GUARANTOR SUBSIDIARIES FINANCIAL INFORMATION

The obligations under the Company's 2016 Notes, 2013 Notes, and Revolving Credit Facility and Term Loan are full and unconditionally guaranteed by all U.S. subsidiaries as guarantors. Each guarantor is 100% owned by the parent company. In accordance with positions established by the Securities and Exchange Commission, the following shows separate financial information with respect to the parent, the guarantor subsidiaries and the non-guarantor subsidiaries. The principal elimination entries eliminate investment in subsidiaries and certain intercompany balances and transactions.

Balance Sheet for June 30, 2017:



In thousands	Parent		Guarantors			Non-Guarantors			Elimination			Consolidated
Cash and cash equivalents	$	2,190	$	8,985		$	317,347		$	—		$	328,522
Receivables, net	71,773		209,518			847,700			—			1,128,991
Inventories	128,733		143,932			473,571			—			746,236
Current assets - other	36,231		3,925			100,904			—			141,060
Total current assets	238,927		366,360			1,739,522			—			2,344,809
Property, plant and equipment, net	50,700		134,047			363,095			—			547,842
Goodwill	25,275		565,154			1,753,179			—			2,343,608
Investment in subsidiaries	6,132,898		2,488,919			—			(8,621,817		)	—
Other intangibles, net	31,236		251,852			846,277			—			1,129,365
Other long term assets	31,634		6,273			35,209			—			73,116
Total assets	$	6,510,670	$	3,812,605		$	4,737,282		$	(8,621,817	)	$	6,438,740
Current liabilities	$	152,688	198,646			$	1,130,765		—			$	1,482,099
Inter-company	1,982,986		(1,918,583		)	(64,403		)	—			—
Long-term debt	1,765,868		36			168,700			—			1,934,604
Long-term liabilities - other	42,272		102,705			292,689			—			437,666
Total liabilities	3,943,814		(1,617,196		)	1,527,751			—			3,854,369
Shareholders' equity	2,566,856		5,431,033			3,190,785			(8,621,817		)	2,566,857
Non-controlling interest	—		(1,232		)	18,746			—			17,514
Total shareholders' equity	$	2,566,856	$	5,429,801		$	3,209,531		$	(8,621,817	)	$	2,584,371
Total Liabilities and Shareholders' Equity	$	6,510,670	$	3,812,605		$	4,737,282		$	(8,621,817	)	$	6,438,740

Balance Sheet for December 31, 2016:



In thousands	Parent		Guarantors			Non-Guarantors		Elimination			Consolidated
Cash and cash equivalents	$	2,522	$	9,496		$	386,466	$	—		$	398,484
Receivables, net	79,041		202,779			660,688		—			942,508
Inventories	120,042		128,076			410,392		—			658,510
Current assets - other	52,576		(17,844		)	833,397		—			868,129
Total current assets	254,181		322,507			2,290,943		—			2,867,631
Property, plant and equipment, net	49,031		126,661			342,684		—			518,376
Goodwill	25,275		477,472			1,576,018		—			2,078,765
Investment in subsidiaries	5,388,613		1,325,150			—		(6,713,763		)	—
Other intangibles, net	31,897		204,512			817,451		—			1,053,860
Other long term assets	9,592		(1,914		)	54,708		—			62,386
Total assets	$	5,758,589	$	2,454,388		$	5,081,804	$	(6,713,763	)	$	6,581,018
Current liabilities	$	194,983	196,956			$	1,054,700	—			$	1,446,639
Inter-company	1,562,399		(1,848,777		)	286,378		—			—
Long-term debt	1,761,933		58			976		—			1,762,967
Long-term liabilities - other	33,298		74,977			286,312		—			394,587
Total liabilities	3,552,613		(1,576,786		)	1,628,366		—			3,604,193
Shareholders' equity	2,205,976		4,032,250			2,681,514		(6,713,763		)	2,205,977
Non-controlling interest	—		(1,076		)	771,924		—			770,848
Total shareholders' equity	$	2,205,976	$	4,031,174		$	3,453,438	$	(6,713,763	)	$	2,976,825
Total Liabilities and Shareholders' Equity	$	5,758,589	$	2,454,388		$	5,081,804	$	(6,713,763	)	$	6,581,018

