Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

MANAGEMENT’S REPORTS TO WABTEC SHAREHOLDERS

Management’s Report on Financial Statements and Practices

The accompanying consolidated financial statements of Westinghouse Air Brake Technologies Corporation and subsidiaries (the “Company”) were prepared by Management, which is responsible for their integrity and objectivity. The statements were prepared in accordance with U.S. generally accepted accounting principles and include amounts that are based on Management’s best judgments and estimates. The other financial information included in the Form 10-K is consistent with that in the financial statements.

Management also recognizes its responsibility for conducting the Company’s affairs according to the highest standards of personal and corporate conduct. This responsibility is characterized and reflected in key policy statements issued from time to time regarding, among other things, conduct of its business activities within the laws of host countries in which the Company operates and potentially conflicting outside business interests of its employees. The Company maintains a systematic program to assess compliance with these policies.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, Management has conducted an assessment, including testing, using the criteria in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (COSO). The Company’s system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

During 2024, the Company completed the acquisitions of Tehnika Pty. Ltd., Fanox Electronic, S.L., Kompozitum s.r.o., and Bloom Engineering Holdings, Inc. Management is currently integrating the acquisitions into its operations, compliance programs and internal control processes and as such, has excluded the acquisitions from its assessment of internal controls over financial reporting as of December 31, 2024. The acquisitions are all subsidiaries whose combined total assets represent 1.3% and combined net sales represent 0.1% of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.

Based on its assessment, Management has concluded that the Company maintained effective internal control over financial reporting as of December 31, 2024, based on criteria in Internal Control-Integrated Framework issued by the COSO. The effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, has been audited by Ernst & Young LLP, independent registered public accounting firm, as stated in their report which is included herein.

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Westinghouse Air Brake Technologies Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Westinghouse Air Brake Technologies Corporation (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, cash flows and shareholders' equity for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 12, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

			Over Time Revenue Recognition for Long-Term Contracts
Description of the Matter			As described in Note 2 to the consolidated financial statements, the Company has long-term customer arrangements involving the design and production of highly engineered products that require revenue to be recognized over time. The Company uses input-based measures for determining the amount of revenue, cost, and gross margin to recognize over time for these customer arrangements. The input methods used for these arrangements include costs of material and labor. During the year ended December 31, 2024, a material amount of the Company's total revenues were derived from performance obligations that are satisfied over time. Auditing the Company's measurement of revenue recognized over time on long-term contracts is especially challenging because it involves subjective management assumptions regarding the estimated remaining costs of the long-term contracts that could span several years. These assumptions could be impacted by the future cost of materials, labor availability and productivity, complexity of the work to be performed, and the performance of suppliers, customers and subcontractors that may be associated with the contracts and may be affected by future market or economic conditions.
How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's process to recognize revenue over time on long-term contracts, including controls over management’s review of the significant underlying assumptions described above. Our audit procedures also included, among others, evaluating the significant assumptions and the accuracy and completeness of the underlying data used in management's calculations. This included, for example, inspection of the executed contracts and testing management's cost estimates by comparing the inputs to the Company’s historical data or experience for similar contracts, the performance of sensitivity analysis and the performance of retrospective review analysis of prior management cost estimates to actual costs incurred for completed contracts. In addition, for certain contracts, we involved our internal valuation specialists to assist in our evaluation of management’s cost estimates at completion.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2002.

Pittsburgh, Pennsylvania

February 12, 2025

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Westinghouse Air Brake Technologies Corporation

Opinion on Internal Control Over Financial Reporting

We have audited Westinghouse Air Brake Technologies Corporation’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Westinghouse Air Brake Technologies Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

As indicated in the accompanying Management's Report on Internal Control over Financial Reporting, management's assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Tehnika Pty Ltd Australia, Fanox Electronic, S.L., Kompozitum s.r.o, and Bloom Engineering Holdings, Inc., which are included in the 2024 consolidated financial statements of the Company and constituted 1.3% of total assets as of December 31, 2024 and 0.1% of net sales, for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Tehnika Pty Ltd Australia, Fanox Electronic, S.L., Kompozitum s.r.o, and Bloom Engineering Holdings, Inc.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, cash flows and shareholders’ equity for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(2) and our report dated February 12, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Pittsburgh, Pennsylvania

February 12, 2025

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

CONSOLIDATED BALANCE SHEETS

						December 31,
In millions, except par value						2024						2023
Assets
Assets
Cash, cash equivalents and restricted cash						$	715					$	620
Accounts receivable						1,152						1,160
Unbilled accounts receivable						550						524
Inventories, net						2,314						2,284
Other current assets						212						267
Total current assets						4,943						4,855
Property, plant and equipment, net						1,447						1,485
Goodwill						8,710						8,780
Other intangible assets, net						2,934						3,205
Other noncurrent assets						668						663
Total noncurrent assets						13,759						14,133
Total Assets						$	18,702					$	18,988
Liabilities and Shareholders’ Equity
Liabilities
Accounts payable						$	1,300					$	1,250
Customer deposits						693						804
Accrued compensation						425						341
Accrued warranty						248						220
Current portion of long-term debt						500						781
Other accrued liabilities						626						660
Total current liabilities						3,792						4,056
Long-term debt						3,480						3,288
Accrued postretirement and pension benefits						58						62
Deferred income taxes						376						318
Other long-term liabilities						863						740
Total Liabilities						8,569						8,464
Commitments and contingencies (Note 18)
Equity
Common stock, $.01 par value; 500.0 shares authorized and 226.9 shares issued; 171.3 and 177.8 shares outstanding at December 31, 2024 and 2023, respectively						2						2
Additional paid-in capital						8,023						7,977
Treasury stock, at cost, 55.6 and 49.1 shares, at December 31, 2024 and 2023, respectively						(3,273)						(2,171)
Retained earnings						6,185						5,269
Accumulated other comprehensive loss						(846)						(590)
Total Westinghouse Air Brake Technologies Corporation shareholders’ equity						10,091						10,487
Noncontrolling interest						42						37
Total Equity						10,133						10,524
Total Liabilities and Equity						$	18,702					$	18,988

The accompanying notes are an integral part of these statements.

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

						Year Ended December 31,
						2024						2023						2022
In millions, except per share data
Net sales:
Sales of goods						$	8,434					$	7,647					$	6,459
Sales of services						1,953						2,030						1,903
Total net sales						10,387						9,677						8,362
Cost of sales:
Cost of goods						(5,918)						(5,581)						(4,791)
Cost of services						(1,103)						(1,152)						(1,031)
Total cost of sales						(7,021)						(6,733)						(5,822)
Gross profit						3,366						2,944						2,540
Operating expenses:
Selling, general and administrative expenses						(1,248)						(1,139)						(1,029)
Engineering expenses						(206)						(218)						(209)
Amortization expense						(303)						(321)						(291)
Total operating expenses						(1,757)						(1,678)						(1,529)
Income from operations						1,609						1,266						1,011
Other income and expenses:
Interest expense, net						(201)						(218)						(186)
Other income, net						2						44						29
Income before income taxes						1,410						1,092						854
Income tax expense						(343)						(267)						(213)
Net income						1,067						825						641
Less: Net income attributable to noncontrolling interest						(11)						(10)						(8)
Net income attributable to Wabtec shareholders						$	1,056					$	815					$	633
Earnings Per Common Share
Basic
Net income attributable to Wabtec shareholders						$	6.05					$	4.54					$	3.46
Diluted
Net income attributable to Wabtec shareholders						$	6.04					$	4.53					$	3.46
Weighted average shares outstanding
Basic						174.1						178.8						182.2
Diluted						174.8						179.5						182.8

The accompanying notes are an integral part of these statements.

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

						Year Ended December 31,
						2024						2023						2022
In millions
Net income attributable to Wabtec shareholders						$	1,056					$	815					$	633
Foreign currency translation (loss) gain						(277)						55						(200)
Unrealized gain (loss) on derivative contracts						14						22						(5)
Unrealized gain on pension benefit plans and post-retirement benefit plans						14						—						11
Other comprehensive (loss) income before tax						(249)						77						(194)
Income tax expense related to components of other comprehensive (loss) income						(7)						(6)						(1)
Other comprehensive (loss) income, net of tax						(256)						71						(195)
Comprehensive income attributable to Wabtec shareholders						$	800					$	886					$	438

The accompanying notes are an integral part of these statements.

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

						December 31,
						2024						2023						2022
In millions
Operating Activities
Net income						$	1,067					$	825					$	641
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization						503						531						479
Stock-based compensation expense						66						47						41
Below market intangible amortization						(44)						(54)						(53)
Deferred income taxes						51						(58)						36
Net loss on disposal of property, plant and equipment						4						7						3
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Accounts receivable and unbilled accounts receivable						(34)						(195)						(52)
Inventories						(117)						(58)						(368)
Accounts payable						70						(58)						306
Accrued income taxes						21						1						7
Current and noncurrent customer deposits						113						116						142
Other accrued liabilities						124						57						(36)
Other operating activities						10						40						(108)
Net cash provided by operating activities						1,834						1,201						1,038
Investing Activities
Purchase of property, plant and equipment						(207)						(186)						(149)
Acquisitions of businesses, net of cash acquired						(168)						(308)						(89)
Proceeds from dispositions of businesses, net of cash disposed						19						—						—
Proceeds from disposal of property, plant and equipment						13						2						3
Net cash used for investing activities						(343)						(492)						(235)
Financing Activities
Proceeds from debt, net of issuance costs						2,258						5,563						6,087
Payments of debt						(2,322)						(5,521)						(6,117)
Repurchase of stock						(1,097)						(409)						(473)
Cash dividends						(140)						(123)						(111)
Payment of contingent consideration on acquisitions						(42)						(112)						(101)
Payment of income tax withholding on share-based compensation						(25)						(16)						(7)
Distribution to noncontrolling interest						(6)						(17)						—
Other financing activities						3						2						14
Net cash used for financing activities						(1,371)						(633)						(708)
Effect of changes in currency exchange rates						(25)						3						(27)
Increase in cash						95						79						68
Cash, cash equivalents and restricted cash, beginning of year						620						541						473
Cash, cash equivalents and restricted cash, end of year						$	715					$	620					$	541

The accompanying notes are an integral part of these statements.

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

In millions						Common Stock Shares						Common Stock Amount						Additional Paid-in Capital						Treasury Stock Shares						Treasury Stock Amount						Retained Earnings						Accumulated Other Comprehensive Loss						Non-controlling Interest						Total
Balance, December 31, 2021						226.9						$	2					$	7,916					(41.1)						$	(1,306)					$	4,055					$	(466)					$	38					$	10,239
Cash dividends ($0.60 dividend per share)						—						—						—						—						—						(111)						—						—						(111)
Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax						—						—						(4)						0.4						10						—						—						—						6
Stock based compensation						—						—						41						—						—						—						—						—						41
Net income						—						—						—						—						—						633						—						8						641
Other comprehensive loss, net of tax						—						—						—						—						—						—						(195)						—						(195)
Stock repurchase						—						—						—						(5.0)						(473)						—						—						—						(473)
Other						—						—						—						—						—						—						—						(1)						(1)
Balance, December 31, 2022						226.9						$	2					$	7,953					(45.7)						$	(1,769)					$	4,577					$	(661)					$	45					$	10,147
Cash dividends ($0.68 dividend per share)						—						—						—						—						—						(123)						—						—						(123)
Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax						—						—						(23)						0.5						10						—						—						—						(13)
Stock based compensation						—						—						47						—						—						—						—						—						47
Net income						—						—						—						—						—						815						—						10						825
Other comprehensive income, net of tax						—						—						—						—						—						—						71						—						71
Stock repurchase						—						—						—						(3.9)						(412)						—						—						—						(412)
Distribution to noncontrolling interest						—						—						—						—						—						—						—						(17)						(17)
Other						—						—						—						—						—						—						—						(1)						(1)
Balance, December 31, 2023						226.9						$	2					$	7,977					(49.1)						$	(2,171)					$	5,269					$	(590)					$	37					$	10,524
Cash dividends ($0.80 dividend per share)						—						—						—						—						—						(140)						—						—						(140)
Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax						—						—						(20)						0.4						5						—						—						—						(15)
Stock based compensation						—						—						66						—						—						—						—						—						66
Net income						—						—						—						—						—						1,056						—						11						1,067
Other comprehensive loss, net of tax						—						—						—						—						—						—						(256)						—						(256)
Stock repurchase						—						—						—						(6.9)						(1,107)						—						—						—						(1,107)
Distribution to noncontrolling interest						—						—						—						—						—						—						—						(6)						(6)
Balance, December 31, 2024						226.9						$	2					$	8,023					(55.6)						$	(3,273)					$	6,185					$	(846)					$	42					$	10,133

The accompanying notes are an integral part of these statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS

Wabtec is a global provider of value-added, technology-based locomotives, equipment, systems, and services for the freight rail and passenger transit industries as well as the mining, marine and industrial markets. Our highly engineered products, which are intended to enhance safety, improve productivity and reduce maintenance costs for customers, can be found on most locomotives, freight cars, passenger transit cars and buses around the world. Our core products and services are essential in the safe and efficient operation of freight rail and passenger transit vehicles. Wabtec is a global company with operations in over 50 countries and our products can be found in more than 100 countries throughout the world. In 2024, approximately 53% of the Company’s net sales came from customers outside the United States.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation The consolidated financial statements include the accounts of the Company and all subsidiaries that it controls. For consolidated subsidiaries in which the Company's ownership is less than 100%, the outside shareholders' interests are shown as noncontrolling interests. These statements have been prepared in accordance with U.S. generally accepted accounting principles. Sales between subsidiaries are eliminated in consolidation.

