ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management’s discussion and analysis of certain significant factors that have affected our consolidated financial condition and operating results during the periods included in the accompanying audited Consolidated Financial Statements and the related notes. You should read the following discussion in conjunction with our audited Consolidated Financial Statements and the related notes, included elsewhere in this annual report.
Forward-Looking Statements
This report contains certain statements that are “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995 (the “Act”) and releases issued by the SEC. The words “may,” “hope,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” and other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters identify forward-looking statements. We believe that it is important to communicate our future expectations to our shareholders, and we therefore make forward-looking statements in reliance upon the safe harbor provisions of the Act. However, there may be events in the future that we are not able to accurately predict or control, and our actual results may differ materially from the expectations we describe in our forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: the risks and uncertainties set forth in Item 1A of this annual report, entitled “Risk Factors” and in this Management's Discussion and Analysis of Financial Condition and Results of Operations. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by law. Whenever you read or hear any subsequent written or oral forward-looking statements attributed to us or any person acting on our behalf, you should keep in mind the cautionary statements contained or referred to in this section.
Non-GAAP Financial Information
In our discussion of our outlook and results of operations, we utilize financial measures that have not been prepared in conformity with generally accepted accounting principles in the United States ("GAAP"). They include adjusted income from continuing operations attributable to Enpro Inc., adjusted diluted earnings per share attributable to Enpro Inc. continuing operations, adjusted earnings before interest, taxes, depreciation, and amortization ("adjusted EBITDA"), and total adjusted segment EBITDA. Tables showing the reconciliation of these non-GAAP financial measures, other than total adjusted segment EBITDA, to the comparable GAAP measures are included in "— Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Measures ," while the reconciliation of total adjusted segment EBITDA is included in "— Results of Operations ."
We believe non-GAAP metrics are commonly used financial measures for investors to evaluate our operating performance and, when read in conjunction with our consolidated financial statements, present a useful tool to evaluate our ongoing operations and performance from period to period. In addition, these non-GAAP measures are some of the factors we use in internal evaluations of the overall performance of our businesses. We acknowledge that there are many items that impact our reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results. In addition, the non-GAAP measures we use are not necessarily comparable to similarly titled measures used by other companies.
Overview
Overview . Enpro is a leading-edge industrial technology company focused on critical applications across a diverse group of growing end markets such as semiconductor, industrial process, commercial vehicle, sustainable power generation, aerospace, food and pharmaceuticals, photonics, and life sciences. We have 15 primary manufacturing and service facilities located in 8 countries, including the United States. Enpro is a leader in applied engineering and designs, develops, manufactures, and markets proprietary, value-added products and solutions that safeguard a variety of critical environments.
Over the past several years, we have executed several strategic initiatives to focus the portfolio of businesses where we offer proprietary, industrial technology-related products and solutions with high barriers to entry, compelling margins, strong cash flow, and perpetual recurring/aftermarket revenue in markets with favorable secular tailwinds.
We manage our business as two segments: a Sealing Technologies segment and an Advanced Surface Technologies segment.
Our Sealing Technologies segment engineers and manufactures value-added products and solutions that safeguard a variety of critical environments, including: metallic, non-metallic and composite material gaskets; dynamic seals; compression packing; elastomeric components; custom-engineered mechanical seals used in diverse applications; hydraulic components; test, measurement and sensing applications; sanitary gaskets; hoses and fittings for hygienic process industries; fluid transfer products for the pharmaceutical and biopharmaceutical industries; and commercial vehicle solutions used in wheel-end and suspension components that customers rely upon to ensure safety on our roadways.
These products are used in a variety of markets, including chemical and petrochemical processing, nuclear energy, hydrogen, natural gas, food and biopharmaceutical processing, primary metal manufacturing, mining, water and waste treatment, commercial vehicle, aerospace (including commercial space), medical, filtration and semiconductor fabrication. In all these industries, the performance and durability of our proprietary products and solutions are vital for the safety and environmental protection of our customers’ processes. Many of our products and solutions are used in highly demanding applications, often in harsh environments, where the cost of failure is extremely high relative to the cost of our offerings to our customers. These environments include those where extreme temperatures, extreme pressures, corrosive agents, strict tolerances, or worn equipment create challenges for product performance. Sealing Technologies offers customers widely recognized applied engineering, innovation, process know- how and enduring reliability, driving a lasting aftermarket for many of our products and solutions.
Our Advanced Surface Technologies (AST) segment applies proprietary technologies, processes, and capabilities to deliver a highly differentiated suite of products and solutions for challenging applications in high-growth markets. The segment’s products and solutions are used in demanding environments requiring performance, precision and repeatability, with a low tolerance for failure. AST’s products and solutions capabilities include: (i) engineering, manufacturing and precision machining of complex front-end wafer processing sub-systems, including critical components used in and around semiconductor process chambers that enable the manufacture of leading-edge chips, as well as edge-welded bellows that support critical applications in the space, aerospace and defense markets; (ii) cleaning, testing, refurbishment and verification for critical components and assemblies used in semiconductor manufacturing equipment, with meaningful exposures to state-of-the-art advanced node chip applications; and (iii) coatings for critical components and assemblies for semiconductor manufacturing equipment, and designing, manufacturing and selling specialized optical filters and proprietary thin-film coatings for the most applications in the industrial technology, life sciences, and semiconductor markets. In many instances, AST capabilities drive products and solutions that the performance of our customers’ high-value processes through an entire life cycle.
Acquisitions
On October 8, 2025, Enpro acquired Overlook, which is headquartered in Easthampton, Massachusetts. Overlook specializes in the design and fabrication of single-use technologies and other critical componentry for biopharmaceutical production processes.
On November 14, 2025, we acquired AlpHa. AlpHa is a Houston, Texas-based leading provider of liquid analytical sensing technologies and instrumentation for the measurement of key parameters for liquid processes. AlpHa serves customers across a diverse set of end-markets, including industrial process control, water and wastewater, laboratory, and environmental monitoring.
