Segment Information

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segment Information

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, 2016 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	442,669	$	329,362	$	—		$	772,031
Intersegment sales/(elimination)	5,808		1,677		(7,485		)	—
Total sales	$	448,477	$	331,039	$	(7,485	)	$	772,031
Income (loss) from operations	$	106,675	$	45,010	$	(9,504	)	$	142,181
Interest expense and other, net	—		—		(4,717		)	(4,717		)
Income (loss) from operations before income taxes	$	106,675	$	45,010	$	(14,221	)	$	137,464

Segment financial information for the three months ended March 31, 2015 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	511,887	$	306,707	$	—		$	818,594
Intersegment sales/(elimination)	8,928		2,584		(11,512		)	—
Total sales	$	520,815	$	309,291	$	(11,512	)	$	818,594
Income (loss) from operations	$	111,569	$	41,423	$	(4,572	)	$	148,420
Interest expense and other, net	—		—		(7,172		)	(7,172		)
Income (loss) from operations before income taxes	$	111,569	$	41,423	$	(11,744	)	$	141,248

Sales by product are as follows:

	Three Months Ended March 31,
In thousands	2016		2015
Specialty Products & Electronics	$	378,269	$	425,537
Brake Products	158,033		136,690
Remanufacturing, Overhaul & Build	151,906		167,397
Other Transit Products	48,795		46,803
Other	35,028		42,167
Total sales	$	772,031	$	818,594