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Systematic Drilling Outlines New High-grade Mineralized Vein Sets Over 630m Strike, Connecting Keats and 515 Zones

VANCOUVER, British Columbia–(BUSINESS WIRE)–New Found Gold Corp. (“New Found” or the “Company”) (TSX-V: NFG, NYSE-A: NFGC) is pleased to announce the results from 17 diamond drill holes that were completed as part of an ongoing systematic drill program exploring a highly prospective segment of the Appleton Fault Zone (“AFZ”) immediately north of the Keats Zone. New Found’s 100% owned Queensway project comprises an approximately 1500km² area, accessible via the Trans-Canada Highway approximately 15km west of Gander, Newfoundland and Labrador.

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Keats North Highlights:

Keats North comprises multiple newly discovered high-grade gold veins in a corridor covering approximately 630m of strike northwards from the northern end of Keats Main to the recently discovered 515 zone, reported on April 13, 2022 (see Figure 1). Highlight results from recent drilling in this corridor include:

Hole No.		From (m)		To (m)		Interval (m)1		Au (g/t)		Prospect		Vein/Zone
NFGC-22-559		131.95		134.00		2.05		13.2		Keats North		Enigma
Including		133.00		134.00		1.00		24.7		Keats North
And		148.00		150.70		2.70		10.7		Keats North
Including		148.00		149.70		1.70		14.9		Keats North
NFGC-22-577		34.20		36.80		2.60		12.9		Keats North		Apogee
Including		36.15		36.80		0.65		48.9		Keats North
NFGC-22-578		22.55		25.30		2.75		45.9		Keats North		Umbra/Keats Main
Including		22.55		23.35		0.80		142.0
NFGC-22-580		52.00		54.20		2.20		24.1		Keats North		Enigma
Including		53.20		53.70		0.50		105.5
NFGC-22-586		48.00		50.00		2.00		40.6		Keats North		Enigma
Including		49.45		50.00		0.55		147.5		Keats North
NFGC-22-610		46.55		48.60		2.05		19.3		Keats North		Umbra/ Keats Main
Including		47.75		48.30		0.55		65.6

Table 1: Keats North Drilling Highlights

¹Note that the host structures are interpreted to be steeply dipping and true widths are unknown at this time. Infill veining in secondary structures with multiple orientations crosscutting the primary host structures are commonly observed in drill core which could result in additional uncertainty in true width. Composite intervals reported carry a minimum weighted average of 1 g/t Au diluted over a minimum core length of 2m with a maximum of 2m consecutive dilution. Included high-grade intercepts are reported as any consecutive interval with grades greater than 10 g/t Au. Grades have not been capped in the averaging and intervals are reported as drill thickness.

• These new results are defining an extensive network of mineralized veins including Umbra, Penumbra, Apogee, Enigma, and Perigee/515 over a roughly 630m long x 150m wide area linking Keats Main and the 515 discovery area (Figure 1). These veins start at the surface, are generally steeply dipping, and to date have been drill tested to a maximum vertical depth of 125m.
• Noteworthy intervals in these veins include:
  • 45.9 g/t Au over 2.75m in NFGC-22-578 (Umbra);
  • 19.3 g/t Au over 2.05m in NFGC-22-610 (Umbra);
  • 40.6 g/t Au over 2.00m in NFGC-22-586 (Enigma);
  • 24.1 g/t Au over 2.20m in NFGC-22-580 (Enigma);
  • and 13.2 g/t Au over 2.05m and 10.7 g/t Au over 2.70m in NFGC-22-559 (Enigma).
• Due to a thin cover of glacial till there is very limited surface exposure of bedrock along the AFZ corridor including between Keats Main and Golden Joint, and until recently there had been essentially no drill testing of this gap. In early 2022 the Company implemented a program of systematic grid drilling between Keats and Golden Joint leading to the 515 discovery (43.9 g/t Au over 3.85m in NFGC-22-515 (reported April 13, 2022) and two near surface intervals of 8.70 g/t Au over 6.75m in NFGC-22-533 and 275 g/t Au over 2.15m in NFGC-22-538 (reported May 4, 2022).
• The results reported in this release are the initial assays following up on these discovery holes, with further results including several high priority holes anticipated in the next several weeks.

BitNile Holdings Announces Conference Call to Provide an Update on TurnOnGreen Special Dividend

LAS VEGAS–(BUSINESS WIRE)–BitNile Holdings, Inc. (NYSE American: NILE), a diversified holding company (“BitNile” or the “Company”), will host a conference call at 2:00 PM Pacific Time on Tuesday, September 6, 2022, to provide an update on the status of the planned spinoff of the Company’s subsidiary, TurnOnGreen, Inc., an electronic vehicle (“EV”) charging and power solutions company (“TurnOnGreen”) and the planned distribution of TurnOnGreen’s securities to BitNile’s stockholders.

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March 21, 2022 Announcement

On March 21, 2022, BitNile announced that it and TurnOnGreen entered into a securities purchase agreement (the “SPA”) with Imperalis Holding Corp. (OTC Pink: IMHC) (“Imperalis”), a publicly traded subsidiary of BitNile, whereby TurnOnGreen will, upon closing, become a subsidiary of Imperalis (the “Acquisition”).

Upon completion of the Acquisition, which is contingent upon the completion of an audit of TurnOnGreen, and each party’s satisfaction or waiver of certain customary closing conditions set forth in the SPA, Imperalis will change its name to TurnOnGreen and, through an upstream merger whereby the current TurnOnGreen shall cease to exist, have two operating subsidiaries, TOG Technologies Inc. and Digital Power Corporation. Promptly following the closing of the Acquisition, Imperalis will dissolve its three dormant subsidiaries. Subsequent to the Acquisition, BitNile will assist TurnOnGreen in pursuing an uplisting to the Nasdaq Capital Market, subject to Nasdaq’s seasoning rules and other criteria for listing.

After completion of the Acquisition, the Company anticipates that stockholders of BitNile will receive a dividend of securities of TurnOnGreen. BitNile expects to distribute to BitNile stockholders approximately 140 million shares of Imperalis common shares and an equal number of warrants to purchase additional shares of Imperalis common stock.

Update Call

The update call will be open to the public. Stockholders, investors, and interested parties who would like to participate in the webcast should use the following link to register in advance. Registration link: https://us06web.zoom.us/webinar/register/WN_qqYTeE06SbCyIIgYF5QV7A

Please direct any questions regarding obtaining access to the conference call to BitNile via e-mail, at [email protected], or by calling 1-888-753-2235.

For more information on TurnOnGreen’s product line, please visit www.TurnOnGreen.com.

For more information on BitNile and its subsidiaries, BitNile recommends that stockholders, investors, and any other interested parties read BitNile’s public filings and press releases available under the Investor Relations section at www.BitNile.com or available at www.sec.gov.

About BitNile Holdings, Inc.

BitNile Holdings, Inc. is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact. Through its wholly and majority-owned subsidiaries and strategic investments, BitNile owns and operates a data center at which it mines Bitcoin and provides mission-critical products that support a diverse range of industries, including defense/aerospace, industrial, automotive, telecommunications, medical/biopharma and textiles. In addition, BitNile extends credit to select entrepreneurial businesses through a licensed lending subsidiary. BitNile’s headquarters are located at 11411 Southern Highlands Parkway, Suite 240, Las Vegas, NV 89141; www.BitNile.com.

About TurnOnGreen, Inc.

TurnOnGreen Inc. designs and manufactures innovative, feature-rich, and top-quality power products for mission-critical applications, lifesaving and sustaining applications spanning multiple sectors in the harshest environments. The diverse markets we serve include defense and aerospace, medical and healthcare, industrial, telecommunications and e-Mobility. TurnOnGreen brings decades of experience to every project, working with our clients to develop leading-edge products to meet a wide range of needs. TurnOnGreen’s headquarters are located at Milpitas, CA; www.TurnOnGreen.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “believes,” “plans,” “anticipates,” “projects,” “estimates,” “expects,” “intends,” “strategy,” “future,” “opportunity,” “may,” “will,” “should,” “could,” “potential,” or similar expressions. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any of them publicly in light of new information or future events. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors. More information, including potential risk factors, that could affect the Company’s business and financial results are included in the Company’s filings with the U.S. Securities and Exchange Commission, including, but not limited to, the Company’s Forms 10-K, 10-Q and 8-K. All filings are available at www.sec.gov and on the Company’s website at www.BitNile.com.

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BitNile Holdings Investor Contact:

[email protected] or 1-888-753-2235

KEYWORDS: United States North America Nevada

INDUSTRY KEYWORDS: Professional Services Other Energy Other Professional Services Technology Other Technology Energy Finance

MEDIA:

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Equitrans Midstream Announces Second Quarter 2022 Results

CANONSBURG, Pa.–(BUSINESS WIRE)–
Equitrans Midstream Corporation (NYSE: ETRN), today, announced financial and operational results for the second quarter 2022. Included in the “Non-GAAP Disclosures” section of this news release are important disclosures regarding the use of non-GAAP supplemental financial measures, including information regarding their most comparable GAAP financial measure.

Q2 2022 Highlights:

• Generated $74 million of net income and achieved $264 million of adjusted EBITDA
• Recorded 71% of total operating revenue from firm reservation fees
• Delivered results ahead of guidance
• Raised full-year financial guidance
• Published 2022 Corporate Sustainability Report
• Secured new booster compression expansion project

“Our second quarter results continue to highlight the strength of our base business and ability to generate free cash flow,” said Thomas F. Karam, Equitrans chairman and chief executive officer. “We have increased our full-year guidance and recently secured a new, organic compression project for one of our producer customers, which will further enhance our asset footprint. Additionally, we are focused on MVP’s permit renewal process and appreciate the agencies’ substantial and continued efforts to satisfy the Court.”

