  accounting adjustment related to the EDF contract during the first
  quarter of the current year. Reflecting the total projected loss on
  the long-term EDF contract in proportion to the percentage of
  completion of the contract, as is the accounting practice for positive
  gross margin long-term contracts, and excluding the effect of the 2016
  AVL charge, first quarter consolidated segment profit increased 43%
  and pro forma segment profit increased 60% from a year ago.
• Excluding restructuring charges and a $3.0 million charge incurred in
  the first quarter of 2016 related to the AVL lawsuit, segment SG&A
  costs in the first quarter were $1.1 million lower on a consolidated
  basis and $1.2 million lower on a pro forma basis versus the same
  period of 2016.

EnPro Industries, Inc.
Consolidated Statements of Operations (Unaudited)
For the Three Months Ended March 31, 2017 and 2016
(Stated in Millions of Dollars, Except Per Share Data)
						March 31					March 31
						2017					2016
Net sales						$	295.8				$	294.9
Cost of sales							194.2					197.3
	Gross profit						101.6					97.6
Operating expenses:
	Selling, general and administrative						72.9					85.6
	Asbestos settlement						-					80.0
	Other						1.3					4.4
		Total operating expenses					74.2					170.0
	Operating income (loss)						27.4					(72.4	)
Interest expense							(14.9	)				(13.3	)
Interest income							0.1					0.2
Other expense							(3.2	)				(1.6	)
	Income (loss) before income taxes						9.4					(87.1	)
Income tax benefit (expense)							(3.0	)				40.3
	Net income (loss)					$	6.4				$	(46.8	)
Basic earnings (loss) per share						$	0.30				$	(2.15	)
Average common shares outstanding (millions)							21.4					21.8
Diluted earnings (loss) per share						$	0.30				$	(2.15	)
Average common shares outstanding (millions)							21.8					21.8

EnPro Industries, Inc.
Consolidated Statements of Cash Flows (Unaudited)
For the Three Months Ended March 31, 2017 and 2016
(Stated in Millions of Dollars)
									2017					2016
Operating activities
	Net income (loss)								$	6.4				$	(46.8	)
	Adjustments to reconcile net income (loss) to net cash used in operating activities:
			Depreciation							7.3					7.4
			Amortization							6.5					6.5
			Asbestos settlement							-					80.0
			Deferred income taxes							(0.1	)				(44.5	)
			Stock-based compensation							1.9					1.6
			Other non-cash adjustments							1.2					1.6
	Change in assets and liabilities, net of effects of deconsolidation of business:
			Accounts receivable, net							(12.6	)				(0.9	)
			Inventories							(7.8	)				(0.6	)
			Accounts payable							(0.5	)				(15.8	)
			Other current assets and liabilities							(19.0	)				(12.4	)
			Other non-current assets and liabilities							(2.9	)				(4.5	)
				Net cash used in operating activities						(19.6	)				(28.4	)
Investing activities
	Purchases of property, plant and equipment									(11.1	)				(6.1	)
	Payments for capitalized internal-use software									(0.9	)				(1.0	)
	Deconsolidation of OldCo									(4.8	)				-
	Other									0.2					0.2
				Net cash used in investing activities						(16.6	)				(6.9	)
Financing activities
	Proceeds from debt									254.8					112.8
	Repayments of debt									(205.6	)				(52.2	)
	Repurchase of common stock									(3.6	)				(8.5	)
	Dividends paid									(4.7	)				(4.6	)
	Other									(3.4	)				(3.1	)
				Net cash provided by financing activities						37.5					44.4
Effect of exchange rate changes on cash and cash equivalents										0.9					(1.7	)
	Net increase in cash and cash equivalents									2.2					7.4
Cash and cash equivalents at beginning of period										111.5					103.4
Cash and cash equivalents at end of period									$	113.7				$	110.8

EnPro Industries, Inc.
Consolidated Balance Sheets (Unaudited)
As of March 31, 2017 and December 31, 2016
(Stated in Millions of Dollars)
						2017					2016
Current assets
	Cash and cash equivalents					$	113.7				$	111.5
	Accounts receivable						221.9					208.1
	Inventories						183.8					175.4
	Other current assets						35.2					29.9
		Total current assets					554.6					524.9
Property, plant and equipment							215.3					215.4
Goodwill							201.8					201.5
Other intangible assets							172.2					176.9
Investment in GST							236.9					236.9
Deferred income taxes and income tax receivable							112.1					152.6
Other assets							36.7					38.2
		Total assets				$	1,529.6				$	1,546.4
Current liabilities
	Short-term borrowings from GST					$	32.1				$	26.2
	Notes payable to GST						309.3					12.7
	Current maturities of long-term debt						0.2					0.2
	Accounts payable						99.0					102.9
	Asbestos liability - current						60.8					30.0
	Accrued expenses						102.6					131.0
		Total current liabilities					604.0					303.0
Long-term debt							468.8					424.8
Notes payable to GST							-					283.2
Asbestos liability							-					80.0
Other liabilities							94.5					96.9
		Total liabilities					1,167.3					1,187.9
Shareholders' equity
	Common stock						0.2					0.2
	Additional paid-in capital						344.2					346.5
	Retained earnings						85.4					84.0
	Accumulated other comprehensive loss						(66.2	)				(70.9	)
	Common stock held in treasury, at cost						(1.3	)				(1.3	)
		Total shareholders' equity					362.3					358.5
		Total liabilities and equity				$	1,529.6				$	1,546.4

