15 unchanged sentences
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
−Removed: Management has excluded L&M Radiator, Inc.
−Removed: and Lokomotiv Kurastyru Zauyty (LKZ) from its assessment of internal controls over financial reporting as of December 31, 2023 because the Company acquired L&M Radiator, Inc.
−Removed: effective June 15, 2023, and LKZ effective December 22, 2023.
−Removed: L&M Radiator, Inc.
−Removed: and LKZ are both subsidiaries whose total assets represent 1.6% and 2.1%, respectively, and customer revenues represents 0.8% and 0.0%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2023.
+Added: During 2024, the Company completed the acquisitions of Tehnika Pty.
+Added: Ltd., Fanox Electronic, S.L., Kompozitum s.r.o., and Bloom Engineering Holdings, Inc.
+Added: Management is currently integrating the acquisitions into its operations, compliance programs and internal control processes and as such, has excluded the acquisitions from its assessment of internal controls over financial reporting as of December 31, 2024.
+Added: The acquisitions are all subsidiaries whose combined total assets represent 1.3% and combined net sales represent 0.1% of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.
Based on its assessment, Management has concluded that the Company maintained effective internal control over financial reporting as of December 31, 2024, based on criteria in Internal Control-Integrated Framework issued by the COSO.
27 unchanged sentences
During the year ended December 31, 2024, a material amount of the Company's total revenues were derived from performance obligations that are satisfied over time.
−Removed: Auditing the Company's measurement of revenue recognized over time on long-term contracts is especially challenging because it involves subjective management assumptions regarding the estimated remaining costs of the long-term contract that could span several years.
−Removed: These assumptions could be impacted by the future cost of materials, labor availability and productivity, complexity of the work to be performed, and the performance of suppliers, customers and subcontractors that may be associated with the contract and may be affected by future market or economic conditions.
+Added: Auditing the Company's measurement of revenue recognized over time on long-term contracts is especially challenging because it involves subjective management assumptions regarding the estimated remaining costs of the long-term contracts that could span several years.
+Added: These assumptions could be impacted by the future cost of materials, labor availability and productivity, complexity of the work to be performed, and the performance of suppliers, customers and subcontractors that may be associated with the contracts and may be affected by future market or economic conditions.
How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's process to recognize revenue over time on long-term contracts, including controls over management’s review of the significant underlying assumptions described above.
Our audit procedures also included, among others, evaluating the significant assumptions and the accuracy and completeness of the underlying data used in management's calculations.
−Removed: This included, for example, inspection of the executed contract and testing management's cost estimates by comparing the inputs to the Company’s historical data or experience for similar contracts, the performance of sensitivity analysis and the performance of retrospective review analysis of prior management cost estimates to actual costs incurred for completed contracts.
−Removed: In addition, for a sample of contracts, we involved our construction and engineering specialists to assist in our evaluation of management’s cost estimates at completion.
+Added: This included, for example, inspection of the executed contracts and testing management's cost estimates by comparing the inputs to the Company’s historical data or experience for similar contracts, the performance of sensitivity analysis and the performance of retrospective review analysis of prior management cost estimates to actual costs incurred for completed contracts.
+Added: In addition, for certain contracts, we involved our internal valuation specialists to assist in our evaluation of management’s cost estimates at completion.
/s/ Ernst & Young LLP
7 unchanged sentences
In our opinion, Westinghouse Air Brake Technologies Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
−Removed: As indicated in the accompanying Management's Report on Internal Control over Financial Reporting, management's assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of L&M Radiator, Inc.
−Removed: and Lokomotiv Kurastyru Zauyty (LKZ), which are included in the 2023 consolidated financial statements of the Company and constituted 1.6% and 2.1% of total assets respectively, as of December 31, 2023 and 0.8% and 0.0% of net sales respectively, for the year then ended.
−Removed: Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of L&M Radiator, Inc.
+Added: As indicated in the accompanying Management's Report on Internal Control over Financial Reporting, management's assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Tehnika Pty Ltd Australia, Fanox Electronic, S.L., Kompozitum s.r.o, and Bloom Engineering Holdings, Inc., which are included in the 2024 consolidated financial statements of the Company and constituted 1.3% of total assets as of December 31, 2024 and 0.1% of net sales, for the year then ended.
+Added: Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Tehnika Pty Ltd Australia, Fanox Electronic, S.L., Kompozitum s.r.o, and Bloom Engineering Holdings, Inc.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, cash flows and shareholders’ equity for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(2) and our report dated February 12, 2025 expressed an unqualified opinion thereon.
11 unchanged sentences
A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
−Removed: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and
−Removed: directors of the company;
+Added: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
30 unchanged sentences
Deferred income taxes 376 318
−Removed: Contingent consideration — 47
Other long-term liabilities 863 740
53 unchanged sentences
Net income attributable to Wabtec shareholders $ 1,056 $ 815 $ 633
−Removed: Foreign currency translation gain (loss) 55 ( 200 ) ( 136 )
+Added: Foreign currency translation (loss) gain ( 277 ) 55 ( 200 )
Unrealized gain (loss) on derivative contracts 14 22 ( 5 )
Unrealized gain on pension benefit plans and post-retirement benefit plans 14 — 11
−Removed: Other comprehensive income (loss) before tax 77 ( 194 ) ( 125 )
−Removed: Income tax expense related to components of other comprehensive loss ( 6 ) ( 1 ) ( 2 )
−Removed: Other comprehensive income (loss), net of tax 71 ( 195 ) ( 127 )
+Added: Other comprehensive (loss) income before tax ( 249 ) 77 ( 194 )
+Added: Income tax expense related to components of other comprehensive (loss) income ( 7 ) ( 6 ) ( 1 )
+Added: Other comprehensive (loss) income, net of tax ( 256 ) 71 ( 195 )
Comprehensive income attributable to Wabtec shareholders $ 800 $ 886 $ 438
10 unchanged sentences
Deferred income taxes 51 ( 58 ) 36
−Removed: Net loss (gain) on disposal of property, plant and equipment 7 3 ( 4 )
−Removed: Changes in operating assets and liabilities, net of acquisitions:
+Added: Net loss on disposal of property, plant and equipment 4 7 3
+Added: Changes in operating assets and liabilities, net of acquisitions and dispositions:
Accounts receivable and unbilled accounts receivable ( 34 ) ( 195 ) ( 52 )
2 unchanged sentences
Accrued income taxes 21 1 7
−Removed: Accrued liabilities and customer deposits 126 108 84
−Removed: Other assets and liabilities 87 ( 110 ) ( 135 )
+Added: Current and noncurrent customer deposits 113 116 142
+Added: Other accrued liabilities 124 57 ( 36 )
+Added: Other operating activities 10 40 ( 108 )
Net cash provided by operating activities 1,834 1,201 1,038
Investing Activities
−Removed: Acquisitions of businesses, net of cash acquired ( 308 ) ( 89 ) ( 435 )
Purchase of property, plant and equipment ( 207 ) ( 186 ) ( 149 )
+Added: Acquisitions of businesses, net of cash acquired ( 168 ) ( 308 ) ( 89 )
+Added: Proceeds from dispositions of businesses, net of cash disposed 19 — —
Proceeds from disposal of property, plant and equipment 13 2 3
6 unchanged sentences
Payment of contingent consideration on acquisitions ( 42 ) ( 112 ) ( 101 )
−Removed: Distribution to noncontrolling interest ( 17 ) — —
Payment of income tax withholding on share-based compensation ( 25 ) ( 16 ) ( 7 )
+Added: Distribution to noncontrolling interest ( 6 ) ( 17 ) —
Other financing activities 3 2 14
1 unchanged sentence
Effect of changes in currency exchange rates ( 25 ) 3 ( 27 )
−Removed: Increase (decrease) in cash 79 68 ( 126 )
+Added: Increase in cash 95 79 68
Cash, cash equivalents and restricted cash, beginning of year 620 541 473
24 unchanged sentences
Net income — — — — — 815 — 10 825
−Removed: Other comprehensive loss, net of tax — — — — — — ( 195 ) — ( 195 )
+Added: Other comprehensive income, net of tax — — — — — — 71 — 71
Stock repurchase — — — ( 3.9 ) ( 412 ) — — — ( 412 )
+Added: Distribution to noncontrolling interest — — — — — — — ( 17 ) ( 17 )
Other — — — — — — — ( 1 ) ( 1 )
5 unchanged sentences
Net income — — — — — 1,056 — 11 1,067
−Removed: Other comprehensive income, net of tax — — — — — — 71 — 71
+Added: Other comprehensive loss, net of tax — — — — — — ( 256 ) — ( 256 )
Stock repurchase — — — ( 6.9 ) ( 1,107 ) — — — ( 1,107 )
Distribution to noncontrolling interest — — — — — — — ( 6 ) ( 6 )
−Removed: Other — — — — — — — ( 1 ) ( 1 )
Balance, December 31, 2024 226.9 $ 2 $ 8,023 ( 55.6 ) $ ( 3,273 ) $ 6,185 $ ( 846 ) $ 42 $ 10,133
33 unchanged sentences
The Company performs its annual impairment test during the fourth quarter after the annual forecasting process is completed, and also tests for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
−Removed: The Company will perform either a qualitative or quantitative test for goodwill, performing a quantitative test for each identified reporting unit at least every three years.
+Added: The Company will perform either a qualitative or quantitative test for goodwill and indefinite-lived intangible assets, performing a quantitative test for each identified reporting unit in goodwill at least every three years.
Periodically, Management of the Company assesses whether or not an indicator of impairment is present that would necessitate an impairment analysis be performed.
9 unchanged sentences
Compensation expense for incentive stock units is updated as necessary if the number of units expected to vest changes based on the Company's performance.