We paid $273.9 million, net of cash acquired, for the two acquisitions completed in the fourth quarter of 2025. We have funded these acquisitions with available cash on hand in the United States and borrowings under our revolving credit facility. In connection with the acquisitions of these businesses, there were $7.4 million of acquisition-related costs incurred during the year ended December 31, 2025 which are included in selling, general, and administrative expense in the accompanying Consolidated Statements of Operations. The post-acquisition results of Overlook and AlpHa are reflected within the Sealing Technologies segment.
On January 29, 2024, Enpro acquired all of the equity securities of AMI for $209.4 million, net of cash acquired. In connection with the acquisition of AMI, there were $3.9 million of acquisition-related costs incurred during the year ended
December 31, 2024 and included in selling, general, and administrative expense in the accompanying Consolidated Statements of Operations.
AMI is a leading provider of highly-engineered, application-specific analyzers and sensing technologies that monitor critical parameters to maintain infrastructure integrity, enable process efficiency, enhance safety, and facilitate the clean energy transition. AMI is included within the Sealing Technologies segment.
Based in Costa Mesa, California, AMI serves customers in the midstream natural gas, biogas, industrial processing, cryogenics, food processing, laboratory wastewater and aerospace markets. AMI offers a portfolio of oxygen, hydrogen, sulfide and moisture analyzers and proprietary sensing capabilities that detect contaminants in a variety of processes, including natural gas and biogas streams, which enable operators to avoid flaring and, thereby, reduce CO2 emissions.
Acquisitions of redeemable non-controlling interests
In connection with our acquisition of Alluxa in October 2020, the Alluxa Executives received rollover equity interests in the form of approximately 7% of the total equity interest the Alluxa Acquisition Subsidiary, which we formed for the purpose of acquiring Alluxa. The Alluxa LLC Agreement entered into with the completion of the transaction, included the Put and Call Rights, under which each Alluxa Executive had the right to sell to us, and we had the right to purchase from each Alluxa Executive, one-third of the Alluxa Executive equity interests in the Alluxa Acquisition Subsidiary during each of three exercise periods in 2024, 2025 and 2026, with any amount not sold or purchased in a prior exercise period being carried forward to the subsequent exercise periods. In January 2024, we agreed with the Alluxa Executives to change the terms of the Put and Call Rights so that all outstanding equity interests could be acquired in 2024. In February of 2024, we acquired all outstanding equity interests in the Alluxa Acquisition Subsidiary for $17.9 million, which was the minimum fixed price set in the Alluxa LLC Agreement. As this transaction was for the acquisition of all remaining shares of a consolidated subsidiary with no change in control, it was recorded within shareholder's equity and as a financing cash flow in the Consolidated Statement of Cash Flows. As a result of the acquisition of these equity interests, Enpro became the sole owner of Alluxa.
Discontinued Operations
During the third quarter of 2022, we entered into an agreement to sell our GGB business and announced our intention to sell Garlock Pipeline Technologies, Inc. ("GPT"). These businesses comprised our remaining Engineered Materials segment ("Engineered Materials"). As a result of classifying the GGB and GPT businesses as held for sale in the third quarter of 2022, we determined Engineered Materials to be a discontinued operation.
On January 30, 2023, we completed the sale of GPT. In 2023, we received $28.9 million, net of transaction fees and cash sold, resulting in a pretax gain of $14.6 million recognized in the first quarter of 2023.
The sale of GGB to The Timken Company closed on November 4, 2022. We received $298.2 million, net of transaction fees and cash sold, including $3.1 million of payments made in Q1 of 2023.
Unless otherwise indicated, amounts presented in Management's Discussion and Analysis of Financial Condition and Results of Operations pertain to continuing operations only (see Note 20 to our Consolidated Financial Statements in this Form 10-K for information on discontinued operations and the related disposition of those operations)
Global Sales
Please refer to Item 1, "Business-Background" for information with respect to our sales by geographic region in 2025, 2024 and 2023.
Highlights
Financial highlights for the years ended December 31, 2025, 2024 and 2023 are as follows:
(in millions, except per share data)
Net sales
Income from continuing operations attributable to Enpro Inc.
Net income attributable to Enpro Inc.
Diluted earnings per share from continuing operations attributable to Enpro Inc.
Adjusted income from continuing operations attributable to Enpro Inc. 1
Adjusted diluted earnings per share attributable to Enpro Inc. continuing operations 1
Adjusted Segment EBITDA 2
Adjusted EBITDA 1
1 Reconciliation of these non-GAAP measures to their respective GAAP measure are located in "— Reconciliation of Non-GAAP Financial Measure to the Comparable GAAP Measure " at the end of this section.
2 Reconciliation of these non-GAAP measures to their respective GAAP measure are located in " — Results of Operations ".
Results of Operations
Years Ended December 31,
(in millions)
Sales
Sealing Technologies
Advanced Surface Technologies
Intersegment sales
Total sales
Income from continuing operations attributable to Enpro Inc.
Adjusted Segment EBITDA
Sealing Technologies
Advanced Surface Technologies
Total Adjusted Segment EBITDA
Reconciliations of Income from continuing operations attributable to Enpro Inc. to Adjusted Segment EBITDA
Income from continuing operations attributable to Enpro Inc.
Plus: net loss attributable to redeemable non-controlling interests
Income from continuing operations
Income tax expense
Income from continuing operations before income taxes
Acquisition and divestiture expenses
Non-controlling interest compensation allocation
Amortization of the fair value adjustment to acquisition date inventory
Restructuring and impairment expense, net
Depreciation and amortization expense
Corporate expenses
Interest expense, net
Goodwill impairment
Loss on pension settlement
Other expense, net
Adjusted Segment EBITDA
We measure operating performance of our reportable segments based on segment earnings before interest, income taxes, depreciation, amortization, and other selected items ("Adjusted Segment EBITDA" or "Segment AEBITDA"), which is segment revenue reduced by operating expenses and other costs identifiable with the segment, excluding acquisition and disposition expenses, non-controlling interest compensation allocation, restructuring and impairment expense, net of gains on restructuring-related sales of assets, amortization of the fair value adjustment to acquisition date inventory, and depreciation and amortization expense. 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. Segment non-operating expenses and income, corporate expenses, net interest expense, goodwill impairment, loss on pension settlement 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.
