What changed in this filing

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Item 1. Financial Statements

2025-04-23 compared with 2024-10-23 · 199 added, 291 removed, 521 unchanged (48% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

In millions, except par value September 30,

In millions, except par value March 31,

2025 December 31,

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Common stock, $ .01 par value;

500.0 shares authorized and 226.9 shares issued:

171.9 and 177.8 outstanding at September 30, 2024 and December 31, 2023, respectively

500.0 shares authorized;

171.9 shares issued and 171.1 outstanding at March 31, 2025;

226.9 shares issued and 171.3 outstanding at December 31, 2024

Additional paid-in capital 8,009 8,023

Treasury stock, at cost, 55.0 and 49.1 shares, at September 30, 2024 and December 31, 2023, respectively

Treasury stock, at cost, 0.8 and 55.6 shares, at March 31, 2025 and December 31, 2024, respectively

( 69 ) ( 3,273 )

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Unaudited Unaudited

Three Months Ended

September 30, Nine Months Ended

September 30,

In millions, except per share data 2025 2024

15 unchanged sentences

Interest expense, net ( 46 ) ( 47 )

Other (expense) income, net ( 3 ) 10 ( 1 ) 17

Other expense, net ( 2 ) ( 2 )

Income before income taxes 426 363

12 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited Unaudited

Three Months Ended

September 30, Nine Months Ended

September 30,

In millions 2025 2024

2 unchanged sentences

Unrealized (loss) gain on derivative contracts ( 3 ) 13

Change in unrealized gain (loss) on pension and post-retirement benefit plans 1 3 ( 3 ) 1

Change in unrealized (loss) gain on pension and post-retirement benefit plans ( 1 ) 1

Other comprehensive income (loss) before tax 112 ( 74 )

Income tax expense related to components of other comprehensive income — ( 7 ) ( 2 ) ( 10 )

Income tax benefit (expense) related to components of other comprehensive income 1 ( 3 )

Other comprehensive income (loss), net of tax 113 ( 77 )

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Three Months Ended

In millions 2025 2024

11 unchanged sentences

Accrued income taxes 44 46

Accrued liabilities and customer deposits ( 172 ) 12

Other assets and liabilities 129 ( 6 )

Current and noncurrent customer deposits 31 ( 145 )

Other accrued liabilities ( 13 ) 8

Other operating activities ( 83 ) ( 59 )

Net cash provided by operating activities 191 334

1 unchanged sentence

Purchase of property, plant and equipment ( 44 ) ( 31 )

Proceeds from dispositions of businesses 17 —

Proceeds from disposal of property, plant and equipment — 12

Acquisitions of businesses, net of cash acquired ( 13 ) ( 227 )

Net cash used for investing activities ( 44 ) ( 19 )

4 unchanged sentences

Cash dividends ( 43 ) ( 36 )

Payment of contingent consideration ( 42 ) —

Payment of income tax withholding on share-based compensation ( 34 ) ( 23 )

Distribution to noncontrolling interest ( 6 ) ( 12 )

Other financing activities ( 1 ) 3

1 unchanged sentence

Effect of changes in currency exchange rates 8 ( 7 )

Decrease in cash ( 210 ) ( 149 )

(Decrease) increase in cash ( 17 ) 19

Cash, cash equivalents and restricted cash, beginning of period 715 620

10 unchanged sentences

Net income — — — — — 322 — 5 327

Other comprehensive loss, net of tax — — — — — — ( 77 ) — ( 77 )

Stock repurchase — — — ( 1.3 ) ( 176 ) — — — ( 176 )

Balance, March 31, 2024 226.9 $ 2 $ 7,967 ( 50.1 ) $ ( 2,345 ) $ 5,505 $ ( 667 ) $ 42 $ 10,504

Cash dividends ($ 0.20 dividend per share)

— — — — — ( 35 ) — — ( 35 )

Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax — — — 0.1 2 — — — 2

Stock based compensation — — 14 — — — — — 14

Net income — — — — — 289 — 2 291

Other comprehensive loss, net of tax — — — — — — ( 53 ) — ( 53 )

Stock repurchase — — — ( 1.3 ) ( 202 ) — — — ( 202 )

Distribution to noncontrolling interest — — — — — — — ( 1 ) ( 1 )

Balance, June 30, 2024 226.9 $ 2 $ 7,981 ( 51.3 ) $ ( 2,545 ) $ 5,759 $ ( 720 ) $ 43 $ 10,520

Cash dividends ($ 0.20 dividend per share)

— — — — — ( 35 ) — ( 35 )

Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax — — — — ( 1 ) — — — ( 1 )

Stock based compensation — — 18 — — — — — 18

Net income — — — — — 283 — 3 286

Other comprehensive income, net of tax — — — — — — 113 — 113

Stock repurchase — — — ( 3.7 ) ( 605 ) — — — ( 605 )

Distribution to noncontrolling interest — — — — — — — ( 1 ) ( 1 )

Balance, September 30, 2024 226.9 $ 2 $ 7,999 ( 55.0 ) $ ( 3,151 ) $ 6,007 $ ( 607 ) $ 41 $ 10,291

Stock repurchase — — — ( 0.5 ) ( 98 ) — — — ( 98 )

Treasury stock retirement ( 55.0 ) ( 1 ) — 55.0 3,305 ( 3,304 ) — — —

Balance, March 31, 2025 171.9 $ 1 $ 8,009 ( 0.8 ) $ ( 69 ) $ 3,160 $ ( 733 ) $ 46 $ 10,414

In millions Common Stock Shares Common Stock Amount Additional Paid-in Capital Treasury Stock Shares Treasury Stock Amount Retained Earnings Accumulated Other Comprehensive Loss Non-controlling Interest Total

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Net income — — — — — 272 — 5 277

Other comprehensive income, net of tax — — — — — — 30 — 30

Other comprehensive loss, net of tax — — — — — — ( 77 ) — ( 77 )

Stock repurchase — — — ( 1.3 ) ( 176 ) — — — ( 176 )

Balance, March 31, 2024 226.9 $ 2 $ 7,967 ( 50.1 ) $ ( 2,345 ) $ 5,505 $ ( 667 ) $ 42 $ 10,504