−Removed: Financial Derivatives and Hedging Activities In the normal course of business, the Company is exposed to interest rate, commodity price and foreign currency exchange rate fluctuations.
−Removed: At times, the Company limits these risks through the use of derivatives such as cross-currency swaps, foreign currency forward contracts, interest rate swaps, commodity swaps and options.
+Added: Financial Derivatives and Hedging Activities In the normal course of business, the Company is exposed to market risks related to interest rates, commodity prices and foreign currency exchange rate fluctuations.
+Added: At times, the Company limits these risks through the use of derivatives such as cross-currency swaps, foreign currency forward contracts, interest rate hedges, commodity swaps and options.
In accordance with the Company's policy, derivatives are only used for hedging purposes.
43 unchanged sentences
The Company expects to recognize revenue of approximately 34 % of remaining performance obligations over the next 12 months, with the remainder recognized thereafter.
−Removed: Revolving Receivables Program The Company utilizes a revolving facility to sell certain receivables of the Company and certain of its subsidiaries (the "Originators").
+Added: Revolving Receivables Program The Company utilizes a revolving facility to sell up to $ 350 million of certain receivables of the Company and certain of its subsidiaries (the "Originators").
The Originators contribute receivables to our bankruptcy-remote subsidiary, which sells the receivables to a financial institution on a recurring basis in exchange for cash equal to the gross receivables sold.
4 unchanged sentences
Neither the Company (except for the bankruptcy-remote consolidated subsidiary referenced above) nor the Originators guarantees the collectability of the receivables under the revolving agreements.
−Removed: During 2021, the Company could transfer up to $ 200 million of certain receivables.
−Removed: During 2022, the program was amended to increase the transfer limit up to $ 350 million of certain receivables.
At December 31, 2024, and 2023 the bankruptcy-remote subsidiary held receivables of $ 693 million and $ 674 million, respectively, which are included in the Company's Consolidated Balance Sheets.
−Removed: The receivables held by the bankruptcy-remote subsidiary collateralize the outstanding receivables sold, which was $ 20 million and $ 80 million at December 31, 2023 and 2022, respectively.
+Added: The receivables held by the bankruptcy-remote subsidiary collateralize the outstanding receivables sold, which was $ 20 million at December 31, 2023.
+Added: There were no receivables outstanding under the facility at December 31, 2024.
The transfers are recorded at the fair value of the proceeds received and obligations assumed less derecognized receivables.
No obligation was recorded at December 31, 2024 or 2023 as the estimated expected credit losses on receivables sold is insignificant.
−Removed: Our maximum exposure to loss related to these receivables transferred is limited to the amount outstanding.
−Removed: The following table sets forth a summary of receivables sold:
−Removed: Twelve Months Ended
+Added: Our maximum exposure to losses related to these receivables transferred is limited to the amount outstanding.
+Added: The following table sets forth a summary of receivables sold and the resulting impact of net cash processed included in cash from operations:
+Added: For the year ended
In millions 2024 2023 2022
1 unchanged sentence
Customer collections remitted to financial institution ( 946 ) ( 2,677 ) ( 1,701 )
−Removed: Net cash proceeds (remitted) received $( 60 ) $ 60 $( 53 )
+Added: Net cash proceeds (remitted) received included in cash from operations $ ( 20 ) $ ( 60 ) $ 60
+Added: During the fourth quarter of 2024, the revolving receivables program agreement was amended to allow us to request loans from the financial institution secured by the receivables held in the program, up to the $ 350 million limit.
+Added: As a result, effective January 1, 2025 proceeds and repayments of loans under the program will be classified as Financing activities on our statement of cash flows and outstanding balances will be classified as debt on our balance sheet.
Pre-Production Costs Certain pre-production costs relating to long-term production and supply contracts have been deferred and will be recognized over the life of the contracts.
3 unchanged sentences
At December 31, 2024 and 2023 there was no preferred stock issued or outstanding.
−Removed: Significant Customers and Concentrations of Credit Risk The Company’s trade receivables are primarily from rail and transit industry original equipment manufacturers, Class I railroads, railroad carriers and commercial companies that utilize rail cars in their operations, such as utility and chemical companies, as well as companies in the mining, marine and industrial markets.
+Added: Significant Customers and Concentrations of Credit Risk The Company’s trade receivables are primarily from rail and transit industry original equipment manufacturers, Class I railroads, railroad carriers and commercial companies that utilize rail
+Added: cars in their operations, such as utility and chemical companies, as well as companies in the mining, marine and industrial markets.
No one customer accounted for more than 10% of the Company’s consolidated net sales in the periods presented.
4 unchanged sentences
Changes in facts and circumstances may result in revised estimates.
−Removed: Accounting Standards Recently Issued In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):
−Removed: Improvements to Reportable Segment Disclosures .
−Removed: The amendments in this update are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.
−Removed: In addition to the current requirements, the amendments specify additional information be provided about the chief operating decision maker (CODM) as well as disaggregated expense categories, to the extent that the CODM utilizes such data in deciding how to allocate resources.
−Removed: The amendments in this update do not affect the recognition, measurement, or financial statement presentation of expenses, and will be effective for Wabtec's annual reporting periods beginning January 1, 2024 and interim reporting periods beginning January 1, 2025.
−Removed: The amendments will require increased interim and annual disclosures on current and comparable reporting periods presented in annual and interim company filings.
−Removed: The Company is assessing the extent of the impact of the amendments on our filings.
−Removed: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
+Added: Accounting Standards Recently Issued In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740):
Improvements to Income Tax Disclosures .
1 unchanged sentence
The amendments in this update also require enhanced disaggregation of disclosures about income taxes paid and income tax expense, among other changes.
−Removed: The amendments in this update do not affect the recognition, measurement, or financial statement presentation of income taxes and will be effective for Wabtec's annual reporting periods beginning January 1, 2025.
−Removed: The amendments will require increased annual disclosures on current and comparable reporting periods presented in annual and interim company filings.
−Removed: The Company is assessing the extent of the impact of the amendments on our filings.
−Removed: Accounting Standards Recently Adopted In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50):
−Removed: Disclosure of Supplier Finance Obligations.
−Removed: The amendments in this update outline specific quantitative and qualitative disclosure requirements for entities that use supplier finance programs in connection with the purchase of goods or services.
−Removed: The amendments in this update do not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs.
−Removed: The amendments in this update were effective for Wabtec's reporting periods beginning January 1, 2023, except for the amendment on roll forward information which will be effective for reporting periods beginning January 1, 2024.
−Removed: The amendments will require increased interim and annual disclosures be provided on current and comparable reporting periods presented in annual and interim company filings.
−Removed: The Company has entered into supply chain financing arrangements with third-party financial institutions to provide our vendors with enhanced payment options while providing the Company with added working capital flexibility.
−Removed: The Company does not provide any guarantees under these arrangements, does not have an economic interest in our supplier's voluntary participation, does not receive an economic benefit from the financial institutions, and no assets are pledged under the arrangements.
+Added: The amendments in this update do not affect the recognition, measurement, or financial statement presentation of income taxes and is effective for Wabtec's annual reporting periods beginning January 1, 2025.
+Added: The amendments require increased annual disclosures on current and comparable reporting periods presented in annual company filings.
+Added: The resulting new annual disclosure requirements will be reflected in our 2025 report on Form 10-K.
+Added: In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):
+Added: Disaggregation of Income Statement Expenses.
+Added: The amendments in this update require entities to disclose disaggregated information about certain costs and expenses in commonly presented income statement expense captions.
+Added: The amendments will require increased interim and annual footnote disclosures either prospectively or retrospectively for reporting periods presented in interim and annual company filings.
+Added: The amendments in this update do not affect the recognition, measurement, or financial statement presentation of income statement expenses and will be effective for Wabtec's annual reporting periods beginning January 1, 2027 and interim reporting periods beginning January 1, 2028.
+Added: The Company is assessing the extent of the impact of the amendments on its future filings.
+Added: Accounting Standards Recently Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures .
+Added: The amendments in this update are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.
+Added: In addition to the current requirements, the amendments specify additional information be provided about the chief operating decision maker ("CODM") as well as disaggregated expense categories, to the extent that the CODM utilizes such data in deciding how to allocate resources.
+Added: The amendments in this update do not affect the recognition, measurement, or financial statement presentation of expenses, and were effective for Wabtec's annual reporting periods beginning January 1, 2024 and will be effective for interim reporting periods beginning January 1, 2025.
+Added: The amendments require increased interim and annual disclosures on current and comparable reporting periods presented in annual and interim company filings.
+Added: The new annual disclosure requirements are included in Note 19.
+Added: Supply Chain Financing Program The Company has entered into supply chain financing arrangements with third-party financial institutions to provide our vendors with enhanced payment options while providing the Company with added working capital flexibility.
+Added: The Company does not provide any guarantees under these arrangements, does not have an economic interest in our suppliers' voluntary participation, does not receive an economic benefit from the financial institutions, and no assets are pledged under the arrangements.
The arrangements do not change the payable terms negotiated by the Company and our vendors, which range between net 45 and net 180 days, and does not result in a change in the classification of amounts due as Accounts payable in the Consolidated Balance Sheets.
−Removed: Suppliers utilized the program to accelerate receipt of payment from these financial institutions for $ 305 million and $ 296 million of the Company's outstanding Accounts payable as of December 31, 2023 and December 31, 2022, respectively.
+Added: Suppliers utilized the program to accelerate receipt of payment from these financial institutions for $ 311 million and $ 305 million of the Company's outstanding Accounts payable as of December 31, 2024 and 2023, respectively.
The supplier invoices included under the program require payment in full to the financial institutions consistent with the Company’s normal terms and conditions as agreed upon with the vendor.
