Item 9A. Controls and Procedures
Item 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Wabtec’s principal executive officer and its principal financial officer have evaluated the effectiveness of Wabtec’s “disclosure controls and procedures,” (as defined in Exchange Act Rule 13a-15(e)) as of December 31, 2022. Based upon their evaluation, the principal executive officer and principal financial officer concluded that Wabtec’s disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by Wabtec in the reports filed or submitted by it under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that information required to be disclosed by Wabtec in such reports is accumulated and communicated to Wabtec’s Management, including its principal executive officer and principal finance officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There was no change in Wabtec’s “internal control over financial reporting” (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2022, that has materially affected, or is reasonably likely to materially affect, Wabtec’s internal control over financial reporting. Management’s annual report on internal control over financial reporting and the attestation report of the registered public accounting firm are included in Part II, Item 8 of this report.
Management’s Report on Internal Control over Financial Reporting
Management’s Report on Internal Control Over Financial Reporting appears on page 44 and is incorporated by reference herein.
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting
Ernst & Young LLP's attestation report on internal control over financial reporting appears on page 47 and is incorporated by reference herein.
Item 9B. OTHER INFORMATION
None.
Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
80
PART III
Items 10 through 14.
In accordance with the provisions of General Instruction G(3) to Form 10-K, the information required by Item 10 (Directors, Executive Officers and Corporate Governance), Item 11 (Executive Compensation), Item 12 (Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters), Item 13 (Certain Relationships and Related Transactions, and Director Independence) and Item 14 (Principal Accounting Fees and Services) is incorporated herein by reference from the Company’s definitive Proxy Statement for its Annual Meeting of Stockholders to be held on May 17, 2023, except for the Equity Compensation Plan Information required by Item 12, which is set forth in the table below. The definitive Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after December 31, 2022. Information relating to the executive officers of the Company is set forth in Part I.
Wabtec has adopted a Code of Business Conduct and Ethics which is applicable to all of our employees, including our executive officers. This Code of Business Conduct and Ethics is posted on our website at www.wabteccorp.com . In the event that we make any amendments to or waivers from this code, we will disclose the amendment or waiver and the reasons for such on our website.
This table provides aggregate information as of December 31, 2022 concerning equity awards under Wabtec’s compensation plans and arrangements.
Plan Category (a)
Number of securities to
be issued upon exercise
of outstanding options, warrants and rights (b)
Weighted-average
exercise price of
outstanding
options warrants and rights (c)
Number of securities
remaining available for
future issuance
under equity compensation
plans (excluding securities reflected in column (a))
Equity compensation plans approved by shareholders 1,100,000 $ 77.32 5,500,000
Equity compensation plans not approved by shareholders — — —
Total 1,100,000 $ 77.32 5,500,000
81
PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The financial statements filed as part of this report are included in Part II Item 8 of this report. Financial statement schedules and exhibits listed below are filed as part of this annual report:
Page
(1) Financial Statements and Reports on Internal Control
Management’s Reports to Westinghouse Air Brake Technologies Corporation Shareholders
44
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 , Pittsburgh, Pennsylvania )
45
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting
47
Consolidated Balance Sheets as of December 31, 202 2 and 20 21
48
Consolidated Statements of Income for the three years ended December 31, 202 2 , 202 1 and 20 20
49
Consolidated Statements of Comprehensive Income for the three years ended December 31, 202 2 , 202 1 and 20 20
50
Consolidated Statements of Cash Flows for the three years ended December 31, 202 2 , 202 1 and 20 20
51
Consolidated Statements of Shareholders’ Equity for the three years ended December 31, 202 2 , 202 1 and 20 20
52
Notes to Consolidated Financial Statements
53
(2) Financial Statement Schedules
Schedule II—Valuation and Qualifying Accounts
86
Filing
Method
Exhibits
2.1 Shareholder's Agreement among Financiere Faiveley S.A., FW Acquisition, LLC, and Wabtec Corporation dated as of October 6, 2015
13
2.2 Amendment No. 1 to Shareholder's Agreement among Financiere Faiveley S.A., Famille Faiveley Participations, Francois Faiveley, Erwan Faiveley, and Wabtec Corporation dated as of dated as of October 24, 2016
14
2.3 Employee Matters Agreement among General Electric Company, Transportation Systems Holdings Inc., Westinghouse Air Brake Technologies Corporation and Wabtec US Rail, Inc.
21
2.4** Tax Matters Agreement among General Electric Company, Transportation Systems Holdings Inc., Westinghouse Air Brake Technologies Corporation and Wabtec US Rail, Inc.