Cash dividends ($ 0.17 dividend per share)

— — — — — ( 31 ) — — ( 31 )

Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax — — ( 3 ) 0.1 3 — — — —

Stock based compensation — — 12 — — — — — 12

Net income — — — — — 191 — 2 193

Other comprehensive income, net of tax — — — — — — 7 — 7

Stock repurchase — — — ( 0.8 ) ( 76 ) — — — ( 76 )

Distribution to noncontrolling interest — — — — — — — ( 12 ) ( 12 )

Balance, June 30, 2023 226.9 $ 2 $ 7,949 ( 47.8 ) $ ( 2,014 ) $ 4,875 $ ( 624 ) $ 39 $ 10,227

Cash dividends ($ 0.17 dividend per share)

— — — — — ( 30 ) — — ( 30 )

Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax — — 2 — 1 — — — 3

Stock based compensation — — 14 — — — — — 14

Net income — — — — — 240 — 2 242

Other comprehensive loss, net of tax — — — — — — ( 89 ) — ( 89 )

Balance, September 30, 2023 226.9 $ 2 $ 7,965 ( 47.8 ) $ ( 2,013 ) $ 5,085 $ ( 713 ) $ 41 $ 10,367

The accompanying notes are an integral part of these statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024 (UNAUDITED)

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025 (UNAUDITED)

Except as the context otherwise requires, all references to “we”, “our”, “us”, the “Company” and “Wabtec” refer to Westinghouse Air Brake Technologies Corporation and its consolidated subsidiaries.

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Wabtec is a global company with operations in over 50 countries and our products can be found in more than 100 countries throughout the world.

In the first nine months of 2024, approximately 52 % of the Company’s Net sales came from customers outside the United States.

In the first three months of 2025, approximately 51 % of the Company’s Net sales came from customers outside the United States.

ACCOUNTING POLICIES

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Certain prior year amounts have been reclassified, where necessary, to conform to the current year presentation.

Results for these interim periods are not necessarily indicative of results to be expected for the full year, particularly in light of ongoing volatility in the macroeconomic environment caused by supply chain disruptions, labor availability, broad-based inflation, and the impacts from regional conflicts.

These factors continue to impact our sales channels, supply chain, manufacturing operations, workforce, and other key aspects of our operations.

We are unable to reasonably predict the full impact of these factors due to the high degree of uncertainty regarding their duration and severity, their potential impact on global economic activity, and the impact that current and new sanctions may have on our business, global supply chain operations and our customers, suppliers, and end-markets.

We are unable to reasonably predict the full impact of these factors due to the high degree of uncertainty regarding their duration and severity, their potential impact on global economic activity, and the impact that current and new sanctions and tariffs may have on our business, global supply chain operations and our customers, suppliers, and end-markets.

The Company operates on a four-four-five week accounting quarter, and the quarters end on or about March 31, June 30, September 30, and December 31.

The notes included herein should be read in conjunction with the audited consolidated financial statements included in Wabtec’s Annual Report on Form 10-K for the year ended December 31, 2024.

The December 31, 2023 information has been derived from the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The December 31, 2024 information included herein has been derived from the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Use of Estimates The preparation of financial statements in conformity with GAAP in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period.

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Remaining performance obligations represent the allocated transaction price of unsatisfied or partially unsatisfied performance obligations.

As of September 30, 2024, the Company's remaining performance obligations were approximately $ 22.2 billion.

As of March 31, 2025, the Company's remaining performance obligations were approximately $ 22.3 billion.

The Company expects to recognize revenue of approximately 37 % of the remaining performance obligations over the next 12 months, with the remainder recognized thereafter.

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.

Revolving Receivables Program Effective January 1, 2025, the Company utilizes its Revolving Receivables Program to request borrowings from a financial institution against certain collateralized receivables for up to $ 350 million.

The Company and certain of its subsidiaries (the "Originators") contribute receivables to our bankruptcy-remote subsidiary, which can then be collateralized on a recurring basis.

As customers pay their balances, we transfer additional receivables into the program.

Borrowings and repayments under the Revolving Receivables Program are classified as Financing activities on our Condensed Consolidated Statement of Cash Flows, with any outstanding collateralized balance at period end classified as debt on our Condensed Consolidated Balance Sheets.

Prior to January 1, 2025, the Company utilized its Revolving Receivables Program to sell up to $ 350 million of certain receivables from the Originators.

Receivables were sold to a financial institution on a recurring basis in exchange for cash equal to the gross receivables sold.

Proceeds and remittances of receivables sold under the program prior to January 1, 2025, are classified as Operating activities on our Condensed Consolidated Statement of Cash Flows.

The bankruptcy remote subsidiary is a separate legal entity with its own creditors, and its assets are not available to pay creditors of the Company or any other affiliates of the Company.

As customers pay their balances, we transfer additional receivables into the program, which could result in our gross receivables sold being higher or lower than customer collections remitted to the financial institution for any applicable period.

The sold receivables are fully guaranteed by our bankruptcy-remote subsidiary, which holds additional receivables that are pledged as collateral under this facility.

The receivables transferred to the program are fully guaranteed by our bankruptcy-remote subsidiary, which holds additional receivables that are pledged as collateral under this facility.

The Company has agreed to guarantee the performance of the Originators' respective obligations under the revolving agreement.

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.

At September 30, 2024 and December 31, 2023, the bankruptcy-remote subsidiary held receivables of $ 646 million and $ 674 million, respectively, which are included in the Company's Condensed Consolidated Balance Sheets.

The receivables held by the bankruptcy-remote subsidiary collateralize the outstanding receivables sold, which were $ 95 million and $ 20 million at September 30, 2024 and December 31, 2023, respectively.

At March 31, 2025 and December 31, 2024, the bankruptcy-remote subsidiary held receivables of $ 735 million and $ 693 million, respectively, which are included in the Company's Condensed Consolidated Balance Sheets.

The receivables held by the bankruptcy-remote subsidiary collateralize the outstanding receivables sold and outstanding borrowings.

There were no outstanding receivables sold or outstanding borrowings at March 31, 2025 or 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 September 30, 2024 or December 31, 2023 as the estimated expected credit losses on receivables sold is insignificant.

Our maximum exposure to losses related to these receivables transferred is limited to the amount outstanding.

