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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Wabtec Corp | NYSE:WAB | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-2.15 | -1.32% | 161.08 | 163.93 | 160.92 | 162.48 | 1,557,834 | 01:00:00 |
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
25-1615902
|
(State or other jurisdiction
of incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
1001 Air Brake Avenue
Wilmerding, PA
|
15148
|
(Address of principal executive offices)
|
(Zip code)
|
Large accelerated filer
|
x
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
|
|
|
Emerging growth company
|
¨
|
Smaller reporting company
|
¨
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|
|
|
|
Class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $.01 par value per share
|
WAB
|
New York Stock Exchange
|
|
|
|
Page
|
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PART I—FINANCIAL INFORMATION
|
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|
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II—OTHER INFORMATION
|
|
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Item 1.
|
||
|
|
|
Item 1A.
|
||
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|
|
Item 2.
|
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Item 4.
|
||
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Item 6.
|
||
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|
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|
Item 1.
|
FINANCIAL STATEMENTS
|
|
Unaudited
|
|
|
||||
In thousands, except shares and par value
|
March 31,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
512,870
|
|
|
$
|
580,908
|
|
Restricted cash
|
—
|
|
|
1,761,446
|
|
||
Accounts receivable
|
1,271,198
|
|
|
801,193
|
|
||
Unbilled accounts receivable
|
455,626
|
|
|
345,585
|
|
||
Inventories
|
1,947,220
|
|
|
844,886
|
|
||
Other current assets
|
194,223
|
|
|
115,649
|
|
||
Total current assets
|
4,381,137
|
|
|
4,449,667
|
|
||
Property, plant and equipment
|
2,133,778
|
|
|
1,036,550
|
|
||
Accumulated depreciation
|
(498,812
|
)
|
|
(472,813
|
)
|
||
Property, plant and equipment, net
|
1,634,966
|
|
|
563,737
|
|
||
Other Assets
|
|
|
|
||||
Goodwill
|
8,142,473
|
|
|
2,396,544
|
|
||
Other intangibles, net
|
4,364,021
|
|
|
1,129,880
|
|
||
Other noncurrent assets
|
555,308
|
|
|
109,406
|
|
||
Total other assets
|
13,061,802
|
|
|
3,635,830
|
|
||
Total Assets
|
$
|
19,077,905
|
|
|
$
|
8,649,234
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
1,187,261
|
|
|
$
|
589,449
|
|
Customer deposits
|
573,244
|
|
|
373,538
|
|
||
Accrued compensation
|
273,449
|
|
|
173,183
|
|
||
Accrued warranty
|
217,752
|
|
|
135,636
|
|
||
Current portion of long-term debt
|
321,308
|
|
|
64,099
|
|
||
Other accrued liabilities
|
681,421
|
|
|
310,785
|
|
||
Total current liabilities
|
3,254,435
|
|
|
1,646,690
|
|
||
Long-term debt
|
4,641,286
|
|
|
3,792,774
|
|
||
Accrued postretirement and pension benefits
|
96,533
|
|
|
95,446
|
|
||
Deferred income taxes
|
176,116
|
|
|
198,269
|
|
||
Accrued warranty
|
31,563
|
|
|
18,066
|
|
||
Other long-term liabilities
|
1,097,526
|
|
|
28,914
|
|
||
Total Liabilities
|
9,297,459
|
|
|
5,780,159
|
|
||
Commitments and contingencies (Note 16)
|
|
|
|
||||
Equity
|
|
|
|
||||
Convertible preferred stock, $0.01 par value; 1,000,000 shares authorized, 10,000 and no shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 500,000,000 shares authorized:
|
|
|
|
||||
198,131,716 and 132,349,534 shares issued and 162,817,600 and 96,614,946 outstanding
|
|
|
|
||||
at March 31, 2019 and December 31, 2018, respectively
|
1,981
|
|
|
1,323
|
|
||
Additional paid-in capital
|
7,796,270
|
|
|
914,568
|
|
||
Treasury stock, at cost, 35,314,116 and 35,734,588 shares,
|
|
|
|
||||
at March 31, 2019 and December 31, 2018, respectively
|
(807,214
|
)
|
|
(816,145
|
)
|
||
Retained earnings
|
3,005,809
|
|
|
3,021,968
|
|
||
Accumulated other comprehensive income (loss)
|
(309,000
|
)
|
|
(256,583
|
)
|
||
Total Westinghouse Air Brake Technologies Corporation shareholders' equity
|
9,687,846
|
|
|
2,865,131
|
|
||
Noncontrolling interest
|
92,600
|
|
|
3,944
|
|
||
Total Equity
|
9,780,446
|
|
|
2,869,075
|
|
||
Total Liabilities and Equity
|
$
|
19,077,905
|
|
|
$
|
8,649,234
|
|
|
Unaudited
|
||||||
|
Three Months Ended
March 31, |
||||||
In thousands, except per share data
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Net sales:
|
|
|
|
||||
Sales of goods
|
$
|
1,434,509
|
|
|
$
|
1,010,677
|
|
Sales of services
|
159,108
|
|
|
45,500
|
|
||
Total net sales
|
1,593,617
|
|
|
1,056,177
|
|
||
Cost of sales:
|
|
|
|
||||
Cost of goods
|
(1,073,571
|
)
|
|
(709,278
|
)
|
||
Cost of services
|
(131,029
|
)
|
|
(36,018
|
)
|
||
Total cost of sales
|
(1,204,600
|
)
|
|
(745,296
|
)
|
||
Gross profit
|
389,017
|
|
|
310,881
|
|
||
Operating expenses:
|
|
|
|
||||
Selling, general and administrative expenses
|
(259,723
|
)
|
|
(147,201
|
)
|
||
Engineering expenses
|
(34,545
|
)
|
|
(22,049
|
)
|
||
Amortization expense
|
(27,442
|
)
|
|
(10,352
|
)
|
||
Total operating expenses
|
(321,710
|
)
|
|
(179,602
|
)
|
||
Income from operations
|
67,307
|
|
|
131,279
|
|
||
Other income and expenses:
|
|
|
|
||||
Interest expense, net
|
(44,569
|
)
|
|
(20,284
|
)
|
||
Other (expense) income, net
|
(8,228
|
)
|
|
2,586
|
|
||
Income from operations before income taxes
|
14,510
|
|
|
113,581
|
|
||
Income tax expense
|
(18,523
|
)
|
|
(26,124
|
)
|
||
Net (loss) income
|
(4,013
|
)
|
|
87,457
|
|
||
Less: Net (gain) loss attributable to noncontrolling interest
|
(459
|
)
|
|
909
|
|
||
Net (loss) income attributable to Wabtec shareholders
|
(4,472
|
)
|
|
88,366
|
|
||
|
|
|
|
||||
Earnings Per Common Share
|
|
|
|
||||
Basic
|
|
|
|
||||
Net (loss) income attributable to Wabtec shareholders
|
$
|
(0.04
|
)
|
|
$
|
0.92
|
|
Diluted
|
|
|
|
||||
Net (loss) income attributable to Wabtec shareholders
|
$
|
(0.04
|
)
|
|
$
|
0.92
|
|
|
|
|
|
||||
Weighted average shares outstanding
|
|
|
|
||||
Basic
|
121,226
|
|
|
95,810
|
|
||
Diluted
|
121,226
|
|
|