21
3.1 Restated Certificate of Incorporation of the Company dated January 30, 1995, as amended December 31, 2003
9
3.2 Certificate of Amendment of Restated Certificate of Incorporation dated May 14, 2013
11
3.3 Amended and Restated By-Laws of the Company, effective February 10, 2023
8
3.4 Certificate of Amendment to Restated Certificate of Incorporation dated November 19, 2018
22
3.5 Certificate of Designations of Series A Non-Voting Convertible Preferred Stock of Westinghouse Air Brake Technologies Corporation, dated February 22, 2019
21
4.1 Indenture, dated August 8, 2013 by and between the Company and Wells Fargo, National Association, as Trustee
12
4.2 First Supplemental Indenture, dated August 8, 2013, by and between the Company and Wells Fargo Bank, National Association, as Trustee
12
4.3 Form of 4.375% Senior Note due 2023 (included in Exhibit 4.2)
12
4.4 Second Supplemental Indenture, dated November 3, 2016, by and among Westinghouse Air Brake Technologies Corporation, the subsidiary guarantors named therein and Wells Fargo Bank, National Association, as Trustee
15
4.5 Third Supplemental Indenture, dated November 3, 2016, by and among Westinghouse Air Brake Technologies Corporation, the subsidiary guarantors named therein and Wells Fargo Bank, National Association, as Trustee
15
4.6 Form of 3.450% Senior Note due 2026 (included in Exhibit 4.5)
15
4.7 Fourth Supplemental Indenture, dated February 9, 2017, by and among Westinghouse Air Brake Technologies Corporation, the subsidiary guarantors named therein and Wells Fargo Bank, National Association, as Trustee
16
82
4.8 Fifth Supplemental Indenture, dated April 28, 2017, by and among Westinghouse Air Brake Technologies Corporation, the subsidiary guarantors named therein and Wells Fargo Bank, National Association, as Trustee
17
4.9 Sixth Supplemental Indenture, dated June 21, 2017, by and among Westinghouse Air Brake Technologies Corporation, the subsidiary guarantors named therein and Wells Fargo Bank, National Association, as Trustee.
18
4.10 Seventh Supplemental Indenture, dated June 8, 2018, by and among Westinghouse Air Brake Technologies Corporation, the subsidiary guarantors named therein and Wells Fargo Bank, National Association, as Trustee
19
4.11 Eighth Supplemental Indenture, dated June 29, 2018, by and among Westinghouse Air Brake Technologies Corporation, the subsidiary guarantors named therein and Wells Fargo Bank, National Association, as Trustee
19
4.12 Ninth Supplemental Indenture, dated September 14, 2018, by and among the Company, the guarantors party thereto and Wells Fargo Bank, National Association, as Trustee.
20
4.13 Form of 1.150% Senior Note due 2024 (included in Exhibit 4.12)
1
4.14 Form of 4.700% Senior Note due 2028 (included in Exhibit 4.12)
1
4.15 Tenth Supplemental Indenture, dated June 6, 2019, by and among the Company, the guarantors party thereto and Wells Fargo Bank, National Association, as Trustee
23
4.16 Eleventh Supplement Indenture, dated June 29, 2020, by and among the Company, the guarantors party thereto and Wells Fargo Bank, National Association, as Trustee
25
4.17 Form of 3.200% Senior Note due 2025 (included in Exhibit 4.16)
1
4.18 Description of Wabtec Common Stock registered pursuant to Section 12 of the Securities Act of 1934
1
4.19 Base Indenture, dated as of June 3, 2021, among Wabtec Transportation Netherlands B.V., as issuer, Westinghouse Air Brake Technologies Corporation, as guarantor, and U.S. Bank National Association, as Trustee
27
4.20 First Supplemental Indenture, dated as of June 3, 2021, among Wabtec Transportation Netherlands B.V., as issuer, Westinghouse Air Brake Technologies Corporation, as guarantor, and U.S. Bank National Association, as Trustee
