What changed in this filing

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Item 1. Business

2024-02-14 compared with 2023-02-15 · 134 added, 161 removed, 350 unchanged (46% of the section changed)

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This brought a global technology leader and supplier of locomotives, equipment, services and digital solutions to the rail, mining, marine, stationary power and drilling industries into Wabtec.

As a result of those strategic acquisitions, as well as other smaller acquisitions and organic growth, Wabtec is now one of the world’s largest providers of value-added, technology-based locomotives, equipment, systems and services for the global freight rail and passenger transit industries, and also serves customers in the mining, marine, and industrial markets.

As a result of those strategic acquisitions, as well as other smaller acquisitions and organic growth, Wabtec is a global provider of value-added, technology-based locomotives, equipment, systems and services for the freight rail and passenger transit industries, and the mining, marine, and industrial markets.

Wabtec has approximately 29,000 employees, excluding contingent workers, and operations in over 50 countries.

We hold a leading market share for many of our core product lines globally.

Our highly engineered products, which are intended to enhance safety, improve productivity and reduce maintenance costs for customers, can be found on most locomotives, freight cars, passenger transit cars and buses around the world.

Through both internal growth as well as acquisitions, Wabtec has positioned itself with the following strategic strengths:

• Diversity of revenues by product, geography and market.

Comprehensive product and service offerings spanning the freight rail and passenger transit industries, as well as products in the bus, mining, marine, and discrete industrial markets help Wabtec to balance the cyclical nature of the global rail business.

• Significant operating synergies and improved financial profile .

The acquisition and integration of GE Transportation has led to operating synergies across all of Wabtec.

Wabtec continues to focus on realizing operating synergies from smaller strategic bolt-on acquisitions as well as driving operational efficiencies through the previously announced Integration 2.0 initiative, a three-year strategic initiative that targets operational synergies and supports Wabtec's margin improvement through productivity gains.

Wabtec is also focused on earnings growth through expanding high-margin recurring revenue streams.

• Exceptional technical and engineering expertise.

Wabtec's engineers and technical capabilities support continued focus on innovative product development and efforts to achieve scalable technologies.

Our technology expertise and investment in technology is key for Wabtec leading the decarbonization of the rail industry.

• Scale of Wabtec’s operations .

Wabtec is one of the world’s largest providers of technology-enabled locomotives and equipment, freight car components, systems, and services for the freight rail and passenger transit industries.

The size of Wabtec's operations enables the Company to achieve economies of scale, in addition to using best-cost locations for executing on operational decisions.

• Complementary Digital and Electronics technologies .

Wabtec has a comprehensive digital and electronics portfolio and leading engineering and technical intellectual property, which provides electronics and digital technologies to meet growing demand for train intelligence and network optimization.

• Enhanced Aftermarket and Services opportunities .

Wabtec has an installed base of more than 23,000 locomotives and content on virtually all North American locomotives and freight cars, as well as a diverse offering of Transit

locomotives and cars both internationally and domestically, which enables significant opportunities in the higher-margin aftermarket parts and services business and mitigates the exposure to cycles.

Industry Overview

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We provide our products and services through two principal business segments, the Freight Segment and the Transit Segment, both of which have different market characteristics and business drivers.

The Freight Segment primarily manufactures new locomotives;

The Freight Segment primarily manufactures new and modernized locomotives;

provides aftermarket parts and services to existing locomotives;

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supplies rail control and infrastructure products including electronics, positive train control equipment, signal design and engineering services;

provides a comprehensive suite of software-enabled solutions designed to improve customer efficiency and productivity in the transportation and mining industries;

provides a comprehensive suite of

software-enabled solutions designed to improve customer safety, efficiency and productivity in the transportation and mining industries;

overhauls locomotives;

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Customers include large, publicly traded railroads, leasing companies, manufacturers of original equipment such as locomotives and freight cars, utilities, and companies in the mining, marine, and industrial markets.

We are the largest global manufacturer of diesel-electric locomotives for freight railroads producing mission-critical products and solutions that help railroads reduce operating costs, decrease fuel use, minimize downtime and comply with emissions standards.

As a result of the large base of more than 23,000 locomotives currently in use, Wabtec's Services product lines of modernizing, rebuilding, remanufacturing, maintaining, and exchanging locomotives and components in the aftermarkets provides a significant, recurring revenue stream.

We are a global manufacturer of diesel-electric locomotives for freight railroads producing essential products and solutions that help railroads reduce operating costs, decrease fuel use, minimize downtime and comply with emissions standards.

As a result of the large base of nearly 24,000 locomotives currently in use, Wabtec's Services product lines of modernizing, rebuilding and overhauling, remanufacturing, maintaining, and exchanging locomotives and components in the aftermarkets provides a significant, recurring revenue stream.

In 2023, the Freight Segment accounted for approximately 72% of Wabtec’s total net sales, with approximately 58% of its net sales in the U.S.

In 2022, approximately 66% of the Freight Segment’s net sales were in the aftermarket.

and approximately 66% of the Freight Segment’s net sales were in the aftermarket.

The Transit Segment primarily manufactures and services components for new and existing passenger transit vehicles, typically regional trains, high speed trains, subway cars, light-rail vehicles and buses;

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In 2023, the Transit Segment accounted for approximately 28% of our total net sales, with approximately 19% of its net sales in the U.S.

Approximately half of the Transit Segment’s net sales are in the aftermarket with the remainder in the original equipment market.

