Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 2-May-14 | |
Entity Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Trading Symbol | 'NPO | ' |
Entity Registrant Name | 'ENPRO INDUSTRIES, INC | ' |
Entity Central Index Key | '0001164863 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 22,717,810 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Income Statement [Abstract] | ' | ' |
Net sales | $287.20 | $286.90 |
Cost of sales | 190.7 | 192.7 |
Gross profit | 96.5 | 94.2 |
Operating expenses: | ' | ' |
Selling, general and administrative | 78.9 | 72.6 |
Other | 0.2 | 0.9 |
Total operating expenses | 79.1 | 73.5 |
Operating income | 17.4 | 20.7 |
Interest expense | -11.1 | -11.1 |
Interest income | 0.2 | 0.1 |
Other expense | -4.2 | 0 |
Income before income taxes | 2.3 | 9.7 |
Income tax expense | -1 | -1.1 |
Net income | 1.3 | 8.6 |
Comprehensive income | $0.30 | $1 |
Basic earnings per share | $0.06 | $0.41 |
Diluted earnings per share | $0.05 | $0.39 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
OPERATING ACTIVITIES | ' | ' |
Net income | $1.30 | $8.60 |
Adjustments to reconcile net income to net cash used in operating activities: | ' | ' |
Depreciation | 7.5 | 7.4 |
Amortization | 6.7 | 6.7 |
Accretion of debt discount | 1.8 | 1.8 |
Loss on exchange of debt | 3.6 | 0 |
Deferred income taxes | -12.3 | -4.3 |
Stock-based compensation | 2.2 | -1.8 |
Excess tax benefits from stock-based compensation | -0.6 | -2 |
Change in assets and liabilities, net of effects of acquisitions of businesses: | ' | ' |
Accounts receivable | -21 | -19.5 |
Inventories | -9.3 | -2.3 |
Accounts payable | 2.8 | 4.2 |
Other current assets and liabilities | -10.5 | -8.3 |
Other non-current assets and liabilities | 2.8 | -8.3 |
Net cash used in operating activities | -25 | -17.8 |
INVESTING ACTIVITIES | ' | ' |
Purchases of property, plant and equipment | -6.7 | -9.8 |
Payments for capitalized internal-use software | -2.8 | -3.5 |
Acquisitions, net of cash acquired | -1.9 | -2.2 |
Other | 0.1 | 0.1 |
Net cash used in investing activities | -11.3 | -15.4 |
FINANCING ACTIVITIES | ' | ' |
Net proceeds from short-term borrowings | 0.7 | 7.4 |
Proceeds from debt | 70.3 | 63.3 |
Repayments of debt | -34.5 | -42.5 |
Other | -4.7 | 2 |
Net cash provided by financing activities | 31.8 | 30.2 |
Effect of exchange rate changes on cash and cash equivalents | -0.1 | -2.4 |
Net decrease in cash and cash equivalents | -4.6 | -5.4 |
Cash and cash equivalents at beginning of period | 64.4 | 53.9 |
Cash and cash equivalents at end of period | 59.8 | 48.5 |
Cash paid during the period for: | ' | ' |
Interest | 18.1 | 16.7 |
Income taxes, net | $13.30 | $5.40 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $59.80 | $64.40 |
Accounts receivable | 215.7 | 193.1 |
Inventories | 160.6 | 149.1 |
Prepaid expenses and other current assets | 47.5 | 41 |
Total current assets | 483.6 | 447.6 |
Property, plant and equipment | 186 | 187.5 |
Goodwill | 219.6 | 220.2 |
Other intangible assets | 198.4 | 200.1 |
Investment in GST | 236.9 | 236.9 |
Other assets | 104 | 100.4 |
Total assets | 1,428.50 | 1,392.70 |
Current liabilities | ' | ' |
Short-term borrowings from GST | 23.1 | 22 |
Notes payable to GST | 11.7 | 11.2 |
Current maturities of long-term debt | 107.1 | 156.6 |
Accounts payable | 90.4 | 86.8 |
Accrued expenses | 121.7 | 140.9 |
Total current liabilities | 354 | 417.5 |
Long-term debt | 44.3 | 8.5 |
Notes payable to GST | 259.3 | 248.1 |
Pension liability | 42.9 | 47.4 |
Other liabilities | 61.1 | 57.8 |
Total liabilities | 761.6 | 779.3 |
Commitments and contingencies | ' | ' |
Temporary equity | 9.4 | 15.9 |
Shareholders’ equity | ' | ' |
Common stock – $.01 par value; 100,000,000 shares authorized; issued, 22,906,663 shares in 2014 and 21,153,389 shares in 2013 | 0.2 | 0.2 |
Additional paid-in capital | 470.6 | 410.9 |
Retained earnings | 174.6 | 173.3 |
Accumulated other comprehensive income | 13.4 | 14.4 |
Common stock held in treasury, at cost – 201,750 shares in 2014 and 202,269 shares in 2013 | -1.3 | -1.3 |
Total shareholders’ equity | 657.5 | 597.5 |
Total liabilities and equity | $1,428.50 | $1,392.70 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Common stock, par value (in usd per share) | $0.01 | $0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 22,906,663 | 21,153,389 |
Treasury stock, shares (in shares) | 201,750 | 202,269 |
Overview_Basis_of_Presentation
Overview, Basis of Presentation and Recently Issued Authoritative Accounting Guidance | 3 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Overview, Basis of Presentation and Recently Issued Authoritative Accounting Guidance | ' |
Overview, Basis of Presentation and Recently Issued Authoritative Accounting Guidance | |
Overview | |
EnPro Industries, Inc. (“we,” “us,” “our,” “EnPro” or the “Company”) is a leader in the design, development, manufacture and marketing of proprietary engineered industrial products that primarily include: sealing products; self-lubricating non-rolling bearing products; precision engineered components and lubrication systems for reciprocating compressors; and heavy-duty, medium-speed diesel, natural gas and dual fuel reciprocating engines, including parts and services. | |
Basis of Presentation | |
The accompanying interim consolidated financial statements are unaudited, and certain related information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in accordance with Rule 10-01 of Regulation S-X. They were prepared following the same policies and procedures used in the preparation of our annual financial statements and reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of results for the periods presented. The Consolidated Balance Sheet as of December 31, 2013 was derived from the audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2013. The results of operations for the interim periods are not necessarily indicative of the results for the fiscal year. These consolidated financial statements should be read in conjunction with our annual consolidated financial statements for the year ended December 31, 2013 included within our annual report on Form 10-K. | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount of assets and liabilities and the disclosures regarding contingent assets and liabilities at period end and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from these estimates. | |
All intercompany accounts and transactions between our consolidated operations have been eliminated. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Earnings Per Share | ' | ||||||||
Earnings Per Share | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
(in millions, except per share amounts) | |||||||||
Numerator (basic and diluted): | |||||||||
Net income | $ | 1.3 | $ | 8.6 | |||||
Denominator: | |||||||||
Weighted-average shares – basic | 21.3 | 20.7 | |||||||
Share-based awards | 0.1 | 0.2 | |||||||
Convertible debentures and related warrants | 3.7 | 1.4 | |||||||
Weighted-average shares – diluted | 25.1 | 22.3 | |||||||
Earnings per share: | |||||||||
Basic | $ | 0.06 | $ | 0.41 | |||||
Diluted | $ | 0.05 | $ | 0.39 | |||||
As discussed further in Note 9, we previously issued Convertible Senior Debentures (the “Convertible Debentures”). Under the terms of the Convertible Debentures, upon conversion, we will settle the par amount of our obligations in cash and the remaining obligations, if any, in common shares. Pursuant to applicable accounting guidelines, we include the conversion option effect in diluted earnings per share during such periods when our average stock price exceeds the stated conversion price of $33.79 per share. As discussed further in Note 9, we exchanged a portion of our outstanding Convertible Debentures for shares of EnPro common stock in March 2014. | |||||||||
We used a portion of the net proceeds from the original sale of the Convertible Debentures to enter into call options, consisting of hedge and warrant transactions, which entitle us to purchase shares of our stock from a financial institution at $33.79 per share and entitle the financial institution to purchase shares of our stock from us at $46.78 per share. The warrant transactions have a dilutive effect during such periods that the average price per share of our common stock exceeds the $46.78 per share strike price of the warrants. |
Acquisitions_Acquisitions
Acquisitions Acquisitions | 3 Months Ended |
Mar. 31, 2014 | |
Business Combinations [Abstract] | ' |
Acquisitions | ' |
Acquisitions | |
In March 2014, we acquired the remaining interest of the Stemco Crewson LLC joint venture. We now own all of the ownership interests in Stemco Crewson LLC. The joint venture was formed in 2009 with joint venture partner Tramec, LLC to expand our brake product offering to include automatic brake adjusters. The purchase of the remaining interest in the joint venture will allow us to accelerate investment in new product development and commercial strategies focused on market share growth for these products. | |
In March 2014, we acquired the business of Strong-Tight Co. Ltd., a manufacturer and seller of gaskets and industrial sealing products by acquiring certain assets and assuming certain liabilities of the business. This acquisition adds an established Asian marketing presence and manufacturing facilities from which we can serve the Asian market. | |
Both of the acquired businesses are included in our Sealing Products segment. The total purchase price of these acquisitions was $5.6 million, of which $1.9 million was paid in March 2014, net of cash acquired, with the remainder to be paid in several installments later in 2014 and subsequent to 2014. Because the assets, liabilities and results of operations for these acquisitions are not significant to our consolidated financial position or results of operations, pro forma financial information and additional disclosures are not presented. |
Inventories
Inventories | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventories | ' | |||||||
Inventories | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Finished products | $ | 75.8 | $ | 84.3 | ||||
Work in process | 49.4 | 36 | ||||||
Raw materials and supplies | 49.4 | 42.8 | ||||||
174.6 | 163.1 | |||||||
Reserve to reduce certain inventories to LIFO basis | (14.0 | ) | (14.0 | ) | ||||
Total inventories | $ | 160.6 | $ | 149.1 | ||||
We use the last-in, first-out (“LIFO”) method of valuing certain of our inventories. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs, which are subject to change until the final year-end LIFO inventory valuation. | ||||||||
Additional information regarding engine contracts accounted for under the completed-contract method is as follows: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Incurred costs relating to long-term contracts | $ | 15.8 | $ | 14.2 | ||||
Progress payments related to long-term contracts | (33.2 | ) | (25.6 | ) | ||||
Net balance associated with completed-contract inventories | $ | (17.4 | ) | $ | (11.4 | ) |
LongTerm_Contracts
Long-Term Contracts | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Contractors [Abstract] | ' | |||||||
Long-Term Contracts | ' | |||||||
Long-Term Contracts | ||||||||
During the third quarter of 2011, the Power Systems segment (formerly referred to as the Engine Products and Services segment as discussed further in Note 12) began using percentage-of-completion (“POC”) accounting for new and nearly new engine contracts rather than the completed-contract method. We made this change as a result of enhancements to our financial management and reporting systems which enable us to reasonably estimate the revenue, costs, and progress towards completion of engine builds. If we are not able to meet those conditions for a particular engine contract, we recognize revenues using the completed-contract method. We will also continue to use the completed-contract method for engines that were in production at June 30, 2011. | ||||||||
Additional information regarding engine contracts accounted for under the POC method is as follows: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Cumulative revenues recognized on uncompleted POC contracts | $ | 161.2 | $ | 141.1 | ||||
Cumulative billings on uncompleted POC contracts | 156.2 | 146.6 | ||||||
$ | 5 | $ | (5.5 | ) | ||||
These amounts were included in the accompanying Consolidated Balance Sheets under the following captions: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Accounts receivable (POC revenue recognized in excess of billings) | $ | 12 | $ | 4.3 | ||||
Accrued expenses (POC billings where revenue has not yet been earned) | (7.0 | ) | (9.8 | ) | ||||
$ | 5 | $ | (5.5 | ) | ||||
At March 31, 2014 and December 31, 2013, deposits and progress payments for long lead time components accounted for under the POC method totaled $4.1 million and $4.5 million, respectively, and are reflected in prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets. | ||||||||
Additional information regarding engine contracts accounted for under the completed-contract method is as follows: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Incurred costs relating to long-term contracts | $ | 15.8 | $ | 14.2 | ||||
Progress payments related to long-term contracts | (33.2 | ) | (25.6 | ) | ||||
Net balance associated with completed-contract inventories | $ | (17.4 | ) | $ | (11.4 | ) | ||
Incurred costs related to long-term contracts in the table above represent inventoried work in process and finished products related to engine contracts accounted for under the completed-contract method. In addition to inventoried costs, we also incur costs associated with deposits and progress payments to our vendors for long lead time manufactured components associated with engine projects that are reflected in prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets. At March 31, 2014 and December 31, 2013, deposits and progress payments for these long lead time components accounted for under the completed-contract method totaled $6.1 million and $6.1 million, respectively. | ||||||||
Progress payments related to long-term contracts in the table above are either advanced billings or milestone billings to the customer accounted for under the completed-contract method which have not yet been earned. Upon shipment of the completed engine and receipt by the customer, revenue associated with the engine is recognized, and the incurred inventoried costs and progress payments are relieved. | ||||||||
At March 31, 2014 and December 31, 2013, progress payments related to long-term contracts were in excess of incurred costs resulting in a net liability balance. As such, the net liability balances are reflected in accrued expenses on the accompanying Consolidated Balance Sheets. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||
Goodwill and Other Intangible Assets | ' | |||||||||||||||
Goodwill and Other Intangible Assets | ||||||||||||||||
The changes in the net carrying value of goodwill by reportable segment for the three months ended March 31, 2014, are as follows: | ||||||||||||||||
Sealing | Engineered | Power Systems | Total | |||||||||||||
Products | Products | |||||||||||||||
(in millions) | ||||||||||||||||
Gross goodwill as of December 31, 2013 | $ | 181.5 | $ | 168.1 | $ | 7.1 | $ | 356.7 | ||||||||
Accumulated impairment losses | (27.8 | ) | (108.7 | ) | — | (136.5 | ) | |||||||||
Goodwill as of December 31, 2013 | 153.7 | 59.4 | 7.1 | 220.2 | ||||||||||||
Change due to foreign currency translation | 0.1 | (0.7 | ) | — | (0.6 | ) | ||||||||||
Gross goodwill as of March 31, 2014 | 181.6 | 167.4 | 7.1 | 356.1 | ||||||||||||
Accumulated impairment losses | (27.8 | ) | (108.7 | ) | — | (136.5 | ) | |||||||||
Goodwill as of March 31, 2014 | $ | 153.8 | $ | 58.7 | $ | 7.1 | $ | 219.6 | ||||||||
Identifiable intangible assets are as follows: | ||||||||||||||||
As of March 31, 2014 | As of December 31, 2013 | |||||||||||||||
Gross | Accumulated | Gross | Accumulated | |||||||||||||
Carrying | Amortization | Carrying | Amortization | |||||||||||||
Amount | Amount | |||||||||||||||
(in millions) | ||||||||||||||||
Amortized: | ||||||||||||||||