Restructuring and impairment expense, net in the table above for the year ended December 31, 2025, includes income related to gains on the sale of fixed assets as a result of restructuring actions.
Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisition of Alluxa that was subject to reduction for certain types of employment terminations of the Alluxa Executives. This expense was recorded in selling, general, and administrative expenses on our Consolidated Statements of Operations and is directly related to the terms of the acquisition. We acquired all of the Alluxa non-controlling interests in the first quarter of 2024.
Other expense, net in the table above represents other expense (non-operating) on our Consolidated Statements of Operations for the respective periods presented.
2025 Compared to 2024
Sales of $1,143.3 million in 2025 increased 9.0% from $1,048.7 million in 2024. The following table summarizes the impact of acquisitions and foreign currency on sales by segment:
Sales
Percent Change 2025 vs. 2024
increase/(decrease)
Organic
Acquisition
Foreign Currency
Total
Enpro Inc.
Sealing Technologies
Advanced Surface Technologies
Following is a discussion of operating results for each segment during 2025 compared to 2024:
Sealing Technologies . Sales of $732.4 million in 2025 reflect a 6.6% increase compared to $687.2 million in 2024. Excluding the favorable foreign exchange translation ($3.4 million) and the sales from recent acquisitions ($11.1 million), sales were up 4.5% or $30.7 million. By end market, we saw strong demand in aerospace, oil and gas, and food and biopharmaceuticals, as well as firm domestic demand in general industrial markets, offset in part by continued weakness in commercial vehicle OEM demand in North America and slow industrial markets internationally. Overall, higher volumes and strategic pricing initiatives equally contributed to sales growth for the year.
Segment AEBITDA of $240.7 million in 2025 increased 7.4% from $224.1 million in 2024. Segment AEBITDA margin increased from 32.6% in 2024 to 32.9% in 2025. Excluding the favorable foreign exchange translation ($0.6 million) and the contribution from recently acquired businesses ($3.5 million), Adjusted Segment EBITDA increased 5.6%, or $12.5 million. The increase in Segment AEBITDA was driven primarily by the the volume and strategic pricing initiatives ($28.8 million), partially offset by material costs and mix headwinds ($3.8 million), unfavorable transactional F/X ($3.7 million) and higher selling, general, and administrative costs ($4.1 million) supporting growth initiatives, and increased payroll and benefits expenses.
Advanced Surface Technologies . Sales of $411.6 million in 2025 reflect a 13.6% increase compared to $362.2 million in 2024. Solutions serving leading-edge applications and some improvement in overall semiconductor capital equipment demand, amidst a choppy demand environment, drove the improvement.
Segment AEBITDA of $83.9 million in 2025 increased 9.2% from $76.7 million in 2024. Segment AEBITDA margin narrowed slightly from 21.2% in 2024 to 20.4% in 2025. The $7.1 million increase in segment AEBITDA was driven by higher volume ($28.4 million) partially offset by labor and benefits expenses ($11.3 million), largely in support of growth initiatives, material costs and mix headwinds ($6.6 million), unfavorable transactional foreign exchange ($2.0 million), and other expenses, including freight and incentives ($2.7 million).
Corporate expenses for 2025 increased $1.4 million as compared to 2024. The increase was driven primarily by increased medical costs offset in part by a decrease in share-price-based long-term incentive compensation expenses and lower professional fees.
Interest expense, net in 2025 decreased by $6.3 million as compared to 2024 primarily driven by lower average outstanding debt, as well as lower interest rates on variable rate debt.
Other expense, net in 2025 decreased by $4.8 million as compared to 2024, primarily due to the 2025 recovery of a reserve taken in 2024 on a long-term promissory note that was received in partial consideration for the sale of a non-strategic business in 2020 ($9.0 million) and decreased foreign exchange losses related to an intercompany note denominated in Euros which settled in the first quarter of 2025 ($1.3 million), offset in part by higher non-service pension related costs ($2.5 million),
a loss incurred on the extinguishment of debt ($1.7 million), and increased costs related to previously divested businesses ($0.9 million).
In the second quarter of 2024, Enpro initiated a plan to terminate and settle its remaining defined benefit pension plan in the United States. The termination and settlement process for this frozen plan, which preserves retirement benefits due to participants but changes the ultimate payor of such benefits, was substantially completed in the fourth quarter of 2025.
As a result of the plan termination, Enpro recorded a pretax, noncash settlement loss of $67.2 million in other nonoperating expense in our consolidated statement of operations in the fourth quarter of 2025. The loss was driven primarily by the recognition of actuarial losses previously deferred in accumulated other comprehensive income on our consolidated balance sheet.
Income tax expense from continuing operations was $17.1 million in 2025 and $21.5 million in 2024. The effective tax rates for 2025 and 2024 were 29.6% and 22.8% respectively. The effective tax rate for 2025 is higher than the U.S. federal tax rate primarily due to higher tax rates in most foreign jurisdictions, partially offset by the favorable impact of tax credits. The effect of these items resulted in a net 6.3% increase in our effective tax rate from the U.S. federal statutory tax rate, or $3.7 million additional income tax expense. In 2025 we had a decrease in tax expense relative to 2024, primarily driven by lower pre-tax income principally due to the pension plan settlement loss.
Income from continuing operations attributable to Enpro Inc. was $40.5 million, or $1.92 per share, in 2025 compared to income from continuing operations attributable to Enpro Inc. of $72.9 million, or $3.48 per share, in 2024.
2024 Compared to 2023
For a comparison of our results of operations for the years ended December 31, 2024 to December 31, 2023, see "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 21, 2025.
Restructuring and Other Costs
We incurred $2.5 million, $6.2 million and $5.0 million of restructuring and impairment costs during the years ended December 31, 2025, 2024 and 2023, respectively. In 2023, we incurred a goodwill impairment charge of $60.8 million related to the Alluxa reporting unit.