+Added: The following table sets forth the changes in amounts due to financial institutions reflected in Accounts payable for the year ended December 31, 2024:
+Added: In millions 2024
+Added: Obligations outstanding at the beginning of the year $ 305
+Added: Invoices confirmed during the year 723
+Added: Confirmed invoices paid during the year ( 717 )
+Added: Obligations outstanding at the end of the year $ 311
+Added: During 2024, the Company made four strategic acquisitions for a combined purchase price of approximately $ 168 million, net of cash acquired.
+Added: Two of the acquisitions are reported in the Transit Segment, one is reported in the Digital Intelligence product line of the Freight Segment and one is reported in the Components product line of the Freight Segment.
+Added: Each of the acquisitions in 2024 are individually and collectively immaterial.
On December 22, 2023, the Company purchased the remaining ownership shares of Lokomotiv Kurastyru Zauyty (LKZ), a locomotive manufacturing and assembly company located in Kazakhstan, at which time it became a wholly owned subsidiary of the Company.
16 unchanged sentences
The fair values of the assets acquired and liabilities assumed were determined using the income, cost and market approaches.
−Removed: These estimates are preliminary in nature and subject to adjustments, which could be material as the Company has not completed its valuation of acquired assets and liabilities.
−Removed: Any necessary adjustments will be finalized within one year from the date of acquisition.
Goodwill was calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of the net assets acquired and represents the assembled workforce and the future economic benefits of expanding our global operations expected to be achieved as a result of the acquisition.
20 unchanged sentences
Discounted cash flow models were used to estimate the fair values of acquired intangibles.
−Removed: The fair value
−Removed: measurements were primarily based on significant inputs that are not observable in the market and are considered Level 3 in the fair value hierarchy.
+Added: The fair value measurements were primarily based on significant inputs that are not observable in the market and are considered Level 3 in the fair value hierarchy.
Intangible assets acquired include customer relationships and acquired technology that are subject to amortization, and trade names that were assigned an indefinite life and are not subject to amortization.
−Removed: Contingent liabilities assumed as part of the transaction are preliminary and subject to change.
−Removed: These estimates are preliminary in nature and subject to adjustments, which could be material as the Company has not completed its valuation of acquired assets and liabilities.
−Removed: Any necessary adjustments will be finalized within one year from the date of acquisition.
Goodwill was calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of the net assets acquired, and represents the assembled workforce and the future economic benefits, including synergies, that are expected to be achieved as a result of the acquisition.
2 unchanged sentences
The pro forma impact on Wabtec’s sales and results of operations, including the pro forma effect of events that are directly attributable to the acquisition, was not significant.
−Removed: During 2022, the Freight Segment made three strategic acquisitions for a combined purchase price of $ 89 million.
+Added: During 2022, the Freight Segment made three strategic acquisitions for a combined purchase price of $ 89 million, net of cash acquired.
Two of the acquisitions are reported in the Digital Intelligence product line and one is reported in the Services product line.
Each of the acquisitions in 2022 are individually and collectively immaterial.
−Removed: On March 31, 2021, the Company acquired Nordco, a leading North American supplier of new, rebuilt and used maintenance of way equipment.
−Removed: Nordco's products and services portfolio includes mobile railcar movers and ultrasonic rail flaw detection technologies.
−Removed: The purchase price paid for 100 % ownership of Nordco was approximately $ 410 million.
−Removed: The following table summarizes the fair value of the Nordco assets acquired and liabilities assumed:
−Removed: Assets acquired
−Removed: Cash and cash equivalents $ 5
−Removed: Accounts receivable 23
−Removed: Other current assets 2
−Removed: Property, plant and equipment 17
−Removed: Other intangible assets 168
−Removed: Other noncurrent assets 12
−Removed: Total assets acquired 476
−Removed: Liabilities assumed
−Removed: Current liabilities 20
−Removed: Noncurrent liabilities 46
−Removed: Total liabilities assumed 66
−Removed: Net assets acquired $ 410
−Removed: The fair values of the assets acquired and liabilities assumed were determined using the income, cost and market approaches.
−Removed: Discounted cash flow models were used to estimate the fair values of acquired intangibles.
−Removed: The fair value measurements were primarily based on significant inputs that are not observable in the market and are considered Level 3 in the fair value hierarchy.
−Removed: Intangible assets acquired include customer relationships and acquired technology that are subject to amortization, and trade names that were assigned an indefinite life and are not subject to amortization.
−Removed: Contingent liabilities assumed as part of the transaction were not material.
−Removed: Goodwill was calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of the net assets acquired, and represents the assembled workforce and the future economic benefits, including synergies, that are expected to be achieved as a result of the acquisition.
−Removed: The purchased goodwill is not expected to be deductible for tax purposes.
−Removed: The results of this business since the date of acquisition are reported within the Services product line of the Freight Segment.
−Removed: The pro forma impact on Wabtec’s sales and results of operations, including the pro forma effect of events that are directly attributable to the acquisition, was not significant.
SUPPLEMENTAL CASH FLOW DISCLOSURES
2 unchanged sentences
Interest paid during the year $ 181 $ 210 $ 179
−Removed: Income taxes paid during the year, net of amount refunded $ 233 $ 157 $ 123
+Added: Income taxes paid during the year, net of amounts refunded $ 237 $ 233 $ 157
Business acquisitions:
Fair value of assets acquired $ 257 $ 438 $ 128
−Removed: Liabilities assumed 82 38 68
−Removed: Non-controlling interest acquired — — ( 1 )
+Added: Fair value of liabilities assumed 63 82 38
Cash paid 194 356 90
1 unchanged sentence
Net cash paid $ 168 $ 308 $ 89
−Removed: At December 31, 2023 and December 31, 2022, Wabtec had restricted cash of $ 5 million and $ 7 million, respectively, primarily from cash in escrow related to a 2022 acquisition.
+Added: At December 31, 2024 and December 31, 2023, Wabtec had restricted cash of $ 9 million and $ 5 million, respectively, primarily from cash in escrow related to acquisitions.
The components of inventory, net of reserves, were:
20 unchanged sentences
GOODWILL AND INTANGIBLE ASSETS
−Removed: Goodwill and indefinite lived intangible assets are reviewed annually during the fourth quarter for impairment.
+Added: Goodwill is reviewed annually during the fourth quarter for impairment.
The Company has identified three reporting units for purposes of testing goodwill for impairment.
Two reporting units exist within the Freight segment (the "Freight" and "Components" reporting units) and the Transit segment is also a reporting unit.
−Removed: In 2023, management elected to first assess qualitative factors to determine whether a quantitative goodwill impairment test is necessary for the Components reporting unit.
−Removed: During the assessment, management evaluated all relevant events and facts that may impact the fair value or carrying value of the reporting unit's goodwill and concluded that it was not more likely than not that the estimated fair values were less than the carrying values;
+Added: In 2024, management elected to first assess qualitative factors to determine whether a quantitative goodwill impairment test is necessary for the Components and Freight reporting units.
+Added: During the assessment, management evaluated all relevant events and facts that may impact the fair value or carrying value of the reporting units' goodwill and concluded that it was not more likely than not that the estimated fair values were less than the carrying values;
therefore, no further analysis was required.
−Removed: For the Freight and Transit reporting units, management elected to proceed directly to the quantitative impairment test.
−Removed: The discounted cash flow method and the market approach were used to estimate the fair value of each reporting unit using a weighting of 75 % and 25 %, respectively.
−Removed: The discounted cash flow model requires several assumptions including future sales growth, EBIT (earnings before interest and taxes) margins, capital expenditures, a discount rate and a terminal revenue growth rate (the revenue growth rate for the period beyond the years forecasted by the reporting units) for each reporting unit.
+Added: For the Transit reporting unit, management elected to proceed directly to the quantitative impairment test.
+Added: The discounted cash flow method and the market approach were used to estimate the fair value of the Transit reporting unit using a weighting of 75 % and 25 %, respectively.
+Added: The discounted cash flow model requires several assumptions including future sales growth, EBIT (earnings before interest and taxes) margins, capital expenditures, a discount rate and a terminal revenue growth rate (the revenue growth rate for the period beyond the years forecasted by the reporting units) for the Transit reporting unit.
The market approach requires several assumptions including EBITDA (earnings before interest, taxes, depreciation and amortization) multiples for comparable companies that operate in the same markets as the Company’s reporting units.
For 2024, the discounted cash flow method was given more weight compared to the market approach due to variables between the operations of the guideline companies used in the analysis and Wabtec's operations, such as different reporting unit sizes, growth and business characteristics.
−Removed: However, both valuations resulted in a conclusion that the estimated fair values of the Freight and Transit reporting units were in excess of their respective carrying value, and no impairment existed.
−Removed: Additionally, the Company proceeded directly to the quantitative impairment test for certain trade names with indefinite lives.
−Removed: For 2023, the Company's Portfolio Optimization resulted in approximately $ 14 million in accelerated trade name amortization expense, recorded in "Amortization expense" on the Consolidated Statements of Income.
−Removed: For the remaining trade names subject to the quantitative impairment test, the fair value exceeded each respective carrying value, resulting in a conclusion that no impairment existed.
−Removed: For 2022, the fair value of all material trade names subject to the quantitative impairment test exceeded its respective carrying value, resulting in a conclusion that no impairment existed.
−Removed: For trade names not subject to quantitative testing in 2023 and 2022, the Company elected to perform a qualitative impairment assessment, resulting in a conclusion that it was not more likely than not that the estimated fair values of the trade names were less than their carrying values;
−Removed: therefore, no further analysis was required.
−Removed: The assessment of qualitative factors used in determining whether it is more likely than not that the fair value of a trade name is less than its carrying amount involves significant judgments and assumptions.