Customer relationships | $ | 192.5 | $ | 88.3 | $ | 191.2 | $ | 85 | ||||||||
Existing technology | 53.9 | 19.9 | 53.9 | 18.8 | ||||||||||||
Trademarks | 36.1 | 17.3 | 33.7 | 16.9 | ||||||||||||
Other | 23.4 | 18.5 | 23.4 | 17.9 | ||||||||||||
305.9 | 144 | 302.2 | 138.6 | |||||||||||||
Indefinite-Lived: | ||||||||||||||||
Trademarks | 36.5 | — | 36.5 | — | ||||||||||||
Total | $ | 342.4 | $ | 144 | $ | 338.7 | $ | 138.6 | ||||||||
Amortization expense for the three months ended March 31, 2014 and 2013, was $5.8 million and $6.2 million, respectively. |
Accrued_Expenses
Accrued Expenses | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accrued Expenses | ' | |||||||
Accrued Expenses | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Salaries, wages and employee benefits | $ | 36.7 | $ | 45.3 | ||||
Interest | 9.6 | 30 | ||||||
Customer advances | 24 | 23.7 | ||||||
Income and other taxes | 17.9 | 10.8 | ||||||
Other | 33.5 | 31.1 | ||||||
$ | 121.7 | $ | 140.9 | |||||
Related_Party_Transactions
Related Party Transactions | 3 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||
Related Party Transactions | ' | ||||||||||
Related Party Transactions | |||||||||||
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 Coltec Industries Inc (“Coltec”). Our subsidiaries’ exposure to asbestos litigation and their relationships with insurance carriers have been managed through another Coltec subsidiary, Garrison Litigation Management Group, Ltd. (“Garrison”). GST LLC, Anchor and Garrison are collectively referred to as “GST.” | |||||||||||
On June 5, 2010, GST commenced an asbestos claims resolution process under Chapter 11 of the United States Bankruptcy Code, which is ongoing. The resulting deconsolidation of GST from our financial results, discussed more fully in Note 15, required certain intercompany indebtedness described below to be reflected on our Consolidated Balance Sheets. | |||||||||||
As of March 31, 2014 and December 31, 2013, Coltec Finance Company Ltd., a wholly-owned subsidiary of Coltec, had aggregate, short-term borrowings of $23.1 million and $22.0 million, respectively, from GST’s subsidiaries in Mexico and Australia. These unsecured obligations were denominated in the currency of the lending party, and bear interest based on the applicable one-month interbank offered rate for each foreign currency involved. | |||||||||||
Effective as of January 1, 2010, Coltec entered into an original issue amount $73.4 million Amended and Restated Promissory Note due January 1, 2017 (the “Coltec Note”) in favor of GST LLC, and our subsidiary Stemco LP entered into an original issue amount $153.8 million Amended and Restated Promissory Note due January 1, 2017, in favor of GST LLC (the “Stemco Note”, and together with the Coltec Note, the “Notes Payable to GST”). The Notes Payable to GST amended and replaced promissory notes in the same principal amounts which were initially issued in March 2005, and which matured on January 1, 2010. | |||||||||||
The Notes Payable to GST bear interest at 11% per annum, of which 6.5% is payable in cash and 4.5% is added to the principal amount of the Notes Payable to GST as payment-in-kind (“PIK”) interest, with interest due on January 31 of each year. In conjunction with the interest payments in 2014 and 2013, $16.9 million and $16.2 million, respectively, was paid in cash and PIK interest of $11.7 million and $11.2 million, respectively, was added to the principal balance of the Notes Payable to GST. If GST LLC is unable to pay ordinary course operating expenses, under certain conditions, they can require Coltec and Stemco to pay in cash the accrued PIK interest necessary to meet such ordinary course operating expenses, subject to certain caps. The interest due under the Notes Payable to GST may be satisfied through offsets of amounts due under intercompany services agreements pursuant to which we provide certain corporate services, make available access to group insurance coverage to GST, make advances to third party providers related to payroll and certain benefit plans sponsored by GST, and permit employees of GST to participate in certain of our benefit plans. | |||||||||||
The Coltec Note is secured by Coltec’s pledge of certain of its equity ownership in specified U.S. subsidiaries. The Stemco Note is guaranteed by Coltec and secured by Coltec’s pledge of its interest in Stemco. The Notes Payable to GST are subordinated to any obligations under our senior secured revolving credit facility described in Note 9. | |||||||||||
We regularly transact business with GST through the purchase and sale of products. We also provide services for GST including information technology, supply chain, treasury, accounting and tax administration, legal, and human resources under a support services agreement. GST is included in our consolidated U.S. federal income tax return and certain state combined income tax returns. As the parent of these consolidated tax groups, we are liable for, and pay, income taxes owed by the entire group. We have agreed with GST to allocate group taxes to GST based on the U.S. consolidated tax return regulations and current income tax accounting guidance. This method generally allocates taxes to GST as if it were a separate taxpayer. As a result, we carry an income tax receivable from GST related to this allocation. | |||||||||||
Amounts included in our financial statements arising from transactions with GST include the following: | |||||||||||
Financial Statement | Three Months Ended | ||||||||||
Location | March 31, | ||||||||||
2014 | 2013 | ||||||||||
(in millions) | |||||||||||
Sales to GST | Net sales | $ | 6.9 | $ | 6.1 | ||||||
Purchases from GST | Cost of sales | $ | 6.2 | $ | 7.3 | ||||||
Interest expense to GST | Interest expense | $ | 7.5 | $ | 7.2 | ||||||
Financial Statement | March 31, | December 31, | |||||||||
Location | 2014 | 2013 | |||||||||
(in millions) | |||||||||||
Due from GST | Accounts receivable | $ | 8.1 | $ | 18.3 | ||||||
Income tax receivable from GST | Other assets | $ | 60.4 | $ | 46.9 | ||||||
Due to GST | Accounts payable | $ | 7.6 | $ | 6.7 | ||||||
Accrued interest to GST | Accrued expenses | $ | 7.4 | $ | 28.5 | ||||||
Additionally, we had outstanding foreign exchange forward contracts with GST LLC involving the Australian dollar, Canadian dollar, Mexican peso and U.S. dollar with a notional amount of $3.2 million as of December 31, 2013. These related party contracts were eliminated in consolidation prior to the deconsolidation of GST. There were none outstanding at March 31, 2014. |
LongTerm_Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2014 | |
Debt Disclosure [Abstract] | ' |
Long-Term Debt | ' |
Long-Term Debt | |
Convertible Debentures | |
In October 2005, we issued $172.5 million in aggregate principal amount of Convertible Debentures, net of an original issue discount of $61.3 million. The Convertible Debentures bear interest at the annual rate of 3.9375%, with interest due on April 15 and October 15 of each year, and will mature on October 15, 2015, unless they are converted prior to that date. The Convertible Debentures are direct, unsecured and unsubordinated obligations and rank equal in priority with all unsecured and unsubordinated indebtedness and senior in right of payment to all subordinated indebtedness. They do not contain any financial covenants. | |
Holders may convert the Convertible Debentures into cash and shares of our common stock, under certain circumstances described more fully in our most recent Form 10-K. As of April 1, 2014, the Convertible Debentures remained convertible by holders of the Convertible Debentures. This conversion right was triggered because the closing price per share of EnPro’s common stock exceeded $43.93, or 130% of the conversion price of $33.79, for at least twenty (20) trading days during the thirty (30) consecutive trading day period ending on March 31, 2014. The Convertible Debentures will be convertible until June 30, 2014, and may be convertible thereafter if one or more of the conversion conditions is satisfied during future measurement periods. Because the Convertible Debentures are currently convertible, the outstanding principal balance less the remaining unamortized debt discount was reflected in current maturities of long-term debt as of March 31, 2014. In addition, we classified the excess cash required to redeem the Convertible Debentures over their carrying value as temporary equity. | |
In March 2014, we entered into privately negotiated transactions with certain holders of approximately $56.1 million in aggregate principal amount of the Convertible Debentures to exchange them for an aggregate of approximately 1.7 million shares of EnPro's common stock, plus cash payments of accrued and unpaid interest and for fractional shares. We recognized a $3.6 million pre-tax loss on the exchange ($2.3 million net of tax) which is included in other (non-operating) expense in the accompanying Consolidated Statement of Operations. There was also a $0.8 million additional tax benefit recorded directly to equity. The transactions reduced the aggregate principal amount of the Convertible Debentures outstanding to approximately $116.4 million. The exchange transactions did not reduce the respective obligations under the hedge and warrant transactions entered into in connection with the original sale of the Convertible Debentures, which remain in force with respect to the original amount of the Convertible Debentures. | |
The debt discount, $9.4 million as of March 31, 2014, is being amortized through interest expense until the maturity date of October 15, 2015, resulting in an effective interest rate of approximately 9.5%. Interest expense related to the Convertible Debentures for the three months ended March 31, 2014 and 2013 includes $1.6 million and $1.7 million, respectively, of contractual interest coupon and $1.8 million and $1.8 million, respectively, of debt discount amortization. | |
Credit Facility | |
Our primary U.S. operating subsidiaries, other than GST LLC, have a senior secured revolving credit facility with a maximum availability of $175 million. Actual borrowing availability under the credit facility is determined by reference to a borrowing base of specified percentages of eligible accounts receivable, inventory, equipment and real property elected to be pledged, and is reduced by usage of the facility, including outstanding letters of credit and any reserves. Under certain conditions, we may request an increase to the facility maximum availability to $225 million in total. Any increase is dependent on obtaining future lender commitments for those amounts, and no current lender has any obligation to provide such commitment. The credit facility matures on July 17, 2015 unless, prior to that date, the Convertible Debentures are paid in full, refinanced on certain terms or defeased, in which case the facility will mature on March 30, 2016. The terms of the facility, including fees and customary covenants and restrictions, are described more fully in our most recent Form 10-K. | |
The borrowing availability under our senior secured revolving credit facility at March 31, 2014 was $78.8 million after giving consideration to $4.8 million of letters of credit outstanding and $43.4 million of outstanding revolver borrowings. |
Pensions_and_Postretirement_Be
Pensions and Postretirement Benefits | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | ||||||||||||||||
Pensions and Postretirement Benefits | ' | ||||||||||||||||
Pensions and Postretirement Benefits | |||||||||||||||||
The components of net periodic benefit cost for the Company’s U.S. and foreign defined benefit pension and other postretirement plans for the three months ended March 31, 2014 and 2013, are as follows: | |||||||||||||||||
Pension Benefits | Other Benefits | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in millions) | |||||||||||||||||
Service cost | $ | 2 | $ | 1.7 | $ | 0.2 | $ | 0.2 | |||||||||
Interest cost | 2.8 | 2.7 | 0.1 | 0.1 | |||||||||||||
Expected return on plan assets | (4.2 | ) | (3.1 | ) | — | — | |||||||||||
Amortization of net loss | 0.7 | 2.2 | — | — | |||||||||||||
Deconsolidation of GST | (0.2 | ) | (0.5 | ) | — | — | |||||||||||
Net periodic benefit cost | $ | 1.1 | $ | 3 | $ | 0.3 | $ | 0.3 | |||||||||
In the three months ended March 31, 2014, we contributed $5.1 million to our U.S. defined benefit pension plans and anticipate additional contributions of approximately $15 million prior to December 31, 2014. |
Derivative_Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' |
Derivative Instruments | ' |
Derivative Instruments | |
We use derivative financial instruments to manage our exposure to various risks. The use of these financial instruments modifies the exposure with the intent of reducing our risk. We do not use financial instruments for trading purposes, nor do we use leveraged financial instruments. The counterparties to these contractual arrangements are major financial institutions and GST LLC as described in Note 8. We use multiple financial institutions for derivative contracts to minimize the concentration of credit risk. The current accounting rules require derivative instruments, excluding certain contracts that are issued and held by a reporting entity that are both indexed to its own stock and classified in shareholders’ equity, be reported in the Consolidated Balance Sheets at fair value and that changes in a derivative’s fair value be recognized currently in earnings unless specific hedge accounting criteria are met. | |
We are exposed to foreign currency risks that arise from normal business operations. These risks include the translation of local currency balances on our foreign subsidiaries’ balance sheets, intercompany loans with foreign subsidiaries and transactions denominated in foreign currencies. We strive to control our exposure to these risks through our normal operating activities and, where appropriate, through derivative instruments. We have entered into contracts to hedge forecasted transactions occurring at various dates through December 2014 that are denominated in foreign currencies. The notional amount of foreign exchange contracts hedging foreign currency transactions was $7.4 million and $51.1 million at March 31, 2014 and December 31, 2013, respectively. | |
Prior to 2013, we applied cash flow hedge accounting to certain of our foreign currency derivatives. We elected to discontinue this accounting treatment in the first quarter of 2013, consequently, all gains and losses that had been deferred in accumulated other comprehensive income at December 31, 2012 were reclassified to income in the quarter ended March 31, 2013. See Note 14 for additional information. The notional amounts of all of our foreign exchange contracts were recorded at their fair market value as of March 31, 2014 with changes in market value recorded in income. The earnings impact of any foreign exchange contract that is specifically related to the purchase of inventory is recorded in cost of sales and the changes in market value of all other contracts are recorded in selling, general and administrative expense in the Consolidated Statements of Operations. The balances of derivative assets are recorded in other current assets and the balances of derivative liabilities are recorded in accrued expenses in the Consolidated Balance Sheets. |
Business_Segment_Information
Business Segment Information | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Business Segment Information | ' | ||||||||
Business Segment Information | |||||||||
We have three reportable segments. Our Sealing Products segment designs, manufactures and sells sealing products, including: metallic, non-metallic and composite material gaskets, dynamic seals, compression packing, resilient metal seals, elastomeric seals, hydraulic components, expansion joints, heavy-duty truck wheel-end component systems including brake products, flange sealing and isolation products, pipeline casing spacers/isolators, casing end seals, modular sealing systems for sealing pipeline penetrations, hole forming products, manhole infiltration sealing systems, safety-related signage for pipelines, bellows and bellows assemblies, pedestals for semiconductor manufacturing, PTFE products, conveyor belting and sheeted rubber products. | |||||||||