Income Statement for the Three Months Ended June 30, 2017:



In thousands	Parent			Guarantors			Non-Guarantors			Elimination			Consolidated
Net Sales	$	137,708		$	250,065		$	576,967		$	(32,487	)	$	932,253
Cost of sales	(100,311		)	(159,789		)	(421,998		)	23,808			(658,290		)
Gross profit (loss)	37,397			90,276			154,969			(8,679		)	273,963
Total operating expenses	(32,954		)	(30,072		)	(97,236		)	—			(160,262		)
Income (loss) from operations	4,443			60,204			57,733			(8,679		)	113,701
Interest (expense) income, net	(18,732		)	2,251			1,061			—			(15,420		)
Other income (expense), net	(10,228		)	(617		)	9,293			—			(1,552		)
Equity earnings (loss)	96,944			38,206			—			(135,150		)	—
Pretax income (loss)	72,427			100,044			68,087			(143,829		)	96,729
Income tax expense	(402		)	124			(24,291		)	—			(24,569		)
Net income (loss)	72,025			100,168			43,796			(143,829		)	72,160
Less: Net income attributable to noncontrolling interest	—			157			(292		)	—			(135		)
Net income (loss) attributable to Wabtec shareholders	$	72,025		$	100,325		$	43,504		$	(143,829	)	$	72,025

Comprehensive income (loss) attributable to Wabtec shareholders	$	72,921		$	100,326		$	189,707		$	(143,829	)	$	219,125

Income Statement for the Three Months Ended June 30, 2016:



In thousands	Parent			Guarantors			Non-Guarantors			Elimination			Consolidated
Net Sales	$	161,632		$	349,763		$	313,239		$	(101,033	)	$	723,601
Cost of sales	(118,079		)	(221,854		)	(210,033		)	63,754			(486,212		)
Gross profit (loss)	43,553			127,909			103,206			(37,279		)	237,389
Total operating expenses	(29,063		)	(30,596		)	(44,446		)	—			(104,105		)
(Loss) income from operations	14,490			97,313			58,760			(37,279		)	133,284
Interest (expense) income, net	(7,085		)	1,596			520			—			(4,969		)
Other income (expense), net	223			611			(2,063		)	—			(1,229		)
Equity earnings (loss)	108,929			46,120			—			(155,049		)	—
Pretax income (loss)	116,557			145,640			57,217			(192,328		)	127,086
Income tax expense	(26,074		)	(947		)	(9,580		)	—			(36,601		)
Net income (loss)	90,483			144,693			47,637			(192,328		)	90,485
Less: Net income attributable to noncontrolling interest	—			—			—			—			—
Net income attributable to Wabtec shareholders	$	90,483		$	144,693		$	47,637		$	(192,328	)	$	90,485

Comprehensive income (loss) attributable to Wabtec shareholders	$	90,182		$	144,691		$	6,691		$	(192,328	)	$	49,236

Income Statement for the Six Months Ended June 30, 2017:



In thousands	Parent			Guarantors			Non-Guarantors			Elimination			Consolidated
Net Sales	$	282,251		$	508,777		$	1,121,356		$	(64,097	)	$	1,848,287
Cost of sales	(199,262		)	(327,395		)	(825,964		)	48,004			(1,304,617		)
Gross profit (loss)	82,989			181,382			295,392			(16,093		)	543,670
Total operating expenses	(57,247		)	(59,944		)	(197,920		)	—			(315,111		)
Income (loss) from operations	25,742			121,438			97,472			(16,093		)	228,559
Interest (expense) income, net	(33,343		)	4,411			(4,200		)	—			(33,132		)
Other income (expense), net	2,854			(1,877		)	(210		)	—			767
Equity earnings (loss)	165,229			50,148			—			(215,377		)	—
Pretax income (loss)	160,482			174,120			93,062			(231,470		)	196,194
Income tax expense	(14,567		)	(17		)	(37,446		)	—			(52,030		)
Net income (loss)	145,915			174,103			55,616			(231,470		)	144,164
Less: Net income attributable to noncontrolling interest	—			157			1,593			—			1,750
Net income (loss) attributable to Wabtec shareholders	$	145,915		$	174,260		$	57,209		$	(231,470	)	$	145,914

Comprehensive income (loss) attributable to Wabtec shareholders	$	147,668		$	174,261		$	250,508		$	(231,470	)	$	340,967

Income Statement for the Six Months Ended June 30, 2016:



In thousands	Parent			Guarantors			Non-Guarantors			Elimination			Consolidated
Net Sales	$	338,619		$	606,676		$	629,223		$	(78,886	)	$	1,495,632
Cost of sales	(247,160		)	(374,815		)	(430,159		)	49,071			(1,003,063		)
Gross profit (loss)	91,459			231,861			199,064			(29,815		)	492,569
Total operating expenses	(66,938		)	(62,948		)	(87,218		)	—			(217,104		)
(Loss) income from operations	24,521			168,913			111,846			(29,815		)	275,465
Interest (expense) income, net	(13,754		)	3,321			593			—			(9,840		)
Other income (expense), net	11,040			(3,870		)	(8,245		)	—			(1,075		)
Equity earnings (loss)	221,950			84,819			—			(306,769		)	—
Pretax income (loss)	243,757			253,183			104,194			(336,584		)	264,550
Income tax expense	(59,108		)	(1,947		)	(18,847		)	—			(79,902		)
Net income (loss)	184,649			251,236			85,347			(336,584		)	184,648
Less: Net income attributable to noncontrolling interest	—			—			—			—			—
Net income attributable to Wabtec shareholders	$	184,649		$	251,236		$	85,347		$	(336,584	)	$	184,648

Comprehensive income (loss) attributable to Wabtec shareholders	$	183,369		$	251,236		$	73,000		$	(336,584	)	$	171,021

Condensed Statement of Cash Flows for the Six Months Ended June 30, 2017:



In thousands	Parent			Guarantors			Non-Guarantors			Elimination			Consolidated
Net cash (used in) provided by operating activities	$	(3,939	)	$	63,758		$	(57,429	)	$	(16,093	)	$	(13,703	)
Net cash used in investing activities	(8,661		)	(105,498		)	(14,422		)	—			(128,581		)
Net cash provided by (used in) financing activities	12,268			41,229			(28,000		)	16,093			41,590
Effect of changes in currency exchange rates	—			—			30,732			—			30,732
Increase (decrease) in cash	(332		)	(511		)	(69,119		)	—			(69,962		)
Cash, beginning of period	2,522			9,496			386,466			—			398,484
Cash, end of period	$	2,190		$	8,985		$	317,347		$	—		$	328,522

Condensed Statement of Cash Flows for the Six Months Ended June 30, 2016:



In thousands	Parent			Guarantors			Non-Guarantors			Elimination			Consolidated
Net cash provided by (used in) operating activities	$	(29,564	)	$	139,189		$	90,343		$	14,008		$	213,976
Net cash used in investing activities	(5,445		)	(19,799		)	(14,958		)	—			(40,202		)
Net cash (used in) provided by financing activities	41,157			(118,345		)	(10,961		)	(14,008		)	(102,157		)
Effect of changes in currency exchange rates	—			—			5,127			—			5,127
Increase (decrease) in cash	6,148			1,045			69,551			—			76,744
Cash, beginning of period	—			13,157			213,034			—			226,191
Cash, end of period	$	6,148		$	14,202		$	282,585		$	—		$	302,935