−Removed: The judgment and assumptions include the identification of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, Wabtec specific events, share price trends and making the assessment on whether each relevant factor will impact the impairment test positively or negatively and the magnitude of any such impact.
+Added: Each valuation resulted in a conclusion that the estimated fair value of the Transit reporting unit was in excess of its carrying value, and no impairment existed.
The change in the carrying amount of goodwill by segment is as follows:
4 unchanged sentences
Additions 215 — 215
+Added: Disposals ( 4 ) — ( 4 )
Foreign currency impact 16 45 61
4 unchanged sentences
Balance at December 31, 2024 $ 7,248 $ 1,462 $ 8,710
−Removed: As of December 31, 2023 and 2022, the Company’s trade names had a net carrying amount of $ 612 million and $ 602 million, respectively, and the Company believes these intangibles have indefinite lives, with the exception of the right to use the GE Transportation trade name, to which the Company has an original useful life of 5 years.
−Removed: Intangible assets of the Company, other than goodwill and trade names, consist of the following:
+Added: The Company’s indefinite lived intangible assets are also reviewed annually during the fourth quarter for impairment.
+Added: During 2024 and 2023, the Company proceeded directly to the quantitative impairment test for certain trade names with indefinite lives.
+Added: Certain trade names that were associated with the Company’s current restructuring actions were tested and considered impaired.
+Added: As such, for the years ended December 31, 2024 and 2023, approximately $ 6 million and $ 14 million, respectively, of amortization expense was recorded in "Amortization expense" on the Consolidated Statements of Income, primarily related to the Company's Portfolio Optimization.
+Added: For the remaining trade names subject to the quantitative impairment test, the fair value exceeded each respective carrying value, resulting in a conclusion that no additional impairment existed.
+Added: For trade names not subject to quantitative testing, the Company elected to perform a qualitative impairment assessment, resulting in a conclusion that it was not more likely than not that the estimated fair values of the trade names were less than their carrying values;
+Added: therefore, no further analysis was required.
+Added: The assessment of qualitative factors used in determining whether it is more likely than not that the fair value of a trade name is less than its carrying amount involves significant judgments and assumptions.
+Added: The judgment and assumptions include the identification of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, Wabtec specific events, share price trends and making the assessment on whether each relevant factor will impact the impairment test positively or negatively and the magnitude of any such impact.
+Added: As of December 31, 2024 and 2023, the Company’s trade names had a net carrying amount of $ 595 million and $ 612 million, respectively, and the Company believes these intangibles have indefinite lives, with the exception of the right to use the GE Transportation trade name, to which the Company had an original useful life of 5 years and has been fully amortized.
+Added: Intangible assets of the Company, other than goodwill and trade names, that are considered definitive lived consist of the following:
December 31, 2024 December 31, 2023
43 unchanged sentences
In millions Face
−Removed: Restated Credit Agreement:
+Added: 2024 Credit Agreement:
+Added: Term Loan 6.6 % $ 225 $ 224 $ 225 $ — $ —
+Added: 2022 Credit Agreement:
Revolving Credit Facility 8.0 % N/A — — — —
2 unchanged sentences
4.15 % Senior Notes, due 2024
−Removed: — $ — — — 250 248
3.20 % Senior Notes, due 2025
2 unchanged sentences
3.5 % $ 750 750 732 749 718
−Removed: 3.45 % Senior Notes, due 2026
−Removed: 3.5 % $ 750 749 718 749 699
1.25 % Senior Notes (EUR), due 2027
2 unchanged sentences
4.8 % $ 1,250 1,246 1,239 1,245 1,237
+Added: 5.611 % Senior Notes, due 2034
+Added: 5.7 % $ 500 496 507 — —
Other Borrowings — — 54 57
5 unchanged sentences
Amortization of discounts and debt issuance fees are included in the calculation of Effective Interest Rate.
−Removed: The Company borrows and repays against the multi-currency Revolving Credit Facility for added flexibility in liquidity to manage cash during the operating cycle.
+Added: The Company borrows and repays against the Revolving Credit Facility and an uncommitted money market line for added flexibility in liquidity to manage cash during the operating cycle.
The proceeds from borrowing and the repayments are included within the Financing Activities section of the Consolidated Statements of Cash Flows.
As of December 31, 2024, the annual repayment requirements for debt obligations are as follows:
+Added: Thereafter 500
Total $ 3,995
2 unchanged sentences
Additionally, the Company has debt issuance costs related to certain financing transactions which are also amortized through interest expense.
−Removed: As of December 31, 2023 and 2022, the Company had total unamortized debt issuance costs and discounts of $ 15 million and $ 21 million, respectively.
−Removed: At December 31, 2023, the weighted average interest rate on the Company's available variable debt facilities under the Restated Credit Agreement was 6.8 %.
+Added: As of December 31, 2024 and 2023, the Company had total unamortized debt issuance costs and discounts of $ 15 million.
Credit Agreements
−Removed: Revolving Credit Agreement
−Removed: On June 8, 2018, the Company entered into a credit agreement ("Original Credit Agreement"), consisting of (i) term loans denominated in euros and U.S.
−Removed: dollars ("Term Loans") and (ii) a multi-currency revolving loan facility, providing for an equivalent in U.S.
−Removed: dollars of up to $ 1.2 billion.
−Removed: On August 15, 2022, the Company entered into a new unsecured credit agreement ("Restated Credit Agreement"), which amended, restated and replaced the Original Credit Agreement.
−Removed: The Restated Credit Agreement is with a syndicate of lenders and provides for borrowings consisting of (i) a multi-currency revolving credit facility, providing for an equivalent in U.S.
−Removed: dollars of up to $ 1.5 billion (the “Revolving Credit Facility”) and (ii) a new $ 250 million delayed draw term loan facility (the “Delayed Draw Term Loan”), all pursuant to the terms and conditions of the
−Removed: Restated Credit Agreement (which are substantially similar with the terms of the Original Credit Agreement).
−Removed: The Restated Credit Agreement allows the Company to request, at prevailing market rates, an aggregate amount not to exceed $ 750 million, (a) increases to the borrowing commitments under the Revolving Credit Facility and/or (b) new incremental term loan commitments.
+Added: 2024 Credit Agreement
+Added: On March 14, 2024, the Company entered into a new stand-alone credit agreement (the "2024 Credit Agreement") for a term loan of $ 225 million.
+Added: Borrowings under the 2024 Credit Agreement bear interest at a base rate plus an interest rate spread up to 1.75 % based on the lower of the pricing corresponding to (i) the Company’s Leverage Ratio or (ii) the Company’s public rating.
+Added: At December 31, 2024, the interest rate was 6.0 %.
+Added: The frequency of interest payments varies based upon the Interest
+Added: Election Request.
+Added: The term loan issued under the 2024 Credit Agreement will mature on March 14, 2029.
+Added: The obligations of the Company under the 2024 Credit Agreement are unsecured and have been guaranteed by certain of the Company’s subsidiari es.
The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type.
+Added: Under the 2024 Credit Agreement, the Company has agreed to maintain an Interest Coverage Ratio of at least 3.0 to 1.0, and a Leverage Ratio not to exceed 3.5 to 1.0.
+Added: The Interest Coverage Ratio is calculated using an earnings metric as defined in the agreement compared to Interest Expense for the four quarters then ended.
+Added: The Leverage Ratio is defined as net debt (total debt, net of up to $ 300 million of unrestricted cash) as of the last day of such fiscal quarter to the defined earnings metric for the four quarters then ended.
+Added: Additionally, the Company may effect an increase in the maximum Leverage Ratio in contemplation of a Material Acquisition.
+Added: All terms are as defined in the 2024 Credit Agreement.
+Added: 2022 Credit Agreement
+Added: On August 15, 2022, the Company entered into a new unsecured credit agreement (the "2022 Credit Agreement").
+Added: The 2022 Credit Agreement provides for borrowings consisting of (i) a multi-currency revolving credit facility, providing for an equivalent in U.S.
+Added: dollars of up to $ 1.5 billion (the “Revolving Credit Facility”) and (ii) a $ 250 million delayed draw term loan facility (the “Delayed Draw Term Loan”), all pursuant to the terms and conditions of the 2022 Credit Agreement.
+Added: The 2022 Credit Agreement allows the Company to request, at prevailing market rates, an aggregate amount not to exceed $ 750 million, (a) increases to the borrowing commitments under the Revolving Credit Facility and/or (b) new incremental term loan commitments.
+Added: The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type.
The Revolving Credit Facility matures on August 15, 2027.
−Removed: The Delayed Draw Term Loan is available for borrowings until February 15, 2024 and any borrowings under the Delayed Draw Term Loan will mature on August 15, 2027.
+Added: The Delayed Draw Term Loan was fully drawn during the third quarter of 2023, and the proceeds were utilized to redeem the 4.375 % Senior Notes, due 2023.
+Added: Borrowings under the Delayed Draw Term Loan will mature on August 15, 2027.
Amounts borrowed and repaid under the Delayed Draw Term Loan may not be reborrowed.
−Removed: The applicable interest rate for borrowings under the Restated Credit Agreement includes a base rate (per the Interest Election terms of the agreement) plus an interest rate spread up to 1.75 % based on the lower of the pricing corresponding to (i) the Company’s financial leverage or (ii) the Company’s public rating.
−Removed: Obligations under the Restated Credit Agreement have been guaranteed by certain of the Company’s subsidiaries.
−Removed: During the third quarter of 2023, the Company borrowed the full $ 250 million of availability from the Delayed Draw Term Loan and utilized the proceeds to redeem the 4.375 % Senior Notes, due 2023.