Our Engineered Products segment includes operations that design, manufacture and sell self-lubricating, non-rolling, metal-polymer, solid polymer and filament wound bearing products, aluminum blocks for hydraulic applications, precision engineered components, and lubrication systems for reciprocating compressors and provides repair services for those compressors. | |||||||||
Our Power Systems segment designs, manufactures, sells and services heavy-duty, medium-speed diesel, natural gas and dual fuel reciprocating engines. Effective the first quarter of 2014, we changed the name of what had previously been called the Engine Products and Services segment to the Power Systems segment to more accurately reflect that the segment's products are the principal components of systems that generate electrical power and other types of energy. There was no change to the composition of this segment and there is no impact on the sales, segment profit, assets or cash flows of the previously reported segment. | |||||||||
Our reportable segments are managed separately based on differences in their products and services and their end-customers. Segment profit is total segment revenue reduced by operating expenses, restructuring and other costs identifiable with the segment. Corporate expenses include general corporate administrative costs. Expenses not directly attributable to the segments, corporate expenses, net interest expense, gains and losses related to the sale of assets, impairments, and income taxes are not included in the computation of segment profit. The accounting policies of the reportable segments are the same as those for EnPro. | |||||||||
Segment operating results and other financial data for the three months ended March 31, 2014 and 2013 were as follows: | |||||||||
2014 | 2013 | ||||||||
(in millions) | |||||||||
Sales | |||||||||
Sealing Products | $ | 155 | $ | 146.6 | |||||
Engineered Products | 91.8 | 91.8 | |||||||
Power Systems | 41.1 | 49.4 | |||||||
287.9 | 287.8 | ||||||||
Intersegment sales | (0.7 | ) | (0.9 | ) | |||||
Total sales | $ | 287.2 | $ | 286.9 | |||||
Segment Profit | |||||||||
Sealing Products | $ | 17.1 | $ | 21.3 | |||||
Engineered Products | 8.7 | 5.8 | |||||||
Power Systems | 3.3 | 4.8 | |||||||
Total segment profit | 29.1 | 31.9 | |||||||
Corporate expenses | (10.1 | ) | (9.1 | ) | |||||
Interest expense, net | (10.9 | ) | (11.0 | ) | |||||
Other expense, net | (5.8 | ) | (2.1 | ) | |||||
Income before income taxes | $ | 2.3 | $ | 9.7 | |||||
Segment assets are as follows: | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Sealing Products | $ | 556.9 | $ | 534.4 | |||||
Engineered Products | 339 | 329.8 | |||||||
Power Systems | 138.4 | 131.3 | |||||||
Corporate | 394.2 | 397.2 | |||||||
$ | 1,428.50 | $ | 1,392.70 | ||||||
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value Measurements | ' | |||||||||||||||
Fair Value Measurements | ||||||||||||||||
We utilize a fair value hierarchy that categorizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: | ||||||||||||||||
• | Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. | |||||||||||||||
• | Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. | |||||||||||||||
• | Level 3: Unobservable inputs that reflect our own assumptions. | |||||||||||||||
Assets and liabilities measured at fair value on a recurring basis are summarized as follows: | ||||||||||||||||
Fair Value Measurements as of | ||||||||||||||||
31-Mar-14 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
(in millions) | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Time deposits | $ | 37.6 | $ | 37.6 | $ | — | $ | — | ||||||||
37.6 | 37.6 | — | — | |||||||||||||
Guaranteed investment contract | 2.9 | — | 2.9 | — | ||||||||||||
Foreign currency derivatives | 0.1 | — | 0.1 | — | ||||||||||||
Deferred compensation assets | 5.7 | 5.7 | — | — | ||||||||||||
$ | 46.3 | $ | 43.3 | $ | 3 | $ | — | |||||||||
Liabilities | ||||||||||||||||
Deferred compensation liabilities | $ | 8.4 | $ | 8.4 | $ | — | $ | — | ||||||||
Foreign currency derivatives | — | — | — | — | ||||||||||||
$ | 8.4 | $ | 8.4 | $ | — | $ | — | |||||||||
Fair Value Measurements as of | ||||||||||||||||
31-Dec-13 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
(in millions) | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
European government money market | $ | 21.7 | $ | 21.7 | $ | — | $ | — | ||||||||
21.7 | 21.7 | — | — | |||||||||||||
Guaranteed investment contract | 2.8 | — | 2.8 | — | ||||||||||||
Foreign currency derivatives | 0.4 | — | 0.4 | — | ||||||||||||
Deferred compensation assets | 5.3 | 5.3 | — | — | ||||||||||||
$ | 30.2 | $ | 27 | $ | 3.2 | $ | — | |||||||||
Liabilities | ||||||||||||||||
Deferred compensation liabilities | $ | 7.6 | $ | 7.6 | $ | — | $ | — | ||||||||
Foreign currency derivatives | 0.4 | — | 0.4 | — | ||||||||||||
$ | 8 | $ | 7.6 | $ | 0.4 | $ | — | |||||||||
Our cash equivalents and deferred compensation assets and liabilities are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The fair value for the guaranteed investment contract is based on quoted market prices for outstanding bonds of the insurance company issuing the contract. The fair values for foreign currency derivatives are based on quoted market prices from various banks for similar instruments. | ||||||||||||||||
The carrying values of our significant financial instruments reflected in the Consolidated Balance Sheets approximated their respective fair values except for the following instruments: | ||||||||||||||||
31-Mar-14 | 31-Dec-13 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
(in millions) | ||||||||||||||||
Long-term debt | $ | 151.4 | $ | 298.2 | $ | 165.1 | $ | 307.6 | ||||||||
Notes payable to GST | $ | 271 | $ | 292.1 | $ | 259.3 | $ | 277.8 | ||||||||
The fair values for long-term debt are based on quoted market prices for identical liabilities, but these would be considered Level 2 computations because the market is not active. The notes payable to GST computations would be considered Level 2 since they are based on rates available to us for debt with similar terms and maturities. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | |||||||||||||||
Accumulated Other Comprehensive Loss | ' | |||||||||||||||
Accumulated Other Comprehensive Income | ||||||||||||||||
Changes in accumulated other comprehensive income by component (after tax) for the three months ended March 31, 2014 are as follows: | ||||||||||||||||
Unrealized | Pension and | Gains and | Total | |||||||||||||
Translation | Other | Losses on | ||||||||||||||
Adjustments | Postretirement | Cash Flow | ||||||||||||||
Plans | Hedges | |||||||||||||||
Beginning balance | $ | 42.6 | $ | (28.2 | ) | $ | — | $ | 14.4 | |||||||
Other comprehensive income before reclassifications | (1.4 | ) | — | — | (1.4 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 0.4 | — | 0.4 | ||||||||||||
Net current-period other comprehensive income (loss) | (1.4 | ) | 0.4 | — | (1.0 | ) | ||||||||||
Ending balance | $ | 41.2 | $ | (27.8 | ) | $ | — | $ | 13.4 | |||||||
Changes in accumulated other comprehensive (loss) income by component (after tax) for the three months ended March 31, 2013 are as follows: | ||||||||||||||||
Unrealized | Pension and | Gains and | Total | |||||||||||||
Translation | Other | Losses on | ||||||||||||||
Adjustments | Postretirement | Cash Flow | ||||||||||||||
Plans | Hedges | |||||||||||||||
Beginning balance | $ | 41.6 | $ | (64.0 | ) | $ | (0.6 | ) | $ | (23.0 | ) | |||||
Other comprehensive income before reclassifications | (9.7 | ) | — | — | (9.7 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | 1.5 | 0.6 | 2.1 | ||||||||||||
Net current-period other comprehensive income (loss) | (9.7 | ) | 1.5 | 0.6 | (7.6 | ) | ||||||||||
Ending balance | $ | 31.9 | $ | (62.5 | ) | $ | — | $ | (30.6 | ) | ||||||
Reclassifications out of accumulated other comprehensive income for the three months months ended March 31, 2014 and 2013 are as follows: | ||||||||||||||||
Details about Accumulated Other Comprehensive Income | Amount Reclassified from | Affected Statement of | ||||||||||||||
Components | Accumulated Other | Operations Line Item | ||||||||||||||
Comprehensive Income | ||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
March 31, 2014 | March 31, 2013 | |||||||||||||||
Amortization of pension and other postretirement plans: | ||||||||||||||||
Actuarial losses | $ | 0.7 | $ | 2.2 | -1 | |||||||||||
Tax benefit | (0.3 | ) | (0.7 | ) | Income tax expense | |||||||||||
Net of tax | $ | 0.4 | $ | 1.5 | ||||||||||||
Gains and losses on cash flow hedges: | ||||||||||||||||
Foreign exchange contracts | $ | — | $ | 1 | Cost of sales | |||||||||||
Tax benefit | — | (0.4 | ) | Income tax expense | ||||||||||||
Net of tax | $ | — | $ | 0.6 | ||||||||||||
-1 | These accumulated other comprehensive income components are included in the computation of net periodic pension cost. (See Note 10 – “Pensions and Postretirement Benefits” for additional details). |
Garlock_Sealing_Technologies_L
Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Reorganizations [Abstract] | ' | ||||||||
Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. | ' | ||||||||
Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. | |||||||||
On the Petition Date, GST LLC, Anchor and Garrison filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court. The filings were the initial step in a claims resolution process, which is ongoing. The goal of the process is an efficient and permanent resolution of all current and future asbestos claims through court approval of a plan of reorganization, which typically would establish a trust to which all asbestos claims would be channeled for resolution. GST seeks an agreement with asbestos claimants and other creditors on the terms of a plan for the establishment of such a trust and repayment of other creditors in full, or in the absence of such an agreement, an order of the Bankruptcy Court confirming such a plan. | |||||||||
In November 2011, GST filed a proposed plan of reorganization with the Bankruptcy Court. GST's initial proposed plan called for a trust to be formed, to which GST and affiliates would contribute $200 million and which would be the exclusive remedy for future asbestos personal injury claimants – those whose claims arise after confirmation of the plan. The initial proposed plan provided that each present asbestos personal injury claim, i.e., any pending claim or one that arises between the Petition Date and plan confirmation, would be assumed by reorganized GST and resolved either by settlement (pursuant to a matrix contained in the proposed plan or as otherwise agreed), or by payment in full of any final judgment entered after trial in federal court. Based on a preliminary estimate provided by Bates White, GST estimates that the indemnity costs to resolve all present claims pursuant to the settlement matrix in the plan would cost reorganized GST approximately $70 million. Under the initial proposed plan, all non-asbestos claimants would be paid the full value of their claims. | |||||||||
On April 13, 2012, the Bankruptcy Court granted a motion by GST for the Bankruptcy Court to estimate the allowed amount of present and future asbestos claims against GST for mesothelioma, a rare cancer attributed to asbestos exposure. The estimation trial commenced on July 22, 2013 and concluded on August 22, 2013. | |||||||||
On January 10, 2014, Bankruptcy Judge George Hodges announced his estimation decision in a 65-page order. Citing with approval the methodology put forth by GST at trial, the judge determined that $125 million is the amount sufficient to satisfy GST's liability for present and future mesothelioma claims. Judge Hodges adopted GST's "legal liability" approach to estimation, focused on the merits of claims, and rejected asbestos claimant representatives' approach, which focused solely on GST's historical settlement history. The judge's liability determination is for mesothelioma claims only. The court has not yet determined amounts for GST's liability for other asbestos claims and for administrative costs that would be required to review and process claims and payments, which will add to the amount. | |||||||||
In his opinion, Judge Hodges wrote, "The best evidence of Garlock's aggregate responsibility is the projection of its legal liability that takes into consideration causation, limited exposure and the contribution of exposures to other products." | |||||||||
The decision validates the positions that GST has been asserting for the more than three years it has been in this process. Following are several important findings in the opinion: | |||||||||
•Garlock's products resulted in a relatively low exposure to asbestos to a limited population, and its legal responsibility for causing mesothelioma is relatively de minimis. | |||||||||
•Chrysotile, the asbestos fiber type used in almost all of Garlock's asbestos products, is far less toxic than other forms of asbestos. The court found reliable and persuasive Garlock's expert epidemiologist, who testified that there is no statistically significant association between low dose chrysotile exposure and mesothelioma. | |||||||||
•The population that was exposed to Garlock's products was necessarily exposed to far greater quantities of higher potency asbestos from the products of others. | |||||||||
•The estimates of Garlock's aggregate liability that are based on its historic settlement values are not reliable because those values are infected with the impropriety of some law firms and inflated by the cost of defense. | |||||||||
GST plans to incorporate the court's ruling into a revised plan of reorganization that it will submit in place of the plan referenced above. GST has not yet determined the amount that it will propose be included in its revised plan, as it continues to hope that it can reach a consensual resolution with representatives of current and future claimants. GST has stated that it continues to be willing to engage in discussions with claimant representatives, recognizing that an agreed settlement would provide the best path to certainty and finality through section 524(g) of the Bankruptcy Code, provide for faster and more efficient completion of the case, save significant future costs, and allow for the attainment of complete finality. | |||||||||
There are many potential hurdles, including appeals, that may arise prior to plan confirmation. | |||||||||
Financial Results | |||||||||
Condensed combined financial information for GST is set forth below, presented on a historical cost basis. | |||||||||
GST | |||||||||
(Debtor-in-Possession) | |||||||||
Condensed Combined Statements of Operations (Unaudited) | |||||||||
(in millions) | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Net sales | $ | 59 | $ | 63.8 | |||||
Cost of sales | 35.9 | 39.8 | |||||||
Gross profit | 23.1 | 24 | |||||||
Operating expenses: | |||||||||
Selling, general and administrative | 10.9 | 10.8 | |||||||
Asbestos-related | 0.3 | 0.6 | |||||||
Other | 0.5 | 0.2 | |||||||
Total operating expenses | 11.7 | 11.6 | |||||||
Operating income | 11.4 | 12.4 | |||||||
Interest income, net | 7.6 | 7.2 | |||||||
Income before reorganization expenses and income taxes | 19 | 19.6 | |||||||
Reorganization expenses | (2.9 | ) | (10.4 | ) | |||||
Income before income taxes | 16.1 | 9.2 | |||||||
Income tax expense | (5.6 | ) | (2.8 | ) | |||||
Net income | $ | 10.5 | $ | 6.4 | |||||
Comprehensive income | $ | 10.5 | $ | 7 | |||||
GST | |||||||||
(Debtor-in-Possession) | |||||||||
Condensed Combined Statements of Cash Flows (Unaudited) | |||||||||
Three Months Ended March 31, 2014 and 2013 | |||||||||
(in millions) | |||||||||
2014 | 2013 | ||||||||
Net cash provided by operating activities | $ | 6.1 | $ | 6.5 | |||||
Investing activities | |||||||||
Purchases of property, plant and equipment | (1.6 | ) | (1.5 | ) | |||||
Net payments on loans to affiliates | (0.7 | ) | (7.4 | ) | |||||
