Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the information in the unaudited condensed consolidated financial statements and notes thereto included herein and Westinghouse Air Brake Technologies Corporation’s Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in its Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 12, 2025.

OVERVIEW

Wabtec is a global provider of value-added, technology-based locomotives, equipment, systems, and services for the freight rail and passenger transit industries, as well as the mining, marine and industrial markets. Our highly engineered products, which are intended to enhance safety, improve productivity and reduce maintenance costs for customers, can be found on most locomotives, freight cars, passenger transit cars and buses around the world. Our core products and services are essential in the safe and efficient operation of freight rail and passenger transit vehicles. Wabtec is a global company with operations in over 50 countries and our products can be found in more than 100 countries throughout the world. In the first six months of 2025, approximately half of the Company’s Net sales came from customers outside the United States.

Business Update

On July 1, 2025, Wabtec completed the previously announced acquisition of Evident’s Inspection Technologies division (Inspection Technologies), formerly part of the Scientific Solutions Division of Olympus Corporation, for approximately $1.78 billion. Inspection Technologies is a global leader in Non-Destructive Testing, Remote Visual Inspection and Analytical Instruments solutions for mission critical assets. Inspection Technologies' industry presence and innovative product portfolio will significantly expand Wabtec's capabilities and complement the existing product portfolio of Digital Intelligence.

On July 7, 2025, the Company announced a definitive agreement to acquire Frauscher Sensor Technology Group, GmbH ("Frauscher"), a global market leader in train detection, wayside object control solutions and axle counting systems, for approximately €675 million. The acquisition positions Wabtec for accelerated, profitable growth, and further strengthens the Company’s Digital Intelligence business by adding highly attractive and complementary railway signaling technologies. Additionally, during the first quarter of 2025, Wabtec announced a definitive agreement to acquire Dellner Couplers for approximately €890 million. Dellner Couplers is a global leader in highly engineered safety-critical train connection systems and services for passenger rail rolling stock. The acquisition brings highly attractive and complementary technologies to the Transit business and provides synergies by complementing our core transit systems portfolio. Both announced acquisitions are subject to customary closing conditions and regulatory approval. Transaction costs incurred during the three and six months ended June 30, 2025 related to completed and announced acquisitions were approximately $25 million and $35 million, respectively.

During the first six months of 2025, Wabtec signed a $140 million new locomotive order with a North American Class I railroad, signed new locomotive, mining and service orders in the Asia-Pacific region totaling $127 million, signed two multi-year transit platform door contracts valued at $85 million, and secured a $47 million order to provide brakes and couplers for servicing a North American customer. Wabtec also continued to drive recurring revenue in the global market by winning a new service contract in Kazakhstan worth $299 million. Additionally, in March of 2025, Moody's upgraded the Senior Notes ratings to Baa2 from Baa3 and changed the outlook to stable from positive, and S&P Global Ratings reaffirmed Wabtec's credit rating at BBB with a Stable outlook.

Wabtec is focused on driving operational efficiency and improving profitability while reducing manufacturing complexity. As a result, there are restructuring initiatives, including Integration 3.0, Portfolio Optimization and Integration 2.0, aimed at achieving these focus areas. During the first six months of 2025, Wabtec incurred $15 million of restructuring costs related to programs under these initiatives, primarily for employee-related costs.

Future macroeconomic volatility, changes to tariffs and trade policies, supply chain disruptions, and labor availability could cause an impact on revenue and cost increases resulting in an adverse effect on the Company’s operating results. Additionally, broad-based inflation, metals, energy and other commodity costs, transportation and logistics costs, labor costs, and foreign currency exchange rate fluctuations all continue to impact our results. The Company utilizes various mitigating actions intended to lessen the impact of macroeconomic volatility. These actions include implementing price escalations and surcharges, driving operational efficiencies through various cost mitigation efforts and discretionary spend management, strategically sourcing materials, reviewing and modifying distribution logistics, and accelerating integration synergies through our strategic initiatives.

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.

RESULTS OF OPERATIONS

Consolidated Results

SECOND QUARTER 2025 COMPARED TO SECOND QUARTER 2024

The following table shows our Condensed Consolidated Statements of Operations for the periods indicated.

			Three Months Ended June 30,
In millions			2025						2024
Net sales:
Sales of goods			$	2,226					$	2,145
Sales of services			480						499
Total Net sales			2,706						2,644
Cost of sales:
Cost of goods			(1,481)						(1,490)
Cost of services			(287)						(280)
Total Cost of sales			(1,768)						(1,770)
Gross profit			938						874
Operating expenses:
Selling, general and administrative expenses			(347)						(316)
Engineering expenses			(50)						(57)
Amortization expense			(69)						(71)
Total Operating expenses			(466)						(444)
Income from operations			472						430
Other income and expenses:
Interest expense, net			(46)						(49)
Other income, net			24						4
Income before income taxes			450						385
Income tax expense			(111)						(94)
Net income			339						291
Less: Net income attributable to noncontrolling interest			(3)						(2)
Net income attributable to Wabtec shareholders			$	336					$	289