The following table sets forth a summary of receivables sold and the resulting impact of net cash proceeds included in cash from operations:

In millions Nine Months Ended

September 30, 2024 Nine Months Ended

September 30, 2023

Our maximum exposure to losses related to these receivables transferred to the program is limited to the amount outstanding.

The following table sets forth a summary of receivables used as collateral for requested borrowings and the resulting impact of net cash proceeds included in cash from financing activities.

There were no receivables sold under the program during the three months ended March 31, 2025.

In millions Three Months Ended

March 31, 2025

Gross receivables collateralized/cash borrowings received $ 175

Customer collections remitted to financial institution ( 175 )

Net cash proceeds received included in cash from financing activities $ —

The following table sets forth a summary of receivables sold and the resulting impact of net cash proceeds included in cash from operating activities during the three months ended March 31, 2024:

In millions Three Months Ended

March 31, 2024

Gross receivables sold/cash proceeds received $ 519

Customer collections remitted to financial institution ( 309 )

Net cash proceeds received included in cash from operations $ 75 $ 155

Restricted Cash At September 30, 2024 and December 31, 2023, the Company classified cash of $ 9 million and $ 5 million, respectively, as restricted for cash held in escrow related to acquisitions.

Net cash proceeds received included in cash from operating activities $ 210

Restricted Cash At March 31, 2025 and December 31, 2024, the Company classified cash of $ 9 million as restricted for cash held in escrow related to acquisitions.

Depreciation Expense Depreciation of property, plant and equipment related to the manufacturing of products or services provided is included in Cost of goods or Cost of services.

Depreciation of other property, plant and equipment that is not attributable to the manufacturing of products or services provided is included in Selling, general and administrative

expenses or Engineering expenses to the extent the property, plant, and equipment is used for research and development purposes.

Depreciation of other property, plant and equipment that is not attributable to the manufacturing of products or services provided is included in Selling, general and administrative expenses or Engineering expenses to the extent the property, plant, and equipment is used for research and development purposes.

Goodwill and Intangible Assets Goodwill and other intangible assets with indefinite lives are not amortized.

6 unchanged sentences

No impairment indicators were identified during the current quarter.

Accounting Standards Recently Issued In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The amendments in this update are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

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.

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.

The amendments will require increased interim and annual disclosures on current and comparable reporting periods presented in annual and interim company filings.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Accounting Standards Recently Issued In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The amendments in this update require entities to disclose disaggregated information about certain costs and expenses in commonly presented income statement expense captions.

The amendments will require increased interim and annual footnote disclosures either prospectively or retrospectively for reporting periods presented in interim and annual company filings.

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.

The Company is assessing the extent of the impact of the amendments on its future filings.

Accounting Standards Recently Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

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The amendments in this update also require enhanced disaggregation of disclosures about income taxes paid and income tax expense, among other changes.

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.

The amendments will require increased annual disclosures on current and comparable reporting periods presented in annual and interim company filings.

The Company is assessing the extent of the impact of the amendments on its future filings.

Accumulated Other Comprehensive Loss Comprehensive (loss) income comprises both Net income and 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, including any tax impacts, for the three months ended September 30, 2024 and 2023 are as follows:

Foreign currency translation Derivative contracts Pension and postretirement benefit plans Total

In millions 2024 2023 2024 2023 2024 2023 2024 2023

Balance at June 30 $ ( 678 ) $ ( 572 ) $ 17 $ 4 $ ( 59 ) $ ( 56 ) $ ( 720 ) $ ( 624 )

Other comprehensive income (loss), net 114 ( 106 ) ( 1 ) 16 — 1 113 ( 89 )

Balance at September 30 $ ( 564 ) $ ( 678 ) $ 16 $ 20 $ ( 59 ) $ ( 55 ) $ ( 607 ) $ ( 713 )

The changes in Accumulated other comprehensive loss by component, including any tax impacts, for the nine months ended September 30, 2024 and 2023 are as follows:

The amendments in this update do not affect the recognition, measurement, or financial statement presentation of income taxes and are effective for Wabtec's annual reporting periods beginning January 1, 2025.

The amendments require increased annual disclosures on current and comparable reporting periods presented in annual company filings.

The resulting new annual disclosure requirements will be reflected in our 2025 report on Form 10-K.

Accumulated Other Comprehensive Loss Comprehensive income (loss) comprises both Net income and Other comprehensive income (loss) 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, including any tax impacts, for the three months ended March 31, 2025 and 2024 are as follows:

Foreign currency translation Derivative contracts Pension and postretirement benefit plans Total

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Balance at beginning of year $ ( 818 ) $ ( 541 ) $ 17 $ 7 $ ( 45 ) $ ( 56 ) $ ( 846 ) $ ( 590 )

Other comprehensive (loss) income before reclassifications ( 23 ) ( 82 ) 9 29 — — ( 14 ) ( 53 )

Amounts reclassified from Accumulated other comprehensive (loss) income — — — — ( 3 ) 1 ( 3 ) 1

Other comprehensive (loss) income, net ( 23 ) ( 82 ) 9 29 ( 3 ) 1 ( 17 ) ( 52 )

Balance at September 30 $ ( 564 ) $ ( 678 ) $ 16 $ 20 $ ( 59 ) $ ( 55 ) $ ( 607 ) $ ( 713 )

Amounts reclassified from Accumulated other comprehensive loss are recognized in "Other (expense) income, net" with the tax impact recognized in "Income tax expense" on the Condensed Consolidated Statements of Income.

Other comprehensive income (loss), net of tax 116 ( 88 ) ( 2 ) 10 ( 1 ) 1 113 ( 77 )

Balance at March 31 $ ( 702 ) $ ( 629 ) $ 15 $ 17 $ ( 46 ) $ ( 55 ) $ ( 733 ) $ ( 667 )

Amounts reclassified from Accumulated other comprehensive loss are recognized in "Other expense, net" with the tax impact recognized in "Income tax expense" on the Condensed Consolidated Statements of Income.

Treasury Stock During the first quarter of 2025, we retired 55 million shares of treasury stock.

The retirement of treasury stock is recognized as a deduction from common stock for the shares' par value and any excess over par as a deduction from retained earnings.

