| þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) |
| o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) |
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| 1-2 | ||||||||
FINANCIAL STATEMENTS: |
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| 3 | ||||||||
| 4 | ||||||||
| 5-11 | ||||||||
SUPPLEMENTAL SCHEDULES: |
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| 12 | ||||||||
Schedule H, line 4i — Schedule of Assets Held for
Investment Purposes, December 31, 2006 |
13 | |||||||
| Exhibit 23.1 | ||||||||
| Exhibit 23.2 | ||||||||
| NOTE: | The accompanying financial statements have been prepared for the purpose of filing DOL
Form 5500. Supplemental schedules required by Section 2520 of the Department of Labor’s
Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, other than the ones listed above, are omitted because of the absence
of the conditions under which they are required. |
1
2
| 2006 | 2005 | |||||||
ASSETS: |
||||||||
Investments, at fair value |
$ | 40,049,548 | $ | 36,201,139 | ||||
Receivables: |
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Participant contributions |
95,516 | 99,921 | ||||||
Employer contributions |
37,957 | 40,703 | ||||||
Total |
133,473 | 140,624 | ||||||
Accrued income and other |
23,126 | 22,557 | ||||||
NET ASSETS AVAILABLE
FOR BENEFITS AT FAIR VALUE |
40,206,147 | 36,364,320 | ||||||
Adjustment from fair value to contract value for
interest in collective trust relating to fully benefit
responsive investment contracts |
81,127 | 65,509 | ||||||
NET ASSETS AVAILABLE FOR BENEFITS |
$ | 40,287,274 | $ | 36,429,829 | ||||
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| 2006 | 2005 | |||||||
ADDITIONS: |
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Additions to net assets attributed to: |
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Investment income: |
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Net appreciation in fair value of investments |
$ | 4,055,071 | $ | 984,380 | ||||
Investment loss from the EnPro Industries,
Inc. Retirement Savings Plan Master Trust |
— | (66,507 | ) | |||||
Interest from participant loans |
169,634 | 142,747 | ||||||
Total investment income |
4,224,705 | 1,060,620 | ||||||
Contributions: |
||||||||
Participants |
2,633,896 | 2,439,695 | ||||||
Employer |
1,051,891 | 945,495 | ||||||
Rollovers |
213,423 | 50,260 | ||||||
Total contributions |
3,899,210 | 3,435,450 | ||||||
Total additions |
8,123,915 | 4,496,070 | ||||||
DEDUCTIONS: |
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Deductions from net assets attributed to: |
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Benefits paid to participants |
4,050,163 | 3,721,812 | ||||||
Fees and commissions |
61,643 | 76,323 | ||||||
Total deductions |
4,111,806 | 3,798,135 | ||||||
INCREASE IN NET ASSETS AVAILABLE
FOR BENEFITS |
4,012,109 | 697,935 | ||||||
TRANSFER OF ASSETS |
(154,664 | ) | — | |||||
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR |
36,429,829 | 35,731,894 | ||||||
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR |
$ | 40,287,274 | $ | 36,429,829 | ||||
4
| 1. | DESCRIPTION OF PLAN |
|
The following description of the Retirement Savings Plan for Hourly Employees of EnPro
Industries, Inc. (the “Plan”) provides only general information. Participants should refer
to the Plan document for a more complete description of the Plan’s provisions. |
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General — EnPro Industries, Inc. (the “Company” or “EnPro”) established the Plan to
provide employees with a systematic means of savings and investing for the future. Regular
full-time, hourly employees of the Company, as defined by the Plan document, are eligible to
enroll on their date of hire. Deferrals begin on the first day of the month subsequent to
enrollment. The Plan is a defined contribution plan subject to the provisions of the
Employee Retirement Income Security Act of 1974 (“ERISA”). |
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Hourly Trust and Master Trust — The Charles Schwab Trust Company (the “Trustee” or
“Schwab”) serves as trustee for the Plan, in addition to serving as trustee for the EnPro
Industries, Inc. Retirement Savings Plan for Salaried Employees (the “Salaried Plan”). Prior
to July 1, 2005, the assets of the Plan and the assets of the Salaried Plan were held in the
EnPro Industries, Inc. Retirement Savings Plan Master Trust (the “Master Trust”) and Mellon
Bank (“Mellon”) served as the trustee of the Master Trust. On that date, the Plan’s
interest in the Master Trust was transferred to the Schwab Directed Employee Benefit Trust
(the “Hourly Trust”). As of December 31, 2006 and 2005, the Plan had no interest in the
Master Trust. |
