Segment Information

6 Months Ended

Jun. 30, 2017

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, 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 regional trains, high speed trains, subway cars, light-rail vehicles and buses, builds new commuter locomotives, refurbishes subway cars, provides heating, ventilation, and air conditioning equipment, and doors for buses and subways. 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. 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. 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, 2017 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	344,828	$	587,425	$	—		$	932,253
Intersegment sales/(elimination)	10,139		6,073		(16,212		)	—
Total sales	$	354,967	$	593,498	$	(16,212	)	$	932,253
Income (loss) from operations	$	63,337	$	59,222	$	(8,858	)	$	113,701
Interest expense and other, net	—		—		(16,972		)	(16,972		)
Income (loss) from operations before income taxes	$	63,337	$	59,222	$	(25,830	)	$	96,729

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 six months ended June 30, 2017 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	692,774	$	1,155,513	$	—		$	1,848,287
Intersegment sales/(elimination)	19,226		11,759		(30,985		)	—
Total sales	$	712,000	$	1,167,272	$	(30,985	)	$	1,848,287
Income (loss) from operations	$	134,732	$	108,370	$	(14,543	)	$	228,559
Interest expense and other, net	—		—		(32,365		)	(32,365		)
Income (loss) from operations before income taxes	$	134,732	$	108,370	$	(46,908	)	$	196,194

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

Sales by product line are as follows:

	Three Months Ended June 30,
In thousands	2017		2016
Specialty Products & Electronics	$	324,798	$	339,188
Transit Products	253,764		49,643
Brake Products	192,557		141,979
Remanufacturing, Overhaul & Build	126,556		156,981
Other	34,578		35,810
Total sales	$	932,253	$	723,601

	Six Months Ended June 30,
In thousands	2017		2016
Specialty Products & Electronics	$	639,863	$	717,457
Transit Products	512,182		98,438
Brake Products	373,016		293,885
Remanufacturing, Overhaul & Build	255,616		315,014
Other	67,610		70,838
Total sales	$	1,848,287	$	1,495,632