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.

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The arrangements do not change the payable terms negotiated by the Company and our vendors, which range between net 30 and net 180 days, and does not result in a change in the classification of amounts due as Accounts payable in the Condensed Consolidated Balance Sheets.

Suppliers utilized the program to accelerate receipt of payment from these financial institutions for $ 338 million and $ 305 million of the Company's outstanding Accounts payable as of September 30, 2024 and December 31, 2023, respectively.

Suppliers utilized the program to accelerate receipt of payment from these financial institutions for $ 300 million and $ 311 million of the Company's outstanding Accounts payable as of March 31, 2025 and December 31, 2024, 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.

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.

Prior to this purchase, Wabtec owned 50 % of LKZ as a joint venture partner and accounted for its ownership interest as an equity method investment.

Total purchase price for the remaining 50 % interest was $ 111 million.

Upon acquisition, Wabtec's previously held equity interest balance was remeasured to fair value and the Company ceased accounting for the investment using the equity method and recognized 100 % of LKZ's identifiable assets and liabilities.

LKZ's results of operations and cash flows have been fully consolidated subsequent to the acquisition date.

The following table summarizes the fair value of 100 % of the LKZ assets acquired and liabilities assumed:

Assets acquired

Cash and cash equivalents $ 30

Accounts receivable 6

Property, plant and equipment 36

Other noncurrent assets 3

Total assets acquired 281

Liabilities assumed

Current liabilities 21

Noncurrent liabilities 3

Total liabilities assumed 24

Net assets acquired $ 257

The fair values of the assets acquired and liabilities assumed were determined using the income, cost and market approaches.

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.

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.

The purchased goodwill is not expected to be deductible for tax purposes.

The results of this business since the date of acquisition are reported within the Equipment product line of the Freight Segment.

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.

During the second quarter of 2023, the Company acquired L&M Radiator, Inc., a leading manufacturer of heavy-duty equipment radiators and heat exchangers for the mining sector, for a purchase price of approximately $ 245 million.

The following table summarizes the fair value of the L&M Radiator, Inc.

assets acquired and liabilities assumed:

Assets acquired

Cash and cash equivalents $ 16

Accounts receivable 20

Other current assets 1

Property, plant and equipment 43

Other intangible assets 89

Other noncurrent assets 1

Total assets acquired 302

Liabilities assumed

Current liabilities 16

Noncurrent liabilities 41

Total liabilities assumed 57

Net assets acquired $ 245

The fair values of the assets acquired and liabilities assumed were determined using the income, cost and market approaches.

Discounted cash flow models were used to estimate the fair values of acquired intangibles.

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.

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.

The purchased goodwill is no t expected to be deductible for tax purposes.

The results of this business since the date of acquisition are reported within the Components product line of the Freight Segment.

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.

The Company also made smaller acquisitions during the periods presented, none of which were material.

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 approximately $ 1.78 billion.

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.

Upon acquisition, Inspection Technologies will be reported within the Digital Intelligence product line of the Freight Segment.

The Company anticipates financing the acquisition with a combination of cash on hand, utilization of the Revolving Credit Facility and an additional term loan.

The transaction is subject to customary closing conditions and regulatory approvals.

On March 18, 2025, Wabtec announced a definitive agreement to acquire Dellner Couplers, a global leader in highly engineered safety-critical train connection systems and services for passenger rail rolling stock, for approximately $ 960 million.

Upon acquisition, Dellner Couplers will be reported within the Transit Segment.

The transaction is subject to customary closing conditions and regulatory approvals.

During 2024, the Company made four strategic acquisitions for a combined purchase price of approximately $ 168 million, net of cash acquired.

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.

Each of the acquisitions in 2024 were individually and collectively immaterial.

The components of inventory, net of reserves, were:

In millions September 30,

In millions March 31,

2025 December 31,

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Balance at December 31, 2024 $ 7,248 $ 1,462 $ 8,710

Additions/adjustments 9 — 9

Foreign currency impact 16 61 77

Balance at September 30, 2024 $ 7,280 $ 1,506 $ 8,786

As of September 30, 2024 and December 31, 2023, the Company’s trade names had a net carrying amount of $ 619 million and $ 612 million, respectively.

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 assigned a useful life of 5 years and has been fully amortized.

Balance at March 31, 2025 $ 7,264 $ 1,523 $ 8,787

As of March 31, 2025 and December 31, 2024, the Company’s trade names had a net carrying amount of $ 610 million and $ 595 million, respectively.

Intangible assets of the Company, other than goodwill and trade names, consist of the following:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

In millions Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

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Total $ 3,972 $ ( 1,690 ) $ 2,282 $ 4,062 $ ( 1,723 ) $ 2,339

At September 30, 2024 the weighted average remaining useful lives of backlog, customer relationships and acquired technology were 7 years, 14 years and 6 years, respectively.

At March 31, 2025 the weighted average remaining useful lives of backlog, customer relationships and acquired technology were 9 years, 14 years and 6 years, respectively.

The backlog intangible asset primarily consists of in-place long-term service agreements acquired by the Company in conjunction with the acquisition of GE Transportation.

Amortization expense for intangible assets was $ 79 million and $ 224 million for the three and nine months ended September 30, 2024, respectively, and $ 74 million and $ 222 million for the three and nine months ended September 30, 2023, respectively.

Amortization expense for intangible assets was $ 73 million and $ 74 million for the three months ended March 31, 2025 and 2024, respectively.

Amortization expense for the five succeeding years is estimated to be as follows:

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The current portion of the contract assets are classified as current assets under the caption “Unbilled accounts receivable” while the noncurrent contract assets are classified as other assets under the caption "Other noncurrent assets" on the Condensed Consolidated Balance Sheets.

Noncurrent contract assets were $ 175 million at September 30, 2024 and $ 154 million at December 31, 2023.

Noncurrent contract assets were $ 197 million at March 31, 2025 and $ 170 million at December 31, 2024.

The Company has elected to use the practical expedient and does not consider unbilled amounts anticipated to be paid within one year as significant financing components.

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The current portion of contract liabilities are classified as current liabilities under the caption “Customer deposits” while the noncurrent contract liabilities are classified as noncurrent liabilities under the caption "Other long-term liabilities" on the Condensed Consolidated Balance Sheets.