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Assets of the Plan are allocated to participant accounts based on specific contributions
made by each participant and respective matches made by the Company. Investment income
(loss) is credited to each account based on appreciation (depreciation) of specific assets
held in each participant account and any earnings thereon. |
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Plan Contributions — Participants may contribute from 1% to 25% of their base pay by
means of payroll deductions, subject to certain discrimination tests prescribed by the
Internal Revenue Code and other limitations specified in the Plan. The Company matches
either 50% or 100% of employee contributions of 3% to 6% of base pay per payroll period. |
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Participants’ contributions are remitted by EnPro to the Trustee at the end of each payroll
cycle. Upon determination of participants’ contributions, EnPro contributions are made to
the Trustee in cash. The contributed cash is allocated to individual employee accounts and
invested at the participants’ direction. |
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Participant Accounts — Each participant’s account is credited with the participant’s
contributions, allocations of the Company’s matching contributions and Plan gains or losses.
Allocations of earnings and losses for each fund are based on the ratio of weighted average
participant account balances to the total weighted average of all participant account
balances. The benefit to which a participant is entitled is the vested benefit that can be
provided from the participant’s account. |
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Investment Options — Upon enrollment in the Plan, participants direct the investment
of their contributions and Company contributions into various investment options offered by
the Plan. Participants may direct their contributions into one or more core mutual funds, a
money market fund and a self-directed brokerage account option that allows contributions in
common stock, mutual funds, corporate debt, and cash and money market funds. |
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Vesting — Participants are fully vested in all contributions, including earnings
thereon. |
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Distributions — Upon retirement, disability or death, a participant or beneficiary
receives the entire amount credited to the participant’s account in either a lump sum or, at
the participant’s election, in annual installments. Upon termination, other than by
retirement, disability or death, a participant becomes eligible to receive the current value
of the participant’s vested account in a lump-sum. Distributions made from the EnPro
Company Stock Fund are made, at the option of the participant, in either cash or shares. |
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Participant Loans — Participants may borrow from their account balances with
interest charged at a rate determined by the Company’s Benefits Committee, which remains in
effect for the duration of the loan. Loan terms range from 1 to 5 years or up to 25 years
for the purchase of a primary residence. The minimum loan is $1,000 and the maximum loan is
the lesser of $50,000 less the highest outstanding loan balance during the one year period
prior to the new loan application date, or 50% of the participant’s account balance less any
current outstanding loan balance. The loans are secured by the balance in the participant’s
account. Principal and interest are paid ratably through payroll deductions. Participants
may only take out one loan during any 12 month period and may only have two loans
outstanding at any time. As of December 31, 2006 and 2005, the Plan had loans receivable
from participants with principal balances totaling $2,674,691 and $2,853,062, respectively,
which are included with investments in the accompanying Statements of Net Assets Available
for Benefits. |
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Participant Investment Rollovers — Participants are allowed to transfer or rollover
funds into the Plan from other qualified plans. |
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Reclassifications — Certain amounts in the 2005 financial statements have been
reclassified to conform with the 2006 presentation. Such reclassifications had no effect on
reported net assets available for benefits. |
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| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
Basis of Accounting — The accompanying financial statements have been prepared on
the accrual basis of accounting in accordance with generally accepted accounting principles