The following table shows the major components of the change in Net sales in the three months ended June 30, 2025 from the three months ended June 30, 2024:

In millions			Freight Segment						Transit Segment						Total
Second Quarter 2024 Net sales			$	1,920					$	724					$	2,644
Acquisitions			18						9						27
Foreign Exchange			(11)						22						11
Organic			(8)						32						24
Second Quarter 2025 Net sales			$	1,919					$	787					$	2,706

Net sales

Net sales for the three months ended June 30, 2025 increased by $62 million, or 2.3%, to $2.71 billion compared to the same period in 2024. Organic sales increased $24 million which was attributable to the Transit Segment, partially offset by the Freight Segment. Transit sales increased from higher demand for Original Equipment Manufacturing and Aftermarket products and services driven by increased investments in sustainable infrastructure, fleet expansion and renewals and increased passenger ridership levels. Freight Components sales decreased primarily due to lower North America rail car build and the exit of low margin business offerings through Portfolio Optimization. Freight Equipment sales decreased primarily due to lower mining sales and lower locomotive deliveries due to a supplied part issue. Freight Services sales increased from higher deliveries of locomotive modernizations and higher parts sales. Sales from acquisitions contributed $27 million, and favorable changes in foreign exchange increased Net sales by $11 million.

Cost of sales

Cost of sales for the three months ended June 30, 2025 decreased by $2 million, or 0.1%, to $1.77 billion compared to the same period in 2024. Cost of sales as a percentage of Net sales was 65.3% and 67.0% for the three months ended June 30, 2025 and 2024, respectively. The improvement in gross margin is attributable to favorable mix within the Freight Segment, strong productivity and cost management, Integration 2.0 and 3.0 savings, and the exit of low margin business offerings through Portfolio Optimization. Costs of sales for the three months ended June 30, 2025 and 2024 included $3 million and $6 million, respectively, of costs related to restructuring initiatives.

Operating expenses

Total operating expenses increased $22 million, or 5.0%, for the three months ended June 30, 2025 compared to the same period in 2024, primarily due to the increase in Net sales and transaction costs associated with announced acquisitions. Operating expenses as a percentage of sales were 17.2% and 16.8% for the three months ended June 30, 2025 and 2024, respectively. Selling, general and administrative expenses ("SG&A") increased $31 million for the three months ended June 30, 2025 compared to the same period in 2024. The increase is primarily from transaction costs associated with announced acquisitions and costs incurred to support the higher sales volume, partially offset by the impacts of Integration 2.0. Transaction costs associated with announced acquisitions included in SG&A were $25 million for three months ended June 30, 2025. SG&A for the three months ended June 30, 2025 and 2024 both included $3 million of costs related to restructuring initiatives. Engineering expenses decreased $7 million due to the timing of investments in new technology.

Interest expense, net

Interest expense, net, decreased $3 million to $46 million for the three months ended June 30, 2025 compared to the same period in 2024, primarily due to interest income earned on cash balances.

Other income, net

Other income, net increased $20 million to $24 million for the three months ended June 30, 2025 compared to the same period in 2024, primarily due to a $32 million gain on mark-to-market derivatives in the current period associated with the anticipated acquisition of Dellner Couplers, partially offset by lower equity income and higher foreign exchange losses.

Income taxes

The effective income tax rate was 24.8% and 24.5% for the three months ended June 30, 2025 and 2024, respectively. The year over year increase in the effective rate was primarily driven by the jurisdictional mix of earnings.

Freight Segment

The following table shows our Condensed Consolidated Statements of Operations for our Freight Segment for the periods indicated:

			Three Months Ended June 30,
In millions			2025						2024						Change						% Change
Net sales:
Sales of goods			$	1,440					$	1,423					$	17					1.2		%
Sales of services			479						497						(18)						(3.6)		%
Total Net sales			1,919						1,920						(1)						(0.1)		%
Cost of sales:
Cost of goods			(936)						(972)						(36)						(3.7)		%
Cost of services			(286)						(279)						7						2.5		%
Total Cost of sales			(1,222)						(1,251)						(29)						(2.3)		%
Cost of sales (% of Net sales)			63.7		%				65.2		%				(1.5)
Gross profit			697						669						28						4.2		%
Operating expenses			(282)						(278)						4						1.4		%
Income from operations			$	415					$	391					$	24					6.1		%
Income from operations (% of Net sales)			21.6		%				20.4		%				1.2

The following table shows the major components of the change in Net sales for the Freight Segment in the second quarter of 2025 from the second quarter of 2024:

In millions
Second Quarter 2024 Net sales			$	1,920
Acquisitions			18
Foreign Exchange			(11)
Organic changes in Net sales by Product Line:
Services			48
Components			(30)
Equipment			(16)
Digital Intelligence			(10)
Second Quarter 2025 Net sales			$	1,919

Net sales

Freight Segment organic sales decreased by $8 million driven primarily by Components sales from lower North America rail car build and the exit of low margin business offerings through Portfolio Optimization and Equipment sales from lower mining sales and lower locomotive deliveries due to a supplied part issue. This was partially offset by increased Services sales from higher deliveries of locomotive modernizations and higher parts sales. Sales from acquisitions contributed $18 million, and unfavorable changes in foreign exchange decreased sales by $11 million.