Other | (0.3 | ) | (0.3 | ) | |||||
Net cash used in investing activities | (2.6 | ) | (9.2 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | (0.1 | ) | (0.3 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 3.4 | (3.0 | ) | ||||||
Cash and cash equivalents at beginning of period | 42.8 | 43.6 | |||||||
Cash and cash equivalents at end of period | $ | 46.2 | $ | 40.6 | |||||
GST | |||||||||
(Debtor-in-Possession) | |||||||||
Condensed Combined Balance Sheets (Unaudited) | |||||||||
(in millions) | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Assets: | |||||||||
Current assets | $ | 309.8 | $ | 314.4 | |||||
Asbestos insurance receivable | 101.1 | 101.1 | |||||||
Deferred income taxes | 128.8 | 130.4 | |||||||
Notes receivable from affiliate | 259.3 | 248.1 | |||||||
Other assets | 75.9 | 76.2 | |||||||
Total assets | $ | 874.9 | $ | 870.2 | |||||
Liabilities and Shareholder’s Equity: | |||||||||
Current liabilities | $ | 31.8 | $ | 43.9 | |||||
Other liabilities | 64.6 | 58.1 | |||||||
Liabilities subject to compromise (A) | 468.4 | 468.4 | |||||||
Total liabilities | 564.8 | 570.4 | |||||||
Shareholder’s equity | 310.1 | 299.8 | |||||||
Total liabilities and shareholder’s equity | $ | 874.9 | $ | 870.2 | |||||
(A) | Liabilities subject to compromise include pre-petition unsecured claims which may be resolved at amounts different from those recorded in the condensed combined balance sheets. Liabilities subject to compromise consist principally of asbestos-related claims. GST has undertaken to project the number and ultimate cost of all present and future bodily injury claims expected to be asserted, based on actuarial principles, and to measure probable and estimable liabilities under generally accepted accounting principles. GST has accrued $466.8 million as of March 31, 2014. The estimate indicated for those asbestos-related claims reflects the point in a wide range of possible outcomes determined based on historical facts and circumstances prior to the Petition Date as our estimate of the cost to resolve asbestos-related personal injury cases and claims against GST as they would have been resolved in the state courts or by settlements over a ten-year period from April 1, 2010 through March 31, 2020. GST adjusts this estimate to reflect payments of previously accrued but unpaid legal fees and to reflect the results of appeals. Otherwise, GST does not expect to adjust the estimate unless developments in the Chapter 11 proceeding provide a reasonable basis for a revised estimate. GST intends to use the claims resolution process in Chapter 11 to determine the validity and ultimate amount of its aggregate liability for asbestos-related claims. Due to the uncertainties of asbestos-related litigation and the Chapter 11 process, GST’s ultimate liability could differ materially from the recorded liability. See Note 16, “Commitments and Contingencies – Asbestos.” |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||
Commitments and Contingencies | ' | |||||||
Commitments and Contingencies | ||||||||
General | ||||||||
A description of environmental, asbestos and other legal matters relating to certain of our subsidiaries is included in this section. In addition to the matters noted herein, we are from time to time subject to, and are presently involved in, other litigation and legal proceedings arising in the ordinary course of business. We believe the outcome of such other litigation and legal proceedings will not have a material adverse effect on our financial condition, results of operations and cash flows. Expenses for administrative and legal proceedings are recorded when incurred. | ||||||||
Environmental | ||||||||
Our facilities and operations are subject to federal, state and local environmental and occupational health and safety requirements of the U.S. and foreign countries. We take a proactive approach in our efforts to comply with environmental, health and safety laws as they relate to our manufacturing operations and in proposing and implementing any remedial plans that may be necessary. We also regularly conduct comprehensive environmental, health and safety audits at our facilities to maintain compliance and improve operational efficiency. | ||||||||
Although we believe past operations were in substantial compliance with the then applicable regulations, we or one or more of our subsidiaries are involved with various remediation activities at 15 sites where the future cost per site for us or our subsidiary is expected to exceed $100 thousand. Investigations have been completed for 11 sites and are in progress at the other four sites. Our costs at a majority of these sites relate to remediation projects for soil and groundwater contamination at former operating facilities that were sold or closed. | ||||||||
Our policy is to accrue environmental investigation and remediation costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. The measurement of the liability is based on an evaluation of currently available facts with respect to each individual situation and takes into consideration factors such as existing technology, presently enacted laws and regulations and prior experience in remediation of contaminated sites. Liabilities are established for all sites based on these factors. As assessments and remediation progress at individual sites, these liabilities are reviewed periodically and adjusted to reflect additional technical data and legal information. As of March 31, 2014 and December 31, 2013, we had accrued liabilities of $15.6 million and $15.1 million, respectively, for estimated future expenditures relating to environmental contingencies. These amounts have been recorded on an undiscounted basis in the Consolidated Balance Sheets. Given the uncertainties regarding the status of laws, regulations, enforcement policies, the impact of other parties potentially being liable, technology and information related to individual sites, we do not believe it is possible to develop an estimate of the range of reasonably possible environmental loss in excess of our recorded liabilities. | ||||||||
During 2013, we accrued a liability of $6.3 million related to environmental remediation costs associated with the pre-1983 site ownership and operation of the former Trent Tube facility in East Troy, Wisconsin. The Trent Tube facility was operated by Crucible Materials Corporation from 1983 until its closure in 1998. Crucible Materials Corporation commenced environmental remediation activities at the site in 1999. In connection with the bankruptcy of Crucible Materials Corporation, a trust was established to fund the remediation of the site. We have reviewed the trust's assets and have valued them at $750,000 for our internal purposes. During 2013, the Wisconsin Department of Natural Resources first notified us of potential liability for remediation of the site as a potentially responsible party under Wisconsin's “Spill Act” which provides that potentially responsible parties may be jointly and severally liable for site remediation. Based on our evaluation of the site, we believe our estimated costs to remediate the site will range between $7 million and $10 million, reduced by the value of the trust's remaining assets. | ||||||||
Except as described below, we believe that our accruals for specific environmental liabilities are adequate for those liabilities based on currently available information. Actual costs to be incurred in future periods may vary from estimates because of the inherent uncertainties in evaluating environmental exposures due to unknown and changing conditions, changing government regulations and legal standards regarding liability. | ||||||||
In addition, based on our prior ownership of Crucible Steel Corporation a/k/a Crucible, Inc. (“Crucible”), we may have additional contingent liabilities in one or more significant environmental matters. One such matter, which is included in the 15 sites referred to above, is the Lower Passaic River Study Area of the Diamond Alkali Superfund Site in New Jersey. Crucible operated a steel mill abutting the Passaic River in Harrison, New Jersey from the 1930s until 1974, which was one of many industrial operations on the river dating back to the 1800s. Certain contingent environmental liabilities related to this site were retained by Coltec when Coltec sold a majority interest in Crucible Materials Corporation (the successor of Crucible) in 1985. The United States Environmental Protection Agency (the “EPA”) has notified Coltec that it is a potentially responsible party (“PRP”) for Superfund response actions in the lower 17-mile stretch of the Passaic River known as the Lower Passaic River Study Area. Coltec and approximately 70 of the numerous other PRPs, known as the Cooperating Parties Group, are parties to a May 2007 Administrative Order on Consent with the EPA to perform a Remedial Investigation/Feasibility Study (“RI/FS”) of the contaminants in the Lower Passaic River Study Area. The RI/FS is ongoing and has not been completed. Separately, on April 11, 2014, the EPA released its Focused Feasibility Study (the “FFS”) with its proposed plan for remediating the lower eight miles of the Lower Passaic River Study Area. The FFS calls for bank-to-bank dredging and capping of the riverbed of that portion of the river and estimates a range of the present value of aggregate remediation costs of approximately $953 million to approximately $1.731 billion, although estimates of the costs and the timing of costs are inherently imprecise. The FFS is subject to a 90-day public comment period and revision, including the adoption of a less extensive remedy, in light of comments that may be received. No final allocations of responsibility have been made among the numerous PRPs that have received notices from the EPA, there are numerous identified PRPs that have not yet received PRP notices from the EPA, and there are likely many PRPs that have not yet been identified. At this time, we cannot estimate a reasonably possible range of loss related to the remediation of the Lower Passaic River Study Area because the ultimate remedial approach has not been determined and the parties that will participate in funding the remediation and their respective allocations are not yet known. In addition, except with respect to specific Crucible environmental matters for which we have accrued a portion of the liability set forth above, we are unable to estimate a reasonably possible range of loss related to any other contingent environmental liability based on our prior ownership of Crucible. | ||||||||
See the section entitled “Crucible Steel Corporation a/k/a Crucible, Inc.” in this footnote for additional information. | ||||||||
Colt Firearms and Central Moloney | ||||||||
We may have contingent liabilities related to divested businesses for which certain of our subsidiaries retained liability or are obligated under indemnity agreements. These contingent liabilities include, but are not limited to, potential product liability and associated claims related to firearms manufactured prior to March 1990 by Colt Firearms, a former operation of Coltec, and for electrical transformers manufactured prior to May 1994 by Central Moloney, another former Coltec operation. We believe that these potential contingent liabilities are not material to our financial condition, results of operation and cash flows. Coltec also has ongoing obligations, which are included in other liabilities in our Consolidated Balance Sheets, with regard to workers’ compensation, retiree medical and other retiree benefit matters that relate to Coltec’s periods of ownership of these operations. | ||||||||
Crucible Steel Corporation a/k/a Crucible, Inc. | ||||||||
Crucible, which was engaged primarily in the manufacture and distribution of high technology specialty metal products, was a wholly owned subsidiary of Coltec until 1983 when its assets and liabilities were distributed to a new Coltec subsidiary, Crucible Materials Corporation. Coltec sold a majority of the outstanding shares of Crucible Materials Corporation in 1985 and divested its remaining minority interest in 2004. Crucible Materials Corporation filed for Chapter 11 bankruptcy protection in May 2009. | ||||||||
In conjunction with the closure of a Crucible plant in the early 1980s, Coltec was required to fund a trust for retiree medical benefits for certain employees at the plant. This trust (the “Benefits Trust”) pays for these retiree medical benefits on an ongoing basis. Coltec has no ownership interest in the Benefits Trust, and thus the assets and liabilities of this trust are not included in our Consolidated Balance Sheets. Under the terms of the Benefits Trust agreement, the trustees retained an actuary to assess the adequacy of the assets in the Benefits Trust in 1995 and 2005. A third and final actuarial report will be required in 2015. The actuarial reports in 1995 and 2005 determined that the Benefits Trust has sufficient assets to fund the payment of future benefits. We own a guaranteed investment contract with a current value of $2.9 million, which is being held in a special account in case of a shortfall in the Benefits Trust. | ||||||||
We have certain ongoing obligations, which are included in other liabilities in our Consolidated Balance Sheets, including workers’ compensation, retiree medical and other retiree benefit matters, in addition to those mentioned previously related to Coltec’s period of ownership of Crucible. Based on Coltec’s prior ownership of Crucible, we may have certain additional contingent liabilities, including liabilities in one or more significant environmental matters included in the matters discussed in “Environmental,” above. We are investigating these matters and are unable to estimate a reasonably possible range of loss related to these contingent liabilities. | ||||||||
Warranties | ||||||||
We provide warranties on many of our products. The specific terms and conditions of these warranties vary depending on the product and the market in which the product is sold. We record a liability based upon estimates of the costs we may incur under our warranties after a review of historical warranty experience and information about specific warranty claims. Adjustments are made to the liability as claims data and historical experience warrant. | ||||||||
Changes in the carrying amount of the product warranty liability for the three months ended March 31, 2014 and 2013 are as follows: | ||||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Balance at beginning of year | $ | 3.8 | $ | 4.1 | ||||
Charges (credits) to expense | (0.3 | ) | 0.8 | |||||
Settlements made (primarily payments) | (0.3 | ) | (0.9 | ) | ||||
Balance at end of period | $ | 3.2 | $ | 4 | ||||
BorgWarner | ||||||||
A subsidiary of BorgWarner Inc. (“BorgWarner”) has asserted claims against GGB France E.U.R.L. (“GGB France”) with respect to certain bearings supplied by GGB France to BorgWarner and used by BorgWarner in manufacturing hydraulic control units included in motor vehicle automatic transmission units. BorgWarner and GGB France are participating in a technical review before a panel of experts to determine, among other things, whether there were any defects in the bearings and whether any defect caused the damages claimed by BorgWarner, which technical review is a required predicate to the commencement of a legal proceeding for damages. There is no fixed deadline for the completion of the technical review and the presentation of the expert panel's findings. We believe that GGB France has valid factual and legal defenses to these claims and we are vigorously defending these claims. At this point in the technical review process we are unable to estimate a reasonably possible range of loss related to these claims. | ||||||||
Asbestos | ||||||||