Of the restructuring and impairment costs incurred in 2025, 2024 and 2023, we incurred $2.5 million, $2.8 million and $4.3 million, respectively, of restructuring costs related to the reorganization of sites and functions, primarily in the United States and $3.4 million, and $0.7 million, in 2024 and 2023, respectively, of non-cash impairment charges of long-lived assets. Workforce reductions associated with our restructuring activities in 2025, 2024, and 2023 totaled 35, 77, and 72 administrative and manufacturing positions, respectively.
Please see the " Overview " section of Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 3 to our consolidated financial statements for further information.
Liquidity and Capital Resources
Cash requirements for, but not limited to, working capital, capital expenditures, acquisitions, and debt repayments have been funded from cash balances on hand, revolver borrowings and cash generated from operations. We are proactively pursuing acquisition opportunities. Should we need additional capital, we have resources available, which are discussed in this section under the heading “Capital Resources.”
As of December 31, 2025, we held $16.6 million of cash and cash equivalents in the United States and $101.5 million of cash and highly liquid short-term investments outside of the United States. If the funds held outside the United States were needed for our operations in the U.S., we have several methods to repatriate such funds without significant adverse tax effects, including repayment of intercompany loans, distributions subject to a 100 percent dividends-received deduction for income tax purposes, or distributions of previously-taxed earnings.
Because of the transition tax, GILTI, and Subpart F provisions, undistributed earnings of our foreign subsidiaries have already been subjected to U.S. income tax or are eligible for the 100 percent dividends-received deduction under Section 245A of the Internal Revenue Code ("IRC"). We do not intend to distribute foreign earnings that will be subject to any significant incremental U.S. or foreign tax. During 2025, we repatriated $306.2 million of earnings from our foreign subsidiaries, resulting in only $0.4 million of withholding taxes. We have determined that estimating any tax liability on our investment in foreign
subsidiaries is not practicable. Therefore, we have not recorded any deferred tax liability on undistributed earnings of foreign subsidiaries.
Cash Flows
Operating activities of continuing operations provided cash in the amount of $201.2 million, $162.9 million and $208.4 million in 2025, 2024 and 2023, respectively. The increase in operating cash flows in 2025 versus 2024 was primarily attributable to the increase in revenue and operating income and lower net cash payments for interest. The decrease in operating cash flows in 2024 versus 2023 was primarily attributable the decline in revenue, timing of working capital, and payments related to short-term operating liabilities, as well as $18.9 million of additional tax payments made in 2024.
Investing activities of continuing operations used $316.9 million,$241.5 million , and $7.4 million of cash in 2025, 2024, and 2023. Investing activities in 2025 used cash primarily for the acquisitions of Overlook and AlpHa ($273.9 million) and investments in property, plant, and equipment ($42.0 million). Investing activities in 2024 used cash primarily for the acquisition of AMI ($209.4 million) and investments in property, plant, and equipment ($29.1 million). Investing activities in 2023 used cash primarily for investments in property, plant, and equipment ($33.9 million), partially offset by proceeds of the sale of businesses, principally the sale of GPT ($25.9 million).
Financing activities of continuing operations used $17.4 million in cash in 2025, as $26.2 million of dividend payments were offset in part by the proceeds from the issuance of our $450 million senior notes and from borrowings on our revolving credit facility net of repayments of our previously outstanding $350 million senior notes and of our term loan facility. See below for further details. Financing activities of continuing operations used $50.5 million in 2024 primarily attributable to the acquisition of non-controlling interests, primarily for the acquisition of the Alluxa non-controlling interests ($18.3 million), net repayments of debt ($8.1 million) and dividend payments ($25.3 million). Financing activities used $170.9 million in 2023, primarily attributable to payments on our term loan facilities in place during that year ($144.9 million), and by dividend payments ($24.3 million).
Capital Resources
Senior Secured Credit Facilities. On April 9, 2025, we entered into a Second Amendment to Third Amended and Restated Credit Agreement dated as of April 9, 2025 (the “Amended Credit Facility Agreement”) among the Company and our subsidiary, EnPro Holdings, Inc. ("EnPro Holdings"), as borrowers, certain foreign subsidiaries of the Company from time to time party thereto, as designated borrowers, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. The Amended Credit Facility Agreement amended the agreement then governing our senior secured credit facilities and provides for a senior secured revolving credit facility of up to $800.0 million (the “Revolving Credit Facility”), which will mature on April 9, 2030. On April 9, 2025, in connection with our entry into the Amended Credit Facility Agreement, we repaid the remaining outstanding principal amount of term loan borrowings outstanding under the agreement governing our senior secured credit facilities prior to such amendment, funded by borrowings under the Revolving Credit Facility and $59.8 million of available cash.
The Amended Credit Facility Agreement provides that we may seek incremental term loans and/or additional revolving credit commitments in an amount equal to the greater of $275.0 million and 100% of consolidated EBITDA for the most recently ended four-quarter period for which we have reported financial results, plus additional amounts based on a consolidated senior secured leverage ratio. Any incremental term loans will be subject to prepayment with the net cash proceeds of non-permitted debt issuances and with the net cash proceeds of certain asset sales and casualty or condemnation events not reinvested in our business or applied to prepay such term loans within a specified period. Borrowings under the Revolving Credit Facility, at our option, bear interest at either (1) an alternate base rate (the highest of (a) the federal funds effective rate plus 0.50%, (b) the prime rate of Bank of America, N.A., and (c) the one-month Term SOFR rate plus 1.00%) or (2) the Term SOFR rate for the applicable interest period plus, in each case, an applicable margin percentage, which initially is 1.375% for Term SOFR borrowings and 0.375% for alternate base rate borrowings and is subject to incremental increase or decrease based on a consolidated total net leverage ratio. In addition, a commitment fee accrues with respect to the unused amount of the Revolving Credit Facility at an annual rate of 0.175% initially, which rate is also subject to incremental increase or decrease based on a consolidated total net leverage ratio.