Cost of sales

Freight Segment Cost of sales decreased $29 million, primarily from the exit of low margin business offerings through Portfolio Optimization, and Cost of sales as a percentage of Net sales decreased 1.5 percentage points. The improvement in gross margin is attributable to favorable mix within the Freight Segment product lines, strong productivity and cost management, and Portfolio Optimization. Cost of sales for the three months ended June 30, 2025 and 2024 included $2 million and $5 million, respectively, of costs related to restructuring initiatives.

Operating expenses

Freight Segment Operating expenses as a percentage of Net sales were 14.7% and 14.4% for the three months ended June 30, 2025 and 2024, respectively. Freight Segment Operating expenses increased by $4 million, primarily driven by higher SG&A expenses resulting from acquisitions, partially offset by a reduction in research and development costs and lower amortization expense for intangibles associated with the GE Transportation acquisition.

Transit Segment

The following table shows our Condensed Consolidated Statements of Operations for our Transit Segment for the periods indicated:

			Three Months Ended June 30,
In millions			2025						2024						Change						% Change
Net sales			$	787					$	724					$	63					8.7		%
Cost of sales			(546)						(519)						27						5.2		%
Cost of sales (% of Net sales)			69.3		%				71.7		%				(2.4)
Gross profit			241						205						36						17.6		%
Operating expenses			(132)						(123)						9						7.3		%
Income from operations			$	109					$	82					$	27					32.9		%
Income from operations (% of Net sales)			13.9		%				11.3		%				2.6

The following table shows the major components of the change in Net sales for the Transit Segment in the second quarter of 2025 from the second quarter of 2024:

In millions
Second Quarter 2024 Net sales			$	724
Acquisitions			9
Foreign Exchange			22
Organic changes in Net sales by Product Line:
Original Equipment Manufacturing			25
Aftermarket			7
Second Quarter 2025 Net sales			$	787

Net sales

Transit Segment organic sales increased by $32 million driven by strong Original Equipment Manufacturing and Aftermarket sales primarily as a result of increased demand for products and services due to fleet expansion and renewals and increased passenger ridership levels, and increased investments in sustainable infrastructure. Sales from acquisitions contributed $9 million, and favorable changes in foreign exchange rates increased sales by $22 million.

Cost of sales

Transit Segment Cost of sales increased by $27 million, primarily due to higher sales volume, and Cost of sales as a percentage of Net sales decreased by 2.4 percentage points. The increase in gross margin was attributable to increased productivity and the benefits from structured cost actions taken through prior years' restructuring and integration projects, primarily Integration 2.0 and 3.0. Transit Segment Cost of sales for the three months ended June 30, 2025 and 2024 both included $1 million of costs related to restructuring initiatives.

Operating expenses

Transit Segment Operating expenses as a percentage of Net sales were 16.8% and 17.0% for the three months ended June 30, 2025 and 2024, respectively. Transit Segment Operating expenses increased by $9 million as compared to the prior year. Higher SG&A expenses to support higher sales volume were partially offset by benefits from structured cost actions taken through Integration 2.0 and prior years' restructuring and integration projects. Transit SG&A expenses for the three months ended June 30, 2025 and 2024 included $4 million and $3 million, respectively, of costs related to restructuring initiatives.

FIRST SIX MONTHS OF 2025 COMPARED TO FIRST SIX MONTHS OF 2024

The following table shows our Condensed Consolidated Statements of Operations for the periods indicated.

			Six Months Ended June 30,
In millions			2025						2024
Net sales:
Sales of goods			$	4,383					$	4,152
Sales of services			933						989
Total Net sales			5,316						5,141
Cost of sales:
Cost of goods			(2,931)						(2,901)
Cost of services			(547)						(551)
Total Cost of sales			(3,478)						(3,452)
Gross profit			1,838						1,689
Operating expenses:
Selling, general and administrative expenses			(654)						(597)
Engineering expenses			(96)						(105)
Amortization expense			(142)						(145)
Total Operating expenses			(892)						(847)
Income from operations			946						842
Other income and expenses:
Interest expense, net			(92)						(96)
Other income, net			22						2
Income before income taxes			876						748
Income tax expense			(210)						(180)
Net income			666						568
Less: Net income attributable to noncontrolling interest			(8)						(7)
Net income attributable to Wabtec shareholders			$	658					$	561

The following table shows the major components of the change in Net sales in the six months ended June 30, 2025 from the six months ended June 30, 2024:

In millions			Freight Segment						Transit Segment						Total
First Six Months of 2024 Net sales			$	3,744					$	1,397					$	5,141
Acquisitions			33						17						50
Foreign Exchange			(37)						5						(32)
Organic			80						77						157
First Six Months of 2025 Net sales			$	3,820					$	1,496					$	5,316

Net sales

Net sales for the six months ended June 30, 2025 increased by $175 million, or 3.4%, to $5.32 billion compared to the same period in 2024. Organic sales increased $157 million which was attributable to both the Freight and Transit Segments. Freight Services sales increased from higher deliveries of locomotive modernizations and engine overhauls and higher parts sales. Freight Equipment sales decreased primarily due to lower locomotive deliveries and lower mining sales. Transit sales increased from higher demand for Original Equipment Manufacturing and Aftermarket products and services driven by increased investments in sustainable infrastructure, fleet expansion and renewals and increased passenger ridership levels. Sales from acquisitions contributed $50 million, and unfavorable changes in foreign exchange rates decreased Net sales by $32 million.

