SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2022

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.

Freight Segment primarily builds new locomotives, manufactures and services components for new and existing freight cars and 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. We refer to sales of both goods, such as spare parts and equipment upgrades, and related services, such as monitoring, maintenance and repairs, as sales in our Services product line.

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. It also refurbishes subway cars and provides heating, ventilation, and air conditioning equipment and doors for buses and 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. 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.

Segment financial information for the three months ended March 31, 2022 is as follows:

In millions	Freight Segment		Transit Segment		Corporate Activities and Elimination		Total
Sales to external customers	$	1,322	$	605	$	—	$	1,927
Intersegment sales/(elimination)	13		8		(21)		—
Total sales	$	1,335	$	613	$	(21)	$	1,927
Income (loss) from operations	$	189	$	65	$	(15)	$	239
Interest expense and other, net	—		—		(39)		(39)
Income (loss) before income taxes	$	189	$	65	$	(54)	$	200

Segment financial information for the three months ended March 31, 2021 is as follows:

In millions	Freight Segment		Transit Segment		Corporate Activities and Elimination		Total
Sales to external customers	$	1,183	$	647	$	—	$	1,830
Intersegment sales/(elimination)	12		10		(22)		—
Total sales	$	1,195	$	657	$	(22)	$	1,830
Income (loss) from operations	$	142	$	70	$	(20)	$	192
Interest expense and other, net	—		—		(34)		(34)
Income (loss) before income taxes	$	142	$	70	$	(54)	$	158

Sales to external customers by product line are as follows:

	Three Months Ended March 31,
In millions	2022		2021
Freight Segment
Equipment	$	274	$	262
Components	229		203
Digital Electronics	153		156
Services	666		562
Total Freight Segment	$	1,322	$	1,183
Transit Segment
Original Equipment Manufacturer	$	292	$	287
Aftermarket	313		360
Total Transit Segment	$	605	$	647