Cash Equivalents and Restricted Cash Cash equivalents are highly liquid investments purchased with an original maturity of three months or less. Restricted cash includes cash held in escrow that is restricted as to withdrawal or usage.

Allowance for Doubtful Accounts The allowance for doubtful accounts receivable reflects our best estimate of expected losses inherent in our receivable portfolio determined on the basis of historical experience, relevant credit forecast information, changes to customer's solvency, and other currently available evidence. The allowance for doubtful accounts was $36 million and $31 million as of December 31, 2024 and 2023, respectively.

Inventories Inventories are stated at the lower of cost or net realizable value. Cost is predominantly determined under the first-in, first-out (FIFO) method. Inventory costs include material, labor and overhead.

Property, Plant and Equipment Property, plant and equipment additions are stated at cost. Expenditures for renewals and improvements are capitalized. Expenditures for ordinary maintenance and repairs are expensed as incurred. The Company computes book depreciation principally on the straight-line method. Accelerated depreciation methods are utilized for income tax purposes.

Leasing Arrangements The Company conducts a portion of its operations from leased facilities and finances certain equipment purchases through lease agreements. In those cases in which the lease term approximates the useful life of the leased asset or the lease meets certain other prerequisites, the leasing arrangement is classified as a financing lease. The remaining arrangements are treated as operating leases. Right-of-use lease assets are classified as long-term assets under the caption "Other noncurrent assets" and lease liabilities are classified under the captions "Other accrued liabilities" and "Other long-term liabilities" on the Consolidated Balance Sheets.

Goodwill and Intangible Assets Goodwill and other intangible assets with indefinite lives are not amortized. Other intangibles with definite lives are amortized on a straight-line basis over their estimated economic lives. Amortizable intangible assets are reviewed for impairment when indicators of impairment are present. The Company tests goodwill and indefinite-lived intangible assets for impairment at the reporting unit level and at least annually. The Company performs its annual impairment test during the fourth quarter after the annual forecasting process is completed, and also tests for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company will perform either a qualitative or quantitative test for goodwill and indefinite-lived intangible assets, performing a quantitative test for each identified reporting unit in goodwill at least every three years. Periodically, Management of the Company assesses whether or not an indicator of impairment is present that would necessitate an impairment analysis be performed.

Equity Method Investments The Company invests in privately-held companies which are accounted for using the equity method when the Company has the ability to exercise significant influence, but not control, over the investee. Equity method investments are included in "Other noncurrent assets" on the Consolidated Balance Sheets and were $39 million and $36 million at December 31, 2024 and 2023, respectively.

Depreciation Expense Depreciation of property, plant and equipment related to the manufacturing of products or services provided is included in Cost of goods or Cost of services. Depreciation of other property, plant and equipment that is not attributable to the manufacturing of products or services provided is included in Selling, general and administrative expenses or Engineering expense to the extent the property, plant, and equipment is used for research and development purposes.

Warranty Costs Warranty costs are accrued based on management’s estimates of repair or upgrade costs per unit and historical experience.

Income Taxes Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws. The provision for income taxes includes federal, state and foreign income taxes.

Stock-Based Compensation The Company recognizes compensation expense for stock-based compensation based on the grant date fair value recognized ratably over the requisite service period following the date of grant. Compensation expense for incentive stock units is updated as necessary if the number of units expected to vest changes based on the Company's performance.

Financial Derivatives and Hedging Activities In the normal course of business, the Company is exposed to market risks related to interest rates, commodity prices and foreign currency exchange rate fluctuations. At times, the Company limits these risks through the use of derivatives such as cross-currency swaps, foreign currency forward contracts, interest rate hedges, commodity swaps and options. In accordance with the Company's policy, derivatives are only used for hedging purposes. The Company does not use derivatives for trading or speculative purposes. Foreign currency forward contracts are agreements with a counterparty to exchange two distinct currencies at a set exchange rate for delivery on a set date at some point in the future. At the delivery date, the Company can either take delivery of the currency or settle on a net basis. For further information regarding the foreign currency forward contracts see Note 17.

Foreign Currency Translation Certain of our international operations have determined that the local currency is the functional currency whereas others have determined the U.S. dollar is their functional currency. Assets and liabilities of foreign subsidiaries where the functional currency is the local currency are translated at the rate of exchange in effect on the balance sheet date while income and expenses are translated at the average rates of exchange prevailing during the period. Foreign currency gains and losses resulting from transactions and the translation of financial statements are recorded in the Company’s consolidated financial statements based upon the provisions of ASC 830 “Foreign Currency Matters.” The effects of currency exchange rate changes on intercompany transactions and balances of a long-term investment nature are accumulated and carried as a component of Accumulated other comprehensive loss. The effects of currency exchange rate changes on transactions that are denominated in a currency other than an entity’s functional currency are charged or credited to earnings. Realized gains and losses related to foreign currency exchange are recognized in Other income, net on the Consolidated Statements of Income.

Noncontrolling Interests In accordance with ASC 810, the Company has classified noncontrolling interests as equity on our Consolidated Balance Sheets. Net income attributable to noncontrolling interests was not material for the years ended December 31, 2024, 2023 and 2022.

Revenue Recognition The Company accounts for Revenue under ASC 606 Revenue from Contracts with Customers. This guidance provides a five-step analysis of transactions to determine when and how revenue is recognized and requires entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer.

A majority of the Company’s revenues are derived from performance obligations that are satisfied at a point in time when control passes to the customer which is generally at the time of shipment in accordance with agreed upon delivery terms. The remaining revenues are earned over time. All fees billed to the customer for shipping and handling are classified as a component of Net sales. All costs associated with shipping and handling are classified as a component of Cost of sales.

The Company also has long-term customer agreements involving the design and production of highly engineered products that require revenue to be recognized over time because these products have no alternative use without significant economic loss, and the agreements contain an enforceable right to payment including a reasonable profit margin from the customer in the event of contract termination. Additionally, the Company has customer agreements involving the creation or enhancement of an asset that the customer controls which also require revenue to be recognized over time. Generally, the Company uses an input method for determining the amount of revenue, cost and gross margin to recognize over time for these customer agreements. The input method used for these agreements recognizes revenue based on our efforts to satisfy the performance obligation and includes costs of material and labor, both of which give an accurate representation of the progress made toward complete satisfaction of a particular performance obligation. The Company may also use the output method which recognizes revenue based on direct measurements of the value transferred to the customer. Contract revenues and cost estimates are reviewed and revised periodically throughout the year and adjustments are reflected in the accounting period as such amounts are determined. Additional information with respect to contract assets and liabilities is included in Note 8.

Due to the nature of work required to be performed on the Company’s long-term projects, the estimation of total revenue and cost at completion is subject to many variables and requires significant judgment. Contract estimates related to long-term projects are based on various assumptions to project the outcome of future events that could span several years. These assumptions include cost of materials; labor availability and productivity; complexity of the work to be performed; and the performance of suppliers, customers and subcontractors that may be associated with the contract. We have a disciplined process where management reviews the progress of long term-projects periodically throughout the year. As part of this process, management reviews information including key contract matters, progress towards completion, identified risks and

opportunities and any other information that could impact the Company’s estimates of revenue and costs. After completing this analysis, any adjustments to net sales, cost of goods sold, and the related impact to operating income are recognized as necessary in the period they become known.

Generally, the Company’s revenue contains a single performance obligation for each distinct good or service; however, a single contract may have multiple performance obligations comprising multiple promises to customers. When there are multiple performance obligations, revenue is allocated based on the relative stand-alone selling price. Pricing is defined in our contracts on a line item basis and includes an estimate of variable consideration when required by the terms of the individual customer contract. Types of variable consideration the Company typically has include volume discounts, prompt payment discounts, price escalation clauses, liquidating damages, and performance bonuses. Sales returns and allowances are also estimated and recognized in the same period the related revenue is recognized, based upon the Company’s experience and future expectations.

Remaining performance obligations represent the allocated transaction price of unsatisfied or partially unsatisfied performance obligations. As of December 31, 2024, the Company's remaining performance obligations were approximately $22.3 billion. The Company expects to recognize revenue of approximately 34% of remaining performance obligations over the next 12 months, with the remainder recognized thereafter.

Revolving Receivables Program The Company utilizes a revolving facility to sell up to $350 million of certain receivables of the Company and certain of its subsidiaries (the "Originators"). The Originators contribute receivables to our bankruptcy-remote subsidiary, which sells the receivables to a financial institution on a recurring basis in exchange for cash equal to the gross receivables sold. The bankruptcy remote subsidiary is a separate legal entity with its own creditors, and its assets are not available to pay creditors of the Company or any other affiliates of the Company. As customers pay their balances, we transfer additional receivables into the program, which could result in our gross receivables sold being higher or lower than customer collections remitted to the financial institution for any applicable period. The sold receivables are fully guaranteed by our bankruptcy-remote subsidiary, which holds additional receivables that are pledged as collateral under this facility. The Company has agreed to guarantee the performance of the Originators respective obligations under the revolving agreement. Neither the Company (except for the bankruptcy-remote consolidated subsidiary referenced above) nor the Originators guarantees the collectability of the receivables under the revolving agreements.

At December 31, 2024, and 2023 the bankruptcy-remote subsidiary held receivables of $693 million and $674 million, respectively, which are included in the Company's Consolidated Balance Sheets. The receivables held by the bankruptcy-remote subsidiary collateralize the outstanding receivables sold, which was $20 million at December 31, 2023. There were no receivables outstanding under the facility at December 31, 2024. The transfers are recorded at the fair value of the proceeds received and obligations assumed less derecognized receivables. No obligation was recorded at December 31, 2024 or 2023 as the estimated expected credit losses on receivables sold is insignificant. Our maximum exposure to losses related to these receivables transferred is limited to the amount outstanding.

The following table sets forth a summary of receivables sold and the resulting impact of net cash processed included in cash from operations:

						For the year ended December 31,
In millions						2024						2023						2022
Gross receivables sold/cash proceeds received						$	926					$	2,617					$	1,761
Customer collections remitted to financial institution						(946)						(2,677)						(1,701)
Net cash proceeds (remitted) received included in cash from operations						$	(20)					$	(60)					$	60

During the fourth quarter of 2024, the revolving receivables program agreement was amended to allow us to request loans from the financial institution secured by the receivables held in the program, up to the $350 million limit. As a result, effective January 1, 2025 proceeds and repayments of loans under the program will be classified as Financing activities on our statement of cash flows and outstanding balances will be classified as debt on our balance sheet.