The following is a summary of our leading products in both aftermarket and original equipment across both of our business segments:

Approximately 55% of the Transit Segment’s net sales are in the aftermarket.

The following is a summary of our primary products and services in both aftermarket and original equipment across both of our business segments:

• Diesel-electric, battery, and liquid natural gas powered locomotives for freight and transit

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• Marine and mining products

Digital & Electronic Products:

Digital Intelligence Products:

• Positive Train Control ("PTC") equipment and electronically controlled pneumatic braking products

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• Transport intelligence such as Industrial/mobile Internet of Things (IoT) hardware & software, edge-to-cloud, on and off-board analytics & rules, and asset performance management

• Transport logistics such as rail transportation management, shipper transportation management, and port visibility and optimization

• Transport logistics such as rail and shipper transportation management and port visibility and optimization

• Network optimization such as rail network scheduling, dispatch and optimization, intermodal, terminal management and optimization, and rail yard management and optimization

• Freight car trucks and braking equipment and related components for Freight applications

• Draft gears, couplers and slack adjusters

• Air compressors and dryers

• Heat exchangers and cooling products for locomotives and power generation equipment

• Heat transfer components and systems for diesel and gas engine cooling, generator and transformer coolers and high temperature applications

• Track and switch products

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• Turbochargers for industrial and aftermarket vehicle applications

• Freight locomotive overhaul, modernizations and refurbishment

• Freight locomotive overhauls, modernizations and refurbishment

• Master service agreements for locomotive and car maintenance

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• Access doors and platform screen doors

• Pantographs and third rail collectors

• Energy measuring systems

• Pantographs

• Auxiliary power converter and battery charging

• Antifire systems

• Passenger information systems and CCTV

• Passenger information systems and closed-circuit television

• Signaling and railway electric relays

• Sanitation systems

• Doors, window assemblies, accessibility lifts and ramps for buses

• Electric charging solutions for buses and electric ferries

We are a leader in the freight rail and passenger transit industries by capitalizing on the strength of our existing products, technological capabilities and new product innovations, and by our ability to harden products to protect them from severe

conditions, including extreme temperatures and high-vibration environments.

Supported by our technical staff of more than 6,300 engineers and specialists, we have extensive experience in a broad range of product lines, which enables us to provide comprehensive, systems-based solutions for our customers.

We have continued to develop Energy Management Solutions for railroads to further reduce fuel consumption and emissions.

These developments include the design of a battery electric locomotive that will be integrated with other diesel electric locomotives in a train.

This hybrid consist, under the control of our Trip Optimizer software, will significantly reduce fuel consumption and have the ability to operate in a low emission state while in populated areas.

In 2021, Wabtec and a Class I completed a three month pilot of a battery electric locomotive which reduced fuel consumption and greenhouse gas emissions by an average of 11% in a revenue service train.

In 2022, this battery electric locomotive was recognized for sustainable innovation by the Business Intelligence Group and awarded “Commercial Technology of the Year” at the Platts Global Energy Awards.

• Doors, window assemblies, accessibility lifts, ramps and electric charging solutions for buses

Wabtec is utilizing a flexible and growing portfolio of freight rail and passenger transit products and innovative technologies to support customers’ sustainability goals and targets.

From pioneering advancements to current signaling systems and network efficiency solutions, we are striving to increase the rail capacity to move more freight by train.

Wabtec is working to reduce existing locomotive fleet emissions through fuel-efficiency solutions and testing renewable diesel and biofuels.

We are developing advanced propulsion technologies such as the first heavy-haul 100% battery electric locomotive.

In 2023, Wabtec secured several orders for new battery-electric locomotives and modernizations that will upgrade existing fleets to help our customers extend the service life of their fleet and improve performance and reliability.

We are also conducting collaborative research and development efforts with the National Laboratories to support the use of hydrogen to lower emissions across the rail industry.

In 2023, Norfolk Southern recognized Wabtec’s innovations in modernizing locomotives with its inaugural Thoroughbred Sustainability Partner Award in recognition of energy efficiency, innovation, and environmental stewardship.

Wabtec also is implementing energy-reducing technologies for the passenger transit sector.

In 2022, Wabtec received sustainability awards from both the German Ministry of Transportation and Deutsche Bahn and for our Green Air heating, ventilation, and air conditioning (HVAC) solution.

In recent years, we have also introduced a number of significant new products, including PTC equipment that encompasses onboard digital data and global positioning communication protocols.

We are making additional investments in this technology which we believe will provide customers with opportunities to improve safety and efficiency, in part through data analytics solutions.

Other new products include HVAC inverter integrated solutions, brake discs and brake controls, platform doors and gates and door controllers.

During 2023, Wabtec also expanded the Digital Intelligence portfolio with entry into the railcar telematics market.

For additional information on our business segments, see Note 19 of “Notes to Consolidated Financial Statements” included in Part II, Item 8 of this report.

Competitive Strengths

Our key strengths include:

Through both organic growth and strategic acquisitions, Wabtec has developed the following competitive strengths:

• Iconic legacy and strong reputation with a history of over 150 years of innovation .

Wabtec has been at the forefront of shaping and transforming the rail landscape through various innovations and technologies for over 150 years.

We are a recognized leader in the development and production of electronic recording, measuring and communications systems, PTC equipment, highly engineered compressors and heat exchangers for locomotives, and a leading manufacturer of freight car components, including electronic braking equipment, draft gears, trucks, brake shoes, and electronic end-of-train devices.