Noncurrent contract liabilities were $ 319 million at September 30, 2024 and $ 174 million at December 31, 2023.

Noncurrent contract liabilities were $ 339 million at March 31, 2025 and $ 389 million at December 31, 2024.

These contract liabilities are not considered a significant financing component because they are used to meet working capital demands that can be higher in the early stages of a contract or revenue associated with the contract liabilities is expected to be recognized within one year.

Contract liabilities also include provisions for estimated losses from uncompleted contracts.

Provisions for loss contracts were $ 89 million and $ 104 million at September 30, 2024 and December 31, 2023, respectively.

Provisions for loss contracts were $ 80 million and $ 91 million at March 31, 2025 and December 31, 2024, respectively.

These provisions for estimated losses are classified as current liabilities and included within the caption “Other accrued liabilities” on the Condensed Consolidated Balance Sheets.

The change in the carrying amount of contract assets and contract liabilities for the nine months ended September 30, 2024 and 2023 is as follows:

The change in the carrying amount of contract assets and contract liabilities for the three months ended March 31, 2025 and 2024 is as follows:

Contract Assets

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Reclassified to accounts receivable ( 184 ) ( 146 )

Acquisitions/adjustments — ( 2 )

Foreign currency impact 7 —

Balance at September 30

Balance at March 31

Contract Liabilities

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Current year amounts reclassified to revenue ( 195 ) ( 114 )

Acquisitions — 1

Foreign currency impact 12 ( 9 )

Balance at September 30 $ 975 $ 969

Balance at March 31 $ 1,214 $ 922

The Company leases certain property, buildings and equipment.

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As most of the Company's leases do not provide a readily stated discount rate, the Company must estimate the rate to discount lease payments using its incremental borrowing rate.

Operating lease expense was $ 18 million and $ 50 million for the three and nine months ended September 30, 2024, respectively, and $ 16 million and $ 48 million for the three and nine months ended September 30, 2023, respectively.

New operating leases of $ 8 million and $ 40 million were added during the three and nine months ended September 30, 2024, respectively, and $ 7 million and $ 27 million for the three and nine months ended September 30, 2023, respectively.

Operating lease expense was $ 16 million for each of the three months ended March 31, 2025 and 2024, respectively.

New operating leases of $ 8 million and $ 14 million were added during the three months ended March 31, 2025 and 2024, respectively.

Wabtec does not have material financing leases, short-term or variable leases or sublease income.

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The following table summarizes the remaining lease term and discount rate assumptions used to develop the present value of operating lease liabilities:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Weighted-average remaining lease term (years) 7.8 7.9

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Long-term debt consisted of the following:

Effective Interest Rate Face Value September 30, 2024 December 31, 2023

Effective Interest Rate Face Value March 31, 2025 December 31, 2024

In millions Book Value Fair Value 1

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3.5 % $ 750 750 737 750 732

3.45 % Senior Notes, due 2026

3.5 % $ 750 750 738 749 718

1.25 % Senior Notes (EUR), due 2027

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Additionally, the Company has debt issuance costs related to certain financing transactions which are also amortized through interest expense.

As of September 30, 2024 and December 31, 2023, the Company had total combined unamortized discount and debt issuance costs of $ 17 million and $ 15 million, respectively.

As of March 31, 2025 and December 31, 2024, the Company had total combined unamortized discount and debt issuance costs of $ 14 million and $ 15 million, respectively.

Credit Agreements

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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.

At September 30, 2024, the interest rate was 6.5 %.

At March 31, 2025, the interest rate was 5.7 %.

The frequency of interest payments varies based upon the Interest Election Request.

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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.

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.

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

The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type.

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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.

At September 30, 2024, the interest rate was 6.5 %.

Obligations under the Restated Credit Agreement have been guaranteed by certain of the Company’s subsidiaries.

At March 31, 2025, the interest rate on the Delayed Draw Term Loan was 5.7 % and the interest rate on the undrawn Revolving Credit Facility was 5.7 %.

Obligations under the 2022 Credit Agreement have been guaranteed by certain of the Company’s subsidiaries.

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.

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All terms are as defined in the 2022 Credit Agreement.

The following table presents availability under the 2022 Credit Agreement at September 30, 2024:

The following table presents availability under the 2022 Credit Agreement at March 31, 2025:

In millions Revolving Credit Facility Delayed Draw Term Loan Total

3 unchanged sentences

Current Availability $ 1,500 $ — $ 1,500

The Company was in compliance with all financial covenants in the 2022 Credit Agreement and the 2024 Credit Agreement as of September 30, 2024.

The Company was in compliance with all financial covenants in the 2022 Credit Agreement and the 2024 Credit Agreement as of March 31, 2025.

Intra-Quarter Uncommitted Money Market Line Credit Agreement

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The Company or its subsidiaries may issue senior notes from time to time.

These notes are comprised of our 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"), 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.

These notes are comprised of our 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"), 4.70 % Senior Notes due 2028 (the "2028 Notes"), and 5.611 % Senior Notes due 2034 (the "2034 Notes").

The 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.

Each series of the Senior Notes may be redeemed at 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.

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The 2034 Notes will mature on March 11, 2034.

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.

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 our 4.15 % Senior Notes due 2024 (the "2024 Notes") at maturity.

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.

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 and the 2024 Credit Agreement.

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 and the 2024 Credit Agreement.

The Euro Notes were issued by Wabtec Transportation Netherlands B.V.

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The Company maintains employee stock-based compensation plans for stock options, restricted stock, and incentive stock units as governed by the 2011 Stock Incentive Compensation Plan, as amended and restated (the “2011 Plan”) and the 2000 Stock Incentive Plan, as amended (the “2000 Plan”).

The 2011 Plan has a term through May 10, 2027, and as of September 30, 2024, the number of shares available for future grants under the 2011 Plan was approximately 4.4 million shares.

The 2011 Plan has a term through May 10, 2027, and as of March 31, 2025, the number of shares available for future grants under the 2011 Plan was approximately 3.9 million shares.

The Company also maintains a 1995 Non-Employee Directors’ Fee and Stock Option Plan as amended and restated (“the Directors Plan”).