Enpro Inc. and EnPro Holdings are the permitted borrowers under the Amended Credit Facility Agreement. We have the ability to add wholly owned foreign subsidiaries as borrowers under the Revolving Credit Facility. Each of our domestic, consolidated subsidiaries (subject to certain exclusions) is required to guarantee the obligations of the borrowers under the Amended Credit Facility Agreement and, subject to the permitted exceptions, each of the Company’s existing domestic subsidiaries has entered into the Amended Credit Facility Agreement to provide such a guarantee.
Collateral. Borrowings under the Amended Credit Facility Agreement are secured by a first priority pledge of the following assets:
• 100% of the capital stock of each domestic, consolidated subsidiary of Enpro Inc.;
• 65% of the capital stock of any first tier foreign subsidiary of Enpro Inc. and its domestic subsidiaries (subject to certain exclusions); and
• substantially all of the assets (including, without limitation, machinery and equipment, inventory and other goods, accounts receivable, bank accounts, general intangibles, financial assets, investment property, license rights, patents, trademarks, trade names, copyrights, chattel paper, insurance proceeds, contract rights, hedge agreements, documents, instruments, indemnification rights, tax refunds and cash, but excluding real estate interests) of Enpro Inc. and the subsidiary guarantors.
Financial Covenants. The Amended Credit Facility Agreement contains certain financial covenants and required financial ratios, including:
• a maximum consolidated total net leverage ratio of not more than 4.0 to 1.0 (with total debt, for the purposes of such ratio, to be net of unrestricted cash of Enpro Inc. and its consolidated subsidiaries), which ratio may be increased (up to three times) at the borrowers’ option to not more than 4.5 to 1.0 for the four-quarter period following a significant acquisition; and
• a minimum consolidated interest coverage ratio of at least 2.5 to 1.0.
Affirmative and Negative Covenants . The Amended Credit Facility Agreement contains affirmative and negative covenants (subject, in each case, to customary exceptions and qualifications), including covenants that limit our ability to, among other things:
• grant liens on our assets;
• incur additional indebtedness (including guarantees and other contingent obligations);
• make certain investments (including loans and advances);
• merge or make other fundamental changes;
• sell or otherwise dispose of property or assets;
• pay dividends and other distributions and prepay certain indebtedness;
• make changes in the nature of our business;
• enter into transactions with our affiliates;
• enter into burdensome contracts; and
• modify or terminate documents related to certain indebtedness.
Events of Default . The Amended Credit Facility Agreement contains events of default including, but not limited to, nonpayment of principal or interest, violation of covenants, breaches of representations and warranties, cross-default to other debt, bankruptcy and other insolvency events, material judgments, certain ERISA events, actual or asserted invalidity of loan documentation, certain changes of control of Enpro Inc. and the invalidity of subordination provisions of subordinated indebtedness.
We were in compliance with all covenants of the Amended Credit Agreement as of December 31, 2025. The borrowing availability under our Revolving Credit Facility at December 31, 2025 was $580.6 million after giving consideration to $9.4 million of outstanding letters of credit and $210.0 million of outstanding borrowings.
Senior Notes. On May 29, 2025, we completed the offering of $450 million in aggregate principal amount of our 6.125% Senior Notes due 2033 (the “Senior Notes”). The Senior Notes were issued to investors at 100% of the principal amount thereof. The Senior Notes are unsecured, unsubordinated obligations of Enpro Inc. and mature on June 1, 2033. Interest on the Senior Notes accrues at a rate of 6.125% per annum and is payable semi-annually in cash in arrears on June 1 and December 1 of each year, commencing December 1, 2025. The Senior Notes are required to be guaranteed on a senior unsecured basis by
each of Enpro’s existing and future direct and indirect domestic subsidiaries that is a borrower under, or guarantees, our indebtedness under the Revolving Credit Facility or guarantees any other Capital Markets Indebtedness (as defined in the indenture governing the Senior Notes) of Enpro or any of the guarantors above a specified threshold. We may, on any one or more occasions, redeem all or a part of the Senior Notes at specified redemption prices plus accrued and unpaid interest.
The indenture governing the Senior Notes includes covenants that restrict our ability, subject to specified exceptions and qualifications set forth in the indenture, to incur liens on assets, engage in certain asset sales, including sale and leaseback transactions, and merge, consolidate, transfer or dispose of all or substantially all assets. The indenture further requires us to offer to repurchase the Senior Notes at a price equal to 100.0% of the principal amount thereof plus accrued and unpaid interest, in the event that the net cash proceeds of certain asset sales are not reinvested in acquisitions, capital expenditures, or used to repay or otherwise reduce specified indebtedness within a specified period, to the extent the remaining net proceeds exceed a specified amount.
Each holder of the Senior Notes may require us to repurchase some or all of the Senior Notes held by such holder for cash upon the occurrence of a defined “change of control” event. Our ability to redeem the Senior Notes prior to maturity is subject to certain conditions, including in certain cases the payment of make-whole amounts.
We applied a portion of the net proceeds from the sale of the Senior Notes to fund the redemption on June 12, 2025 of all of our outstanding 5.75% Senior Notes due 2026 (having an aggregate principal amount of $350 million) at a redemption price equal to 100% of the aggregate principal amount thereof, plus accrued but unpaid interest to, but not including, the redemption date.
Contractual Obligations
A summary of our contractual obligations and commitments at December 31, 2025 is as follows:
Payments Due by Period (in millions)
Total
Less than
1 Year
Years
Years
More than
5 Years
Long-term debt
Interest on debt
Operating leases
Environmental liabilities
Total
The payments for long-term debt shown in the table above reflect the contractual principal amount for the Senior Notes. In our Consolidated Balance Sheet, these amounts are shown net of an unamortized debt discount of $5.4 million. Additional discussion regarding the Senior Notes and Amended Credit Agreement is included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations in “Liquidity and Capital Resources – Capital Resources,” and in Note 11 , "Debt," to the consolidated financial statements. The interest on debt represents the contractual interest coupon. It does not include the debt discount accretion, which also is a component of interest expense.