Pre-Production Costs Certain pre-production costs relating to long-term production and supply contracts have been deferred and will be recognized over the life of the contracts. Deferred pre-production costs were $52 million and $61 million at December 31, 2024 and 2023, respectively which are included in Other noncurrent assets on the Consolidated Balance Sheets.

Preferred Stock The Company’s authorized capital stock includes 1,000,000 shares of preferred stock. The Board of Directors has the authority to issue the preferred stock and to fix the rights and preferences, which would be superior to those of the common stock. At December 31, 2024 and 2023 there was no preferred stock issued or outstanding.

Significant Customers and Concentrations of Credit Risk The Company’s trade receivables are primarily from rail and transit industry original equipment manufacturers, Class I railroads, railroad carriers and commercial companies that utilize rail

cars in their operations, such as utility and chemical companies, as well as companies in the mining, marine and industrial markets. No one customer accounted for more than 10% of the Company’s consolidated net sales in the periods presented.

Reclassifications Certain prior year amounts have been reclassified, where necessary, to conform to the current year presentation.

Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ materially from the estimates. On an ongoing basis, Management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates.

Accounting Standards Recently Issued In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update require entities to disclose on an annual basis specific categories within the income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The amendments in this update also require enhanced disaggregation of disclosures about income taxes paid and income tax expense, among other changes. The amendments in this update do not affect the recognition, measurement, or financial statement presentation of income taxes and is effective for Wabtec's annual reporting periods beginning January 1, 2025. The amendments require increased annual disclosures on current and comparable reporting periods presented in annual company filings. The resulting new annual disclosure requirements will be reflected in our 2025 report on Form 10-K.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this update require entities to disclose disaggregated information about certain costs and expenses in commonly presented income statement expense captions. The amendments will require increased interim and annual footnote disclosures either prospectively or retrospectively for reporting periods presented in interim and annual company filings. The amendments in this update do not affect the recognition, measurement, or financial statement presentation of income statement expenses and will be effective for Wabtec's annual reporting periods beginning January 1, 2027 and interim reporting periods beginning January 1, 2028. The Company is assessing the extent of the impact of the amendments on its future filings.

Accounting Standards Recently Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition to the current requirements, the amendments specify additional information be provided about the chief operating decision maker ("CODM") as well as disaggregated expense categories, to the extent that the CODM utilizes such data in deciding how to allocate resources. The amendments in this update do not affect the recognition, measurement, or financial statement presentation of expenses, and were effective for Wabtec's annual reporting periods beginning January 1, 2024 and will be effective for interim reporting periods beginning January 1, 2025. The amendments require increased interim and annual disclosures on current and comparable reporting periods presented in annual and interim company filings. The new annual disclosure requirements are included in Note 19.

Supply Chain Financing Program The Company has entered into supply chain financing arrangements with third-party financial institutions to provide our vendors with enhanced payment options while providing the Company with added working capital flexibility. The Company does not provide any guarantees under these arrangements, does not have an economic interest in our suppliers' voluntary participation, does not receive an economic benefit from the financial institutions, and no assets are pledged under the arrangements. The arrangements do not change the payable terms negotiated by the Company and our vendors, which range between net 45 and net 180 days, and does not result in a change in the classification of amounts due as Accounts payable in the Consolidated Balance Sheets. Suppliers utilized the program to accelerate receipt of payment from these financial institutions for $311 million and $305 million of the Company's outstanding Accounts payable as of December 31, 2024 and 2023, respectively. The supplier invoices included under the program require payment in full to the financial institutions consistent with the Company’s normal terms and conditions as agreed upon with the vendor.

The following table sets forth the changes in amounts due to financial institutions reflected in Accounts payable for the year ended December 31, 2024:

						December 31,
In millions						2024
Obligations outstanding at the beginning of the year						$	305
Invoices confirmed during the year						723
Confirmed invoices paid during the year						(717)
Obligations outstanding at the end of the year						$	311

3. ACQUISITIONS

During 2024, the Company made four strategic acquisitions for a combined purchase price of approximately $168 million, net of cash acquired. Two of the acquisitions are reported in the Transit Segment, one is reported in the Digital Intelligence product line of the Freight Segment and one is reported in the Components product line of the Freight Segment. Each of the acquisitions in 2024 are individually and collectively immaterial.

On December 22, 2023, the Company purchased the remaining ownership shares of Lokomotiv Kurastyru Zauyty (LKZ), a locomotive manufacturing and assembly company located in Kazakhstan, at which time it became a wholly owned subsidiary of the Company. Prior to this purchase, Wabtec owned 50% of LKZ as a joint venture partner and accounted for its ownership interest as an equity method investment. Total purchase price for the remaining 50% interest was $111 million. As a result of the change in ownership interest and obtaining control of LKZ, Wabtec's previously held equity interest balance was remeasured to fair value, resulting in a gain of approximately $35 million recorded to Other income, net. Upon acquisition, Wabtec ceased accounting for the investment using the equity method and recognized 100% of LKZ's identifiable assets and liabilities, and LKZ's results of operations and cash flows are fully consolidated subsequent to the acquisition date.

The following table summarizes the fair value of 100% of the LKZ assets acquired and liabilities assumed:

In millions
Assets acquired
Cash and cash equivalents						$	30
Accounts receivable						6
Inventory						95
Property, plant and equipment						36
Goodwill						111
Other noncurrent assets						3
Total assets acquired						281
Liabilities assumed
Current liabilities						21
Noncurrent liabilities						3
Total liabilities assumed						24
Net assets acquired						$	257

The fair values of the assets acquired and liabilities assumed were determined using the income, cost and market approaches. Goodwill was calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of the net assets acquired and represents the assembled workforce and the future economic benefits of expanding our global operations expected to be achieved as a result of the acquisition. The purchased goodwill is not expected to be deductible for tax purposes. The results of this business since the date of acquisition are reported within the Equipment product line of the Freight Segment. The pro forma impact on Wabtec’s sales and results of operations, including the pro forma effect of events that are directly attributable to the acquisition, was not significant.

During the second quarter of 2023, the Company acquired L&M Radiator, Inc., a leading manufacturer of heavy-duty equipment radiators and heat exchangers for the mining sector, for a purchase price of approximately $245 million.

The following table summarizes the fair value of the L&M Radiator, Inc. assets acquired and liabilities assumed:

In millions
Assets acquired
Cash and cash equivalents						$	16
Accounts receivable						20
Inventory						26
Other current assets						1
Property, plant and equipment						43
Goodwill						106
Other intangible assets						89
Other noncurrent assets						1
Total assets acquired						302
Liabilities assumed
Current liabilities						16
Noncurrent liabilities						41
Total liabilities assumed						57
Net assets acquired						$	245

The fair values of the assets acquired and liabilities assumed were determined using the income, cost and market approaches. Discounted cash flow models were used to estimate the fair values of acquired intangibles. The fair value measurements were primarily based on significant inputs that are not observable in the market and are considered Level 3 in the fair value hierarchy. Intangible assets acquired include customer relationships and acquired technology that are subject to amortization, and trade names that were assigned an indefinite life and are not subject to amortization.

Goodwill was calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of the net assets acquired, and represents the assembled workforce and the future economic benefits, including synergies, that are expected to be achieved as a result of the acquisition. The purchased goodwill is not expected to be deductible for tax purposes. The results of this business since the date of acquisition are reported within the Components product line of the Freight Segment. The pro forma impact on Wabtec’s sales and results of operations, including the pro forma effect of events that are directly attributable to the acquisition, was not significant.

During 2022, the Freight Segment made three strategic acquisitions for a combined purchase price of $89 million, net of cash acquired. Two of the acquisitions are reported in the Digital Intelligence product line and one is reported in the Services product line. Each of the acquisitions in 2022 are individually and collectively immaterial.

4. SUPPLEMENTAL CASH FLOW DISCLOSURES

						Year Ended December 31,
						2024						2023						2022
In millions
Interest paid during the year						$	181					$	210					$	179
Income taxes paid during the year, net of amounts refunded						$	237					$	233					$	157
Business acquisitions:
Fair value of assets acquired						$	257					$	438					$	128
Fair value of liabilities assumed						63						82						38
Cash paid						194						356						90
Less: Cash acquired						(26)						(48)						(1)
Net cash paid						$	168					$	308					$	89

At December 31, 2024 and December 31, 2023, Wabtec had restricted cash of $9 million and $5 million, respectively, primarily from cash in escrow related to acquisitions.

5. INVENTORIES

The components of inventory, net of reserves, were:

						December 31,
In millions						2024						2023
Raw materials						$	977					$	1,062
Work-in-progress						587						463
Finished goods						750						759
Total inventories						$	2,314					$	2,284

6. PROPERTY, PLANT & EQUIPMENT

The major classes of depreciable assets are as follows:

						December 31,
In millions						2024						2023
Machinery and equipment						$	1,666					$	1,600
Buildings and improvements						810						838
Land and improvements						106						100
Construction in progress						171						137
Property, plant and equipment						2,753						2,675
Less: accumulated depreciation						(1,306)						(1,190)
Property, plant and equipment, net						$	1,447					$	1,485

The estimated useful lives of property, plant and equipment are as follows:

						Years
Land improvements						10 to 20
Building and improvements						15 to 40
Machinery and equipment						3 to 15

Depreciation expense was $196 million, $204 million, and $182 million for 2024, 2023 and 2022, respectively.

7. GOODWILL AND INTANGIBLE ASSETS

Goodwill is reviewed annually during the fourth quarter for impairment. The Company has identified three reporting units for purposes of testing goodwill for impairment. Two reporting units exist within the Freight segment (the "Freight" and "Components" reporting units) and the Transit segment is also a reporting unit. In 2024, management elected to first assess qualitative factors to determine whether a quantitative goodwill impairment test is necessary for the Components and Freight reporting units. During the assessment, management evaluated all relevant events and facts that may impact the fair value or carrying value of the reporting units' goodwill and concluded that it was not more likely than not that the estimated fair values were less than the carrying values; therefore, no further analysis was required. For the Transit reporting unit, management elected to proceed directly to the quantitative impairment test. The discounted cash flow method and the market approach were used to estimate the fair value of the Transit reporting unit using a weighting of 75% and 25%, respectively. The discounted cash flow model requires several assumptions including future sales growth, EBIT (earnings before interest and taxes) margins, capital expenditures, a discount rate and a terminal revenue growth rate (the revenue growth rate for the period beyond the years forecasted by the reporting units) for the Transit reporting unit. The market approach requires several assumptions including EBITDA (earnings before interest, taxes, depreciation and amortization) multiples for comparable companies that operate in the same markets as the Company’s reporting units. For 2024, the discounted cash flow method was given more weight compared to the market approach due to variables between the operations of the guideline companies used in the analysis and Wabtec's operations, such as different reporting unit sizes, growth and business characteristics. Each valuation resulted in a conclusion that the estimated fair value of the Transit reporting unit was in excess of its carrying value, and no impairment existed.