EnPro Industries, Inc.
Segment Information (Unaudited)
For the Three Months Ended March 31, 2017 and 2016
(Stated in Millions of Dollars)
Sales
						2017			2016
Sealing Products						$ 179.3			$ 172.2
Engineered Products						75.1			73.7
Power Systems						42.4			50.0
						296.8			295.9
Less intersegment sales						(1.0)			(1.0)
						$ 295.8			$ 294.9
Segment Profit
						2017			2016
Sealing Products						$ 20.3			$ 14.7
Engineered Products						9.5			2.1
Power Systems						6.2			1.2
						$ 36.0			$ 18.0
Segment Margin
						2017			2016
Sealing Products						11.3%			8.5%
Engineered Products						12.6%			2.8%
Power Systems						14.6%			2.4%
						12.2%			6.1%
Reconciliation of Segment Profit to Net Income (Loss)
						2017			2016
Segment profit						$ 36.0			$ 18.0
Corporate expenses						(7.5)			(9.0)
Asbestos settlement						-			(80.0)
Interest expense, net						(14.8)			(13.1)
Other expense, net						(4.3)			(3.0)
Income (loss) before income taxes						9.4			(87.1)
Income tax benefit (expense)						(3.0)			40.3
Net income (loss)						$ 6.4			$ (46.8)

Segment profit is total segment revenue reduced by operating expenses and 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/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 the Company.

EnPro Industries, Inc.
Reconciliation of Consolidated Net Income (Loss) to Consolidated Adjusted Net Income (Loss) and
Consolidated Adjusted Diluted Earnings (Loss) Per Share (Unaudited)
For the Three Months Ended March 31, 2017 and 2016
(Stated in Millions of Dollars, Except Per Share Data)
					2017													2016
					$					Average common shares outstanding, diluted (millions)				Per share				$					Average common shares outstanding, diluted (millions)			Per share
Net income (loss)					$	6.4					21.8			$	0.30			$	(46.8	)			21.8			$	(2.15	)
Income tax expense (benefit)						3.0													(40.3	)
Income (loss) before income taxes						9.4													(87.1	)
Adjustments:
	Asbestos settlement					-													80.0
	Restructuring costs					0.8													4.3
	Environmental reserve adjustment					3.3													1.6
	Acquisition expenses					0.1													0.4
	Other					0.5													0.6
Adjusted income (loss) before income taxes						14.1													(0.2	)
	Adjusted income tax expense					(4.6	)												(0.0	)
Adjusted net income (loss)					$	9.5				$	21.8			$	0.44			$	(0.2	)			21.8			$	(0.01	)

Management of the Company believes that it would be helpful to the readers of the financial statements to understand the impact of certain selected items on the Company's reported net income, earnings per share, and segment profit, including items that may recur from time to time. The items adjusted for in this schedule 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. This presentation enables readers to better compare EnPro Industries, Inc. to other diversified industrial manufacturing companies that do not incur the sporadic impact of restructuring activities or other selected items. Management acknowledges that there are many items that impact a company's reported results and this list is not intended to present all items that may have impacted these results.

The acquisition expenses are included in selling, general and administrative expenses, and the restructuring costs, environmental reserve adjustment, and other are included as part of other operating expense and other expense.

The adjusted income tax expense presented above is calculated using a normalized company-wide effective tax rate excluding discrete items of 32.5%. Per share amounts were calculated by dividing by the weighted-average shares of diluted common stock outstanding during the periods.

EnPro Industries, Inc.
Reconciliation of Segment Profit to Adjusted Segment EBITDA (Unaudited)
For the Three Months Ended March 31, 2017 and 2016
(Stated in Millions of Dollars)
						Three Months Ended March 31, 2017
						Sealing					Engineered					Power					Total
						Products					Products					Systems					Segments
Segment profit						$	20.3				$	9.5				$	6.2				$	36.0
	Acquisition expenses						0.1					-					-					0.1
	Restructuring costs						0.3					0.5					-					0.8
	Depreciation and amortization expense						8.6					4.1					1.1					13.8
Earnings before interest, income taxes, depreciation, amortization, and other selected items (adjusted segment EBITDA)						$	29.3				$	14.1				$	7.3				$	50.7
Adjusted segment EBITDA margin							16.3	%				18.8	%				17.2	%				17.1	%
						Three Months Ended March 31, 2016
						Sealing					Engineered					Power					Total
						Products					Products					Systems					Segments
Segment profit						$	14.7				$	2.1				$	1.2				$	18.0
	Acquisition expenses						0.4					-					-					0.4
	Restructuring costs						1.4					2.9					-					4.3
	Depreciation and amortization expense						8.3					4.5					1.1					13.9
Earnings before interest, income taxes, depreciation, amortization, and other selected items (adjusted segment EBITDA)						$	24.8				$	9.5				$	2.3				$	36.6
Adjusted segment EBITDA margin							14.4	%				12.9	%				4.6	%				12.4	%

For a reconciliation of segment profit to net income (loss), please refer to the Segment Information (Unaudited) schedule.