27
4.21 Form of 1.250% Notes due 2027 (included in Exhibit 4.20 hereof).
27
10.1 Agreement of Sale and Purchase of the North American Operations of the Railway Products Group, an operating division of American Standard Inc. (now known as Trane), dated as of 1990 between Rail Acquisition Corp. and American Standard Inc. (only provisions on indemnification are reproduced) 2
10.2 Letter Agreement (undated) between the Company and American Standard Inc. (now known as Trane) on environmental costs and sharing 2
10.3 Purchase Agreement dated as of June 17, 1992 among the Company, Schuller International, Inc., Manville Corporation and European Overseas Corporation (only provisions on indemnification are reproduced) 2
10.4 Westinghouse Air Brake Company 1995 Non-Employee Directors’ Fee and Stock Option Plan, as amended and restated*
4
10.5 Westinghouse Air Brake Technologies Corporation 2000 Stock Incentive Plan, as Westinghouse Air Brake Technologies Corporation 2000 Stock Incentive Plan, as amended * *
33
10.6 Employment Agreement with Albert J. Neupaver, dated February 1, 2006 *
3
10.7 Form of Restricted Stock Agreement *
10
10.8 Westinghouse Air Brake Technologies Corporation A mended and R estated 2011 Stock Incentive Plan *
5
10.9 Stock Purchase Agreement, by and among the Company, Standard Car Truck Company and Robclif, Inc., dated September 12, 2008
6
10.10 Form of Employment Continuation Agreement entered into b y the Company with Nicole Theophilus, Michael E. Fetsko, and John A Mastalerz Jr.*
7
10.11 Wabtec Corporation Deferred Compensation Plan for Executive Officers and Directors as adopted December 10, 2009 *
10
10.12 Form of Agreement for Nonstatutory Stock Option under the 1995 Non-Employee Directors’ Fee and Stock Option Plan, as amended and restated*
10
10.13 Form of Agreement for Nonstatutory Stock Options under 2000 Stock Incentive Plan, as amended *
10
10.14 Form of Agreement for Nonstatutory Stock Options under 2011 Stock Incentive Plan as amended and restated*
10
83
10.15 Amendment and Restatement Agreement, dated as of August 15, 2022, among Westinghouse Air Brake Technologies Corporation, Wabtec Transportation Netherlands BV, the other loan parties hereto, the lenders party thereto, the issuing banks thereto, the swingline lender and PNC Bank, National Association as administrative agent (including the Amended and Restated Credit Agreement, as Annex I thereto).
28
10.16 [Reserved]
10.17 [Reserved]
10.18 Form of Severance and Employment Continuation Agreement entered into by the Company with John Olin, David DeNinno, Pascal Schweitzer, and Eric Gebhardt*
26
10.19 Westinghouse Air Brake Technologies Corporation Deferred Compensation Plan for Executives, dated October 21, 2021
30
10.20 Separation Agreement between Stephane Rambaud-Measson and Westinghouse Air Brake Technologies Corporation, dated as of February 13, 2019
24
10.21 Transition Agreement between Raymond T. Betler and Westinghouse Air Brake Technologies Corporation, dated as of April 24, 2019
24
10.22 Severance and Employment Continuation Agreement of Rafael Santana dated as of December 5, 202 2*
26
10.23 Transition Agreement of Scott Wahlstrom dated as of November 25, 2020
32
10.24 [Reserved]
10.25 Transition Agreement of Patrick A. Dugan, dated as of September 9, 2021
31
21.0 List of subsidiaries of the Company
1
22.0 List of Subsidiary Guarantors
1
23.1 Consent of Ernst & Young LLP
1
31.1 Rule 13a-14(a)/15d-14(a) Certifications
1
31.2 Rule 13a-14(a)/15d-14(a) Certifications
1
32.1 Section 1350 Certifications
1
101.INS XBRL Instance Document. 1
101.SCH XBRL Taxonomy Extension Calculation Linkbase Document 1
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 1
101.DEF XBRL Taxonomy Extension Definition Linkbase Document. 1
101.LAB XBRL Taxonomy Extension Label Linkbase Document 1
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document 1
104 XBRL Cover Page Interactive Data (embedded within the Inline XBRL document) 1
1 Filed herewith.
2 Filed as an exhibit to the Company’s Registration Statement on Form S-1 (File No. 033-90866).
3 Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q (File No. 033-90866) for the period ended March 31, 2006.
4 Filed as an Annex to the Company’s Schedule 14A Proxy Statement (File No. 033-90866) filed on March 31, 2017.
5 Filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 033-90866) filed on April 6, 2022.
6 Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q (File No. 033-90866) for the period ended September 30, 2008.
7 Filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 033-90866) dated July 2, 2009.
8 Filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 033-90866), dated February 14, 2023.
9 Filed as an exhibit to the Company’s Annual Report on Form 10-K (File No. 033-90866), dated February 25, 2011.
10 Filed as an exhibit to the Company’s Annual Report on Form 10-K (File No. 033-90866), dated February 22, 2013.
84
11 Filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 033-90866), dated September 9, 2019.
12 Filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 033-90866), dated August 8, 2013.
13 Filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 033-90866), dated October 6,2015.
14 Filed as an exhibit to the Company's Current Report on Form 8-K (File No. 033-90866), dated October 26, 2016.
15 Filed as an exhibit to the Company's Current Report on Form 8-K (File No. 033-90866), dated November 3, 2016.
16 Filed as an exhibit to the Company's Current Report on Form 10-K (File No. 033-90866), dated February 28, 2017.
17 Filed as an exhibit to the Company's Quarterly Report on Form 10-Q (File No. 033-90866), for the period ended March 31, 2017.