96,371
|
|
|
Unaudited
|
|
||||||
|
Three Months Ended
March 31, |
|
||||||
In thousands
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
||||
Net (loss) income attributable to Wabtec shareholders
|
$
|
(4,472
|
)
|
|
$
|
88,366
|
|
|
Foreign currency translation (loss) gain
|
(46,553
|
)
|
|
77,967
|
|
|
||
Unrealized (loss) gain on derivative contracts
|
(4,093
|
)
|
|
2,066
|
|
|
||
Unrealized loss on pension benefit plans and post-retirement benefit plans
|
(3,622
|
)
|
|
(430
|
)
|
|
||
Other comprehensive (loss) income before tax
|
(54,268
|
)
|
|
79,603
|
|
|
||
Income tax (benefit) expense related to components of
|
|
|
|
|
||||
other comprehensive income
|
1,851
|
|
|
(595
|
)
|
|
||
Other comprehensive (loss) income, net of tax
|
(52,417
|
)
|
|
79,008
|
|
|
||
Comprehensive (loss) income attributable to Wabtec shareholders
|
$
|
(56,889
|
)
|
|
$
|
167,374
|
|
|
|
Unaudited
|
||||||
|
Three Months Ended
March 31, |
||||||
In thousands, except per share data
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Operating Activities
|
|
|
|
||||
Net (loss) income
|
$
|
(4,013
|
)
|
|
$
|
87,457
|
|
Adjustments to reconcile net income to cash provided by operations:
|
|
|
|
||||
Depreciation and amortization
|
55,962
|
|
|
27,854
|
|
||
Stock-based compensation expense
|
8,526
|
|
|
5,696
|
|
||
Loss (gain) on disposal of property, plant and equipment
|
1,028
|
|
|
(24
|
)
|
||
Changes in operating assets and liabilities, net of acquisitions
|
|
|
|
||||
Accounts receivable and unbilled accounts receivable
|
(51,614
|
)
|
|
(66,347
|
)
|
||
Inventories
|
75,300
|
|
|
(50,755
|
)
|
||
Accounts payable
|
(116,375
|
)
|
|
32,096
|
|
||
Accrued income taxes
|
18,396
|
|
|
14,004
|
|
||
Accrued liabilities and customer deposits
|
(59,978
|
)
|
|
(1,529
|
)
|
||
Other assets and liabilities
|
104,106
|
|
|
(24,252
|
)
|
||
Net cash provided by operating activities
|
31,338
|
|
|
24,200
|
|
||
Investing Activities
|
|
|
|
||||
Purchase of property, plant and equipment
|
(29,720
|
)
|
|
(17,466
|
)
|
||
Proceeds from disposal of property, plant and equipment
|
786
|
|
|
7,898
|
|
||
Acquisitions of businesses, net of cash acquired
|
(2,710,714
|
)
|
|
(34,297
|
)
|
||
Net cash used for investing activities
|
(2,739,648
|
)
|
|
(43,865
|
)
|
||
Financing Activities
|
|
|
|
||||
Proceeds from debt
|
1,736,521
|
|
|
306,610
|
|
||
Payments of debt
|
(837,744
|
)
|
|
(266,347
|
)
|
||
Proceeds from exercise of stock options and other benefit plans
|
25
|
|
|
2,873
|
|
||
Payment of income tax withholding on share-based compensation
|
(4,125
|
)
|
|
(2,937
|
)
|
||
Cash dividends ($0.12 and $0.12 per share for the three months
|
|
|
|
||||
ended March 31, 2019 and 2018, respectively)
|
(11,687
|
)
|
|
(11,531
|
)
|
||
Net cash provided by financing activities
|
882,990
|
|
|
28,668
|
|
||
Effect of changes in currency exchange rates
|
(4,164
|
)
|
|
7,482
|
|
||
(Decrease) increase in cash
|
(1,829,484
|
)
|
|
16,485
|
|
||
Cash, cash equivalents and restricted cash beginning of period
|
2,342,354
|
|
|
233,401
|
|
||
Cash and cash equivalents end of period
|
$
|
512,870
|
|
|
$
|
249,886
|
|
|
|
Common
Stock |
|
Common
Stock |
|
Additional
Paid-in |
|
Treasury
Stock |
|
Treasury
Stock |
|
Retained
|
|
Accumulated
Other |
|
Non-controlling
|
|
|
||||||||||||||||
In thousands, except share and per share data
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Shares
|
|
Amount
|
|
Earnings
|
|
Comprehensive Loss
|
|
Interest
|
|
Total
|
||||||||||||||||
Balance, December 31, 2017
|
|
132,349,534
|
|
|
1,323
|
|
|
906,616
|
|
|
(36,315,182
|
)
|
|
(827,379
|
)
|
|
2,773,300
|
|
|
(44,992
|
)
|
|
19,664
|
|
|
2,828,532
|
|
|||||||
Cash dividends ($0.12 dividend per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,531
|
)
|
|
—
|
|
|
—
|
|
|
(11,531
|
)
|
|||||||
Proceeds from treasury stock issued from the exercise of stock
options and other benefit plans, net of tax |
|
—
|
|
|
—
|
|
|
(4,511
|
)
|
|
193,013
|
|
|
3,222
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,289
|
)
|
|||||||
Stock based compensation
|
|
—
|
|
|
—
|
|
|
5,696
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,696
|
|
|||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88,366
|
|
|
—
|
|
|
(909
|
)
|
|
87,457
|
|
|||||||
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79,008
|
|
|
—
|
|
|
79,008
|
|
|||||||
Other owner changes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
356
|
|
|
356
|
|
|||||||
Balance, March 31, 2018
|
|
132,349,534
|
|
|
$
|
1,323
|
|
|
$
|
907,801
|
|
|
(36,122,169
|
)
|
|
$
|
(824,157
|
)
|
|
$
|
2,850,135
|
|
|
$
|
34,016
|
|
|
$
|
19,111
|
|
|
$
|
2,988,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance, December 31, 2018
|
|
132,349,534
|
|
|
1,323
|
|
|
914,568
|
|
|
(35,734,588
|
)
|
|
(816,145
|
)
|
|
3,021,968
|
|
|
(256,583
|
)
|
|
3,944
|
|
|
2,869,075
|
|
|||||||
Cash dividends ($0.12 dividend per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,687
|
)
|
|
—
|
|
|
—
|
|
|
(11,687
|
)
|
|||||||
Proceeds from treasury stock issued from the exercise of stock
options and other benefit plans, net of tax |
|
—
|
|
|
—
|
|
|
(14,446
|
)
|
|
420,472
|
|
|
8,931
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,515
|
)
|
|||||||
Stock based compensation
|
|
—
|
|
|
—
|
|
|
8,526
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,526
|
|
|||||||
Net (loss) income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,472
|
)
|
|
—
|
|
|
459
|
|
|
(4,013
|
)
|
|||||||
Other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52,417
|
)
|
|
—
|
|
|
(52,417
|
)
|
|||||||
Acquisition of General Electric Transportation
|
|
65,782,182
|
|
|
658
|
|
|
6,887,622
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86,765
|
|
|
6,975,045
|
|
|||||||
Other owner changes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,432
|
|
|
1,432
|
|
|||||||
Balance, March 31, 2019
|
|
198,131,716
|
|
|
$
|
1,981
|
|
|
$
|
7,796,270
|
|
|
(35,314,116
|
)
|
|
$
|
(807,214
|
)
|
|
$
|
3,005,809
|
|
|
$
|
(309,000
|
)
|
|
$
|
92,600
|
|
|
$
|
9,780,446
|