EnPro Industries, Inc.
Reconciliation of to Consolidated Net Income (Loss) to Consolidated
Adjusted EBITDA (Unaudited)
For the Three Months Ended March 31, 2017 and 2016
(Stated in Millions of Dollars)
						2017				2016
Net income (loss)						$	6.4			$	(46.8	)
Adjustments to arrive at earnings before interest, income taxes, depreciation and amortization (EBITDA):
	Interest expense, net						14.8				13.1
	Income tax expense (benefit)						3.0				(40.3	)
	Depreciation and amortization expense						13.8				13.9
		EBITDA					38.0				(60.1	)
Adjustments to arrive at earnings before interest, income taxes, depreciation, amortization and other selected items (Consolidated Adjusted EBITDA):
	Asbestos settlement						-				80.0
	Restructuring costs						0.8				4.3
	Acquisition expenses						0.1				0.4
	Environmental reserve adjustment						3.3				1.6
	Other						0.5				0.6
		Consolidated adjusted EBITDA				$	42.7			$	26.8

*	Consolidated adjusted EBITDA as presented also represents the amount defined as "EBITDA" under the indenture governing the Company's 5.875% senior notes due 2022.

Unaudited Pro Forma Information Reflecting the Reconsolidation of
Garlock Sealing Technologies

The historical business operations of Garlock Sealing Technologies LLC
(“GST LLC”) and The Anchor Packing Company (“Anchor”) resulted in a
substantial volume of asbestos litigation in which plaintiffs alleged
personal injury or death as a result of exposure to asbestos fibers.
Those subsidiaries manufactured and/or sold industrial sealing products,
predominately gaskets and packing, that contained encapsulated asbestos
fibers. Anchor is an inactive and insolvent indirect subsidiary of
EnPro. EnPro’s subsidiaries’ exposure to asbestos litigation and their
relationships with insurance carriers have been managed through another
subsidiary, Garrison Litigation Management Group, Ltd. (“Garrison”). GST
LLC, Anchor and Garrison are collectively referred to as “GST.”

On June 5, 2010 (the “Petition Date”), GST filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy Code in
the U.S. Bankruptcy Court for the Western District of North Carolina in
Charlotte (the “Bankruptcy Court”). The filings were the initial step in
an asbestos claims resolution process, which is ongoing.

The financial results of GST and its subsidiaries are included in our
consolidated results through June 4, 2010, the day prior to the Petition
Date. However, U.S. generally accepted accounting principles require an
entity that files for protection under the U.S. Bankruptcy Code, whether
solvent or insolvent, whose financial statements were previously
consolidated with those of its parent, as GST’s and its subsidiaries’
were with EnPro’s, generally must be prospectively deconsolidated from
the parent and the investment accounted for using the cost method.
Accordingly, the financial results of GST and its subsidiaries are not
included in EnPro’s consolidated results after June 4, 2010.

On March 17, 2016, EnPro announced that it had reached a comprehensive
settlement to resolve current and future asbestos claims. The settlement
was reached with the court-appointed committee representing current
asbestos claimants (the “GST Committee”) and the court-appointed legal
representative of future asbestos claimants (the “GST FCR”) in GST’s
Chapter 11 case pending before the Bankruptcy Court. Representatives for
current and future asbestos claimants (the “Coltec Representatives”)
against Coltec Industries Inc (“Coltec”) (another subsidiary of EnPro
and, at that time, GST’s direct parent) also joined in the settlement.
The terms of the settlement are set forth in the Term Sheet for
Permanent Resolution of All Present and Future GST Asbestos Claims and
Coltec Asbestos Claims dated March 17, 2016 among EnPro, Coltec, GST,
the GST Committee, the GST FCR and the Coltec Representatives included
as Exhibit 99.2 to EnPro’s Form 8-K filed on March 18, 2016. Under the
settlement, the GST Committee, the GST FCR and the Coltec
Representatives agreed to join GST and Coltec in proposing a joint plan
of reorganization that incorporates the settlement and to ask asbestos
claimants and the court to approve the plan. The joint plan of
reorganization was filed with the Bankruptcy Court on May 20, 2016 and
technical amendments to the joint plan of reorganization were filed with
the Bankruptcy Court on June 21, 2016, July 29, 2016, December 2, 2016
and April 3, 2017. The joint plan of reorganization supersedes all prior
plans of reorganization filed by GST with the Bankruptcy Court.