“We have been working to position Equitrans to be resilient in any environment, including the global transformation to a lower-carbon future, and in the past year we’ve made great strides incorporating ESG into ETRN’s DNA,” said Diana M. Charletta, Equitrans president and chief operating officer. “Building upon our already robust ESG disclosures, we recently published our annual corporate sustainability report, which, as an early adopter, utilizes GRI’s newest ‘Consolidated Set of the GRI Standards 2021’ and continues to follow SASB Oil & Gas Midstream reporting standards.

“Sustainability performance is about knowing we, as a Company, are doing the right thing for future generations – serving Americans’ current and increasing needs for reliable, clean-burning energy and supporting our national security and energy independence. We believe that our continued commitment to sustainability, including minimizing impacts to the environment and society, will serve to create long-term value for all stakeholders.”

2022 SECOND QUARTER SUMMARY RESULTS

	Three Months Ended June 30, 2022
$ millions (except per share metrics)
Net income attributable to ETRN common shareholders	$	55.2
Adjusted net income attributable to ETRN common shareholders	$	47.3
Earnings per diluted share attributable to ETRN common shareholders	$	0.13
Adjusted earnings per diluted share attributable to ETRN common shareholders	$	0.11
Net income	$	73.8
Adjusted EBITDA	$	263.8
Deferred revenue	$	89.4
Net cash provided by operating activities	$	351.0
Free cash flow	$	183.5
Retained free cash flow	$	118.6

Net income attributable to ETRN common shareholders for the second quarter 2022 was impacted by several items, including a $13.7 million unrealized gain on derivative instruments, a $24.9 million loss on extinguishment of debt, and a $16.2 million reduction of valuation allowances on deferred tax assets. The unrealized gain is reported within other income and relates to the contractual agreement with EQT Corporation (EQT) in which ETRN will receive cash from EQT conditioned on the quarterly average of certain Henry Hub natural gas prices exceeding certain thresholds beginning with the quarter in which the Mountain Valley Pipeline (MVP) is placed in-service through the fourth quarter of 2024. The contract is accounted for as a derivative with the fair value marked-to-market at each quarter-end. The loss on extinguishment of debt is primarily related to the purchase of approximately $1 billion aggregate principal amount of several tranches of EQM Midstream Partners, LP’s (EQM), a wholly owned subsidiary of ETRN, senior notes in tender offers. The reduction in valuation allowances is reported within income tax expense.

As a result of the gathering agreement entered into with EQT in February 2020, revenue from the contracted minimum volume commitment (MVC) is recognized utilizing an average gathering rate applied over the 15-year contract life. The difference between the cash received from the MVC and the revenue recognized results in the deferral of revenue into future periods. For the second quarter 2022, deferred revenue was $89.4 million.

Operating revenue for the second quarter decreased by $19.7 million, compared to the same quarter last year, primarily due to increased deferred revenue, lower gathered volumes and lower water services revenue. Operating expenses decreased by $70.0 million compared to the second quarter 2021, primarily as a result of a $56.2 million impairment of long-lived assets in the second quarter 2021, lower selling, general and administrative expenses, and lower operating and maintenance expenses.

QUARTERLY DIVIDEND

For the second quarter 2022, ETRN will pay a quarterly cash dividend of $0.15 per common share on August 12, 2022, to ETRN common shareholders of record at the close of business on August 3, 2022.

TOTAL CAPITAL EXPENDITURES AND CAPITAL CONTRIBUTIONS
$ millions		Three Months Ended June 30, 2022		Six Months Ended June 30, 2022		Full-Year 2022 Forecast
MVP		$39		$111		$175 – $215
Gathering(1)		$61		$111		$250 – $290
Transmission(2)		$6		$11		$40
Water(3)		$22		$32		$75
Total		$128		$265		$540 – $620

(1)	Excludes $8.7 million and $11.7 million of capital expenditures related to the noncontrolling interest in Eureka Midstream Holdings, LLC (Eureka) for the three and six months ended June 30, 2022, respectively. Full-year 2022 forecast excludes approximately $20 million of capital expenditures related to the noncontrolling interests in Eureka.
(2)	Includes capital contributions to Mountain Valley Pipeline, LLC (MVP JV) for the MVP Southgate project.
(3)	Full-year forecast includes approximately $20 million to replace certain previously installed water lines that ETRN believes do not meet their prescribed quality standards. ETRN is pursuing recoupment of such replacement and related costs.

OUTLOOK

Financial Outlook
$ millions		Q3 2022
Net income		$50 – $70
Adjusted EBITDA		$250 – $270
Deferred Revenue		$75
$ millions		Full-Year 2022
Net income		$255 – $325
Adjusted EBITDA		$1,015 – $1,085
Deferred Revenue		$340
Free cash flow		$300 – $370
Retained free cash flow		$40 – $110

BUSINESS AND PROJECT UPDATES

Outstanding Debt and Liquidity

As of June 30, 2022, ETRN reported $6.4 billion of consolidated long-term debt; $160.0 million of borrowings and $234.9 million of letters of credit outstanding under EQM’s revolving credit facility; $260.5 million of borrowings under Eureka’s revolving credit facility; and $114.5 million of cash.

Senior Notes Offering and Tender Results

On June 7, 2022, EQM completed the issuance of $500 million aggregate principal amount of its 7.50% senior notes due 2027 and $500 million aggregate principal amount of its 7.50% senior notes due 2030. Net proceeds from the offering and cash on hand were used to acquire in tender offers approximately $500 million of aggregate principal amount of EQM’s outstanding 4.75% senior notes due 2023, $200 million of aggregate principal amount of EQM’s 4.00% senior notes due 2024, and $300 million of aggregate principal amount of EQM’s 6.00% senior notes due 2025.

Exercise of Cash Option

Pursuant to the 2020 gathering agreement, on July 8, 2022, EQT elected to forgo aggregate gathering rate relief of $235 million in the 24 months following MVP’s in-service in exchange for a cash payment of approximately $196 million. The cash payment represents final consideration for approximately 20.5 million ETRN common shares that were purchased from EQT and retired in the first quarter of 2020. ETRN expects to make the cash payment no later than October 5, 2022.

2022 Corporate Sustainability Report

On July 28, 2022, ETRN published its annual Corporate Sustainability Report (CSR), which was produced under the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) Oil & Gas Midstream Standards. In 2021, GRI updated and released its “Consolidated Set of the GRI Standards 2021” – effective for companies’ reporting in 2023. As an early adopter, ETRN’s 2022 CSR utilizes this most recent set of GRI Universal and Topic Standards, as well as GRI’s Oil and Gas Sector Standard 2021. The report content reflects the results of ETRN’s most recent materiality assessment, which, for the first time, included engaging both internal and external stakeholders to identify the Environmental, Social, and Governance (ESG) topics most significant to ETRN’s business and stakeholders. The report can be viewed online at csr.equitransmidstream.com.

Compression Expansion Project

ETRN recently entered into an agreement with a producer customer to install approximately 32,000 horsepower booster compression to existing facilities. The project is backed by a long-term firm commitment and is targeted to be in-service in mid-2024. ETRN expects to invest approximately $70 million, with a majority of the capital spend in 2023 and 2024.

Ohio Valley Connector Expansion Project

On July 7, 2022, the Federal Energy Regulatory Commission (FERC) issued a Notice of Intent to Prepare an Environmental Impact Statement for the Ohio Valley Connector Expansion Project (OVCX). OVCX will increase deliverability on ETRN’s Ohio Valley Connector pipeline by approximately 350 MMcf per day and is designed to meet growing demand in key markets in the mid-continent and Gulf Coast through existing interconnects with long-haul pipelines in Clarington, OH. Based on the expected regulatory and permitting timeframe, ETRN is targeting the incremental capacity to be in-service during the first half of 2024. ETRN expects to invest approximately $160 million in the project, which is primarily supported by a long-term firm capacity commitment of 330 MMcf per day.

Mountain Valley Pipeline

MVP JV is engaged in the permitting process with the relevant federal agencies for the outstanding permits required to complete the project. ETRN continues to target a full in-service date during the second half of 2023 at a total project cost of approximately $6.6 billion. Through June 30, 2022, ETRN has funded approximately $2.6 billion and, based on the total project cost estimate, expects to fund a total of approximately $3.4 billion and to have an approximate 48.1% ownership interest in MVP. ETRN will operate the pipeline.

MVP Southgate

The MVP JV continues to evaluate the MVP Southgate project, including engaging in discussions with the shipper regarding options for the project, such as potential changes to the project design and timing in lieu of pursuing the project as originally contemplated. As originally designed, MVP Southgate is estimated to cost approximately $450 million to $500 million and is backed by a 300 MMcf per day firm capacity commitment from Dominion Energy North Carolina. In 2022, ETRN expects to make capital contributions related to MVP Southgate of less than $5 million. ETRN has a 47.2% ownership interest in MVP Southgate and would operate the pipeline.

Water Services

In the second quarter, water operating income was $3.1 million and water EBITDA was $7.9 million. For the year, ETRN expects water EBITDA of approximately $30 million.

Q2 2022 Earnings Conference Call Information

ETRN will host a conference call with security analysts today, August 2, 2022, at 10:30 a.m. (ET) to discuss second quarter 2022 financial results, operating results, and other business matters.

Call Access: An audio live stream of the call will be available on the internet, and participants are encouraged to pre-register online, in advance of the call. A link to the audio live stream will be available on the Investors page of ETRN’s website the day of the call.

Security Analysts:: Dial-In Participation

To participate in the Q&A session, security analysts may access the call in the U.S. tollfree at (888) 330-3573; and internationally at (646) 960-0677. The ETRN conference ID is 6625542.

All Other Participants :: Webcast Registration

Please Note: For optimal audio quality, the webcast is best supported through Google Chrome and Mozilla Firefox browsers.