We are also a leading provider of braking equipment;

heating, ventilation and air conditioning equipment;

door assemblies and platform screen doors;

lifts and ramps;

couplers and current collection equipment, such as pantographs, for passenger transit vehicles.

Wabtec has been transforming the rail landscape through various innovations and technologies for over 150 years.

We have a long history of advancing technologies to meet customer needs and have been recognized for the development and production of locomotives, equipment, including PTC equipment, and systems for the freight rail and passenger transit industries.

We are also a service provider for freight rail and passenger transit vehicles.

• Breadth of product offering with a stable mix of original equipment market (OEM) and aftermarket business .

Our product portfolio is one of the broadest in the rail industry, as we offer a wide selection of quality parts, components and assemblies across the entire train and worldwide.

Our comprehensive product portfolio and service offerings span the freight rail and passenger transit industries, as well as the bus, mining, marine, and industrial markets, which help Wabtec balance the cyclical nature of the global rail business.

We provide our products in both the original equipment market and the aftermarket.

Our substantial installed base of products with end-users such as the railroads and the passenger transit authorities is a significant competitive advantage for providing products and services to the aftermarket because these customers often look to purchase safety- and performance-related replacement parts from the original equipment components supplier.

Sales of aftermarket parts and services typically represent approximately 60% of our total net sales.

Our substantial installed base of products with end-users, such as the railroads and the passenger transit authorities, is a significant competitive advantage for providing products and services to the aftermarket because these customers often look to purchase safety- and performance-related replacement parts and technology upgrades from the original equipment components supplier.

Wabtec has an installed base of nearly 24,000 locomotives, as well as a diverse offering of Transit locomotives and cars both internationally and domestically.

Our significant installed base enables opportunities in the aftermarket parts and services business.

• Leading design and engineering capabilities.

We believe a hallmark of our relationship with our customers has been our leading design and engineering practice, which has assisted in the improvement and modernization of global railway equipment.

Wabtec's engineers and technical capabilities support continued focus on innovative product development and efforts to achieve scalable technologies.

We believe both our customers and government authorities value our technological capabilities and commitment to innovation, as we seek not only to enhance the efficiency and profitability of our customers, but also to improve the overall safety of the railways through continuous improvement of product performance.

To that end, we have assembled a wide range of patented products, which we believe provides us with a competitive advantage.

• Market leader in decarbonizing the rail industry.

Today, rail represents the cleanest, most energy efficient, and safest mode of moving freight and people on land.

As global demands for growth increase, current trends indicate that freight and passenger rail activity will more than double by 2050, leading to an increased demand for sustainable transportation of people and goods.

These converging forces highlight the critical interplay between market dynamics, the need for decarbonization and Wabtec’s business strategy.

We are advancing our sustainability priorities both through our own commitments to our people, communities, and planet, as well as by innovating next generation technologies that reduce emissions, energy consumption and waste, and increase fuel efficiency for our customers through advancements in our equipment and digital solutions.

• Decarbonizing the rail industry.

We have taken significant steps to decarbonize global transport and make our world safer, smarter and greener.

Wabtec is advancing our sustainability priorities both through our own commitments to our people, communities, and planet, as well as by innovating next generation technologies that reduce emissions, energy consumption and waste, and increase fuel efficiency for our customers through advancements in our equipment and digital solutions.

• Driving the digital transformation of the rail industry.

Our early investment in data analytics and software has allowed us to become a strategic partner for customers looking to derive new value from assets and digitally transform their operations.

Through these initiatives, our digital solutions have helped to transform many distribution channels in the transportation industry including mine to ports, from shipper to receiver, from port to intermodal terminals to main

line locomotives and railcars and across train yards and operation centers.

The breadth of our Digital and Electronic solutions gives customers confidence in our ability to address their current and future needs.

Our early investment in data analytics and software has allowed us to become a strategic partner for customers looking to derive new value from existing assets, digitally transform their operations and enhance their network optimization.

The breadth of our Digital Intelligence solutions gives customers confidence in our ability to address their current and future needs with the latest digital technologies.

• Strategic partnerships with longstanding customers and other key stakeholders.

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Transformational change requires collaboration, so we are committed to accelerating progress by partnering with customers, government leaders, corporations, universities, and other key stakeholders.

For example, we have partnered with a customer, a leading short line and regional freight railroad, as well as a leading artificial intelligence and robotics institution to create technologies that will further decarbonize freight rail transport, improve freight safety, and generate greater rail network utilization.

We also have collaborated with a global transportation company focused on the development and commercialization of battery technology and hydrogen fuel cell systems for Wabtec locomotives.

For example, we have partnered with a customer, as well as an artificial intelligence and robotics institution to create technologies that will further decarbonize freight rail transport, improve freight safety, and generate greater rail network utilization.

By working together with these partners and others, we are developing advanced solutions for the industry to realize the zero-emission rail network of the future.

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• Streamlined cost structure and operational excellence provide operating leverage and support Wabtec’s growth.

We focus on driving continuous operational improvement across the organization by sharing best practices, instilling a culture of learning, problem solving and continuous improvement, and driving standard operating practices.

This culture is illustrated by the launch of Integration 2.0 in 2022.

We focus on driving continuous operational improvement across the organization by sharing best practices, instilling a culture of learning, problem solving and constant improvement, and driving standard operating practices.

Wabtec is also focused on earnings growth through expanding high-margin recurring revenue streams.

Additionally, Wabtec is a provider of technology-enabled locomotives and equipment, freight car components, systems, and services for the freight rail and passenger transit industries.

