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 2025, the Company completed the acquisitions of Continental Railworks Technology I Inc., Dotnetix Proprietary Limited and Dotnetix SA Proprietary Limited, Evident's Inspection Technologies Division, and Frauscher Sensor Technology Group GmbH, and 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, 2025. The acquisitions are all subsidiaries whose combined total assets represent 2.4% and combined net sales represent 2.5% of the related consolidated financial statement amounts as of and for the year ended December 31, 2025.

Based on its assessment, Management has concluded that the Company maintained effective internal control over financial reporting as of December 31, 2025, 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, 2025, 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, 2025 and 2024, 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, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, 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, 2025, 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 13, 2026 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 Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters 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 matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

			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 inputs used for these arrangements include costs of material and labor. During the year ended December 31, 2025, 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.

			Valuation of Customer Relationships Intangible Asset in the Acquisition of Evident’s Inspection Technologies Division
Description of the Matter			As discussed in Note 3 to the consolidated financial statements, on July 1, 2025, the Company acquired Evident’s Inspection Technologies division (“Inspection Technologies”). The transaction was accounted for under the acquisition method of accounting. The Company preliminarily determined the fair value of the identified customer relationships intangible asset to be $411 million using an income approach. Auditing the Company’s valuation of the acquired customer relationships intangible asset was complex due to estimation uncertainty in determining the fair value. The estimation uncertainty was primarily due to the sensitivity of the fair value of the customer relationships intangible asset to underlying assumptions about the future performance of the acquired Inspection Technologies business. The significant assumptions used to estimate the fair value of the customer relationships intangible asset included a discount rate and certain assumptions that form the basis of the forecasted results (future revenue and earnings before interest, taxes, depreciation, and amortization margin). These significant assumptions are forward looking and could be affected by future economic and market 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 estimate the fair value of the acquired customer relationships intangible asset. We also tested controls over management’s review of the significant assumptions used in the fair value calculation described above and management’s review of the valuation model. To test the estimated fair value of the acquired customer relationships intangible asset, our audit procedures included, among others, evaluating the Company's use of the income approach, testing the significant assumptions described above, and testing the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. For example, we compared the significant assumptions used by management to observable market data, current industry and economic trends, and actual operating results realized subsequent to the acquisition. We also performed sensitivity analyses of the significant assumptions to evaluate the changes in the fair value of customer relationships intangible asset resulting from changes in the significant assumptions. In addition, we involved our valuation specialists to assist in our evaluation of the methodologies and certain significant assumptions used by the Company, such as the discount rate.

/s/ Ernst & Young LLP

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

Pittsburgh, Pennsylvania

February 13, 2026

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, 2025, 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, 2025, 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 Continental Railworks Technology I Inc., Dotnetix Proprietary Limited and Dotnetix SA Proprietary Limited, Evident's Inspection Technologies Division, and Frauscher Sensor Technology Group GmbH, which are included in the 2025 consolidated financial statements of the Company and constituted 2.4% of total assets as of December 31, 2025 and 2.5% 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 Continental Railworks Technology I Inc., Dotnetix Proprietary Limited and Dotnetix SA Proprietary Limited, Evident's Inspection Technologies Division, and Frauscher Sensor Technology Group GmbH.

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, 2025 and 2024, 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, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(2) and our report dated February 13, 2026 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 13, 2026

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

CONSOLIDATED BALANCE SHEETS

						December 31,
In millions, except par value						2025						2024
Assets
Assets
Cash, cash equivalents and restricted cash						$	789					$	715
Accounts receivable						1,410						1,152
Unbilled accounts receivable						487						550
Inventories, net						2,745						2,314
Other current assets						263						212
Total current assets						5,694						4,943
Property, plant and equipment, net						1,616						1,447
Goodwill						10,216						8,710
Other intangible assets, net						3,838						2,934
Other noncurrent assets						705						668
Total noncurrent assets						16,375						13,759
Total Assets						$	22,069					$	18,702
Liabilities and Shareholders’ Equity
Liabilities
Accounts payable						$	1,402					$	1,300
Customer deposits						1,015						693
Accrued compensation						490						425
Accrued warranty						266						248
Current portion of long-term debt						1,250						500
Other accrued liabilities						727						626
Total current liabilities						5,150						3,792
Long-term debt						4,291						3,480
Deferred income taxes						606						376
Other long-term liabilities						832						921
Total Liabilities						10,879						8,569
Commitments and contingencies (Note 18)
Equity
Common stock, $.01 par value; 500.0 shares authorized; 171.9 shares issued and 170.6 outstanding at December 31, 2025; 226.9 shares issued and 171.3 outstanding at December 31, 2024						1						2
Additional paid-in capital						8,069						8,023
Treasury stock, at cost, 1.3 and 55.6 shares, at December 31, 2025 and 2024, respectively						(190)						(3,273)
Retained earnings						3,878						6,185
Accumulated other comprehensive loss						(616)						(846)
Total Westinghouse Air Brake Technologies Corporation shareholders’ equity						11,142						10,091
Noncontrolling interest						48						42
Total Equity						11,190						10,133
Total Liabilities and Equity						$	22,069					$	18,702

The accompanying notes are an integral part of these statements.

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

						Year Ended December 31,
						2025						2024						2023
In millions, except per share data
Net sales:
Sales of goods						$	9,261					$	8,434					$	7,647
Sales of services						1,906						1,953						2,030
Total net sales						11,167						10,387						9,677
Cost of sales:
Cost of goods						(6,244)						(5,918)						(5,581)
Cost of services						(1,117)						(1,103)						(1,152)
Total cost of sales						(7,361)						(7,021)						(6,733)
Gross profit						3,806						3,366						2,944
Operating expenses:
Selling, general and administrative expenses						(1,490)						(1,248)						(1,139)
Engineering expenses						(223)						(206)						(218)
Amortization expense						(300)						(303)						(321)
Total operating expenses						(2,013)						(1,757)						(1,678)
Income from operations						1,793						1,609						1,266
Other income and expenses:
Interest expense, net						(225)						(201)						(218)
Other income, net						24						2						44
Income before income taxes						1,592						1,410						1,092
Income tax expense						(409)						(343)						(267)
Net income						1,183						1,067						825
Less: Net income attributable to noncontrolling interest						(13)						(11)						(10)
Net income attributable to Wabtec shareholders						$	1,170					$	1,056					$	815
Earnings Per Common Share
Basic
Net income attributable to Wabtec shareholders						$	6.84					$	6.05					$	4.54
Diluted
Net income attributable to Wabtec shareholders						$	6.83					$	6.04					$	4.53
Weighted average shares outstanding
Basic						170.5						174.1						178.8
Diluted						171.1						174.8						179.5

The accompanying notes are an integral part of these statements.