Stock-based compensation expense was $ 23 million and $ 57 million for the three and nine months ended September 30, 2024, respectively, and $ 16 million and $ 42 million for the three and nine months ended September 30, 2023, respectively.

At September 30, 2024, unamortized compensation expense related to stock options, non-vested restricted shares and incentive stock units expected to vest was approximately $ 91 million.

Stock-based compensation expense was $ 20 million and $ 17 million for the three months ended March 31, 2025 and 2024, respectively.

At March 31, 2025, unamortized compensation expense related to stock options, non-vested restricted shares and incentive stock units expected to vest was approximately $ 130 million.

Stock Options Stock options can be granted to eligible employees and directors at an exercise price equal to fair market value, which is the average of the high and low Wabtec stock price on the date of grant.

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There were no stock options granted in the periods presented.

At September 30, 2024, there were 231,026 shares issuable pursuant to exercisable stock options.

At March 31, 2025, there were 170,213 shares issuable pursuant to exercisable stock options.

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.

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The incentive stock units included in the table below represent the number of incentive stock units that are expected to vest based on the Company’s estimate for meeting those established performance targets.

As of September 30, 2024, the Company estimates that it will achieve 158 %, 163 % and 175 % 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.

As of March 31, 2025, the Company estimates that it will achieve 186 %, 200 % and 120 % 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, 2025, 2026, and 2027, respectively, and has recorded incentive compensation expense accordingly.

If the estimates of the number of these incentive 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.

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Expense for incentive stock units is updated as necessary based on the Company's performance.

The following table summarizes the restricted stock, restricted stock unit and incentive stock unit activity and related information for the nine months ended September 30, 2024:

The following table summarizes the restricted stock, restricted stock unit and incentive stock unit activity and related information for the three months ended March 31, 2025:

and Units Incentive

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Canceled ( 3,393 ) — $ 108.73

Outstanding at September 30, 2024 749,767 758,236 $ 114.70

The overall effective tax rate for the three and nine months ended September 30, 2024 was 24.2 % and 24.1 %, respectively.

The overall effective tax rate for the three and nine months ended September 30, 2023 was 24.5 % and 25.1 %, respectively.

The year over year decrease in the effective rate for the three month period ended September 30, 2024 was driven by a change in the jurisdictional mix of earnings and audit closures.

Additionally, the year over year decrease in the effective tax rate for the nine month period ended September 30, 2024 was impacted by higher discrete equity compensation tax deductions, audit closures, and a change in jurisdictional mix of earnings.

Outstanding at March 31, 2025 687,291 778,620 $ 138.98

The overall effective tax rate for the three months ended March 31, 2025 and 2024 was 23.2 % and 23.6 %, respectively.

The year over year decrease in the effective rate was driven by higher discrete equity compensation tax deductions and the jurisdictional mix of earnings.

EARNINGS PER SHARE

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.

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.

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.

The computation of basic and diluted earnings per share for Net income attributable to Wabtec shareholders is as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

In millions, except per share data 2025 2024

Net income attributable to Wabtec shareholders $ 322 $ 272

Net income allocated to non-vested restricted stock ( 1 ) ( 1 )

Numerator for basic and diluted earnings per common share $ 321 $ 271

Weighted average shares outstanding - basic 170.5 176.5

Effect of dilutive securities:

Assumed conversion of dilutive stock-based compensation plans 0.7 0.6 0.6 0.6

Assumed conversion of dilutive stock-based compensation plans excluding non-vested restricted stock 0.4 0.3

Assumed conversion of dilutive non-vested restricted stock 0.4 0.4

Weighted average shares outstanding - diluted 171.3 177.2

Net income attributable to Wabtec shareholders per common share

Earnings per common share attributable to Wabtec shareholders

Basic $ 1.88 $ 1.54

Diluted $ 1.88 $ 1.53

The following table reconciles the changes in the Company’s product warranty reserve for the nine months ended September 30, 2024 and 2023:

The following table reconciles the changes in the Company’s product warranty reserve for the three months ended March 31, 2025 and 2024:

In millions 2025 2024

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Foreign currency impact/other 3 ( 2 )

Balance at September 30

Balance at March 31

FAIR VALUE MEASUREMENT AND DERIVATIVE INSTRUMENTS

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The Company’s cash, cash equivalents and restricted cash are highly liquid investments purchased with an original maturity of three months or less and are considered Level 1 on the fair value valuation hierarchy.

The fair value of cash, cash equivalents and restricted cash approximated the carrying value at September 30, 2024 and December 31, 2023.

The fair value of cash, cash equivalents and restricted cash approximated the carrying value at March 31, 2025 and December 31, 2024.

The Senior Notes are considered Level 2 based on the fair value valuation hierarchy.

Contingent consideration related to the GE Transportation acquisition is considered Level 3 based on the fair value valuation hierarchy.

At December 31, 2023, $ 42 million was classified as "Other accrued liabilities" on the Company's Condensed Consolidated Balance Sheets, which approximates fair value.

There was no amount of contingent consideration outstanding as of September 30, 2024.

Hedging Activities In the normal course of business, the Company is exposed to market risk related to interest rates, commodity prices and foreign currency exchange rate fluctuations, which may adversely affect our operating results and financial position.

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The effective portion of gains and losses is deferred as a component of Accumulated other comprehensive loss and is recognized in earnings at the time the hedged item affects earnings, in the same line item as the underlying hedged item.

For the three and nine months ended September 30, 2024 and 2023, the amounts reclassified into income were not material.

For the three months ended March 31, 2025 and 2024, the amounts reclassified into income were not material.

The Company has also established balance sheet risk management and net investment hedging programs to protect its balance sheet against foreign currency exchange rate volatility.

We conduct our business worldwide in U.S.

dollars and the functional currencies of our foreign subsidiaries, including euro, Indian rupee, British pound sterling, Australian dollars and several other foreign currencies.

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.

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The Company enters into certain derivative contracts in accordance with its risk management strategy that do not meet the criteria for hedge accounting, but which have the impact of largely mitigating foreign currency exposure.

These foreign exchange contracts are accounted for on a full mark to market basis through earnings, with gains and losses recorded as a component of Other (expense) income, net.