−Removed: The borrowing rate for the Delayed Draw Term Loan is a variable rate reassessed periodically in accordance with the terms of the Restated Credit Agreement.
−Removed: Under the Restated Credit Agreement, the Company has agreed to maintain an Interest Coverage Ratio of at least 3.0 to 1.0, and a Leverage Ratio not to exceed 3.5 to 1.0.
−Removed: The Interest Coverage Ratio is defined as EBITDA (earnings before interest, taxes, depreciation, and amortization) to Interest Expense for the four quarters then ended.
−Removed: The Leverage Ratio is defined as Net Debt as of the last day of such fiscal quarter to EBITDA for the four quarters then ended.
−Removed: Additionally, the Company may submit a request for an increased maximum Leverage Ratio in contemplation of a Material Acquisition.
−Removed: All terms are as defined in the Restated Credit Agreement.
−Removed: The Company was in compliance with all financial covenants in the Restated Credit Agreement as of December 31, 2023.
−Removed: The following table presents availability under the Restated Credit Agreement as of December 31, 2023:
+Added: The applicable interest rate for borrowings under the 2022 Credit Agreement includes a base rate (per the Interest Election terms of the agreement) plus an interest rate spread up to 1.75 % based on the lower of the pricing corresponding to (i) the Company’s financial leverage or (ii) the Company’s public rating.
+Added: At December 31, 2024, the interest rate on the Delayed Draw Term Loan was 6.0 % and the interest rate on the undrawn Revolving Credit Facility was 5.7 %.
+Added: Obligations under the 2022 Credit Agreement have been guaranteed by certain of the Company’s subsidiaries.
+Added: Under the 2022 Credit Agreement, the Company has agreed to maintain an Interest Coverage Ratio of at least 3.0 to 1.0, and a Leverage Ratio not to exceed 3.5 to 1.0.
+Added: The Interest Coverage Ratio is calculated using an earnings metric as defined in the agreement compared to Interest Expense for the four quarters then ended.
+Added: The Leverage Ratio is defined as net debt (total debt, net of up to $ 300 million of unrestricted cash) as of the last day of such fiscal quarter to the defined earnings metric for the four quarters then ended.
+Added: Additionally, the Company may effect an increase in the maximum Leverage Ratio in contemplation of a Material Acquisition.
+Added: All terms are as defined in the 2022 Credit Agreement.
+Added: The following table presents availability under the 2022 Credit Agreement as of December 31, 2024:
In millions Revolving Credit Facility Delayed Draw Term Loan Total
1 unchanged sentence
Outstanding Borrowings — ( 250 ) ( 250 )
+Added: Letters of Credit Under Credit Agreement — — —
Current Availability $ 1,500 $ — $ 1,500
−Removed: 364 -Day Facility
−Removed: During 2021 the Company utilized a $ 600 million 364 day credit facility ("364 Day Facility") with a group of banks which included a $ 144 million revolving credit facility and a $ 456 million term loan.
−Removed: On June 3, 2021, the Company repaid all outstanding borrowings and related interest, effectively retiring the facility.
+Added: The Company was in compliance with all financial covenants in the 2022 Credit Agreement and the 2024 Credit Agreement as of December 31, 2024.
+Added: Intra-Quarter Uncommitted Money Market Line Credit Agreement
+Added: During the third quarter of 2024, the Company entered into an uncommitted bilateral money market line credit agreement which provides an aggregate borrowing capacity of $ 150 million, for general business purposes and working capital needs within a quarter.
The Company or its subsidiaries may issue senior notes from time to time.
−Removed: These notes are comprised of our 4.375 % Senior Notes due 2023 (the "2023 Notes"), 4.15 % Senior Notes due 2024 (the "2024 Notes"), 3.20 % Senior Notes due 2025 (the "2025 Notes"), 3.45 % Senior Notes due 2026 (the "2026 Notes"), 1.25 % Senior Notes (EUR) due 2027 (the "Euro Notes" discussed below), and 4.70 % Senior Notes due 2028 (the "2028 Notes").
+Added: These notes are comprised of our 4.15 % Senior Notes which matured in 2024 (the "2024 Notes"), 3.20 % Senior Notes due 2025 (the "2025 Notes"), 3.45 % Senior Notes due 2026 (the "2026 Notes"), 1.25 % Senior Notes (EUR) due 2027 (the "Euro Notes" discussed below), 4.70 % Senior Notes due 2028 (the "2028 Notes") and 5.611 % Senior Notes due 2034 (the "2034 Notes").
The 2024 Notes, 2025 Notes, 2026 Notes, 2028 Notes, and 2034 Notes are the “US Notes”, and collectively with the Euro Notes, the “Senior Notes.” Interest on the US Notes is payable semi-annually and interest on the Euro Notes is paid annually.
−Removed: Each series of the Senior Notes may be redeemed any time in whole or from time to time in part in accordance with the provisions of the indenture, under which such series of notes was issued.
+Added: Each series of the Senior Notes may be
+Added: redeemed any time in whole or from time to time in part in accordance with the provisions of the indenture, under which such series of notes was issued.
Each of the Senior Notes may be redeemed at a redemption price of 100 % of the principal amount plus a specified make-whole premium and accrued interest.
The US Notes and the Company's guarantee of the Euro Notes are senior unsecured obligations of the Company and rank pari passu with all existing and future senior debt and senior to all existing and future subordinated indebtedness of the Company.
+Added: On March 11, 2024, the Company issued $ 500 million of 5.611 % Senior Notes due in 2034 (2034 Notes).
+Added: The 2034 Notes were issued at 100 % of face value and the Company recognized approximately $ 5 million of total deferred financing costs.
+Added: Interest on the 2034 Notes will accrue at a rate of 5.611 % per year, payable semi-annually on March 11 and September 11 of each year, commencing September 11, 2024.
+Added: The 2034 Notes will mature on March 11, 2034.
+Added: Proceeds from the 2034 Notes, combined with the proceeds from the term loan under the 2024 Credit Agreement and cash on hand, were utilized to repay the outstanding amount of 2024 Notes at maturity.
Beginning September 15, 2023, the effective interest rates for the 2024 Notes and the 2028 Notes were each reduced by 0.25 % due to a favorable change in Wabtec's corporate credit rating and the rating of the aforementioned notes.
During the second quarter of 2022, the Company redeemed $ 25 million of principal from the 2024 Notes plus a premium and the related accrued interest.
−Removed: On June 3, 2021, Wabtec Transportation Netherlands B.V.
−Removed: ("Wabtec Netherlands") issued € 500 million of 1.25 % Senior Notes due in 2027, which are fully and unconditionally guaranteed by the Company.
−Removed: The Euro Notes were issued at 99.267 % of face value.
−Removed: Interest on the Euro Notes accrues at a rate of 1.25 % per annum and is payable annually beginning December 3, 2021.
−Removed: The Company incurred approximately $ 4 million of deferred financing costs related to the issuance of the Euro Notes for total net proceeds of approximately $ 599 million after consideration of the discount.
The indentures under which the Senior Notes were issued contain covenants and restrictions which limit, subject to certain exceptions, certain sale and leaseback transactions with respect to principal properties, the incurrence of secured debt without equally and ratably securing the Senior Notes, and certain merger and consolidation transactions.
The covenants do not require the Company to maintain any financial ratios or specified levels of net worth or liquidity.
−Removed: The US Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis by each of the Company's subsidiaries that is a guarantor under the Restated Credit Agreement.
+Added: The US Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis by each of the Company's subsidiaries that is a guarantor under the 2022 Credit Agreement.
The Euro Notes were issued by Wabtec Netherlands and are fully and unconditionally guaranteed by the Company.
26 unchanged sentences
Acquisition — ( 29 ) — —
−Removed: Actuarial (loss) gain — 8 ( 5 ) 86
+Added: Actuarial gain (loss) 2 — 17 ( 5 )
Effect of currency rate changes — — 10 ( 10 )
43 unchanged sentences
Amortization of net loss — — 1 3 3 2
−Removed: Settlement and curtailment (gains) losses recognized ( 1 ) — — — ( 1 ) 1
+Added: Settlement and curtailment gains recognized — ( 1 ) — — — ( 1 )
Net periodic benefit (income) cost $ — $ ( 1 ) $ 1 $ 6 $ 7 $ ( 2 )
29 unchanged sentences
Fair value of plan assets $ 52 $ 55 $ 204 $ 211
−Removed: plan has a target asset allocation of 11 % equity securities, 88 % debt securities and 1 % in other investments.
+Added: plan has a target asset allocation of 15 % equity securities and 85 % debt securities.
The International plan has a target asset allocation of 12 % equity securities, 24 % debt securities and 64 % in other investments.
30 unchanged sentences
The Company’s funding methods are based on governmental requirements and differ from those methods used to recognize pension expense.
−Removed: The Company expects to contribute $ 2 million to certain international pension plans and does not expect to make a contribution to the U.S.
+Added: The Company does not expect material contributions to the international pension plans and does not expect to make a contribution to the U.S.
pension plan during 2025.
11 unchanged sentences
The Company participates in certain defined contribution plans.
−Removed: Costs of approximately $ 60 million were recognized during 2023 and $ 55 million was recognized during 2022 and 2021, respectively.
+Added: Costs of approximately $ 65 million were recognized during 2024 and $ 60 million and $ 55 million was recognized during 2023 and 2022, respectively.
The 401(k) savings plan is a participant directed defined contribution plan that holds shares of the Company’s stock as one of the investment options.