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

						Year Ended December 31,
						2025						2024						2023
In millions
Net income attributable to Wabtec shareholders						$	1,170					$	1,056					$	815
Foreign currency translation gain (loss)						229						(277)						55
Unrealized gain on derivative contracts						8						14						22
Unrealized (loss) gain on pension benefit plans and post-retirement benefit plans						(7)						14						—
Other comprehensive income (loss) before tax						230						(249)						77
Income tax expense related to components of other comprehensive income (loss)						—						(7)						(6)
Other comprehensive income (loss), net of tax						230						(256)						71
Comprehensive income attributable to Wabtec shareholders						$	1,400					$	800					$	886

The accompanying notes are an integral part of these statements.

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

						December 31,
						2025						2024						2023
In millions
Operating Activities
Net income						$	1,183					$	1,067					$	825
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization						501						503						531
Stock-based compensation expense						80						66						47
Net loss on business disposition						38						—						—
Net gain on mark-to-market derivatives						(19)						—						—
Below market intangible amortization						(44)						(44)						(54)
Deferred income taxes						11						51						(58)
Net loss on disposal of property, plant and equipment						2						4						7
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Accounts receivable and unbilled accounts receivable						(36)						(34)						(195)
Inventories						(182)						(117)						(58)
Accounts payable						34						70						(58)
Accrued income taxes						6						21						1
Current and noncurrent customer deposits						146						113						116
Other accrued liabilities						36						124						57
Other operating activities						3						10						40
Net cash provided by operating activities						1,759						1,834						1,201
Investing Activities
Acquisitions of businesses, net of cash acquired						(2,520)						(168)						(308)
Purchase of property, plant and equipment						(260)						(207)						(186)
Proceeds from dispositions of businesses, net of cash disposed						8						19						—
Settlement of foreign currency derivatives related to acquisition						20						—						—
Proceeds from disposal of property, plant and equipment						5						13						2
Net cash used for investing activities						(2,747)						(343)						(492)
Financing Activities
Proceeds from debt, net of issuance costs						4,708						2,258						5,563
Payments of debt						(3,224)						(2,322)						(5,521)
Repurchase of stock						(223)						(1,097)						(409)
Cash dividends						(173)						(140)						(123)
Payment of contingent consideration						—						(42)						(112)
Payment of income tax withholding on share-based compensation						(40)						(25)						(16)
Distribution to noncontrolling interest						(6)						(6)						(17)
Other financing activities						(11)						3						2
Net cash provided by (used for) financing activities						1,031						(1,371)						(633)
Effect of changes in currency exchange rates on cash						31						(25)						3
Increase in cash						74						95						79
Cash, cash equivalents and restricted cash, beginning of year						715						620						541
Cash, cash equivalents and restricted cash, end of year						$	789					$	715					$	620

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, 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
Cash dividends ($1.00 dividend per share)						—						—						—						—						—						(173)						—						—						(173)
Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax						—						—						(34)						0.4						2						—						—						—						(32)
Stock based compensation						—						—						80						—						—						—						—						—						80
Net income						—						—						—						—						—						1,170						—						13						1,183
Other comprehensive income, net of tax						—						—						—						—						—						—						230						—						230
Stock repurchase						—						—						—						(1.1)						(224)						—						—						—						(224)
Treasury stock retirement						(55.0)						(1)						—						55.0						3,305						(3,304)						—						—						—
Distribution to noncontrolling interest						—						—						—						—						—						—						—						(6)						(6)
Other						—						—						—						—						—						—						—						(1)						(1)
Balance at December 31, 2025						171.9						$	1					$	8,069					(1.3)						$	(190)					$	3,878					$	(616)					$	48					$	11,190

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 and applications. Our highly engineered rail and transit 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 2025, approximately half 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. The Company also 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. These statements have been prepared in accordance with U.S. generally accepted accounting principles. Sales between subsidiaries are eliminated in consolidation.

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.

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 $32 million and $36 million as of December 31, 2025 and 2024, 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.

Business Combinations The Company accounts for business acquisitions under the acquisition method of accounting, in accordance with ASC 805, Business Combinations, which requires the purchase price of the acquired business to be allocated to tangible and intangible assets acquired and liabilities assumed based on the respective fair values. The amount of purchase price which is in excess of the fair value of assets acquired and liabilities assumed is recognized as goodwill.

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.

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.

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, 2025, the Company's remaining performance obligations were approximately $27.4 billion. The Company expects to recognize revenue of approximately 30% of remaining performance obligations over the next 12 months, with the remainder recognized thereafter.

Revolving Receivables Program Effective January 1, 2025, the Company utilizes its Revolving Receivables Program to request borrowings from a financial institution against certain collateralized receivables for up to $350 million. During the third quarter of 2025, the Company amended the Revolving Receivables Program to increase its availability from $350 million to up to $450 million. The Company and certain of its subsidiaries (the "Originators") contribute receivables to our bankruptcy-remote subsidiary, which can then be collateralized on a recurring basis. As customers pay their balances, we transfer additional receivables into the program. Borrowings and repayments under the Revolving Receivables Program are classified as Financing activities on our Consolidated Statement of Cash Flows, with any outstanding collateralized balance at period end classified as debt on our Consolidated Balance Sheets. Prior to January 1, 2025, the Company utilized its Revolving Receivables Program to sell up to $350 million of certain receivables from the Originators. Receivables were sold to a financial institution on a recurring basis in exchange for cash equal to the gross receivables sold. Proceeds and remittances of receivables sold under the program prior to January 1, 2025 are classified as Operating activities on our Consolidated Statement of Cash Flows. For the years ended December 31, 2024 and 2023, the net cash proceeds remitted to the financial institution were $20 million and $60 million, respectively.