The joint plan of reorganization was subject to approval by a vote in
favor of the plan by asbestos claimants. The solicitation process to
obtain approval of the asbestos claimants was completed successfully on
December 9, 2016, with 95.85% in number and 95.80% in amount of claims
held by asbestos claimants casting valid ballots voting in favor of
approval of the joint plan of reorganization. The joint plan of
reorganization remains subject to approval by the Bankruptcy Court and
the U.S. District Court for the Western District of North Carolina (the
“District Court”) and, if so approved and consummated, would permanently
resolve all current and future asbestos claims against GST and
Coltec/OldCo, and would protect all of EnPro and its subsidiaries from
those claims, which claims would be enjoined under Section 524(g) of the
U.S. Bankruptcy Code. The hearing on objections to the joint plan of
reorganization and to determine whether the Bankruptcy Court will
confirm the joint plan of reorganization is scheduled to commence on May
15, 2017.

As contemplated by the comprehensive settlement, following the approval
of the joint plan of reorganization by asbestos claimants, Coltec
engaged in a series of corporate restructuring transactions in which all
of its significant operating assets and subsidiaries, which included
each of EnPro’s major business units, were distributed to a new direct
EnPro subsidiary (“EnPro Holdings”). OldCo, as the successor by merger
to Coltec in those transactions, retained responsibility for all
asbestos claims and rights to certain insurance assets. The
restructuring was completed on December 31, 2016 and, as contemplated by
the joint plan of reorganization and the comprehensive settlement, OldCo
filed a pre-packaged Chapter 11 bankruptcy petition with the Bankruptcy
Court on January 30, 2017. Accordingly, the financial results of OldCo
and its subsidiaries are not included in EnPro’s consolidated results
after January 29, 2017. On February 3, 2017, the Bankruptcy Court issued
an order for the joint administration of the OldCo Chapter 11
proceedings with the GST Chapter 11 proceedings.

The joint plan of reorganization provides for the establishment of a
trust (the “Trust”) to be fully funded within a year of consummation of
the joint plan of reorganization. The Trust is to be funded with
aggregate cash contributions by GST LLC and Garrison of $370 million
made at the effective date of the joint plan of reorganization and by
the contribution made by OldCo at the effective date of the joint plan
of reorganization of $30 million in cash and an option, exercisable
one-year after the effective date of the joint plan of reorganization,
permitting the Trust to purchase for $1 shares of EnPro common stock
having a value of $20 million and the obligation of OldCo to make a
deferred contribution of $60 million in cash no later than one year
after the effective date of the joint plan of reorganization. This
deferred contribution is to be guaranteed by EnPro and secured by a
pledge of 50.1% of the outstanding voting equity interests of GST LLC
and Garrison. Under the joint plan of reorganization, the Trust will
assume responsibility for all present and future asbestos claims arising
from the conduct, operations or products of GST or Coltec/OldCo. Under
the joint plan of reorganization, all non-asbestos creditors will be
paid in full and EnPro will retain ownership of OldCo, GST LLC and
Garrison.

The consensual settlement includes as a condition to EnPro’s obligations
to proceed with the settlement that EnPro, Coltec, GST LLC and Garlock
of Canada Ltd (an indirect subsidiary of GST LLC) enter into a written
agreement, to be consummated concurrently with the effective date of
consummation of the joint plan of reorganization, with the Canadian
provincial workers’ compensation boards (the “Provincial Boards”)
resolving remedies the Provincial Boards may possess against Garlock of
Canada Ltd, GST, Coltec or any of their affiliates, including releases
and covenants not to sue, for any present or future asbestos-related
claim, and that the agreement is either approved by the Bankruptcy Court
following notice to interested parties or the Bankruptcy Court concludes
that its approval is not required. On November 11, 2016, EnPro and such
subsidiaries entered into such an agreement (the “Canadian Settlement”)
with the Provincial Boards to resolve current and future claims against
EnPro, GST, Garrison, Coltec, and Garlock of Canada Ltd. for recovery of
a portion of amounts the Provincial Boards have paid and will pay in the
future under asbestos-injury recovery statutes in Canada for claims
relating to asbestos-containing products. The Canadian Settlement
provides for an aggregate cash settlement payment to the Provincial
Boards of $(U.S.) 20 million, payable on the fourth anniversary of the
effective date of the joint plan of reorganization. Under the Canadian
Settlement, after the effective date of the joint plan of
reorganization, the Provincial Boards will have the option of
accelerating the payment, in which case the amount payable would be
discounted from the fourth anniversary of the effective date of the
joint plan of reorganization to the payment date at a discount rate of
4.5% per annum. On February 3, 2017, the Bankruptcy Court issued an
order approving the Canadian Settlement.

