GUARANTOR SUBSIDIARIES FINANCIAL INFORMATION

The obligations under the Company's 2016 Notes, 2013 Notes and Revolving Credit Facility and Term Loan are fully 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 December 31, 2017:



In thousands	Parent		Guarantors			Non-Guarantors			Elimination			Consolidated
Cash and cash equivalents	$	933	$	4,802		$	227,666		$	—		$	233,401
Receivables, net	77,046		237,360			852,381			—			1,166,787
Inventories	120,937		137,972			483,725			—			742,634
Current assets - other	1,142		4,507			116,642			—			122,291
Total current assets	200,058		384,641			1,680,414			—			2,265,113
Property, plant and equipment	52,532		136,382			385,058			—			573,972
Goodwill	25,274		546,527			1,888,302			—			2,460,103
Investment in subsidiaries	6,517,205		2,570,391			—			(9,087,596		)	—
Other intangibles, net	30,575		251,347			922,510			—			1,204,432
Other long term assets	17,414		295			58,651			—			76,360
Total assets	$	6,843,058	$	3,889,583		$	4,934,935		$	(9,087,596	)	$	6,579,980
Current liabilities	$	196,827	217,176			$	1,159,327		—			$	1,573,330
Inter-company	2,121,546		(2,026,634		)	(94,912		)	—			—
Long-term debt	1,661,771		14			161,518			—			1,823,303
Long-term liabilities - other	54,046		67,824			232,945			—			354,815
Total liabilities	4,034,190		(1,741,620		)	1,458,878			—			3,751,448
Shareholders' equity	2,808,868		5,632,665			3,454,931			(9,087,596		)	2,808,868
Non-controlling interest	—		(1,462		)	21,126			—			19,664
Total shareholders' equity	$	2,808,868	$	5,631,203		$	3,476,057		$	(9,087,596	)	$	2,828,532
Total Liabilities and Shareholders' Equity	$	6,843,058	$	3,889,583		$	4,934,935		$	(9,087,596	)	$	6,579,980

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	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 Year Ended December 31, 2017:



In thousands	Parent			Guarantors			Non-Guarantors			Elimination			Consolidated
Net Sales	$	577,397		$	1,067,954		$	2,378,817		$	(142,412	)	$	3,881,756
Cost of sales	(440,911		)	(675,546		)	(1,808,370		)	108,384			(2,816,443		)
Gross profit (loss)	136,486			392,408			570,447			(34,028		)	1,065,313
Total operating expenses	(113,872		)	(123,423		)	(406,285		)	—			(643,580		)
Income (loss) from operations	22,614			268,985			164,162			(34,028		)	421,733
Interest (expense) income, net	(72,233		)	8,843			(5,314		)	—			(68,704		)
Other income (expense), net	5,103			289			(6,358		)	—			(966		)
Equity earnings (loss)	416,068			131,620			—			(547,688		)	—
Pretax income (loss)	371,552			409,737			152,490			(581,716		)	352,063
Income tax expense	(109,294		)	32,393			(12,872		)	—			(89,773		)
Net income (loss)	262,258			442,130			139,618			(581,716		)	262,290
Less: Net income attributable to noncontrolling interest	—			386			(415		)	—			(29		)
Net income (loss) attributable to Wabtec shareholders	$	262,258		$	442,516		$	139,203		$	(581,716	)	$	262,261

Comprehensive income (loss) attributable to Wabtec shareholders	$	263,907		$	442,516		$	472,167		$	(581,716	)	$	596,874

Income Statement for the Year Ended December 31, 2016:



In thousands	Parent			Guarantors			Non-Guarantors			Elimination			Consolidated
Net Sales	$	641,809		$	1,112,001		$	1,322,937		$	(145,559	)	$	2,931,188
Cost of sales	(473,700		)	(708,062		)	(928,608		)	103,421			(2,006,949		)
Gross profit (loss)	168,109			403,939			394,329			(42,138		)	924,239
Total operating expenses	(141,940		)	(122,617		)	(201,321		)	—			(465,878		)
(Loss) income from operations	26,169			281,322			193,008			(42,138		)	458,361
Interest (expense) income, net	(34,975		)	7,012			(14,598		)	—			(42,561		)
Other income (expense), net	20,509			(2,284		)	(21,188		)	—			(2,963		)
Equity earnings (loss)	322,650			131,234			—			(453,884		)	—
Pretax income (loss)	334,353			417,284			157,222			(496,022		)	412,837
Income tax expense	(29,466		)	(57,667		)	(12,300		)	—			(99,433		)
Net income (loss)	304,887			359,617			144,922			(496,022		)	313,404
Less: Net income attributable to noncontrolling interest	—			—			(8,517		)	—			(8,517		)
Net income attributable to Wabtec shareholders	$	304,887		$	359,617		$	136,405		$	(496,022	)	$	304,887

