Document

11-K 1 a11k-6x28x19.htm 11-K - 6-29-19 Document

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________

Form 11-K

_________________

FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934



ý	ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
	For the fiscal year ended December 31, 2018



¨	TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
	For the transition period from ______ to ________.

Commission file number: 001-31225

EnPro Industries, Inc.

Retirement Savings Plan

5605 Carnegie Boulevard, Suite 500

Charlotte, North Carolina 28209

(Full title of the plan and the address of the plan)

EnPro Industries, Inc.

5605 Carnegie Boulevard, Suite 500

Charlotte, North Carolina 28209

(Name of issuer of the securities held pursuant to the plan and the address of its principal executive office)

ENPRO INDUSTRIES, INC.

RETIREMENT SAVINGS PLAN

Financial Statements and Supplemental

Schedule for the Years Ended

December 31, 2018 and 2017 and

Report of Independent Registered Public Accounting Firm

TABLE OF CONTENTS



	Pages

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	1 - 2

FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of December 31, 2018 and 2017	3
Statements of Changes in Net Assets Available for Benefits for the Years Ended
December 31, 2018 and 2017	4
Notes to Financial Statements for the Years Ended December 31, 2018 and 2017	5 - 10

SUPPLEMENTAL SCHEDULES:
Schedule H, line 4i - Schedule of Assets (Held at End of Year) as of	11
December 31, 2018

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Participants and Administrator of the

EnPro Industries, Inc. Retirement Savings Plan

and the EnPro Industries, Inc. Benefits Committee

Charlotte, North Carolina:

Opinion on the Financial Statements

We have audited the accompanying statements of net assets available for benefits of the EnPro Industries, Inc. Retirement Savings Plan (the "Plan") as of December 31, 2018 and 2017 and the related statements of changes in net assets available for benefits for the years ended December 31, 2018 and 2017 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2018 and 2017, and the changes in net assets available for benefits for the years ended December 31, 2018 and 2017, in conformity with generally accepted accounting principles in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on the Plan's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Supplemental Information

The supplemental information in the accompanying Schedule of Assets (Held at Year End) as of December 31, 2018 has been subjected to audit procedures performed in conjunction with the audit of the Plan's financial statements. The supplemental information is the responsibility of the Plan's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department

of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.

/s/ GreerWalker LLP

Certified Public Accountants

June 26, 2019

Charlotte, North Carolina

We have served as the Plan's auditor since 2006.

ENPRO INDUSTRIES, INC. RETIREMENT SAVINGS PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

DECEMBER 31, 2018 AND 2017



	2018		2017
ASSETS:
Investments, at fair value	$	299,877,012	$	327,274,819
Receivables:
Notes receivable from participants	9,631,733		9,634,775
Participant contributions	—		48,793
Employer contributions	270,351		30,984
Total receivables	9,902,084		9,714,552
NET ASSETS AVAILABLE FOR BENEFITS	$	309,779,096	$	336,989,371

See notes to financial statements.

ENPRO INDUSTRIES, INC. RETIREMENT SAVINGS PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017



	2018			2017
ADDITIONS:
Additions to net assets attributed to:
Net investment income (loss):
Net appreciation (depreciation) of investments	$	(30,914,005	)	$	39,541,243
Interest and dividend income	10,854,682			9,357,618
Net investment income (loss)	(20,059,323		)	48,898,861

Interest income on notes receivable from participants	441,407			381,495

Contributions:
Participants	17,798,619			16,451,728
Employer	13,798,605			13,618,836
Rollovers	1,727,219			5,579,091
Total contributions	33,324,443			35,649,655

Total additions, net	13,706,527			84,930,011

DEDUCTIONS:
Deductions from net assets attributed to:
Benefits paid to participants	40,693,571			33,160,177
Fees and commissions	223,231			257,910
Total deductions	40,916,802			33,418,087

CHANGE IN NET ASSETS AVAILABLE FOR BENEFITS	(27,210,275		)	51,511,924

TRANSFERS OF ASSETS, NET	—			52,762

NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR	336,989,371			285,424,685

NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR	$	309,779,096		$	336,989,371

See notes to financial statements.

ENPRO INDUSTRIES, INC. RETIREMENT SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

1. DESCRIPTION OF PLAN

The following description of the EnPro Industries, Inc. Retirement Savings Plan (the “Plan”) provides only general information. Participants should refer to the plan document for a more complete description of the Plan’s provisions.