Background on Asbestos-Related Litigation. The historical business operations of GST LLC and 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 in products produced or sold by GST LLC or Anchor, together with products produced and sold by numerous other companies. GST LLC and Anchor manufactured and/or sold industrial sealing products that contained encapsulated asbestos fibers. Other of our subsidiaries that manufactured or sold equipment that may have at various times in the past contained asbestos-containing components have also been named in a number of asbestos lawsuits, but neither we nor any of our subsidiaries other than GST LLC and Anchor have ever paid an asbestos claim. | ||||||||
Since the first asbestos-related lawsuits were filed against GST LLC in 1975, GST LLC and Anchor have processed more than 900,000 claims to conclusion, and, together with insurers, have paid over $1.4 billion in settlements and judgments and over $400 million in fees and expenses. Our subsidiaries’ exposure to asbestos litigation and their relationships with insurance carriers have been managed through Garrison. | ||||||||
Subsidiary Chapter 11 Filing and Effect. On the Petition Date, GST LLC, Garrison and Anchor filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court. The filings were the initial step in a claims resolution process, which is ongoing. See Note 15 for additional information about this process and its impact on us. | ||||||||
During the pendency of the Chapter 11 proceedings, certain actions proposed to be taken by GST not in the ordinary course of business are subject to approval by the Bankruptcy Court. As a result, during the pendency of these proceedings, we do not have exclusive control over these companies. Accordingly, as required by GAAP, GST was deconsolidated beginning on the Petition Date. | ||||||||
As a result of the initiation of the Chapter 11 proceedings, the resolution of asbestos claims is subject to the jurisdiction of the Bankruptcy Court. The filing of the Chapter 11 cases automatically stayed the prosecution of pending asbestos bodily injury and wrongful death lawsuits, and initiation of new such lawsuits, against GST. Further, the Bankruptcy Court issued an order enjoining plaintiffs from bringing or further prosecuting asbestos products liability actions against affiliates of GST, including EnPro, Coltec and all their subsidiaries, during the pendency of the Chapter 11 proceedings, subject to further order. As a result, the numbers of new claims filed against our subsidiaries and, except as a result of the resolution of appeals from verdicts rendered prior to the Petition Date, and the elimination of claims as a result of information obtained in the Chapter 11 proceedings, the numbers of claims pending against them have not changed since the Petition Date, and those numbers continue to be as reported in our 2009 Form 10-K and our quarterly reports for the first and second quarters of 2010. | ||||||||
Pending Claims. On the Petition Date, according to Garrison's claim records, there were more than 90,000 total claims pending against GST LLC, of which approximately 5,800 were claims alleging the disease mesothelioma. Based on discovery in the Chapter 11 proceedings, GST has learned that more than 1,900 of those mesothelioma claims records were not, in fact, pending mesothelioma claims. Garrison now believes that there were less than 4,000 mesothelioma claims pending against it as of the Petition Date. Mesothelioma is a rare cancer of the protective lining of many of the body’s internal organs, principally the lungs. The primary cause of mesothelioma is believed to be exposure to asbestos. As a result of asbestos tort reform during the 2000s, most active asbestos-related lawsuits, and a large majority of the amount of payments made by our subsidiaries in the years immediately preceding the Petition Date, have been of claims alleging mesothelioma. In total, GST LLC has paid $563.2 million to resolve a total of 15,300 mesothelioma claims, and another 5,700 mesothelioma claims have been dismissed without payment. | ||||||||
In order to estimate the allowed amount for mesothelioma claims against GST, the Bankruptcy Court approved a process whereby all current GST LLC mesothelioma claimants were required to respond to a questionnaire about their claims. Questionnaires were distributed to the mesothelioma claimants identified in Garrison’s claims database. Many of the 5,800 claimants (over 500) did not respond to the questionnaire at all; many others (more than 1,900) clarified that: claimants do not have mesothelioma, claimants cannot establish exposure to GST products, claims were dismissed, settled or withdrawn, claims were duplicates of other filed claims, or claims were closed or inactive. Still others responded to the questionnaire but their responses were deficient in some material respect. As a result of this process, less than 3,300 claimants presented questionnaires asserting mesothelioma claims against GST LLC as of the Petition Date and many of them did not establish exposure to GST products or have claims that are otherwise deficient. | ||||||||
Since the Petition Date, many asbestos-related lawsuits have been filed by claimants against other companies in state and federal courts, and many of those claimants might also have included GST LLC as a defendant but for the bankruptcy injunction. Many of those claimants likely will make claims against GST in the bankruptcy proceeding. | ||||||||
Product Defenses. We believe that the asbestos-containing products manufactured or sold by GST could not have been a substantial contributing cause of any asbestos-related disease. The asbestos in the products was encapsulated, which means the asbestos fibers incorporated into the products during the manufacturing process were sealed in binders. The products were also nonfriable, which means they could not be crumbled by hand pressure. The U.S. Occupational Safety and Health Administration, which began generally requiring warnings on asbestos-containing products in 1972, has never required that a warning be placed on products such as GST LLC’s gaskets. Even though no warning label was required, GST LLC included one on all of its asbestos-containing products beginning in 1978. Further, gaskets such as those previously manufactured and sold by GST LLC are one of the few asbestos-containing products still permitted to be manufactured under regulations of the U.S. Environmental Protection Agency. Nevertheless, GST LLC discontinued all manufacture and distribution of asbestos-containing products in the U.S. during 2000 and worldwide in mid-2001. | ||||||||
Appeals. GST LLC has a record of success in trials of asbestos cases, especially before the bankruptcies of many of the historically significant asbestos defendants that manufactured raw asbestos, asbestos insulation, refractory products or other dangerous friable asbestos products. However, it has on occasion lost jury verdicts at trial. GST has consistently appealed when it has received an adverse verdict and has had success in a majority of those appeals. We believe that GST LLC will continue to be successful in the appellate process, although there can be no assurance of success in any particular appeal. At March 31, 2014, three GST LLC appeals are pending from adverse decisions totaling $2.4 million. | ||||||||
GST LLC won reversals of adverse verdicts in one of two recent appellate decisions. In September 2011, the United States Court of Appeals for the Sixth Circuit overturned a $500 thousand verdict against GST LLC that was handed down in 2009 by a Kentucky federal court jury. The federal appellate court found that GST LLC’s motion for judgment as a matter of law should have been granted because the evidence was not sufficient to support a determination of liability. The Sixth Circuit’s chief judge wrote that, “On the basis of this record, saying that exposure to Garlock gaskets was a substantial cause of [claimant’s] mesothelioma would be akin to saying that one who pours a bucket of water into the ocean has substantially contributed to the ocean’s volume.” In May 2011, a three-judge panel of the Kentucky Court of Appeals upheld GST LLC’s $700 thousand share of a jury verdict, which included punitive damages, in a lung cancer case against GST LLC in Kentucky state court. This verdict, which was secured by a bond pending the appeal, was paid in June 2012. | ||||||||
Insurance Coverage. At March 31, 2014 we had $121.1 million of insurance coverage we believe is available to cover current and future asbestos claims payments and certain expense payments. GST has collected insurance payments totaling $74.0 million since the Petition Date. Of the $121.1 million of available insurance coverage remaining, we consider $120.0 million (99%) to be of high quality because the insurance policies are written or guaranteed by U.S.-based carriers whose credit rating by S&P is investment grade (BBB-) or better, and whose AM Best rating is excellent (A-) or better. We consider $1.1 million (1%) to be of moderate quality because the insurance policies are written with various London market carriers. Of the $121.1 million, $85.1 million is allocated to claims that were paid by GST LLC prior to the initiation of the Chapter 11 proceedings and submitted to insurance companies for reimbursement, and the remainder is allocated to pending and estimated future claims. There are specific agreements in place with carriers covering $86.2 million of the remaining available coverage. Based on those agreements and the terms of the policies in place and prior decisions concerning coverage, we believe that substantially all of the $121.1 million of insurance proceeds will ultimately be collected, although there can be no assurance that the insurance companies will make the payments as and when due. The $121.1 million is in addition to the $20.8 million collected in 2013. Based on those agreements and policies, some of which define specific annual amounts to be paid and others of which limit the amount that can be recovered in any one year, we anticipate that $39.1 million will become collectible at the conclusion of GST’s Chapter 11 proceeding and, assuming the insurers pay according to the agreements and policies, that the following amounts should be collected in the years set out below regardless of when the case concludes: | ||||||||
2014 – $20 million | ||||||||
2015 – $20 million | ||||||||
2016 – $18 million | ||||||||
2017 – $13 million | ||||||||
2018 – $11 million | ||||||||
GST LLC has received $7.2 million of insurance recoveries from insolvent carriers since 2007 and may receive additional payments from insolvent carriers in the future. No anticipated insolvent carrier collections are included in the $121.1 million of anticipated collections. The insurance available to cover current and future asbestos claims is from comprehensive general liability policies that cover Coltec and certain of its other subsidiaries in addition to GST LLC for periods prior to 1985 and therefore could be subject to potential competing claims of other covered subsidiaries and their assignees. | ||||||||
Liability Estimate. Our recorded asbestos liability as of the Petition Date was $472.1 million. We based that recorded liability on an estimate of probable and estimable expenditures to resolve asbestos personal injury claims under generally accepted accounting principles, made with the assistance of Garrison and an estimation expert, Bates White, retained by GST LLC’s counsel. The estimate developed was an estimate of the most likely point in a broad range of potential amounts that GST LLC might pay to resolve asbestos claims (by settlement in the majority of the cases except those dismissed or tried) over the ten-year period following the date of the estimate in the state court system, plus accrued but unpaid legal fees. The estimate, which was not discounted to present value, did not reflect GST LLC’s views of its actual legal liability; GST LLC has continuously maintained that its products could not have been a substantial contributing cause of any asbestos disease. Instead, the liability estimate reflected GST LLC’s recognition that most claims would be resolved more efficiently and at a significantly lower total cost through settlements without any actual liability determination. | ||||||||
Neither we nor GST has endeavored to update the accrual since the Petition Date except as necessary to reflect payments of accrued fees and the disposition of cases on appeal. After those necessary updates, the liability accrual at March 31, 2014 was $466.8 million. In each asbestos-driven Chapter 11 case that has been resolved previously, the amount of the debtor’s liability has been determined as part of a consensual plan of reorganization agreed to by the debtor and its creditors, including asbestos claimants and a representative of potential future claimants. GST does not believe that there is a reliable process by which an estimate of such a consensual resolution can be made and therefore believes that, prior to the resolution of liability in GST's Chapter 11 proceeding, there is no basis upon which it can revise the estimate last updated prior to the Petition Date. In addition, we do not believe that we can make a reasonable estimate of a specific range of more likely outcomes with respect to the asbestos liability of GST, and therefore, while we believe it to be an unlikely worst case scenario, GST’s ultimate costs to resolve all asbestos claims against it could range up to the total value of GST. | ||||||||
In a proposed plan of reorganization filed by GST and opposed by claimant representatives, GST proposed to resolve all pending and future claims. GST estimated that the amounts to be paid into the trust created by the plan for payments to future claimants, plus the indemnity costs incurred under the plan to pay present claimants, would be approximately $270 million. Claimant representatives, on the other hand, have asserted that GST’s liability exceeds the value of GST. | ||||||||
The proposed plan of reorganization includes provisions that would resolve any and all alleged derivative claims against us based on GST asbestos products. The provisions specify that we would fund $30 million of the amount proposed to be paid into the trust to pay future claimants and would guarantee the obligations of GST under the plan. Those provisions are incorporated into the terms of the proposed plan only in the context of the specifics of that plan, which would result in the equity interests of GST being retained by GST’s equity holder, the reconsolidation of GST into the Company with substantial equity above the amount of equity currently included in our consolidated financial statements, and an injunction protecting us from future GST claims. | ||||||||
As stated previously, GST intends to incorporate the judge's recent decision estimating GST's liability for mesothelioma into a revised plan of reorganization that it will submit in place of its initial proposed plan. GST has not yet determined the amount that it will propose be included in the revised plan. We cannot predict when a plan of reorganization for GST might be approved and effective nor can we predict the amount of funding that a confirmed plan will require. An estimation trial for the purpose of determining the number and value of allowed mesothelioma claims for plan feasibility purposes commenced on July 22, 2013, and concluded on August 22, 2013. On January 10, 2014, the Bankruptcy Court entered an order estimating GST's liability for present and future mesothelioma claims at $125 million, consistent with the positions that GST put forth at trial. The Court's estimate is for mesothelioma claims only. Additional amounts may be necessary to resolve other disease claims and trust administration costs. The estimation decision did not end the case; there are many potential hurdles, including appeals, that may arise prior to plan confirmation. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Schedule of Computation of Basic and Diluted Earnings Per Share | ' | ||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
(in millions, except per share amounts) | |||||||||
Numerator (basic and diluted): | |||||||||
Net income | $ | 1.3 | $ | 8.6 | |||||
Denominator: | |||||||||
Weighted-average shares – basic | 21.3 | 20.7 | |||||||