|
In thousands
|
Foreign
currency
translation
|
|
Derivative
contracts
|
|
Pension and
post
retirement
benefit plans
|
|
Total
|
||||||||
Balance at December 31, 2018
|
$
|
(202,204
|
)
|
|
$
|
(53
|
)
|
|
$
|
(54,326
|
)
|
|
$
|
(256,583
|
)
|
Other comprehensive income (loss) before reclassifications
|
(46,553
|
)
|
|
(3,111
|
)
|
|
(3,305
|
)
|
|
(52,969
|
)
|
||||
Amounts reclassified from accumulated other
|
|
|
|
|
|
|
|
||||||||
comprehensive income
|
—
|
|
|
—
|
|
|
552
|
|
|
552
|
|
||||
Net current period other comprehensive income (loss)
|
(46,553
|
)
|
|
(3,111
|
)
|
|
(2,753
|
)
|
|
(52,417
|
)
|
||||
Balance at March 31, 2019
|
$
|
(248,757
|
)
|
|
$
|
(3,164
|
)
|
|
$
|
(57,079
|
)
|
|
$
|
(309,000
|
)
|
In thousands
|
Amount reclassified from
accumulated other
comprehensive income
|
|
Affected line item in the
Condensed Consolidated
Statements of Income
|
||
Amortization of defined pension and post retirement items
|
|
|
|
||
Amortization of initial net obligation and prior service cost
|
$
|
(366
|
)
|
|
Other income (expense), net
|
Amortization of net loss
|
1,092
|
|
|
Other income (expense), net
|
|
|
726
|
|
|
Other income (expense), net
|
|
|
(174
|
)
|
|
Income tax expense
|
|
|
$
|
552
|
|
|
Net income
|
|
|
|
|
||
Derivative contracts
|
|
|
|
||
Realized loss on derivative contracts
|
$
|
—
|
|
|
Interest expense, net
|
|
—
|
|
|
Income tax expense
|
|
|
$
|
—
|
|
|
Net income
|
|
Foreign
currency translation |
|
Derivative
contracts |
|
Pension and
post retirement benefit plans |
|
Total
|
||||||||
Balance at December 31, 2017
|
$
|
5,063
|
|
|
$
|
4,015
|
|
|
$
|
(54,070
|
)
|
|
$
|
(44,992
|
)
|
Other comprehensive income (loss) before reclassifications
|
77,967
|
|
|
920
|
|
|
(847
|
)
|
|
78,040
|
|
||||
Amounts reclassified from accumulated other
|
|
|
|
|
|
|
|
||||||||
comprehensive income
|
—
|
|
|
448
|
|
|
520
|
|
|
968
|
|
||||
Net current period other comprehensive income (loss)
|
77,967
|
|
|
1,368
|
|
|
(327
|
)
|
|
79,008
|
|
||||
Balance at March 31, 2018
|
$
|
83,030
|
|
|
$
|
5,383
|
|
|
$
|
(54,397
|
)
|
|
$
|
34,016
|
|
In thousands
|
Amount reclassified from
accumulated other comprehensive income |
|
Affected line item in the
Condensed Consolidated Statements of Operations |
||
Amortization of defined pension and post retirement items
|
|
|
|
||
Amortization of initial net obligation and prior service cost
|
$
|
(375
|
)
|
|
Other income (expense), net
|
Amortization of net loss
|
1,093
|
|
|
Other income (expense), net
|
|
|
718
|
|
|
Other income (expense), net
|
|
|
(198
|
)
|
|
Income tax expense
|
|
|
$
|
520
|
|
|
Net income
|
|
|
|
|
||
Derivative contracts
|
|
|
|
||
Realized loss on derivative contracts
|
$
|
679
|
|
|
Interest expense, net
|
|
(231
|
)
|
|
Income tax expense
|
|
|
$
|
448
|
|
|
Net income
|
In thousands
|
|
|
||
Assets acquired
|
|
|
||
Cash and cash equivalents
|
|
$
|
174,334
|
|
Accounts receivable
|
|
530,054
|
|
|
Inventories
|
|
1,179,439
|
|
|
Other current assets
|
|
64,464
|
|
|
Property, plant, and equipment
|
|
1,071,402
|
|
|
Goodwill
|
|
5,783,358
|
|
|
Trade names
|
|
50,000
|
|
|
Customer relationships
|
|
529,984
|
|
|
Intellectual property
|
|
1,219,968
|
|
|
Backlog
|
|
1,480,000
|
|
|
Other noncurrent assets
|
|
234,823
|
|
|
Total assets acquired
|
|
12,317,826
|
|
|
Liabilities assumed
|
|
|
||
Current liabilities
|
|
1,495,438
|
|
|
Contingent consideration
|
|
440,000
|
|
|
Other noncurrent liabilities
|
|
523,801
|
|
|
Total liabilities assumed
|
|
2,459,239
|
|
|
Net assets acquired
|
|
9,858,587
|
|
|
Noncontrolling interest
|
|
$
|
86,765
|
|
•
|
On
March 22, 2018
, the Company acquired Annax GmbH ("Annax"), a leading supplier of public address and passenger information systems for transit vehicles, for a purchase price of approximately
$28.7 million
, net of cash acquired, resulting in final goodwill of
$27.2 million
, none of which will be deductible for tax purposes.
|
|
Annax
|
||
In thousands
|
March 22,
2018 |
||
Current assets
|
$
|
32,831
|
|
Property, plant & equipment
|
674
|
|
|
Goodwill
|
27,188
|
|
|
Other intangible assets
|
11,715
|
|
|
Total assets acquired
|
72,408
|
|
|
Total liabilities assumed
|
(43,741
|
)
|
|
Net assets acquired
|
$
|
28,667
|
|
In thousands
|
Three Months Ended
March 31, 2019 |
|
Three Months Ended
March 31, 2018 |
||||
Net sales
|
$
|
2,079,771
|
|
|
$
|
1,881,724
|
|
Gross profit
|
543,480
|
|
|
553,681
|
|
||
Net income attributable to Wabtec shareholders
|
83,277
|
|
|
77,275
|
|
||
Diluted earnings per share
|
|
|
|
||||
As Reported
|
$
|
(0.04
|
)
|
|
$
|
0.92
|
|
Pro forma
|
$
|
0.44
|
|
|
$
|
0.41
|
|
In thousands
|
March 31,
2019 |
|
December 31,
2018 |
||||
Raw materials
|
$
|
822,178
|
|
|
$
|
465,873
|
|
Work-in-progress
|
435,565
|
|
|
154,485
|
|
||
Finished goods
|
689,477
|
|
|
224,528
|
|
||
Total inventories
|
$
|
1,947,220
|
|
|
$
|
844,886
|
|
In thousands
|
Freight
Segment
|
|
Transit
Segment
|
|
Total
|
||||||
Balance at December 31, 2018
|
$
|
713,391
|
|
|
$
|
1,683,153
|
|
|
$
|
2,396,544
|
|
Additions
|
5,783,358
|
|
|
—
|
|
|
5,783,358
|
|
|||
Foreign currency impact
|
(15,315
|
)
|
|
(22,114
|
)
|
|
(37,429
|
)
|
|||
Balance at March 31, 2019
|
$
|
6,481,434
|
|
|
$
|
1,661,039
|
|
|
$
|
8,142,473
|
|
In thousands
|
March 31,
2019 |
|
December 31,
2018 |
||||
Intellectual property, patents, non-compete and other intangibles, net of accumulated
|
|
|
|
||||
amortization of $51,127 and $42,446
|
$
|
2,697,919
|
|
|
$
|
15,328
|
|
Customer relationships, net of accumulated amortization
|
|
|
|
||||
of $168,774 and $158,533
|
1,041,551
|
|
|
531,761
|
|
||
Total
|
$
|
3,739,470
|
|
|
$
|
547,089
|
|
Remainder of 2019
|
$
|
191,746
|
|
2020
|
254,053
|
|
|
2021
|
253,908
|
|
|
2022
|
253,596
|
|
|
2023
|
253,258
|
|
In thousands
|
|
Contract Assets
|
||
Balance at beginning of year
|
|
$
|
345,585
|
|
Acquisitions
|
|
238,665
|
|
|
Recognized in current year
|
|
188,299
|
|
|
Reclassified to accounts receivable
|
|
(196,973
|
)
|
|
Foreign currency impact
|
|
(756
|
)
|
|
Balance at March 31, 2019
|
|
$
|
574,820