12 unchanged sentences
In millions 2024 2023 2022
−Removed: Current tax expense (benefit)
+Added: Current tax expense
Federal $ 106 $ 148 $ 37
1 unchanged sentence
Foreign 160 148 137
−Removed: Deferred tax (benefit) expense
+Added: Deferred tax expense (benefit)
Federal 26 ( 50 ) 29
14 unchanged sentences
Effective rate 24.3 % 24.5 % 25.0 %
+Added: The decrease in effective tax rate from 2023 to 2024 was primarily due to changes in valuation allowances and audit closures, partially offset by a change in the jurisdictional mix of earnings and the non-recurrence of the non-taxable gain generated on the acquisition of LKZ in 2023.
The decrease in effective tax rate from 2022 to 2023 was primarily due to a change in mix of foreign earnings, changes in valuation allowances, and the non-taxable gain generated on the acquisition of LKZ.
−Removed: The increase in effective tax rate from 2021 to 2022 was primarily due to the absence of benefit from amended federal and state income tax returns that were filed in 2021 and higher foreign taxes, partially offset by the change in valuation allowance.
On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law.
22 unchanged sentences
A valuation allowance is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized.
−Removed: As of December 31, 2023, the valuation allowance for certain deferred tax asset carryforwards was $ 58 million, primarily in the United States, South Africa, China, the Netherlands, and Denmark.
−Removed: The increase in valuation allowances in 2023 is primarily related to state net operating loss carry-forwards that are not expected to be realized.
+Added: As of December 31, 2024, the valuation allowance for certain deferred tax asset carryforwards was $ 52 million, primarily in the United States, South Africa, China and the Netherlands.
+Added: The decrease in valuation allowances in 2024 is primarily related to the sale of a business.
The Company has net operating loss carry-forwards in the amount of $ 373 million, of which $ 141 million are indefinite lived, $ 103 million expire within ten years and $ 129 million expire in various periods between December 31, 2035 to December 31, 2044.
10 unchanged sentences
The Company includes interest and penalties related to unrecognized tax benefits in income tax expense.
−Removed: As of December 31, 2023 and 2022, the total interest and penalties accrued was approximately $ 13 million and $ 5 million, respectively.
−Removed: An audit of Company’s U.S.
−Removed: federal income tax returns for years 2017-2019 is ongoing and select state and non-U.S.
+Added: As of December 31, 2024 and 2023, the total interest and penalties accrued was approximately $ 13 million.
+Added: An audit of the Company’s U.S.
+Added: federal income tax return for the year 2017 is ongoing and select state and non-U.S.
income tax audits are also underway.
3 unchanged sentences
EARNINGS PER SHARE
−Removed: The computation of basic and diluted earnings per share for Net income attributable to Wabtec shareholders is as follows:
+Added: The Company’s non-vested restricted stock contains rights to receive non-forfeitable dividends, and thus are participating securities requiring the two-class method of computing earnings per share.
+Added: The calculation of earnings per share for common stock excludes the income attributable to the non-vested restricted stock from the numerator, which results in approximately 0.3 % of Net income attributable to Wabtec shareholders being allocated to non-vested restricted stock in all periods presented.
+Added: Additionally, the dilutive impact of the assumed conversion of non-vested restricted stock is excluded from the denominator of the diluted weighted average shares outstanding.
+Added: The computation of basic and diluted earnings per common share for Net income attributable to Wabtec shareholders is as follows:
For the year ended
1 unchanged sentence
Net income attributable to Wabtec shareholders $ 1,056 $ 815 $ 633
+Added: Net income allocated to non-vested restricted stock ( 3 ) ( 2 ) ( 2 )
+Added: Numerator for basic and diluted earnings per common share $ 1,053 $ 813 $ 631
Weighted average shares outstanding - basic 174.1 178.8 182.2
Effect of dilutive securities:
−Removed: Assumed conversion of dilutive stock-based compensation plans 0.7 0.6 0.4
+Added: Assumed conversion of dilutive stock-based compensation plans excluding non-vested restricted stock 0.3 0.4 0.4
+Added: Assumed conversion of dilutive non-vested restricted stock 0.4 0.3 0.2
Weighted average shares outstanding - diluted 174.8 179.5 182.8
−Removed: Net income attributable to Wabtec shareholders per common share
+Added: Earnings per common share attributable to Wabtec shareholders
Basic $ 6.05 $ 4.54 $ 3.46
4 unchanged sentences
The Company also maintains a 1995 Non-Employee Directors’ Fee and Stock Option Plan as amended and restated (“the Directors Plan”).
−Removed: The Directors Plan, as amended, authorizes a total of 1,100,000 shares of Common Stock to be issued.
+Added: The Directors Plan, as amended, authorizes a total of 1.1 million shares of Common Stock to be issued.
Under the Directors Plan, options issued become exercisable over a three-year vesting period and expire ten years from the date of grant, and restricted stock issued under the plan vests one year from the date of grant.
6 unchanged sentences
Associated tax benefits related to the stock-based compensation plans for the years ended December 31, 2024, 2023 and 2022 were not material.
−Removed: Included in the stock-based compensation expense for 2023 above is $ 23 million of expense related to non-vested restricted stock, $ 22 million of expense related to incentive stock units, $ 12 million related to restricted stock units, $ 1 million related to stock options, and $ 1 million related to units issued for Directors’ fees.
−Removed: The restricted stock units are liability-classified equity awards as they can be settled in cash.
−Removed: At December 31, 2023, unamortized compensation expense related to those stock options, non-vested restricted shares and incentive stock units expected to vest totaled $ 52 million and will be recognized over a weighted period of 1.4 years.
+Added: Included in the stock-based compensation expense for 2024 above is $ 37 million of expense related to incentive stock units, $ 28 million of expense related to non-vested restricted stock, $ 19 million related to restricted stock units, and $ 1 million related to units issued for Directors’ fees.
+Added: At December 31, 2024, unamortized compensation expense related to those non-vested restricted shares and incentive stock units expected to vest totaled $ 79 million and will be recognized over a weighted period of 1.4 years.
Stock Options Stock options are granted to eligible employees and directors at fair market value, which is the average of the high and low Wabtec stock price on the date of grant.
Under the 2011 Plan and the 2000 Plan, options become exercisable over a three year vesting period and expire 10 years from the date of grant.
−Removed: The following table summarizes the Company’s stock option activity and related information for the years ended December 31.
−Removed: There were no stock options granted during the years ended December 31, 2023 or 2022.
−Removed: Options Weighted
−Removed: Price Weighted Average
−Removed: Contractual Life Aggregate
−Removed: Intrinsic value
−Removed: (in millions)
−Removed: Outstanding at December 31, 2020 552,669 $ 69.82 6.1 $ 4
−Removed: Granted 126,794 $ 81.21
−Removed: Exercised ( 113,728 ) $ 50.38
−Removed: Canceled ( 33,820 ) $ 73.53
−Removed: Outstanding at December 31, 2021 531,915 $ 75.40 6.5 $ 9
−Removed: Exercised ( 116,590 ) $ 68.57
−Removed: Canceled ( 15,387 ) $ 77.10
−Removed: Outstanding at December 31, 2022 399,938 $ 77.32 5.9 $ 11
−Removed: Exercised ( 87,035 ) $ 74.49
−Removed: Canceled ( 3,078 ) $ 79.04
−Removed: Outstanding at December 31, 2023 309,825 $ 78.41 5.3 $ 15
−Removed: Exercisable at December 31, 2023 275,198 $ 78.06 5.3 $ 13
−Removed: Options outstanding at December 31, 2023 were as follows:
−Removed: Range of Exercise Prices Number of Options Outstanding Weighted Average Exercise Price of Options Outstanding Weighted Average Remaining Contractual Life Number of Options Currently Exercisable Weighted Average Exercise Price of Options Currently Exercisable
−Removed: 50.00 - 65.00
−Removed: 27,595 $ 61.51 2.9 27,595 $ 61.51
−Removed: 65.00 - 80.00
−Removed: 131,568 $ 75.03 5.6 131,568 $ 75.03
−Removed: 150,662 $ 84.46 5.5 116,035 $ 85.43
−Removed: 309,825 $ 78.41 5.3 275,198 $ 78.06
−Removed: Restricted Stock and Incentive Stock As provided for under the 2011 and 2000 Plans, eligible employees are granted restricted stock that generally vests over three years from the date of grant.
+Added: There were no stock options granted in the years ended December 31, 2024, 2023 and 2022.
+Added: At December 31, 2024, there were 172,196 shares issuable pursuant to exercisable stock options.
+Added: Restricted Stock, Restricted Stock Units and Incentive Stock As provided for under the 2011 Plan and 2000 Plan, eligible employees are granted restricted stock that generally vests over three years from the date of grant.
Under the Directors Plan, restricted stock awards vest one year from the date of grant.
+Added: The restricted stock units are liability-classified equity awards as they can be settled in cash.
In addition, the Company has issued incentive stock units to eligible employees that vest upon attainment of certain cumulative three-year performance goals, including a Relative Total Stockholder Return ("RTSR") modifier.
−Removed: The RTSR can modify the payment up or down by 10%.
+Added: The RTSR can increase or decrease the payment by 10 % to 20 % depending on the plan year.
Significant judgments and estimates are used in determining the estimated three-year performance, which is then used to estimate the total shares expected to vest over the three year vesting cycle and corresponding expense based on the grant date fair value of the award.
4 unchanged sentences
The incentive stock units included in the table below represent the number of shares that are expected to vest based on the Company’s estimate for meeting those established performance targets.
−Removed: As of December 31, 2023, the Company estimates that it will achieve 145 %, 139 % and 116 % for the incentive stock awards expected to vest, inclusive of the RTSR modifier, based on the estimated performance for the three year periods ending December 31, 2023, 2024, and 2025, respectively, and has recorded incentive compensation expense accordingly.