18 Filed as an exhibit to the Company's Registration Statement on Form S-4 (File No. 0333-219354).
19 Filed as an exhibit to the Company's Quarterly Report on Form 10-Q (File No. 033-90866), for the period ended June 30, 2018.
20 Filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 033-90866), dated September 14, 2018.
21 Filed as an exhibit to the Company’s Current Report on Form 8-K (File No. 033-90866), dated February 25, 2019.
22 Filed as an exhibit to the Company’s Annual Report on Form 10-K (File No. 033-90866), dated February 27, 2019.
23 Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q (File No. 033-90866), dated August 1, 2019.
24 Filed as an exhibit to the Company's Quarterly Report on Form 10-Q (File No. 033-90866), dated May 9, 2019.
25 Filed as an exhibit to the Company's Current Report on Form 8-K (File No. 033-90866), dated June 29, 2020.
26 Filed as an exhibit to the Company's Current Report on Form 8-K (File No 033-90866), dated December 7, 2022.
27 Filed as an exhibit to the Company's Current Report on Form 8-K (File No 033-90866), dated June 2, 2021
28 Filed as an exhibit to the Company's Quarterly Report on Form 10-Q (File No. 033-90866), dated November 1, 2022.
29 [Reserved]
30 Filed as an exhibit to the Company's Current Report on Form 8-K (File No 033-90866), dated October 21, 2021
31 Filed as an exhibit to the Company's Quarterly Report on Form 10-Q (File No. 033-90866), for the period ended September 30, 2021.
32 Filed as an exhibit to the Company’s Annual Report on Form 10-K (File No. 033-90866), dated February 19, 2021.
33 Filed as an exhibit to the Company's Registration Statement on Form S-8 (File No. 033-90866), dated March 2, 2012.
* Management contract or compensatory plan.
** Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Wabtec hereby undertakes to furnish supplementally, copies of any of the omitted schedules upon request by the SEC.
85
SCHEDULE II
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
VALUATION AND QUALIFYING ACCOUNTS
For each of the three years ended December 31
In millions Balance at
beginning
of period Charged to
expense Charged/ (credited) to
other
accounts (1) Deductions
from
reserves (2) Balance
at end of
period
2022
Allowance for doubtful accounts $ 32 $ 4 $ ( 1 ) $ ( 7 ) $ 28
Valuation allowance-taxes $ 64 $ — $ — $ ( 18 ) $ 46
2021
Allowance for doubtful accounts $ 37 $ 3 $ ( 1 ) $ ( 7 ) $ 32
Valuation allowance-taxes $ 42 $ 22 $ — $ — $ 64
2020
Allowance for doubtful accounts $ 20 $ 18 $ — $ ( 1 ) $ 37
Valuation allowance-taxes $ 58 $ — $ — $ ( 16 ) $ 42
(1) Impact of fluctuations in foreign currency exchange rates.
(2) Deductions in Allowance for doubtful accounts are from amounts written off as uncollectible or proceeds from subsequent collections. Deductions for Valuation allowances-taxes were primarily from changes in expected deferred tax utilization.
Item 16. FORM 10-K SUMMARY
Not applicable.
86
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
WESTINGHOUSE AIR BRAKE
TECHNOLOGIES CORPORATION
Date: February 15, 2023 By: / S / RAFAEL SANTANA
Rafael Santana,
President and Chief Executive Officer, and Director
87
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.
Signature and Title
Date
By / S / A LBERT J. N EUPAVER
February 15, 2023
Albert J. Neupaver,
Chairman of the Board
By / S / R AFAEL S ANTANA
February 15, 2023
Rafael Santana,
President and Chief Executive Officer and Director (Principal Executive Officer)
By / S / J OHN A. O LIN
February 15, 2023
John A. Olin,
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
By / S / J OHN A. M ASTALERZ
February 15, 2023
John A. Mastalerz,
Senior Vice President and Principal Accounting Officer
By /S/ LINDA A. HARTY February 15, 2023
Linda A. Harty,
Lead Director
By / S / B EVERLEY B ABCOCK
February 15, 2023
Beverley Babcock,
Director
By / S / L EE B ANKS
February 15, 2023
Lee Banks,
Director
By / S / B YRON F OSTER
February 15, 2023
Byron Foster,
Director
By / S / B RIAN P. H EHIR
February 15, 2023
Brian P. Hehir,
Director
By / S / W ILLIAM E. K ASSLING
February 15, 2023
William E. Kassling,
Director
By / S / A NN R. K LEE
February 15, 2023
Ann R. Klee,
Director
88