|
|
|
|
|
||
In thousands
|
|
Contract Liabilities
|
||
Balance at beginning of year
|
|
$
|
444,805
|
|
Acquisitions
|
|
274,054
|
|
|
Recognized in current year
|
|
205,272
|
|
|
Amounts in beginning balance reclassified to revenue
|
|
(204,388
|
)
|
|
Current year amounts reclassified to revenue
|
|
(6,421
|
)
|
|
Foreign currency impact
|
|
(424
|
)
|
|
Balance at March 31, 2019
|
|
$
|
712,898
|
|
|
Three Months Ended
March 31, |
||
(in thousands)
|
2019
|
||
Operating Lease Expense
|
$
|
13,397
|
|
Finance Lease Expense
|
|
||
Amortization of Leased Assets
|
271
|
|
|
Interest on Lease Liabilities
|
4
|
|
|
Short-term and Variable Lease Expense
|
105
|
|
|
Sublease Income
|
(138
|
)
|
|
Total
|
$
|
13,639
|
|
(in thousands)
|
Operating Leases
|
|
Finance
Leases
|
|
Total
|
||||||
Remaining 2019
|
$
|
38,094
|
|
|
$
|
278
|
|
|
$
|
38,372
|
|
2020
|
44,455
|
|
|
377
|
|
|
44,832
|
|
|||
2021
|
36,350
|
|
|
180
|
|
|
36,530
|
|
|||
2022
|
29,824
|
|
|
121
|
|
|
29,945
|
|
|||
2023
|
25,377
|
|
|
121
|
|
|
25,498
|
|
|||
Thereafter
|
106,069
|
|
|
348
|
|
|
106,417
|
|
|||
Total Lease Payments
|
280,169
|
|
|
1,425
|
|
|
281,594
|
|
|||
Less: Present Value Discount
|
(30,949
|
)
|
|
(5
|
)
|
|
(30,954
|
)
|
|||
Present Value Lease Liabilities
|
$
|
249,220
|
|
|
$
|
1,420
|
|
|
$
|
250,640
|
|
|
Three Months Ended
March 31, |
|
|
2019
|
|
Weighted-average remaining lease term (years)
|
|
|
Operating Leases
|
8.44
|
|
Finance Leases
|
5.68
|
|
Weighted-average discount rate
|
|
|
Operating Leases
|
3.00
|
%
|
Finance Leases
|
1.19
|
%
|
In thousands
|
March 31,
2019 |
|
December 31,
2018 |
||||
Floating Senior Notes, due 2021, net of unamortized debt
issuance costs of $2,904 and $3,204 |
$
|
497,096
|
|
|
$
|
496,796
|
|
4.150% Senior Notes, due 2024, net of unamortized debt
issuance costs of $6,703 and $7,043 |
743,297
|
|
|
742,957
|
|
||
4.70% Senior Notes, due 2028, net of unamortized debt
issuance costs of $10,076 and $10,343 |
1,239,924
|
|
|
1,239,657
|
|
||
3.45% Senior Notes, due 2026, net of unamortized debt
issuance costs of $1,661 and $1,718 |
748,339
|
|
|
748,282
|
|
||
4.375% Senior Notes, due 2023, net of unamortized
discount and debt issuance costs of $1,113 and $1,177 |
248,888
|
|
|
248,823
|
|
||
Revolving Credit Facility, net of unamortized
debt issuance costs of $2,865 and $3,138 |
1,226,903
|
|
|
338,112
|
|
||
Other Borrowings
|
258,147
|
|
|
42,246
|
|
||
Total
|
4,962,594
|
|
|
3,856,873
|
|
||
Less - current portion
|
321,308
|
|
|
64,099
|
|
||
Long-term portion
|
$
|
4,641,286
|
|
|
$
|
3,792,774
|
|
•
|
Floating Rate Senior Notes due 2021
-
The Company issued
$500.0 million
of Floating Rate Senior Notes due 2021 (the "Floating Rate Notes"). The Floating Rate Notes, which are non-callable for
one year
, were issued at
100%
of face value. Interest on the Floating Rate Notes accrues at a floating rate per annum equal to three-month Libor plus 105 basis points. The interest rate for the Floating Rate Notes for the initial interest period was the three-month Libor plus 105 basis points determined on September 12, 2018 and is payable quarterly on December 15, March 15, June 15, and September 15 of each year. The Company incurred
$3.5 million
of deferred financing costs related to the issuance of the Floating Rate Notes.
|
•
|
4.15% Senior Notes due 2024
-
The Company issued
$750.0 million
of
4.15%
Senior Notes due 2024 (the "2024 Notes"). The 2024 Notes were issued at
99.805%
of face value. Interest on the 2024 Notes accrues at a rate of
4.15%
per annum and is payable semi-annually on March 15 and September 15 of each year. The Company incurred
$7.4 million
of deferred financing costs related to the issuance of the 2024 Notes.
|
•
|
4.70% Senior Notes Due 2028
-
The Company issued
$1,250.0 million
of
4.70%
Senior Notes due 2028 (the "2028 Notes" and together with the Floating Rate Notes and 2024 Notes, the "Senior Notes"). The 2028 Notes were issued at
99.889%
of face value. Interest on the 2028 Notes accrues at a rate of
4.70%
per annum and is payable semi-annually on March 15 and September 15 of each year. The Company incurred
$10.6 million
of deferred financing costs related to the issuance of the 2028 Notes.
|
|
U.S.
|
|
International
|
||||||||||||
|
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
||||||||||||
In thousands, except percentages
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net periodic benefit cost
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
71
|
|
|
$
|
87
|
|
|
$
|
611
|
|
|
$
|
691
|
|
Interest cost
|
372
|
|
|
333
|
|
|
1,711
|
|
|
1,834
|
|
||||
Expected return on plan assets
|
(433
|
)
|
|
(445
|
)
|
|
(2,927
|
)
|
|
(3,466
|
)
|
||||
Net amortization/deferrals
|
207
|
|
|
243
|
|
|
641
|
|
|
554
|
|
||||
Net periodic benefit cost (credit)
|
$
|
217
|
|
|
$
|
218
|
|
|
$
|
36
|
|
|
$
|
(387
|
)
|
Assumptions
|
|
|
|
|
|
|
|
||||
Discount Rate
|
4.30
|
%
|
|
3.56
|
%
|
|
2.53
|
%
|
|
2.40
|
%
|
Expected long-term rate of return
|
5.35
|
%
|
|
5.15
|
%
|
|
5.01
|
%
|
|
5.10
|
%
|
Rate of compensation increase
|
3.00
|
%
|
|
3.00
|
%
|
|
2.60
|
%
|
|
2.60
|
%
|
|
U.S.
|
|
International
|
||||||||||||
|
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
||||||||||||
In thousands, except percentages
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net periodic benefit cost
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
8
|
|
Interest cost
|
89
|
|
|
81
|
|
|
20
|
|
|
26
|
|
||||
Net amortization/deferrals
|
(101
|
)
|
|
(76
|
)
|
|
(22
|
)
|
|
(4
|
)
|
||||
Net periodic benefit cost
|
$
|
(11
|
)
|
|
$
|
6
|
|
|
$
|
0
|
|
|
$
|
30
|
|
Assumptions
|
|
|
|
|
|
|
|
||||
Discount Rate
|
4.17
|
%
|
|
3.43
|
%
|
|
3.49
|
%
|
|
3.21
|
%
|
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual Life
|
|
Aggregate
Intrinsic value
(in thousands)
|
|||||
Outstanding at December 31, 2018
|
466,677
|
|
|
$
|
61.04
|
|
|
5.7
|
|
$
|
5,917
|
|
Granted
|
128,555
|
|
|
72.85
|
|
|
|
|
112
|
|
||
Exercised
|
(734
|
)
|
|
64.54
|
|
|
|
|
7
|
|
||
Canceled
|
(228
|
)
|
|
74.38
|
|
|
|
|
—
|
|
||