in the United States of America. |
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Use of Accounting Estimates — The preparation of financial statements in conformity
with generally accepted accounting principles in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of certain
assets, liabilities and disclosures. Accordingly, the actual amounts could differ from
those estimates. Any adjustments applied to estimated amounts are recognized in the year in
which such adjustments are determined. |
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Investment Valuation and Income Recognition — At December 31, 2006 and 2005, the
Plan’s investments are held in the Hourly Trust, which is an investment trust administered
by Schwab. Investments in common/collective trusts and mutual funds held in the Hourly
Trust are stated at fair value. The asset value of the EnPro Company Stock Fund is derived
from the value of EnPro’s common stock. The net appreciation in the fair value of
investments includes realized and unrealized gains and losses on the fair value of
investments held by the Plan. The loans to participants are valued at their outstanding
balance, which approximates fair value. Purchases and sales of investments are recorded on a
settlement date basis. Interest income is accrued as it is earned and dividends are
recorded as of the ex-dividend date. The Plan’s interest in the collective trust is valued
based on information reported by the investment advisor using the audited financial
statements of the collective trust as of year end. |
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As described in Financial Accounting Standards Board Staff Position FSP, AAG INV-1 and SOP
94-4-1, Reporting of Fully Benefit Responsive Investment Contracts Held by Certain
Investment Companies Subject to the AICPA Investment Company Guide and Defined Contribution
Health and Welfare and Pension Plans (the “FSP”), investment contracts held by a defined
contribution plan are required to be reported at fair value. However, contract value is the
relevant measurement attribute for that portion of net assets available for benefits for a
defined contribution plan attributable to fully benefit responsive investment contacts
because contract value is the amount that participants would receive if they were to
initiate permitted transactions under the terms of the Plan. The Plan invests in investment
contracts through a collective trust. As required by the FSP, the Statements of Net Assets
Available for Benefits present the fair value of the investment in the collective trust, as
well as the adjustment of the investment in the collective trust from fair value to contract
value relating to the investment contracts. The Statements of Changes in Net Assets
Available for Benefits are prepared on a contract value basis. |
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Management fees and operating expenses charged to the Plan for investments in mutual funds
are deducted from income earned on a daily basis and are not separately reflected.
Consequently, management fees and operating expenses are reflected as a reduction of net
appreciation in fair value of investments. |
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The change in net unrealized appreciation/depreciation of investments held from the
beginning of the Plan year to the end of the Plan year is included with realized
gains/losses as net investment income/loss reported in the accompanying Statements of
Changes in Net Assets Available for Benefits. |
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Contributions — Contributions from employees and the Company are recorded in the
period in which the Company makes the payroll deductions from participant earnings. |
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Distributions — Distributions are recorded when paid. At December 31, 2006 and
2005, there were no benefits processed and approved for payment, but not paid. |
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Expenses — Certain of the Plan’s administrative expenses are paid by the Company.
Other expenses such as legal and accounting are paid from Plan assets and deducted from
participant accounts in accordance with the Plan document. |
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| 3. | INVESTMENTS |
|
The Plan’s investment assets are held in trust and administered by Schwab. All investment
information disclosed in the accompanying financial statements and supplemental schedules,
including investments held, and net investment income and interest and dividends, was
obtained or derived from information supplied to the Plan administrator by the Trustee for
the year ended December 31, 2006 and the period from July 1, 2005 to December 31, 2005.