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. The receivables transferred to the program 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, 2025 and 2024, the bankruptcy-remote subsidiary held receivables of $623 million and $693 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 and outstanding borrowings. There were no collateralized borrowings or outstanding receivables sold at December 31, 2025 and 2024. The transfers are recorded at the fair value of the proceeds received and obligations assumed less derecognized receivables, if applicable. Our maximum exposure to losses related to these receivables transferred is limited to the amount outstanding.

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 $42 million and $52 million at December 31, 2025 and 2024, 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, 2025 and 2024 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 and applications. 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.

Accounting Standards Recently Issued In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 December 2023, the FASB issued 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 are effective for Wabtec's annual reporting periods beginning January 1, 2025. The amendments require increased annual disclosures on current and future comparable reporting periods presented in annual company filings. The new annual disclosure requirements are included in Note 11.

Treasury Stock The Company records treasury stock purchases at cost. The cost of shares repurchased is recorded as a reduction of stockholders' equity. The retirement of treasury stock is recognized as a deduction from common stock for the shares' par value and any excess over par as a deduction from retained earnings. During the first quarter of 2025, the Company retired 55 million shares of treasury stock.

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 30 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 $285 million and $311 million of the Company's outstanding Accounts payable as of December 31, 2025 and 2024, 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 reconciles the changes in amounts due to financial institutions reflected in Accounts payable as follows:

In millions						2025						2024
Obligations outstanding at the beginning of the year						$	311					$	305
Invoices confirmed during the year						683						723
Confirmed invoices paid during the year						(709)						(717)
Obligations outstanding at the end of the year						$	285					$	311

3. ACQUISITIONS

2025

On December 1, 2025, Wabtec acquired Frauscher Sensor Technology Group GmbH ("Frauscher"), a global market leader in train detection, wayside object control solutions and axle counting systems for approximately $792 million. The acquisition positions Wabtec for accelerated, profitable growth, and further strengthens the Company’s product portfolio by adding highly attractive and complementary railway signaling technologies. Frauscher reports within the Digital Intelligence product line of the Freight Segment. The acquisition was funded with a combination of cash on hand, proceeds from the 2025 Term Credit Agreement and borrowings under other sources of available liquidity.

The following table summarizes the preliminary fair value of the Frauscher assets acquired and liabilities assumed:

In millions
Assets acquired
Cash and cash equivalents						$	27
Accounts receivable						48
Inventory						48
Other current assets						5
Property, plant and equipment						14
Goodwill						368
Other intangible assets						393
Other noncurrent assets						24
Total assets acquired						927
Liabilities assumed
Current liabilities						34
Noncurrent liabilities						101
Total liabilities assumed						135
Net assets acquired						$	792

As of December 31, 2025, the measurement period remains open, and the Company has not finalized the purchase accounting for the acquisition. Certain information necessary to complete the purchase price allocation is not yet available, including, but not limited to, valuations of assets acquired and liabilities assumed and final income tax computations. The amounts recognized for the assets acquired and liabilities assumed are provisional and may be adjusted as the Company continues to obtain and evaluate information about facts and circumstances that existed as of the acquisition date and complete the valuations of assets acquired and liabilities assumed, consistent with the measurement‑period guidance in ASC 805. Any necessary adjustments will be finalized within one year from the date of acquisition, once the Company has received the necessary information.

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. The fair value of these intangibles are preliminary in nature and subject to adjustments, which could be material as the Company has not completed its valuation of acquired assets and liabilities.

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 net sales and results of operations subsequent to the acquisition date were not material to the Company’s consolidated net sales or results of operations. 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.

On July 1, 2025, Wabtec acquired 100% ownership in Evident’s Inspection Technologies division ("Inspection Technologies") for approximately $1.788 billion. Inspection Technologies was formerly part of the Scientific Solutions Division of Olympus Corporation, a global leader in nondestructive testing, remote visual inspection and analytical instruments solutions for mission critical assets. 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. Inspection Technologies reports within the Digital Intelligence product line of the Freight Segment. The acquisition was funded with a combination of cash on hand, proceeds from the 2035 Notes, and borrowings under other sources of available liquidity.

The following table summarizes the preliminary fair value of the Inspection Technologies assets acquired and liabilities assumed:

In millions
Assets acquired
Cash and cash equivalents						$	44
Accounts receivable						73
Inventory						144
Other current assets						8
Property, plant and equipment						59
Goodwill						936
Customer relationships						411
Trade names						142
Acquired technology						170
Other noncurrent assets						37
Total assets acquired						2,024
Liabilities assumed
Current liabilities						65
Noncurrent liabilities						171
Total liabilities assumed						236
Net assets acquired						$	1,788

As of December 31, 2025, the measurement period remains open, and the Company has not finalized the purchase accounting for the acquisition. 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 intangible assets. 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. Contingent liabilities assumed as part of the transaction were not material. These estimates are preliminary in nature and subject to adjustments, which could be material as the Company has not completed its valuation of acquired assets and liabilities. Certain information necessary to complete the purchase price allocation is not yet available, including, but not limited to, final valuations of assets acquired and liabilities assumed and final income tax computations. Any necessary adjustments will be finalized within one year from the date of acquisition, once the Company has received the necessary information.

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. Approximately half of the purchased goodwill is expected to be deductible for tax purposes. The net sales and results of operations subsequent to the acquisition date were not material to the Company’s consolidated net sales or results of operations. 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.

Also during 2025, the Freight Segment completed two additional acquisitions for a combined purchase price of approximately $26 million, net of cash acquired, which were individually and collectively immaterial.