Outstanding at March 31, 2019
|
594,270
|
|
|
63.58
|
|
|
6.4
|
|
6,027
|
|
||
Exercisable at March 31, 2019
|
355,222
|
|
|
56.00
|
|
|
5.2
|
|
6,295
|
|
|
Three Months Ended
March 31, |
||||
|
2019
|
|
2018
|
||
Dividend yield
|
0.66
|
%
|
|
0.33
|
%
|
Risk-free interest rate
|
2.63
|
%
|
|
2.70
|
%
|
Stock price volatility
|
25.8
|
%
|
|
23.9
|
%
|
Expected life (years)
|
5.0
|
|
|
5.0
|
|
|
Restricted
Stock
and Units
|
|
Incentive
Stock
Units
|
|
Weighted
Average Grant
Date Fair
Value
|
||||
Outstanding at December 31, 2018
|
445,089
|
|
|
415,243
|
|
|
$
|
75.51
|
|
Granted
|
535,873
|
|
|
258,600
|
|
|
70.64
|
|
|
Vested
|
(105,651
|
)
|
|
(119,835
|
)
|
|
68.62
|
|
|
Adjustment for incentive stock awards expected to vest
|
—
|
|
|
18,398
|
|
|
81.20
|
|
|
Canceled
|
(6,733
|
)
|
|
(5,350
|
)
|
|
80.17
|
|
|
Outstanding at March 31, 2019
|
868,578
|
|
|
567,056
|
|
|
73.93
|
|
|
Three Months Ended
March 31, |
||||||
In thousands, except per share data
|
2019
|
|
2018
|
||||
Numerator
|
|
|
|
||||
Numerator for basic and diluted earnings per common
share - net income attributable
|
|
|
|
||||
to Wabtec shareholders
|
$
|
(4,472
|
)
|
|
$
|
88,366
|
|
Less: dividends declared - common shares
and non-vested restricted stock
|
(11,687
|
)
|
|
(11,531
|
)
|
||
Undistributed earnings
|
(16,159
|
)
|
|
76,835
|
|
||
Percentage allocated to common shareholders (1)
|
99.7
|
%
|
|
99.7
|
%
|
||
|
(16,111
|
)
|
|
76,604
|
|
||
Add: dividends declared - common shares
|
11,646
|
|
|
11,497
|
|
||
Numerator for basic and diluted earnings per
common share
|
$
|
(4,465
|
)
|
|
$
|
88,101
|
|
Denominator
|
|
|
|
||||
Denominator for basic earnings per common
share - weighted average shares
|
121,226
|
|
|
95,810
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Assumed conversion of dilutive stock-based
compensation plans
|
—
|
|
|
561
|
|
||
Denominator for diluted earnings per common share -
|
|
|
|
||||
adjusted weighted average shares and assumed conversion
|
121,226
|
|
|
96,371
|
|
||
Net income attributable to Wabtec
shareholders per common share
|
|
|
|
||||
Basic
|
$
|
(0.04
|
)
|
|
$
|
0.92
|
|
Diluted
|
$
|
(0.04
|
)
|
|
$
|
0.92
|
|
(1) Basic weighted-average common shares outstanding
|
121,226
|
|
|
95,810
|
|
Basic weighted-average common shares outstanding and
non-vested restricted stock expected to vest
|
121,565
|
|
|
96,091
|
|
Percentage allocated to common shareholders
|
99.7
|
%
|
|
99.7
|
%
|
In thousands
|
2019
|
|
2018
|
||||
Balance at beginning of year
|
$
|
153,702
|
|
|
$
|
153,063
|
|
Acquisitions
|
89,919
|
|
|
1,975
|
|
||
Warranty expense
|
34,627
|
|
|
11,677
|
|
||
Warranty claim payments
|
(27,841
|
)
|
|
(11,282
|
)
|
||
Foreign currency impact/other
|
(1,092
|
)
|
|
2,138
|
|
||
Balance at March 31
|
$
|
249,315
|
|
|
$
|
157,571
|
|
In millions
|
|
Designated
|
|
Non-Designated
|
|
Total
|
||||||
Gross notional amount
|
|
$
|
1,727.0
|
|
|
$
|
524.0
|
|
|
$
|
2,251.0
|
|
|
|
|
|
|
|
|
||||||
Fair Value:
|
|
|
|
|
|
|
||||||
Other current assets
|
|
$
|
4.3
|
|
|
$
|
—
|
|
|
$
|
4.3
|
|
Other current liabilities
|
|
—
|
|
|
(3.3
|
)
|
|
(3.3
|
)
|
|||
Total
|
|
$
|
4.3
|
|
|
$
|
(3.3
|
)
|
|
$
|
1.0
|
|
In millions
|
|
Designated
|
|
Non-Designated
|
|
Total
|
||||||
Gross notional amount
|
|
$
|
863.0
|
|
|
$
|
834.0
|
|
|
$
|
1,697.0
|
|
|
|
|
|
|
|
|
||||||
Fair Value:
|
|
|
|
|
|
|
||||||
Other current assets
|
|
$
|
—
|
|
|
$
|
1.3
|
|
|
$
|
1.3
|
|
Other current liabilities
|
|
(2.3
|
)
|
|
—
|
|
|
(2.3
|
)
|
|||
Total
|
|
$
|
(2.3
|
)
|
|
$
|
1.3
|
|
|
$
|
(1.0
|
)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||
In thousands
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value |
|
Fair
Value |
||||
4.375% Senior Notes
|
248,888
|
|
|
250,108
|
|
|
248,823
|
|
|
254,218
|
|
3.45% Senior Notes
|
748,339
|
|
|
698,258
|
|
|
748,282
|
|
|
675,075
|
|
Floating Rate Notes 2021
|
497,096
|
|
|
500,495
|
|
|
496,796
|
|
|
497,425
|
|
4.15% Senior Notes
|
743,298
|
|
|
762,870
|
|
|
742,957
|
|
|
729,350
|
|
4.7% Senior Notes
|
1,239,924
|
|
|
1,267,750
|
|
|
1,239,657
|
|
|
1,179,625
|
|
In thousands
|
Freight
Segment
|
|
Transit
Segment
|
|
Corporate
Activities and
Elimination
|
|
Total
|
||||||||
Sales to external customers
|
$
|
876,434
|
|
|
$
|
717,183
|
|
|
$
|
—
|
|
|
$
|
1,593,617
|
|
Intersegment sales/(elimination)
|
16,704
|
|
|
6,122
|
|
|
(22,826
|
)
|
|
—
|
|
||||
Total sales
|
$
|
893,138
|
|
|
$
|
723,305
|
|
|
$
|
(22,826
|
)
|
|
$
|
1,593,617
|
|
Income (loss) from operations
|
$
|
75,210
|
|
|
$
|
58,933
|
|
|
$
|
(66,836
|
)
|
|
$
|
67,307
|
|
Interest expense and other, net
|
—
|
|
|
—
|
|
|
(52,797
|
)
|
|
(52,797
|
)
|
||||
Income (loss) from operations before income taxes
|
$
|
75,210
|
|
|
$
|
58,933
|
|
|
$
|
(119,633
|
)
|
|
$
|
14,510
|
|
In thousands
|
Freight
Segment
|
|
Transit
Segment
|
|
Corporate
Activities and
Elimination
|
|
Total
|
||||||||
Sales to external customers
|
$
|
379,554
|
|
|
$
|
676,623
|
|
|
$
|
—
|
|
|
$
|
1,056,177
|
|
Intersegment sales/(elimination)
|
12,002
|
|
|
3,889
|
|
|
(15,891
|
)
|
|
—
|
|
||||
Total sales
|
$
|
391,556
|
|
|
$
|
680,512
|
|
|
$
|
(15,891
|
)
|
|
$
|
1,056,177
|
|
Income (loss) from operations
|
$
|
69,623
|
|
|
$
|
68,083
|
|
|
$
|
(6,427
|
)
|
|
$
|
131,279
|
|
Interest expense and other, net
|
—
|
|
|
—
|
|
|
(17,698
|
)
|
|
(17,698
|
)
|
||||
Income (loss) from operations before income taxes
|
$
|
69,623
|
|
|
$
|
68,083
|
|
|
$
|
(24,125
|
)
|
|
$
|
113,581
|
|
|
Three Months Ended
March 31, |
||||||
In thousands
|
2019
|
|
2018
|
||||
Remanufacturing, Overhaul & Build
|
$
|
582,177
|
|
|
$
|
135,713
|
|
Specialty Products & Electronics
|
418,114
|
|
|
386,548
|
|
||
Transit Products
|
294,817
|
|
|
274,265
|
|
||
Brake Products
|
242,222
|
|
|
215,618
|
|
||
Other
|
56,287
|
|
|
44,033
|
|
||
Total sales
|
$
|
1,593,617
|
|
|
$
|
1,056,177
|
|
In thousands
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Elimination
|
|
Consolidated
|
||||||||||
Cash and cash equivalents
|
$
|
5,288
|
|
|
$
|
(38
|
)
|
|
$
|
507,620
|
|
|
$
|
—
|
|
|
$
|
512,870
|
|