Cost of sales

Cost of sales for the six months ended June 30, 2025 increased by $26 million, or 0.8%, to $3.48 billion compared to the same period in 2024. The increase is primarily due to the increase in Net sales. Cost of sales as a percentage of Net sales was 65.4% and 67.2% for the six months ended June 30, 2025 and 2024, respectively. The improvement in gross margin is attributable to favorable mix within the Freight Segment, strong productivity and cost management, Integration 2.0 and 3.0 savings, and the exit of low margin business offerings through Portfolio Optimization. Cost of sales for the six months ended June 30, 2025 and 2024 included $6 million and $12 million, respectively, of costs related to restructuring initiatives.

Operating expenses

Total operating expenses increased $45 million, or 5.3%, for the six months ended June 30, 2025 compared to the same period in 2024, primarily due to the increase in Net sales and transaction costs associated with announced acquisitions. Operating expenses as a percentage of sales were 16.8% and 16.5% for the six months ended June 30, 2025 and 2024, respectively. SG&A expenses increased $57 million for the six months ended June 30, 2025 compared to the same period in 2024. The increase is primarily from costs incurred to support the higher sales volume, transaction costs associated with announced acquisitions and higher employee compensation and benefit costs, partially offset by the impacts of Integration 2.0 and 3.0. Transaction costs associated with announced acquisitions included in SG&A were $35 million for six months ended June 30, 2025. SG&A for the six months ended June 30, 2025 and 2024 included $8 million and $6 million, respectively, of costs related to restructuring initiatives. Engineering expenses decreased $9 million due to the timing of investments in new technology.

Interest expense, net

Interest expense, net, decreased $4 million to $92 million for the six months ended June 30, 2025 compared to the same period in 2024, primarily due to interest income earned on cash balances.

Other income, net

Other income, net, increased $20 million to $22 million for the six months ended June 30, 2025 compared to the same period in 2024, primarily due to a $32 million gain on mark-to-market derivatives in the current period associated with the anticipated acquisition of Dellner Couplers, partially offset by lower equity income and higher foreign exchange losses.

Income taxes

The effective income tax rate was 24.0% and 24.1% for the six months ended June 30, 2025 and 2024, respectively. The year over year decrease in the effective tax rate was primarily driven by the jurisdictional mix of earnings.

Freight Segment

The following table shows our Condensed Consolidated Statements of Operations for our Freight Segment for the periods indicated:

			Six Months Ended June 30,
In millions			2025						2024						Change						% Change
Net sales:
Sales of goods			$	2,890					$	2,760					$	130					4.7		%
Sales of services			930						984						(54)						(5.5)		%
Total Net sales			3,820						3,744						76						2.0		%
Cost of sales:
Cost of goods			(1,893)						(1,902)						(9)						(0.5)		%
Cost of services			(545)						(548)						(3)						(0.5)		%
Total Cost of sales			(2,438)						(2,450)						(12)						(0.5)		%
Cost of sales (% of Net sales)			63.8		%				65.4		%				(1.6)
Gross profit			1,382						1,294						88						6.8		%
Operating expenses			(547)						(535)						12						2.2		%
Income from operations			$	835					$	759					$	76					10.0		%
Income from operations (% of Net sales)			21.9		%				20.3		%				1.6

The following table shows the major components of the change in Net sales for the Freight Segment in the first six months of 2025 from the first six months of 2024:

In millions
First Six Months of 2024 Net sales			$	3,744
Acquisitions			33
Foreign Exchange			(37)
Organic changes in Net sales by Product Line:
Services			179
Equipment			(54)
Components			(42)
Digital Intelligence			(3)
First Six Months of 2025 Net sales			$	3,820

Net sales

Freight Segment organic sales increased by $80 million driven primarily by Services sales from higher deliveries of locomotive modernizations and engine overhauls and higher parts sales. This was partially offset by decreased Equipment sales from lower locomotive deliveries and lower mining sales and decreased Components sales from lower North America rail car build and the exit of low margin business offerings through Portfolio Optimization. Sales from acquisitions contributed $33 million, and unfavorable changes in foreign exchange decreased sales by $37 million.

Cost of sales

Freight Segment Cost of sales decreased by $12 million, primarily from the exit of low margin business offerings through Portfolio Optimization, partially offset by higher sales volume, and Cost of sales as a percentage of Net sales decreased 1.6 percentage points. The improvement in gross margin is attributable to favorable mix within the Freight Segment product lines, strong productivity and cost management, Portfolio Optimization, and Integration 2.0 and 3.0. Cost of sales for the six months ended June 30, 2025 and 2024 included $4 million and $8 million, respectively, of costs related to restructuring initiatives.

