Business Segment Information | Business Segment Information We aggregate our operating businesses into three reportable segments. The factors considered in determining our reportable segments are the economic similarity of the businesses, the nature of products sold or services provided, the production processes and the types of customers and distribution methods. Our reportable segments are managed separately based on these differences. Our Sealing Technologies segment designs, manufactures and sells sealing products, including: metallic, non-metallic and composite material gaskets, dynamic seals, compression packing, resilient metal seals, elastomeric seals, custom-engineered mechanical seals for applications in the aerospace industry and other markets, hydraulic components, expansion joints, sanitary gaskets, hoses and fittings for the hygienic process industries, fluid transfer products for the pharmaceutical and biopharmaceutical industries, hole forming products, bellows and bellows assemblies, PTFE products, and heavy-duty commercial vehicle parts used in wheel-end and suspension components. These products are used in a variety of industries, including chemical and petrochemical processing, pulp and paper processing, power generation, food and pharmaceutical processing, primary metal manufacturing, mining, water and waste treatment, heavy-duty trucking, aerospace, medical, filtration and semiconductor fabrication. In many of these industries, performance and durability are vital for safety and environmental protection. Many of our products are used in highly demanding applications, e.g., where extreme temperatures, extreme pressures, corrosive environments, strict tolerances, and/or worn equipment make product performance difficult. Our Advanced Surface Technologies segment applies proprietary technologies, processes, and capabilities to deliver highly differentiated suites of products and services for the most challenging applications in high growth markets. The segment’s products and services are used in highly demanding environments requiring performance, precision and repeatability, with a low tolerance for failure. The segment’s services include cleaning, coating, testing, refurbishment and verification services for critical components and assemblies used in state-of-the-art advanced node semiconductor manufacturing equipment. It designs, manufactures and sells specialized optical filters and thin-film coatings for the most challenging applications in the industrial technology, life sciences, and semiconductor markets and complex front-end wafer processing sub-systems, new and refurbished electrostatic chuck pedestals, thin film coatings, and edge-welded metal bellows for the semiconductor equipment industry and for critical applications in the space, aerospace and defense markets. Our Engineered Materials segment includes operations that design, manufacture and sell self-lubricating, non-rolling metal-polymer, engineered plastics, and fiber reinforced composite bearing products, precision engineered components and lubrication systems for reciprocating compressors and engines, critical service flange gaskets, seals and electrical flange isolation kits used in high-pressure wellhead equipment, flow lines, water injection lines, sour hydrocarbon process applications, and crude oil and natural gas pipeline/transmission line applications. These products are used in a wide range of applications, including the automotive, aerospace, pharmaceutical, pulp and paper, natural gas, health, power generation, machine tools, air treatment, refining, petrochemical and general industrial markets. We measure operating performance based on segment earnings before interest, income taxes, depreciation, amortization, and other selected items ("Adjusted Segment EBITDA"), which is segment revenue reduced by operating expenses and other costs identifiable with the segment, excluding acquisition and divestiture expenses, restructuring costs, impairment charges, non-controlling interest compensation, amortization of the fair value adjustment to acquisition date inventory, and depreciation and amortization. Adjusted Segment EBITDA is not defined under GAAP and may not be comparable to similarly-titled measures used by other companies. 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, and income taxes are not included in the computation of Adjusted Segment EBITDA. The accounting policies of the reportable segments are the same as those for EnPro. Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa being subject to reduction for certain types of employment terminations of the sellers. This expense is recorded in selling, general, and administrative expenses on our Consolidated Statements of Operations and is directly related to the terms of the acquisitions. This expense will continue to be recognized as compensation expense over the term of the put and call options associated with the acquisitions unless certain employment terminations have occurred. Segment operating results and other financial data for the quarters and nine months ended September 30, 2021 and 2020 were as follows: Quarters Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Sales Sealing Technologies $ 146.9 $ 157.8 $ 455.9 $ 482.0 Advanced Surface Technologies 64.3 44.6 178.2 121.3 Engineered Materials 73.8 67.7 234.2 201.4 285.0 270.1 868.3 804.7 Intersegment sales (1.9) (1.8) (7.3) (6.7) Total sales $ 283.1 $ 268.3 $ 861.0 $ 798.0 Adjusted Segment EBITDA Sealing Technologies $ 34.5 $ 32.0 $ 110.8 $ 96.1 Advanced Surface Technologies 19.4 13.4 52.3 31.7 Engineered Materials 8.8 7.9 34.4 21.1 $ 62.7 $ 53.3 $ 197.5 $ 148.9 Reconciliation of Adjusted Segment EBITDA to income (loss) from continuing operations before income taxes Adjusted Segment EBITDA $ 62.7 $ 53.3 $ 197.5 $ 148.9 Acquisition and divestiture expenses (0.3) (1.3) (0.4) (2.6) Non-controlling interest compensation allocation (1.3) (0.5) (4.1) (1.6) Amortization of fair value adjustment to acquisition date inventory (1.0) — (5.8) — Restructuring and impairment expense (0.7) (5.0) (5.2) (23.9) Depreciation and amortization expense (18.3) (17.0) (55.6) (51.5) Corporate expenses (11.6) (11.7) (36.0) (27.3) Interest expense, net (2.6) (3.9) (10.2) (11.4) Other income (expense), net 15.8 (42.5) 15.8 (42.7) Income (loss) from continuing operations before income taxes $ 42.7 $ (28.6) $ 96.0 $ (12.1) Segment assets are as follows: September 30, December 31, (in millions) Sealing Technologies $ 713.1 $ 741.9 Advanced Surface Technologies 758.5 768.2 Engineered Materials 250.5 245.8 Corporate 430.6 327.7 $ 2,152.7 $ 2,083.6 Backlog As of September 30, 2021, the aggregate amount of transaction price of remaining performance obligations, or backlog, on a consolidated basis was $298.3 million. Approximately 96% of these obligations are expected to be satisfied within one year. There is no certainty these orders will result in actual sales at the times or in the amounts ordered. In addition, for most of our business, this total is not particularly predictive of future performance because of our short lead times and some seasonality. Revenue by End Market Due to the diversified nature of our business and the wide array of products that we offer, we sell into a number of end markets. Underlying economic conditions within these markets are a major driver of our segments' sales performance. Below is a summary of our third-party sales by major end market with which we did business for the quarters and nine months ended September 30, 2021 and 2020: Quarter Ended September 30, 2021 (in millions) Sealing Technologies Advanced Surface Technologies Engineered Materials Total Aerospace $ 8.4 $ 2.6 $ 1.6 $ 12.6 Automotive 0.6 0.2 13.4 14.2 Chemical and material processing 17.5 — 11.2 28.7 Food and pharmaceutical 16.8 — 0.3 17.1 General industrial 40.9 7.2 27.2 75.3 Medium-duty/heavy-duty truck 43.2 — 2.1 45.3 Oil and gas 4.6 1.0 16.3 21.9 Power generation 8.4 0.1 0.8 9.3 Semiconductors 3.3 52.5 — 55.8 Other 1.8 0.6 0.5 2.9 Total third-party sales $ 145.5 $ 64.2 $ 73.4 $ 283.1 Quarter Ended September 30, 2020 (in millions) Sealing Technologies Advanced Surface Technologies Engineered Materials Total Aerospace $ 10.3 $ 1.7 $ 0.9 $ 12.9 Automotive 0.4 — 14.1 14.5 Chemical and material processing 9.3 — 11.0 20.3 Food and pharmaceutical 12.7 — 0.4 13.1 General industrial 38.6 — 20.3 58.9 Medium-duty/heavy-duty truck 66.0 — 1.4 67.4 Oil and gas 5.2 0.3 17.0 22.5 Power generation 9.5 — 2.3 11.8 Semiconductors 3.5 42.5 — 46.0 Other 0.8 — 0.1 0.9 Total third-party sales $ 156.3 $ 44.5 $ 67.5 $ 268.3 Nine Months Ended September 30, 2021 (in millions) Sealing Technologies Advanced Surface Technologies Engineered Materials Total Aerospace $ 23.4 $ 7.1 $ 4.4 $ 34.9 Automotive 1.6 0.7 48.4 50.7 Chemical and material processing 54.1 — 33.1 87.2 Food and pharmaceutical 49.8 — 1.1 50.9 General industrial 128.5 19.4 88.0 235.9 Medium-duty/heavy-duty truck 129.7 — 7.6 137.3 Oil and gas 14.2 3.4 47.0 64.6 Power generation 29.1 0.1 2.6 31.8 Semiconductors 13.4 145.3 — 158.7 Other 5.9 2.0 1.1 9.0 Total third-party sales $ 449.7 $ 178.0 $ 233.3 $ 861.0 Nine Months Ended September 30, 2020 (in millions) Sealing Technologies Advanced Surface Technologies Engineered Materials Total Aerospace $ 31.1 $ 5.9 $ 4.4 $ 41.4 Automotive 0.8 — 38.2 39.0 Chemical and material processing 35.0 — 32.7 67.7 Food and pharmaceutical 37.5 — 1.2 38.7 General industrial 121.3 — 64.3 185.6 Medium-duty/heavy-duty truck 188.9 — 4.7 193.6 Oil and gas 17.2 1.8 49.3 68.3 Power generation 30.5 — 5.7 36.2 Semiconductors 10.6 113.5 — 124.1 Other 3.2 — 0.2 3.4 Total third-party sales $ 476.1 $ 121.2 $ 200.7 $ 798.0 In 2021, we refined the end market classification of certain sales in the Engineered Materials segment for the quarter and nine months ended September 30, 2020. This refinement resulted in a reduction in sales reported for the quarter ended September 30, 2020 in the automotive and power generation markets of approximately $2.6 million and $3.2 million, respectively, with an offsetting increase in the general industrial, and medium duty/heavy duty truck markets of approximately, $4.4 million, and $1.4 million, respectively. For the nine months ended September 30, 2020, this refinement resulted in a reduction to the automotive and power generation markets of approximately $6.3 million and $8.6 million, respectively, and an |