Receivables, net
|
137,358
|
|
|
69,745
|
|
|
1,519,721
|
|
|
—
|
|
|
1,726,824
|
|
|||||
Inventories
|
139,550
|
|
|
62,766
|
|
|
1,744,904
|
|
|
—
|
|
|
1,947,220
|
|
|||||
Current assets - other
|
11,335
|
|
|
920
|
|
|
181,968
|
|
|
—
|
|
|
194,223
|
|
|||||
Total current assets
|
293,531
|
|
|
133,393
|
|
|
3,954,213
|
|
|
—
|
|
|
4,381,137
|
|
|||||
Property, plant and equipment, net
|
54,641
|
|
|
25,550
|
|
|
1,554,775
|
|
|
—
|
|
|
1,634,966
|
|
|||||
Goodwill
|
503,700
|
|
|
283,241
|
|
|
7,355,532
|
|
|
—
|
|
|
8,142,473
|
|
|||||
Investment in subsidiaries
|
16,575,061
|
|
|
5,258,593
|
|
|
—
|
|
|
(21,833,654
|
)
|
|
—
|
|
|||||
Other intangibles, net
|
28,924
|
|
|
77,924
|
|
|
4,257,173
|
|
|
—
|
|
|
4,364,021
|
|
|||||
Other long-term assets
|
26,262
|
|
|
6,772
|
|
|
522,274
|
|
|
—
|
|
|
555,308
|
|
|||||
Total assets
|
$
|
17,482,119
|
|
|
$
|
5,785,473
|
|
|
$
|
17,643,967
|
|
|
$
|
(21,833,654
|
)
|
|
$
|
19,077,905
|
|
Current liabilities
|
$
|
467,702
|
|
|
$
|
84,137
|
|
|
$
|
2,702,596
|
|
|
$
|
—
|
|
|
$
|
3,254,435
|
|
Inter-company
|
2,557,628
|
|
|
(1,458,674
|
)
|
|
(1,098,954
|
)
|
|
—
|
|
|
—
|
|
|||||
Long-term debt
|
4,387,180
|
|
|
—
|
|
|
254,106
|
|
|
—
|
|
|
4,641,286
|
|
|||||
Long-term liabilities - other
|
381,763
|
|
|
54,560
|
|
|
965,415
|
|
|
—
|
|
|
1,401,738
|
|
|||||
Total liabilities
|
7,794,273
|
|
|
(1,319,977
|
)
|
|
2,823,163
|
|
|
—
|
|
|
9,297,459
|
|
|||||
Shareholders' equity
|
9,672,846
|
|
|
7,105,450
|
|
|
14,743,204
|
|
|
(21,833,654
|
)
|
|
9,687,846
|
|
|||||
Non-controlling interest
|
15,000
|
|
|
—
|
|
|
77,600
|
|
|
—
|
|
|
92,600
|
|
|||||
Total shareholders' equity
|
$
|
9,687,846
|
|
|
$
|
7,105,450
|
|
|
$
|
14,820,804
|
|
|
$
|
(21,833,654
|
)
|
|
$
|
9,780,446
|
|
Total Liabilities and Shareholders' Equity
|
$
|
17,482,119
|
|
|
$
|
5,785,473
|
|
|
$
|
17,643,967
|
|
|
$
|
(21,833,654
|
)
|
|
$
|
19,077,905
|
|
In thousands
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Elimination
|
|
Consolidated
|
||||||||||
Cash and cash equivalents
|
$
|
1,782,682
|
|
|
$
|
(119
|
)
|
|
$
|
559,791
|
|
|
$
|
—
|
|
|
$
|
2,342,354
|
|
Receivables, net
|
106,815
|
|
|
61,513
|
|
|
978,450
|
|
|
—
|
|
|
1,146,778
|
|
|||||
Inventories
|
149,622
|
|
|
69,116
|
|
|
626,148
|
|
|
—
|
|
|
844,886
|
|
|||||
Current assets - other
|
11,884
|
|
|
690
|
|
|
103,075
|
|
|
—
|
|
|
115,649
|
|
|||||
Total current assets
|
2,051,003
|
|
|
131,200
|
|
|
2,267,464
|
|
|
—
|
|
|
4,449,667
|
|
|||||
Property, plant and equipment, net
|
51,551
|
|
|
24,755
|
|
|
487,431
|
|
|
—
|
|
|
563,737
|
|
|||||
Goodwill
|
25,275
|
|
|
283,241
|
|
|
2,088,028
|
|
|
—
|
|
|
2,396,544
|
|
|||||
Investment in subsidiaries
|
6,707,979
|
|
|
4,022,107
|
|
|
—
|
|
|
(10,730,086
|
)
|
|
—
|
|
|||||
Other intangibles, net
|
29,254
|
|
|
78,547
|
|
|
1,022,079
|
|
|
—
|
|
|
1,129,880
|
|
|||||
Other long-term assets
|
8,775
|
|
|
149
|
|
|
100,482
|
|
|
—
|
|
|
109,406
|
|
|||||
Total assets
|
$
|
8,873,837
|
|
|
$
|
4,539,999
|
|
|
$
|
5,965,484
|
|
|
$
|
(10,730,086
|
)
|
|
$
|
8,649,234
|
|
Current liabilities
|
$
|
264,630
|
|
|
$
|
91,004
|
|
|
$
|
1,291,056
|
|
|
$
|
—
|
|
|
$
|
1,646,690
|
|
Inter-company
|
1,947,504
|
|
|
(1,436,222
|
)
|
|
(511,282
|
)
|
|
—
|
|
|
—
|
|
|||||
Long-term debt
|
3,779,627
|
|
|
—
|
|
|
13,147
|
|
|
—
|
|
|
3,792,774
|
|
|||||
Long-term liabilities - other
|
16,945
|
|
|
48,714
|
|
|
275,036
|
|
|
—
|
|
|
340,695
|
|
|||||
Total liabilities
|
6,008,706
|
|
|
(1,296,504
|
)
|
|
1,067,957
|
|
|
—
|
|
|
5,780,159
|
|
|||||
Shareholders' equity
|
2,865,131
|
|
|
5,836,503
|
|
|
4,893,583
|
|
|
(10,730,086
|
)
|
|
2,865,131
|
|
|||||
Non-controlling interest
|
—
|
|
|
—
|
|
|
3,944
|
|
|
—
|
|
|
3,944
|
|
|||||
Total shareholders' equity
|
$
|
2,865,131
|
|
|
$
|
5,836,503
|
|
|
$
|
4,897,527
|
|
|
$
|
(10,730,086
|
)
|
|
$
|
2,869,075
|
|
Total Liabilities and Shareholders' Equity
|
$
|
8,873,837
|
|
|
$
|
4,539,999
|
|
|
$
|
5,965,484
|
|
|
$
|
(10,730,086
|
)
|
|
$
|
8,649,234
|
|
In thousands
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Elimination
|
|
Consolidated
|
||||||||||
Net Sales
|
$
|
193,066
|
|
|
$
|
128,803
|
|
|
$
|
1,327,249
|
|
|
$
|
(55,501
|
)
|
|
$
|
1,593,617
|
|
Cost of sales
|
(157,650
|
)
|
|
(82,015
|
)
|
|
(998,019
|
)
|
|
33,084
|
|
|
(1,204,600
|
)
|
|||||
Gross profit
|
35,416
|
|
|
46,788
|
|
|
329,230
|
|
|
(22,417
|
)
|
|
389,017
|
|
|||||
Total operating expenses
|
(97,540
|
)
|
|
(15,321
|
)
|
|
(208,849
|
)
|
|
—
|
|
|
(321,710
|
)
|
|||||
Income from operations
|
(62,124
|
)
|
|
31,467
|
|
|
120,381
|
|
|
(22,417
|
)
|
|
67,307
|
|
|||||
Interest (expense) income, net
|
(41,646
|
)
|
|
3,478
|
|
|
(6,401
|
)
|
|
—
|
|
|
(44,569
|
)
|
|||||
Other income (expense), net
|
20,333
|
|
|
(2,485
|
)
|
|
(26,076
|
)
|
|
—
|
|
|
(8,228
|
)
|
|||||
Equity earnings
|
91,482
|
|
|
79,759
|
|
|
—
|
|
|
(171,241
|
)
|
|
—
|
|
|||||
Pretax income
|
8,045
|
|
|
112,219
|
|
|
87,904
|
|
|
(193,658
|
)
|
|
14,510
|
|
|||||
Income tax (expense) benefit
|
(12,517
|
)
|
|
—
|
|
|
(6,006
|
)
|
|
—
|
|
|
(18,523
|
)
|
|||||
Net income
|
(4,472
|
)
|
|
112,219
|
|
|
81,898
|
|
|
(193,658
|
)
|
|
(4,013
|
)
|
|||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(459
|
)
|
|
—
|
|
|
(459
|
)
|
|||||
Net income attributable to Wabtec shareholders
|
$
|
(4,472
|
)
|
|
$
|
112,219
|
|
|
$
|
81,439
|
|
|
$
|
(193,658
|
)
|
|
$
|
(4,472
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income attributable to Wabtec shareholders
|
$
|
(4,472
|
)
|
|
$
|
112,219
|
|
|
$
|
29,022
|
|
|
$
|
(193,658
|
)
|
|
$
|
(56,889
|
)
|
In thousands
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Elimination
|
|
Consolidated
|
||||||||||
Net Sales
|
$
|
161,301
|
|
|
$
|
301,706
|
|
|
$
|
641,663
|
|
|
$
|
(48,493
|
)
|
|
$
|
1,056,177
|
|
Cost of sales
|
(118,658
|
)
|
|
(179,090
|
)
|
|
(488,233
|
)
|
|
40,685
|
|
|
(745,296
|
)
|
|||||
Gross profit
|
42,643
|
|
|
122,616
|
|
|
153,430
|
|
|
(7,808
|
)
|
|
310,881
|
|
|||||
Total operating expenses
|
(35,627
|
)
|
|
(37,327
|
)
|
|
(106,648
|
)
|
|
—
|
|