General - The Plan is a defined contribution plan covering eligible employees of EnPro Industries, Inc. (the “Employer”) as defined by the plan document. Eligible employees of the Employer may enroll in the Plan on their date of hire. Deferrals begin on the first day of the month subsequent to enrollment. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

Trust - The Charles Schwab Trust Company (the “Trustee” or “Schwab”) serves as trustee for the Plan. The Plan’s assets are held in the Schwab Directed Employee Benefit Trust (the “Trust”).

Plan Merger - On July 26, 2017, a portion of the assets of the QCC, LLC Profit Sharing Plan (the “QCC Plan”) was merged into the Plan. Participants that were transferred into the plan maintained their account balances and vesting status from the QCC Plan and are eligible to fully participate in the Plan.

Contributions - Each year, participants may contribute between 1% and 75% of their base pay by means of payroll deductions, subject to certain discrimination tests prescribed by the Internal Revenue Code (“IRC”) and other limitations specified in the Plan. Participants who have attained age 50 before the end of the plan year are eligible to make catch-up contributions. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans (rollover). Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan includes an auto-enrollment provision whereby all newly eligible employees are automatically enrolled in the Plan unless they affirmatively elect not to participate in the Plan. Automatically enrolled participants have their deferral rate set at 6% of eligible compensation and their contributions invested in a designated balanced fund until changed by the participant. The Employer matches between 25% and 100% of employee contributions between 4% and 6% of base pay per payroll period, as defined by the plan document. The Employer also contributes an additional 2% to certain eligible employees.

Participant Accounts - Each participant’s account is credited with the participant’s contributions and the Employer’s matching contributions, as well as allocations of the Plan’s earnings. Participant accounts are charged with an allocation of administrative expenses that are paid by the Plan. Allocations are based on participant earnings, account balances, or specific participant transactions, as defined by the plan document. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

Vesting - Participants are immediately vested in their voluntary contributions, the Employer’s matching contributions, and actual earnings thereon. However, vesting in the Employer’s additional 2% contributions for certain employees is based on years of service. Prior to normal retirement age, a participant’s interest in the Employer’s additional 2% contribution becomes 100% vested after three years of service.

Notes Receivable from Participants - Participants may borrow from their account a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. The loans are secured

by the balance in the participant’s account. The loan interest rate, determined quarterly, is set at 1% above the prime rate, as defined by the plan document. Principal and interest are paid ratably through payroll deductions.

Payment of Benefits - Upon retirement, disability or death, a participant or beneficiary receives the entire amount credited to the participant’s account in either a lump sum or, at the participant’s election, in annual installments. Upon termination, other than by retirement, disability or death, a participant becomes eligible to receive the current value of the participant’s vested account in a lump-sum. Distributions of the EnPro Industries, Inc. common stock are made, at the option of the participant, in either cash or shares.

Forfeited Accounts - The non-vested portion of terminated participants’ account balances are used to reduce future Employer contributions and to pay plan expenses. As of December 31, 2018 and 2017, forfeited non-vested accounts in the Plan totaled approximately $215,000 and $735,000, respectively. During the years ended December 31, 2018 and 2017, the Employer’s contributions were reduced by approximately $515,000 and $8,000, respectively, from forfeited non-vested accounts.


2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting - The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America.

Use of Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of certain assets, liabilities and disclosures. Accordingly, the actual amounts could differ from those estimates. Any adjustments applied to estimated amounts are recognized in the year in which such adjustments are determined.

Investment Valuation and Income Recognition - Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants at the measurement date. The EnPro Industries, Inc. Benefits Committee determines the Plan’s valuation policies utilizing information provided by the investment advisor and custodian. See Note 3 for disclosure of fair value measurements.

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation (depreciation) in fair value of investments includes the Plan’s gains and losses on investments bought and sold as well as held during the year.

Contributions - Contributions from participants are recorded as they are withheld from the participant’s wages. Contributions from the Employer are recorded in the period in which the related participant contributions are due.

Notes Receivable From Participants - Notes receivables from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Interest income is recorded on the accrual basis. Related fees are recorded as administrative expenses and are expensed when they are incurred. No allowance for credit losses has been recorded as of December 31, 2018 and 2017. If a participant ceases to make loan repayments and the plan administrator deems the participant loan to be in default, the participant loan balance is reduced and a benefit payment is recorded.

Payment of Benefits - Benefits are recorded when paid.