The estimated payments of environmental liabilities is based on information currently known to us. However, it is possible that these estimates will vary from actual results and it is possible that these estimates may be updated if new information becomes available in the future or if there are changes in the facts and circumstances related to these liabilities. Additional discussion regarding these liabilities is included earlier in this Management’s Discussion and Analysis of Financial Condition and Results of Operations in “Contingencies – Environmental" and "Contingencies – Crucible Steel Corporation a/k/a Crucible, Inc.,” and in Note 19 , "Commitments and Contingencies," to the consolidated financial statements.
The table does not include obligations under our pension plans, which is included in Note 14 , "Pension," to the consolidated financial statements.
Share Repurchase Program
Enpro’s board of directors approved a two-year share repurchase authorization in October 2024, replacing the previous $50.0 million authorization that expired in October 2024. No shares were purchased under the prior repurchase program. Under the replacement authorization, which, other than the expiration date, is identical to the prior authorization, the Company may repurchase up to $50.0 million of shares in both open market and privately negotiated transactions. The Company’s management is authorized to determine the timing and amount of any such repurchases based on its evaluation of market
conditions, capital alternatives, and other factors. Repurchases may also be made under Rule 10b5-1 plans, which could result in the repurchase of shares during periods when the Company otherwise would be precluded from doing so under insider trading laws.
Dividends
On January 13, 2015, our board of directors adopted a policy under which it intends to declare regular quarterly cash dividends on Enpro’s common stock, with the determination of whether to declare a dividend and the amount being considered each quarter, after taking into account our cash flow, earnings, cash position, financial position and other relevant matters. On February 13, 2025, we announced that our board of directors had increased the quarterly dividend to $0.31 per share, commencing with the dividend to be paid on March 19, 2025 to all shareholders of record as of March 5, 2025. Quarterly dividends paid in 2024 and 2023 were $0.30 and $0.29 per share, respectively. On February 13, 2026 we announced that our board of directors had increased the quarterly dividend to $0.32 per share, commencing with the dividend to be paid on March 18, 2026 to all shareholders of record as of March 5, 2025
Each of the Credit Agreement and the indenture governing the Senior Notes includes covenants restricting the payment of dividends, but includes a basket permitting the payment of cash dividends of up to $50.0 million per year under the Credit Agreement and $60.0 million per year under the indenture governing the Senior Notes. Other baskets may be available under that the agreement governing the Revolving Credit Facility and the indenture governing the Senior Notes to permit the payment of dividends in excess of the respective basket amount.
Critical Accounting Estimates
The preparation of our Consolidated Financial Statements, in accordance with accounting principles generally accepted in the United States, requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures pertaining to contingent assets and liabilities. Note 1 , “Overview, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Guidance,” to the Consolidated Financial Statements describes the significant accounting policies used to prepare the Consolidated Financial Statements and recently issued accounting guidance. On an ongoing basis we evaluate our estimates, including, but not limited to, those related to bad debts, inventories, intangible assets, income taxes, warranty obligations, restructuring, pensions, and contingencies and litigation. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Actual results may differ from our estimates.
We believe the following accounting estimates are the most critical. Some of them involve significant judgments and uncertainties and could potentially result in materially different results under different assumptions and conditions.
Goodwill and Other Intangible Assets
Goodwill represents the excess of the purchase price over the estimated fair value of the net assets of acquired businesses. Goodwill is not amortized, but instead is subject to annual impairment testing that is conducted each calendar year in the fourth quarter. Our annual impairment testing for all of our intangible assets is November 1 of each year.
The goodwill asset impairment test involves comparing the fair value of a reporting unit to its carrying amount. An impairment charge is recognized when the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Interim tests during the year may be required if an event occurs or circumstances change (a "triggering event") that in management's judgment would more likely than not reduce the fair value of a reporting unit below its’ carrying amount.
To estimate the fair value of the four of our five reporting units with goodwill balances remaining, we use both a discounted cash flow and a market valuation approach. The discounted cash flow approach uses cash flow projections and a discount rate to calculate the fair value of each reporting unit while the market approach relies on market multiples of similar companies. The key assumptions used for the discounted cash flow approach include projected revenues and profit margins, projected capital expenditures, changes in working capital, and the discount and tax rates. For the market approach, we select a group of peer companies that we believe are best representative of each reporting unit. We used a 75% weighting for the discounted cash flow valuation approach and a 25% weighting for the market valuation approach, reflecting our belief that the discounted cash flow valuation approach is a better indicator of a reporting unit's value since it reflects the specific cash flows anticipated to be generated in the future by the business.
In the second quarter of 2023, we determined the lower than previously projected actual and forecasted financial performance of our Alluxa reporting unit to be a triggering event for an interim goodwill impairment test. We determined the carrying value of our Alluxa reporting unit to exceed its fair value and, as a result, we impaired the remaining $60.8 million of
goodwill related to Alluxa. Our Consolidated Balance Sheet at December 31, 2025, 2024, and 2023 reflects no goodwill related to Alluxa.
The fair value of our semiconductor reporting unit, included in the Advanced Surface Technologies segment significantly exceeded its carrying value as of November 1, 2025. All annual impairment tests of goodwill for the Semiconductor reporting unit performed during the 3-years ended December 31, 2025 indicated there was no impairment of goodwill for the Semiconductor reporting unit.
The fair value of the three reporting units of our Sealing Technologies segment all exceeded their respective carrying values as of November 1, 2025. All annual impairment tests of goodwill for these reporting units performed during the 3-years ended December 31, 2025 indicated there was no impairment of goodwill for the reporting units.
Annual assessments are conducted in the context of information that was reasonably available to us as of the date of the assessment including our best estimates of future sales volumes and prices; material and labor cost and availability; operational efficiency including the impact of projected capital asset additions, and the discount rates and tax rates. We will perform our next annual goodwill impairment tests as of November 1, 2026; or earlier, if adverse changes in circumstances result in our assessment that a triggering event has occurred at any of our reporting units and an interim test is required.
Other intangible assets are recorded at cost or, when acquired as a part of a business combination, at estimated fair value. These assets include customer relationships, patents and other technology-related assets, trademarks, licenses, and non-compete agreements. Intangible assets that have definite lives are amortized using a method that reflects the pattern in which the economic benefits of the assets are consumed or the straight-line method over estimated useful lives of 1 to 21 years.