Call Replay: For 14 days following the call, an audio replay will be available at (800) 770-2030 or (647) 362-9199. The ETRN conference ID: 6625542.

ETRN management speaks to investors from time-to-time and the presentation for these discussions, which is updated periodically, is available via www.equitransmidstream.com.

NON-GAAP DISCLOSURES

Adjusted Net Income Attributable to ETRN Common Shareholders and Adjusted Earnings per Diluted Share Attributable to ETRN Common Shareholders

Adjusted net income (loss) attributable to ETRN common shareholders and adjusted earnings (loss) per diluted share attributable to ETRN common shareholders are non-GAAP supplemental financial measures that management and external users of ETRN’s consolidated financial statements, such as investors, may use to make period-to-period comparisons of earnings trends. Management believes that adjusted net income (loss) attributable to ETRN common shareholders and adjusted earnings (loss) per diluted share attributable to ETRN common shareholders as presented provide useful information for investors for evaluating period-over-period earnings. Adjusted net income (loss) attributable to ETRN common shareholders and adjusted earnings (loss) per diluted share attributable to ETRN common shareholders should not be considered as alternatives to net income (loss) attributable to ETRN common shareholders, earnings (loss) per diluted share attributable to ETRN common shareholders or any other measure of financial performance presented in accordance with GAAP. Adjusted net income (loss) attributable to ETRN common shareholders and adjusted earnings (loss) per diluted share attributable to ETRN common shareholders as presented have important limitations as analytical tools because they exclude some, but not all, items that affect net income (loss) attributable to ETRN common shareholders and earnings (loss) per diluted share attributable to ETRN common shareholders, including, as applicable, impairments of long-lived assets and equity method investments, unrealized gain (loss) on derivative instruments, loss on extinguishment of debt and the related tax impacts of these items, which items affect the comparability of results period to period. Additionally, because these non-GAAP metrics may be defined differently by other companies in ETRN’s industry, ETRN’s definitions of adjusted net income (loss) attributable to ETRN common shareholders and adjusted earnings (loss) per diluted share attributable to ETRN common shareholders may not be comparable to similarly titled measures of other companies, thereby diminishing the utility of the measures. Adjusted net income (loss) attributable to ETRN common shareholders and adjusted earnings (loss) per diluted share attributable to ETRN common shareholders should not be viewed as indicative of the actual amount of net income (loss) attributable to ETRN common shareholders or actual earnings (loss) of ETRN in any given period.

The table below reconciles adjusted net income attributable to ETRN common shareholders and adjusted earnings per diluted share attributable to ETRN common shareholders with net income attributable to ETRN common shareholders and earnings per diluted share attributable to ETRN common shareholders as derived from the statements of consolidated comprehensive income to be included in ETRN’s Quarterly Report on Form 10-Q for the three months ended June 30, 2022.

Reconciliation of Adjusted Net Income Attributable to ETRN Common Shareholders and Adjusted Earnings per Diluted Share Attributable to ETRN Common Shareholders
		Three Months Ended June 30,
(Thousands, except per share information)		2022				2021
Net income attributable to ETRN common shareholders		$	55,230			$	22,485
Add back (deduct):
Impairment of long-lived assets			—				56,178
Unrealized gain on derivative instruments			(13,726	)			(9,434	)
Loss on extinguishment of debt			24,937				—
Tax impact of non-GAAP items(1)			(19,140	)			(12,270	)
Adjusted net income attributable to ETRN common shareholders		$	47,301			$	56,959
Diluted weighted average common shares outstanding			434,025				433,464
Adjusted earnings per diluted share attributable to ETRN common shareholders		$	0.11			$	0.13

(1)	The adjustments were tax effected at ETRN’s federal and state statutory tax rate for each period and account for certain discrete valuation allowance adjustments associated with the impact of nonrecurring items.

Adjusted EBITDA

As used in this news release, Adjusted EBITDA means, as applicable, net income (loss) plus income tax expense (benefit), net interest expense, loss on extinguishment of debt, depreciation, amortization of intangible assets, impairments of long-lived assets and equity method investment, payments on the preferred interest in EQT Energy Supply, LLC (Preferred Interest), non-cash long-term compensation expense, and less equity income, AFUDC-equity, unrealized gain (loss) on derivative instruments and adjusted EBITDA attributable to noncontrolling interest.

The table below reconciles adjusted EBITDA with net income as derived from the statements of consolidated comprehensive income to be included in ETRN’s Quarterly Report on Form 10-Q for the three months ended June 30, 2022.

Reconciliation of Adjusted EBITDA
		Three Months Ended June 30,
(Thousands)		2022				2021
Net income		$	73,806			$	40,121
Add (deduct):
Income tax expense			3,650				12,564
Net interest expense			95,117				95,642
Loss on extinguishment of debt			24,937				—
Depreciation			67,657				69,315
Amortization of intangible assets			16,205				16,205
Impairment of long-lived assets			—				56,178
Preferred Interest payments			2,746				2,746
Non-cash long-term compensation expense			3,656				3,146
Equity income			(39	)			(5,921	)
AFUDC – equity			(45	)			(63	)
Unrealized gain on derivative instruments			(13,726	)			(9,434	)
Adjusted EBITDA attributable to noncontrolling interest(1)			(10,117	)			(8,946	)
Adjusted EBITDA		$	263,847			$	271,553

(1)

Reflects adjusted EBITDA attributable to noncontrolling interest associated with the third-party ownership interest in Eureka. Adjusted EBITDA attributable to noncontrolling interest for the three months ended June 30, 2022, was calculated as net income of $3.9 million plus depreciation of $3.1 million, plus amortization of intangible assets of $2.1 million and plus interest expense of $1.0 million. Adjusted EBITDA attributable to noncontrolling interest for the three months ended June 30, 2021, was calculated as net income of $3.0 million, plus depreciation of $2.9 million, plus amortization of intangible assets of $2.1 million, and plus interest expense of $0.9 million.

Free Cash Flow

As used in this news release, free cash flow means net cash provided by operating activities plus principal payments received on the Preferred Interest, and less net cash provided by operating activities attributable to noncontrolling interest, dividends paid to Series A Preferred Shareholders, premiums and fees paid on extinguishment of debt, capital expenditures (excluding the noncontrolling interest share (40%) of Eureka capital expenditures), and capital contributions to MVP JV.

Retained Free Cash Flow

As used in this news release, retained free cash flow means free cash flow less dividends paid to common shareholders.

The table below reconciles free cash flow and retained free cash flow with net cash provided by operating activities as derived from the statements of consolidated cash flows to be included in ETRN’s Quarterly Report on Form 10-Q for the three months ended June 30, 2022.

Reconciliation of Free Cash Flow and Retained Free Cash Flow
		Three Months Ended June 30,
(Thousands)		2022				2021
Net cash provided by operating activities		$	351,026			$	382,595
Add (deduct):
Principal payments received on the Preferred Interest			1,370				1,295
Net cash provided by operating activities attributable to noncontrolling interest(1)			(10,475	)			(9,519	)
ETRN Series A Preferred Shares dividends(2)			(14,628	)			(14,628	)
Premiums and fees on debt extinguishment			(20,400	)			—
Capital expenditures(3)(4)			(84,144	)			(65,528	)
Capital contributions to MVP JV			(39,215	)			(73,932	)
Free cash flow		$	183,534			$	220,283
Less:
Dividends paid to common shareholders (5)			(64,915	)			(64,874	)
Retained free cash flow		$	118,619			$	155,409

(1)	Reflects 40% of $26.2 million and $23.8 million, which was Eureka’s standalone net cash provided by operating activities for the three months ended June 30, 2022, and June 30, 2021, respectively, which represents the noncontrolling interest portion for the three months ended June 30, 2022, and June 30, 2021, respectively.
(2)	Reflects cash dividends paid of $0.4873 per ETRN Series A Perpetual Convertible Preferred Share.
(3)	Does not reflect amounts related to the noncontrolling interest share of Eureka.
(4)	ETRN accrues capital expenditures when the work has been completed but the associated bills have not yet been paid. Accrued capital expenditures are excluded from the statements of consolidated cash flows until they are paid.
(5)	First quarter 2022 dividend of $0.15 per ETRN common share was paid during the second quarter 2022.

Adjusted EBITDA, free cash flow and retained free cash flow are non-GAAP supplemental financial measures that management and external users of ETRN’s consolidated financial statements, such as industry analysts, investors, lenders, and rating agencies, may use to assess:

• ETRN’s operating performance as compared to other publicly traded companies in the midstream energy industry without regard to historical cost basis or, in the case of adjusted EBITDA, financing methods
• The ability of ETRN’s assets to generate sufficient cash flow to pay dividends to ETRN’s shareholders
• ETRN’s ability to incur and service debt and fund capital expenditures and capital contributions
• The viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities

ETRN believes that adjusted EBITDA, free cash flow, and retained free cash flow provide useful information to investors in assessing ETRN’s financial condition and results of operations. Adjusted EBITDA, free cash flow, and retained free cash flow should not be considered as alternatives to net income (loss), operating income, or net cash provided by operating activities, as applicable, or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA, free cash flow, and retained free cash flow have important limitations as analytical tools because they exclude some, but not all, items that affect net income (loss), operating income and net cash provided by operating activities. Additionally, because these non-GAAP metrics may be defined differently by other companies in ETRN’s industry, ETRN’s definitions of adjusted EBITDA, free cash flow, and retained free cash flow may not be comparable to similarly titled measures of other companies, thereby diminishing the utility of the measures. Free cash flow and retained free cash flow should not be viewed as indicative of the actual amount of cash that ETRN has available for dividends or that ETRN plans to distribute and are not intended to be liquidity measures.