The net gains and losses related to these contracts were not material for the three and nine months ended September 30, 2024 and 2023.

These foreign exchange contracts are accounted for on a full mark to market basis through earnings, with gains and losses recorded as a component of Other expense, net.

The net gains and losses related to these contracts were not material for the three months ended March 31, 2025 and 2024.

These contracts typically mature within one year .

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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.

During the first quarter of

2024, the Company utilized all outstanding interest rate hedge contracts to help manage interest expense for the 2034 Notes.

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.

F or the three and nine months ended September 30, 2024 and 2023, the amounts reclassified into income were not material.

During the first quarter of 2024, the Company utilized all outstanding interest rate hedge contracts to help manage interest expense for the 2034 Notes.

During the third quarter of 2024 and the first quarter of 2025, the Company entered into new interest rate hedge contracts to manage interest rate risk for a portion of future expected debt transactions.

F or the three months ended March 31, 2025 and 2024, the amounts reclassified into income were not material.

Commodity Price Risk

The Company may use commodity forward swaps to manage its exposure to commodity price changes and to reduce its overall cost of manufacturing.

For the three and nine months ended September 30, 2024 and 2023, the amounts recognized as income or expense were not material.

The following table summarizes the assets, liabilities, gross notional amounts, fair values, and fair value hierarchy classification of the designated and non-designated hedges discussed in the above sections as of September 30, 2024, which are included in other current assets and liabilities on the Condensed Consolidated Balance Sheets:

For the three months ended March 31, 2025 and 2024, the amounts recognized as income or expense were not material.

The following table summarizes the assets, liabilities, gross notional amounts, fair values, and fair value hierarchy classification of the designated and non-designated hedges discussed in the above sections as of March 31, 2025, which are included in other current assets and liabilities on the Condensed Consolidated Balance Sheets:

Fair Value Gross Notional Amount

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District Court for the District of Delaware asserting antitrust, breach of contract, unfair competition law, and misrepresentation claims.

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.

The case is currently at an early stage.

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.

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.

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Wabtec intends to vigorously defend itself against this lawsuit and believes that it has meritorious defenses to the claims asserted by Progress.

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").

No damages have been asserted for the alleged late delivery of the TMDS, and no formal claim has been filed;

Xorail has successfully completed a remediation plan concerning the TMDS issues.

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.

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.

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.

Xorail has worked with DTC to modify its system and implement the FRA's and PUC's previously undefined approval requirements;

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.

DTC has not updated its claim notices or alleged damages 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.

DTC's claim against RTD proceeded to trial on September 21, 2020.

On February 10, 2023, the court issued a decision in favor of RTD, denying DTC's damages claim.

DTC has filed a Notice of Appeal.

The case is still at an early stage;

Wabtec filed a motion to dismiss, and briefing on this motion was completed in early 2024.

The court has not yet issued a decision on Wabtec's motion.

Xorail, Inc., a wholly owned subsidiary of the Company (“Xorail”), received notices from Denver Transit Constructors (“DTC”) alleging breach of contract related to the operation of a wireless crossing system provided by Xorail for use by the Denver Regional Transit District ("RTD").

DTC’s alleged damages stem from a delay in approval of the wireless crossing system by regulatory authorities, which resulted in the interim use of flaggers at the crossings.

Xorail denied DTC's assertions, stating that the system satisfied the contractual requirements.

DTC has since contacted Xorail seeking $ 58 million in damages;

Xorail has denied liability, but there can be no assurances as to the ultimate outcome of this claim.

From time to time the Company is involved in litigation relating to claims arising out of its operations in the ordinary course of business.

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It also refurbishes subway cars and provides heating, ventilation, and air conditioning equipment and doors for buses and subway cars.

Customers include public transit authorities and municipalities, leasing companies and manufacturers of subway cars and buses around the world.

The Company evaluates its business segments’ operating results based on income from operations.

Customers include public transit authorities and municipalities, leasing companies and manufacturers of passenger transit vehicles and buses, and companies in the electrical generation, distribution, and charging industries.

Wabtec’s chief operating decision maker (CODM) is the Company’s Chief Executive Officer, Rafael Santana.

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.

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.

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.

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.

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.

Corporate activities include general corporate expenses, elimination of intersegment transactions, interest income and expense, and other unallocated charges.

During the first quarter of 2024, Company Management determined that certain parts of the business would be better aligned with Management oversight in different product lines.

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 the three months ended September 30, 2024 is as follows:

Corporate activities include general corporate expenses, elimination of certain intersegment transactions, interest income and expense and other unallocated charges.

Segment assets for the Freight and Transit Segment include assets directly utilized for segment operations, as well as the related goodwill and intangible assets.

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.

Cost of sales for both segments represents costs directly related to manufacturing products and providing services.

Primary costs include raw materials, direct labor, overhead, shipping and handling, warehousing, and the depreciation of manufacturing, warehousing and distribution facilities.

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.

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.

During the first quarter of 2025, Company Management determined that certain businesses within the Services product line would be better aligned with Management oversight in the Components product line.

As such, Sales by product line for 2024 and 2023 have been recast to conform to the current period presentation.

These changes were within the Freight Segment and had no impact on Total Freight Segment Sales, Gross profit, or Income from operations.

Segment financial information for the three months ended March 31, 2025 is as follows:

In millions Freight

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Sales to external customers $ 1,901 $ 709 $ — $ 2,610

Intersegment sales/(elimination) 12 23 ( 35 ) —

Total sales $ 1,942 $ 756 $ ( 35 ) $ 2,663

Cost of sales ( 1,216 ) ( 494 ) — ( 1,710 )

Gross profit $ 685 $ 215 $ — $ 900

Gross margin 36.0 % 30.3 %

Selling, general & administrative expenses $ ( 164 ) $ ( 107 ) $ ( 36 ) $ ( 307 )

Engineering expenses ( 36 ) ( 10 ) — ( 46 )

Amortization expense ( 65 ) ( 8 ) — ( 73 )

Income (loss) from operations 420 90 ( 36 ) 474

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Income (loss) before income taxes $ 420 $ 90 $ ( 84 ) $ 426

Segment financial information for the three months ended September 30, 2023 is as follows:

In millions Freight

Segment Transit

Segment Corporate

Activities and

Elimination Total

Sales to external customers $ 1,881 $ 669 $ — $ 2,550

Intersegment sales/(elimination) $ 11 $ 9 $ ( 20 ) $ —

Total sales $ 1,899 $ 678 $ ( 27 ) $ 2,550

Income (loss) from operations $ 325 $ 70 $ ( 25 ) $ 370

Interest expense and other, net — — ( 50 ) ( 50 )

Income (loss) before income taxes $ 325 $ 70 $ ( 75 ) $ 320

Segment financial information for the nine months ended September 30, 2024 is as follows:

Depreciation and amortization $ 97 $ 20 $ 3 $ 120

Capital expenditures $ 31 $ 10 $ 3 $ 44

Segment assets $ 13,224 $ 4,145 $ 1,727 $ 19,096

Segment financial information for the three months ended March 31, 2024 is as follows:

In millions Freight

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Sales to external customers $ 1,824 $ 673 $ — $ 2,497

Intersegment sales/(elimination) 37 44 ( 81 ) —

Total sales $ 5,711 $ 2,174 $ ( 81 ) $ 7,804

Cost of sales ( 1,199 ) ( 483 ) — ( 1,682 )

Gross profit $ 625 $ 190 $ — $ 815

Gross margin 34.3 % 28.2 %

Selling, general & administrative expenses $ ( 150 ) $ ( 101 ) $ ( 30 ) $ ( 281 )

Engineering expenses ( 39 ) ( 9 ) — ( 48 )

Amortization expense ( 68 ) ( 6 ) — ( 74 )

Income (loss) from operations 368 74 ( 30 ) 412

1 unchanged sentence

Income (loss) before income taxes $ 368 $ 74 $ ( 79 ) $ 363

Segment financial information for the nine months ended September 30, 2023 is as follows:

In millions Freight

Segment Transit

Segment Corporate

Activities and

Elimination Total

Sales to external customers $ 5,134 $ 2,017 $ — $ 7,151

Intersegment sales/(elimination) $ 13 $ 11 $ ( 24 ) $ —

Total sales $ 5,181 $ 2,048 $ ( 78 ) $ 7,151

Income (loss) from operations $ 820 $ 208 $ ( 70 ) $ 958

Interest expense and other, net — — ( 146 ) ( 146 )

Income (loss) before income taxes $ 820 $ 208 $ ( 216 ) $ 812

Depreciation and amortization $ 103 $ 16 $ 4 $ 123

Capital expenditures $ 17 $ 13 $ 1 $ 31

Segment assets $ 13,316 $ 3,938 $ 1,493 $ 18,747

Sales to external customers by product line are as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

In millions 2025 2024

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Total Transit Segment $ 709 $ 673

OTHER (EXPENSE) INCOME, NET

The components of Other (expense) income, net are as follows:

OTHER EXPENSE, NET

The components of Other expense, net are as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

In millions 2025 2024

2 unchanged sentences

Expected return on pension assets/amortization 2 2

Other miscellaneous expense, net ( 1 ) ( 1 ) — ( 2 )

Total Other (expense) income, net $ ( 3 ) $ 10 $ ( 1 ) $ 17

Other miscellaneous income (expense), net 1 ( 1 )

Total Other expense, net $ ( 2 ) $ ( 2 )

RESTRUCTURING

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.

Through this initiative, Management will also evaluate additional capital investments to further simplify and streamline the business.

Wabtec is focused on driving operational efficiency and improving profitability while reducing manufacturing complexity.

As a result, there are key strategic initiatives aimed at achieving these focus areas.

Integration 3.0

Integration 3.0 is a multi-year strategic initiative to further consolidate our footprint, reduce complexity and streamline manufacturing, engineering, administrative, and commercial activities.

The Company anticipates that it will incur one-time restructuring charges related to Integration 3.0 of approximately $ 80 million to $ 100 million.

Amounts recorded to date are approximately $ 16 million, including amounts recorded during the fourth quarter of 2024, and are primarily for employee-related costs.

Cash payments made during the three months ended March 31, 2025 were no t material.

A summary of restructuring charges related to the Integration 3.0 initiative is as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

In millions 2025

1 unchanged sentence

Cost of goods sold $ 1

Selling, general and administrative expenses — 1 — 3

Other income, net — — ( 4 ) —

Total Freight Segment $ 2 $ 3 $ 2 $ 7

Transit Segment:

1 unchanged sentence

Selling, general and administrative expenses 4

Amortization expense — — 2 2

Total Transit Segment $ 6

Total Integration 3.0 restructuring charges $ 7

Total one-time restructuring charges related to Integration 2.0 to date are approximately $ 140 million, which includes amounts recorded beginning in the fourth quarter 2021, and are primarily for employee-related costs and asset write downs associated with site consolidations in Europe.

Cash payments made during the three and nine months ended September 30, 2024 were approximately $ 5 million and $ 35 million, respectively.

Cash payments made during the three and nine months ended September 30, 2023 were not material.

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.

Wabtec expects to incur approximately $ 85 million in net exit charges related to Portfolio Optimization, which will be predominately non-cash asset write downs.

Wabtec recorded charges of approximately $ 8 million and $ 13 million during the three and nine months ended September 30, 2024, respectively, primarily for asset write downs related to Portfolio Optimization.

No charges related to Portfolio Optimization were recorded during the three and nine months ended September 30, 2023.

Portfolio Optimization

Wabtec is focused on exiting various low margin product offerings through Portfolio Optimization to improve profitability while reducing manufacturing complexity.

Wabtec recorded charges of approximately $ 3 million in each of the three months ended March 31, 2025 and 2024, primarily for asset write downs related to Portfolio Optimization.

Total one-time restructuring charges related to Portfolio Optimization to date are approximately $ 59 million.

Integration 2.0

Integration 2.0 is a multi-year strategic initiative 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.

The Company anticipates that it will incur one-time restructuring charges related to Integration 2.0 of up to approximately $ 170 million, of which approximately $ 145 million has been incurred to date.

There were no material charges or cash payments during the three months ended March 31, 2025.

During the three months ended March 31, 2024, charges and cash payments of approximately $ 8 million and approximately $ 22 million, respectively, were recognized.

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-Q

Item 1. Financial Statements