On March 18, 2025, Wabtec announced a definitive agreement to acquire Dellner Couplers, a global leader in highly engineered safety-critical train connection systems and services for passenger rail rolling stock, for approximately €890 million. The transaction subsequently closed on February 10, 2026.

Transaction costs related to the completed and announced acquisitions for the year ended December 31, 2025, were approximately $49 million and are included in Selling, general, and administrative expenses.

2024

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.

2023

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, and was allocated primarily to goodwill. 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.

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 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.

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.

4. SUPPLEMENTAL CASH FLOW DISCLOSURES

						Year Ended December 31,
						2025						2024						2023
In millions
Interest paid during the year						$	219					$	181					$	210
Business acquisitions:
Fair value of assets acquired						$	2,989					$	257					$	438
Fair value of liabilities assumed						396						63						82
Cash paid						2,593						194						356
Less: Cash and cash equivalents acquired						(73)						(26)						(48)
Net cash paid						$	2,520					$	168					$	308

At December 31, 2025 and December 31, 2024, Wabtec had restricted cash of $25 million and $9 million, respectively, primarily for cash held in escrow related to acquisitions.

5. INVENTORIES

The components of inventory, net of reserves, were:

						December 31,
In millions						2025						2024
Raw materials						$	1,194					$	977
Work-in-progress						698						587
Finished goods						853						750
Total inventories						$	2,745					$	2,314

6. PROPERTY, PLANT & EQUIPMENT

The major classes of depreciable assets are as follows:

						December 31,
In millions						2025						2024
Machinery and equipment						$	1,898					$	1,666
Buildings and improvements						852						810
Land and improvements						121						106
Construction in progress						236						171
Property, plant and equipment						3,107						2,753
Less: accumulated depreciation						(1,491)						(1,306)
Property, plant and equipment, net						$	1,616					$	1,447

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 $195 million, $196 million, and $204 million for 2025, 2024 and 2023, 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 2025, management elected to first assess qualitative factors to determine whether a quantitative goodwill impairment test is necessary for the Freight and Transit 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 Components 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 Components 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 Components 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 2025, 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 Components 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, 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
Additions						1,320						—						1,320
Disposals						(3)						—						(3)
Foreign currency impact						2						187						189
Balance at December 31, 2025						$	8,567					$	1,649					$	10,216

The Company’s indefinite lived intangible assets are also reviewed annually during the fourth quarter for impairment. During 2025 and 2024, the Company proceeded directly to the quantitative impairment test for certain trade names with indefinite lives. For 2025 and 2024, certain trade names that were associated with the Company’s current restructuring actions were tested and considered impaired. As such, for the year ended December 31, 2025 and 2024, approximately $3 million and approximately $6 million of expense was recorded, respectively, primarily related to the Company's Portfolio Optimization. For the remaining trade names subject to the quantitative impairment test in both 2025 and 2024, the fair value exceeded each respective carrying value, resulting in a conclusion that no additional impairment existed. For other trade names, management assessed qualitative factors and concluded 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 assessing whether each relevant factor will impact the impairment test positively or negatively and the magnitude of any such impact.

As of December 31, 2025 and 2024, the Company’s trade names had a net carrying amount of $851 million and $595 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 became fully amortized in the first quarter of 2024.

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

						December 31, 2025																		December 31, 2024
In millions						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
Backlog						$	1,311					$	(613)					$	698					$	1,415					$	(629)					$	786
Customer relationships						2,000						(550)						1,450						1,329						(480)						849
Acquired technology						1,570						(731)						839						1,318						(614)						704
Total						$	4,881					$	(1,894)					$	2,987					$	4,062					$	(1,723)					$	2,339

The remaining weighted average useful lives of backlog, customer relationships and acquired technology were 8 years, 16 years and 8 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 $300 million, $303 million, and $321 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Amortization expense for the five succeeding years is estimated to be as follows:

In millions
2026						$	323
2027						$	318
2028						$	316
2029						$	315
2030						$	315

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 $121 million and $170 million at December 31, 2025 and 2024, 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 $259 million and $389 million at December 31, 2025 and 2024, 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 $82 million and $91 million at December 31, 2025 and 2024, 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						2025						2024
Balance at beginning of year						$	720					$	678
Recognized in current year						811						856
Reclassified to accounts receivable						(946)						(801)
Acquisitions/adjustments						—						3
Foreign currency impact						23						(16)
Balance at end of year						$	608					$	720
						Contract Liabilities
In millions						2025						2024
Balance at beginning of year						$	1,173					$	1,082
Recognized in current year						1,659						1,562
Amounts in beginning balance reclassified to net sales						(554)						(572)
Current year amounts reclassified to net sales						(958)						(876)
Acquisitions						1						8
Foreign currency impact						35						(31)
Balance at end of year						$	1,356					$	1,173

9. LONG-TERM DEBT

Long-term debt consisted of the following:

															December 31,
			Effective Interest Rate												2025												2024
In millions						Face Value						Book Value						Fair Value 1						Book Value						Fair Value 1
2025 Credit Agreement:
Revolving Credit Facility			6.0		%				N/A						$	—					$	—					$	—					$	—
Term Loan Facility, due 2030			5.6		%				$	725					721						725						—						—
2025 Term Credit Agreement:
Term Loan, due 2026			4.9		%				$	500					500						500						—						—
2024 Credit Agreement:
Term Loan			—		%				$	—					—						—						224						225
2022 Credit Agreement:
Delayed Draw Term Loan			—		%				$	—					—						—						250						250
Senior Notes:
3.20% Senior Notes, due 2025			—		%				$	—					—						—						500						496
3.45% Senior Notes, due 2026			3.5		%				$	750					750						746						750						732
1.25% Senior Notes (EUR), due 2027			1.5		%				€	500					583						575						514						495
4.70% Senior Notes, due 2028			4.8		%				$	1,250					1,247						1,266						1,246						1,239
4.90% Senior Notes, due 2030			5.1		%				$	500					496						512						—						—
5.611% Senior Notes, due 2034			5.7		%				$	500					496						526						496						507
5.50% Senior Notes, due 2035			5.6		%				$	750					743						783						—						—
Other Borrowings															5						5						—						—
Total															5,541						5,638						3,980						3,944
Less: current portion															(1,250)						(1,246)						(500)						(496)
Long-term portion															$	4,291					$	4,392					$	3,480					$	3,448

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, 2025, the annual repayment requirements for debt obligations are as follows:

In millions
2026			$	1,250
2027			589
2028			1,251
2029			1
2030			1,226
Thereafter			1,250
Total			$	5,567

The Company has debt issuance costs related to certain financing transactions which are amortized through interest expense. As of December 31, 2025 and 2024, the Company had total unamortized debt issuance costs and discounts of $26 million and $15 million, respectively.