Share-based awards | 0.1 | 0.2 | |||||||
Convertible debentures and related warrants | 3.7 | 1.4 | |||||||
Weighted-average shares – diluted | 25.1 | 22.3 | |||||||
Earnings per share: | |||||||||
Basic | $ | 0.06 | $ | 0.41 | |||||
Diluted | $ | 0.05 | $ | 0.39 | |||||
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Schedule of Inventories | ' | |||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Finished products | $ | 75.8 | $ | 84.3 | ||||
Work in process | 49.4 | 36 | ||||||
Raw materials and supplies | 49.4 | 42.8 | ||||||
174.6 | 163.1 | |||||||
Reserve to reduce certain inventories to LIFO basis | (14.0 | ) | (14.0 | ) | ||||
Total inventories | $ | 160.6 | $ | 149.1 | ||||
LongTerm_Contracts_Tables
Long-Term Contracts (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Contractors [Abstract] | ' | |||||||
Schedule of Information Regarding Contracts Accounted for Under Percentage-of-Completion Method | ' | |||||||
Additional information regarding engine contracts accounted for under the POC method is as follows: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Cumulative revenues recognized on uncompleted POC contracts | $ | 161.2 | $ | 141.1 | ||||
Cumulative billings on uncompleted POC contracts | 156.2 | 146.6 | ||||||
$ | 5 | $ | (5.5 | ) | ||||
Schedule of Uncompleted Contracts Reflected in Consolidated Balance Sheets | ' | |||||||
These amounts were included in the accompanying Consolidated Balance Sheets under the following captions: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Accounts receivable (POC revenue recognized in excess of billings) | $ | 12 | $ | 4.3 | ||||
Accrued expenses (POC billings where revenue has not yet been earned) | (7.0 | ) | (9.8 | ) | ||||
$ | 5 | $ | (5.5 | ) | ||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||
Schedule of Changes in Net Carrying Value of Goodwill by Reportable Segment | ' | |||||||||||||||
The changes in the net carrying value of goodwill by reportable segment for the three months ended March 31, 2014, are as follows: | ||||||||||||||||
Sealing | Engineered | Power Systems | Total | |||||||||||||
Products | Products | |||||||||||||||
(in millions) | ||||||||||||||||
Gross goodwill as of December 31, 2013 | $ | 181.5 | $ | 168.1 | $ | 7.1 | $ | 356.7 | ||||||||
Accumulated impairment losses | (27.8 | ) | (108.7 | ) | — | (136.5 | ) | |||||||||
Goodwill as of December 31, 2013 | 153.7 | 59.4 | 7.1 | 220.2 | ||||||||||||
Change due to foreign currency translation | 0.1 | (0.7 | ) | — | (0.6 | ) | ||||||||||
Gross goodwill as of March 31, 2014 | 181.6 | 167.4 | 7.1 | 356.1 | ||||||||||||
Accumulated impairment losses | (27.8 | ) | (108.7 | ) | — | (136.5 | ) | |||||||||
Goodwill as of March 31, 2014 | $ | 153.8 | $ | 58.7 | $ | 7.1 | $ | 219.6 | ||||||||
Schedule of Identifiable Intangible Assets | ' | |||||||||||||||
Identifiable intangible assets are as follows: | ||||||||||||||||
As of March 31, 2014 | As of December 31, 2013 | |||||||||||||||
Gross | Accumulated | Gross | Accumulated | |||||||||||||
Carrying | Amortization | Carrying | Amortization | |||||||||||||
Amount | Amount | |||||||||||||||
(in millions) | ||||||||||||||||
Amortized: | ||||||||||||||||
Customer relationships | $ | 192.5 | $ | 88.3 | $ | 191.2 | $ | 85 | ||||||||
Existing technology | 53.9 | 19.9 | 53.9 | 18.8 | ||||||||||||
Trademarks | 36.1 | 17.3 | 33.7 | 16.9 | ||||||||||||
Other | 23.4 | 18.5 | 23.4 | 17.9 | ||||||||||||
305.9 | 144 | 302.2 | 138.6 | |||||||||||||
Indefinite-Lived: | ||||||||||||||||
Trademarks | 36.5 | — | 36.5 | — | ||||||||||||
Total | $ | 342.4 | $ | 144 | $ | 338.7 | $ | 138.6 | ||||||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Schedule of Accrued Expenses | ' | |||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Salaries, wages and employee benefits | $ | 36.7 | $ | 45.3 | ||||
Interest | 9.6 | 30 | ||||||
Customer advances | 24 | 23.7 | ||||||
Income and other taxes | 17.9 | 10.8 | ||||||
Other | 33.5 | 31.1 | ||||||
$ | 121.7 | $ | 140.9 | |||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||
Schedule of Amounts Included in Financial Statements Arising From Transactions with GST | ' | ||||||||||
Amounts included in our financial statements arising from transactions with GST include the following: | |||||||||||
Financial Statement | Three Months Ended | ||||||||||
Location | March 31, | ||||||||||
2014 | 2013 | ||||||||||
(in millions) | |||||||||||
Sales to GST | Net sales | $ | 6.9 | $ | 6.1 | ||||||
Purchases from GST | Cost of sales | $ | 6.2 | $ | 7.3 | ||||||
Interest expense to GST | Interest expense | $ | 7.5 | $ | 7.2 | ||||||
Financial Statement | March 31, | December 31, | |||||||||
Location | 2014 | 2013 | |||||||||
(in millions) | |||||||||||
Due from GST | Accounts receivable | $ | 8.1 | $ | 18.3 | ||||||
Income tax receivable from GST | Other assets | $ | 60.4 | $ | 46.9 | ||||||
Due to GST | Accounts payable | $ | 7.6 | $ | 6.7 | ||||||
Accrued interest to GST | Accrued expenses | $ | 7.4 | $ | 28.5 | ||||||
Pensions_and_Postretirement_Be1
Pensions and Postretirement Benefits (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of Net Periodic Benefit Cost | ' | ||||||||||||||||
The components of net periodic benefit cost for the Company’s U.S. and foreign defined benefit pension and other postretirement plans for the three months ended March 31, 2014 and 2013, are as follows: | |||||||||||||||||
Pension Benefits | Other Benefits | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in millions) | |||||||||||||||||
Service cost | $ | 2 | $ | 1.7 | $ | 0.2 | $ | 0.2 | |||||||||
Interest cost | 2.8 | 2.7 | 0.1 | 0.1 | |||||||||||||
Expected return on plan assets | (4.2 | ) | (3.1 | ) | — | — | |||||||||||
Amortization of net loss | 0.7 | 2.2 | — | — | |||||||||||||
Deconsolidation of GST | (0.2 | ) | (0.5 | ) | — | — | |||||||||||
Net periodic benefit cost | $ | 1.1 | $ | 3 | $ | 0.3 | $ | 0.3 | |||||||||
Business_Segment_Information_T
Business Segment Information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Schedule of Segment Operating Results and Other Financial Data | ' | ||||||||
Segment operating results and other financial data for the three months ended March 31, 2014 and 2013 were as follows: | |||||||||
2014 | 2013 | ||||||||
(in millions) | |||||||||
Sales | |||||||||
Sealing Products | $ | 155 | $ | 146.6 | |||||
Engineered Products | 91.8 | 91.8 | |||||||
Power Systems | 41.1 | 49.4 | |||||||
287.9 | 287.8 | ||||||||
Intersegment sales | (0.7 | ) | (0.9 | ) | |||||
Total sales | $ | 287.2 | $ | 286.9 | |||||
Segment Profit | |||||||||
Sealing Products | $ | 17.1 | $ | 21.3 | |||||
Engineered Products | 8.7 | 5.8 | |||||||
Power Systems | 3.3 | 4.8 | |||||||
Total segment profit | 29.1 | 31.9 | |||||||
Corporate expenses | (10.1 | ) | (9.1 | ) | |||||
Interest expense, net | (10.9 | ) | (11.0 | ) | |||||
Other expense, net | (5.8 | ) | (2.1 | ) | |||||
Income before income taxes | $ | 2.3 | $ | 9.7 | |||||
Schedule of Segment Assets | ' | ||||||||
Segment assets are as follows: | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Sealing Products | $ | 556.9 | $ | 534.4 | |||||
Engineered Products | 339 | 329.8 | |||||||
Power Systems | 138.4 | 131.3 | |||||||
Corporate | 394.2 | 397.2 | |||||||
$ | 1,428.50 | $ | 1,392.70 | ||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis | ' | |||||||||||||||
Assets and liabilities measured at fair value on a recurring basis are summarized as follows: | ||||||||||||||||
Fair Value Measurements as of | ||||||||||||||||
31-Mar-14 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
(in millions) | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Time deposits | $ | 37.6 | $ | 37.6 | $ | — | $ | — | ||||||||
37.6 | 37.6 | — | — | |||||||||||||
Guaranteed investment contract | 2.9 | — | 2.9 | — | ||||||||||||
Foreign currency derivatives | 0.1 | — | 0.1 | — | ||||||||||||
Deferred compensation assets | 5.7 | 5.7 | — | — | ||||||||||||
$ | 46.3 | $ | 43.3 | $ | 3 | $ | — | |||||||||
Liabilities | ||||||||||||||||
Deferred compensation liabilities | $ | 8.4 | $ | 8.4 | $ | — | $ | — | ||||||||
Foreign currency derivatives | — | — | — | — | ||||||||||||
$ | 8.4 | $ | 8.4 | $ | — | $ | — | |||||||||
Fair Value Measurements as of | ||||||||||||||||
31-Dec-13 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
(in millions) | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
European government money market | $ | 21.7 | $ | 21.7 | $ | — | $ | — | ||||||||
21.7 | 21.7 | — | — | |||||||||||||
Guaranteed investment contract | 2.8 | — | 2.8 | — | ||||||||||||
Foreign currency derivatives | 0.4 | — | 0.4 | — | ||||||||||||
Deferred compensation assets | 5.3 | 5.3 | — | — | ||||||||||||
$ | 30.2 | $ | 27 | $ | 3.2 | $ | — | |||||||||
Liabilities | ||||||||||||||||
Deferred compensation liabilities | $ | 7.6 | $ | 7.6 | $ | — | $ | — | ||||||||
Foreign currency derivatives | 0.4 | — | 0.4 | — | ||||||||||||
$ | 8 | $ | 7.6 | $ | 0.4 | $ | — | |||||||||
Schedule of Carrying Value of Financial Instruments | ' | |||||||||||||||
The carrying values of our significant financial instruments reflected in the Consolidated Balance Sheets approximated their respective fair values except for the following instruments: | ||||||||||||||||
31-Mar-14 | 31-Dec-13 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
(in millions) | ||||||||||||||||
Long-term debt | $ | 151.4 | $ | 298.2 | $ | 165.1 | $ | 307.6 | ||||||||
Notes payable to GST | $ | 271 | $ | 292.1 | $ | 259.3 | $ | 277.8 | ||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | |||||||||||||||
Summary of Changes in Accumulated Other Comprehensive Loss by Component | ' | |||||||||||||||
Changes in accumulated other comprehensive income by component (after tax) for the three months ended March 31, 2014 are as follows: | ||||||||||||||||
Unrealized | Pension and | Gains and | Total | |||||||||||||
Translation | Other | Losses on | ||||||||||||||
Adjustments | Postretirement | Cash Flow | ||||||||||||||
Plans | Hedges | |||||||||||||||
Beginning balance | $ | 42.6 | $ | (28.2 | ) | $ | — | $ | 14.4 | |||||||
Other comprehensive income before reclassifications | (1.4 | ) | — | — | (1.4 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 0.4 | — | 0.4 | ||||||||||||
Net current-period other comprehensive income (loss) | (1.4 | ) | 0.4 | — | (1.0 | ) | ||||||||||
Ending balance | $ | 41.2 | $ | (27.8 | ) | $ | — | $ | 13.4 | |||||||
Changes in accumulated other comprehensive (loss) income by component (after tax) for the three months ended March 31, 2013 are as follows: | ||||||||||||||||
Unrealized | Pension and | Gains and | Total | |||||||||||||
Translation | Other | Losses on | ||||||||||||||
Adjustments | Postretirement | Cash Flow | ||||||||||||||
Plans | Hedges | |||||||||||||||
Beginning balance | $ | 41.6 | $ | (64.0 | ) | $ | (0.6 | ) | $ | (23.0 | ) | |||||
Other comprehensive income before reclassifications | (9.7 | ) | — | — | (9.7 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | 1.5 | 0.6 | 2.1 | ||||||||||||
Net current-period other comprehensive income (loss) | (9.7 | ) | 1.5 | 0.6 | (7.6 | ) | ||||||||||
Ending balance | $ | 31.9 | $ | (62.5 | ) | $ | — | $ | (30.6 | ) | ||||||
Summary of Reclassifications Out of Accumulated Other Comprehensive Loss | ' | |||||||||||||||
Reclassifications out of accumulated other comprehensive income for the three months months ended March 31, 2014 and 2013 are as follows: | ||||||||||||||||
Details about Accumulated Other Comprehensive Income | Amount Reclassified from | Affected Statement of | ||||||||||||||
Components | Accumulated Other | Operations Line Item | ||||||||||||||
Comprehensive Income | ||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
March 31, 2014 | March 31, 2013 | |||||||||||||||
Amortization of pension and other postretirement plans: | ||||||||||||||||
Actuarial losses | $ | 0.7 | $ | 2.2 | -1 | |||||||||||
Tax benefit | (0.3 | ) | (0.7 | ) | Income tax expense | |||||||||||
Net of tax | $ | 0.4 | $ | 1.5 | ||||||||||||
Gains and losses on cash flow hedges: | ||||||||||||||||
Foreign exchange contracts | $ | — | $ | 1 | Cost of sales | |||||||||||
Tax benefit | — | (0.4 | ) | Income tax expense | ||||||||||||
Net of tax | $ | — | $ | 0.6 | ||||||||||||
-1 | These accumulated other comprehensive income components are included in the computation of net periodic pension cost. (See Note 10 – “Pensions and Postretirement Benefits” for additional details). |
Garlock_Sealing_Technologies_L1
Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Reorganizations [Abstract] | ' | ||||||||
Schedule of Condensed Combined Statements of Operations | ' | ||||||||
Condensed combined financial information for GST is set forth below, presented on a historical cost basis. | |||||||||
GST | |||||||||
(Debtor-in-Possession) | |||||||||
Condensed Combined Statements of Operations (Unaudited) | |||||||||
(in millions) | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Net sales | $ | 59 | $ | 63.8 | |||||
Cost of sales | 35.9 | 39.8 | |||||||
Gross profit | 23.1 | 24 | |||||||
Operating expenses: | |||||||||
Selling, general and administrative | 10.9 | 10.8 | |||||||
Asbestos-related | 0.3 | 0.6 | |||||||
Other | 0.5 | 0.2 | |||||||
Total operating expenses | 11.7 | 11.6 | |||||||
Operating income | 11.4 | 12.4 | |||||||
Interest income, net | 7.6 | 7.2 | |||||||
Income before reorganization expenses and income taxes | 19 | 19.6 | |||||||
Reorganization expenses | (2.9 | ) | (10.4 | ) | |||||
Income before income taxes | 16.1 | 9.2 | |||||||
Income tax expense | (5.6 | ) | (2.8 | ) | |||||
Net income | $ | 10.5 | $ | 6.4 | |||||
Comprehensive income | $ | 10.5 | $ | 7 | |||||
Schedule of Condensed Combined Statements of Cash Flows | ' | ||||||||
GST | |||||||||
(Debtor-in-Possession) | |||||||||
Condensed Combined Statements of Cash Flows (Unaudited) | |||||||||
Three Months Ended March 31, 2014 and 2013 | |||||||||
(in millions) | |||||||||
2014 | 2013 | ||||||||
Net cash provided by operating activities | $ | 6.1 | $ | 6.5 | |||||
Investing activities | |||||||||
Purchases of property, plant and equipment | (1.6 | ) | (1.5 | ) | |||||
Net payments on loans to affiliates | (0.7 | ) | (7.4 | ) | |||||
Other | (0.3 | ) | (0.3 | ) | |||||
Net cash used in investing activities | (2.6 | ) | (9.2 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | (0.1 | ) | (0.3 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 3.4 | (3.0 | ) | ||||||
Cash and cash equivalents at beginning of period | 42.8 | 43.6 | |||||||
Cash and cash equivalents at end of period | $ | 46.2 | $ | 40.6 | |||||
Schedule of Condensed Combined Balance Sheets | ' | ||||||||
GST | |||||||||
(Debtor-in-Possession) | |||||||||
Condensed Combined Balance Sheets (Unaudited) | |||||||||
(in millions) | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Assets: | |||||||||
Current assets | $ | 309.8 | $ | 314.4 | |||||
Asbestos insurance receivable | 101.1 | 101.1 | |||||||
Deferred income taxes | 128.8 | 130.4 | |||||||
Notes receivable from affiliate | 259.3 | 248.1 | |||||||
Other assets | 75.9 | 76.2 | |||||||
Total assets | $ | 874.9 | $ | 870.2 | |||||
Liabilities and Shareholder’s Equity: | |||||||||
Current liabilities | $ | 31.8 | $ | 43.9 | |||||
Other liabilities | 64.6 | 58.1 | |||||||
Liabilities subject to compromise (A) | 468.4 | 468.4 | |||||||
Total liabilities | 564.8 | 570.4 | |||||||
Shareholder’s equity | 310.1 | 299.8 | |||||||
Total liabilities and shareholder’s equity | $ | 874.9 | $ | 870.2 | |||||