+Added: As of December 31, 2024, the Company estimates that it will achieve approximately 184 %, 181 % and 200 % for the incentive stock awards expected to vest, inclusive of the RTSR modifier, based on the estimated performance for the three year periods ending December 31, 2024, 2025, and 2026, respectively, and has recorded incentive compensation expense accordingly.
If estimates of the number of these stock units expected to vest changes in a future accounting period, cumulative compensation expense could increase or decrease and will be recognized in the current period for the elapsed portion of the vesting period and would change future expense for the remaining vesting period.
22 unchanged sentences
ACCUMULATED OTHER COMPREHENSIVE LOSS
−Removed: Comprehensive income (loss) comprises both net income and the Other Comprehensive income (loss) resulting from the change in equity from transactions and other events and circumstances from non-owner sources.
+Added: Comprehensive income (loss) comprises both Net income and the Other Comprehensive (loss) income resulting from the change in equity from transactions and other events and circumstances from non-owner sources.
The changes in Accumulated other comprehensive loss by component, net of tax, for the years ended December 31, 2024, 2023, and 2022 are as follows:
5 unchanged sentences
Balance at December 31, 2022 $ ( 596 ) $ ( 9 ) $ ( 56 ) $ ( 661 )
−Removed: Other comprehensive (loss) income before reclassifications ( 200 ) ( 4 ) 7 ( 197 )
−Removed: Amounts reclassified from Accumulated other comprehensive loss — — 2 2
−Removed: Other comprehensive (loss) income, net ( 200 ) ( 4 ) 9 ( 195 )
−Removed: Balance at December 31, 2022 $ ( 596 ) $ ( 9 ) $ ( 56 ) $ ( 661 )
Other comprehensive income (loss) before reclassifications 55 16 ( 2 ) 69
2 unchanged sentences
Balance at December 31, 2023 $ ( 541 ) $ 7 $ ( 56 ) $ ( 590 )
+Added: Other comprehensive (loss) income before reclassifications ( 277 ) 10 13 ( 254 )
+Added: Amounts reclassified from Accumulated other comprehensive loss — — ( 2 ) ( 2 )
+Added: Other comprehensive (loss) income, net ( 277 ) 10 11 ( 256 )
+Added: Balance at December 31, 2024 $ ( 818 ) $ 17 $ ( 45 ) $ ( 846 )
Amounts reclassified from Accumulated other comprehensive loss are recognized in "Other income, net" with the tax impact recognized in "Income tax expense" on the Consolidated Statements of Income.
38 unchanged sentences
The Senior Notes are considered Level 2 based on the fair value valuation hierarchy.
−Removed: Contingent consideration related to the GE Transportation acquisition is considered Level 3 based on the fair value valuation hierarchy.
−Removed: At December 31, 2023 and 2022, $ 42 million and $ 105 million, respectively, were classified as "Other accrued liabilities" and at December 31, 2022, $ 47 million was included within long-term liabilities shown as "Contingent consideration" on the Company's Consolidated Balance Sheets.
−Removed: The fair value approximates the carrying value at December 31, 2023 and 2022.
+Added: Contingent consideration related to the GE Transportation acquisition was considered Level 3 based on the fair value valuation hierarchy.
+Added: At December 31, 2023, $ 42 million was classified as "Other accrued liabilities" on the Company's Consolidated Balance Sheets, which approximates fair value.
+Added: There was no contingent consideration outstanding at December 31, 2024.
Hedging Activities In the normal course of business, the Company is exposed to market risks related to interest rates, commodity prices and foreign currency exchange rate fluctuations, which may adversely affect our operating results and financial position.
11 unchanged sentences
We conduct our business worldwide in U.S.
−Removed: dollars and the functional currencies of our foreign subsidiaries, including euro, Indian rupee, British pound sterling, Australian dollars and several other foreign currencies.
+Added: dollars and the functional currencies of our foreign subsidiaries, including euro, Indian rupee, British pound sterling, Australian dollars, Brazilian real, Kazakhstani tenge, and several other foreign currencies.
Changes in these foreign currency exchange rates could have a material adverse impact on our financial results that are reported in U.S.
8 unchanged sentences
The Company may use interest rate hedge contracts on certain investing and borrowing transactions to manage its net exposure to interest rate changes and to manage its overall cost of borrowing.
−Removed: Accordingly, the Company has entered into interest rate hedges to manage interest rate risk for a portion of future expected debt transactions.
The Company does not use leveraged swaps and, in general, does not leverage any of its investment activities that would put principal capital at risk.
+Added: During the first quarter of 2024, the Company utilized all outstanding interest rate hedge contracts to help manage interest expense for the 2034 Notes issued in the first quarter of 2024.
+Added: In the third quarter of 2024, the Company entered into new interest rate hedge contracts to manage interest rate risk for a portion of future expected debt transactions.
For the years ended December 31, 2024, 2023 and 2022, the amounts reclassified into income were not material.
18 unchanged sentences
Other current liabilities 2 ( 12 ) ( 3 ) 655 200
+Added: Interest Rate Contracts
+Added: Other current assets 2 10 — 250 —
Total $ 4 $ — $ 1,224 $ 310
13 unchanged sentences
The complaint challenges the Wabtec-GE Transportation merger and contends that since the merger, Wabtec has unlawfully monopolized the markets for long-haul freight locomotives, Tier IV long-haul freight locomotives, and energy management systems by, among other things, failing to ensure that Progress’ products are interoperable with Wabtec’s locomotives and cab electronics.
−Removed: The case is currently at an early stage.
Progress seeks an order requiring Wabtec to divest GE Transportation, unspecified treble damages for its alleged lost profits from reduced sales of locomotive and cab systems, and attorneys’ fees and costs.
1 unchanged sentence
Wabtec intends to vigorously defend itself against this lawsuit and believes that it has meritorious defenses to the claims asserted by Progress.
+Added: The case is still at an early stage;
+Added: Wabtec filed a motion to dismiss, briefing on this motion was completed in early 2024.
+Added: The Court has not yet issued a decision on Wabtec’s motion.
Xorail, Inc., a wholly owned subsidiary of the Company (“Xorail”), has received notices from Denver Transit Constructors (“DTC”) alleging breach of contract related to the operating of constant warning wireless crossings, and late delivery of the Train Management & Dispatch System (“TMDS”) for the Denver Eagle P3 Project, which is owned by the Denver Regional Transit District ("RTD").
1 unchanged sentence
Xorail has successfully completed a remediation plan concerning the TMDS issues.
−Removed: With regard to the wireless crossing issue, as of September 8, 2017, DTC alleged that total damages were $ 37 million through July 31, 2017 and were continuing to accumulate.
+Added: With regard to the wireless crossing issue, as of September 8, 2017, DTC alleged that total damages were $ 37 million through July 31, 2017
+Added: and were continuing to accumulate.
The majority of the damages stems from a delay in approval of the wireless crossing system by the Federal Railway Administration ("FRA") and the Public Utility Commission ("PUC"), resulting in the use of flaggers at all of the crossings pending approval of the wireless crossing system and certification of the crossings.
−Removed: DTC has alleged that the
−Removed: delay is due to Xorail's failure to achieve constant warning times for the crossings in accordance with the approval requirements imposed by the FRA and PUC.
+Added: DTC has alleged that the delay is due to Xorail's failure to achieve constant warning times for the crossings in accordance with the approval requirements imposed by the FRA and PUC.
Xorail has denied DTC's assertions, stating that its system satisfied the contractual requirements.
1 unchanged sentence
the FRA and PUC have both approved modified wireless crossing system, and as of August 2018, DTC completed the process of certifying the crossings and eliminated the use of flaggers.
−Removed: DTC has not updated its claim notices or alleged damages against Xorail, nor have they filed any formal claim against Xorail.
+Added: DTC has not updated its claim notices against Xorail, nor have they filed any formal claim against Xorail.
On September 21, 2018, DTC filed a complaint against RTD in Colorado state court for breach of contract related to non-payments and the costs for the flaggers, asserting a change-in-law arising from the FRA/PUC’s new certification requirements.
1 unchanged sentence
On February 10, 2023, the court issued a decision in favor of RTD, denying DTC's damages claim.
−Removed: DTC has filed a Notice of Appeal.
+Added: DTC filed an appeal to the Colorado Court of Appeals;
+Added: on May 13, 2024, the Court of Appeals upheld the trial Court’s decision in favor of RTD;
+Added: DTC filed a Writ of Certiorari with the Colorado Supreme Court seeking another appeal;
+Added: the Writ was denied on February 4, 2025.
+Added: DTC has informally indicated that they intend to send an updated claim notice to Xorail.
From time to time the Company is involved in litigation relating to claims arising out of its operations in the ordinary course of business.
10 unchanged sentences
It also refurbishes subway cars and provides heating, ventilation, and air conditioning equipment and doors for buses and subway cars.
−Removed: Customers include public transit authorities and municipalities, leasing companies and manufacturers of subway cars and buses around the world.
−Removed: The Company evaluates its business segments’ operating results based on income from operations.
+Added: Customers include public transit authorities and municipalities, leasing companies, manufacturers of passenger transit vehicles and buses, and companies in the electrical generation, distribution, and charging industries.
+Added: Wabtec’s chief operating decision maker (CODM) is the Company’s Chief Executive Officer, Rafael Santana.
+Added: Santana utilizes Income (loss) from operations as the primary reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources.
+Added: For both of the Company’s segments, the CODM uses segment Income (loss) from operations to make operational and personnel related decisions across the business.
+Added: The CODM considers actual, budgeted and forecasted Income (loss) from operations on a monthly basis for evaluating the performance of each segment and making decisions about allocating capital and other resources to each segment.
+Added: Additionally, Gross margin is used by the CODM as a secondary measure of segment profit or loss in assessing segment performance and deciding how to allocate resources.