Credit Agreements

On November 28, 2025, the Company entered into a new stand-alone credit agreement (the "2025 Term Credit Agreement") for a term loan of $500 million. Borrowings under the 2025 Term Credit Agreement bear interest at a base rate plus an interest rate spread up to 1.50% based on the lower of the pricing corresponding to (i) the Company's Leverage Ratio or (ii) the Company's public credit rating. The frequency of interest payments varies based upon the Interest Election Request. The term loan issued under this agreement will mature on November 27, 2026. The obligations of the Company under this 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 2025 Term Credit Agreement, the Company has agreed to maintain the same Interest Coverage Ratio and Leverage Ratio as the 2025 Credit Agreement. The borrowing rate for the agreement is a variable rate assessed periodically in accordance with the terms of the agreement. At December 31, 2025, the interest rate was 4.7%.

On April 23, 2025, the Company entered into a new unsecured amended and restated credit agreement (the "2025 Credit Agreement"), which amended and restated the 2022 Credit Agreement and refinanced the 2024 Credit Agreement. The 2025 Credit Agreement provides for borrowings consisting of (i) a multi-currency revolving credit facility for a U.S. dollar equivalent of up to $2.0 billion (the "Revolving Credit Facility") and (ii) a delayed draw term loan facility of $725 million (the "Term Loan Facility"), all pursuant to the terms and conditions of the 2025 Credit Agreement. The Term Loan Facility was utilized to refinance outstanding borrowings on the 2022 and 2024 credit agreements. During the third quarter of 2025, the remaining $250 million under the Term Loan Facility was drawn and utilized as part of funding for the Inspection Technologies acquisition. The 2025 Credit Agreement includes an incremental facility that allows the Company to request, at prevailing market rates, an aggregate amount not to exceed $1.0 billion, (a) increases to the borrowing commitments under the Revolving Credit Facility and/or (b) new incremental term loan commitments (the "Incremental Facility"). The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type.

The Revolving Credit Facility matures on April 23, 2030. The Term Loan Facility was fully drawn at December 31, 2025, and all borrowings mature on April 23, 2030. Amounts borrowed and repaid under the Term Loan Facility may not be reborrowed. The applicable interest rate for borrowings under the 2025 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 credit rating. At December 31, 2025, the interest rate on the Term Loan Facility was 5.5%, and the interest rate on the undrawn Revolving Credit Facility was 4.9%. Obligations under the 2025 Credit Agreement have been guaranteed by certain of the Company’s subsidiaries.

Under the 2025 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 $500 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 2025 Credit Agreement.

The following table presents availability under the 2025 Credit Agreement as of December 31, 2025:

In millions						Revolving Credit Facility						Term Loan Facility						Total
Maximum Availability						$	2,000					$	725					$	2,725
Outstanding Borrowings						—						(725)						(725)
Letters of Credit Under Credit Agreement						—						—						—
Current Availability						$	2,000					$	—					$	2,000

The Company was in compliance with all financial covenants in the 2025 Credit Agreement and the 2025 Term Credit Agreement as of December 31, 2025.

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 3.45% Senior Notes due 2026 (the "2026 Notes"), 1.25% Senior Notes (EUR) due 2027 (the "Euro Notes"), 4.70% Senior Notes due 2028 (the "2028 Notes"), 4.90% Senior Notes due 2030 (the "2030 Notes"), 5.611% Senior Notes due 2034 (the "2034 Notes"),

and 5.50% Senior Notes due 2035 (the "2035 Notes"). The 2026 Notes, 2028 Notes, 2030 Notes, 2034 Notes, and 2035 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 are senior to all existing and future subordinated indebtedness of the Company.

On May 29, 2025, the Company issued (i) $500 million of 4.90% Senior Notes due 2030 and (ii) $750 million of 5.50% Senior Notes due 2035. The 2030 Notes and 2035 Notes were issued at approximately 100% of face value, and the Company recognized approximately $12 million of total deferred financing costs. Interest on the 2030 Notes and 2035 Notes will accrue at a rate of 4.90% and 5.50%, respectively, per year, payable semi-annually on May 29 and November 29 of each year, commencing November 29, 2025. The 2030 Notes will mature on May 29, 2030, and the 2035 Notes will mature on May 29, 2035.

Proceeds from the 2030 Notes and cash on hand were utilized to repay the outstanding amount of 3.20% Senior Notes due 2025 at maturity. Proceeds from the 2035 Notes were utilized as part of funding for the Inspection Technologies acquisition, which closed July 1, 2025.

On March 11, 2024, the Company issued $500 million of 5.611% Senior Notes due in 2034. 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 accrues 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 our 4.15% Senior Notes due 2024 (the "2024 Notes") at maturity.

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

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 2025 Credit Agreement. The Euro Notes were issued by Wabtec Transportation Netherlands B.V. 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 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 $1,141 million and $931 million at December 31, 2025 and 2024, 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 majority of these plans are frozen, and therefore, participants do not accrue additional benefits. Retirement plan expenses are not material to the Company's results of operations. Plan assets are primarily comprised of cash, equity security funds and debt security funds. The following table provides summarized information regarding the Company's significant defined benefit pension plans by U.S. and international components:

						U.S.												International
In millions						2025						2024						2025						2024
Fair value of plan assets						$	51					$	52					$	210					$	204
Projected benefit obligation						$	(51)					$	(52)					$	(238)					$	(225)
Accumulated benefit obligation						$	(51)					$	(52)					$	(226)					$	(214)
Amounts recognized in the statement of financial position consist of:
Total assets						$	—					$	—					$	25					$	29
Total liabilities						$	—					$	—					$	(54)					$	(50)

Benefit payments expected to be paid to plan participants for the U.S. and international plans combined are expected to be approximately $20 million each year for the next 10 years.

