SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2013

SEGMENT INFORMATION

14. SEGMENT INFORMATION

Wabtec has two reportable segments—the Freight Segment and the Transit Segment. The key factors used to identify these reportable segments are the organization and alignment of the Company’s internal operations, the nature of the products and services, and customer type. The business segments are:

Freight Segment primarily manufactures and services components for new and existing freight cars and locomotives, builds new switcher locomotives, rebuilds freight locomotives, supplies railway electronics, positive train control equipment, signal design and engineering services, friction products, and provides related heat exchange and cooling systems. Customers include large, publicly traded railroads, leasing companies, manufacturers of original equipment such as locomotives and freight cars, and utilities.

Transit Segment primarily manufactures and services components for new and existing passenger transit vehicles, typically subway cars and buses, builds new commuter locomotives, friction products, and refurbishes 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. Corporate activities include general corporate expenses, elimination of intersegment transactions, interest income and expense and other unallocated charges. Since certain administrative and other operating expenses and other items have not been allocated to business segments, the results in the following tables are not necessarily a measure computed in accordance with generally accepted accounting principles and may not be comparable to other companies.

Segment financial information for the three months ended March 31, 2013 is as follows:

In thousands	Freight Segment	Transit Segment	Corporate Activitiesand Elimination	Total
Sales to external customers	$305,865	$309,645	$—	$615,510
Intersegment sales/(elimination)	7,060	1,360	(8,420)	—
Total sales	$312,925	$311,005	$(8,420)	$615,510
Income (loss) from operations	$75,426	$43,582	$(15,341)	$103,667
Interest expense and other, net	—	—	(4,195)	(4,195)
Income (loss) from operations before income taxes	$75,426	$43,582	$(19,536)	$99,472

Segment financial information for the three months ended March 31, 2012 is as follows:

In thousands	Freight Segment	Transit Segment	Corporate Activitiesand Elimination	Total
Sales to external customers	$397,288	$186,021	$—	$583,309
Intersegment sales/(elimination)	5,702	2,391	(8,093)	—
Total sales	$402,990	$188,412	$(8,093)	$583,309
Income (loss) from operations	$75,615	$22,615	$(4,120)	$94,110
Interest expense and other, net	—	—	(3,838)	(3,838)
Income (loss) from operations before income taxes	$75,615	$22,615	$(7,958)	$90,272

Sales by product are as follows:

	ThreeMonthsEnded March 31,
In thousands	2013	2012
Specialty Products& Electronics	$231,388	$278,841
Brake Products	141,322	131,250
Remanufacturing, Overhaul& Build	163,594	108,722
Other Transit Products	58,863	45,898
Other	20,343	18,598
Total sales	$615,510	$583,309