ETRN is unable to provide a reconciliation of projected adjusted EBITDA from projected net income (loss), the most comparable financial measure calculated in accordance with GAAP, or a reconciliation of projected free cash flow or retained free cash flow to net cash provided by operating activities, the most comparable financial measure calculated in accordance with GAAP. ETRN has not provided a reconciliation of projected adjusted EBITDA to projected net income (loss), the most comparable financial measure calculated in accordance with GAAP, due to the inherent difficulty and impracticability of predicting certain amounts required by GAAP with a reasonable degree of accuracy. Net income (loss) includes the impact of depreciation expense, income tax expense (benefit), the impact of changes in the projected fair value of derivative instruments prior to settlement, potential changes in estimates for certain contract liabilities and unbilled revenues and certain other items that impact comparability between periods and the tax effect of such items, which may be significant and difficult to project with a reasonable degree of accuracy. Therefore, a reconciliation of projected adjusted EBITDA to projected net income (loss) is not available without unreasonable effort.

ETRN is unable to project net cash provided by operating activities because this metric includes the impact of changes in operating assets and liabilities related to the timing of cash receipts and disbursements that may not relate to the period in which the operating activities occurred. ETRN is unable to project these timing differences with any reasonable degree of accuracy to a specific day, three or more months in advance. Therefore, ETRN is unable to provide projected net cash provided by operating activities, or the related reconciliation of each of projected free cash flow and projected retained free cash flow to projected net cash provided by operating activities, without unreasonable effort. ETRN provides a range for the forecasts of net income, adjusted EBITDA, free cash flow and retained free cash flow to allow for the inherent difficulty of predicting certain amounts and the variability in the timing of cash spending and receipts and the impact on the related reconciling items, many of which interplay with each other.

Water EBITDA

As used in this news release, water EBITDA means water operating income (loss) plus, as applicable, depreciation and impairment of long-lived assets of ETRN’s water services business. Water EBITDA is a non-GAAP supplemental financial measure that management and external users of ETRN’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, use to assess the impact of ETRN’s water services business on ETRN’s operating performance and ETRN’s ability to incur and service debt and fund capital expenditures. Water EBITDA should not be considered as an alternative to ETRN’s net income (loss), operating income or any other measure of financial performance presented in accordance with GAAP. Water EBITDA has important limitations as an analytical tool because the measure excludes some, but not all, items that affect net income (loss) and operating income. Additionally, because water EBITDA may be defined differently by other companies in ETRN’s industry, the definition of water EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing the utility of the measure. The table below reconciles water EBITDA from ETRN’s water operating income (loss) as derived from ETRN’s statements of consolidated comprehensive income to be included in ETRN’s Quarterly Report on Form 10-Q for the three months ended June 30, 2022.

ETRN has not provided a reconciliation of projected water EBITDA from projected water operating income (loss), the most comparable measure calculated in accordance with GAAP. ETRN does not allocate certain costs, such as interest expense, to individual assets within its business segments. Therefore, the reconciliation of projected water EBITDA from projected water operating income (loss) is not available without unreasonable effort.

Reconciliation of Water EBITDA
		Three Months Ended June 30,
(Thousands)		2022				2021
Water operating income (loss)		$	3,120			$	(55,640	)
Add: Depreciation			4,804				8,201
Add: Impairment of long-lived assets			—				56,178
Water EBITDA		$	7,924			$	8,739

About Equitrans Midstream Corporation:

Equitrans Midstream Corporation (ETRN) has a premier asset footprint in the Appalachian Basin and, as the parent company of EQM Midstream Partners, is one of the largest natural gas gatherers in the United States. Through its strategically located assets in the Marcellus and Utica regions, ETRN has an operational focus on gas transmission and storage systems, gas gathering systems, and water services that support natural gas development and production across the Basin. With a rich 135-year history in the energy industry, ETRN was launched as a standalone company in 2018 with the vision to be the premier midstream services provider in North America. ETRN is helping to meet America’s growing need for clean-burning energy, while also providing a rewarding workplace and enriching the communities where its employees live and work.

For more information on Equitrans Midstream Corporation, visit www.equitransmidstream.com; and to learn more about our environmental, social, and governance practices, visit csr.equitransmidstream.com.

Cautionary Statements

This news release contains certain forward-looking statements within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and Section 27A of the United States Securities Act of 1933, as amended (the Securities Act), concerning ETRN and other matters. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of the management of ETRN, as well as assumptions made by, and information currently available to, such management. Words such as “could,” “will,” “may,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” “project,” “budget,” “potential,” “target,” “seek,” “strive,” “continue,” or “outlook” and similar expressions are used to identify forward-looking statements. These statements are subject to various risks and uncertainties, many of which are outside ETRN’s control. Without limiting the generality of the foregoing, forward-looking statements contained in this communication may include expectations of plans, strategies, objectives and growth and anticipated financial and operational performance of ETRN and its affiliates, including guidance and any changes in such guidance regarding ETRN’s gathering, transmission and storage and water services revenue and volume, including the anticipated effects associated with the February 2020 Gas Gathering and Compression Agreement and related documents entered into with EQT Corporation (EQT) (collectively, the EQT Global GGA); projected revenue (including from firm reservation fees) and volumes, deferred revenues, expenses, and contract liabilities, and the effects on liquidity, leverage, projected revenue, deferred revenue and contract liabilities associated with the EQT Global GGA and the MVP project (including changes in the targeted full in-service date for such project); the ultimate gathering fee relief, and timing thereof, provided to EQT under the EQT Global GGA and related agreements; ETRN’s ability to de-lever and timing thereof; forecasted adjusted EBITDA (and incremental adjusted EBITDA with MVP full in-service), water operating (loss) income, water EBITDA, net (loss) income, free cash flow, retained free cash flow (and usage thereof), leverage ratio, build multiples and deferred revenue; the weighted average contract life of gathering, transmission and storage contracts; infrastructure programs (including the timing, cost, capacity and sources of funding with respect to gathering, transmission and storage and water projects); the cost to construct or restore right-of way for, capacity of, shippers for, timing and durability of regulatory approvals and concluding litigation, final design (including expansions, extensions or refinements and capital and incremental adjusted EBITDA related thereto), ability to contract additional capacity on, mitigate emissions from, targeted in-service dates, and completion of current, planned or in-service projects or assets, in each case as applicable; the ultimate terms, partner relationships and structure of the MVP JV and ownership interests therein; the impact of changes in the targeted full in-service date of the MVP project on, among other things, the fair value of the Henry Hub cash bonus payment provision of the EQT Global GGA and the estimated transaction price allocated to ETRN’s remaining performance obligations under certain contracts with firm reservation fees and MVCs; expansion projects in ETRN’s operating areas and in areas that would provide access to new markets; ETRN’s ability to provide produced and mixed water handling services and realize expansion opportunities; ETRN’s ability to identify and complete acquisitions and other strategic transactions, including joint ventures, effectively integrate transactions into ETRN’s operations, and achieve synergies, system optionality, accretion and other benefits associated with transactions, including through increased scale; any credit rating impacts associated with the MVP project, customer credit ratings changes, defaults, acquisitions, dispositions and financings and any changes in EQM’s credit ratings; the effect and outcome of contractual disputes, litigation and other proceedings, including regulatory proceedings; the effects of any consolidation of or effected by upstream gas producers, whether in or outside of the Appalachian Basin; the timing and amount of future issuances or repurchases of ETRN’s securities; the effects of conversion, if at all, of ETRN’s preferred shares; the effects of seasonality; expected cash flows and MVCs, including those associated with the EQT Global GGA, and the potential impacts thereon of the commission timing and cost of the MVP project; the ability to achieve, and time for achieving, Hammerhead pipeline full commercial in-service; projected capital contributions and capital and operating expenditures, including the amount and timing of reimbursable capital expenditures, capital budget and sources of funds for capital expenditures; ETRN’s seeking recoupment of, and ability to recoup, replacement and related costs; dividend amounts, timing and rates; changes in commodity prices and the effect of commodity prices on ETRN’s business; future decisions of customers in respect of production growth, curtailing natural gas production, timing of turning wells in line, rig and completion activity and related impacts on ETRN’s business; liquidity and financing requirements, including sources and availability; interest rates; the ability of ETRN’s subsidiaries (some of which are not wholly owned) to service debt under, and comply with the covenants contained in, their respective credit agreements; the MVP JV’s ability to raise project-level debt, and the anticipated proceeds that ETRN expects to receive therefrom; expectations regarding natural gas and water volumes in ETRN’s areas of operations; ETRN’s ability to achieve anticipated benefits associated with the execution of the EQT Global GGA and other commercial agreements; the impact on ETRN and its subsidiaries of the coronavirus disease 2019 (COVID-19) pandemic; ETRN’s ability to achieve and create value from, its ESG and sustainability targets and aspirations (including targets and aspirations set forth in its climate policy) and ETRN’s ability to respond, and impacts of responding, to increasing stakeholder scrutiny in these areas; the effectiveness of ETRN’s information technology and operational technology systems and practices to defend against evolving cyberattacks on United States critical infrastructure; the effects of government regulation including any quantification of potential impacts of regulatory matters related to climate change on ETRN; and tax rates, status and position. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from projected results.

Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. ETRN has based these forward-looking statements on current expectations and assumptions about future events. While ETRN considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory, judicial and other risks and uncertainties, many of which are difficult to predict and are beyond ETRN’s control. The risks and uncertainties that may affect the operations, performance and results of ETRN’s business and forward-looking statements include, but are not limited to, those set forth under “Item 1A. Risk Factors” in ETRN’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (the SEC), as updated by any risk factors disclosed under Part II, “Item 1A. Risk Factors,” of ETRN’s Quarterly Report on Form 10-Q for the three months ended March 31, 2022 filed with the SEC, ETRN’s Quarterly Report on Form 10-Q for the three months ended June 30, 2022 to be filed with the SEC and ETRN’s subsequent filings. Any forward-looking statement speaks only as of the date on which such statement is made, and ETRN does not intend to correct or update any forward-looking statement, unless required by securities laws, whether as a result of new information, future events or otherwise. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

EQUITRANS MIDSTREAM CORPORATION STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (UNAUDITED)
		Three Months Ended June 30,
		2022				2021
		(Thousands, except per share amounts)
Operating revenues		$	328,611			$	348,295
Operating expenses:
Operating and maintenance			32,442				38,162
Selling, general and administrative			29,009				35,482
Depreciation			67,657				69,315
Amortization of intangible assets			16,205				16,205
Impairment of long-lived assets			—				56,178
Total operating expenses			145,313				215,342
Operating income			183,298				132,953
Equity income			39				5,921
Other income, net			14,173				9,453
Loss on extinguishment of debt			(24,937	)			—
Net interest expense			(95,117	)			(95,642	)
Income before income taxes			77,456				52,685
Income tax expense			3,650				12,564
Net income			73,806				40,121
Net income attributable to noncontrolling interests			3,948				3,008
Net income attributable to ETRN			69,858				37,113
Preferred dividends			14,628				14,628
Net income attributable to ETRN common shareholders		$	55,230			$	22,485
Earnings per share of common stock attributable to ETRN common shareholders – basic		$	0.13			$	0.05
Earnings per share of common stock attributable to ETRN common shareholders – diluted		$	0.13			$	0.05
Weighted average common shares outstanding – basic			433,333				433,003
Weighted average common shares outstanding – diluted			434,025				433,464

EQUITRANS MIDSTREAM CORPORATION GATHERING RESULTS OF OPERATIONS
		Three Months Ended June 30,
		2022				2021
FINANCIAL DATA		(Thousands, except per day amounts)
Firm reservation fee revenues(1)		$	138,605			$	149,360
Volumetric-based fee revenues			86,709				90,592
Total operating revenues			225,314				239,952
Operating expenses:
Operating and maintenance			21,703				24,274
Selling, general and administrative			19,269				25,689
Depreciation			48,573				46,911
Amortization of intangible assets			16,205				16,205
Total operating expenses			105,750				113,079
Operating income		$	119,564			$	126,873
Other income, net (2)		$	13,726			$	9,434
OPERATIONAL DATA
Gathered volumes (BBtu per day)
Firm capacity(1)			5,218				5,279
Volumetric-based services			2,654				3,106
Total gathered volumes			7,872				8,385
Capital expenditures(3)		$	69,189			$	59,680

(1)	Includes revenues and volumes, as applicable, from contracts with MVCs.
(2)	Other income, net, includes the unrealized gains on derivative instruments associated with the Henry Hub cash bonus payment provision.
(3)	Includes approximately $8.7 million and $4.1 million of capital expenditures related to noncontrolling interests in Eureka for the three months ended June 30, 2022, and 2021, respectively.

EQUITRANS MIDSTREAM CORPORATION TRANSMISSION RESULTS OF OPERATIONS
		Three Months Ended June 30,
		2022				2021
FINANCIAL DATA		(Thousands, except per day amounts)
Firm reservation fee revenues		$	84,675			$	83,797
Volumetric-based fee revenues			6,403				9,101
Total operating revenues			91,078				92,898
Operating expenses:
Operating and maintenance			7,897				8,478
Selling, general and administrative			8,436				8,632
Depreciation			13,904				13,826
Total operating expenses			30,237				30,936
Operating income		$	60,841			$	61,962
Equity income		$	39			$	5,921
OPERATIONAL DATA
Transmission pipeline throughput (BBtu per day)
Firm capacity reservation			3,037				2,906
Volumetric-based services			17				12
Total transmission pipeline throughput			3,054				2,918
Average contracted firm transmission reservation commitments (BBtu per day)			3,793				3,780
Capital expenditures(1)		$	6,339			$	7,790

(1)	Transmission capital expenditures do not include aggregate capital contributions made to the MVP JV for the MVP and MVP Southgate projects of approximately $39.2 million and $73.9 million for the three months ended June 30, 2022, and 2021, respectively.

EQUITRANS MIDSTREAM CORPORATION WATER RESULTS OF OPERATIONS
		Three Months Ended June 30,
		2022				2021
FINANCIAL DATA		(Thousands, except MMgal amounts)
Firm reservation fee revenues(1)		$	9,375			$	929
Volumetric-based fee revenues			2,844				14,516
Total operating revenues			12,219				15,445
Operating expenses:
Operating and maintenance			2,820				5,393
Selling, general and administrative			1,475				1,313
Depreciation			4,804				8,201
Impairment of long-lived assets			—				56,178
Total operating expenses			9,099				71,085
Operating income (loss)		$	3,120			$	(55,640	)
OPERATIONAL DATA
Water services volumes (MMgal)
Firm capacity reservation(1)			106				18
Volumetric-based services			54				296
Total water volumes			160				314
Capital expenditures		$	22,526			$	4,820

(1)	Includes revenues and volumes from contracts with MVCs or Annual Revenue Commitments (ARCs), as applicable.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220802005259/en/

Analyst inquiries:

Nate Tetlow – Vice President, Corporate Development and Investor Relations

412-553-5834

[email protected]

Media inquiries:

Natalie Cox – Communications and Corporate Affairs

412-395-3941

[email protected]

KEYWORDS: United States North America Pennsylvania

INDUSTRY KEYWORDS: Professional Services Environmental, Social and Governance (ESG) Environment Oil/Gas Sustainability Energy

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Enpro Reports Strong Second Quarter 2022 Results; Raises Guidance

Second Quarter 2022 Highlights

(All results reflect comparisons to prior-year period unless otherwise noted)

• Sales of $333.3 million increased 11.6%; organic sales increased 9.5%

• Net income attributable to EnPro Industries, Inc. was $33.1 million compared to $29.3 million last year

• Adjusted EBITDA* increased 43.4% to $82.0 million; adjusted EBITDA margin* increased 540 bps to 24.6%

• Diluted earnings per share attributable to EnPro Industries, Inc. was $1.59, compared to a diluted earnings per share of $1.41 last year

• Adjusted diluted earnings per share* increased 48.7% to $2.32 versus $1.56 last year

• Revenue growth guidance raised to low-to-mid double digits

• Adjusted EBITDA guidance increased to $270-$280 million, from the previous range of $263-$275 million

CHARLOTTE, N.C.–(BUSINESS WIRE)–
EnPro Industries, Inc. (NYSE: NPO) today announced its financial results for the three and six months ended June 30, 2022.

“We delivered outstanding results in the second quarter despite a challenging economic environment marked by inflationary cost pressures, ongoing supply chain challenges and heightened macroeconomic uncertainty,” said Eric Vaillancourt, President and Chief Executive Officer. “We drove solid revenue and earnings growth across the company as adjusted EBITDA margins exceeded 24%. Our performance was driven by strong organic growth, including pricing initiatives, and the sustained benefits from our portfolio reshaping actions.”

Mr. Vaillancourt continued, “Demand for our leading industrial technology applications remained firm in the second quarter, and we are entering the second half with strong backlog and order patterns. Our results this quarter continue to demonstrate our ability to drive sustainable growth and enhanced value for our stakeholders as we build upon the strong foundation in place at Enpro.”

Financial Highlights (Dollars in millions except per share data)
	Quarters Ended June 30,									Six Months Ended June 30,
	2022			2021			Change			2022			2021			Change
Net Sales	$	333.3		$	298.6		11.6	%		$	662.0		$	577.9		14.6	%
Net Income Attributable to EnPro Industries, Inc.	$	33.1		$	29.3		13.0	%		$	49.3		$	47.3		4.2	%
Diluted Earnings Per Share Attributable to EnPro Industries, Inc.	$	1.59		$	1.41		12.8	%		$	2.36		$	2.28		3.5	%
Adjusted Net Income Attributable to EnPro Industries, Inc.*	$	48.2		$	32.4		48.8	%		$	86.5		$	60.7		42.5	%
Adjusted Diluted Earnings Per Share*	$	2.32		$	1.56		48.7	%		$	4.15		$	2.92		42.1	%
Adjusted EBITDA*	$	82.0		$	57.2		43.4	%		$	150.0		$	109.3		37.2	%
Adjusted EBITDA Margin*		24.6	%		19.2	%					22.7	%		18.9	%
*Non-GAAP measure. See the attached schedules for adjustments and reconciliations to GAAP numbers.

Second Quarter 2022 Consolidated Results

Sales of $333.3 million increased 11.6% compared to the second quarter of 2021. Semiconductor, aerospace, food & pharma and power generation markets saw continued positive momentum and general industrial remained firm year-over-year. Contribution from the NxEdge acquisition, as well as organic growth across all three segments, drove the increase in sales, partially offset by the impact of last year’s divestitures and weakness in the European automotive market. Excluding the impact of acquired and divested businesses and foreign exchange translation, sales grew 9.5% year-over-year.

Corporate expenses of $9.5 million in the second quarter of 2022 decreased from $12.8 million last year, driven primarily by a $2.5 million reversal of incentive compensation accruals due to the share price decline experienced during the second quarter.

Net income attributable to EnPro Industries, Inc. was $33.1 million, compared to $29.3 million in the prior-year period. Diluted earnings per share attributable to EnPro Industries, Inc. was $1.59, compared to $1.41 in the prior-year period.

Adjusted net income attributable to EnPro Industries, Inc. of $48.2 million increased 48.8% compared to the second quarter of 2021 and adjusted diluted earnings per share was $2.32, compared to $1.56 in the prior-year period, an increase of 48.7%.

Adjusted EBITDA of $82.0 million increased 43.4% compared to the prior-year period driven primarily by the addition of NxEdge, and organic growth, including pricing initiatives, partially offset by inflationary raw material costs, rising labor expenses and the impact of divestitures completed in 2021. Adjusted EBITDA in the second quarter was positively impacted by a $2.8 million foreign exchange benefit from revaluation gains primarily on foreign cash balances due to a strengthening dollar and the aforementioned incentive compensation accrual reduction related to the share price decline during the second quarter. Adjusted EBITDA margin of 24.6% increased 540 basis points compared to the prior-year period.

