Segment Information

9 Months Ended

Sep. 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 September 30, 2017 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	340,185	$	617,746	$	—		$	957,931
Intersegment sales/(elimination)	8,376		4,494		(12,870		)	—
Total sales	$	348,561	$	622,240	$	(12,870	)	$	957,931
Income (loss) from operations	$	61,596	$	47,531	$	(7,116	)	$	102,011
Interest expense and other, net	—		—		(20,826		)	(20,826		)
Income (loss) from operations before income taxes	$	61,596	$	47,531	$	(27,942	)	$	81,185

Segment financial information for the three months ended September 30, 2016 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	361,998	$	313,576	$	—		$	675,574
Intersegment sales/(elimination)	10,341		1,823		(12,164		)	—
Total sales	$	372,339	$	315,399	$	(12,164	)	$	675,574
Income (loss) from operations	$	77,999	$	51,164	$	(9,067	)	$	120,096
Interest expense and other, net	—		—		(4,869		)	(4,869		)
Income (loss) from operations before income taxes	$	77,999	$	51,164	$	(13,936	)	$	115,227

Segment financial information for the nine months ended September 30, 2017 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	1,032,959	$	1,773,259	$	—		$	2,806,218
Intersegment sales/(elimination)	27,602		16,253		(43,855		)	—
Total sales	$	1,060,561	$	1,789,512	$	(43,855	)	$	2,806,218
Income (loss) from operations	$	196,328	$	155,901	$	(21,659	)	$	330,570
Interest expense and other, net	—		—		(53,191		)	(53,191		)
Income (loss) from operations before income taxes	$	196,328	$	155,901	$	(74,850	)	$	277,379

Segment financial information for the nine months ended September 30, 2016 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	1,201,734	$	969,472	$	—		$	2,171,206
Intersegment sales/(elimination)	29,765		7,606		(37,371		)	—
Total sales	$	1,231,499	$	977,078	$	(37,371	)	$	2,171,206
Income (loss) from operations	$	276,990	$	148,321	$	(29,750	)	$	395,561
Interest expense and other, net	—		—		(15,784		)	(15,784		)
Income (loss) from operations before income taxes	$	276,990	$	148,321	$	(45,534	)	$	379,777

Sales by product line are as follows:

	Three Months Ended September 30,
In thousands	2017		2016
Specialty Products & Electronics	$	335,143	$	334,349
Transit Products	276,913		44,996
Brake Products	177,165		134,900
Remanufacturing, Overhaul & Build	132,018		129,264
Other	36,692		32,065
Total sales	$	957,931	$	675,574

	Nine Months Ended September 30,
In thousands	2017		2016
Specialty Products & Electronics	$	975,006	$	1,051,806
Transit Products	789,096		143,434
Brake Products	550,181		428,785
Remanufacturing, Overhaul & Build	387,634		444,278
Other	104,301		102,903
Total sales	$	2,806,218	$	2,171,206