The size of Wabtec's operations enables the Company to achieve economies of scale, in addition to using best-cost locations for executing on operational decisions.

Completed strategic acquisitions and integrations have also led to operating synergies across Wabtec.

Business Strategy

We strive to generate sufficient cash to invest in our growth strategies and to build on what we consider to be a leading position as a low-cost producer in the industry while maintaining world-class product quality, technology and customer responsiveness.

We strive to generate sufficient cash to invest in our growth strategies while maintaining world-class product value, technology and customer responsiveness.

We continuously strive to improve quality, delivery and productivity, and to reduce costs utilizing global sourcing and supply chain management.

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We also rely on functional experts within the Company across various disciplines to train, coach and share best practices throughout the Company, while benchmarking against best-in-class competitors and peers.

Over time, we expect to continue to increase operating margins, improve cash flow and strengthen our ability to invest in the following growth strategies:

Over time, we intend to continue to increase operating margins, improve cash flow and strengthen our ability to invest in the following growth strategies:

• Accelerate innovation of scalable technologies .

We continue to emphasize innovation and development funding to create new products and capabilities to increase customer productivity, efficiency, capacity, utilization and safety, such as the battery electric locomotive, vehicle monitoring and data analytics.

We will continue to lead the way with technologies that use less energy, reduce weight and size, and increase recyclability.

We plan to invest in bringing new technologies to market for our customers.

A significant portion of our investment will be focused on three customer-centric areas of innovation:

A significant portion of our investment is expected to be focused on three customer-centric areas of innovation:

zero-emissions operations, automation and digitization and advanced supply chain visibility.

These investments will position our customers for success and make these technologies the standard going forward.

We have a multi-year initiative to build on our existing expertise and technologies in the digital and electronics areas.

We have a multi-year initiative to build on our existing expertise and technologies in the Digital Intelligence space.

In addition, we invest in developing enhancements and new features to existing products, such as brake discs and heat exchangers.

We are focusing on technological advances, especially in the areas of electronics, battery power and alternative fuels, braking products and other on-board equipment, as a means to deliver new product growth.

We are focusing on technological advances, especially in the areas of electronics, battery power and alternative fuels, including hydrogen technologies, braking products and other on-board equipment, as a means to deliver new product growth.

We seek to provide customers with incremental technological advances that offer immediate benefits with cost-effective investments.

• Grow and refresh expansive installed base.

We are a leading transportation and component manufacturer with a significant installed base with expansive product and service capabilities.

We have over 23,000 locomotives in service, the majority of which are equipped with Digital technologies, like Positive Train Control.

We are a transportation and component manufacturer with a significant installed base with expansive product and service capabilities.

We have nearly 24,000 locomotives in service, the majority of which are equipped with Digital Intelligence technologies, like Positive Train Control.

We intend to increase sales through direct sales of existing products to current and new customers, by developing specific new products for application in new geographic markets, by making strategic acquisitions and through joint ventures with railway suppliers which have a strong presence in their local markets.

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In Transit, we are focused on mature markets such as Europe and emerging markets such as India.

In Freight, we are targeting markets that operate significant fleets of North American-style locomotives and freight cars, including Australia, Brazil, China, Egypt, India, South Africa and other select areas within Europe, Asia and South America.

In Freight, we are targeting markets that operate significant fleets of locomotives and freight cars, including Australia, Brazil, Egypt, India, South Africa, Kazakhstan, and other select areas within Europe, Asia

and South America.

In addition, we have opportunities to increase the sale of certain products that we currently manufacture for the rail industry into other industrial markets, such as mining, off-highway and energy.

• Lead the decarbonization of rail.

We have taken significant steps to decarbonize global transport and make our world safer, smarter and greener.

Today, rail represents the cleanest, most energy efficient and safest mode of moving freight

and people on land.

Today, rail represents the cleanest, most energy efficient and safest mode of moving freight and people on land.

As global demands for growth increase, current trends suggest that freight and passenger rail activity will more than double by 2050, leading to an increased demand for sustainable transportation of people and goods.

These converging forces highlight the critical interplay between market dynamics, the need for decarbonization and Wabtec’s business strategy.

Wabtec is leading the transition to a more utilized, efficient, and low-carbon rail network.

Wabtec is helping customers transition to a more utilized, efficient, and low-carbon rail network.

Alternative clean energy technologies are critical in the fight against climate change and reducing greenhouse gas emissions.

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Aftermarket sales are typically done at higher margins and are less cyclical than OEM sales because a certain level of aftermarket maintenance and service work must be performed, even during an industry slowdown.

Sales of aftermarket parts and services typically represent approximately 60% of total net sales.

Sales of aftermarket parts and services represent approximately 60% of total net sales.

As a long-time supplier of original equipment, we have an extensive installed base of equipment in operation and growing this installed base further will expand our recurring aftermarket sales.

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We are focused on continuous improvement to drive cost competitiveness, effectively deploy capital and accelerate Lean.

Lean is a set of principles that emphasize customer focus, elimination of waste, high quality growth and ruthless prioritization of work to improve safety, quality, delivery and cost.

Lean is a set of principles that emphasize customer focus, elimination of waste, high quality growth and relentless prioritization of work to improve safety, quality, delivery and cost.

Lean is being embedded in our culture and is fundamental to how we execute our strategy.

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2024 $ 5,450 $ 2,007 $ 7,457

Other years $ 13,740 $ 1,941 $ 15,681

Although the current unfavorable global economic conditions have not resulted in any material cancellations, they have impacted the timing of some orders in backlog as, in certain cases, the delivery of goods and services were pushed out from their original timelines.

