Segment Information

6 Months Ended

Jun. 30, 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 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 June 30, 2016 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	397,067	$	326,534	$	—		$	723,601
Intersegment sales/(elimination)	13,616		4,106		(17,722		)	—
Total sales	$	410,683	$	330,640	$	(17,722	)	$	723,601
Income (loss) from operations	$	92,317	$	52,146	$	(11,179	)	$	133,284
Interest expense and other, net	—		—		(6,198		)	(6,198		)
Income (loss) from operations before income taxes	$	92,317	$	52,146	$	(17,377	)	$	127,086

Segment financial information for the three months ended June 30, 2015 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	534,674	$	312,354	$	—		$	847,028
Intersegment sales/(elimination)	9,029		2,799		(11,828		)	—
Total sales	$	543,703	$	315,153	$	(11,828	)	$	847,028
Income (loss) from operations	$	125,232	$	37,514	$	(6,886	)	$	155,860
Interest expense and other, net	—		—		(5,928		)	(5,928		)
Income (loss) from operations before income taxes	$	125,232	$	37,514	$	(12,814	)	$	149,932

Segment financial information for the six months ended June 30, 2016 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	839,736	$	655,896	$	—		$	1,495,632
Intersegment sales/(elimination)	19,424		5,783		(25,207		)	—
Total sales	$	859,160	$	661,679	$	(25,207	)	$	1,495,632
Income (loss) from operations	$	198,991	$	97,156	$	(20,682	)	$	275,465
Interest expense and other, net	—		—		(10,915		)	(10,915		)
Income (loss) from operations before income taxes	$	198,991	$	97,156	$	(31,597	)	$	264,550

Segment financial information for the six months ended June 30, 2015 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	1,046,561	$	619,061	$	—		$	1,665,622
Intersegment sales/(elimination)	17,957		5,383		(23,340		)	—
Total sales	$	1,064,518	$	624,444	$	(23,340	)	$	1,665,622
Income (loss) from operations	$	236,801	$	78,937	$	(11,458	)	$	304,280
Interest expense and other, net	—		—		(13,100		)	(13,100		)
Income (loss) from operations before income taxes	$	236,801	$	78,937	$	(24,558	)	$	291,180

Sales by product are as follows:

	Three Months Ended June 30,
In thousands	2016		2015
Specialty Products & Electronics	$	339,188	$	448,292
Remanufacturing, Overhaul & Build	156,981		151,859
Brake Products	141,979		159,034
Other Transit Products	49,643		50,864
Other	35,810		36,979
Total sales	$	723,601	$	847,028

	Six Months Ended June 30,
In thousands	2016		2015
Specialty Products & Electronics	$	717,457	$	873,829
Remanufacturing, Overhaul & Build	315,014		288,549
Brake Products	293,885		326,431
Other Transit Products	98,438		97,667
Other	70,838		79,146
Total sales	$	1,495,632	$	1,665,622