The change in the carrying amount of goodwill by segment is as follows:

In millions						Freight Segment						Transit Segment						Total
Balance at December 31, 2022						$	7,067					$	1,441					$	8,508
Additions						215						—						215
Disposals						(4)						—						(4)
Foreign currency impact						16						45						61
Balance at December 31, 2023						$	7,294					$	1,486					$	8,780
Additions						31						54						85
Disposals						(5)						(1)						(6)
Foreign currency impact						(72)						(77)						(149)
Balance at December 31, 2024						$	7,248					$	1,462					$	8,710

The Company’s indefinite lived intangible assets are also reviewed annually during the fourth quarter for impairment. During 2024 and 2023, the Company proceeded directly to the quantitative impairment test for certain trade names with indefinite lives. Certain trade names that were associated with the Company’s current restructuring actions were tested and considered impaired. As such, for the years ended December 31, 2024 and 2023, approximately $6 million and $14 million, respectively, of amortization expense was recorded in "Amortization expense" on the Consolidated Statements of Income, primarily related to the Company's Portfolio Optimization. For the remaining trade names subject to the quantitative impairment test, the fair value exceeded each respective carrying value, resulting in a conclusion that no additional impairment existed. For trade names not subject to quantitative testing, the Company elected to perform a qualitative impairment assessment, resulting in a conclusion that it was not more likely than not that the estimated fair values of the trade names were less than their carrying values; therefore, no further analysis was required. The assessment of qualitative factors used in determining whether it is more likely than not that the fair value of a trade name is less than its carrying amount involves significant judgments and assumptions. The judgment and assumptions include the identification of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, Wabtec specific events, share price trends and making the assessment on whether each relevant factor will impact the impairment test positively or negatively and the magnitude of any such impact.

As of December 31, 2024 and 2023, the Company’s trade names had a net carrying amount of $595 million and $612 million, respectively, and the Company believes these intangibles have indefinite lives, with the exception of the right to use the GE Transportation trade name, to which the Company had an original useful life of 5 years and has been fully amortized.

Intangible assets of the Company, other than goodwill and trade names, that are considered definitive lived consist of the following:

						December 31, 2024																		December 31, 2023
In millions						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
Backlog						$	1,415					$	(629)					$	786					$	1,431					$	(526)					$	905
Customer relationships						1,329						(480)						849						1,333						(431)						902
Acquired technology						1,318						(614)						704						1,283						(497)						786
Total						$	4,062					$	(1,723)					$	2,339					$	4,047					$	(1,454)					$	2,593

The remaining weighted average useful lives of backlog, customer relationships and acquired technology were 7 years, 14 years and 6 years, respectively. The backlog intangible asset primarily consists of in-place long-term service agreements acquired by the Company in conjunction with the acquisition of GE Transportation. Amortization expense for intangible assets was $303 million, $321 million, and $291 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Estimated amortization expense for the five succeeding years is as follows (in millions):

2025						$	277
2026						$	272
2027						$	267
2028						$	267
2029						$	266

8. CONTRACT ASSETS AND CONTRACT LIABILITIES

Contract assets include unbilled amounts resulting from sales under long-term contracts where revenue is recognized over time and revenue exceeds the amount that can be billed to the customer based on the terms of the contract. The current portion of the contract assets are classified as current assets under the caption “Unbilled accounts receivable” while the noncurrent contract assets are classified as other assets under the caption "Other noncurrent assets" on the Consolidated Balance Sheets. Noncurrent contract assets were $170 million and $154 million at December 31, 2024 and 2023, respectively. Included in noncurrent contract assets are certain costs that are specifically related to a contract but do not directly contribute to the transfer of control of the tangible product being created, such as non-recurring engineering costs. The Company has elected to use the practical expedient and not consider unbilled amounts anticipated to be paid within one year as significant financing components.

Contract liabilities include customer deposits that are made prior to the incurrence of costs related to a newly agreed upon contract and advanced customer payments that are in excess of revenue recognized. The current portion of contract liabilities are classified as current liabilities under the caption “Customer deposits” while the noncurrent contract liabilities are classified as noncurrent liabilities under the caption "Other long-term liabilities" on the Consolidated Balance Sheets. Noncurrent contract liabilities were $389 million and $174 million at December 31, 2024 and 2023, respectively. These contract liabilities are not considered a significant financing component because they are used to meet working capital demands that can be higher in the early stages of a contract or revenue associated with the contract liabilities is expected to be recognized within one year. Contract liabilities also include provisions for estimated losses from uncompleted contracts. Provisions for loss contracts were $91 million and $104 million at December 31, 2024 and 2023, respectively. These provisions for estimated losses are classified as current liabilities and included within the caption “Other accrued liabilities” on the Consolidated Balance Sheets.

The following table reconciles the changes in the Company’s contract assets and liabilities as follows:

						Contract Assets
In millions						2024						2023
Balance at beginning of year						$	678					$	706
Recognized in current year						856						692
Reclassified to accounts receivable						(801)						(723)
Acquisitions/adjustments						3						(2)
Foreign currency impact						(16)						5
Balance at end of year						$	720					$	678
						Contract Liabilities
In millions						2024						2023
Balance at beginning of year						$	1,082					$	956
Recognized in current year						1,562						1,380
Amounts in beginning balance reclassified to revenue						(572)						(665)
Current year amounts reclassified to revenue						(876)						(593)
Acquisitions						8						1
Foreign currency impact						(31)						3
Balance at end of year						$	1,173					$	1,082

9. LONG-TERM DEBT

Long-term debt consisted of the following:

															December 31,
			Effective Interest Rate												2024												2023
In millions						Face Value						Book Value						Fair Value 1						Book Value						Fair Value 1
2024 Credit Agreement:
Term Loan			6.6		%				$	225					$	224					$	225					$	—					$	—
2022 Credit Agreement:
Revolving Credit Facility			8.0		%				N/A						—						—						—						—
Delayed Draw Term Loan			6.6		%				$	250					250						250						250						250
Senior Notes:
4.15% Senior Notes, due 2024															—						—						725						722
3.20% Senior Notes, due 2025			3.4		%				$	500					500						496						499						484
3.45% Senior Notes, due 2026			3.5		%				$	750					750						732						749						718
1.25% Senior Notes (EUR), due 2027			1.5		%				€	500					514						495						547						509
4.70% Senior Notes, due 2028			4.8		%				$	1,250					1,246						1,239						1,245						1,237
5.611% Senior Notes, due 2034			5.7		%				$	500					496						507						—						—
Other Borrowings															—						—						54						57
Total															3,980						3,944						4,069						3,977
Less: current portion															(500)						(496)						(781)						(779)
Long-term portion															$	3,480					$	3,448					$	3,288					$	3,198

1. See Note 17 for information on the fair value measurement of the Company's long-term debt.

Variances between Face Value and Book Value are the result of unamortized discounts and debt issuance costs as well as foreign exchange on the Euro Notes. Amortization of discounts and debt issuance fees are included in the calculation of Effective Interest Rate.

The Company borrows and repays against the Revolving Credit Facility and an uncommitted money market line for added flexibility in liquidity to manage cash during the operating cycle. The proceeds from borrowing and the repayments are included within the Financing Activities section of the Consolidated Statements of Cash Flows.

As of December 31, 2024, the annual repayment requirements for debt obligations are as follows:

In millions
2025			$	500
2026			750
2027			770
2028			1,250
2029			225
Thereafter			500
Total			$	3,995

For those debt securities that have a premium or discount at the time of issuance, the Company amortizes the amount through interest expense based on the maturity date or the first date the holders may require the Company to repurchase the debt securities, if applicable. A premium would result in a decrease in interest expense, and a discount would result in an increase in interest expense in future periods. Additionally, the Company has debt issuance costs related to certain financing transactions which are also amortized through interest expense. As of December 31, 2024 and 2023, the Company had total unamortized debt issuance costs and discounts of $15 million.

Credit Agreements

2024 Credit Agreement

On March 14, 2024, the Company entered into a new stand-alone credit agreement (the "2024 Credit Agreement") for a term loan of $225 million. Borrowings under the 2024 Credit Agreement bear interest at a base rate plus an interest rate spread up to 1.75% based on the lower of the pricing corresponding to (i) the Company’s Leverage Ratio or (ii) the Company’s public rating. At December 31, 2024, the interest rate was 6.0%. The frequency of interest payments varies based upon the Interest

Election Request. The term loan issued under the 2024 Credit Agreement will mature on March 14, 2029. The obligations of the Company under the 2024 Credit Agreement are unsecured and have been guaranteed by certain of the Company’s subsidiaries. The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type.

Under the 2024 Credit Agreement, the Company has agreed to maintain an Interest Coverage Ratio of at least 3.0 to 1.0, and a Leverage Ratio not to exceed 3.5 to 1.0. The Interest Coverage Ratio is calculated using an earnings metric as defined in the agreement compared to Interest Expense for the four quarters then ended. The Leverage Ratio is defined as net debt (total debt, net of up to $300 million of unrestricted cash) as of the last day of such fiscal quarter to the defined earnings metric for the four quarters then ended. Additionally, the Company may effect an increase in the maximum Leverage Ratio in contemplation of a Material Acquisition. All terms are as defined in the 2024 Credit Agreement.

2022 Credit Agreement

On August 15, 2022, the Company entered into a new unsecured credit agreement (the "2022 Credit Agreement"). The 2022 Credit Agreement provides for borrowings consisting of (i) a multi-currency revolving credit facility, providing for an equivalent in U.S. dollars of up to $1.5 billion (the “Revolving Credit Facility”) and (ii) a $250 million delayed draw term loan facility (the “Delayed Draw Term Loan”), all pursuant to the terms and conditions of the 2022 Credit Agreement. The 2022 Credit Agreement allows the Company to request, at prevailing market rates, an aggregate amount not to exceed $750 million, (a) increases to the borrowing commitments under the Revolving Credit Facility and/or (b) new incremental term loan commitments. The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type.

The Revolving Credit Facility matures on August 15, 2027. The Delayed Draw Term Loan was fully drawn during the third quarter of 2023, and the proceeds were utilized to redeem the 4.375% Senior Notes, due 2023. Borrowings under the Delayed Draw Term Loan will mature on August 15, 2027. Amounts borrowed and repaid under the Delayed Draw Term Loan may not be reborrowed. The applicable interest rate for borrowings under the 2022 Credit Agreement includes a base rate (per the Interest Election terms of the agreement) plus an interest rate spread up to 1.75% based on the lower of the pricing corresponding to (i) the Company’s financial leverage or (ii) the Company’s public rating. At December 31, 2024, the interest rate on the Delayed Draw Term Loan was 6.0% and the interest rate on the undrawn Revolving Credit Facility was 5.7%. Obligations under the 2022 Credit Agreement have been guaranteed by certain of the Company’s subsidiaries.

Under the 2022 Credit Agreement, the Company has agreed to maintain an Interest Coverage Ratio of at least 3.0 to 1.0, and a Leverage Ratio not to exceed 3.5 to 1.0. The Interest Coverage Ratio is calculated using an earnings metric as defined in the agreement compared to Interest Expense for the four quarters then ended. The Leverage Ratio is defined as net debt (total debt, net of up to $300 million of unrestricted cash) as of the last day of such fiscal quarter to the defined earnings metric for the four quarters then ended. Additionally, the Company may effect an increase in the maximum Leverage Ratio in contemplation of a Material Acquisition. All terms are as defined in the 2022 Credit Agreement.

The following table presents availability under the 2022 Credit Agreement as of December 31, 2024:

In millions						Revolving Credit Facility						Delayed Draw Term Loan						Total
Maximum Availability						$	1,500					$	250					$	1,750
Outstanding Borrowings						—						(250)						(250)
Letters of Credit Under Credit Agreement						—						—						—
Current Availability						$	1,500					$	—					$	1,500

The Company was in compliance with all financial covenants in the 2022 Credit Agreement and the 2024 Credit Agreement as of December 31, 2024.

Intra-Quarter Uncommitted Money Market Line Credit Agreement

During the third quarter of 2024, the Company entered into an uncommitted bilateral money market line credit agreement which provides an aggregate borrowing capacity of $150 million, for general business purposes and working capital needs within a quarter.