If the joint plan of reorganization is approved by the Bankruptcy Court
and the District Court and is consummated, GST and OldCo will be
re-consolidated with EnPro’s results for financial reporting purposes.
EnPro cannot assure you that necessary approvals of the joint plan of
reorganization will be obtained and that the joint plan of
reorganization will be consummated. Confirmation and consummation of the
joint plan of reorganization are subject to a number of risks and
uncertainties, certain of which are summarized above in the paragraph
following the caption, “Forward-Looking Statements.”

EnPro is providing the unaudited pro forma condensed consolidated
financial information which assumes, with respect to GST and OldCo, the
confirmation and consummation of the joint plan of reorganization for
illustrative purposes only, in light of specific requests for such pro
forma information by investors. The unaudited pro forma condensed
consolidated financial information presented below has been prepared to
illustrate the effects of the reconsolidation of GST and OldCo and their
respective subsidiaries with EnPro assuming the confirmation and
consummation of the joint plan of reorganization and the consummation of
the Canadian Settlement and is based upon the historical balance sheet
of EnPro as of March 31, 2017, the estimated fair value of assets and
liabilities of GST as of March 31, 2017 and the historical results of
GST operations after consideration of the adjustments to the fair value
of assets and liabilities. The unaudited pro forma condensed
consolidated balance sheet as of March 31, 2017 gives effect to the
reconsolidation as if it occurred on March 31, 2017. The unaudited pro
forma condensed consolidated statements of operations for the three
months ended March 31, 2017 and 2016 give effect to the reconsolidation
as if it had occurred on January 1, 2016.

Under generally accepted accounting principles, the reconsolidation of
GST and OldCo requires that the tangible and intangible assets and
liabilities of GST be reflected at their estimated fair values. The
preliminary fair value amounts used in the unaudited pro forma condensed
consolidated financial information reflects management’s best estimates
of fair value. Upon completion of detailed valuation studies and the
final determination of fair value, EnPro may make additional adjustments
to the fair value allocation, which may differ significantly from the
valuations set forth in the unaudited pro forma condensed consolidated
financial information.

The unaudited pro forma condensed consolidated statements of operations
are based on estimates and assumptions, which have been made solely for
the purposes of developing such pro forma information. The unaudited pro
forma condensed consolidated statements of operations also include
certain adjustments such as increased depreciation and amortization
expense on tangible and intangible assets, increased interest expense on
the debt incurred to complete the reconsolidation as well as the tax
impacts related to these adjustments. The pro forma adjustments are
based upon available information and certain assumptions that EnPro
believes are reasonable.

The unaudited pro forma condensed consolidated financial information has
been presented for information purposes only and is not necessarily
indicative of what the consolidated company’s financial position or
results of operations actually would have been had the reconsolidation
been completed as of the dates indicated, nor is it necessarily
indicative of the future operating results or financial position of the
consolidated company. Therefore, the actual amounts recorded at the date
the reconsolidation occurs may differ from the information presented
herein.

EnPro Industries, Inc.
Pro Forma Condensed Consolidated Statements of Operations (Unaudited)
For the Three Months Ended March 31, 2017
(Stated in Millions of Dollars, Except Per Share Data)
																	Effect of
													Eliminate				Reconsolidation								Pro Forma
					Consolidated				GST and				Intercompany				of GST and								Adjustments
					EnPro				OldCo				Transactions				OldCo				Pro Forma				Reference
Net sales					$	295.8			$	56.6			$	(14.5	)		$	-			$	337.9			(1)
Cost of sales						194.2				36.1				(14.5	)			0.3				216.1			(1), (2)
	Gross profit					101.6				20.5				-				(0.3	)			121.8
Operating expenses:
	Selling, general and administrative					72.9				10.8				-				1.4				85.1			(2), (3)
	Other					1.3				0.2				-				(0.5	)			1.0			(4)
		Total operating expenses				74.2				11.0				-				0.9				86.1
	Operating income					27.4				9.5				-				(1.2	)			35.7
Interest expense						(14.9	)			-				8.7				(0.9	)			(7.1	)		(5)
Interest income						0.1				9.0				(8.7	)			-				0.4			(5)
Other expense						(3.2	)			(2.1	)			-				2.1				(3.2	)		(4)
	Income before income taxes					9.4				16.4				-				(0.0	)			25.8
Income tax expense						(3.0	)			(5.8	)			-				0.4				(8.4	)		(6)
	Net income				$	6.4			$	10.6			$	-			$	0.4			$	17.4
Basic earnings per share					$	0.30				N/A				N/A				N/A			$	0.81
Average common shares outstanding (millions)						21.4																21.4
Diluted earnings per share					$	0.30				N/A				N/A				N/A			$	0.80
Average common shares outstanding (millions)						21.8																21.8
(1)		Eliminate intercompany sales of $14.5 million.
(2)		Reflects the increase in depreciation expense of $0.3 million due to adjusting property, plant and equipment to fair value. The total fair value adjustment to property, plant and equipment was $19.8 million of which $14.6 million related to depreciable buildings and improvements and machinery and equipment that have a net estimated remaining economic life of 14.1 years.
(3)		Reflects the increase in amortization expense as a result of the estimated fair value adjustment due to the creation of the finite- lived intangible assets. The estimated useful life of the finite-lived intangible assets is 15 years.
(4)		Eliminate asbestos-related expenses which would cease upon confirmation and consummation of the proposed joint plan of reorganization
(5)		Eliminate intercompany interest and add interest expense on incremental borrowings made in order to make payment upon confirmation and consummation of the proposed consensual plan of reorganization. We used an estimated interest rate of 3% for all periods.
(6)		For purposes of the consolidated pro forma financial information, an estimated effective tax rate of 32.5% has been used for all periods presented.