Comprehensive income (loss) attributable to Wabtec shareholders	$	305,180		$	359,617		$	33,226		$	(496,022	)	$	202,001

Income Statement for the Year Ended December 31, 2015:



In thousands	Parent			Guarantors			Non-Guarantors			Elimination			Consolidated
Net Sales	$	743,262		$	1,436,935		$	1,300,577		$	(172,776	)	$	3,307,998
Cost of sales	(531,269		)	(843,104		)	(976,798		)	90,989			(2,260,182		)
Gross (loss) profit	211,993			593,831			323,779			(81,787		)	1,047,816
Total operating expenses	(142,953		)	(131,251		)	(166,045		)	—			(440,249		)
(Loss) income from operations	69,040			462,580			157,734			(81,787		)	607,567
Interest (expense) income, net	(23,129		)	5,914			327			—			(16,888		)
Other income (expense), net	23,193			(9,140		)	(19,364		)	—			(5,311		)
Equity earnings (loss)	506,903			112,286			—			(619,189		)	—
Pretax income (loss)	576,007			571,640			138,697			(700,976		)	585,368
Income tax expense	(177,379		)	8,989			(18,350		)	—			(186,740		)
Net income (loss)	398,628			580,629			120,347			(700,976		)	398,628
Less: Net income attributable to noncontrolling interest	—			—			—			—			—
Net income attributable to Wabtec shareholders	$	398,628		$	580,629		$	120,347		$	(700,976	)	$	398,628

Comprehensive income (loss) attributable to Wabtec shareholders	$	409,734		$	580,629		$	(7,992	)	$	(700,976	)	$	281,395

Condensed Statement of Cash Flows for the year ended December 31, 2017:



In thousands	Parent			Guarantors			Non-Guarantors			Elimination			Consolidated
Net cash (used in) provided by operating activities	$	(49,231	)	$	249,204		$	22,866		$	(34,028	)	$	188,811
Net cash used in investing activities	(11,156		)	(120,661		)	(143,912		)	—			(275,729		)
Net cash provided by (used in) financing activities	58,798			(133,237		)	(57,020		)	34,028			(97,431		)
Effect of changes in currency exchange rates	—			—			19,266			—			19,266
Increase (decrease) in cash	(1,589		)	(4,694		)	(158,800		)	—			(165,083		)
Cash, beginning of year	2,522			9,496			386,466			—			398,484
Cash, end of year	$	933		$	4,802		$	227,666		$	—		$	233,401

Condensed Statement of Cash Flows for the year ended December 31, 2016:



In thousands	Parent			Guarantors			Non-Guarantors			Elimination			Consolidated
Net cash provided by (used in) operating activities	$	(44,611	)	$	332,822		$	204,457		$	(42,138	)	$	450,530
Net cash used in investing activities	(829,783		)	(14,725		)	69,443			—			(775,065		)
Net cash (used in) provided by financing activities	876,916			(321,758		)	(74,325		)	42,138			522,971
Effect of changes in currency exchange rates	—			—			(26,143		)	—			(26,143		)
(Decrease) increase in cash	2,522			(3,661		)	173,432			—			172,293
Cash, beginning of year	—			13,157			213,034			—			226,191
Cash, end of year	$	2,522		$	9,496		$	386,466		$	—		$	398,484

Condensed Statement of Cash Flows for the year ended December 31, 2015:



In thousands	Parent			Guarantors			Non-Guarantors			Elimination			Consolidated
Net cash provided by (used in) operating activities	$	(90,374	)	$	487,516		$	135,489		$	(81,787	)	$	450,844
Net cash used in investing activities	(7,862		)	(109,326		)	(262,948		)	—			(380,136		)
Net cash provided by (used in) financing activities	(48,570		)	(378,330		)	93,615			81,787			(251,498		)
Effect of changes in currency exchange rates	—			—			(18,868		)	—			(18,868		)
Increase in cash	(146,806		)	(140		)	(52,712		)	—			(199,658		)
Cash, beginning of year	146,806			13,297			265,746			—			425,849
Cash, end of year	$	—		$	13,157		$	213,034		$	—		$	226,191