Senior Notes

The Company or its subsidiaries may issue senior notes from time to time. These notes are comprised of our 4.15% Senior Notes which matured in 2024 (the "2024 Notes"), 3.20% Senior Notes due 2025 (the "2025 Notes"), 3.45% Senior Notes due 2026 (the "2026 Notes"), 1.25% Senior Notes (EUR) due 2027 (the "Euro Notes" discussed below), 4.70% Senior Notes due 2028 (the "2028 Notes") and 5.611% Senior Notes due 2034 (the "2034 Notes"). The 2024 Notes, 2025 Notes, 2026 Notes, 2028 Notes, and 2034 Notes are the “US Notes”, and collectively with the Euro Notes, the “Senior Notes.” Interest on the US Notes is payable semi-annually and interest on the Euro Notes is paid annually. Each series of the Senior Notes may be

redeemed any time in whole or from time to time in part in accordance with the provisions of the indenture, under which such series of notes was issued. Each of the Senior Notes may be redeemed at a redemption price of 100% of the principal amount plus a specified make-whole premium and accrued interest. The US Notes and the Company's guarantee of the Euro Notes are senior unsecured obligations of the Company and rank pari passu with all existing and future senior debt and senior to all existing and future subordinated indebtedness of the Company.

On March 11, 2024, the Company issued $500 million of 5.611% Senior Notes due in 2034 (2034 Notes). The 2034 Notes were issued at 100% of face value and the Company recognized approximately $5 million of total deferred financing costs. Interest on the 2034 Notes will accrue at a rate of 5.611% per year, payable semi-annually on March 11 and September 11 of each year, commencing September 11, 2024. The 2034 Notes will mature on March 11, 2034. Proceeds from the 2034 Notes, combined with the proceeds from the term loan under the 2024 Credit Agreement and cash on hand, were utilized to repay the outstanding amount of 2024 Notes at maturity.

Beginning September 15, 2023, the effective interest rates for the 2024 Notes and the 2028 Notes were each reduced by 0.25% due to a favorable change in Wabtec's corporate credit rating and the rating of the aforementioned notes.

During the second quarter of 2022, the Company redeemed $25 million of principal from the 2024 Notes plus a premium and the related accrued interest.

The indentures under which the Senior Notes were issued contain covenants and restrictions which limit, subject to certain exceptions, certain sale and leaseback transactions with respect to principal properties, the incurrence of secured debt without equally and ratably securing the Senior Notes, and certain merger and consolidation transactions. The covenants do not require the Company to maintain any financial ratios or specified levels of net worth or liquidity. The US Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis by each of the Company's subsidiaries that is a guarantor under the 2022 Credit Agreement. The Euro Notes were issued by Wabtec Netherlands and are fully and unconditionally guaranteed by the Company.

The Company is in compliance with the restrictions and covenants in the indentures under which the Senior Notes were issued and expects that these restrictions and covenants will not be any type of limiting factor in executing our operating activities.

Cash Pooling

Wabtec aggregates the Company's domestic cash position on a daily basis. Outside the United States, the Company uses cash pooling arrangements with banks to help manage our liquidity requirements. In these pooling arrangements, Wabtec subsidiary “Participants” agree with a single bank that the cash balances of any of the pool Participants with the bank will be subject to a full right of set-off against amounts other Participants owe the bank, and the bank provides for overdrafts as long as the net overdraft balance for all Participants does not exceed an agreed-upon level. Typically, each Participant pays interest on outstanding overdrafts and receives interest on cash balances. The Company's Consolidated Balance Sheets reflect cash, net of bank overdrafts, under all pooling arrangements.

Letters of Credit and Bank Guarantees

In the ordinary course of its business, the Company arranges for certain types of bank guarantees and letters of credit, such as performance bonds, bid bonds and financial guarantees, that are issued by certain banks and insurance companies to support customer contracts. The outstanding amount, including the letters of credit issued under the credit facility, was $931 million and $855 million at December 31, 2024 and 2023, respectively.

10. EMPLOYEE BENEFIT PLANS

Defined Benefit Pension Plans

The Company sponsors defined benefit pension plans that cover certain U.S. and international employees, primarily in the United Kingdom, Canada and Germany, which provide benefits of stated amounts for each year of service of the employee. The Company uses a December 31 measurement date for the plans.

The following tables provide information regarding the Company’s significant defined benefit pension plans summarized by U.S. and international components.

Obligations and Funded Status

						U.S.												International
In millions						2024						2023						2024						2023
Change in projected benefit obligation
Obligation at beginning of year						$	(55)					$	(29)					$	(251)					$	(236)
Service cost						—						—						(3)						(3)
Interest cost						(3)						(2)						(11)						(11)
Employee contributions						—						—						(1)						(1)
Plan settlements, curtailments and amendments						—						1						1						1
Benefits paid						4						4						13						14
Acquisition						—						(29)						—						—
Actuarial gain (loss)						2						—						17						(5)
Effect of currency rate changes						—						—						10						(10)
Obligation at end of year						$	(52)					$	(55)					$	(225)					$	(251)
Change in plan assets
Fair value of plan assets at beginning of year						$	55					$	31					$	211					$	201
Actual return on plan assets						1						2						10						10
Employer contributions						—						—						5						6
Employee contributions						—						—						1						1
Benefits paid						(4)						(4)						(13)						(14)
Settlements and other						—						—						(1)						(1)
Acquisition						—						26						—						—
Effect of currency rate changes						—						—						(9)						8
Fair value of plan assets at end of year						$	52					$	55					$	204					$	211
Funded status
Fair value of plan assets						$	52					$	55					$	204					$	211
Benefit obligations						(52)						(55)						(225)						(251)
Funded status						$	—					$	—					$	(21)					$	(40)
Amounts recognized in the statement of financial position consist of:
Noncurrent assets						$	—					$	—					$	29					$	13
Current liabilities						—						—						(2)						(2)
Noncurrent liabilities						—						—						(48)						(51)
Net amount recognized						$	—					$	—					$	(21)					$	(40)
Amounts recognized in Accumulated other comprehensive loss, before tax at December 31, consist of:
Prior service cost						—						—						(1)						(1)
Net actuarial loss						(13)						(14)						(44)						(64)
Net amount recognized						$	(13)					$	(14)					$	(45)					$	(65)

The aggregate accumulated benefit obligation for the U.S. pension plans was $52 million and $55 million as of December 31, 2024 and 2023, respectively. The aggregate accumulated benefit obligation for the international pension plans was $214 million and $241 million as of December 31, 2024 and 2023, respectively.

												International
In millions																		2024						2023
Information for pension plans with accumulated benefit obligations in excess of Plan assets:
Projected benefit obligation																		$	(74)					$	(185)
Accumulated benefit obligation																		(65)						(178)
Fair value of plan assets																		25						133
Information for pension plans with projected benefit obligations in excess of plan assets:
Projected benefit obligation																		$	(79)					$	(194)
Accumulated benefit obligation																		(69)						(185)
Fair value of plan assets																		29						141

Components of Net Periodic Benefit Costs

						U.S.																		International
In millions						2024						2023						2022						2024						2023						2022
Service cost						$	—					$	—					$	—					$	3					$	3					$	3
Interest cost						3						2						1						11						11						6
Expected return on plan assets						(3)						(2)						(1)						(11)						(10)						(12)
Amortization of net loss						—						—						1						3						3						2
Settlement and curtailment gains recognized						—						(1)						—						—						—						(1)
Net periodic benefit (income) cost						$	—					$	(1)					$	1					$	6					$	7					$	(2)

Interest cost is recorded in Interest expense, net on the Consolidated Statements of Income. Expected return on plan assets, Amortization of net loss, and Settlement and curtailment losses recognized are recorded within Other income, net on the Consolidated Statements of Income. Service cost is considered a component of employee compensation and is recorded within Cost of sales or Selling, general and administrative expenses depending on the plan participants relative job function.

Amounts recognized in Other comprehensive income during 2024 for other changes in plan assets and benefit obligations are not material. The amounts of net actuarial loss and prior service cost included in Other comprehensive loss expected to be recognized as components of periodic benefit costs in 2025 are not material.

The weighted average assumptions in the following table represent the rates used to develop the actuarial present value of the projected benefit obligation for the year listed.

						U.S.																		International
						2024						2023						2022						2024						2023						2022
Discount rate						5.70		%				5.25		%				5.58		%				4.68		%				4.38		%				4.77		%
Expected return on plan assets						4.50		%				3.80		%				3.80		%				5.53		%				5.09		%				4.25		%
Rate of compensation increase						3.00		%				3.00		%				3.00		%				2.92		%				2.88		%				2.78		%

The discount rate is based on settling the pension obligation with high grade, high yield corporate bonds, and the rate of compensation increase is based on actual experience. The expected return on plan assets is based on historical performance as well as expected future rates of return on plan assets considering the current investment portfolio mix and the long-term investment strategy.

Pension Plan Assets

The Company has established formal investment policies for the assets associated with our pension plans. Objectives include maximizing long-term return at acceptable risk levels and diversifying among asset classes. Asset allocation targets are based on periodic asset liability study results which help determine the appropriate investment strategies. The investment policies permit variances from the targets within certain parameters. The plan assets consist primarily of equity security funds, debt security funds, insurance contracts, and cash and cash equivalent investments. The assets held in these funds are generally actively managed and are valued at the net asset value per share multiplied by the number of shares held as of the measurement

date. (See Note 17). Plan assets by asset category at December 31, 2024 and 2023 are as follows:

						U.S.												International
In millions						2024						2023						2024						2023
Pension Plan Assets
Equity security funds						$	8					$	3					$	59					$	56
Debt security funds						42						35						118						129
Insurance contracts						—						—						11						12
Cash and cash equivalents and other						2						17						16						14
Fair value of plan assets						$	52					$	55					$	204					$	211

The U.S. plan has a target asset allocation of 15% equity securities and 85% debt securities. The International plan has a target asset allocation of 12% equity securities, 24% debt securities and 64% in other investments. Investment policies are determined by the respective Plan’s Pension Committee and set forth in its Investment Policy. Rebalancing of the asset allocation occurs on a quarterly basis.

The Company’s defined benefit pension plan assets consist primarily of equity security funds, debt security funds, insurance contracts, and temporary cash and cash equivalent investments. These investments are comprised of a number of investment funds that invest in a diverse portfolio of assets including equity securities, corporate and governmental bonds, and money markets. Trusts are valued at the net asset value (“NAV”) as determined by their custodian. NAV represents the accumulation of the unadjusted quoted close prices on the reporting date for the underlying investments divided by the total shares outstanding at the reporting dates.

The following tables summarize our pension plan assets measured at fair value on a recurring basis by fair value hierarchy level (See Note 17):

						December 31, 2024
In millions						NAV						Level 1						Level 2						Level 3						Total
US:
Equity						$	—					$	8					$	—					$	—					$	8
Debt Securities						—						9						33						—						42
Cash and cash equivalents						—						2						—						—						2
International:
Equity						6						14						39						—						59
Debt Securities						—						3						115						—						118
Insurance Contracts						—						—						3						8						11
Cash and cash equivalents and other						—						6						10						—						16
Total						$	6					$	42					$	200					$	8					$	256

						December 31, 2023
In millions						NAV						Level 1						Level 2						Level 3						Total
US:
Equity						$	—					$	3					$	—					$	—					$	3
Debt Securities						—						5						30						—						35
Cash and cash equivalents						—						17						—						—						17
International:
Equity						6						14						36						—						56
Debt Securities						—						3						126						—						129
Insurance Contracts						—						—						4						8						12
Cash and cash equivalents and other						—						6						8						—						14
Total						$	6					$	48					$	204					$	8					$	266

There were no material changes to the Level 3 assets during 2024 and 2023.

Cash Flows

The Company’s funding methods are based on governmental requirements and differ from those methods used to recognize pension expense. The Company does not expect material contributions to the international pension plans and does not expect to make a contribution to the U.S. pension plan during 2025.

Benefit payments expected to be paid to plan participants are as follows:

In millions						U.S.						International
Year ended December 31,
2025						$	4					$	15
2026						$	4					$	15
2027						$	4					$	16
2028						$	4					$	16
2029						$	4					$	17
2030 through 2034						$	20					$	86

Defined Contribution Plans

The Company participates in certain defined contribution plans. Costs of approximately $65 million were recognized during 2024 and $60 million and $55 million was recognized during 2023 and 2022, respectively. The 401(k) savings plan is a participant directed defined contribution plan that holds shares of the Company’s stock as one of the investment options. At December 31, 2024 and 2023, the plan held on behalf of its participants approximately 329,000 shares with a market value of $62 million, and approximately 355,000 shares with a market value of $45 million, respectively.