EnPro Industries, Inc.
Pro Forma Condensed Consolidated Statements of Operations (Unaudited)
For the Three Months Ended March 31, 2016
(Stated in Millions of Dollars, Except Per Share Data)
													Eliminate				Effect of								Pro Forma
					Consolidated								Intercompany				Reconsolidation								Adjustments
					EnPro				GST				Transactions				of GST				Pro Forma				Reference
Net sales					$	294.9			$	51.1			$	(11.3	)		$	-			$	334.7			(1)
Cost of sales						197.3				32.5				(11.3	)			0.3				218.8			(1), (2)
	Gross profit					97.6				18.6				-				(0.3	)			115.9
Operating expenses:
	Selling, general and administrative					85.6				10.7				-				1.4				97.7			(2), (3)
	Other					84.4				49.8				-				(129.9	)			4.3			(4)
		Total operating expenses				170.0				60.5				-				(128.5	)			102.0
	Operating income (loss)					(72.4	)			(41.9	)			-				128.2				13.9
Interest expense						(13.3	)			-				8.3				(0.9	)			(5.9	)		(5)
Interest income						0.2				8.4				(8.3	)			-				0.3			(5)
Other expense						(1.6	)			(6.1	)			-				6.1				(1.6	)		(4)
	Income (loss) before income taxes					(87.1	)			(39.6	)			-				133.4				6.7
Income tax benefit (expense)						40.3				14.2				-				(56.7	)			(2.2	)		(6)
	Net income (loss)				$	(46.8	)		$	(25.4	)		$	-			$	76.7			$	4.5
Basic earnings (loss) per share					$	(2.15	)			N/A				N/A				N/A			$	0.21
Average common shares outstanding (millions)						21.8																21.8
Diluted earnings (loss) per share					$	(2.15	)			N/A				N/A				N/A			$	0.20
Average common shares outstanding (millions)						21.8												0.2				22.0			(7)
(1)		Eliminate intercompany sales of $11.3 million.
(2)		Reflects the increase in depreciation expense of $0.3 million due to adjusting property, plant and equipment to fair value. The total fair value adjustment to property, plant and equipment was $19.8 million of which $14.6 million related to depreciable buildings and improvements and machinery and equipment that have a net estimated remaining economic life of 14.1 years.
(3)		Reflects the increase in amortization expense as a result of the estimated fair value adjustment due to the creation of the finite-lived intangible assets. The estimated useful life of the finite-lived intangible assets is 15 years.
(4)		Eliminate asbestos-related expenses which would cease upon confirmation and consummation of the proposed joint plan of reorganization
(5)		Eliminate intercompany interest and add interest expense on incremental borrowings made in order to make payment upon confirmation and consummation of the proposed joint plan of reorganization. We used an estimated interest rate of 3% for all periods.
(6)		For purposes of the consolidated pro forma financial information, an estimated effective tax rate of 32.5% has been used for all periods presented.
(7)		Represents shares that would no longer be antidilutive since the pro-forma consolidated company would have net income.