Thereafter $ 12,381 $ 2,161 $ 14,542

Global economic conditions have not resulted in any material cancellations recently, but they have impacted the timing of some orders in backlog as, in certain cases, the delivery of goods and services were pushed out from their original timelines and could result in future modifications or cancellations.

Engineering and Development

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Intellectual Property

We have approximately 6,000 active patents worldwide and on average file for approximately 300 new patents each year.

We have more than 6,500 active patents worldwide and file for approximately 300 new patents each year.

We actively review our patent procurement processes and make adjustments as appropriate to the business environment.

We also rely on a combination of trade secrets and other intellectual property laws, nondisclosure agreements and other protective measures to establish and protect our proprietary rights in our intellectual property.

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We believe that we have strong relationships with all of our key customers.

We hold a leading market share for many of our core product lines globally, although market shares vary by product lines and geographies.

We operate in a highly competitive marketplace.

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Within North America, New York Air Brake Company, a subsidiary of the German air brake producer Knorr-Bremse AG (“Knorr”) and Amsted Rail Company, Inc., a subsidiary of Amsted Industries Corporation, are our principal overall OEM competitors.

Our primary competition for locomotives is Electro-Motive Diesel, a division of Caterpillar.

Our primary competition for locomotives is Electro-Motive Diesel, owned by a subsidiary of Caterpillar.

Our primary competition for freight and passenger transit service and repair is mostly from the railroads’ and passenger transit authorities’ in-house operations and Knorr.

We believe our key strengths, which include leading market positions in core products, including sustainable technologies, breadth of product offering with a stable mix of OEM and aftermarket business, leading design and engineering capabilities, significant barriers to entry, strategic partnerships and operational excellence, coupled with an experienced management team, enable us to compete effectively in this marketplace.

We believe our key strengths, strategic partnerships and operational excellence, coupled with an experienced management team, enable us to compete effectively in this marketplace.

Outside of North America, Knorr is our main competitor, although not in every product line or geography.

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Wabtec is committed to sustainable value creation.

Our sustainability strategy is to contribute to a better, more sustainable world through our unique business offerings, leading technologies and sustainable business practices.

Our sustainability strategy is to contribute to a better, more sustainable world through our unique business offerings, technologies and sustainable business practices.

Our strategy helps us capitalize on market opportunities and reduce safety and environmental risks, while creating value for our customers, employees and other stakeholders.

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We are committed to driving an inclusive culture grounded in integrity, committed to the development of and investment in the communities where our teams live and work.

As we develop and refine our sustainability strategy, it is important that we listen to our key stakeholders and focus on areas where Wabtec can enable the most meaningful impact for our customers, communities and the world.

In 2021, we conducted a comprehensive Environmental, Social and Governance ("ESG") assessment that included internal and external stakeholder involvement, to identify key ESG issues of focus for the Company.

Based on the assessment, we identified topics with the highest relative priority to Wabtec and its external stakeholders that are aligned to our overall sustainability strategy and action plans:

As we refine our sustainability strategy, we believe it is important to listen to our key stakeholders.

Accordingly, we identified the following Environmental, Social and Governance ("ESG") topics with the highest relative priority to Wabtec and its external stakeholders, which are aligned to our overall sustainability strategy and action plans:

Topic Definition Alignment to Wabtec Strategic Sustainability Principles

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• Innovating with Purpose

Wabtec is committed to transparency on ESG topics, including the opportunities and challenges we encounter as we work to enhance performance and conduct business in a responsible manner.

We publish an annual Sustainability Report, where we present ESG information, including policies, goals, activities, and qualitative and quantitative data on our progress.

See "Available Information," below.

During 2021, Wabtec adopted its Green Finance Framework.

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See "Available Information," below .

Wabtec is committed to transparency on ESG topics, including the opportunities and challenges we encounter as we work to enhance performance and conduct business in a responsible manner.

In 2020, we established ESG goals around innovation, operations, safety, and people.

We report our progress on these goals in our annual Sustainability Report.

See "Available Information," below.

ESG Governance

Wabtec developed an ESG governance framework to provide oversight for our climate action strategy.

This structure starts with Wabtec's Board of Directors and its committees who oversee the execution of the Company’s ESG strategy as part of their oversight of Wabtec’s overall business.

In particular, the Board established the Environmental, Social and Governance Subcommittee ("ESG Subcommittee") of the Nominating and Corporate Governance Committee to support and provide oversight of Wabtec’s sustainability strategy and ongoing commitment to ESG matters relevant to Wabtec, including complying with all applicable laws and regulations affecting the health and safety of our employees and stakeholders, as well as protection of the environment (including climate) and other public policy matters.

To further facilitate the Board’s engagement and oversight, ESG was added as a risk category in Wabtec’s enterprise risk management process.

This framework starts with Wabtec's Board of Directors who oversee the execution of the Company’s ESG strategy as part of their oversight of Wabtec’s overall business, risks and opportunities.

The Board of Directors delegates certain ESG responsibilities to committees and has established an Environmental, Social and Governance Subcommittee ("ESG Subcommittee") to support and provide oversight of Wabtec’s sustainability strategy and ongoing commitment to ESG matters relevant to Wabtec, including complying with all applicable laws and regulations affecting the health and safety of our employees and stakeholders, as well as protection of the environment (including climate) and other public policy matters.