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.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update required prospective changes to certain annual income tax disclosures and are effective for Wabtec's annual reporting periods beginning January 1, 2025. As such, the impacted disclosures for 2025 are reflected below in accordance with the updated requirements. These updates include specific categories and presentation within the income tax rate reconciliation and enhanced disaggregation of disclosures about income taxes paid and income tax expense, among other changes. As allowed under the ASU, Wabtec has not applied these changes retroactively. The amendments in this update did not affect the recognition, measurement, or financial statement presentation of income taxes.

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						2025						2024						2023
Domestic						$	938					$	782					$	506
Foreign						654						628						586
Income before income taxes						$	1,592					$	1,410					$	1,092

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						2025						2024						2023
Current tax expense
Federal						$	146					$	106					$	148
State						36						26						29
Foreign						216						160						148
						398						292						325
Deferred tax expense (benefit)
Federal						28						26						(50)
State						(8)						9						1
Foreign						(9)						16						(9)
						11						51						(58)
Total provision						$	409					$	343					$	267

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						2025
U.S. federal statutory rate						$	334					21.0		%
State and local income tax, net of federal income tax effect						24						1.5
Foreign tax effects						64						4.0
Effect of cross-border tax laws:
Foreign branch income						19						1.2
Other						17						1.1
Tax credits:
Foreign tax credits						(48)						(3.0)
Other						(10)						(0.6)
Nontaxable or nondeductible items						4						0.3
Changes in unrecognized tax benefits						17						1.0
Other adjustments						(12)						(0.8)
Effective rate						$	409					25.7		%

The majority of State and local income tax, net of federal income tax effect for the year ended December 31, 2025 is attributable to state taxes in Illinois, Pennsylvania, California, and Texas.

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

The increase in effective tax rate from 2024 to 2025 was primarily due to changes in jurisdictional mix of earnings and the non-deductible loss generated from the divestiture of a business as part of the Portfolio Optimization initiative.

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.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. Among other provisions, this act includes permanently extending and modifying certain expiring provisions of the 2017 Tax Cuts and Jobs Act and immediate expensing of domestic research and development expenses. The impacts of these provisions do not have a material impact on the consolidated financial statements.

Components of deferred tax assets and liabilities were as follows:

						December 31,
In millions						2025						2024
Deferred income tax assets:
Accrued expenses and reserves						$	64					$	38
Warranty reserve						47						53
Deferred compensation/employee benefits						103						92
Right-of-use assets						94						74
Pension and postretirement obligations						14						13
Inventory						34						39
Deferred revenue						127						93
Tax credit carry forwards						36						—
Net operating loss carry forwards						132						106
Other						52						50
Gross deferred income tax assets						703						558
Less: Valuation allowance						(57)						(52)
Total deferred income tax assets						646						506
Deferred income tax liabilities:
Property, plant & equipment						55						64
Right-of-use liabilities						89						71
Intangible assets						1,036						663
Total deferred income tax liabilities						1,180						798
Net deferred income tax liability						$	534					$	292

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, 2025, the valuation allowance for certain deferred tax asset carryforwards was $57 million, primarily in the United States, South Africa, China and the Netherlands.

The Company has net operating loss carry-forwards in the amount of $438 million, of which $216 million are indefinite lived, $109 million expire within ten years and $113 million expire in various periods between December 31, 2036 to December 31, 2045.

Components of cash taxes paid, net of refunds, were as follows:

						For the year ended December 31,
In millions						2025
United States federal taxes						$	139
State taxes						22
Foreign taxes:
Australia						18
Brazil						19
India						45
Kazakhstan						23
Other foreign jurisdictions						76
Income taxes paid, net of amounts refunded						$	342

Income taxes paid, net of amounts refunded for the years ended December 31, 2024 and 2023, were $237 million and $233 million, respectively.

As of December 31, 2025, the liability for income taxes associated with unrecognized tax benefits was $29 million, of which $18 million, if recognized, would favorably affect the Company’s effective income tax rate. 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. A reconciliation of the beginning and ending amount of the gross liability for income taxes associated with unrecognized tax benefits follows:

In millions						2025						2024						2023
Balance at beginning of year						$	19					$	40					$	33
Unrecognized tax benefits in prior periods						11						3						13
Audit settlement during year						(1)						(22)						(5)
Expiration of audit statute of limitations						—						(2)						(1)
Balance at end of year						$	29					$	19					$	40

The Company includes interest and penalties related to unrecognized tax benefits in income tax expense. As of December 31, 2025 and 2024, the total interest and penalties accrued was approximately $19 million and $13 million, respectively.

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 2020.

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						2025						2024						2023
Numerator
Net income attributable to Wabtec shareholders						$	1,170					$	1,056					$	815
Less: Net income allocated to non-vested restricted stock						(3)						(3)						(2)
Numerator for basic and diluted earnings per common share						$	1,167					$	1,053					$	813
Denominator
Weighted average shares outstanding - basic						170.5						174.1						178.8
Effect of dilutive securities:
Assumed conversion of dilutive stock-based compensation plans excluding non-vested restricted stock						0.4						0.3						0.4
Assumed conversion of dilutive non-vested restricted stock						0.2						0.4						0.3
Weighted average shares outstanding - diluted						171.1						174.8						179.5
Earnings per common share attributable to Wabtec shareholders
Basic						$	6.84					$	6.05					$	4.54
Diluted						$	6.83					$	6.04					$	4.53

13. STOCK-BASED COMPENSATION PLANS

As of December 31, 2025, 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 15, 2030, and as of December 31, 2025, the number of shares available for future grants under the 2011 Plan was approximately 3.9 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: 7,861 shares for 2025; 9,320 shares for 2024; and 14,856 shares for 2023. The total number of shares issued under the Directors Plan as of December 31, 2025 was approximately 1.0 million shares.

