EnPro Industries Announces District Court Approval of Subsidiaries’ Joint Reorganization Plan

CHARLOTTE, N.C.–(BUSINESS WIRE)–EnPro Industries, Inc. (NYSE: NPO) today announced that on June 12, 2017
the U.S. District Court for the Western District of North Carolina (the
“Bankruptcy Court”) entered an order confirming the joint plan of
reorganization (the “Joint Plan”) of certain of EnPro’s subsidiaries,
including Garlock Sealing Technologies LLC (“GST LLC”), to resolve their
current and future asbestos claims. The District Court’s decision
follows a hearing before the District Court held on June 12, 2017,
following the recommendation for confirmation of the Joint Plan made by
the U.S. Bankruptcy Court for the Western District of North Carolina
(the “Bankruptcy Court”) after a hearing held by it on May 12, 2017. All
remaining objections to the Joint Plan pending at the time of the
Bankruptcy Court’s hearing had been resolved prior to the hearing before
the District Court and no new objections were raised at the District
Court’s hearing.

The Joint Plan may not be consummated until at least 40 days after the
date the District Court issues its order confirming the Joint Plan.
EnPro anticipates that, absent any appeals, the Joint Plan will be
consummated on or about July 29, 2017.

The Joint Plan implements the terms of a comprehensive settlement
reached in March 2016, which has been generally described in EnPro’s
periodic reports filed with the Securities and Exchange Commission,
including its Form 10-Q for the period ended March 31, 2017 on May 2,
2017. Consummation of the Joint Plan would effect the substantive
conclusion of the asbestos claims resolution proceedings involving GST
LLC and EnPro subsidiaries, Garrison Litigation Management Group, Ltd.
(Garrison”), The Anchor Packing Company (together with GST LLC and
Garrison, “GST”) and OldCo, LLC (the successor by merger to Coltec
Industries Inc (“Coltec”)).

The District Court also approved several settlements with insurance
carriers that issued policies covering losses associated with product
liability claims against Coltec and certain of its subsidiaries, as had
been recommended by the Bankruptcy Court following its May 12 hearing.
In addition, the District Court approved a settlement, reached after May
12, with the successors to Coltec’s Fairbanks Morse Pump business in
which the Fairbanks Morse Pump successors agreed to pay OldCo $6 million
in three installments over nine years following consummation of the
Joint Plan. The successor entities are entitled to recoup up to the full
amount of their payments to OldCo from collections expected to be
received from an additional insurance carrier that issued general
liability policies to Coltec prior to January 1, 1976. OldCo and the
asbestos trust to be established under the Joint Plan will share equally
in any collections above that $6 million amount. OldCo estimates that
the carrier will owe approximately $11 million in reimbursements over
the life of the asbestos trust for its share of Coltec claims (which
includes Fairbanks Morse Pump claims).

“The District Court’s confirmation of the Joint Plan is the critical
step to the final resolution of this asbestos burden, which we have been
striving toward for years,” said Steve Macadam, EnPro’s President and
CEO. “Given the absence of any objections at the District Court’s
hearing, we view it as unlikely that there will be any appeal of the
District Court’s order, and we look forward to soon consummating the
Joint Plan and reconsolidating these subsidiaries with EnPro for
financial reporting purposes,” Mr. Macadam continued.

GST and OldCo, as entities currently under reorganization, are not
consolidated with EnPro and its other subsidiaries for financial
reporting purposes and are accounted for on a cost basis in the
consolidated financial statements of EnPro. As a result, the above
described settlements will not impact the consolidated financial results
of EnPro for the quarter ending June 30, 2017. Pursuant to applicable
accounting rules, upon and as of the date of consummation of the Joint
Plan, the assets and liabilities of both GST and OldCo would be
reconsolidated into the EnPro balance sheet at their estimated fair
value, and a pre-tax gain would be recognized for the excess of the
estimated fair value of the GST and OldCo businesses over the net book
value of EnPro’s investment. In addition, beginning on the date of
consummation, EnPro’s consolidated financial statements would include
the sales, income, expenses and cash flows of both GST and OldCo.

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: the risk of any appeal of
the District Court’s order confirming the Joint Plan, including any
delay in the effectiveness of the Joint Plan as a result of any appeal
and any changes to the Joint Plan implemented in connection with or as a
result of such an appeal, risks and uncertainties as a result of any
unanticipated delays in the consummation of the Joint Plan, 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, and risks and
uncertainties related to the estimation of the amount and timing of
future insurance recoveries. EnPro’s filings with the Securities and
Exchange Commission, including the Form 10-K for the year ended December
31, 2016, describe other risks and uncertainties. Except as may be
required by law or as expressly undertaken in this press release, EnPro
does not undertake to update any forward-looking statement 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.

Contacts

EnPro Industries, Inc.
Chris O’Neal, 704-731-1527
Vice
President – Strategy, Corporate Development and Investor Relations
[email protected]