Intangible assets with indefinite lives, which consist primarily of trade names and future products that were in development at the time of the acquisition of AMI in January 2024, are subject to at least annual impairment testing. The impairment testing for the indefinite lived trade names compares the fair value of the intangible asset with its carrying amount using the relief from royalty method. Key assumptions used in the relief from royalty method are projected revenues and royalty, discount, tax, and terminal growth rates. Impairment testing for these assets were conducted as of November 1 in 2025, 2024 and 2023 and indicated no impairment. Impairment testing related to the future products that were in development at the time of the acquisition of AMI compares the fair value of the intangible asset with its carrying value using a multi-period excess earnings method. Key assumptions used in the excess earnings method are projected revenues and profit margins, obsolescence factors, and tax, discount, and long-term growth rates. This testing was conducted as of November 1, 2025 and 2024, the first testing period after the asset was acquired, and indicated no impairment. Interim tests may be required if an event occurs or circumstances change that would more likely than not reduce the fair value below the carrying value or change the useful life of the asset. For additional information regarding the acquisition of AMI, see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview as well as Note 2 to the Consolidated Financial Statements.
Many of the factors used in assessing fair value are outside the control of management, and it is reasonably likely that assumptions and estimates will change in future periods. These changes could result in future impairments. For additional information, see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview ” as well as Notes 1 and 8 to the Consolidated Financial Statements.
Business Combinations
Over the past several years, we have executed several strategic acquisitions, most of which are material. We utilize the acquisition method of accounting for business combinations. The estimated fair value of assets acquired and liabilities assumed in a business combination are included in our Consolidated Balance Sheet beginning on the acquisition date. We may evaluate these values and adjust our estimates up to one-year from the date the business was acquired.
We estimate the fair-value of the assets acquired and liabilities assumed in a business combination using various valuation methods that are appropriate for the specific business combination or the specific asset or liability being valued. Various techniques are used to determine the fair-value of intangible assets, which require judgement and often comprise a significant portion of total assets acquired in a business combination. We use the income approach to determine the fair-value of our intangible assets, primarily using the relief-from-royalty or multi-period excess earnings methods. Under these valuation approaches, we use key assumptions in valuing the assets, including projected revenues and profit margins, royalty rates, obsolescence factors, customer attrition rates, contributory asset charges, tax rates, discount rates and long-term growth rates. Any excess total consideration transferred in a business combination greater than the fair value of identifiable assets acquired net of liabilities assumed is recorded as goodwill.
For additional information regarding our acquisitions, see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview as well as Note 2 to the Consolidated Financial Statements.
Environmental
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 or an investigation to determine responsibility for environmental conditions at 19 sites.
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. In general, due to uncertainties regarding, among other factors, changes to operating and monitoring requirements based on the ongoing performance of the remediation system and/or changes to applicable legal and regulatory requirements, we do not consider costs for remediation activities beyond five years to be reasonably estimable. To the extent that capital costs to be incurred more than five years out, such as costs for the construction or decommissioning of remediation systems, can be reasonably estimated such costs are included in our environmental reserves. For sites with multiple future projected cost scenarios for identified feasible investigation and remediation options where no one estimate is more likely than all the others, our policy is to accrue the lowest estimate among the range of estimates. The measurement of our 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 the remediation of similar contaminated sites. Liabilities are established for all sites based on these factors. As assessments and remediation progress at individual sites, these liabilities are reviewed and adjusted to reflect additional technical data and legal information. Given the uncertainties regarding the status of laws, regulations, enforcement policies, the impact of other parties potentially being fully or partially 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 in excess of our recorded liabilities.
We believe that our accruals for specific environmental liabilities are adequate based on currently available information. Based upon limited information regarding any incremental remediation or other actions that may be required at these sites, we cannot estimate any further loss or a reasonably possible range of loss related to these matters. 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.
Income Taxes
We use the asset and liability method of accounting for income taxes. Temporary differences arising between the tax basis of an asset or liability and its carrying amount on the Consolidated Balance Sheet are used to calculate future income tax assets or liabilities. This method also requires the recognition of deferred tax benefits, such as net operating loss carryforwards. Valuation allowances are recorded as appropriate to reduce deferred tax assets to the amount considered likely to be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the taxable income (losses) in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment of the change. A tax benefit from an uncertain tax position is recognized only if we believe it is more likely than not that the position will be sustained on its technical merits. If the recognition threshold for the tax position is met, only the portion of the tax benefit that we believe is greater than 50 percent likely to be realized is recorded. Our future results may include favorable or adjustments to our estimated tax liabilities due to of income tax examinations, statute expirations, new regulatory or judicial pronouncements, changes in tax laws, changes in projected levels of taxable income, future tax planning strategies, or other relevant events.
OECD/G20 Base Erosion and Profit Shifting Project - Pillar 2
The Organisation for Economic Co-operation and Development (the “OECD”) introduced a framework to implement a global minimum corporate tax of 15%, referred to as Pillar Two, effective for tax years beginning in 2024. While it is uncertain whether the U.S. will enact legislation to adopt Pillar Two, certain countries in which we operate have enacted legislation to adopt Pillar Two. The adoption of Pillar Two had no impact on our income tax expense for the year ended December 31, 2025 and we expect there to be a minimal impact, if any, in subsequent years. Any impact would be accounted for as a period cost in the period in which it is incurred.
Impact of Pending Accounting Pronouncements
See Note 1 , "Overview, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Guidance," to our consolidated financial statements for a discussion of recently issued accounting guidance that we have not yet adopted.
Contingencies
A description of our contingencies is included in Note 19 to the Consolidated Financial Statements in this report, which is incorporated herein by reference.
Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Measures
We believe that it would be helpful to the readers of the financial statements to understand the impact of certain selected items on our reported income from continuing operations attributable to Enpro Inc. and diluted earnings per share attributable to Enpro Inc. continuing operations, including items that may recur from time to time. Accordingly, we have included a discussion of adjusted income from continuing operations attributable to Enpro Inc., including on a per share basis, adjusted EBITDA and total adjusted segment EBITDA in this report, each of which is a non-GAAP financial measure. The items adjusted for in these non-GAAP financial measures are those that are excluded by management in budgeting or projecting for performance in future periods, as they typically relate to events specific to the period in which they occur. Accordingly, these are some of the factors the Company uses in internal evaluations of the overall performance of its businesses. In addition, management believes these non-GAAP financial measures are commonly used financial measures for investors to evaluate the Company’s operating performance and, when read in conjunction with the Company’s consolidated financial statements, present a useful tool to evaluate the Company’s ongoing operations and performance from period to period. Management acknowledges that there are many items that impact a company’s reported results and the adjustments reflected in these non-GAAP financial measures are not intended to present all items that may have impacted these results. In addition, these non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies.
A reconciliation of (i) income from continuing operations attributable to Enpro Inc. to adjusted income from continuing operations attributable to Enpro Inc., including on a per share basis, and (ii) income from continuing operations attributable to Enpro Inc. to adjusted EBITDA for the years ended December 31, 2025, 2024 and 2023 as set forth below.
Reconciliation of Adjusted Income from Continuing Operations Attributable to Enpro Inc .
Years Ended December 31,
(In Millions Except Per Share Amounts)
Average common shares outstanding, diluted
Per Share
Average common shares outstanding, diluted
Per Share
Income from continuing operations attributable to Enpro Inc.
Income tax expense
Income from continuing operations before income taxes
Adjustments from selling, general, and administrative:
Acquisition expense
Amortization of acquisition-related intangible assets
Adjustments from other operating expense and cost of sales:
Restructuring and impairment expense, net
Amortization of the fair value adjustment to acquisition date inventory
Adjustments from other non-operating expense
Environmental reserve adjustments
Costs associated with previously disposed businesses
Pension expense (non-service cost)
Loss on extinguishment of debt
Foreign exchange losses related to the divestiture of a discontinued operation
Long-term promissory note adjustment 1
Loss on pension settlement 2
Other adjustments
Other
Adjusted income from continuing operations before income taxes
Adjusted tax expense
Adjusted income from continuing operations attributable to Enpro Inc.
Restructuring and impairment expense, net in the table above for the year ended December 31, 2025, includes income related to gains on the sale of fixed assets as a result of restructuring actions.
Year Ended December 31,
(In Millions Except Per Share Amounts)
Average common shares outstanding, diluted
Per Share
Income from continuing operations attributable to Enpro Inc.
Net loss attributable to redeemable non-controlling interests
Income tax expense
Income from continuing operations before income taxes
Adjustments from selling, general, and administrative:
Acquisition expense
Non-controlling interest compensation allocation
Amortization of acquisition-related intangible assets
Adjustments from other operating expense and cost of sales:
Restructuring and impairment expense
Adjustments from other non-operating expense
Environmental reserve adjustments
Costs associated with previously disposed businesses
Pension expense (non-service cost)
Goodwill impairment
Foreign exchange losses related to the divestiture of a discontinued operation
Other adjustments
Other
Adjusted income from continuing operations before income taxes
Adjusted tax expense
Income from redeemable non-controlling interest, net of taxes
Adjusted income from continuing operations attributable to Enpro Inc.
Adjustments in the tables above only reflect amounts attributable to Enpro Inc.
1 We received a long-term promissory note in connection to the sale of a divested business. As part of our regular review of the note, in the first quarter of 2024, we concluded a reserve was needed for expected future credit losses. In the fourth quarter of 2025, the obligor of the note refinanced all of its long-term debt, which led to the repayment of the note in full, and a recovery of the corresponding loss.
2 The termination and settlement process for our defined benefit pension plan in the United States was substantially completed in the fourth quarter of 2025, resulting in the recognition of a settlement loss to recognize actuarial losses previously deferred in accumulated other comprehensive income on our consolidated balance sheet.
3 Adjusted diluted earnings per share, which amounts were calculated by dividing by the weighted-average shares of diluted common stock outstanding during the periods.
The adjusted income tax expense presented above is calculated using a normalized company-wide effective tax rate excluding discrete items of 25.0%. Per share amounts were calculated by dividing by the weighted-average shares of diluted common stock outstanding during the periods.
Reconciliation of Income from Continuing Operations Attributable to Enpro Inc. to Adjusted EBITDA
Years Ended December 31,
(In Millions)
Income from continuing operations attributable to Enpro Inc.
Net loss attributable to redeemable non-controlling interests
Income from continuing operations
Adjustments to arrive at earnings before interest, income taxes, depreciation, amortization, and other selected items (" Adjusted EBITDA"):
Interest expense, net
Income tax expense
Depreciation and amortization expense
Restructuring and impairment expense, net
Environmental reserve adjustments
Costs associated with previously disposed businesses
Acquisition expense
Pension expense (non-service cost)
Non-controlling interest compensation allocations
Amortization of the fair value adjustment to acquisition date inventory
Loss on extinguishment of debt
Goodwill impairment
Foreign exchange losses related to the divestiture of a discontinued operation
Long-term promissory note adjustment 1
Loss on pension settlement 2
Other
Adjusted EBITDA
Restructuring and impairment expense, net in the table above for the year ended December 31, 2025, includes income related to gains on the sale of fixed assets as a result of restructuring actions.
1 We received a long-term promissory note in connection to the sale of a divested business. As part of our regular review of the note, in the first quarter of 2024, we concluded a reserve was needed for expected future credit losses. In the fourth quarter of 2025, the obligor of the note refinanced all of its long-term debt, which led to the repayment of the note in full, and a recovery of the corresponding loss.
2 The termination and settlement process for our defined benefit pension plan in the United States was substantially completed in the fourth quarter of 2025, resulting in the recognition of a settlement loss to recognize actuarial losses previously deferred in accumulated other comprehensive income on our consolidated balance sheet.
Adjusted EBITDA as presented in the table above also represents the amount defined as "EBITDA" under the Indenture.
The reconciliation of income from continuing operations attributable to Enpro Inc. to total adjusted segment EBITDA for the years ended December 31, 2025, 2024, and 2023 is included in “— Results of Operations ."