Administrative Expenses - Certain expenses of maintaining the Plan are paid by the Plan, unless otherwise paid by the Employer. Expenses that are paid by the Employer are excluded from these financial statements. Fees related to the administration of notes receivable from participants are charged directly to the participant’s account and are included in administrative expenses. Investment related expenses are included in net appreciation (depreciation) in fair value of investments.

Subsequent Events - In preparing its financial statements, the Employer has evaluated subsequent events through June 26, 2019, which is the date the financial statements were available to be issued for 2018.


3.	FAIR VALUE MEASUREMENTS

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under FASB ASC 820 are described as follows:



Level 1	Inputs to the valuation methodology are unadjusted quoted prices for
	identical assets or liabilities in active markets that the Plan has the ability
	to access.

Level 2	Inputs to the valuation methodology include:
	Quoted prices for similar assets or liabilities in active markets;
	Quoted prices for identical or similar assets or liabilities in inactive markets;
	Inputs other than quoted prices that are observable for the asset or liability;
	Inputs that are derived principally from or corroborated by observable market
	data by correlation or other means.
	If the asset or liability has a specified (contractual) term, the level 2 input must
	be observable for substantially the full term of the asset or liability.

Level 3	Inputs to the valuation methodology are unobservable and significant to the fair
	value measurement.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodology used as of December 31, 2018 or 2017.

Registered investment companies: Valued at the daily closing price as reported by the fund. Mutual funds held by the Plan are open-ended mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish at their daily net asset value (“NAV”) and to transact at that price. The mutual funds held by the Plan are deemed to be actively traded.

EnPro Industries, Inc. common stock: Valued at the closing price of EnPro Industries, Inc. common stock reported on the New York Stock Exchange.

Money market fund: Valued as of the ending cash balance plus any accrued interest held by the Plan as of year-end.

Self-directed accounts: Valued at the closing price reported on the active market on which the individually owned securities are traded.

Common/collective trusts: Valued at the NAV of units of a bank collective trust. The NAV, as provided by the Trustee, is used as a practical expedient to estimate fair value. This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported NAV.

The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the plan management believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following table sets forth by level, within the fair value hierarchy, the Plan’s investments at fair value as of December 31, 2018:



	Level 1		Level 2		Level 3	Total
Registered investment companies	$	163,535,475	$	—	—	$	163,535,475
Employer common stock	5,830,583		—		—	5,830,583
Money market fund	1,553		—		—	1,553
Self-directed accounts	3,834,398		—		—	3,834,398
Total investments in the fair value hierarchy	$	173,202,009	—		—	173,202,009
Investments measured at net asset value						126,675,003
Investments, at fair value						$	299,877,012

The following table sets forth by level, within the fair value hierarchy, the Plan's investments at fair value as of December 31, 2017:



	Level 1		Level 2		Level 3	Total
Registered investment companies	$	183,876,672	$	—	—	$	183,876,672
Employer common stock	10,000,053		—		—	10,000,053
Money market fund	3,390		—		—	3,390
Self-directed accounts	4,763,380		—		—	4,763,380
Total investments in the fair value hierarchy	$	198,643,495	—		—	198,643,495
Investments measured at net asset value						128,631,324
Investments, at fair value						$	327,274,819

The following table summarizes investments measured at fair value based on NAV per share as of December 31, 2018 and 2017, respectively.



December 31, 2018	Fair Value		Unfunded Commitments	Redemption Frequency (if currently eligible)	Redemption Notice Period
Common/Collective Trust - Target Date	$	103,757,245	N/A	Daily	10 days
Common/Collective Trust - Income	$	22,917,758	N/A	Daily	0 to 10 days



December 31, 2017	Fair Value		Unfunded Commitments	Redemption Frequency (if currently eligible)	Redemption Notice Period
Common/Collective Trust - Target Date	$	105,046,863	N/A	Daily	10 days
Common/Collective Trust - Income	$	23,584,461	N/A	Daily	0 to 10 days


4.	TRANSACTIONS WITH PARTIES-IN-INTEREST

Certain plan investments are managed by Charles Schwab Bank (“Schwab”). Schwab is the “Trustee” as defined by the Plan, and therefore, these transactions qualify as party-in-interest transactions.

The Plan also invests in shares of the Employer. The Employer is the plan sponsor and, therefore, these transactions qualify as party-in-interest transactions.

As described in Note 1, the Plan permits participants to borrow from their account balances. These transactions qualify as exempt party-in-interest transactions.


5.	PLAN TERMINATION

Although it has not expressed any intent to do so, the Employer has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become fully vested in their accounts.