Operating expenses

Freight Segment Operating expenses as a percentage of Net sales were 14.3% for both the six months ended June 30, 2025 and 2024. Freight Segment Operating expenses increased by $12 million, primarily driven by higher SG&A expenses resulting from higher costs to support increased sales volume, higher employee compensation and benefit costs and incremental expense from acquisitions. This was partially offset by a reduction in research and development costs and lower amortization expense for intangibles associated with the GE Transportation acquisition.

Transit Segment

The following table shows our Condensed Consolidated Statements of Operations for our Transit Segment for the periods indicated:

			Six Months Ended June 30,
In millions			2025						2024						Change						% Change
Net sales			$	1,496					$	1,397					$	99					7.1		%
Cost of sales			(1,040)						(1,002)						38						3.8		%
Cost of sales (% of Net sales)			69.5		%				71.7		%				(2.2)
Gross profit			456						395						61						15.4		%
Operating expenses			(257)						(239)						18						7.5		%
Income from operations			$	199					$	156					$	43					27.6		%
Income from operations (% of Net sales)			13.3		%				11.2		%				2.1

The following table shows the major components of the change in Net sales for the Transit Segment in the first six months of 2025 from the first six months of 2024:

In millions
First Six Months of 2024 Net sales			$	1,397
Acquisitions			17
Foreign Exchange			5
Organic changes in Net sales by Product Line:
Original Equipment Manufacturing			41
Aftermarket			36
First Six Months of 2025 Net sales			$	1,496

Net sales

Transit Segment organic sales increased by $77 million driven by strong Original Equipment Manufacturing and Aftermarket sales primarily as a result of increased demand for products and services, due to fleet expansion and renewals and increased passenger ridership levels and increased investments in sustainable infrastructure. Sales from acquisitions contributed $17 million, and favorable changes in foreign exchange rates increased sales by $5 million.

Cost of sales

Transit Segment Cost of sales increased by $38 million, primarily due to higher sales volume, and Costs of sales as a percentage of Net sales decreased by 2.2 percentage points. The increase in gross margin is primarily attributable to increased productivity and the benefits from structured cost actions taken through Integration 2.0 and prior years' restructuring and integration projects. Transit Cost of sales for the six months ended June 30, 2025 and 2024 included $2 million and $4 million, respectively, of costs related to restructuring initiatives.

Operating expenses

Transit Segment Operating expenses as a percentage of Net sales were 17.2% and 17.1% for the six months ended June 30, 2025 and 2024, respectively. Transit Segment Operating expenses increased by $18 million as compared to the prior year. Higher SG&A expenses to support higher sales volume and higher employee compensation and benefit costs were partially offset by benefits from structured cost actions taken through Integration 2.0 and prior years' restructuring and integration projects. Transit SG&A expenses for the six months ended June 30, 2025 and 2024 included $8 million and $6 million, respectively, of costs related to restructuring initiatives.

Liquidity and Capital Resources

Liquidity is provided by operating cash flows, borrowings under the 2025 Credit Agreement, with a consortium of commercial banks, and proceeds from the Company’s Senior Notes. Additionally, the Company utilizes the Revolving Receivables Program and supply chain financing program described below, as well as other short-term financing agreements with certain banks, for added flexibility as part of our liquidity management strategy. The following is a summary of selected cash flow information and other relevant data:

			Six Months Ended June 30,
In millions			2025						2024
Cash provided by (used for):
Operating activities			$	400					$	569
Investing activities			$	(98)					$	(57)
Financing activities			$	454					$	(523)

Operating activities In the first six months of 2025, cash provided by operating activities was $400 million compared to $569 million in the first six months of 2024. Significant changes to the sources and (uses) of cash for the six month periods include the following:

• $98 million from increased Net income, partially offset by $(32) million for a non-cash gain on mark-to-market derivatives;

• $(97) million from changes in receivables driven by the timing of collections from customers;

• $(60) million from changes in inventory primarily driven by the timing of locomotive deliveries due to a supplied part issue; and,

• $(58) million from changes to employee related benefit payments.

Investing activities In the first six months of 2025 and 2024, cash used for investing activities was $(98) million and $(57) million, respectively. During the first six months of 2025, Wabtec used $(83) million for additions to property, plant and equipment for investments in our facilities and manufacturing processes and used $(21) million for acquisitions. During the first six months of 2024, Wabtec used $(77) million for additions to property, plant, and equipment and received $20 million of proceeds from disposals of property, plant and equipment.

Financing activities In the first six months of 2025, cash provided by financing activities was $454 million which included $735 million from net changes in debt, $(148) million in stock repurchases, $(87) million of dividend payments, and $(39) million of payments for income tax withholding on share-based compensation. In the first six months of 2024, cash used for financing activities was $(523) million, which included $(58) million from net changes in debt, $(375) million in stock repurchases, $(71) million of dividend payments, and $(23) million of payments for income tax withholding on share-based compensation.