+Added: For both of the Company’s segments, the CODM uses segment Gross margin to make commercial and operational related decisions across the business.
Intersegment sales are accounted for at prices that are generally established by reference to similar transactions with unaffiliated customers.
−Removed: Corporate activities include general corporate expenses, elimination of intersegment transactions, interest income and expense and other unallocated charges.
+Added: Corporate activities include general corporate expenses, elimination of certain intersegment transactions, interest income and expense and other unallocated charges.
+Added: Segment assets for the Freight and Transit Segment include assets directly utilized for segment operations, as well as the related goodwill and intangible assets.
+Added: Corporate segment assets include cash, cash equivalents, and restricted cash, equity method investment assets, certain tax assets, receivables held by our bankruptcy-remote facility, pension assets, corporate headquarters' assets and other asset balances that are managed outside of operating segments.
+Added: During 2024, management changed the presentation of segment assets below to show intercompany balances eliminated.
+Added: As such, segment assets for 2023 have been updated to conform to the current period presentation.
+Added: Cost of sales for both segments represents costs directly related to manufacturing products and providing services.
+Added: Primary costs include raw materials, direct labor, overhead, shipping and handling, warehousing, and the depreciation of
+Added: manufacturing, warehousing and distribution facilities.
+Added: Selling, general and administrative expenses for both segments represent costs incurred in managing the business, including salary, benefits, professional fees and operating costs associated with each segment’s non-manufacturing activities.
+Added: The amounts of depreciation and amortization disclosed by reportable segment are included within their respective segment expense captions, such as Cost of sales, Selling, general & administrative expenses and Amortization expense.
+Added: During 2024, Company management determined that certain parts of the business would be better aligned with management oversight in different product lines.
+Added: These changes were immaterial to the individual product lines and segments affected, and historical amounts have been reclassified to conform to the current period presentation.
Segment financial information for 2024 is as follows:
1 unchanged sentence
Sales to external customers $ 7,468 $ 2,919 $ — $ 10,387
−Removed: Intersegment sales/(elimination) 60 41 ( 101 ) —
−Removed: Total sales $ 7,022 $ 2,756 $ ( 101 ) $ 9,677
+Added: Cost of sales ( 4,945 ) ( 2,076 ) — ( 7,021 )
+Added: Gross profit $ 2,523 $ 843 $ — $ 3,366
+Added: Gross margin 33.8 % 28.9 %
+Added: Selling, general & administrative expenses $ ( 664 ) $ ( 433 ) $ ( 151 ) $ ( 1,248 )
+Added: Engineering expenses ( 164 ) ( 42 ) — ( 206 )
+Added: Amortization expense ( 273 ) ( 30 ) — ( 303 )
Income (loss) from operations 1,422 338 ( 151 ) 1,609
1 unchanged sentence
Income (loss) before income taxes $ 1,422 $ 338 $ ( 350 ) $ 1,410
+Added: Intersegment sales/(elimination) $ 48 $ 59 $ ( 107 ) $ —
Depreciation and amortization $ 413 $ 73 $ 17 $ 503
4 unchanged sentences
Sales to external customers $ 6,923 $ 2,754 $ — $ 9,677
−Removed: Intersegment sales/(elimination) 51 31 ( 82 ) —
−Removed: Total sales $ 6,063 $ 2,381 $ ( 82 ) $ 8,362
+Added: Cost of sales ( 4,742 ) ( 1,991 ) — ( 6,733 )
+Added: Gross profit $ 2,181 $ 763 $ — $ 2,944
+Added: Gross margin 31.5 % 27.7 %
+Added: Selling, general & administrative expenses $ ( 637 ) $ ( 408 ) $ ( 94 ) $ ( 1,139 )
+Added: Engineering expenses ( 180 ) ( 38 ) — ( 218 )
+Added: Amortization expense ( 299 ) ( 22 ) — ( 321 )
Income (loss) from operations 1,065 295 ( 94 ) 1,266
1 unchanged sentence
Income (loss) before income taxes $ 1,065 $ 295 $ ( 268 ) $ 1,092
+Added: Intersegment sales/(elimination) $ 58 $ 42 $ ( 100 ) $ —
Depreciation and amortization $ 442 $ 72 $ 17 $ 531
4 unchanged sentences
Sales to external customers $ 5,979 $ 2,383 $ — $ 8,362
−Removed: Intersegment sales/(elimination) 48 33 ( 81 ) —
−Removed: Total sales $ 5,287 $ 2,616 $ ( 81 ) $ 7,822
+Added: Cost of sales ( 4,090 ) ( 1,732 ) — ( 5,822 )
+Added: Gross profit $ 1,889 $ 651 $ — $ 2,540
+Added: Gross margin 31.6 % 27.3 %
+Added: Selling, general & administrative expenses $ ( 580 ) $ ( 365 ) $ ( 84 ) $ ( 1,029 )
+Added: Engineering expenses ( 177 ) ( 32 ) — ( 209 )
+Added: Amortization expense ( 272 ) ( 19 ) — ( 291 )
Income (loss) from operations 860 235 ( 84 ) 1,011
1 unchanged sentence
Income (loss) before income taxes $ 860 $ 235 $ ( 241 ) $ 854
+Added: Intersegment sales/(elimination) $ 48 $ 32 $ ( 80 ) $ —
Depreciation and amortization $ 398 $ 61 $ 20 $ 479
15 unchanged sentences
India 579 593 531 119 122
+Added: Kazakhstan / CIS 559 457 399 34 39
Australia / New Zealand 481 451 465 16 15
China 242 286 244 25 28
−Removed: Kazakhstan / Russia / CIS 457 399 412 39 3
Other Asia / Middle East 258 240 183 — —
23 unchanged sentences
Total Other income, net $ 2 $ 44 $ 29
−Removed: As a result of the change in ownership interest and obtaining control of LKZ, Wabtec's previously held equity interest balance was remeasured to fair value, resulting in a gain of approximately $ 35 million recorded to Other income, net and is included in Other miscellaneous income (expense) above.
+Added: As a result of the change in ownership interest and obtaining control of LKZ, Wabtec's previously held equity interest balance was remeasured to fair value, resulting in a gain of approximately $ 35 million recorded to Other income, net and is included in Other miscellaneous income (expense) in 2023.
See Note 3 for additional information.
RESTRUCTURING
−Removed: During the first quarter of 2022, Wabtec announced a three-year strategic initiative (“Integration 2.0”) to review and consolidate our operating footprint, reduce headcount, streamline the end-to-end manufacturing process, restructure the North America distribution channels, expand operations in low-cost countries, and simplify the business through systems enablement.
−Removed: Through this initiative, Management will also evaluate additional capital investments to further simplify and streamline the business.
−Removed: The Company anticipates that it will incur one-time charges related to Integration 2.0 of approximately $ 135 million to $ 165 million.
+Added: During the first quarter of 2022, Wabtec announced a multi-year strategic initiative (“Integration 2.0”) to review and consolidate our operating footprint, reduce headcount, streamline the end-to-end manufacturing process, restructure the North America distribution channels, expand operations in low-cost countries, and simplify the business through systems enablement.
+Added: Through this initiative, Management has evaluated additional capital investments to further simplify and streamline the business.
+Added: The Company now anticipates that it will incur one-time charges related to Integration 2.0 up to approximately $ 170 million.
A summary of restructuring charges related to the Integration 2.0 initiative is as follows:
4 unchanged sentences
Selling, general and administrative expenses — 5 1
+Added: Other income, net ( 4 ) — $ —
Total Freight Segment $ 3 $ 9 $ 14
7 unchanged sentences
Cash payments made during 2024 were approximately $ 48 million, primarily for employee related costs.
−Removed: Cash payments made during 2022 were not material.
+Added: Cash payments made during 2023 were approximately $ 39 million.
In addition to Integration 2.0, Wabtec is focused on exiting various low margin product offerings through Portfolio Optimization to improve profitability while reducing manufacturing complexity.
−Removed: Wabtec expects to incur approximately $ 85 million in net exit charges related to Portfolio Optimization, which will be predominately non-cash asset write downs.
−Removed: Wabtec recorded charges of approximately $ 28 million in the fourth quarter of 2023 for asset write downs related to Portfolio Optimization.
+Added: Wabtec now expects to incur approximately $ 70 million in net exit charges related to Portfolio Optimization, which will be predominately non-cash asset write downs.
+Added: Total charges related to Portfolio Optimization to date are approximately $ 56 million, which includes approximately $ 28 million charged in 2024 and in 2023.
+Added: During 2024, approximately $ 18 million is related to the Freight Segment and approximately $ 10 million is related to the Transit Segment.
+Added: Charges are primarily related to asset write downs.
+Added: SUBSEQUENT EVENTS
+Added: On January 14, 2025, Wabtec announced a definitive agreement to acquire Evident’s Inspection Technologies division (Inspection Technologies), formerly part of the Scientific Solutions Division of Olympus Corporation, a global leader in Non-Destructive Testing, Remote Visual Inspection and Analytical Instruments solutions for mission critical assets, for $ 1.78 billion.
+Added: Inspection Technologies’ leading industry presence and innovative product portfolio is expected to significantly expand Wabtec's capabilities, adding advanced automated inspection capabilities, driving technology in a space where data acquisition, analytics and automation are critical.
+Added: Upon acquisition, Inspection Technologies will be reported within the Digital Intelligence product line of the Freight Segment.
+Added: The Company anticipates financing the acquisition with a combination of cash on hand, utilization of the Revolving Credit Facility and an additional term loan.
+Added: The transaction is subject to customary closing conditions and regulatory approvals, with the Company expecting to finalize the acquisition of Inspection Technologies by the end of the first half of 2025.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
1 unchanged sentence
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.