Investment information for the period from January 1, 2005 to June 30, 2005 was supplied to
the Plan administrator by the prior trustee, Mellon. |
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The fair value of investments that represented 5% or more of the Plan’s net assets available
for benefits as of December 31, 2006 and 2005 is as follows: |
| 2006 | 2005 | |||||||
Schwab Stable Value Fund |
$ | 6,256,900 | $ | 6,114,592 | ||||
Laudus International Market Masters |
$ | 2,229,878 | $ | — | ||||
Oppenheimer Main St A |
$ | 3,461,656 | $ | 3,069,439 | ||||
PIMCO Total Return |
$ | 4,033,380 | $ | 4,099,083 | ||||
Schwab Institutional Select S&P 500 |
$ | 11,064,322 | $ | 9,878,128 | ||||
Participant Loans |
$ | 2,674,691 | $ | 2,853,062 | ||||
Investment gain for the year ended December 31, 2006 is as follows: |
Interest and dividends |
$ | 1,240,625 | ||
Net appreciation of common stock |
219,871 | |||
Net appreciation of common/collective trusts |
558,802 | |||
Net appreciation of registered investment companies |
2,205,407 | |||
Investment gains (net) |
$ | 4,224,705 | ||
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Investment gain for the period of July 1, 2005 to December 31, 2005 for the Hourly Trust is
as follows: |
Interest and dividends (including participant loan
interest) |
$ | 158,770 | ||
Net appreciation of common stock |
(48,428 | ) | ||
Net appreciation of common/collective trusts |
224,445 | |||
Net appreciation of registered investment companies |
792,340 | |||
Investment gains Hourly Trust (net) |
$ | 1,127,127 | ||
| 4. | MASTER TRUST |
|
As discussed in Note 1, the Plan’s interest in the Master Trust was transferred to the
Hourly Trust on July 1, 2005. At December 31, 2004, the Plan’s interest in the net assets
of the Master Trust was approximately 22%. Accordingly, the Plan had no interest in the
Master Trust as of December 31, 2006 and 2005. |
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Investment gain for the Master Trust is as follows: |
Interest and dividends (including participant loan interest) |
$ | 1,749 | ||
Net appreciation of common stock |
(606,663 | ) | ||
Net appreciation of common/collective trusts |
301,366 | |||
Net appreciation of registered investment companies |
696,946 | |||
Investment gains Hourly Trust (net) |
$ | 393,398 | ||
| 5. | TRANSACTIONS WITH PARTIES-IN-INTEREST |
|
Certain Plan investments are shares of mutual funds managed by Schwab. Schwab is the
Trustee as defined by the Plan, and therefore, these transactions qualify as
party-in-interest transactions. |
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The Plan also invests in shares of the Company. The Company is the plan sponsor and,
therefore, these transactions qualify as party-in-interest transactions. |
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Fees paid by the Plan for investment management services were included as a reduction of the
return earned on each fund. Certain administrative fees related to the administration of
the Plan were paid by the Plan. Certain other third party administrator fees were paid by
the Company on behalf of the Plan. These transactions also qualify as party-in-interest
transactions. |
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| 6. | TAX STATUS |
|
The Plan has received a determination letter from the Internal Revenue Service dated August
28, 2003 stating that the Plan is qualified under Section 401(a) of the Internal Revenue
Code (the “Code”) and, therefore, the related trust is exempt from taxation. Once
qualified, the Plan is required to operate in conformity with the Code to maintain its
qualification. The Plan has been amended from time to time since receiving the
determination letter. The Company believes the Plan is currently designed and being
operated in compliance with the applicable requirements of the Code. Therefore, no
provision for income tax has been included in the Plan’s financial statements. |
9
| 7. | PLAN TERMINATION |
|
Although it has not expressed any intent to do so, the Company has the right under the Plan
to discontinue its contributions at any time and to terminate the Plan subject to the
provisions of ERISA. However, no such action may deprive any participant or beneficiary
under the Plan of any vested right. |
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| 8. | RISKS AND UNCERTAINTIES |
|
The Plan invests in various investment securities. Investment securities are exposed to
various risks such as interest rate, market, and credit risks. Due to the level of risk
associated with certain investment securities, it is at least reasonably possible that
changes in the values of investment securities will occur in the near term and that such
changes could materially affect participants’ account balances and the amounts reported in
the Statements of Net Assets Available for Benefits. |
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| 9. | PROHIBITED TRANSACTION |