During the second quarter of 2025, the Company entered into the 2025 Credit Agreement, which amended and restated the 2022 Credit Agreement and refinanced the 2024 Credit Agreement. The 2025 Credit Agreement increased the amount available under the Revolving Credit Facility to $2.0 billion and provided a Term Loan Facility of $725 million. The Term Loan Facility was utilized to refinance (i) $250 million of the outstanding Delayed Draw Term Loan under the 2022 Credit Agreement and (ii) $225 million of the outstanding term loan under the 2024 Credit Agreement. After June 30, 2025, the remaining $250 million under the Term Loan Facility was drawn and utilized as part of funding for the Inspection Technologies acquisition.

Also during the second quarter of 2025, the Company issued $500 million of Senior Notes due in 2030 and $750 million of Senior Notes due in 2035. Proceeds from the 2030 Notes and cash on hand were utilized to repay the outstanding amount of the 2025 Notes at maturity. Proceeds from the 2035 Notes were utilized as part of funding for the Inspection Technologies acquisition.

During the first quarter of 2024, the Company entered into the 2024 Credit Agreement for a term loan of $225 million. Also during the first quarter of 2024, the Company issued $500 million of Senior Notes due in 2034. Proceeds from the 2034 Notes, combined with the proceeds from the term loan under the 2024 Credit Agreement and cash on hand, were utilized to repay the outstanding amount of 2024 Notes at maturity.

As of June 30, 2025, the Company held approximately $1.50 billion of cash, cash equivalents and restricted cash, of which approximately $976 million was held within the United States and approximately $523 million was held outside of the United States, primarily in Europe, India, and Brazil. While repatriation of some cash held outside the United States may be restricted by local laws, most of the Company’s foreign cash could be repatriated to the United States net of any tax impacts. As of June 30, 2025, approximately $13 million of the Company's $1.50 billion cash balance was classified as restricted.

We or our affiliates may, from time to time, seek to retire or purchase outstanding debt through negotiated or open-market cash purchases, exchanges, or otherwise, and such transactions, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

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. The Company collateralizes certain receivables through our bankruptcy-remote subsidiary 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 included within Proceeds from debt and Payments of debt within the Financing activities section of the Condensed Consolidated Statement of Cash Flows.

Prior to January 1, 2025, the Company utilized its Revolving Receivables Program to sell certain receivables for up to $350 million on a recurring basis. Net cash proceeds received from the sale of receivables in exchange for cash equal to the gross receivables sold are included in cash from operations within the Condensed Consolidated Statement of Cash Flows.

During the six months ended June 30, 2025, the Company borrowed and repaid $350 million against the collateralized receivables. There were no receivables sold during the six months ended June 30, 2025. Net cash payments included in cash from operations from the Revolving Receivables Program was $(20) million for the six months ended June 30, 2024. Additional information with respect to the Revolving Receivables Program is included in Note 2 of "Notes to Condensed Consolidated Financial Statements" included in Part I, Item 1 of this report.

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 and does not result in a change in the classification of amounts due as Accounts payable in the Condensed Consolidated Balance Sheets. Additional information with respect to the Supply Chain Financing Program is included in Note 2 of "Notes to Condensed Consolidated Financial Statements" included in Part I, Item 1 of this report.

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.

Total Available Liquidity

The components of total available liquidity were as follows:

In millions			June 30, 2025						December 31, 2024
Cash and cash equivalents			$	1,486					$	706
Revolving Credit Facility			2,000						1,500
Term Loan Facility			250						—
Revolving Receivables Program			350						350
Total Available Liquidity			$	4,086					$	2,556

On July 1, 2025, Wabtec acquired Inspection Technologies for $1.78 billion, which was financed through a combination of cash on hand, proceeds from the 2035 Notes, and borrowings under other sources of available liquidity.

On March 18, 2025, Wabtec announced a definitive agreement to acquire Dellner Couplers, with a purchase price of approximately €890 million. In connection with the announced definitive agreement to acquire Dellner Couplers, the Company

entered into foreign exchange contracts for a notional amount of €440 million to mitigate foreign currency exposure associated with the acquisition. In addition, on July 7, 2025, Wabtec announced a definitive agreement to acquire Frauscher Sensor Technology Group, with a purchase price of approximately €675 million. Wabtec intends to finance these acquisitions using cash on hand, together with a mix of short- and long-term borrowings.

Guarantor Summarized Financial Information

Westinghouse Air Brake Technologies Corporation (the “Parent Company”) has issued 3.20% Senior Notes due 2025, 3.45% Senior Notes due 2026, 4.70% Senior Notes due 2028, 4.90% Senior Notes due 2030, 5.611% Senior Notes due 2034, and 5.50% Senior Notes due 2035 (collectively, the “US Notes”).

The obligations under the US Notes issued by the Parent Company have been fully and unconditionally guaranteed by certain of the Parent Company's U.S. subsidiaries ("Guarantor Subsidiaries"), currently comprising GE Transportation, a Wabtec Company, RFPC Holding Corp., Transportation IP Holdings, LLC, Transportation Systems Services Operations Inc., Wabtec Components LLC, Wabtec Holding LLC, Wabtec Railway Electronics Holdings, LLC, Wabtec Transportation Systems, LLC and Wabtec US Rail, Inc.. Each guarantor is 100% owned by the Parent Company, with the exception of GE Transportation, a Wabtec Company, which has 15,000 shares outstanding of Class A Non-Voting Preferred Stock held by General Electric Company. The Euro Notes are issued by Wabtec Transportation Netherlands B.V. ("Wabtec Netherlands") and are fully and unconditionally guaranteed by the Parent Company.