The ESG governance framework is supported by Wabtec's broader enterprise risk management process, which is Wabtec's primary vehicle for assessing and managing operational, strategic, financial, and compliance risk.

An enterprise risk management report, which includes climate change as a risk category, with the status of relevant mitigation measures, is reviewed with the Board of Directors twice a year.

Human Capital

At Wabtec, we believe performance drives progress, and are committed to developing sustainable transportation solutions that move and improve the world.

We are committed to driving an inclusive culture and integrating our talent and capabilities across the enterprise.

As a Company, we believe that protecting the health and safety of our people and the environment is the responsibility of everyone at Wabtec.

Our headquarters are in Pittsburgh, Pennsylvania and we have offices and facilities in over 50 countries around the globe.

In 2023, after years of growth and integration, we took the next step on our journey to become One Wabtec by aligning the behaviors of our legacy companies and evolving our shared culture.

We launched our new cultural blueprint through our Vision, Mission, and Values after hearing from over 2,200 diverse stakeholders around the globe, including our customers, team members, managers, senior leaders, and Board of Directors.

Revolutionize the way the world moves for future generations.

unlock our customers’ potential by delivering innovative and lasting transportation solutions.

At Wabtec, our purpose stems from four values that shape our core identity:

People First, Expand the Possible, Embrace Diversity, and One Wabtec.

These values are woven throughout our global operations, and they motivate us to build lasting connections.

Our headquarters are in Pittsburgh, Pennsylvania and we have offices, facilities, and operations in over 50 countries around the globe.

As of December 31, 2023, we have a global workforce of approximately 29,000 employees, excluding contingent workers.

A portion of our workers are represented by labor unions.

For 2023, the United Electrical, Radio and Machine Workers of America (UE), Locals 506 and 618 collective bargaining agreement, covering approximately 1,400 locomotive manufacturing workers in Erie, Pennsylvania, expires on June 9, 2023.

Negotiations with UE will begin in 2023.

The United Electrical, Radio and Machine Workers of America (UE), Locals 506 and 618 collective bargaining agreement, covering approximately 1,400 locomotive manufacturing workers in Erie, Pennsylvania, expired on June 9, 2023.

Negotiations with the UE officially began on April 27, 2023 and an agreement between the Company and the UE was not reached before the contract expired.

On June 22, 2023, the UE voted against ratification of the Company's proposed agreement and authorized a strike.

The Company and the UE subsequently reached an agreement that was ratified by the UE on August 31, 2023, ending the labor strike.

The Company continuously monitors its labor activity.

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Our Board of Directors also plays a critical role in creating an organization that prioritizes, supports, and invests in diversity, inclusion, and equity.

Over the last three years, Wabtec has named three diverse members to its Board, with 55% of Wabtec’s Board currently considered diverse (gender;

race/ethnicity).

In 2021, women constituted approximately 17% of our global workforce and approximately 19% of our salaried employees, and people of color constituted approximately 20% of our U.S.

salaried workforce and approximately 24% of the total U.S.

Women constituted approximately 17% of our global workforce and approximately 20% of our salaried employees, and people of color constituted approximately 25% of the total U.S.

Wabtec's Board is considered 44% diverse based on gender, race/ethnicity.

Training and Development

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We have invested in training courses through Wabtec’s Learning Management System ("LMS").

In 2021, Wabtec partnered with a third-party to provide diversity and inclusion training.

In 2022, Wabtec continued this partnership, refining the program to our company-wide initiatives.

In 2023, Wabtec again partnered with a third-party to provide diversity and inclusion training.

Over 10,000 employees have participated in the training, which was coupled with tools and resources for people leaders to help make diversity and inclusion part of a long-term conversation rather than a one-time training.

Our two-year Leadership, Expertise, Advancement and Development ("LEAD") program is the primary path for university graduates into Wabtec.

Our Leadership, Expertise, Advancement and Development ("LEAD") program is the primary path for university graduates into Wabtec.

LEAD is a two-year program that offers an immersive learning experience in the fields of engineering, operations, finance and IT along with extensive leadership training designed to build the next generation of leaders.

On average, there are 100 participants in the LEAD program that rotate between business units every six months to

work on strategic projects and assignments, gain exposure to senior leadership and build their global professional network.

On average, there are 100 participants in the LEAD program that rotate between business units every six months to work on strategic projects and assignments, gain exposure to senior leadership and build their global professional network.

We are focused on strengthening this program to support our global talent pipeline.

In addition, Wabtec recognized our first graduating class of the Propel leadership development program created for mid-career employees and designed to cultivate and accelerate individual leadership and growth for our engineers around the world.

Program participants have the opportunity to hone key skills, network, gain visibility with senior leadership, and strengthen cross-cultural awareness.

The program includes stretch assignments, high-impact projects, and a custom curriculum supported by ongoing feedback and mentorship from senior leaders.

Environmental, Health and Safety

At Wabtec, our commitment to environmental, health and safety ("EHS") is at the heart of our core values.

The well-being of our employees, the communities where we operate, and our customers and their customers depends on it.

Putting people first is how we do business at Wabtec.

Our Environmental, Health and Safety ("EHS") program has a longstanding commitment to continuously improve and foster a culture that proactively reduces risks and hazards in our operations, protects the environment, ensures regulatory compliance, and encourages learning and development.

To ensure operational accountability for EHS across all levels of Wabtec, we use standard metrics (both lagging and leading indicators) and structured management reviews to track and measure EHS performance across all our operational sites.