11. INCOME TAXES

The Company is responsible for filing consolidated U.S. federal, foreign and combined, unitary or separate state income tax returns. The Company is responsible for paying the taxes relating to such returns, including any subsequent adjustments resulting from the redetermination of such tax liabilities by the applicable taxing authorities.

The components of the income before income taxes for the Company’s domestic and foreign operations for the years ended December 31 are provided below:

						For the year ended December 31,
In millions						2024						2023						2022
Domestic						$	782					$	506					$	372
Foreign						628						586						482
Income before income taxes						$	1,410					$	1,092					$	854

The consolidated provision for income taxes included in the Consolidated Statements of Income consisted of the following:

						For the year ended December 31,
In millions						2024						2023						2022
Current tax expense
Federal						$	106					$	148					$	37
State						26						29						3
Foreign						160						148						137
						292						325						177
Deferred tax expense (benefit)
Federal						26						(50)						29
State						9						1						—
Foreign						16						(9)						7
						51						(58)						36
Total provision						$	343					$	267					$	213

A reconciliation of the United States federal statutory income tax rate to the effective income tax rate on operations for the years ended December 31 is provided below:

						For the year ended December 31,
In millions						2024						2023						2022
U.S. federal statutory rate						21.0		%				21.0		%				21.0		%
State taxes						1.8						1.5						2.0
Foreign						3.1						2.0						3.8
Research and development credit						(0.7)						(0.6)						(0.8)
Non-taxable gain on acquisition						—						(0.8)						—
U.S. net operating loss carryback						(1.0)						—						—
Changes in valuation allowances						(0.4)						1.0						(2.0)
U.S. tax reform provision						0.5						0.6						0.1
Other, net						—						(0.2)						0.9
Effective rate						24.3		%				24.5		%				25.0		%

The decrease in effective tax rate from 2023 to 2024 was primarily due to changes in valuation allowances and audit closures, partially offset by a change in the jurisdictional mix of earnings and the non-recurrence of the non-taxable gain generated on the acquisition of LKZ in 2023.

The decrease in effective tax rate from 2022 to 2023 was primarily due to a change in mix of foreign earnings, changes in valuation allowances, and the non-taxable gain generated on the acquisition of LKZ.

On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law. This act includes a new book minimum tax on certain large corporations and an excise tax on corporate stock buybacks among other provisions. At this time, the Company does not believe the act will have a material impact on our consolidated financial position, results of operations, or cash flows.

Components of deferred tax assets and liabilities were as follows:

						December 31,
In millions						2024						2023
Deferred income tax assets:
Accrued expenses and reserves						$	38					$	50
Warranty reserve						53						49
Deferred compensation/employee benefits						92						77
Right-of-use assets						74						78
Pension and postretirement obligations						13						16
Inventory						39						49
Deferred revenue						93						84
Net operating loss carry forwards						106						124
Other						50						51
Gross deferred income tax assets						558						578
Less: Valuation allowance						(52)						(58)
Total deferred income tax assets						506						520
Deferred income tax liabilities:
Property, plant & equipment						64						64
Right-of-use liabilities						71						75
Intangible assets						663						610
Total deferred income tax liabilities						798						749
Net deferred income tax liability						$	292					$	229

A valuation allowance is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 2024, the valuation allowance for certain deferred tax asset carryforwards was $52 million, primarily in the United States, South Africa, China and the Netherlands. The decrease in valuation allowances in 2024 is primarily related to the sale of a business.

The Company has net operating loss carry-forwards in the amount of $373 million, of which $141 million are indefinite lived, $103 million expire within ten years and $129 million expire in various periods between December 31, 2035 to December 31, 2044.

As of December 31, 2024, the liability for income taxes associated with unrecognized tax benefits was $19 million, of which $18 million, if recognized, would favorably affect the Company’s effective income tax rate. As of December 31, 2023, the liability for income taxes associated with unrecognized tax benefits was $40 million, of which $27 million, if recognized, would favorably affect the Company’s effective income tax rate. A reconciliation of the beginning and ending amount of the gross liability for income taxes associated with unrecognized tax benefits follows:

In millions						2024						2023						2022
Balance at beginning of year						$	40					$	33					$	32
Unrecognized tax benefits in prior periods						3						13						1
Audit settlement during year						(22)						(5)						—
Expiration of audit statute of limitations						(2)						(1)						—
Balance at end of year						$	19					$	40					$	33

The Company includes interest and penalties related to unrecognized tax benefits in income tax expense. As of December 31, 2024 and 2023, the total interest and penalties accrued was approximately $13 million.

An audit of the Company’s U.S. federal income tax return for the year 2017 is ongoing and select state and non-U.S. income tax audits are also underway. With limited exception, the Company is no longer subject to examination by various U.S. and foreign taxing authorities for years before 2019. At this time, the Company believes that it is reasonably possible that unrecognized tax benefits of approximately $14 million may change within the next 12 months due to the expiration of statutory review periods and current examinations.

12. EARNINGS PER SHARE

The Company’s non-vested restricted stock contains rights to receive non-forfeitable dividends, and thus are participating securities requiring the two-class method of computing earnings per share. The calculation of earnings per share for common stock excludes the income attributable to the non-vested restricted stock from the numerator, which results in approximately 0.3% of Net income attributable to Wabtec shareholders being allocated to non-vested restricted stock in all periods presented. Additionally, the dilutive impact of the assumed conversion of non-vested restricted stock is excluded from the denominator of the diluted weighted average shares outstanding. The computation of basic and diluted earnings per common share for Net income attributable to Wabtec shareholders is as follows:

						For the year ended December 31,
In millions, except per share data						2024						2023						2022
Numerator
Net income attributable to Wabtec shareholders						$	1,056					$	815					$	633
Less: Net income allocated to non-vested restricted stock						(3)						(2)						(2)
Numerator for basic and diluted earnings per common share						$	1,053					$	813					$	631
Denominator
Weighted average shares outstanding - basic						174.1						178.8						182.2
Effect of dilutive securities:
Assumed conversion of dilutive stock-based compensation plans excluding non-vested restricted stock						0.3						0.4						0.4
Assumed conversion of dilutive non-vested restricted stock						0.4						0.3						0.2
Weighted average shares outstanding - diluted						174.8						179.5						182.8
Earnings per common share attributable to Wabtec shareholders
Basic						$	6.05					$	4.54					$	3.46
Diluted						$	6.04					$	4.53					$	3.46

13. STOCK-BASED COMPENSATION PLANS

As of December 31, 2024, the Company maintains employee stock-based compensation plans for stock options, restricted stock, and incentive stock units as governed by the 2011 Stock Incentive Compensation Plan, as amended and restated (the “2011 Plan”) and the 2000 Stock Incentive Plan, as amended (the “2000 Plan”). The 2011 Plan has a term through May 10, 2027, and as of December 31, 2024, the number of shares available for future grants under the 2011 Plan was approximately 4.4 million shares. The Company also maintains a 1995 Non-Employee Directors’ Fee and Stock Option Plan as amended and restated (“the Directors Plan”). The Directors Plan, as amended, authorizes a total of 1.1 million shares of Common Stock to be issued. Under the Directors Plan, options issued become exercisable over a three-year vesting period and expire ten years from the date of grant, and restricted stock issued under the plan vests one year from the date of grant. The amount of restricted stock issued to non-employee directors as compensation for directors’ fees was as follows: 9,320 shares for 2024; 14,856 shares for 2023; and 14,269 shares for 2022. The total number of shares issued under the Directors Plan as of December 31, 2024 was approximately 1.0 million shares.

Stock-based compensation expense for all of the plans was $85 million, $59 million and $49 million for the years ended December 31, 2024, 2023 and 2022, respectively. Associated tax benefits related to the stock-based compensation plans for the years ended December 31, 2024, 2023 and 2022 were not material.

Included in the stock-based compensation expense for 2024 above is $37 million of expense related to incentive stock units, $28 million of expense related to non-vested restricted stock, $19 million related to restricted stock units, and $1 million related to units issued for Directors’ fees. At December 31, 2024, unamortized compensation expense related to those non-vested restricted shares and incentive stock units expected to vest totaled $79 million and will be recognized over a weighted period of 1.4 years.

Stock Options Stock options are granted to eligible employees and directors at fair market value, which is the average of the high and low Wabtec stock price on the date of grant. Under the 2011 Plan and the 2000 Plan, options become exercisable over a three year vesting period and expire 10 years from the date of grant. There were no stock options granted in the years ended December 31, 2024, 2023 and 2022. At December 31, 2024, there were 172,196 shares issuable pursuant to exercisable stock options.

Restricted Stock, Restricted Stock Units and Incentive Stock As provided for under the 2011 Plan and 2000 Plan, eligible employees are granted restricted stock that generally vests over three years from the date of grant. Under the Directors Plan, restricted stock awards vest one year from the date of grant. The restricted stock units are liability-classified equity awards as they can be settled in cash.

In addition, the Company has issued incentive stock units to eligible employees that vest upon attainment of certain cumulative three-year performance goals, including a Relative Total Stockholder Return ("RTSR") modifier. The RTSR can increase or decrease the payment by 10% to 20% depending on the plan year. Significant judgments and estimates are used in determining the estimated three-year performance, which is then used to estimate the total shares expected to vest over the three year vesting cycle and corresponding expense based on the grant date fair value of the award. When determining the estimated three-year performance, the Company utilizes a combination of historical actual results, budgeted results and forecasts. Upon the initial grant of a performance cycle, the Company estimates the three-year performance at 100%. Quarterly, the Company reviews and updates performance estimates based on actual performance results and current projections. Based on the Company’s performance for each three year period then ended, the incentive stock units can vest and be awarded ranging from 0% to 200% of the initial incentive stock units granted. The incentive stock units included in the table below represent the number of shares that are expected to vest based on the Company’s estimate for meeting those established performance targets. As of December 31, 2024, the Company estimates that it will achieve approximately 184%, 181% and 200% for the incentive stock awards expected to vest, inclusive of the RTSR modifier, based on the estimated performance for the three year periods ending December 31, 2024, 2025, and 2026, respectively, and has recorded incentive compensation expense accordingly. If estimates of the number of these stock units expected to vest changes in a future accounting period, cumulative compensation expense could increase or decrease and will be recognized in the current period for the elapsed portion of the vesting period and would change future expense for the remaining vesting period.

Compensation expense for the non-vested restricted stock and incentive stock units is based on the closing price of the Company’s common stock on the date of grant and recognized over the applicable vesting period. Expense for incentive stock units is updated as necessary based on the Company's performance.

The following table summarizes the restricted stock and incentive stock units activity and related information for the years ended December 31:

						Restricted Stock and Units						Incentive Stock Awards						Weighted Average Grant Date Fair Value
Outstanding at December 31, 2021						507,698						607,101						$	78.06
Granted						460,841						176,657						$	91.19
Vested						(234,597)						(43,039)						$	75.14
Adjustment for incentive stock awards expected to vest						—						45,301						$	84.55
Canceled						(44,522)						(41,176)						$	76.84
Outstanding at December 31, 2022						689,420						744,844						$	84.73
Granted						368,209						192,751						$	104.70
Vested						(262,339)						(265,678)						$	81.00
Adjustment for incentive stock awards expected to vest						—						31,011						$	88.02
Canceled						(34,721)						(10,196)						$	93.44
Outstanding at December 31, 2023						760,569						692,732						$	93.65
Granted						310,461						193,661						$	142.55
Vested						(296,463)						(298,756)						$	87.23
Adjustment for incentive stock awards expected to vest						—						313,519						$	118.53
Canceled						(46,531)						(24,092)						$	105.98
Outstanding at December 31, 2024						728,036						877,064						$	115.71

14. ACCUMULATED OTHER COMPREHENSIVE LOSS

Comprehensive income (loss) comprises both Net income and the Other Comprehensive (loss) income resulting from the change in equity from transactions and other events and circumstances from non-owner sources.