|
During the Plan year ended December 31, 2006, employee withholdings in the amount of $4,873
were not remitted within the appropriate time period by the Company. This transaction
constitutes a prohibited transaction as defined by ERISA. The Company is aware of the
occurrence and has taken steps to correct the situation, and has further implemented
procedures to ensure that all future withholdings are remitted within the prescribed time
period. |
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| 10. | RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 |
|
The following is a reconciliation of net assets available for benefits per the financial
statements to the Form 5500 for the years ended December 31, 2006 and 2005: |
| 2006 | 2005 | |||||||
Net assets available for benefits per the
Accompanying financial statements at fair
value |
$ | 40,206,147 | $ | 36,364,320 | ||||
Plus adjustment from fair value to contract value
for fully benefit responsive investment
contracts |
81,127 | 65,509 | ||||||
Rounding |
(3 | ) | — | |||||
Net assets available for benefits per the
Form 5500 |
$ | 40,287,271 | $ | 36,429,829 | ||||
10
The following is a reconciliation of the change in net assets available for benefits per the
financial statements to the Form 5500 for the years ended December 31, 2006 and 2005: |
| 2006 | 2005 | |||||||
Change in net assets available for benefits
per the accompanying financial
statements net of transfers |
$ | 3,857,445 | $ | 697,935 | ||||
Rounding |
(3 | ) | — | |||||
Change in net assets available for benefits
per the Form 5500 |
$ | 3,857,442 | $ | 697,935 | ||||
| 11. | SUBSEQUENT EVENTS |
|
Effective June 1, 2007, the Company amended the Plan to add a Roth feature. Participants
can now choose between pre-tax contributions and after-tax contributions which are held in
Roth accounts. |
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| Participant | Total That Constitute Nonexempt Prohibited Transactions | Total Fully | ||||||
| Contributions | Contributions | Contributions | Contributions | Corrected | ||||
| Transferred Late | Not | Collected Outside of | Pending Correction | Under VFCP and | ||||
| To The Plan | Corrected | VFCP | In VFCP | PTFE 2002 – 51 | ||||
| $4,873 | $4,873 | |||||||
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| (a) | (b) | (c) | (d) | (e) | ||||||
| Identity of issuer, borrower, | Description of investment including maturity date, | Current | ||||||||
| Party-in-interest | lessor or similar party | rate of interest, collateral, par or maturity value | Cost | Value | ||||||
* |
Schwab U.S. Treasury Money Fund | Money Market | ** | $ | 1,681 | |||||
* |
EnPro Company Stock Fund | Common stock | ** | 911,467 | ||||||
* |
Schwab Managed Retirement 2010 | Common/collective trust | ** | 505,180 | ||||||
* |
Schwab Managed Retirement 2020 | Common/collective trust | ** | 1,360,535 | ||||||
* |
Schwab Managed Retirement 2030 | Common/collective trust | ** | 938,857 | ||||||
* |
Schwab Managed Retirement 2040 | Common/collective trust | ** | 234,365 | ||||||
* |
Schwab Stable Value Fund | Common/collective trust | ** | 6,256,900 | ||||||
* |
Personal Choice Retirement Account | Self directed brokerage account | ** | 52,286 | ||||||
* |
American Beacon Small Cap Value Plan | Registered investment company | ** | 1,324,459 | ||||||
* |
Dodge & Cox Stock Fund | Registered investment company | ** | 1,615,806 | ||||||
* |
Growth Fund of America A | Registered investment company | ** | 566,519 | ||||||
* |
JP Morgan Mid Cap Value | Registered investment company | ** | 685,386 | ||||||
* |
Laudus International Market Masters | Registered investment company | ** | 2,229,878 | ||||||
* |
Oppenheimer Main St A | Registered investment company | ** | 3,461,656 | ||||||
* |
PIMCO Total Return | Registered investment company | ** | 4,033,380 | ||||||
* |
Schwab Institutional Select S&P 500 | Registered investment company | ** | 11,064,322 | ||||||
* |
T Rowe Price Mid-Cap Growth | Registered investment company | ** | 649,833 | ||||||
* |
Van Kampen Equity and Income | Registered investment company | ** | 1,250,703 | ||||||
* |
Vanguard Explorer | Registered investment company | ** | 231,644 | ||||||
* |
Participant loans | Interest rates ranging from 5.50% to 10.50% | $0 | 2,674,691 | ||||||
| $— | $ | 40,049,548 | ||||||||
| * | Party-in-interest transaction, not a prohibited transaction. |
|
| ** | Cost information is not
required pursuant to the instructions to Form 5500 for participant directed funds. |
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| ENPRO INDUSTRIES, INC. RETIREMENT SAVINGS PLAN FOR HOURLY EMPLOYEES |
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| By: | ENPRO INDUSTRIES, INC., Plan Administrator | |||||||
| By: | /s/ John R. Smith
|
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| Senior Vice President, Human Resources and Administration |
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