EnPro Industries, Inc.
Pro forma Condensed Consolidated Balance Sheets (Unaudited)
As of March 31, 2017
(Stated in Millions of Dollars)
																			Effect of
											Proposed				Eliminate				Reconsolidation							Pro Forma
					Consolidated			GST			Consensual				Intercompany				of GST							Adjustments
					EnPro			and OldCo			Plan impact (1)				Balances				and OldCo				Pro Forma			Reference
Current assets
	Cash and investments				$	113.7		$	318.3		$	(301.6	)		$	-			$	-			$	130.4
	Accounts receivable					221.9			35.6			-				(20.0	)			-				237.5		(4)
	Inventories					183.8			17.2			-				-				5.6				206.6		(2)
	Notes receivable from EnPro					-			341.4			-				(341.4	)			-				0.0		(3)
	Asbestos insurance receivable					-			13.0			38.0				-				-				51.0
	Other current assets					35.2			12.0			58.9				(8.4	)			-				97.7		(4)
		Total current assets				554.6			737.5			(204.7	)			(369.8	)			5.6				723.2
Property, plant and equipment						215.3			41.1			-				-				19.8				276.2		(2)
Goodwill						201.8			18.3			-				-				(18.3	)			201.8		(2)
Other intangible assets						172.2			3.7			-				-				156.7				332.6		(2)
Investment in GST						236.9			-			-				-				(236.9	)			-		(6)
Asbestos insurance receivable						-			49.0			(38.0	)			-				-				11.0
Deferred income taxes and income taxes receivable						112.1			136.0			(58.9	)			(91.9	)			-				97.3		(5)
Other assets						36.7			3.3			-				(0.2	)			-				39.8		(4)
		Total assets			$	1,529.6		$	988.9		$	(301.6	)		$	(461.9	)		$	(73.1	)		$	1,681.9
Current liabilities
	Short-term borrowings from GST				$	32.1		$	-		$	-			$	(32.1	)		$	-			$	-		(3)
	Notes payable to GST					309.3			-			-				(309.3	)			-				-		(3)
	Current maturities of long-term debt					0.2			-			-				-				-				0.2
	Accounts payable					99.0			19.3			1.6				(20.0	)			-				99.9		(4)
	Asbestos liability					60.8			-			-				-				(60.8	)			-		(6)
	Accrued expenses					102.6			10.0			-				(8.4	)			-				104.2		(4)
		Total current liabilities				604.0			29.3			1.6				(369.8	)			(60.8	)			204.3
Long-term debt						468.8			-			115.2								-				584.0
Notes payable to GST						-			-			-				-				-				-		(3)
Asbestos liability						-			498.4			(418.4	)							-				80.0
Deferred income taxes and income taxes payable						7.3			92.2			-				(91.9	)			45.6				53.2		(5), (7)
Other liabilities						87.2			5.2			-				(0.2	)			-				92.2		(4)
		Total liabilities				1,167.3			625.1			(301.6	)			(461.9	)			(15.2	)			1,013.7
Shareholders' equity						362.3			363.8			-				-				(57.9	)			668.2		(8)
		Total liabilities and equity			$	1,529.6		$	988.9		$	(301.6	)		$	(461.9	)		$	(73.1	)		$	1,681.9
(1)		We determined that in the establishment of the Trust contemplated by the Proposed Consensual Plan, payments of agreed-upon amounts on the effective date would be funded by cash on hand and additional borrowings of $115.2 million.  The existing deferred tax asset on the asbestos liability was eliminated and a new deferred tax asset on the remaining trust liability payments was established.  Upon payment of these liabilities, $58.9 million of the new deferred tax asset is reversed and an income tax receivable is established to reflect the tax benefits that will be realized from a carryback of the resulting tax deductions.
(2)		Upon reconsolidation, the assets and liabilities of  GST will need to be recognized at fair value.  Inventory is valued at net realizable value which required a $5.6 million adjustment to the carrying value.  We reflected a $19.8 million fair value adjustment to property, plant and equipment.  We eliminated GST's pre-existing goodwill and other identifiable intangible assets of $18.3 million and  $3.7 million, respectively.  We  identified finite-lived intangible assets with an estimated fair value of  $92.2 million.  In addition, we identified  $68.2 million of indefinite-lived intangible assets.  The carrying value of all other assets and liabilities approximated fair value.
(3)		Eliminate intercompany notes receivable/payable
(4)		Eliminate intercompany trade receivables/payables , intercompany interest receivable/payable and other intercompany receivables/payables.
(5)		Eliminate $91.9 million of intercompany income taxes payable.
(6)		Eliminate the investment in GST, which is carried at historical cost, and release liability associated with keep well to OldCo upon reconsolidation.
(7)		The elimination of the deferred tax liability on the investment in GST and establish a deferred tax  liability on the step-up in fair value of assets resulted in a net increase in long-term tax liabilities of $45.6 million.
(8)		The entries above resulted in reflecting a $305.9 million after-tax gain upon reconsolidation.

EnPro Industries, Inc.
Reconciliation of Pro Forma Net Income to Pro Forma Adjusted
EBITDA (Unaudited)
For the Three Months ended March 31, 2017 and 2016
(Stated in Millions of Dollars)
						2017				2016
Pro forma net income						$	17.4			$	4.5
Adjustments to arrive at pro forma earnings before interest, taxes, depreciation, and amortization (pro forma EBITDA)
	Interest expense, net						6.7				5.6
	Income tax expense						8.4				2.2
	Depreciation and amortization expense						17.1				17.4
		Pro forma EBITDA					49.6				29.7
Adjustments to arrive at pro forma earnings before interest, income taxes, depreciation, amortization, and other selected items (pro forma adjusted EBITDA):
	Restructuring costs						0.8				4.3
	Acquisition expenses						0.1				0.4
	Environmental reserve adjustment						3.3				1.6
	Other						0.1				-
											.
Pro forma adjusted EBITDA						$	53.9			$	36.0

The foregoing table provides a reconciliation of pro forma net income set forth in the accompanying unaudited pro forma condensed consolidated statements of operations reflecting reconsolidation of GST to pro forma earnings before interest, income taxes, depreciation, amortization and other selected items (pro forma adjusted EBITDA). The methodology for reconciliation is the same as presented on the table titled "Reconciliation of Consolidated Net Income (Loss) to Consolidated Adjusted EBITDA (Unaudited)."