Each site is responsible for developing a risk reduction plan to drive site or project-level actions related to risk reduction, employee engagement, and continuous EHS improvement.

Monthly EHS operating reviews with the Executive Vice President for Global Operations are used to review operational risks at the enterprise-level, develop strategic initiatives, and communicate key performance indicators to senior management.

In 2022, we continued our progress toward best-in-class EHS performance by strengthening our focus on compliance assurance, risk reduction, and learning and development.

We also continued our efforts to comprehensively deploy and validate effective and consistent adherence with the Environment, Health, and Safety component of the Wabtec Management System (known as the “EHS WMS”) to strengthen our management system approach to addressing EHS risks and promote the consistent implementation of best practices across all our global manufacturing and services sites, regardless of how local laws are implemented or enforced.

We also improved our focus on proactive risk reduction in our operations by conducting monthly incident review sessions with our site Operations and EHS teams to review common incidents, discuss corrective actions, and share best practices.

Through these enhanced incident learning efforts, our Operations and EHS teams are partnering to eliminate and reduce hazards and risks within Wabtec’s operations, which is fundamental to improved EHS performance.

With zero fatalities and over 65 operational sites with zero recordable injuries, 2022 saw a 10% injury rate reduction across Wabtec's operations as compared with 2021.

In 2022, Wabtec continued its EHS leadership training course aimed at building the toolkits of general managers and plant managers to empower them as critical stewards of our EHS culture.

Each site is responsible for developing a risk reduction plan to drive site or project-level actions related to risk reduction, compliance assurance, employee engagement, and continuous EHS improvement.

In 2023, we continued to focus on our EHS performance by deploying an enterprise-wide electronic EHS concern reporting tool to make it easier for our team members to raise an EHS concern at any time and continuing our monthly incident review sessions with site Operations and EHS teams to review common incidents, discuss corrective actions, and share best practices.

Through these efforts, our Operations and EHS teams are partnering to eliminate and reduce hazards and risks within Wabtec’s operations, which is fundamental to improved EHS performance.

While we had zero fatalities and over 70 operational sites with zero recordable injuries across Wabtec’s operations in 2023, our total recordable injury rate slightly increased by 6% compared with 2022.

We remain steadfast in our commitment to protecting our people and driving toward EHS excellence.

Wabtec also continued its EHS leadership training course aimed at building the toolkits of general managers and plant managers to empower them as critical stewards of our EHS culture.

This course instills Wabtec’s EHS expectations of its Operational Leaders by providing an awareness of EHS impacts and legal and compliance responsibilities, practical tips for achieving and maintaining EHS excellence, and ideas for cultivating a positive culture and engaging employees to take ownership for EHS.

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To deliver on that commitment, we utilize market data to benchmark to the external market, and consider factors such as an employee’s role and experience, the location of the job and performance when determining compensation.

We provide our employees resources to help them succeed.

We offer a wide range of benefits including healthcare and wellness benefits, retirement benefits, an Employee Assistance Program, Employee Resource Groups to build diverse and inclusive communities at Wabtec, and paid time off.

Cybersecurity Framework

Cybersecurity and data protection are important considerations in the design and production of Wabtec products, projects, and services.

Information technology is used and relied upon extensively by our business.

We collect, process, and retain sensitive and confidential customer information, including proprietary business information, personal data and other information, some of which may be subject to privacy and security laws, regulations and/or customer-imposed data protection controls.

To address risks related to cybersecurity and privacy, Wabtec seeks to leverage industry cybersecurity practices that have been developed by organizations such as National Institute of Standards and Technology (NIST) and the International Standardization Organization (ISO) and also engages external independent advisors.

Wabtec’s Data Protection Plan describes the technical, physical and administrative controls used to protect the confidentiality, integrity, and availability of information provided to and managed by Wabtec.

Cybersecurity is addressed and discussed regularly with our Chief Information Officer, the Audit Committee and Board of Directors.

Wabtec also maintains SOC 1 Type 2 certification for select digital products, as well as cyber liability insurance coverage.

We also regularly evaluate our response readiness, including disaster recovery plans and business continuity considerations in the case of a cyber incident.

Finally, Wabtec engages in regular security awareness training to highlight and educate its employees on how to identify and mitigate cybersecurity risks at the individual level.

We provide our employees resources to help them be mentally, physically and financially well.

We offer a wide range of benefits including healthcare and wellness (physical and mental) benefits, retirement benefits, paid time off, an employee assistance program, and seven employee resource groups to build diverse and inclusive communities at Wabtec.

In the course of our operations, we are subject to various regulations and standards of governments and other agencies in the U.S.

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New products generally must undergo testing and approval processes that are rigorous and lengthy.

As a result of these regulations and requirements, we must usually obtain and

maintain certifications in a variety of jurisdictions and countries.

The governing bodies include the FRA and the Association of American Railroads ("AAR") in the U.S., and the International Union of Railways (“UIC”) and the European Railway Agencies in Europe.

As a result of these regulations and requirements, we must usually obtain and maintain certifications in a variety of jurisdictions and countries.

The governing bodies include the Federal Railroad Administration ("FRA") and the Association of American Railroads ("AAR") in the U.S., and the International Union of Railways (“UIC”) and the European Railway Agencies in Europe.

Also, in Europe, the European Committees for Standardization continually draft new European standards which cover, for example, the Reliability, Availability, Maintainability and Safety of railways systems.