The changes in Accumulated other comprehensive loss by component, net of tax, for the years ended December 31, 2024, 2023, and 2022 are as follows:

In millions						Foreign currency translation						Derivative contracts						Pension and post retirement benefit plans						Total
Balance at December 31, 2021						$	(396)					$	(5)					$	(65)					$	(466)
Other comprehensive (loss) income before reclassifications						(200)						(4)						7						(197)
Amounts reclassified from Accumulated other comprehensive loss						—						—						2						2
Other comprehensive (loss) income, net						(200)						(4)						9						(195)
Balance at December 31, 2022						$	(596)					$	(9)					$	(56)					$	(661)
Other comprehensive income (loss) before reclassifications						55						16						(2)						69
Amounts reclassified from Accumulated other comprehensive loss						—						—						2						2
Other comprehensive income, net						55						16						—						71
Balance at December 31, 2023						$	(541)					$	7					$	(56)					$	(590)
Other comprehensive (loss) income before reclassifications						(277)						10						13						(254)
Amounts reclassified from Accumulated other comprehensive loss						—						—						(2)						(2)
Other comprehensive (loss) income, net						(277)						10						11						(256)
Balance at December 31, 2024						$	(818)					$	17					$	(45)					$	(846)

Amounts reclassified from Accumulated other comprehensive loss are recognized in "Other income, net" with the tax impact recognized in "Income tax expense" on the Consolidated Statements of Income.

15. LEASES

The Company leases certain property, buildings and equipment. For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of lease payments. Many of the Company's leases include rental escalation clauses, renewal options, and/or termination options that are factored into our determination of lease payments when appropriate. The Company does not separate lease and non-lease components. Operating lease expense for the years ended December 31, 2024, 2023, and 2022 was $71 million, $64 million, and $60 million, respectively. During 2024 and 2023, new operating leases of $76 million and $37 million, respectively, were added during the year. As most of the Company's leases do not provide a readily stated discount rate, the Company must estimate the rate to discount lease payments using its incremental borrowing rate. Wabtec does not have material financing leases, short-term or variable leases or sublease income.

Scheduled payments of operating lease liabilities are as follows:

In millions			Operating Leases
2025			$	63
2026			56
2027			45
2028			37
2029			30
Thereafter			114
Total lease payments			345
Less: Present value discount			(37)
Present value lease liabilities			$	308

The following table summarizes the remaining lease term and discount rate assumptions used to develop the present value of operating lease liabilities:

			December 31, 2024						December 31, 2023
Weighted-average remaining lease term (years)			7.9						7.8
Weighted-average discount rate			2.9		%				2.4		%

16. WARRANTIES

The following table reconciles the changes in the Company’s product warranty reserve as follows:

In millions						2024						2023
Balance at beginning of year						$	248					$	242
Warranty expense						117						95
Warranty claim payments						(85)						(93)
Acquisitions						1						—
Foreign currency impact/other						(7)						4
Balance at end of year						$	274					$	248

17. FAIR VALUE MEASUREMENT AND DERIVATIVE INSTRUMENTS

ASC 820 “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value and explains the related disclosure requirements. ASC 820 indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model.

Valuation Hierarchy. ASC 820 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The Company’s cash, cash equivalents and restricted cash are highly liquid investments purchased with an original maturity of three months or less and are considered Level 1 on the fair value valuation hierarchy. The fair value of cash, cash equivalents and restricted cash approximated the carrying value at December 31, 2024 and 2023. The Senior Notes are considered Level 2 based on the fair value valuation hierarchy. Contingent consideration related to the GE Transportation acquisition was considered Level 3 based on the fair value valuation hierarchy. At December 31, 2023, $42 million was classified as "Other accrued liabilities" on the Company's Consolidated Balance Sheets, which approximates fair value. There was no contingent consideration outstanding at December 31, 2024.

Hedging Activities In the normal course of business, the Company is exposed to market risks related to interest rates, commodity prices and foreign currency exchange rate fluctuations, which may adversely affect our operating results and financial position. At times, we limit these risks through the use of derivatives such as cross-currency swaps, foreign currency forward contracts, interest rate swaps, commodity swaps and options. These hedging contracts are valued using broker quotations, or market transactions in either the listed or over-the counter markets. As such, these derivative instruments are classified within Level 2. In accordance with our policy, derivatives are only used for hedging purposes. We do not use derivatives for trading or speculative purposes.

Foreign Currency Exchange Risk

The Company uses forward contracts to hedge forecasted foreign currency denominated sales of finished goods and future settlement of foreign currency denominated assets and liabilities. Derivatives used to hedge firm commitments relevant to sales and purchases and forecasted transactions to be realized with high probability that meet the criteria for hedge accounting are designated as cash flow hedges. The effective portion of gains and losses is deferred as a component of Accumulated other comprehensive loss and is recognized in earnings at the time the hedged item affects earnings, in the same line item as the underlying hedged item. For the years ended December 31, 2024, 2023 and 2022, the amounts reclassified into income were not material.

The Company has also established balance sheet risk management and net investment hedging programs to protect its balance sheet against foreign currency exchange rate volatility. We conduct our business worldwide in U.S. dollars and the functional currencies of our foreign subsidiaries, including euro, Indian rupee, British pound sterling, Australian dollars, Brazilian real, Kazakhstani tenge, and several other foreign currencies. Changes in these foreign currency exchange rates could have a material adverse impact on our financial results that are reported in U.S. dollars. We are also exposed to foreign currency exchange rate risk related to our foreign subsidiaries, including intercompany loans denominated in non-functional currencies. We hedge these exposures using foreign currency swap contracts and cross-currency swaps to offset the potential income statement effects on intercompany loans denominated in non-functional currencies. These programs reduce but do not eliminate foreign currency exchange rate risk entirely.

The Company enters into certain derivative contracts in accordance with its risk management strategy that do not meet the criteria for hedge accounting, but which have the impact of largely mitigating foreign currency exposure. These foreign exchange contracts are accounted for on a full mark-to-market basis through earnings, with gains and losses recorded as a component of Other income, net. The net gains and losses related to these contracts were not material for the years ended December 31, 2024, 2023 and 2022. These contracts typically mature within one year.

Interest Rate Risk

The Company may use interest rate hedge contracts on certain investing and borrowing transactions to manage its net exposure to interest rate changes and to manage its overall cost of borrowing. The Company does not use leveraged swaps and, in general, does not leverage any of its investment activities that would put principal capital at risk. During the first quarter of 2024, the Company utilized all outstanding interest rate hedge contracts to help manage interest expense for the 2034 Notes issued in the first quarter of 2024. In the third quarter of 2024, the Company entered into new interest rate hedge contracts to manage interest rate risk for a portion of future expected debt transactions. For the years ended December 31, 2024, 2023 and 2022, the amounts reclassified into income were not material.

Commodity Price Risk

The Company may use commodity forward swaps to manage its exposure to commodity price changes and to reduce its overall cost of manufacturing. For the years ended December 31, 2024, 2023 and 2022, the amounts reclassified into income were not material.

The following table summarizes the assets, liabilities, gross notional amounts, fair values, and fair value hierarchy classification of the designated and non-designated hedges discussed in the above sections as of December 31, 2024, which are

included in Other current assets and liabilities on the Consolidated Balance Sheets:

									Fair Value												Gross Notional Amount
In millions			Level						Designated						Non-Designated						Designated						Non-Designated
Foreign Exchange Contracts
Other current assets			2						$	5					$	1					$	387					$	153
Other current liabilities			2						(4)						(1)						182						44
Interest Rate Contracts
Other current assets			2						2						—						40						—
Total									$	3					$	—					$	609					$	197

The following table summarizes the assets, liabilities, gross notional amounts, fair values, and fair value hierarchy classification of the designated and non-designated hedges discussed in the above sections as of December 31, 2023, which are included in other current assets and liabilities on the Consolidated Balance Sheets:

									Fair Value												Gross Notional Amount
In millions			Level						Designated						Non-Designated						Designated						Non-Designated
Foreign Exchange Contracts
Other current assets			2						$	6					$	3					$	319					$	110
Other current liabilities			2						(12)						(3)						655						200
Interest Rate Contracts
Other current assets			2						10						—						250						—
Total									$	4					$	—					$	1,224					$	310

18. COMMITMENTS AND CONTINGENCIES

The Company is subject to a variety of environmental laws and regulations governing discharges to air and water, the handling, storage and disposal of hazardous or solid waste materials and the remediation of contamination associated with releases of hazardous substances. The Company believes its operations currently comply in all material respects with all of the various environmental laws and regulations applicable to our business; however, there can be no assurance that environmental requirements will not change in the future or that we will not incur significant costs to comply with such requirements.

Claims have been filed against the Company and certain of its affiliates in various jurisdictions across the United States by persons alleging bodily injury as a result of exposure to asbestos-containing products. The vast majority of the claims are submitted to insurance carriers for defense and indemnity, or to non-affiliated companies that retain the liabilities for the asbestos-containing products at issue. We cannot, however, assure that all of these claims will be fully covered by insurance, or that the indemnitors or insurers will remain financially viable. Our ultimate legal and financial liability with respect to these claims, as is the case with other pending litigation, cannot be estimated. A limited number of claims are not covered by insurance, nor are they subject to indemnity from non-affiliated parties. Management believes that the costs of the Company’s asbestos-related cases will not be material to the Company’s overall financial position, results of operations and cash flows.

During the third quarter of 2023, a competitor of the Company, Progress Rail (“Progress”), which is a Caterpillar Inc. company, sued the Company in the U.S. District Court for the District of Delaware asserting antitrust, breach of contract, unfair competition law, and misrepresentation claims. The complaint challenges the Wabtec-GE Transportation merger and contends that since the merger, Wabtec has unlawfully monopolized the markets for long-haul freight locomotives, Tier IV long-haul freight locomotives, and energy management systems by, among other things, failing to ensure that Progress’ products are interoperable with Wabtec’s locomotives and cab electronics. Progress seeks an order requiring Wabtec to divest GE Transportation, unspecified treble damages for its alleged lost profits from reduced sales of locomotive and cab systems, and attorneys’ fees and costs. It also asks the court to enjoin Wabtec from engaging in the conduct and require the Company to comply with its agreements with Progress. Wabtec intends to vigorously defend itself against this lawsuit and believes that it has meritorious defenses to the claims asserted by Progress. The case is still at an early stage; Wabtec filed a motion to dismiss, briefing on this motion was completed in early 2024. The Court has not yet issued a decision on Wabtec’s motion.

Xorail, Inc., a wholly owned subsidiary of the Company (“Xorail”), has received notices from Denver Transit Constructors (“DTC”) alleging breach of contract related to the operating of constant warning wireless crossings, and late delivery of the Train Management & Dispatch System (“TMDS”) for the Denver Eagle P3 Project, which is owned by the Denver Regional Transit District ("RTD"). No damages have been asserted for the alleged late delivery of the TMDS, and no formal claim has been filed; Xorail has successfully completed a remediation plan concerning the TMDS issues. With regard to the wireless crossing issue, as of September 8, 2017, DTC alleged that total damages were $37 million through July 31, 2017

and were continuing to accumulate. The majority of the damages stems from a delay in approval of the wireless crossing system by the Federal Railway Administration ("FRA") and the Public Utility Commission ("PUC"), resulting in the use of flaggers at all of the crossings pending approval of the wireless crossing system and certification of the crossings. DTC has alleged that the delay is due to Xorail's failure to achieve constant warning times for the crossings in accordance with the approval requirements imposed by the FRA and PUC. Xorail has denied DTC's assertions, stating that its system satisfied the contractual requirements. Xorail has worked with DTC to modify its system and implement the FRA's and PUC's previously undefined approval requirements; the FRA and PUC have both approved modified wireless crossing system, and as of August 2018, DTC completed the process of certifying the crossings and eliminated the use of flaggers. DTC has not updated its claim notices against Xorail, nor have they filed any formal claim against Xorail. On September 21, 2018, DTC filed a complaint against RTD in Colorado state court for breach of contract related to non-payments and the costs for the flaggers, asserting a change-in-law arising from the FRA/PUC’s new certification requirements. DTC's claim against RTD proceeded to trial on September 21, 2020. On February 10, 2023, the court issued a decision in favor of RTD, denying DTC's damages claim. DTC filed an appeal to the Colorado Court of Appeals; on May 13, 2024, the Court of Appeals upheld the trial Court’s decision in favor of RTD; DTC filed a Writ of Certiorari with the Colorado Supreme Court seeking another appeal; the Writ was denied on February 4, 2025. DTC has informally indicated that they intend to send an updated claim notice to Xorail.