Stock-based compensation expense for all of the plans was $94 million, $85 million and $59 million for the years ended December 31, 2025, 2024 and 2023, respectively. Associated tax benefits related to the stock-based compensation plans were approximately $11 million for the year ended December 31, 2025 and not material for the years ended December 31, 2024 and 2023.

Included in the stock-based compensation expense for 2025 above is $46 million of expense related to incentive stock units, $32 million of expense related to non-vested restricted stock, $14 million related to restricted stock units, and $2 million related to units issued for Directors’ fees. At December 31, 2025, unamortized compensation expense related to those non-vested restricted shares and incentive stock units expected to vest totaled $85 million and will be recognized over a weighted period of 1.3 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, 2025, 2024 and 2023. At December 31, 2025, there were 87,079 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, 2025, the Company estimates that it will achieve approximately 194%, 200% and 154% 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, 2025, 2026, and 2027, 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, 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
Granted						290,724						163,207						$	187.97
Vested						(394,667)						(298,747)						$	100.41
Adjustment for incentive stock awards expected to vest						—						138,432						$	147.20
Canceled						(31,517)						(7,903)						$	146.57
Outstanding at December 31, 2025						592,576						872,053						$	147.49

14. ACCUMULATED OTHER COMPREHENSIVE LOSS

Comprehensive income (loss) comprises both Net income and the Other Comprehensive income (loss) 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, including any tax impacts, for the years ended December 31, 2025, 2024, and 2023 are as follows:

In millions						Foreign currency translation						Derivative contracts						Pension and post retirement benefit plans						Total
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)
Other comprehensive income (loss) before reclassifications						229						6						(5)						230
Amounts reclassified from Accumulated other comprehensive loss						—						(2)						2						—
Other comprehensive income (loss), net						229						4						(3)						230
Balance at December 31, 2025						$	(589)					$	21					$	(48)					$	(616)

Amounts included under Derivative contracts related to interest rate hedges reclassified from Accumulated other comprehensive loss are recognized in "Interest expense, net" with the tax impact recognized in "Income tax expense" on the Consolidated Statements of Income. All other 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, 2025, 2024, and 2023 was $72 million, $71 million, and $64 million, respectively. During 2025 and 2024, new operating leases of $149 million and $76 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
2026			$	77
2027			66
2028			57
2029			50
2030			43
Thereafter			156
Total lease payments			449
Less: Present value discount			(57)
Present value lease liabilities			$	392

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

			December 31, 2025						December 31, 2024
Weighted-average remaining lease term (years)			7.9						7.9
Weighted-average discount rate			3.6		%				2.9		%

16. WARRANTIES

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

In millions						2025						2024
Balance at beginning of year						$	274					$	248
Warranty expense						112						117
Warranty claim payments						(110)						(85)
Acquisitions						3						1
Foreign currency impact/other						10						(7)
Balance at end of year						$	289					$	274

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, 2025 and 2024. The Senior Notes are considered Level 2 based on the fair value valuation hierarchy.

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.

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. 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 may also use commodity forward swaps to manage its exposure to commodity price changes and to reduce its overall cost of manufacturing.

The Company has 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, Canadian 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. Net gains and losses related to the Company's hedging activities, except as described below, were not material for the years ended December 31, 2025, 2024 and 2023.

In connection with the acquisitions of Frauscher and Dellner Couplers, the Company entered into foreign exchange contracts for a notional value of €1,290 million to mitigate foreign currency exposure of the purchase prices. As part of the acquisition of Frauscher, the Company utilized foreign exchange forward contracts with a notional value of €690 million. The contracts are not designated as accounting hedges under Topic 815 of ASC, and as such, the gains and losses are recorded as a component of Other income, net. For the year ended December 31, 2025 these contracts resulted in a net gain of $19 million.

At December 31, 2025, the Company had a total gross notional amount of designated and non-designated derivatives of $467 million and $1.355 billion, respectively. At December 31, 2024, the Company had a total gross notional amount of designated and non-designated derivatives of $609 million and $197 million, respectively. The related assets and liabilities at both December 31, 2025 and 2024 were not significant.

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, defamation and false advertising 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. On June 12, 2025, in response to a motion filed by Wabtec, the Court dismissed the antitrust claims against Wabtec saying that no harmful effects on competition resulting from the merger had been shown. Progress Rail subsequently filed an amended Complaint seeking to revive its antitrust claims. Wabtec filed another motion to dismiss the antitrust claims, which is still pending before the Court. The Court did not dismiss the alleged breach of contract, unfair competition, defamation and false advertising claims. Wabtec is vigorously defending those remaining claims and a trial on those claims is currently scheduled to begin on February 23, 2026.

As previously disclosed, Xorail, Inc., a wholly owned subsidiary of the Company (“Xorail”), received notices from Denver Transit Constructors (“DTC”) alleging breach of contract related to the operation of a wireless crossing system provided by Xorail for use by the Denver Regional Transit District ("RTD"). DTC's alleged damages stemmed from a delay in approval of the wireless crossing system by regulatory authorities, which resulted in the interim use of flaggers at the crossings. Xorail denied DTC's assertions, stating that the system satisfied the contractual requirements. In December 2025, DTC and Xorail agreed to settle all of DTC's claims. The settlement was not material to the Company's operating results or cash flows.

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 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 and applications. 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.

The 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 Segments 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.

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 the first quarter of 2025, Company Management determined that certain businesses within the Services product line would be better aligned with Management oversight in the Components product line. As such, Sales by product line for 2024 and 2023 have been recast to conform to the current period presentation. These changes were within the Freight Segment and had no impact on Total Freight Segment Sales, Gross profit, or Income from operations.