|
(179,602
|
)
|
|||||
Income from operations
|
7,016
|
|
|
85,289
|
|
|
46,782
|
|
|
(7,808
|
)
|
|
131,279
|
|
|||||
Interest (expense) income, net
|
(20,394
|
)
|
|
2,301
|
|
|
(2,191
|
)
|
|
—
|
|
|
(20,284
|
)
|
|||||
Other income (expense), net
|
8,729
|
|
|
(2,469
|
)
|
|
(3,674
|
)
|
|
—
|
|
|
2,586
|
|
|||||
Equity earnings
|
106,698
|
|
|
28,720
|
|
|
—
|
|
|
(135,418
|
)
|
|
—
|
|
|||||
Pretax income
|
102,049
|
|
|
113,841
|
|
|
40,917
|
|
|
(143,226
|
)
|
|
113,581
|
|
|||||
Income tax expense
|
(13,682
|
)
|
|
1,194
|
|
|
(13,636
|
)
|
|
—
|
|
|
(26,124
|
)
|
|||||
Net income
|
88,367
|
|
|
115,035
|
|
|
27,281
|
|
|
(143,226
|
)
|
|
87,457
|
|
|||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
215
|
|
|
694
|
|
|
—
|
|
|
909
|
|
|||||
Net income attributable to Wabtec shareholders
|
$
|
88,367
|
|
|
$
|
115,250
|
|
|
$
|
27,975
|
|
|
$
|
(143,226
|
)
|
|
$
|
88,366
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income attributable to Wabtec shareholders
|
$
|
88,649
|
|
|
$
|
115,250
|
|
|
$
|
106,701
|
|
|
$
|
(143,226
|
)
|
|
$
|
167,374
|
|
In thousands
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Elimination
|
|
Consolidated
|
||||||||||
Net cash (used for) provided by operating activities
|
$
|
(118,411
|
)
|
|
$
|
24,140
|
|
|
$
|
148,026
|
|
|
$
|
(22,417
|
)
|
|
$
|
31,338
|
|
Net cash provided by (used for) investing activities
|
6,898,021
|
|
|
(1,601
|
)
|
|
(9,636,068
|
)
|
|
—
|
|
|
(2,739,648
|
)
|
|||||
Net cash (used for) provided by financing activities
|
(8,557,004
|
)
|
|
(22,458
|
)
|
|
9,440,035
|
|
|
22,417
|
|
|
882,990
|
|
|||||
Effect of changes in currency exchange rates
|
—
|
|
|
—
|
|
|
(4,164
|
)
|
|
—
|
|
|
(4,164
|
)
|
|||||
(Decrease) increase in cash
|
(1,777,394
|
)
|
|
81
|
|
|
(52,171
|
)
|
|
—
|
|
|
(1,829,484
|
)
|
|||||
Cash, cash equivalents, and restricted cash beginning of period
|
1,782,682
|
|
|
(119
|
)
|
|
559,791
|
|
|
—
|
|
|
2,342,354
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
5,288
|
|
|
$
|
(38
|
)
|
|
$
|
507,620
|
|
|
$
|
—
|
|
|
$
|
512,870
|
|
In thousands
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Elimination
|
|
Consolidated
|
||||||||||
Net cash (used for) provided by operating activities
|
$
|
(9,439
|
)
|
|
$
|
50,789
|
|
|
$
|
(9,342
|
)
|
|
$
|
(7,808
|
)
|
|
$
|
24,200
|
|
Net cash (used for) provided by investing activities
|
(1,759
|
)
|
|
(3,693
|
)
|
|
(38,413
|
)
|
|
—
|
|
|
(43,865
|
)
|
|||||
Net cash provided by (used for) financing activities
|
22,973
|
|
|
(49,808
|
)
|
|
47,695
|
|
|
7,808
|
|
|
28,668
|
|
|||||
Effect of changes in currency exchange rates
|
—
|
|
|
—
|
|
|
7,482
|
|
|
—
|
|
|
7,482
|
|
|||||
Increase (decrease) in cash
|
11,775
|
|
|
(2,712
|
)
|
|
7,422
|
|
|
—
|
|
|
16,485
|
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
933
|
|
|
4,802
|
|
|
227,666
|
|
|
—
|
|
|
233,401
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
12,708
|
|
|
$
|
2,090
|
|
|
$
|
235,088
|
|
|
$
|
—
|
|
|
$
|
249,886
|
|
|
Three Months Ended
March 31, |
||||||
In thousands
|
2019
|
|
2018
|
||||
Foreign currency (loss) gain
|
$
|
(12,682
|
)
|
|
$
|
(1,032
|
)
|
Equity income
|
929
|
|
|
629
|
|
||
Expected return on pension assets/amortization
|
3,376
|
|
|
3,023
|
|
||
Other miscellaneous expense (income)
|
149
|
|
|
(34
|
)
|
||
Total other (expense) income, net
|
$
|
(8,228
|
)
|
|
$
|
2,586
|
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended
March 31, |
|||||||||
In thousands
|
2019
|
|
2018
|
|
Percent Change
|
|||||
Net sales:
|
|
|
|
|
|
|||||
Sales of goods
|
$
|
1,434,509
|
|
|
$
|
1,010,677
|
|
|
41.9
|
%
|
Sales of services
|
159,108
|
|
|
45,500
|
|
|
249.7
|
%
|
||
Total net sales
|
1,593,617
|
|
|
1,056,177
|
|
|
50.9
|
%
|
||
Cost of sales:
|
|
|
|
|
|
|||||
Cost of goods
|
(1,073,571
|
)
|
|
(709,278
|
)
|
|
51.4
|
%
|
||
Cost of services
|
(131,029
|
)
|
|
(36,018
|
)
|
|
263.8
|
%
|
||
Total cost of sales
|
(1,204,600
|
)
|
|
(745,296
|
)
|
|
61.6
|
%
|
||
Gross profit
|
389,017
|
|
|
310,881
|
|
|
25.1
|
%
|
||
Operating expenses:
|
|
|
|
|
|
|||||
Selling, general and administrative expenses
|
(259,723
|
)
|
|
(147,201
|
)
|
|
76.4
|
%
|
||
Engineering expenses
|
(34,545
|
)
|
|
(22,049
|
)
|
|
56.7
|
%
|
||
Amortization expense
|
(27,442
|
)
|
|
(10,352
|
)
|
|
165.1
|
%
|
||
Total operating expenses
|
(321,710
|
)
|
|
(179,602
|
)
|
|
79.1
|
%
|
||
Income from operations
|
67,307
|
|
|
131,279
|
|
|
(48.7
|
)%
|
||
Other income and expenses:
|
|
|
|
|
|
|||||
Interest expense, net
|
(44,569
|
)
|
|
(20,284
|
)
|
|
119.7
|
%
|
||
Other (expense) income, net
|
(8,228
|
)
|
|
2,586
|
|
|
(418.2
|
)%
|
||
Income from operations before income taxes
|
14,510
|
|
|
113,581
|
|
|
(87.2
|
)%
|
||
Income tax expense
|
(18,523
|
)
|
|
(26,124
|
)
|
|
(29.1
|
)%
|
||
Net (loss) income
|
(4,013
|
)
|
|
87,457
|
|
|
(104.6
|
)%
|
||
Less: Net (gain) loss attributable to noncontrolling interest
|
(459
|
)
|
|
909
|
|
|
(150.5
|
)%
|
||
Net (loss) income attributable to Wabtec shareholders
|
(4,472
|
)
|
|
88,366
|
|
|
(105.1
|
)%
|
In thousands
|
Freight
Segment |
|
Transit
Segment |
|
Total
|
||||||
First Quarter 2018 Net Sales
|
$
|
379,554
|
|
|
$
|
676,623
|
|
|
$
|
1,056,177
|
|
Acquisitions
|
494,976
|
|
|
14,748
|
|
|
509,724
|
|
|||
Change in Sales by Product Line:
|
|
|
|
|
|
||||||
Brake Products
|
292
|
|
|
97,675
|
|
|
97,967
|
|
|||
Specialty Products & Electronics
|
9,242
|
|
|
(9,211
|
)
|
|
31
|
|
|||
Remanufacturing, Overhaul & Build
|
(171
|
)
|
|
(1,635
|
)
|
|
(1,806
|
)
|
|||
Transit Products
|
—
|
|
|
(12,283
|
)
|
|
(12,283
|
)
|
|||
Other
|
(56
|
)
|
|
2,063
|
|
|
2,007
|
|
|||
Foreign exchange
|
(7,403
|
)
|
|
(50,797
|
)
|
|
(58,200
|
)
|
|||
First Quarter 2019 Net Sales
|
$
|
876,434
|
|
|
$
|
717,183
|
|
|
$
|
1,593,617
|
|
|
Three Months Ended March 31,
|
|||||||||
In thousands
|
2019
|
|
2018
|
|
Percent Change
|
|||||
Net sales:
|
|
|
|
|
|
|||||
Sales of goods
|
$
|
729,161
|
|
|
$
|
345,863
|
|
|
110.8
|
%
|
Sales of services
|
147,273
|
|
|
33,691
|
|
|
337.1
|
%
|
||
Total net sales
|
876,434