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Available free of charge on this site are:

our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well as the annual report to stockholders, our Green Bond Report (www.wabteccorp.com/investor-relations/green-finance-framework), our Sustainability Report (www.wabteccorp.com/sustainability), and other information.

our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well as the annual report to stockholders, our Green Bond Report (https://ir.wabteccorp.com/investor-relations/green-finance-framework), our Sustainability Report (www.wabteccorp.com/sustainability), and other information.

The Internet site and the information contained therein or connected thereto are not incorporated by reference into this Form 10-K.

The following are also available free of charge on this site and are available in print to any shareholder who requests them:

Our Corporate Governance Guidelines, the charters of our Audit, Compensation and Nominating and Corporate Governance Committees, our Code of Conduct, which is applicable to all employees, our Code of Ethics for Senior Officers, which is applicable to our executive officers, our Policies on Related Party Transactions and Conflict Minerals.

Our Corporate Governance Guidelines, the charters of our Audit, Compensation and Talent Management and Governance and Sustainability Committees, our Code of Conduct, which is applicable to all employees, our Code of Ethics for Senior Officers, which is applicable to our executive officers, our Policies on Related Party Transactions and Conflict Minerals.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

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Fetsko 59 President, Freight and Industrial Components

Pascal Schweitzer 46 President, Freight Services

Alicia Hammersmith 53 President, Freight Services

Rogerio Mendonca 51 President, Freight Equipment

Nalin Jain 53 President, Digital Electronics

Lillian Leroux 51 President, Transit

Nalin Jain 54 President, Digital Intelligence

Pascal Schweitzer 47 President, Transit

Lillian Leroux 52 Chief Strategy and Sustainability Officer

Mastalerz 57 Senior Vice President of Finance and Chief Accounting Officer

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Prior to joining Wabtec, Mr.

Gebhardt served as Managing Director of KCK-US from May 2019 through September 2020.

Gebhardt served as Managing Director of KCK-US, a Deleware corporation, from May 2019 through September 2020.

He also served in a variety of roles with General Electric including Chief Technology Officer of GE Power from August 2017 through January 2019, Chief Product Management Officer for GE Energy Connections from February 2017 through August 2017, Chief Platforms and Operations Officer for Current from January 2016 through January 2017, and Chief Technology Officer for GE Oil & Gas from October 2012 through December 2015.

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Prior to joining Wabtec, Ms.

Trombley served in various executive roles at Bombardier Transportation from 2017 to 2019, most recently as Vice President of Services and previously as Vice President Sales for Bombardier Transport - Americas.

Trombley served in various executive roles at Bombardier Transportation from 2017 to August 2020, most recently as Vice President of Services and previously as Vice President Sales for Bombardier Transport - Americas.

Trombley also held progressive commercial and marketing leadership roles at Parsons and GE Transportation.

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Fetsko served in various management roles with two different environmental engineering firms.

Pascal Schweitzer was named President, Freight Services in February 2019.

Previously Mr.

Schweitzer was the Vice President—Services of GE Transportation since April 2017.

He served as General Manger – Europe – Power Services for GE Power from November 2015 through April 2017 and prior to that several positions with Alstom Power.

Alicia Hammersmith was named President, Freight Services in April 2023.

Previously, Ms.

Hammersmith served as Group Vice President, Transit Operations from 2020-2023 and as General Manager Latin America & Texas from 2019-2020.

Prior to joining Wabtec, Ms.

Hammersmith served in various management roles with GE.

Rogerio Mendonca was named President, Freight Equipment in February 2021.

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Prior to that he served as President of GE Transportation in Latin America from April 2016 through July 2017 and in several roles leading up to that including Commercial Director and Service Operations General Manager.

Nalin Jain was named President, Digital Electronics business effective December 2020.

Jain had served as President, Global Equipment since May 2019 and previously as President & CEO, International Markets since Aug 2017 for GE Transportation.

Nalin Jain was named President, Digital Intelligence business effective December 2020.

Jain had served as President, Global Equipment since May 2019 and previously as President & CEO, International Markets since August 2017 for GE Transportation.

Prior to that, Mr.

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Jain served as Director Global Partnerships with Bombardier Inc since July 2002 and prior to that he worked for Saint Gobain.

Lilian Leroux was named President, Transit effective March 2019.

Previously he served as Group President—Brakes & Safety from January 2017 to October 2019.

Pascal Schweitzer was named President, Transit in April 2023.

Previously, Mr.

Schweitzer served as President, Freight Services from February 2019 to April 2023 and Vice President—Services of GE Transportation from April 2017 to February 2019.

He also served as General Manager – Europe – Power Services for GE Power from November 2015 through April 2017 and prior to that several positions with Alstom Power.

Lilian Leroux was named Chief Strategy and Sustainability officer in April 2023.

Previously he served as President, Transit from March 2019 to April 2023 and Group President—Brakes & Safety from January 2017 to October 2019.

Prior to that, Mr.

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Kubacki was on Wall Street from January 2004 to April 2019 as a sell-side equity analyst covering industrials and served as Executive Director and Senior Analyst for the transportation, logistics and equipment sector at Mizuho Securities USA from June 2017 to April 2019, as well as Director of Equity Research for the global industrial equipment industry at CLSA from July 2016 to March 2017.

Kubacki prior to her role at CLSA spent nearly nine years covering the industrial sector at Avondale Partners, as well as operations management, process design and supply chain management positions at Procter and Gamble.

prior to her role at CLSA, Ms.

Kubacki spent nearly nine years covering the industrial sector at Avondale Partners, as well as operations management, process design and supply chain management positions at Procter and Gamble.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business