From time to time the Company is involved in litigation relating to claims arising out of its operations in the ordinary course of business. As of the date hereof, the Company is involved in no litigation that the Company believes will have a material adverse effect on its financial condition, results of operations or liquidity.

19. SEGMENT INFORMATION

The Company 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 Company’s business segments are:

Freight Segment builds, rebuilds, upgrades, and overhauls locomotives, services locomotives and freight cars, and provides a range of component and digital solutions for customers in the freight and transit rail, mining, and marine industries. It also manufactures and services components for new and existing freight cars and locomotives, supplies railway electronics, positive train control equipment, signal design and engineering services, maintenance of way, and provides heat exchange and cooling systems for locomotives and power generation equipment. Customers include large, publicly traded railroads, leasing companies, manufacturers of original equipment such as locomotives and freight cars, and utilities, and also serves companies in the mining, marine, and industrial markets. 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, manufacturers of passenger transit vehicles and buses, and companies in the electrical generation, distribution, and charging industries.

Wabtec’s chief operating decision maker (CODM) is the Company’s Chief Executive Officer, Rafael Santana. Mr. Santana utilizes Income (loss) from operations as the primary reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources. For both of the Company’s segments, the CODM uses segment Income (loss) from operations to make operational and personnel related decisions across the business. The CODM considers actual, budgeted and forecasted Income (loss) from operations on a monthly basis for evaluating the performance of each segment and making decisions about allocating capital and other resources to each segment. Additionally, Gross margin is used by the CODM as a secondary measure of segment profit or loss in assessing segment performance and deciding how to allocate resources. For both of the Company’s segments, the CODM uses segment Gross margin to make commercial and operational related decisions across the business.

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 certain intersegment transactions, interest income and expense and other unallocated charges. Segment assets for the Freight and Transit Segment include assets directly utilized for segment operations, as well as the related goodwill and intangible assets. Corporate segment assets include cash, cash equivalents, and restricted cash, equity method investment assets, certain tax assets, receivables held by our bankruptcy-remote facility, pension assets, corporate headquarters' assets and other asset balances that are managed outside of operating segments. During 2024, management changed the presentation of segment assets below to show intercompany balances eliminated. As such, segment assets for 2023 have been updated to conform to the current period presentation.

Cost of sales for both segments represents costs directly related to manufacturing products and providing services. Primary costs include raw materials, direct labor, overhead, shipping and handling, warehousing, and the depreciation of

manufacturing, warehousing and distribution facilities. Selling, general and administrative expenses for both segments represent costs incurred in managing the business, including salary, benefits, professional fees and operating costs associated with each segment’s non-manufacturing activities. The amounts of depreciation and amortization disclosed by reportable segment are included within their respective segment expense captions, such as Cost of sales, Selling, general & administrative expenses and Amortization expense.

During 2024, Company management determined that certain parts of the business would be better aligned with management oversight in different product lines. These changes were immaterial to the individual product lines and segments affected, and historical amounts have been reclassified to conform to the current period presentation.

Segment financial information for 2024 is as follows:
In millions						Freight Segment						Transit Segment						Corporate Activities and Elimination						Total
Sales to external customers						$	7,468					$	2,919					$	—					$	10,387
Cost of sales						(4,945)						(2,076)						—						(7,021)
Gross profit						$	2,523					$	843					$	—					$	3,366
Gross margin						33.8		%				28.9		%
Selling, general & administrative expenses						$	(664)					$	(433)					$	(151)					$	(1,248)
Engineering expenses						(164)						(42)						—						(206)
Amortization expense						(273)						(30)						—						(303)
Income (loss) from operations						1,422						338						(151)						1,609
Interest expense and other, net						—						—						(199)						(199)
Income (loss) before income taxes						$	1,422					$	338					$	(350)					$	1,410
Intersegment sales/(elimination)						$	48					$	59					$	(107)					$	—
Depreciation and amortization						$	413					$	73					$	17					$	503
Capital expenditures						$	140					$	62					$	5					$	207
Segment assets						$	13,176					$	3,861					$	1,665					$	18,702

Segment financial information for 2023 is as follows:
In millions						Freight Segment						Transit Segment						Corporate Activities and Elimination						Total
Sales to external customers						$	6,923					$	2,754					$	—					$	9,677
Cost of sales						(4,742)						(1,991)						—						(6,733)
Gross profit						$	2,181					$	763					$	—					$	2,944
Gross margin						31.5		%				27.7		%
Selling, general & administrative expenses						$	(637)					$	(408)					$	(94)					$	(1,139)
Engineering expenses						(180)						(38)						—						(218)
Amortization expense						(299)						(22)						—						(321)
Income (loss) from operations						1,065						295						(94)						1,266
Interest expense and other, net						—						—						(174)						(174)
Income (loss) before income taxes						$	1,065					$	295					$	(268)					$	1,092
Intersegment sales/(elimination)						$	58					$	42					$	(100)					$	—
Depreciation and amortization						$	442					$	72					$	17					$	531
Capital expenditures						$	119					$	58					$	9					$	186
Segment assets						$	13,417					$	3,944					$	1,627					$	18,988

Segment financial information for 2022 is as follows:
In millions						Freight Segment						Transit Segment						Corporate Activities and Elimination						Total
Sales to external customers						$	5,979					$	2,383					$	—					$	8,362
Cost of sales						(4,090)						(1,732)						—						(5,822)
Gross profit						$	1,889					$	651					$	—					$	2,540
Gross margin						31.6		%				27.3		%
Selling, general & administrative expenses						$	(580)					$	(365)					$	(84)					$	(1,029)
Engineering expenses						(177)						(32)						—						(209)
Amortization expense						(272)						(19)						—						(291)
Income (loss) from operations						860						235						(84)						1,011
Interest expense and other, net						—						—						(157)						(157)
Income (loss) before income taxes						$	860					$	235					$	(241)					$	854
Intersegment sales/(elimination)						$	48					$	32					$	(80)					$	—
Depreciation and amortization						$	398					$	61					$	20					$	479
Capital expenditures						$	86					$	55					$	8					$	149

The following geographic area data as of and for the years ended December 31, 2024, 2023 and 2022, respectively, includes net sales based on product shipment destination and long-lived assets, which consist of property, plant and equipment, net of depreciation, resident in their respective countries:

						Net Sales																		Long-Lived Assets
In millions						2024						2023						2022						2024						2023
United States						$	4,924					$	4,553					$	3,734					$	927					$	948
Canada						616						531						454						7						7
Mexico						275						347						287						34						23
North America						5,815						5,431						4,475						968						978
South America						445						346						336						40						47
Germany						371						347						339						54						54
France						369						346						273						59						58
United Kingdom						296						248						213						33						44
Italy						166						183						163						38						37
Other Europe						612						520						458						58						60
Europe						1,814						1,644						1,446						242						253
India						579						593						531						119						122
Kazakhstan / CIS						559						457						399						34						39
Australia / New Zealand						481						451						465						16						15
China						242						286						244						25						28
Other Asia / Middle East						258						240						183						—						—
Egypt						28						120						164						—						—
Other Africa						166						109						119						3						3
Total						$	10,387					$	9,677					$	8,362					$	1,447					$	1,485

Net sales to external customers by product line are as follows:

In millions						2024						2023						2022
Freight Segment:
Services						$	3,381					$	3,262					$	2,819
Equipment						2,108						1,794						1,547
Components						1,193						1,094						884
Digital Intelligence						786						773						729
Total Freight Segment sales						$	7,468					$	6,923					$	5,979
Transit Segment:
Original Equipment Manufacturer						$	1,308					$	1,264					$	1,117
Aftermarket						1,611						1,490						1,266
Total Transit Segment sales						$	2,919					$	2,754					$	2,383

20. OTHER INCOME, NET

The components of Other income, net are as follows:

						For the year ended December 31,
In millions						2024						2023						2022
Foreign currency (loss) gain						$	(19)					$	(20)					$	6
Equity income						8						25						17
Expected return on pension assets/amortization						11						7						7
Other miscellaneous income (expense)						2						32						(1)
Total Other income, net						$	2					$	44					$	29

As a result of the change in ownership interest and obtaining control of LKZ, Wabtec's previously held equity interest balance was remeasured to fair value, resulting in a gain of approximately $35 million recorded to Other income, net and is included in Other miscellaneous income (expense) in 2023. See Note 3 for additional information.

21. RESTRUCTURING

During the first quarter of 2022, Wabtec announced a multi-year strategic initiative (“Integration 2.0”) to review and consolidate our operating footprint, reduce headcount, streamline the end-to-end manufacturing process, restructure the North America distribution channels, expand operations in low-cost countries, and simplify the business through systems enablement. Through this initiative, Management has evaluated additional capital investments to further simplify and streamline the business. The Company now anticipates that it will incur one-time charges related to Integration 2.0 up to approximately $170 million.

A summary of restructuring charges related to the Integration 2.0 initiative is as follows:

			For the year ended December 31,
In millions			2024						2023						2022
Freight Segment:
Cost of goods sold			$	7					$	4					$	13
Selling, general and administrative expenses			—						5						1
Other income, net			(4)						—						$	—
Total Freight Segment			$	3					$	9					$	14
Transit Segment:
Cost of goods sold			$	13					$	25					$	26
Selling, general and administrative expenses			10						13						6
Amortization expense			2						2						—
Total Transit Segment			$	25					$	40					$	32
Total Integration 2.0 restructuring charges			$	28					$	49					$	46

Total charges related to Integration 2.0 to date are approximately $146 million which includes amounts recorded in the fourth quarter 2021 for similar actions in Europe. Cash payments made during 2024 were approximately $48 million, primarily for employee related costs. Cash payments made during 2023 were approximately $39 million.

In addition to Integration 2.0, Wabtec is focused on exiting various low margin product offerings through Portfolio Optimization to improve profitability while reducing manufacturing complexity. Wabtec now expects to incur approximately $70 million in net exit charges related to Portfolio Optimization, which will be predominately non-cash asset write downs. Total charges related to Portfolio Optimization to date are approximately $56 million, which includes approximately $28 million charged in 2024 and in 2023. During 2024, approximately $18 million is related to the Freight Segment and approximately $10 million is related to the Transit Segment. Charges are primarily related to asset write downs.

22. SUBSEQUENT EVENTS

On January 14, 2025, Wabtec announced a definitive agreement to acquire Evident’s Inspection Technologies division (Inspection Technologies), formerly part of the Scientific Solutions Division of Olympus Corporation, a global leader in Non-Destructive Testing, Remote Visual Inspection and Analytical Instruments solutions for mission critical assets, for $1.78 billion. Inspection Technologies’ leading industry presence and innovative product portfolio is expected to significantly expand Wabtec's capabilities, adding advanced automated inspection capabilities, driving technology in a space where data acquisition, analytics and automation are critical. Upon acquisition, Inspection Technologies will be reported within the Digital Intelligence product line of the Freight Segment. The Company anticipates financing the acquisition with a combination of cash on hand, utilization of the Revolving Credit Facility and an additional term loan. The transaction is subject to customary closing conditions and regulatory approvals, with the Company expecting to finalize the acquisition of Inspection Technologies by the end of the first half of 2025.