6.	TAX STATUS

The Plan has been operating under a prototype plan sponsored by Charles Schwab Bank, the recordkeeper of the Plan. Schwab has received a letter dated June 19, 2014 from the Internal Revenue Service stating that the prototype plan is designed in accordance with applicable sections of the IRC. Although the Plan has been amended since receiving the determination letter, the plan administrator and the Plan’s tax counsel believe that the Plan is designed, and is currently being operated, in compliance with the applicable requirements of the IRC and, therefore, believe that the Plan is qualified, and the related trust is tax-exempt.

Generally accepted accounting principles in the United States of America require plan management to evaluate tax positions taken by the Plan and recognize a tax liability if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the taxing authorities. The plan administrator has analyzed the tax position taken by the Plan, and has concluded that as of December 31, 2018 and 2017, there are no uncertain positions taken or expected to be taken that would require recognition

of a liability or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits of any tax periods in progress.


7.	RISKS AND UNCERTAINTIES

The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits.

ENPRO INDUSTRIES, INC. RETIREMENT SAVINGS PLAN

SCHEDULE H, LINE 4i – SCHEDULE OF ASSETS (HELD AT END OF YEAR)

DECEMBER 31, 2018

EIN: 01-0573945 – PLAN NUMBER: 004



(a)	(b)	(c)	(e)
Party-in-	Identity of issuer, borrower,	Description of investment including maturity date,	Current
Interest	lessor or similar party	rate of interest, collateral, par or maturity value	Value

	Vanguard Institutional Index	Registered investment company	$	48,222,657
*	Schwab Managed Retirement 2030	Common/collective trust	32,629,007
*	Schwab Managed Retirement 2040	Common/collective trust	24,718,357
*	Schwab Managed Retirement 2050	Common/collective trust	21,153,925
	Galliard Retirement Income Fund	Common/collective trust	20,580,658
*	Schwab Managed Retirement 2020	Common/collective trust	18,897,377
	PIMCO Total Return Fund	Registered investment company	17,350,202
	T Rowe Price Mid-Cap Growth	Registered investment company	15,583,040
	Dodge & Cox Stock Fund	Registered investment company	15,438,197
	Nuveen Winslow Large-Cap Growth Fund	Registered investment company	13,994,689
	Vanguard Total Bond Market Index	Registered investment company	9,137,944
	Europacific Growth	Registered investment company	8,897,240
	Columbia Small Cap Value	Registered investment company	6,972,134
*	EnPro Company Stock	Common stock	5,830,583
	Invesco Van Kampen Equity and Income	Registered investment company	4,945,145
	Vanguard Extended Market Index	Registered investment company	4,724,306
	Vanguard Total International Stock Index	Registered investment company	4,540,383
	Virtus Emerging Markets Opportunity Fund	Registered investment company	4,275,015
	American Beacon Small Cap Growth Fund	Registered investment company	4,225,910
	Personal Choice Retirement Account	Self-directed brokerage account	3,834,398
	Vanguard Selected Value Mid Cap	Registered investment company	3,527,770
*	Schwab Managed Retirement Income	Common/collective trust	2,337,100
*	Schwab Managed Retirement 2010	Common/collective trust	1,912,947
	BlackRock Global Allocation Fund	Registered investment company	1,700,843
*	Schwab Managed Retirement 2025	Common/collective trust	1,668,135
*	Schwab Managed Retirement 2035	Common/collective trust	1,329,862
*	Schwab Managed Retirement 2055	Common/collective trust	665,988
*	Schwab Managed Retirement 2060	Common/collective trust	407,887
*	Schwab Managed Retirement 2045	Common/collective trust	373,316
*	Schwab US Treasury Money Fund	Registered investment company	1,553
*	Schwab Managed Retirement 2015	Money market fund	444
*	Participant loans	Interest rate of 3.25 - 8%	9,631,733
			$	309,508,745

* Party-in-interest transaction.

See independent auditors' report.

EXHIBIT INDEX



Exhibit No.	Document

23.1	Consent of GreerWalker LLP

SIGNATURES

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, EnPro Industries, Inc., as Plan Administrator, has duly caused this annual report to be signed on behalf of the Plan by the undersigned hereunto duly authorized.

ENPRO INDUSTRIES, INC. RETIREMENT

SAVINGS PLAN

By: ENPRO INDUSTRIES, INC., Plan Administrator



By:	/s/ Robert S. McLean
	Robert S. McLean
	Executive Vice President, General Counsel and
	Secretary

Date: June 28, 2019