(A) | Liabilities subject to compromise include pre-petition unsecured claims which may be resolved at amounts different from those recorded in the condensed combined balance sheets. Liabilities subject to compromise consist principally of asbestos-related claims. GST has undertaken to project the number and ultimate cost of all present and future bodily injury claims expected to be asserted, based on actuarial principles, and to measure probable and estimable liabilities under generally accepted accounting principles. GST has accrued $466.8 million as of March 31, 2014. The estimate indicated for those asbestos-related claims reflects the point in a wide range of possible outcomes determined based on historical facts and circumstances prior to the Petition Date as our estimate of the cost to resolve asbestos-related personal injury cases and claims against GST as they would have been resolved in the state courts or by settlements over a ten-year period from April 1, 2010 through March 31, 2020. GST adjusts this estimate to reflect payments of previously accrued but unpaid legal fees and to reflect the results of appeals. Otherwise, GST does not expect to adjust the estimate unless developments in the Chapter 11 proceeding provide a reasonable basis for a revised estimate. GST intends to use the claims resolution process in Chapter 11 to determine the validity and ultimate amount of its aggregate liability for asbestos-related claims. Due to the uncertainties of asbestos-related litigation and the Chapter 11 process, GST’s ultimate liability could differ materially from the recorded liability. See Note 16, “Commitments and Contingencies – Asbestos.” |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||
Schedule of Changes in Carrying Amount of Product Warranty Liability | ' | |||||||
Changes in the carrying amount of the product warranty liability for the three months ended March 31, 2014 and 2013 are as follows: | ||||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Balance at beginning of year | $ | 3.8 | $ | 4.1 | ||||
Charges (credits) to expense | (0.3 | ) | 0.8 | |||||
Settlements made (primarily payments) | (0.3 | ) | (0.9 | ) | ||||
Balance at end of period | $ | 3.2 | $ | 4 | ||||
Schedule of Future Insurance Proceeds | ' | |||||||
the following amounts should be collected in the years set out below regardless of when the case concludes: | ||||||||
2014 – $20 million | ||||||||
2015 – $20 million | ||||||||
2016 – $18 million | ||||||||
2017 – $13 million | ||||||||
2018 – $11 million |
Earnings_Per_Share_Schedule_of
Earnings Per Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Detail) (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Earnings Per Share [Abstract] | ' | ' |
Net income | $1.30 | $8.60 |
Weighted-average shares - basic (in shares) | 21.3 | 20.7 |
Share-based awards (in shares) | 0.1 | 0.2 |
Convertible debentures and related warrants (in shares) | 3.7 | 1.4 |
Weighted-average shares - diluted (in shares) | 25.1 | 22.3 |
Basic (in usd per share) | $0.06 | $0.41 |
Diluted (in usd per share) | $0.05 | $0.39 |
Debt Instrument, Convertible, Conversion Price | $33.79 | ' |
Class of Warrant or Right, Exercise Price of Warrants or Rights | 46.78 | ' |
Acquisitions_Details
Acquisitions (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Business Combinations [Abstract] | ' | ' |
Payments to Acquire Businesses, Gross | $5.60 | ' |
Payments to Acquire Businesses, Net of Cash Acquired | $1.90 | $2.20 |
Inventories_Schedule_of_Invent
Inventories - Schedule of Inventories (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Finished products | $75.80 | $84.30 |
Work in process | 49.4 | 36 |
Raw materials and supplies | 49.4 | 42.8 |
Inventory Gross | 174.6 | 163.1 |
Reserve to reduce certain inventories to LIFO basis | -14 | -14 |
Progress payments | 33.2 | 25.6 |
Total | $160.60 | $149.10 |
Costs_and_Billings_on_Uncomple
Costs and Billings on Uncompleted Contracts - Schedule of Information Regarding Contracts Accounted for Under Percentage-of-Completion Method (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Receivables [Abstract] | ' | ' |
Cumulative revenues recognized on uncompleted contracts | $161.20 | $141.10 |
Cumulative billings on uncompleted contracts | 156.2 | 146.6 |
Revenues and billing on uncompleted contracts | $5 | ($5.50) |
Costs_and_Billings_on_Uncomple1
Costs and Billings on Uncompleted Contracts - Schedule of Uncompleted Contracts Reflected in Consolidated Balance Sheets (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Receivables [Abstract] | ' | ' |
Accounts receivable (POC revenue in excess of billings) | $12 | $4.30 |
Accrued expenses (POC billings where revenue has not yet been earned) | -7 | -9.8 |
Revenues and billing on uncompleted contracts | 5 | -5.5 |
RetainagedDeposit | 4.1 | 4.5 |
Amount of Deferred Costs Related to Long-term Contracts | 15.8 | 14.2 |
Progress Payments Netted Against Inventory for Long-term Contracts or Programs | -33.2 | -25.6 |
Inventory, Net of Allowances, Customer Advances and Progress Billings | -17.4 | -11.4 |
Retainage Deposit | $6.10 | $6.10 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets - Schedule of Changes in Net Carrying Value of Goodwill by Reportable Segment (Detail) (USD $) | 3 Months Ended | ||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
Sealing Products [Member] | Engineered Products [Member] | Power Systems [Member] | Power Systems [Member] | ||
Goodwill [Roll Forward] | ' | ' | ' | ' | ' |
Gross goodwill, beginning balance | $356.70 | $181.50 | $168.10 | $7.10 | $7.10 |
Accumulated impairment losses | -136.5 | -27.8 | -108.7 | ' | ' |
Goodwill, beginning balance | 220.2 | 153.7 | 59.4 | 7.1 | 7.1 |
Decrease due to foreign currency translation | -0.6 | 0.1 | -0.7 | ' | ' |
Gross goodwill, ending balance | 356.1 | 181.6 | 167.4 | 7.1 | 7.1 |
Accumulated impairment losses | -136.5 | -27.8 | -108.7 | ' | ' |
Goodwill, ending balance | $219.60 | $153.80 | $58.70 | $7.10 | $7.10 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets - Schedule of Identifiable Intangible Assets (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Amortized, Gross Carrying Amount | $305.90 | $302.20 |
Amortized, Accumulated Amortization | 144 | 138.6 |
Intangible Assets, Gross (Excluding Goodwill) | 342.4 | 338.7 |
Customer relationships [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Amortized, Gross Carrying Amount | 192.5 | 191.2 |
Amortized, Accumulated Amortization | 88.3 | 85 |
Existing technology [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Amortized, Gross Carrying Amount | 53.9 | 53.9 |
Amortized, Accumulated Amortization | 19.9 | 18.8 |
Trademarks [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Amortized, Gross Carrying Amount | 36.1 | 33.7 |
Amortized, Accumulated Amortization | 17.3 | 16.9 |
Indefinite-Lived, Gross Carrying Amount | 36.5 | 36.5 |
Other [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Amortized, Gross Carrying Amount | 23.4 | 23.4 |
Amortized, Accumulated Amortization | $18.50 | $17.90 |
Goodwill_and_Other_Intangible_4
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' |
Amortization expense | $5.80 | $6.20 |
Accrued_Expenses_Schedule_of_A
Accrued Expenses - Schedule of Accrued Expenses (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Payables and Accruals [Abstract] | ' | ' |
Salaries, wages and employee benefits | $36.70 | $45.30 |
Interest | 9.6 | 30 |
Customer Advances and Deposits, Current | 24 | 23.7 |
Income and other taxes | 17.9 | 10.8 |
Other | 33.5 | 31.1 |
Accrued expenses | $121.70 | $140.90 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Jan. 01, 2010 | Jan. 01, 2010 | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | Garlock Sealing Technologies [Member] | Garlock Sealing Technologies [Member] | Majority-Owned Subsidiary, Unconsolidated [Member] | Subsidiary of Common Parent [Member] | Intercompany Notes [Member] | Intercompany Notes [Member] | ||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Short-term borrowings | $23.10 | $22 | $23.10 | $22 | ' | ' | ' | ' |
Amended and Restated Promissory Note | 271 | 259.3 | ' | ' | 73.4 | 153.8 | ' | ' |
Interest rate, stated percentage | 3.94% | ' | ' | ' | ' | ' | 11.00% | ' |
Intercompany notes, interest payable in cash, percentage | ' | ' | ' | ' | ' | ' | 6.50% | ' |
Intercompany notes, interest paid in kind added to principal amount, percentage | ' | ' | ' | ' | ' | ' | 4.50% | ' |
Intercompany notes, interest paid in kind added to principal balance, value | 11.7 | 11.2 | ' | ' | ' | ' | 11.7 | 11.2 |
Derivative, Notional Amount | ' | ' | ' | $3.20 | ' | ' | ' | ' |
Related_Party_Transactions_Sch
Related Party Transactions - Schedule of Amounts Included in Financial Statements Arising From Transactions with GST (Detail) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Related Party Transaction [Line Items] | ' | ' | ' |
Interest Paid | $18.10 | $16.70 | ' |
Accrued interest | 9.6 | ' | 30 |
Accounts Receivable [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Due from GST | 8.1 | ' | 18.3 |
Other Assets [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Income tax receivable | 60.4 | ' | 46.9 |
Accounts Payable [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Due to GST | 7.6 | ' | 6.7 |
Accrued Expenses [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Accrued interest | 7.4 | ' | 28.5 |
Net Sales [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Sales to GST | 6.9 | 6.1 | ' |
Cost of Sales [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Purchases from GST | 6.2 | 7.3 | ' |
Interest Expense [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Interest expense | 7.5 | 7.2 | ' |
Garlock Sealing Technologies [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Interest Paid | 16.9 | 16.2 | ' |
Derivative, Notional Amount | ' | ' | $3.20 |
LongTerm_Debt_Additional_Infor
Long-Term Debt - Additional Information (Detail) (USD $) | 3 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Oct. 30, 2005 |
D | Credit Facility [Member] | 3.9375% Debenture [Member] | ||
Line of Credit Facility [Line Items] | ' | ' | ' | ' |
Aggregate principal amount | ' | ' | ' | $172.50 |
Debt discount amount | 9.4 | ' | ' | 61.3 |
Interest rate of debentures | 3.94% | ' | ' | ' |
Debentures trigger conversion price | $43.93 | ' | ' | ' |
Percentage of current conversion price | 130.00% | ' | ' | ' |
Conversion price, per share | $33.79 | ' | ' | ' |
Debt Instrument, Convertible, Threshold Trading Days | 20 | ' | ' | ' |
Minimum trading days required for common stock conversion | '30 days | ' | ' | ' |
Stock Issued During Period, Value, Conversion of Convertible Securities | 56.1 | ' | ' | ' |
Stock Issued During Period, Shares, Conversion of Convertible Securities | 1.7 | ' | ' | ' |
Gains (Losses) on Extinguishment of Debt | -3.6 | 0 | ' | ' |
Extinguishment of Debt, Gain (Loss), Net of Tax | 2.3 | ' | ' | ' |
Adjustments to Additional Paid in Capital, Convertible Debt with Conversion Feature | 0.8 | ' | ' | ' |
Convertible Debt | 116.4 | ' | ' | ' |
Effective interest rate of debt instrument | 9.50% | ' | ' | ' |
Interest Expense, Debt, Excluding Amortization | 1.6 | 1.7 | ' | ' |
Debt discount amortization | 1.8 | 1.8 | ' | ' |
Credit facility maximum availability | 225 | ' | 175 | ' |
Credit facility borrowing capacity | ' | ' | 78.8 | ' |
Letter of credit outstanding | ' | ' | 4.8 | ' |
Credit facility borrowings outstanding | ' | ' | $43.40 | ' |
Maturity period of long term debt | 15-Oct-15 | ' | ' | ' |
Pensions_and_Postretirement_Be2
Pensions and Postretirement Benefits - Schedule of Net Periodic Benefit Cost (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Pension Benefits [Member] | ' | ' |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ' | ' |
Service cost | $2 | $1.70 |
Interest cost | 2.8 | 2.7 |
Expected return on plan assets | -4.2 | -3.1 |
Amortization of net loss | 0.7 | 2.2 |
Deconsolidation of GST | -0.2 | -0.5 |
Net periodic benefit cost | 1.1 | 3 |
Other Benefits [Member] | ' | ' |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ' | ' |
Service cost | 0.2 | 0.2 |
Interest cost | 0.1 | 0.1 |
Net periodic benefit cost | $0.30 | $0.30 |
Pensions_and_Postretirement_Be3
Pensions and Postretirement Benefits - Additional Information (Detail) (U.S. Pension Plans, Defined Benefit [Member], USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
U.S. Pension Plans, Defined Benefit [Member] | ' |
Defined Benefit Plan Disclosure [Line Items] | ' |
Contributions to defined benefit pension plans | $5.10 |
Anticipated additional contribution to defined benefit pension plans | $15 |
Derivative_Instruments_Additio
Derivative Instruments - Additional Information (Detail) (Foreign Exchange Contracts [Member], USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Foreign Exchange Contracts [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative, Notional Amount | $7.40 | $51.10 |
Business_Segment_Information_A
Business Segment Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2014 | |
Segment | |
Segment Reporting [Abstract] | ' |
Number Of Operating Segments | 3 |
Business_Segment_Information_S
Business Segment Information - Schedule of Segment Operating Results and Other Financial Data (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Segment Reporting Information [Line Items] | ' | ' |
Total product segment sales | $287.20 | $286.90 |
Intersegment sales | -0.7 | -0.9 |
Segment profit | 17.4 | 20.7 |
Interest expense, net | -10.9 | -11 |
Other expense, net | -4.2 | 0 |
Income before income taxes | 2.3 | 9.7 |
Sealing Products [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total product segment sales | 155 | 146.6 |
Segment profit | 17.1 | 21.3 |
Engineered Products [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total product segment sales | 91.8 | 91.8 |
Segment profit | 8.7 | 5.8 |
Power Systems [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total product segment sales | 41.1 | 49.4 |
Segment profit | 3.3 | 4.8 |
Operating Segments [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total product segment sales | 287.9 | 287.8 |
Segment profit | 29.1 | 31.9 |
Corporate and Other [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Segment profit | -10.1 | -9.1 |
Other expense, net | ($5.80) | ($2.10) |
Business_Segment_Information_S1
Business Segment Information - Schedule of Segment Assets (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Schedule Of Assets By Segment [Line Items] | ' | ' |
Assets | $1,428.50 | $1,392.70 |
Sealing Products [Member] | ' | ' |
Schedule Of Assets By Segment [Line Items] | ' | ' |
Assets | 556.9 | 534.4 |
Engineered Products [Member] | ' | ' |
Schedule Of Assets By Segment [Line Items] | ' | ' |
Assets | 339 | 329.8 |
Power Systems [Member] | ' | ' |
Schedule Of Assets By Segment [Line Items] | ' | ' |
Assets | 138.4 | 131.3 |
Corporate [Member] | ' | ' |
Schedule Of Assets By Segment [Line Items] | ' | ' |
Assets | $394.20 | $397.20 |
Fair_Value_Measurements_Assets
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ' | ' |
Cash equivalents | $37.60 | $21.70 |
Assets measured at fair value | 46.3 | 30.2 |
Liabilities measured at fair value | 8.4 | 8 |
Bank Time Deposits [Member] | ' | ' |
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ' | ' |
Cash equivalents | 37.6 | ' |
European Government Money Market [Member] | ' | ' |
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ' | ' |
Cash equivalents | ' | 21.7 |
Guaranteed Investment Contract [Member] | ' | ' |
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ' | ' |
Assets measured at fair value | 2.9 | 2.8 |
Foreign Currency Derivatives [Member] | ' | ' |
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ' | ' |
Assets measured at fair value | 0.1 | 0.4 |
Liabilities measured at fair value | 0 | 0.4 |
Deferred Compensation [Member] | ' | ' |
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ' | ' |
Assets measured at fair value | 5.7 | 5.3 |
Liabilities measured at fair value | 8.4 | 7.6 |
Level 1 [Member] | ' | ' |
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ' | ' |
Cash equivalents | 37.6 | 21.7 |
Assets measured at fair value | 43.3 | 27 |
Liabilities measured at fair value | 8.4 | 7.6 |
Level 1 [Member] | Bank Time Deposits [Member] | ' | ' |
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ' | ' |
Cash equivalents | 37.6 | ' |
Level 1 [Member] | European Government Money Market [Member] | ' | ' |
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ' | ' |
Cash equivalents | ' | 21.7 |
Level 1 [Member] | Deferred Compensation [Member] | ' | ' |
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ' | ' |
Assets measured at fair value | 5.7 | 5.3 |
Liabilities measured at fair value | 8.4 | 7.6 |
Level 2 [Member] | ' | ' |
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ' | ' |
Assets measured at fair value | 3 | 3.2 |