The following tables present summarized financial information of the Parent Company and the Guarantor Subsidiaries on a combined basis. The combined summarized financial information eliminates (i) intercompany balances and transactions among the Parent Company and Guarantor Subsidiaries and (ii) equity in earnings from and investments in any subsidiary that is not a Guarantor Subsidiary.

The summarized financial information is provided in accordance with the reporting requirements of Rule 13-01 under SEC Regulation S-X for the Parent Company, as the issuer of the US Notes, and Guarantor Subsidiaries.

Summarized Statement of Income

						Unaudited
						Parent Company and Guarantor Subsidiaries
In millions						Six Months Ended June 30, 2025
Net sales						$	3,039
Gross profit						$	469
Net income attributable to Wabtec shareholders						$	163

Summarized Balance Sheet

						Unaudited
						Parent Company and Guarantor Subsidiaries
In millions						June 30, 2025						December 31, 2024
Current assets						$	2,236					$	1,624
Noncurrent assets						$	3,457					$	3,500
Current liabilities						$	1,936					$	2,278
Long-term debt						$	4,199					$	2,962
Other non-current liabilities						$	582					$	738

The following is a description of the transactions between the combined Parent Company and Guarantor Subsidiaries with non-guarantor subsidiaries.

						Unaudited
						Parent Company and Guarantor Subsidiaries
In millions						Six Months Ended June 30, 2025
Net sales to non-guarantor subsidiaries						$	479
Purchases from non-guarantor subsidiaries						$	573
						Unaudited
						Parent Company and Guarantor Subsidiaries
In millions						June 30, 2025
Amount due to non-guarantor subsidiaries						$	7,372

Summarized Financial Information—Euro Notes

The obligations under Wabtec Netherlands’ Euro Notes are fully and unconditionally guaranteed by the Parent Company. Wabtec Netherlands is a wholly owned, indirect subsidiary of the Parent Company. Wabtec Netherlands is a holding company and does not have any independent operations. Its assets consist of its investments in subsidiaries, which are separate and distinct legal entities that are not guarantors of the Euro Notes and have no obligations to pay amounts due under Wabtec Netherlands’ obligations.

The following tables present summarized financial information of Wabtec Netherlands, as the Issuer of the Euro Notes, and the Parent Company, as the parent Guarantor, on a combined basis. The combined summarized financial information eliminates all intercompany balances and transactions among Wabtec Netherlands and the Parent Company as well as all equity in earnings from and investments in any subsidiary of the Parent Company, other than Wabtec Netherlands, which we refer to below as the Non-Guarantor Subsidiaries.

The summarized financial information is provided in accordance with the reporting requirements of Rule 13-01 under SEC Regulation S-X for Wabtec Netherlands, as the issuer of the Euro Notes, and Parent Company guarantor.

Summarized Statement of Income

						Unaudited
						Issuer and Parent Company (Guarantor)
In millions						Six Months Ended June 30, 2025
Net sales						$	277
Gross profit						$	60
Net loss attributable to Wabtec shareholders						$	(91)

Summarized Balance Sheet

						Unaudited
						Issuer and Parent Company (Guarantor)
In millions						June 30, 2025						December 31, 2024
Current assets						$	1,271					$	546
Noncurrent assets						$	657					$	646
Current liabilities						$	477					$	1,014
Long-term debt						$	4,782					$	3,479
Other non-current liabilities						$	49					$	49

The following is a description of the transactions between the combined Wabtec Netherlands, as the Issuer of the Euro Notes, and the Parent Company, as the parent Guarantor, with the subsidiaries of Westinghouse Air Brake Technologies Corp., other than Wabtec Netherlands, none of which are guarantors of the Euro Notes.

						Unaudited
						Issuer and Parent Company (Guarantor)
In millions						Six Months Ended June 30, 2025
Net sales to non-guarantor subsidiaries						$	19
Purchases from non-guarantor subsidiaries						$	59
						Unaudited
						Issuer and Parent Company (Guarantor)
In millions						June 30, 2025
Amount due to non-guarantor subsidiaries						$	8,599

Contractual Obligations

During the second quarter of 2025, the Company entered into the 2025 Credit Agreement and utilized the Term Loan Facility, which will mature on April 23, 2030 to refinance (i) $250 million of the outstanding Delayed Draw Term Loan that was scheduled to mature August 15, 2027 under the 2022 Credit Agreement and (ii) $225 million of the outstanding term loan that was scheduled to mature March 14, 2029 under the 2024 Credit Agreement. Also during the second quarter of 2025, the Company issued $500 million of 2030 Notes and $750 million of 2035 Notes. Proceeds from the 2030 Notes and cash on hand were utilized to repay the outstanding amount of the 2025 Notes at maturity. As a result of the foregoing, as of June 30, 2025, contractual obligations related to the repayment of long-term debt decreased for 2026-2027 from $1,520 million to $1,270 million and for 2028-2029 from $1,475 million to $1,250 million, and increased for 2030 and beyond from $500 million to $2,225 million.