Segment financial information for 2025 is as follows:
In millions						Freight Segment						Transit Segment						Corporate Activities and Elimination						Total
Sales to external customers						$	8,036					$	3,131					$	—					$	11,167
Cost of sales						(5,201)						(2,160)						—						(7,361)
Gross profit						$	2,835					$	971					$	—					$	3,806
Gross margin						35.3		%				31.0		%
Selling, general & administrative expenses						$	(823)					$	(471)					$	(196)					$	(1,490)
Engineering expenses						(170)						(53)						—						(223)
Amortization expense						(275)						(25)						—						(300)
Income (loss) from operations						1,567						422						(196)						1,793
Interest expense and other, net						—						—						(201)						(201)
Income (loss) before income taxes						$	1,567					$	422					$	(397)					$	1,592
Intersegment sales/(elimination)						$	48					$	48					$	(96)					$	—
Depreciation and amortization						$	413					$	74					$	14					$	501
Capital expenditures						$	166					$	78					$	16					$	260
Segment assets						$	16,049					$	4,344					$	1,676					$	22,069

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

The following geographic area data as of and for the years ended December 31, 2025, 2024 and 2023, 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						2025						2024						2023						2025						2024
United States						$	5,367					$	4,924					$	4,553					$	935					$	927
Canada						555						616						531						43						7
Mexico						270						275						347						56						34
North America						6,192						5,815						5,431						1,034						968
South America						513						445						346						54						40
France						419						369						346						72						59
Germany						379						371						347						73						54
United Kingdom						313						296						248						43						33
Italy						182						166						183						44						38
Other Europe						663						612						520						82						58
Europe						1,956						1,814						1,644						314						242
India						699						579						593						125						119
Australia / New Zealand						453						481						451						18						16
Kazakhstan / CIS						431						559						457						37						34
China						297						242						286						25						25
Other Asia / Middle East						300						258						240						6						—
Africa						326						194						229						3						3
Total						$	11,167					$	10,387					$	9,677					$	1,616					$	1,447

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

In millions						2025						2024						2023
Freight Segment:
Services						$	3,055					$	3,019					$	2,877
Equipment						2,365						2,108						1,794
Components						1,586						1,555						1,479
Digital Intelligence						1,030						786						773
Total Freight Segment						$	8,036					$	7,468					$	6,923
Transit Segment:
Original Equipment Manufacturer						$	1,393					$	1,308					$	1,264
Aftermarket						1,738						1,611						1,490
Total Transit Segment						$	3,131					$	2,919					$	2,754

20. OTHER INCOME, NET

The components of Other income, net are as follows:

						For the year ended December 31,
In millions						2025						2024						2023
Foreign currency loss						$	(6)					$	(19)					$	(20)
Net gain on mark-to-market derivatives						19						—						—
Equity income						2						8						25
Expected return on pension assets/amortization						11						11						7
Other miscellaneous (expense) income						(2)						2						32
Total Other income, net						$	24					$	2					$	44

In connection with the completed acquisition of Frauscher and announced definitive agreement to acquire Dellner Couplers, the Company entered into foreign exchange contracts for a notional value of €1,290 million to mitigate foreign currency exposure of the purchase price. As part of the acquisition of Frauscher, the Company utilized foreign exchange forward contracts with a notional value of €690 million. The contracts are not designated as accounting hedges under Topic 815 of ASC, and as such, the gains and losses are recorded as a component of Other income, net. For the year ended December 31, 2025, these contracts resulted in a net gain of $19 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 and is included in Other miscellaneous income in 2023. See Note 3 for additional information.

21. RESTRUCTURING

Wabtec is focused on driving operational efficiency and improving profitability while reducing manufacturing complexity. As a result, there are key strategic initiatives aimed at achieving these focus areas.

Integration 3.0

Integration 3.0 is a multi-year strategic initiative to further consolidate our footprint, reduce complexity and streamline manufacturing, engineering, administrative, and commercial activities. The Company anticipates that it will incur one-time restructuring charges related to Integration 3.0 of approximately $80 million to $100 million. Net charges to date of $36 million were primarily for employee-related costs.

A summary of restructuring charges related to the Integration 3.0 initiative is as follows:

						For the year ended December 31,
In millions						2025
Freight Segment:
Cost of goods sold						$	3
Selling, general and administrative expenses						10
Total Freight Segment						$	13
Transit Segment:
Cost of goods sold						$	6
Selling, general and administrative expenses						6
Total Transit Segment						$	12
Corporate:
Selling, general and administrative expenses						$	2
Total Integration 3.0 restructuring charges						$	27

For the year ended December 31, 2024, approximately $9 million of net charges were recorded, of which $3 million was in the Freight Segment and $6 million was in the Transit Segment. Cash payments for the years ended December 31, 2025 and 2024 were not material.

Portfolio Optimization

Wabtec is focused on exiting various low margin product offerings through Portfolio Optimization to improve profitability while reducing manufacturing complexity. Wabtec recorded net charges of approximately $45 million, $28 million

and $28 million for the years ended December 31, 2025, 2024 and 2023, respectively, primarily for asset write downs related to Portfolio Optimization. During 2025, approximately $41 million was related to the Freight Segment and approximately $4 million was related to the Transit Segment. Total one-time restructuring charges related to Portfolio Optimization to date are approximately $101 million.

Integration 2.0

Integration 2.0 is a multi-year strategic initiative 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. The Company anticipates that it will incur one-time charges related to Integration 2.0 up to approximately $170 million, of which approximately $149 million has been incurred to date. There were no material charges or cash payments during the year ended December 31, 2025.

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
Freight Segment:
Cost of goods sold						$	7					$	4
Selling, general and administrative expenses						—						5
Other income, net						(4)						—
Total Freight Segment						$	3					$	9
Transit Segment:
Cost of goods sold						$	13					$	25
Selling, general and administrative expenses						10						13
Amortization expense						2						2
Total Transit Segment						$	25					$	40
Total Integration 2.0 restructuring charges						$	28					$	49

Cash payments made during 2024 and 2023 were approximately $48 million and $39 million, respectively.