Second Quarter 2022 Segment Highlights

(All results reflect comparisons to prior-year period unless otherwise noted)

Sealing Technologies – Safeguarding environments with critical applications in diverse end markets

Garlock, STEMCO, and Technetics Group

	Quarters Ended June 30,							Six Months Ended June 30,
(Dollars in millions)	2022		2021		Change			2022		2021		Change
Sales	$155.9		$162.5		(4.1	)%		$309.5		$309.0		0.2	%
Adjusted Segment EBITDA	$42.5		$42.4		0.2	%		$76.0		$76.4		(0.5	)%
Adjusted Segment EBITDA Margin	27.3	%	26.1	%				24.6	%	24.7	%

• Sales decreased 4.1% versus the prior-year period driven primarily by the divestiture of the polymer components business completed in September 2021. Excluding the impact of the divested business and foreign exchange translation, organic sales increased 6.3% versus the prior-year period driven by strong demand from aerospace, power generation and food & pharma markets.
• Adjusted segment EBITDA of $42.5 million was essentially flat year-over-year. Excluding the impact of the divestiture and foreign exchange translation, adjusted segment EBITDA increased 10.0% compared to the prior-year period, reflecting operating leverage on organic sales growth, including strategic pricing actions, that more than offset material and wage increases during the quarter.

Advanced Surface Technologies – Leading edge precision manufacturing, coatings, innovative optical and cleaning and refurbishment solutions – NxEdge, Technetics Semi, LeanTeq, and Alluxa

	Quarters Ended June 30,							Six Months Ended June 30,
(Dollars in millions)	2022		2021		Change			2022		2021		Change
Sales	$121.5		$59.2		105.2	%		$238.2		$113.9		109.1	%
Adjusted Segment EBITDA	$37.8		$15.6		142.3	%		$72.7		$32.9		121.0	%
Adjusted Segment EBITDA Margin	31.1	%	26.4	%				30.5	%	28.9	%

• Sales increased 105.2% versus the prior-year period driven by the acquisition of NxEdge and continued strong demand in the semiconductor market. Excluding the impact of the NxEdge acquisition and foreign exchange translation, sales increased 19.1% year-over-year.
• Adjusted segment EBITDA increased 142.3% versus the prior-year period, driven primarily by the NxEdge acquisition and strong organic sales growth. Excluding the impact of the NxEdge acquisition and foreign exchange translation, adjusted segment EBITDA increased 33.3%. While spending on growth initiatives continued in the second quarter, margin expansion was driven by operating leverage from strong sales growth and favorable mix in the segment.

Engineered Materials – High performance polymer applications and critical pipeline products – GGB and GPT

	Quarters Ended June 30,							Six Months Ended June 30,
(Dollars in millions)	2022		2021		Change			2022		2021		Change
Sales	$56.5		$80.0		(29.4	)%		$115.5		$160.4		(28.0	)%
Adjusted Segment EBITDA	$9.5		$13.0		(26.9	)%		$18.7		$25.6		(27.0	)%
Adjusted Segment EBITDA Margin	16.8	%	16.3	%				16.2	%	16.0	%

• Sales decreased 29.4% versus the prior-year period driven by the CPI divestiture completed in December 2021. Excluding the divestiture and foreign exchange translation, sales increased 7.6% compared to the prior-year period, driven by strength in aerospace, oil & gas and domestic automotive markets, partially offset by a slow European automotive market and COVID-related lockdowns in China.
• Adjusted segment EBITDA decreased 26.9% versus the prior-year period, driven by the CPI divestiture. Excluding the CPI divestiture and foreign exchange translation, adjusted segment EBITDA increased 13.6% compared to the prior-year period, reflecting operating leverage on organic sales growth, including pricing initiatives, and cost management.

Balance Sheet, Cash Flow and Capital Allocation

The company generated $67.1 million of cash flow from operations during the six months ended June 30, 2022 and $58.6 million of free cash flow, net of $8.5 million in capital expenditures. This compares to $58.5 million of cash flow from operations, or $48.3 million of free cash flow, net of $10.2 million in capital expenditures, in the prior-year period. The year-over-year change was driven primarily by higher operating profits and lower capital expenditures. During the second quarter, the company paid a regular quarterly dividend of $0.28 per share, with dividend payments totaling $11.7 million for the first six months of 2022.

Enpro ended the second quarter with total debt of $990.9 million and cash of $222.1 million. Outstanding letters of credit totaled $10.8 million.

Quarterly Dividend

EnPro Industries, Inc. declared a regular quarterly dividend of $0.28 per share on July 27, 2022. The dividend is payable September 14, 2022 to shareholders of record as of the close of business on August 31, 2022.

2022 Guidance

The company expects 2022 revenue growth to be in the low-to-mid double-digit range. For 2022, the company is raising adjusted EBITDA guidance to be in the range of $270 million to $280 million. Adjusted diluted earnings per share is expected to be in the range of $6.80 to $7.30.

	Prior Guidance (as of 5/2/22)	Current Guidance (as of 8/2/22)
Sales Growth	Low Double-Digits	Low-to-Mid Double-Digits
Adjusted EBITDA	$263 – $275 million	$270 – $280 million
Adjusted Diluted EPS	$6.60 – $7.15	$6.80 – $7.30
	Assumptions	Assumptions
Amortization of Acquisition-Related Intangible Assets*	$77 – $79 million	$77 – $79 million
Depreciation and Other Amortization	$37 – $39 million	$36 – $38 million
Net Interest Expense	$33 – $36 million	$33 – $36 million
Normalized Tax Rate	27%	27%
*Amortization of acquisition-related intangible assets excluded from the calculation of adjusted diluted EPS.

Conference Call, Webcast Information, and Presentations

Enpro will hold a conference call today, August 2, at 8:30 a.m. Eastern Time to discuss second quarter 2022 financial results. Investors who wish to participate in the call should dial 1-877-407-0832 approximately 10 minutes before the call begins and provide conference access code 13714142. A live audio webcast of the call and accompanying slide presentation will be accessible from the company’s website, https://www.enproindustries.com. To access the earnings presentation, log on to the webcast by clicking the link on the company’s home page.

Primary Segment Operating Performance Measure

The primary metric used by management to allocate resources and assess segment performance is 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. Expenses not directly attributable to the segments, corporate expenses, net interest expense, gains/losses related to the sale of assets, and income taxes are not included in the computation of adjusted segment EBITDA. Under U.S. generally accepted accounting principles (“GAAP”), the primary metric used by management to allocate resources and assess segment performance is required to be disclosed in financial statement footnotes, and accordingly such metric as presented for each segment is not deemed to be a non-GAAP measure under applicable regulations of the Securities and Exchange Commission.

Non-GAAP Financial Information

This press release contains financial measures that have not been prepared in conformity with GAAP. They include adjusted net income attributable to EnPro Industries, Inc., adjusted diluted earnings per share attributable to EnPro Industries, Inc., adjusted EBITDA, adjusted EBITDA margin, total adjusted segment EBITDA and free cash flow. Tables showing the reconciliation of these historical non-GAAP financial measures to the comparable GAAP measures are attached to the release. Adjusted EBITDA and adjusted diluted earnings per share anticipated for full year 2022 are calculated in a manner consistent with the historical presentation of these measures in the attached tables. Because of the forward-looking nature of these estimates, it is impractical to present quantitative reconciliations of such measures to comparable GAAP measures, and accordingly no such GAAP measures are being presented.

Management believes these non-GAAP metrics 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. In addition, these are some of the factors the company uses in internal evaluations of the overall performance of its businesses. Management acknowledges that there are many items that impact a company’s 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, these non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies.

Forward-Looking Statements and Guidance

Statements in this press release that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They involve a number of risks and uncertainties that may cause actual events and results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to: impacts from the COVID-19 pandemic and governmental responses to limit the further spread of COVID-19, including impacts on the company’s operations, and the operations and businesses of its customers and vendors, including whether the company’s operations and those of its customers and vendors will continue to be treated as “essential” operations under government orders restricting business activities or, even if so treated, whether site-specific health and safety concerns might otherwise require certain operations to be halted or otherwise curtailed for some period of time; uncertainty with respect to the duration and severity of these impacts from the COVID-19 pandemic, including impacts on the general economy and the markets served by the company’s customers, as well as supply chain disruptions and materials cost increases that are not passed along to our customers; the extent to which the impacts from the COVID-19 pandemic could result in a reduction in demand for the company’s products and services, which could also result in asset impairment charges, including for goodwill; other economic conditions in the markets served by Enpro’s businesses and those of its customers, some of which are cyclical and experience periodic downturns and disruptions, such as disruptions in the pricing of oil and gas; the impact of geopolitical activity on those markets, including the outbreak, threat of outbreak or continuation of armed hostilities and the imposition of governmental sanctions in response thereto, prices and availability of its raw materials; uncertainties with respect to the company’s ability to achieve anticipated growth within the semiconductor, life sciences, and other technology-enabled markets; the impact of fluctuations in relevant foreign currency exchange rates or unanticipated increases in applicable interest rates; unanticipated delays or problems in introducing new products; the impact of any labor disputes; announcements by competitors of new products, services or technological innovations; changes in pricing policies or the pricing policies of competitors; and the amount of any payments required to satisfy contingent liabilities, including those related to discontinued operations, other divested businesses and the discontinued operations of its predecessors, including liabilities for certain products, environmental matters, employee benefit and statutory severance obligations and other matters. Enpro’s filings with the Securities and Exchange Commission, including its most recent Form 10-K, describe these and other risks and uncertainties in more detail. Enpro does not undertake to update any forward-looking statements made in this press release to reflect any change in management’s expectations or any change in the assumptions or circumstances on which such statements are based.