On July 1, 2025, the Company utilized cash on hand, together with the proceeds from the 2035 Notes, and borrowings under other sources of available liquidity to fund the acquisition of Inspection Technologies at closing.

Company Stock Repurchase Plan

On December 3, 2024, the Board of Directors authorized an additional $1.0 billion to the Company's existing stock repurchase program for stock repurchases of the Company’s outstanding shares. This new authorization provides an additional $1.0 billion that became available for repurchases after the remaining availability as of December 3, 2024 was expended. No time limit was set for the completion of the program, which conformed to the requirements under the 2022 Credit Agreement and the 2024 Credit Agreement, and complies with the requirements under the 2025 Credit Agreement and the indentures for the Senior Notes currently outstanding. The Company may repurchase shares in the future at any time, depending upon market conditions, our capital needs and other factors. Purchases of shares may be made by open market purchases or privately negotiated purchases and may be made pursuant to Rule 10b5-1 plan or otherwise. As of June 30, 2025, approximately $852 million was remaining under the stock repurchase plan.

Forward Looking Statements

We believe that all statements other than statements of historical facts included in this report, including certain statements under “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may constitute forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure that our assumptions and expectations are correct.

These forward-looking statements are subject to various risks, uncertainties and assumptions about us, including, among other things:

Economic and industry conditions

• changes in general economic and/or industry specific conditions, including the impacts of tax and tariff programs, inflation, supply chain disruptions, foreign currency exchange, and industry consolidation;

• the impacts of significant recent shifts in trade policies, including the imposition of tariffs, retaliatory tariff measures, and subsequent modifications or suspensions thereof, and market reactions to such policies and resulting trade disputes;

• prolonged unfavorable economic and industry conditions in the markets served by us, including North America, South America, Europe, Australia, Asia and Africa;

• decline in demand for freight cars, locomotives, passenger transit cars, buses and related products and services;

• reliance on major original equipment manufacturer customers;

• original equipment manufacturers’ program delays;

• decreased demand for services in the freight and passenger rail industry;

• decreased demand for our products and services;

• orders either being delayed, canceled, not returning to historical levels or being reduced, and/or economic conditions affecting the ability of our customers to pay timely for goods and services delivered;

• consolidations in the rail industry;

• continued outsourcing by our customers;

• industry demand for faster and more efficient braking equipment;

• fluctuations in interest rates and foreign currency exchange rates;

• availability of credit or difficulty in obtaining debt or equity financing;

• changes in market consensus as to what attributes are required for projects to be considered "green" or "sustainable" or negative perceptions regarding determinations in such regard with respect to our Green Finance Framework or ESG strategy; or

• changes in the ESG topics that have the highest relative priority for Wabtec's external stakeholders;

Operating factors

• supply disruptions;

• technical difficulties;

• changes in operating conditions and costs;

• increases in raw material costs;

• challenges associated with the successful introduction of new products;

• product safety, quality and reliability;

• performance under material long-term contracts;

• labor availability constraints and labor relations challenges;

• the outcome of our existing or any future legal proceedings, including litigation involving our principal customers and any litigation with respect to environmental matters, asbestos-related matters, pension liabilities, warranties, product liabilities, competition and anti-trust matters or intellectual property claims;

• our ability to successfully complete and integrate acquisitions;

• risks associated with the development and use of new technology; or

• cybersecurity and data protection risks;

Competitive factors

• the actions of competitors; or

• adverse outcomes of negotiations with partners, suppliers, customers or others;

Political/governmental factors

• political instability in relevant areas of the world, including the impacts of war, conflicts, global military action, and acts of terrorism;

• future regulation/deregulation of our customers and/or the rail industry;

• decreases in levels of governmental funding on transit projects, including for some of our customers;

• political developments and laws and regulations, including those related to Positive Train Control;

• consequences of federal and state income tax legislation;

• sanctions imposed on countries and persons; or

• the outcome of negotiations with governments;

Natural hazards / health crises

• impacts of climate change, including evolving climate change policy;

• disruptive natural hazards, including earthquakes, fires, floods, tornadoes, hurricanes or other weather conditions;

• epidemics, pandemics, or similar public health crises;

• deterioration of general economic conditions as a result of natural hazards or health crises;

• shutdown of one or more of our operating facilities as a result of natural hazards and health crises; or

• supply chain and sourcing disruptions as a result of natural hazards, health crises or other external factors;

Statements in this Quarterly Report on Form 10-Q apply only as of the date on which such statements are made, and except as required by law, we undertake no obligation to update any statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. Reference is also made to the risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Critical Accounting Estimates

A summary of critical accounting estimates is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. In particular, judgment is used in areas such as accounts receivable and the allowance for doubtful accounts, inventories, business combinations, goodwill and indefinite-lived intangible assets, warranty reserves, income taxes, and revenue recognition. There have been no significant changes in the related accounting policies since December 31, 2024.