Liabilities measured at fair value | 0 | 0.4 |
Level 2 [Member] | Guaranteed Investment Contract [Member] | ' | ' |
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ' | ' |
Assets measured at fair value | 2.9 | 2.8 |
Level 2 [Member] | Foreign Currency Derivatives [Member] | ' | ' |
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items] | ' | ' |
Assets measured at fair value | 0.1 | 0.4 |
Liabilities measured at fair value | $0 | $0.40 |
Fair_Value_Measurements_Schedu
Fair Value Measurements - Schedule of Carrying Value of Financial Instruments (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Compensation and Retirement Disclosure [Abstract] | ' | ' |
Long-term debt, Carrying Value | $151.40 | $165.10 |
Notes payable to GST, Carrying Value | 271 | 259.3 |
Long-term Debt, Fair Value | 298.2 | 307.6 |
Notes payable to GST, Fair Value | $292.10 | $277.80 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss - Summary of Changes in Accumulated Other Comprehensive Loss by Component (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Accumulated Other Comprehinsive Income [Roll Forward] | ' | ' |
Beginning balance | $14.40 | ($23) |
Other comprehensive income before reclassifications | -1.4 | -9.7 |
Amounts reclassified from accumulated other comprehensive loss | 0.4 | 2.1 |
Net current-period other comprehensive income | -1 | -7.6 |
Ending balance | 13.4 | -30.6 |
Unrealized Translation Adjustments [Member] | ' | ' |
Accumulated Other Comprehinsive Income [Roll Forward] | ' | ' |
Beginning balance | 42.6 | 41.6 |
Other comprehensive income before reclassifications | -1.4 | -9.7 |
Net current-period other comprehensive income | -1.4 | -9.7 |
Ending balance | 41.2 | 31.9 |
Pension and Other Postretirement Plans [Member] | ' | ' |
Accumulated Other Comprehinsive Income [Roll Forward] | ' | ' |
Beginning balance | -28.2 | -64 |
Amounts reclassified from accumulated other comprehensive loss | 0.4 | 1.5 |
Net current-period other comprehensive income | 0.4 | 1.5 |
Ending balance | -27.8 | -62.5 |
Gains and Losses on Cash Flow Hedges [Member] | ' | ' |
Accumulated Other Comprehinsive Income [Roll Forward] | ' | ' |
Beginning balance | 0 | -0.6 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0.6 |
Net current-period other comprehensive income | 0 | 0.6 |
Ending balance | $0 | $0 |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Loss - Summary of Reclassifications Out of Accumulated Other Comprehensive Loss (Detail) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ' | ' | ||
Income Tax Expense (Benefit) | $1 | $1.10 | ||
Net income | 1.3 | 8.6 | ||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | ' | ' | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ' | ' | ||
Actuarial losses | 0.7 | [1] | 2.2 | [1] |
Income Tax Expense (Benefit) | -0.3 | -0.7 | ||
Net income | 0.4 | 1.5 | ||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | ' | ' | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ' | ' | ||
Net income | 0 | 0.6 | ||
Foreign Exchange Contract [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | ' | ' | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ' | ' | ||
Income Tax Expense (Benefit) | 0 | -0.4 | ||
Foreign exchance contracts | $0 | $1 | ||
[1] | These accumulated other comprehensive income components are included in the computation of net periodic pension cost. (See Note 10 – “Pensions and Postretirement Benefits†for additional details). |
Garlock_Sealing_Technologies_L2
Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. - Additional Information (Detail) (USD $) | 3 Months Ended | 1 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 | Nov. 30, 2011 |
Garlock Sealing Technologies [Member] | ||
Contribution by affiliates | ' | $200 |
Indemnity costs for current claims | $30 | $70 |
Garlock_Sealing_Technologies_L3
Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. - Schedule of Condensed Combined Statements of Operations (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Other Items Net Interest And Other Financial Income [Line Items] | ' | ' |
Net sales | $287.20 | $286.90 |
Cost of sales | 190.7 | 192.7 |
Gross profit | 96.5 | 94.2 |
Selling, general and administrative | 78.9 | 72.6 |
Other operating | 0.2 | 0.9 |
Total operating expenses | 79.1 | 73.5 |
Operating income | 17.4 | 20.7 |
Interest income, net | -10.9 | -11 |
Income before income taxes | 2.3 | 9.7 |
Income tax expense | -1 | -1.1 |
Net income | 1.3 | 8.6 |
Comprehensive income | 0.3 | 1 |
Garlock Sealing Technologies [Member] | ' | ' |
Other Items Net Interest And Other Financial Income [Line Items] | ' | ' |
Net sales | 59 | 63.8 |
Cost of sales | 35.9 | 39.8 |
Gross profit | 23.1 | 24 |
Selling, general and administrative | 10.9 | 10.8 |
Asbestos-related | 0.3 | 0.6 |
Other operating | 0.5 | 0.2 |
Total operating expenses | 11.7 | 11.6 |
Operating income | 11.4 | 12.4 |
Interest income, net | 7.6 | 7.2 |
Income before reorganization expenses and income taxes | 19 | 19.6 |
Reorganization expenses | -2.9 | -10.4 |
Income before income taxes | 16.1 | 9.2 |
Income tax expense | -5.6 | -2.8 |
Net income | 10.5 | 6.4 |
Comprehensive income | $10.50 | $7 |
Garlock_Sealing_Technologies_L4
Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. - Schedule of Condensed Combined Statements of Cash Flows (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Supplemental Cash Flow Information [Line Items] | ' | ' |
Net cash provided by (used in) operating activities | ($25) | ($17.80) |
Purchases of property, plant and equipment | -6.7 | -9.8 |
Other | 0.1 | 0.1 |
Net cash used in investing activities | -11.3 | -15.4 |
Effect of exchange rate changes on cash and cash equivalents | -0.1 | -2.4 |
Net decrease in cash and cash equivalents | -4.6 | -5.4 |
Cash and cash equivalents at beginning of period | 64.4 | 53.9 |
Cash and cash equivalents at end of period | 59.8 | 48.5 |
Garlock Sealing Technologies [Member] | ' | ' |
Supplemental Cash Flow Information [Line Items] | ' | ' |
Net cash provided by (used in) operating activities | 6.1 | 6.5 |
Purchases of property, plant and equipment | -1.6 | -1.5 |
Net receipts (payments) from loans to affiliates | -0.7 | -7.4 |
Other | -0.3 | -0.3 |
Net cash used in investing activities | -2.6 | -9.2 |
Effect of exchange rate changes on cash and cash equivalents | -0.1 | -0.3 |
Net decrease in cash and cash equivalents | 3.4 | -3 |
Cash and cash equivalents at beginning of period | 42.8 | 43.6 |
Cash and cash equivalents at end of period | $46.20 | $40.60 |
Garlock_Sealing_Technologies_L5
Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. - Schedule of Condensed Combined Balance Sheets (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Condensed Balance Sheet [Line Items] | ' | ' | ||
Current assets | $483.60 | $447.60 | ||
Other assets | 104 | 100.4 | ||
Total assets | 1,428.50 | 1,392.70 | ||
Current liabilities | 354 | 417.5 | ||
Other liabilities | 61.1 | 57.8 | ||
Total liabilities | 761.6 | 779.3 | ||
Shareholder's equity | 657.5 | 597.5 | ||
Total liabilities and equity | 1,428.50 | 1,392.70 | ||
Garlock Sealing Technologies [Member] | ' | ' | ||
Condensed Balance Sheet [Line Items] | ' | ' | ||
Current assets | 309.8 | 314.4 | ||
Asbestos insurance receivable | 101.1 | 101.1 | ||
Deferred income taxes | 128.8 | 130.4 | ||
Notes receivable from affiliate | 259.3 | 248.1 | ||
Other assets | 75.9 | 76.2 | ||
Total assets | 874.9 | 870.2 | ||
Current liabilities | 31.8 | 43.9 | ||
Other liabilities | 64.6 | 58.1 | ||
Liabilities subject to compromise | 468.4 | [1] | 468.4 | [1] |
Total liabilities | 564.8 | 570.4 | ||
Shareholder's equity | 310.1 | 299.8 | ||
Total liabilities and equity | $874.90 | $870.20 | ||
[1] | Liabilities subject to compromise include pre-petition unsecured claims which may be resolved at amounts different from those recorded in the condensed combined balance sheets. Liabilities subject to compromise consist principally of asbestos-related claims. GST has undertaken to project the number and ultimate cost of all present and future bodily injury claims expected to be asserted, based on actuarial principles, and to measure probable and estimable liabilities under generally accepted accounting principles. GST has accrued $466.8 million as of March 31, 2014. The estimate indicated for those asbestos-related claims reflects the point in a wide range of possible outcomes determined based on historical facts and circumstances prior to the Petition Date as our estimate of the cost to resolve asbestos-related personal injury cases and claims against GST as they would have been resolved in the state courts or by settlements over a ten-year period from April 1, 2010 through March 31, 2020. GST adjusts this estimate to reflect payments of previously accrued but unpaid legal fees and to reflect the results of appeals. Otherwise, GST does not expect to adjust the estimate unless developments in the Chapter 11 proceeding provide a reasonable basis for a revised estimate. GST intends to use the claims resolution process in Chapter 11 to determine the validity and ultimate amount of its aggregate liability for asbestos-related claims. Due to the uncertainties of asbestos-related litigation and the Chapter 11 process, GST’s ultimate liability could differ materially from the recorded liability. See Note 16, “Commitments and Contingencies – Asbestos.†|
Garlock_Sealing_Technologies_L6
Garlock Sealing Technologies LLC and Garrison Litigation Management Group, Ltd. - Schedule of Condensed Combined Balance Sheets (Parenthetical) (Detail) (USD $) | Jun. 30, 2010 | Mar. 31, 2014 |
In Millions, unless otherwise specified | Garlock Sealing Technologies [Member] | |
Condensed Balance Sheet [Line Items] | ' | ' |
Accrued asbestos liability | $472.10 | $466.80 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 46 Months Ended | 459 Months Ended | 3 Months Ended | 87 Months Ended | 459 Months Ended | 1 Months Ended | 3 Months Ended | |||||||||
Sep. 30, 2011 | 31-May-11 | Mar. 31, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2010 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Jun. 30, 2010 | Mar. 31, 2014 | Nov. 30, 2011 | Mar. 31, 2014 | Mar. 31, 2014 | |
Claim | LegalMatter | LegalMatter | LegalMatter | Minimum [Member] | Maximum [Member] | High Quality [Member] | Moderate Quality [Member] | Garlock Sealing Technologies LLC [Member] | Garlock Sealing Technologies LLC [Member] | Mesothelioma [Member] | Garlock Sealing Technologies [Member] | Garlock Sealing Technologies [Member] | Garlock Sealing Technologies [Member] | |||||
Appeals | Claim | Claim | LegalMatter | LegalMatter | Future Claim Representative [Member] | |||||||||||||
site | ||||||||||||||||||
LegalMatter | ||||||||||||||||||
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of sites owned | ' | ' | 15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost which the sites are expected to exceed | ' | ' | $100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of sites investigations completed | ' | ' | 11 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of sites where investigations are in progress | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Environmental contingencies and accrued liabilities | ' | ' | 15,600,000 | ' | 15,600,000 | 15,600,000 | 15,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Site Contingency, Environmental Remediation Costs Recognized | ' | ' | ' | 6,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remediation Trust Retained Assets | ' | ' | 750,000 | ' | 750,000 | 750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Site Contingency Number of Other Potentially Responsible Parties | ' | ' | 70 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Site Contingency, Loss Exposure Not Accrued, Low Estimate | ' | ' | 7,000,000 | ' | ' | ' | ' | ' | 953,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Site Contingency, Loss Exposure Not Accrued, High Estimate | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | 1,731,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Current value of guaranteed investment contract held in a special account | ' | ' | 2,900,000 | ' | 2,900,000 | 2,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of asbestos claims processed | ' | ' | ' | ' | ' | 900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cumulative claims paid | ' | ' | ' | ' | ' | 1,400,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | 563,200,000 | ' | ' | ' |
Fees and expenses related to asbestos claim | ' | ' | ' | ' | ' | 400,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pending Mesothelioma claims | ' | ' | ' | ' | ' | ' | ' | 5,800 | ' | ' | ' | ' | ' | 90,000 | ' | ' | ' | ' |
Non-Mesothelioma Pending Claims | ' | ' | 1,900 | ' | 1,900 | 1,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum Number Of Mesothelioma Claims | ' | ' | 4,000 | ' | 4,000 | 4,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of claims resolved | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,300 | ' | ' | ' |
Number of claims dismissed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,700 | ' | ' | ' |
Number of claimants not responded to questionnaire | ' | ' | 500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of claimants acknowledging that they do not have Mesothelioma | ' | ' | 1,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of claimants asserting Mesothelioma claims | ' | ' | 3,300 | ' | 3,300 | 3,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of additional appeals pending from adverse decisions | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of additional appeals pending from adverse decisions | ' | ' | 2,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of verdict overturned by court | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of verdicts upheld by court | ' | 700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of insurance coverage available | ' | ' | 121,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Insurance recoveries | ' | ' | 20,800,000 | ' | 74,000,000 | ' | ' | ' | ' | ' | ' | ' | 7,200,000 | ' | ' | ' | ' | ' |
Percentage of insurance coverage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 99.00% | 1.00% | ' | ' | ' | ' | ' | ' |
Portion of insurance coverage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 120,000,000 | 1,100,000 | ' | ' | ' | ' | ' | ' |
Coverage for pre-Petition Date claims | ' | ' | 85,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Insurance coverage under payment schedules | ' | ' | 86,200,000 | ' | 86,200,000 | 86,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future insurance recoveries | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 39,100,000 | ' | ' | ' | ' | ' |
Recorded asbestos liability at the Petition Date | ' | ' | ' | ' | ' | ' | ' | 472,100,000 | ' | ' | ' | ' | 466,800,000 | ' | ' | ' | 466,800,000 | ' |
Estimated cost to resolve claims | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 270,000,000 | ' | ' | ' | ' | ' |
Proposed Settlement | ' | ' | $30,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $70,000,000 | ' | $125,000,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Schedule of Changes in Carrying Amount of Product Warranty Liability (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Movement in Standard Product Warranty Accrual [Roll Forward] | ' | ' |
Balance at beginning of year | $3.80 | $4.10 |
Charges (credits) to expense | -0.3 | 0.8 |
Settlements made (primarily payments) | -0.3 | -0.9 |
Balance at end of period | $3.20 | $4 |
Commitments_and_Contingencies_3
Commitments and Contingencies - Schedule of Future Insurance Proceeds (Detail) (USD $) | Mar. 31, 2014 |
In Millions, unless otherwise specified | |
2014 [Member] | ' |
Product Liability Contingency [Line Items] | ' |
Insurance Recoveries | $20 |
2015 [Member] | ' |
Product Liability Contingency [Line Items] | ' |
Insurance Recoveries | 20 |
2016 [Member] | ' |
Product Liability Contingency [Line Items] | ' |
Insurance Recoveries | 18 |
2017 [Member] | ' |
Product Liability Contingency [Line Items] | ' |
Insurance Recoveries | 13 |
2018 [Member] | ' |
Product Liability Contingency [Line Items] | ' |
Insurance Recoveries | $11 |