Full-year guidance excludes changes in the number of shares outstanding, impacts from future and pending acquisitions, dispositions and related transaction costs, restructuring costs, incremental impacts of tariffs and trade tensions on market demand and costs subsequent to the end of the second quarter, the impact of foreign exchange rate changes subsequent to the end of the second quarter, impacts from further spread of COVID-19, and environmental and litigation charges.

About Enpro

Enpro is a leading industrial technology company focused on critical applications across many end-markets, including semiconductor, photonics, industrial process, aerospace, food and pharma and life sciences. For more information about Enpro, visit the company’s website at http://www.enproindustries.com.

# # # #

APPENDICES

Consolidated Financial Information and Reconciliations

EnPro Industries, Inc.
Consolidated Statements of Operations (Unaudited)
For the Quarters and Six Months Ended June 30, 2022 and 2021
(In Millions, Except Per Share Data)
	Quarters Ended							Six Months Ended
	June 30,			June 30,				June 30,			June 30,
	2022			2021				2022			2021
Net sales	$	333.3		$	298.6			$	662.0		$	577.9
Cost of sales		202.8			181.6				416.9			351.5
Gross profit		130.5			117.0				245.1			226.4
Operating expenses:
Selling, general and administrative		79.9			82.7				165.6			163.0
Other		0.9			2.4				2.4			4.3
Total operating expenses		80.8			85.1				168.0			167.3
Operating income		49.7			31.9				77.1			59.1
Interest expense		(7.7	)		(4.0	)			(14.8	)		(8.0	)
Interest income		—			0.2				0.2			0.4
Other income (expense)		(2.7	)		1.9				(2.0	)		1.8
Income before income taxes		39.3			30.0				60.5			53.3
Income tax expense		(6.3	)		(0.8	)			(11.0	)		(6.0	)
Net income		33.0			29.2				49.5			47.3
Less: net income (loss) attributable to redeemable non-controlling interests		(0.1	)		(0.1	)			0.2			—
Net income attributable to EnPro Industries, Inc.	$	33.1		$	29.3			$	49.3		$	47.3
Basic earnings per share attributable to EnPro Industries, Inc.	$	1.59		$	1.42			$	2.37		$	2.30
Average common shares outstanding (millions)		20.8			20.6				20.8			20.6
Diluted earnings per share attributable to EnPro Industries, Inc.	$	1.59		$	1.41			$	2.36		$	2.28
Average common shares outstanding (millions)		20.8			20.8				20.8			20.8

EnPro Industries, Inc.
Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended June 30, 2022 and 2021
(In Millions)
	2022			2021
Operating activities
Net income	$	49.5		$	47.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		16.1			13.8
Amortization		39.9			23.7
Deferred income taxes		(1.4	)		(2.2	)
Stock-based compensation		3.1			3.3
Other non-cash adjustments		6.9			4.0
Change in assets and liabilities, net of effects of divestitures of businesses:
Accounts receivable, net		(17.2	)		(24.3	)
Inventories		(11.0	)		(10.6	)
Accounts payable		11.1			16.7
Income taxes, net		(12.1	)		(10.6	)
Other current assets and liabilities		(22.8	)		(0.9	)
Other non-current assets and liabilities		5.0			(1.7	)
Net cash provided by operating activities		67.1			58.5
Investing activities
Purchases of property, plant and equipment		(8.5	)		(10.2	)
Proceeds from (payments for) sale of businesses		0.4			(2.3	)
Acquisitions, net of cash acquired		2.9			—
Other		(0.3	)		0.5
Net cash used in investing activities		(5.5	)		(12.0	)
Financing activities
Proceeds from debt		26.6			—
Repayments of debt		(162.5	)		(2.0	)
Dividends paid		(11.7	)		(11.3	)
Other		(6.8	)		(1.5	)
Net cash used in financing activities		(154.4	)		(14.8	)
Effect of exchange rate changes on cash and cash equivalents		(23.2	)		0.7
Net increase (decrease) in cash and cash equivalents		(116.0	)		32.4
Cash and cash equivalents at beginning of period		338.1			229.5
Cash and cash equivalents at end of period	$	222.1		$	261.9
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net	$	13.4		$	7.5
Income taxes, net	$	26.1		$	18.1

EnPro Industries, Inc.
Consolidated Balance Sheets (Unaudited)
As of June 30, 2022 and December 31, 2021
(In Millions)
	June 30,			December 31,
	2022			2021
Current assets
Cash and cash equivalents	$	222.1		$	338.1
Accounts receivable, net		185.7			177.0
Inventories		168.0			160.0
Prepaid expenses and other current assets		53.2			37.9
Total current assets		629.0			713.0
Property, plant and equipment, net		224.1			236.7
Goodwill		943.5			953.2
Other intangible assets		861.2			913.4
Other assets		156.9			153.5
Total assets	$	2,814.7		$	2,969.8
Current liabilities
Current maturities of long-term debt	$	14.5		$	12.7
Short-term debt		99.7			149.3
Accounts payable		91.6			81.9
Accrued expenses		124.3			135.2
Total current liabilities		330.1			379.1
Long-term debt		876.7			963.9
Deferred taxes and non-current income taxes payable		158.5			167.3
Other liabilities		126.3			142.8
Total liabilities		1,491.6			1,653.1
Redeemable non-controlling interests		48.1			50.1
Shareholders’ equity
Common stock		0.2			0.2
Additional paid-in capital		301.0			303.6
Retained earnings		987.0			949.4
Accumulated other comprehensive income		(12.0	)		14.6
Common stock held in treasury, at cost		(1.2	)		(1.2	)
Total shareholders’ equity		1,275.0			1,266.6
Total liabilities and equity	$	2,814.7		$	2,969.8

EnPro Industries, Inc.
Segment Information (Unaudited)
For the Quarters and Six Months Ended June 30, 2022 and 2021
(In Millions)
Sales
	Quarters Ended							Six Months Ended
	June 30,							June 30,
	2022			2021				2022			2021
Sealing Technologies	$	155.9		$	162.5			$	309.5		$	309.0
Advanced Surface Technologies		121.5			59.2				238.2			113.9
Engineered Materials		56.5			80.0				115.5			160.4
		333.9			301.7				663.2			583.3
Less: intersegment sales		(0.6	)		(3.1	)			(1.2	)		(5.4	)
	$	333.3		$	298.6			$	662.0		$	577.9
Net income attributable to EnPro Industries, Inc.	$	33.1		$	29.3			$	49.3		$	47.3
Earnings before interest, income taxes, depreciation,
amortization and other selected items (Adjusted Segment EBITDA)
	Quarters Ended							Six Months Ended
	June 30,							June 30,
	2022			2021				2022			2021
Sealing Technologies	$	42.5		$	42.4			$	76.0		$	76.4
Advanced Surface Technologies		37.8			15.6				72.7			32.9
Engineered Materials		9.5			13.0				18.7			25.6
	$	89.8		$	71.0			$	167.4		$	134.9
Adjusted Segment EBITDA Margin
	Quarters Ended							Six Months Ended
	June 30,							June 30,
	2022			2021				2022			2021
Sealing Technologies		27.3	%		26.1	%			24.6	%		24.7	%
Advanced Surface Technologies		31.1	%		26.4	%			30.5	%		28.9	%
Engineered Materials		16.8	%		16.3	%			16.2	%		16.0	%
		26.9	%		23.8	%			25.3	%		23.3	%
Reconciliation of Adjusted Segment EBITDA to Net Income Attributable to EnPro Industries, Inc.
	Quarters Ended							Six Months Ended
	June 30,							June 30,
	2022			2021				2022			2021
Adjusted Segment EBITDA	$	89.8		$	71.0			$	167.4		$	134.9
Acquisition and divestiture expenses		(0.3	)		—				(0.4	)		(0.1	)
Non-controlling interest compensation allocation1		(1.4	)		(1.3	)			(0.5	)		(2.9	)
Amortization of the fair value adjustment to acquisition date inventory		(1.0	)		(2.3	)			(11.3	)		(4.8	)
Restructuring and impairment expense		(0.9	)		(2.7	)			(1.3	)		(4.5	)
Depreciation and amortization expense		(27.9	)		(18.5	)			(55.9	)		(37.4	)
Corporate expenses		(9.5	)		(12.8	)			(22.9	)		(24.3	)
Interest expense, net		(7.7	)		(3.8	)			(14.6	)		(7.6	)
Other income (expense), net		(1.8	)		0.4				—			—
Income before income taxes		39.3			30.0				60.5			53.3
Income tax expense		(6.3	)		(0.8	)			(11.0	)		(6.0	)
Net income		33.0			29.2				49.5			47.3
Less: net income (loss) attributable to redeemable non-controlling interests		(0.1	)		(0.1	)			0.2			—
Net income attributable to EnPro Industries, Inc.	$	33.1		$	29.3			$	49.3		$	47.3

Adjusted Segment EBITDA is total segment revenue reduced by operating expenses and other costs identifiable with the segment, excluding acquisition and divestiture expenses, restructuring and impairment expense, non-controlling interest compensation, amortization of the fair value adjustment to acquisition date inventory, and depreciation and amortization.

Corporate expenses include general corporate administrative costs. Expenses not directly attributable to the segments, corporate expenses, net interest expense, gains/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 the Company.

1Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa that is subject to reduction for certain types of employment terminations of the LeanTeq and Alluxa sellers and is directly related to the terms of the respective 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.