EnPro Industries, Inc.
Reconciliation of Net Sales to Pro Forma Net Sales (Unaudited)
For the Three Months Ended March 31, 2017 and 2016
(Stated in Millions of Dollars)
						Three Months Ended March 31, 2017
						Sealing					Engineered					Power					Intersegment
						Products					Products					Systems					sales					Consolidated
Net sales						$	179.3				$	75.1				$	42.4				$	(1.0	)			$	295.8
Adjustments:
	Sales of deconsolidated entities						52.7					0.5					3.4					-					56.6
	Intercompany sales						(12.6	)				(0.4	)				(1.5	)				-					(14.5	)
Pro forma net sales						$	219.4				$	75.2				$	44.3				$	(1.0	)			$	337.9
						Three Months Ended March 31, 2016
						Sealing					Engineered					Power					Intersegment
						Products					Products					Systems					sales					Consolidated
Net sales						$	172.2				$	73.7				$	50.0				$	(1.0	)			$	294.9
Adjustments:
	Sales of deconsolidated entities						49.5					0.6					1.0					-					51.1
	Intercompany sales						(10.6	)				(0.3	)				(0.2	)				(0.2	)				(11.3	)
Pro forma net sales						$	211.1				$	74.0				$	50.8				$	(1.2	)			$	334.7

EnPro Industries, Inc.
Reconciliation of Segment Profit to Pro Forma Adjusted Segment EBITDA (Unaudited)
For the Three Months Ended March 31, 2017 and 2016
(Stated in Millions of Dollars)
						Three Months Ended March 31, 2017
						Sealing					Engineered				Power				Total
						Products					Products				Systems				Segments
Segment Profit						$	20.3				$	9.5			$	6.2			$	36.0
	Segment profit of deconsolidated entities						9.0					-				0.9				9.9
	Pro forma depreciation and amortization adjustments (1)						(1.7	)				-				-				(1.7	)
Pro forma segment profit							27.6					9.5				7.1				44.2
Adjustments:
	Acquisition expenses						0.1					-				-				0.1
	Restructuring costs						0.3					0.5				-				0.8
	Depreciation and amortization expense						11.9					4.1				1.1				17.1
Pro forma segment earnings before interest, income taxes, depreciation amortization, and other selected items (pro forma adjusted segment EBITDA)						$	39.9				$	14.1			$	8.2			$	62.2
						Three Months Ended March 31, 2016
						Sealing					Engineered				Power				Total
						Products					Products				Systems				Segments
Segment Profit						$	14.7				$	2.1			$	1.2			$	18.0
	Segment profit of deconsolidated entities						7.4					0.1				0.2				7.7
	Pro forma depreciation and amortization adjustments (1)						(1.7	)				-				-				(1.7	)
Pro forma segment profit							20.4					2.2				1.4				24.0
Adjustments:
	Acquisition expenses						0.4					-				-				0.4
	Restructuring costs						1.4					2.9				-				4.3
	Depreciation and amortization expense						11.7					4.5				1.1				17.3
Pro forma segment earnings before interest, income taxes, depreciation amortization, and other selected items (pro forma adjusted segment EBITDA)						$	33.9				$	9.6			$	2.5			$	46.0

(1)		See notes (2) and (3) to the accompanying Pro Forma Condensed Consolidated Statements of Operations (Unaudited) for further information about these adjustments.

EnPro Industries, Inc.
Reconciliation of Pro Forma Net Income to
Pro Forma Adjusted Net Income (Unaudited)
For the Three Months Ended March 31, 2017 and 2016
(Stated in Millions of Dollars, Except Per Share Data)
					2017					2016
Pro forma net income					$	17.4				$	4.5
Income tax expense						8.1					1.9
Income before taxes						25.5					6.4
Adjustments:
	Restructuring costs					0.8					4.3
	Environmental reserve adjustment					3.3					1.6
	Acquisition expenses					0.1					0.4
	Other					0.1					-
Adjusted income before taxes						29.8					12.7
	Adjusted income tax expense					(9.7	)				(4.1	)
Pro forma adjusted net income					$	20.1				$	8.6

The foregoing tables provide a reconciliation of pro forma net income set forth in the accompanying unaudited pro forma condensed consolidated statements of operations reflecting reconsolidation of GST to pro forma net income before selected items (pro forma adjusted net income). The methodology for reconciliation is the same as presented on the table titled "Reconciliation of Consolidated Net Income (Loss) to Consolidated Adjusted Net Income (Loss) (Unaudited)."

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