|
|
|
379,554
|
|
|
130.9
|
%
|
||
Cost of sales:
|
|
|
|
|
|
|||||
Cost of goods
|
(547,988
|
)
|
|
(230,238
|
)
|
|
138.0
|
%
|
||
Cost of services
|
(122,060
|
)
|
|
(26,741
|
)
|
|
356.5
|
%
|
||
Total cost of sales
|
(670,048
|
)
|
|
(256,979
|
)
|
|
160.7
|
%
|
||
|
|
|
|
|
|
|||||
Gross profit
|
206,386
|
|
|
122,575
|
|
|
68.4
|
%
|
||
|
|
|
|
|
|
|||||
Operating expenses
|
(131,176
|
)
|
|
(52,952
|
)
|
|
147.7
|
%
|
||
|
|
|
|
|
|
|||||
Income from operations ($)
|
75,210
|
|
|
69,623
|
|
|
8.0
|
%
|
||
Income from operations (%)
|
8.6
|
%
|
|
18.3
|
%
|
|
|
|
Three Months Ended March 31,
|
|||||||||
In thousands
|
2019
|
|
2018
|
|
Percent Change
|
|||||
|
|
|
|
|
|
|||||
Net sales
|
$
|
717,183
|
|
|
$
|
676,623
|
|
|
6.0
|
%
|
Cost of sales
|
(534,552
|
)
|
|
(488,317
|
)
|
|
9.5
|
%
|
||
Gross profit
|
182,631
|
|
|
188,306
|
|
|
(3.0
|
)%
|
||
|
|
|
|
|
|
|||||
Operating expenses
|
(123,698
|
)
|
|
(120,223
|
)
|
|
2.9
|
%
|
||
|
|
|
|
|
|
|||||
Income from operations ($)
|
58,933
|
|
|
68,083
|
|
|
(13.4
|
)%
|
||
Income from operations (%)
|
8.2
|
%
|
|
10.1
|
%
|
|
|
|
Three Months Ended
March 31, |
||||||
In thousands
|
2019
|
|
2018
|
||||
Cash provided by (used for):
|
|
|
|
||||
Operating activities
|
$
|
31,338
|
|
|
$
|
24,200
|
|
Investing activities
|
(2,739,648
|
)
|
|
(43,865
|
)
|
||
Financing activities
|
882,990
|
|
|
28,668
|
|
||
(Decrease)/increase in cash
|
$
|
(1,829,484
|
)
|
|
$
|
16,485
|
|
•
|
Floating Rate Senior Notes due 2021
-
The Company issued
$500.0 million
of Floating Rate Senior Notes due 2021 (the "Floating Rate Notes"). The Floating Rate Notes, which are non-callable for
one year
, were issued at
100%
of face value. Interest on the Floating Rate Notes accrues at a floating rate per annum equal to three-month Libor plus 105 basis points. The interest rate for the Floating Rate Notes for the initial interest period was the three-month Libor plus 105 basis points determined on September 12, 2018 and is payable quarterly on December 15, March 15, June 15, and September 15 of each year. The Company incurred
$3.5 million
of deferred financing costs related to the issuance of the Floating Rate Notes.
|
•
|
4.15% Senior Notes due 2024
-
The Company issued
$750.0 million
of
4.15%
Senior Notes due 2024 (the "2024 Notes"). The 2024 Notes were issued at
99.805%
of face value. Interest on the 2024 Notes accrues at a rate of
4.15%
per annum and is payable semi-annually on March 15 and September 15 of each year. The Company incurred
$7.4 million
of deferred financing costs related to the issuance of the 2024 Notes.
|
•
|
4.70% Senior Notes Due 2028
-
The Company issued
$1,250.0 million
of
4.70%
Senior Notes due 2028 (the "2028 Notes" and together with the Floating Rate Notes and 2024 Notes, the "Senior Notes"). The 2028 Notes were issued at
99.889%
of face value. Interest on the 2028 Notes accrues at a rate of
4.70%
per annum and is payable semi-annually on March 15 and September 15 of each year. The Company incurred
$10.6 million
of deferred financing costs related to the issuance of the 2028 Notes.
|
•
|
prolonged unfavorable economic and industry conditions in the markets served by us, including North America, South America, Europe, Australia, Asia and South 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;
|
•
|
demand for services in the freight and passenger rail industry;
|
•
|
demand for our products and services;
|
•
|
orders either being delayed, canceled, not returning to historical levels, or reduced or any combination of the foregoing;
|
•
|
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; or
|
•
|
availability of credit;
|
•
|
supply disruptions;
|
•
|
technical difficulties;
|
•
|
changes in operating conditions and costs;
|
•
|
increases in raw material costs;
|
•
|
successful introduction of new products;
|
•
|
performance under material long-term contracts;
|
•
|
labor relations;
|
•
|
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 or intellectual property claims;
|
•
|
completion and integration of acquisitions, including the acquisition of Faiveley Transport and GE Transportation; or
|
•
|
the development and use of new technology;
|
•
|
the actions of competitors; or
|
•
|
the outcome of negotiations with partners, suppliers, customers or others;
|
•
|
political stability in relevant areas of the world;
|
•
|
future regulation/deregulation of our customers and/or the rail industry;
|
•
|
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; or
|
•
|
federal and state income tax legislation; and
|
•
|
the outcome of negotiations with governments.
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 1.
|
LEGAL PROCEEDINGS
|
Item 1A.
|
RISK FACTORS
|
Item 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Month
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Programs (1)
|
|
Maximum Dollar Value of Shares That May Yet Be Purchased Under the Programs (1)
|
||||||
January 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
137,824
|
|
|
February 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
137,824
|
|
March 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
137,824
|
|
Total quarter ended March 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
137,824
|
|
(1)
|
On February 9, 2016, the Board of Directors amended its stock repurchase authorization to
$350.0 million
of the Company’s outstanding shares. No time limit was set for the completion of the programs which conforms to the requirements under the 2016 Refinancing Credit Agreement, as well as the senior notes currently outstanding.
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Item 6.
|
EXHIBITS
|
10.1
|
|
|
|
10.2
|
|
|
|
10.3
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
101.INS
|
XBRL Instance Document.
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
|
|
|
|
By:
|
/s/ PATRICK D. DUGAN
|
|
Patrick D. Dugan,
|
|
Executive Vice President and
Chief Financial Officer
|
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
|
|
|
DATE:
|
May 9, 2019
|
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