EnPro Industries, Inc.
Adjusted Segment EBITDA Reconciling Items by Segment (Unaudited)
For the Quarters and Six Months Ended June 30, 2022 and 2021
(In Millions)
	Quarter Ended June 30, 2022
	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total Segments
Acquisition and divestiture expenses	$	0.1	$	0.2	$	—	$	0.3
Non-controlling interest compensation allocation1	$	—	$	1.4	$	—	$	1.4
Amortization of the fair value adjustment to acquisition date inventory	$	—	$	1.0	$	—	$	1.0
Restructuring and impairment expense	$	0.2	$	0.6	$	0.1	$	0.9
Depreciation and amortization expense	$	6.7	$	19.4	$	1.8	$	27.9

	Quarter Ended June 30, 2021
	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total Segments
Non-controlling interest compensation allocation1	$	—	$	1.3	$	—	$	1.3
Amortization of the fair value adjustment to acquisition date inventory	$	—	$	2.3	$	—	$	2.3
Restructuring and impairment expense	$	0.6	$	—	$	2.1	$	2.7
Depreciation and amortization expense	$	7.7	$	7.7	$	3.1	$	18.5

	Six Months Ended June 30, 2022
	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total Segments
Acquisition and divestiture expenses	$	0.1	$	0.3	$	—	$	0.4
Non-controlling interest compensation allocation1	$	—	$	0.5	$	—	$	0.5
Amortization of the fair value adjustment to acquisition date inventory	$	—	$	11.3	$	—	$	11.3
Restructuring and impairment expense	$	0.5	$	0.6	$	0.2	$	1.3
Depreciation and amortization expense	$	13.5	$	38.6	$	3.8	$	55.9

	Six Months Ended June 30, 2021
	Sealing Technologies		Advanced Surface Technologies		Engineered Materials		Total Segments
Acquisition and divestiture expenses	$	0.1	$	—	$	—	$	0.1
Non-controlling interest compensation allocation1	$	—	$	2.9	$	—	$	2.9
Amortization of the fair value adjustment to acquisition date inventory	$	—	$	4.8	$	—	$	4.8
Restructuring and impairment expense	$	2.0	$	—	$	2.5	$	4.5
Depreciation and amortization expense	$	15.7	$	15.4	$	6.3	$	37.4

1Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa that is subject to reduction for certain types of employment terminations of the LeanTeq and Alluxa sellers and is directly related to the terms of the respective 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.

EnPro Industries, Inc.
Reconciliation of Net Income Attributable to EnPro Industries, Inc. to Adjusted Net Income Attributable to EnPro Industries, Inc. and Adjusted Diluted Earnings Per Share (Unaudited)
For the Quarters and Six Months Ended June 30, 2022 and 2021
(In Millions, Except Per Share Data)
	Quarters Ended June 30,
	2022									2021
	$			Average common shares outstanding, diluted		Per Share				$			Average common shares outstanding, diluted		Per Share
Net income attributable to EnPro Industries, Inc.	$	33.1		20.8		$	1.59			$	29.3		20.8		$	1.41
Net loss from redeemable non-controlling interests		(0.1	)								(0.1	)
Income tax expense		6.3									0.8
Income before income taxes		39.3									30.0
Adjustments from selling, general, and administrative:
Acquisition and divestiture expenses		1.2									0.7
Non-controlling interest compensation allocations1		1.4									1.3
Amortization of acquisition-related intangible assets		19.6									11.3
Adjustments from other operating expense and cost of sales:
Restructuring and impairment expense		0.8									2.7
Amortization of the fair value adjustment to acquisition date inventory		1.0									2.3
Adjustments from other non-operating expense:
Asbestos receivable adjustment		2.8									—
Costs associated with previously disposed businesses		0.5									0.1
Net loss on sale of businesses		—									0.1
Pension income (non-service cost)		(0.6	)								(2.1	)
Other adjustments:
Other		(0.1	)								(0.3	)
Adjusted income before income taxes		65.9									46.1
Adjusted income tax expense		(17.8	)								(13.8	)
Net loss from redeemable non-controlling interests		0.1									0.1
Adjusted net income attributable to EnPro Industries, Inc.	$	48.2		20.8		$	2.32		2	$	32.4		20.8		$	1.56		2

	Six Months Ended June 30,
	2022									2021
	$			Average common shares outstanding, diluted		Per Share				$			Average common shares outstanding, diluted		Per Share
Net income attributable to EnPro Industries, Inc.	$	49.3		20.8		$	2.36			$	47.3		20.8		$	2.28
Net income from redeemable non-controlling interests		0.2									—
Income tax expense		11.0									6.0
Income before income taxes		60.5									53.3
Adjustments from selling, general, and administrative:
Acquisition and divestiture expenses		2.8									0.7
Non-controlling interest compensation allocations1		0.5									2.9
Amortization of acquisition-related intangible assets		39.4									22.5
Adjustments from other operating expense and cost of sales:
Restructuring and impairment expense		2.3									4.5
Amortization of the fair value adjustment to acquisition date inventory		11.3									4.8
Adjustments from other non-operating expense:
Environmental reserve adjustment		(0.3	)								—
Asbestos receivable adjustment		2.8									—
Costs associated with previously disposed businesses		0.7									0.4
Net loss on sale of businesses		0.1									2.0
Pension income (non-service cost)		(1.3	)								(4.2	)
Other adjustments:
Other		—									(0.2	)
Adjusted income before income taxes		118.8									86.7
Adjusted income tax expense		(32.1	)								(26.0	)
Net income from redeemable non-controlling interests		(0.2	)								—
Adjusted net income attributable to EnPro Industries, Inc.	$	86.5		20.8		$	4.15		2	$	60.7		20.8		$	2.92		2

Management of the Company believes that it is helpful to the readers of the financial statements to understand the impact of certain selected items on the Company’s reported net income attributable to EnPro Industries, Inc. and diluted earnings per share attributable to EnPro Industries, Inc., including items that may recur from time to time. The items adjusted for in this schedule 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. This presentation enables readers to better compare EnPro Industries, Inc. to other diversified industrial manufacturing companies that do not incur the sporadic impact of restructuring activities, costs associated with previously disposed of businesses, acquisitions and divestitures, or other selected items.

Management acknowledges that there are many items that impact a company’s reported results, and this list is not intended to present all items that may have impacted these results.

Other adjustments are included in selling, general, and administrative and other operating expenses on the consolidated statements of operations.

The adjusted income tax expense presented above is calculated using a normalized company-wide effective tax rate excluding discrete items of 27.0% and 30.0% for 2022 and 2021, respectively. Per share amounts were calculated by dividing by the weighted-average shares of diluted common stock outstanding during the periods.

1Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa that is subject to reduction for certain types of employment terminations of the LeanTeq and Alluxa sellers and is directly related to the terms of the respective 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.

2 Adjusted diluted earnings per share.

EnPro Industries, Inc.
Reconciliation of Net Income Attributable to EnPro Industries, Inc. to Adjusted EBITDA (Unaudited)
For the Quarters and Six Months Ended June 30, 2022 and 2021
(In Millions)
	Quarters Ended							Six Months Ended
	June 30,							June 30,
	2022			2021				2022			2021
Net income attributable to EnPro Industries, Inc.	$	33.1		$	29.3			$	49.3		$	47.3
Net income (loss) attributable to redeemable non-controlling interests		(0.1	)		(0.1	)			0.2			—
Net income		33.0			29.2				49.5			47.3
Adjustments to arrive at earnings before interest, income taxes, depreciation, amortization, and other selected items (Adjusted EBITDA):
Interest expense, net		7.7			3.8				14.6			7.6
Income tax expense		6.3			0.8				11.0			6.0
Depreciation and amortization expense		28.0			18.6				56.0			37.5
Restructuring and impairment expense		0.8			2.7				2.3			4.5
Environmental reserve adjustment		—			—				(0.3	)		—
Asbestos receivable adjustment		2.8			—				2.8			—
Costs associated with previously disposed businesses		0.5			0.1				0.7			0.4
Net loss on sale of businesses		—			0.1				0.1			2.0
Acquisition and divestiture expenses		1.2			0.7				2.8			0.7
Pension income (non-service cost)		(0.6	)		(2.1	)			(1.3	)		(4.2	)
Non-controlling interest compensation allocation1		1.4			1.3				0.5			2.9
Amortization of the fair value adjustment to acquisition date inventory		1.0			2.3				11.3			4.8
Other		(0.1	)		(0.3	)			—			(0.2	)
Adjusted EBITDA	$	82.0		$	57.2			$	150.0		$	109.3

1Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa that is subject to reduction for certain types of employment terminations of the LeanTeq and Alluxa sellers and is directly related to the terms of the respective 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.

Supplemental disclosure: Adjusted EBITDA as presented also represents the amount defined as “EBITDA” under the indenture governing the Company’s 5.75% Senior Notes due 2026. For the six months ended June 30, 2022 approximately 49% of the adjusted EBITDA  as presented above was attributable to EnPro’s subsidiaries that do not guarantee the Company’s 5.75% Senior Notes due 2026.

EnPro Industries, Inc.
Reconciliation of Free Cash Flow (Unaudited)
(In Millions)
Free Cash Flow – Six Months Ended June 30, 2022
Net cash provided by operating activities1	$	67.1
Purchases of property, plant, and equipment		(8.5	)
Free cash flow	$	58.6
Free Cash Flow – Six Months Ended June 30, 2021
Net cash provided by operating activities	$	58.5
Purchases of property, plant, and equipment		(10.2	)
Free cash flow	$	48.3

1 Net cash provided by operating activities for the quarter ended March 31, 2022 has been lowered by $3.5 million as compared to the amount previously reported. The effect of exchange rate changes on cash and cash equivalents (not a component of net cash provided by operating activities) has been increased by $3.5 million for the respective period.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220802005393/en/

Investor Contacts:

Milt Childress

Executive Vice President and

Chief Financial Officer

James Gentile

Vice President, Investor Relations

Phone:704-731-1527

Email:[email protected]

KEYWORDS: North Carolina United States North America

INDUSTRY KEYWORDS: Semiconductor Hardware Manufacturing Other Manufacturing Technology

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