SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2012

SEGMENT INFORMATION

14. SEGMENT INFORMATION

Wabtec has two reportable segments—the Freight Segment and the Transit Segment. The key factors used to identify these reportable segments are the organization and alignment of the Company’s internal operations, the nature of the products and services, and customer type. The business segments are:

Freight Segment primarily manufactures and services components for new and existing freight cars and locomotives, builds new switcher locomotives, rebuilds freight locomotives, supplies railway electronics, positive train control equipment, signal design and engineering services, friction products, and provides related heat exchange and cooling systems. Customers include large, publicly traded railroads, leasing companies, manufacturers of original equipment such as locomotives and freight cars, and utilities.

Transit Segment primarily manufactures and services components for new and existing passenger transit vehicles, typically subway cars and buses, builds new commuter locomotives, friction products, and refurbishes subway cars. Customers include public transit authorities and municipalities, leasing companies, and manufacturers of subway cars and buses around the world.

The Company evaluates its business segments’ operating results based on income from operations. Corporate activities include general corporate expenses, elimination of intersegment transactions, interest income and expense and other unallocated charges. Since certain administrative and other operating expenses and other items have not been allocated to business segments, the results in the following tables are not necessarily a measure computed in accordance with generally accepted accounting principles and may not be comparable to other companies.

Segment financial information for the three months ended June 30, 2012 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities  and Elimination			Total
Sales to external customers	$	407,706	$	202,114	$	—		$	609,820
Intersegment sales/(elimination)		5,850		3,037		(8,887	)		—
Total sales	$	413,556	$	205,151	$	(8,887	)	$	609,820
Income (loss) from operations	$	83,417	$	21,934	$	(4,486	)	$	100,865
Interest expense and other, net		—		—		(3,286	)		(3,286	)
Income (loss) from operations before income taxes	$	83,417	$	21,934	$	(7,772	)	$	97,579

Segment financial information for the three months ended June 30, 2011 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	280,036	$	198,863	$	—		$	478,899
Intersegment sales/(elimination)		3,619		1,639		(5,258	)		—
Total sales	$	283,655	$	200,502	$	(5,258	)	$	478,899
Income (loss) from operations	$	52,396	$	26,052	$	(22,086	)	$	56,362
Interest expense and other, net		—		—		(4,203	)		(4,203	)
Income (loss) from operations before income taxes	$	52,396	$	26,052	$	(26,289	)	$	52,159

Segment financial information for the six months ended June 30, 2012 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	804,994	$	388,135	$	—		$	1,193,129
Intersegment sales/(elimination)		11,552		5,428		(16,980	)		—
Total sales	$	816,546	$	393,563	$	(16,980	)	$	1,193,129
Income (loss) from operations	$	159,032	$	44,549	$	(8,606	)	$	194,975
Interest expense and other, net		—		—		(7,124	)		(7,124	)
Income (loss) from operations before income taxes	$	159,032	$	44,549	$	(15,730	)	$	187,851

Segment financial information for the six months ended June 30, 2011 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	544,892	$	389,266	$	—		$	934,158
Intersegment sales/(elimination)		7,910		2,034		(9,944	)		—
Total sales	$	552,802	$	391,300	$	(9,944	)	$	934,158
Income (loss) from operations	$	99,973	$	50,173	$	(27,407	)	$	122,739
Interest expense and other, net		—		—		(7,427	)		(7,427	)
Income (loss) from operations before income taxes	$	99,973	$	50,173	$	(34,834	)	$	115,312

Sales by product are as follows:

	Three Months Ended June 30,
In thousands	2012		2011
Specialty Products & Electronics	$	298,447	$	205,697
Brake Products		128,363		125,547
Remanufacturing, Overhaul & Build		109,933		82,223
Other Transit Products		54,902		48,994
Other		18,175		16,438
Total sales	$	609,820	$	478,899

Sales by product are as follows:

	Six Months Ended June 30,
In thousands	2012		2011
Specialty Products & Electronics	$	577,288	$	390,874
Brake Products		259,613		251,443
Remanufacturing, Overhaul & Build		218,655		161,657
Other Transit Products		100,800		99,884
Other		36,773		30,300
Total sales	$	1,193,129	$	934,158