15. GUARANTOR SUBSIDIARIES FINANCIAL INFORMATION

Effective August 2003, the Company issued $150 million of Senior Notes due in 2013 (“the Notes”). On November 7, 2011, the Company refinanced its existing revolving credit and term loan facility due in 2016 (“the Bank Debt”). The obligations under the Note and the Bank Debt are fully and unconditionally guaranteed by all U.S. subsidiaries as guarantors. In accordance with positions established by the Securities and Exchange Commission, the following shows separate financial information with respect to the parent, the guarantor subsidiaries and the non-guarantor subsidiaries. The principal elimination entries eliminate investment in subsidiaries and certain intercompany balances and transactions.

Balance Sheet as of June 30, 2013:

In thousands	Parent			Guarantors			Non-Guarantors		Elimination			Consolidated
Cash and cash equivalents	$	3,984		$	5,232		$	205,289	$	—		$	214,505
Accounts receivable		486			289,807			198,156		—			488,449
Inventories		—			266,879			139,059		—			405,938
Other current assets		62,915			4,937			13,241		—			81,093
Total current assets		67,385			566,855			555,745		—			1,189,985
Property, plant and equipment		5,018			124,322			111,626		—			240,966
Goodwill		7,980			402,995			303,979		—			714,954
Investment in subsidiaries		3,423,789			380,494			—		(3,804,283	)		—
Other intangibles		—			166,413			163,421		—			329,834
Other long term assets		(11,248	)		7,797			44,102		—			40,651
Total Assets	$	3,492,924		$	1,648,876		$	1,178,873	$	(3,804,283	)	$	2,516,390
Current liabilities	$	17,042		$	331,997		$	175,233	$	—		$	524,272
Inter-company		1,606,493			(1,697,841	)		91,348		—			—
Long-term debt		396,400			153			362		—			396,915
Other long term liabilities		67,283			34,570			87,644		—			189,497
Total liabilities		2,087,218			(1,331,121	)		354,587		—			1,110,684
Stockholders’ equity		1,405,706			2,979,997			824,286		(3,804,283	)		1,405,706
Total Liabilities and Stockholders’ Equity	$	3,492,924		$	1,648,876		$	1,178,873	$	(3,804,283	)	$	2,516,390

Balance Sheet as of December 31, 2012:

In thousands	Parent			Guarantors			Non-Guarantors
Cash and cash equivalents	$	22,335		$	5,473		$	187,958	$	—		$	215,766
Accounts receivable		1,210			213,895			174,810		—			389,915
Inventories		—			278,610			128,429		—			407,039
Other current assets		63,496			5,400			11,322		—			80,218
Total current assets		87,041			503,378			502,519		—			1,092,938
Property, plant and equipment, net		4,685			127,165			112,238		—			244,088
Goodwill		7,980			402,510			255,532		—			666,022
Investment in subsidiaries		3,146,931			279,731			—		(3,426,662	)		—
Other intangibles, net		—			169,374			138,947		—			308,321
Other long term assets		(10,491	)		4,309			46,355		—			40,173
Total Assets	$	3,236,146		$	1,486,467		$	1,055,591	$	(3,426,662	)	$	2,351,542
Current liabilities	$	64,404		$	321,675		$	166,980	$	—		$	553,059
Intercompany		1,506,541			(1,598,419	)		91,878		—			—
Long-term debt		317,000			168			685		—			317,853
Other long term liabilities		66,184			37,845			94,584		—			198,613
Total liabilities		1,954,129			(1,238,731	)		354,127		—			1,069,525
Stockholders’ equity		1,282,017			2,725,198			701,464		(3,426,662	)		1,282,017
Total Liabilities and Stockholders’ Equity	$	3,236,146		$	1,486,467		$	1,055,591	$	(3,426,662	)	$	2,351,542

Income Statement for the Three Months Ended June 30, 2013:

In thousands	Parent			Guarantors
Net sales	$	—		$	436,000		$	260,310		$	(58,308	)	$	638,002
Cost of sales		614			(262,311	)		(208,402	)		24,978			(445,121	)
Gross profit		614			173,689			51,908			(33,330	)		192,881
Operating expenses		(12,535	)		(39,554	)		(28,238	)		—			(80,327	)
Operating (loss) profit		(11,921	)		134,135			23,670			(33,330	)		112,554
Interest (expense) income, net		(4,928	)		1,547			110			—			(3,271	)
Other income (expense), net		2,771			490			(2,855	)		—			406
Equity earnings		112,430			26,894			—			(139,324	)		—
Income (loss) from operations before income tax		98,352			163,066			20,925			(172,654	)		109,689
Income tax expense		(23,714	)		(3,355	)		(7,982	)		—			(35,051	)
Net income (loss) attributable to Wabtec shareholders	$	74,638		$	159,711		$	12,943		$	(172,654	)	$	74,638
Comprehensive income (loss) attributable to Wabtec shareholders	$	77,084		$	159,711		$	3,688		$	(172,654	)	$	67,829

(1) Includes elimination of gross profit realized with certain intercompany transactions between Guarantor and Non-Guarantor subsidiaries.

Income Statement for the Three Months Ended June 30, 2012:

In thousands	Parent
Net sales	$	—		$	431,392		$	223,556		$	(45,128	)	$	609,820
Cost of sales		(293	)		(275,312	)		(177,492	)		16,704			(436,393	)
Gross (loss) profit		(293	)		156,080			46,064			(28,424	)		173,427
Operating expenses		(15,571	)		(38,879	)		(18,112	)		—			(72,562	)
Operating (loss) profit		(15,864	)		117,201			27,952			(28,424	)		100,865
Interest (expense) income, net		(5,370	)		1,006			855			—			(3,509	)
Other income (expense), net		289			(1,791	)		1,725			—			223
Equity earnings		107,941			24,573			—			(132,514	)		—
Income (loss) from operations before income tax		86,996			140,989			30,532			(160,938	)		97,579
Income tax expense		(22,284	)		(3,218	)		(7,365	)		—			(32,867	)
Net income (loss) attributable to Wabtec shareholders	$	64,712		$	137,771		$	23,167		$	(160,938	)	$	64,712
Comprehensive income (loss) attributable to Wabtec shareholders	$	64,605		$	137,771		$	6,648		$	(160,938	)	$	48,086

(1) Includes elimination of gross profit realized with certain intercompany transactions between Guarantor and Non-Guarantor subsidiaries.

Income Statement for the Six Months Ended June 30, 2013:

In thousands	Parent			Guarantors			Non-Guarantors			Elimination(1)
Net sales	$	—		$	854,035		$	497,470		$	(97,993	)	$	1,253,512
Cost of sales		1,101			(532,856	)		(390,544	)		44,556			(877,743	)
Gross profit		1,101			321,179			106,926			(53,437	)		375,769
Operating expenses		(27,709	)		(77,873	)		(53,966	)		—			(159,548	)
Operating (loss) profit		(26,608	)		243,306			52,960			(53,437	)		216,221
Interest (expense) income, net		(9,844	)		2,831			128			—			(6,885	)
Other income (expense), net		13,667			(3,286	)		(10,556	)		—			(175	)
Equity earnings		213,845			44,594			—			(258,439	)		—
Income (loss) from operations before income tax		191,060			287,445			42,532			(311,876	)		209,161
Income tax expense		(46,809	)		(6,781	)		(11,320	)		—			(64,910	)
Net income (loss) attributable to Wabtec shareholders	$	144,251		$	280,664		$	31,212		$	(311,876	)	$	144,251
Comprehensive income (loss) attributable to Wabtec shareholders	$	148,883		$	280,664		$	(5,969	)	$	(311,876	)	$	111,702

(1) Includes elimination of gross profit realized with certain intercompany transactions between Guarantor and Non-Guarantor subsidiaries.

Income Statement for the Six Months Ended June 30, 2012:

In thousands	Parent
Net sales	$	—		$	846,042		$	433,609		$	(86,522	)	$	1,193,129
Cost of sales		(348	)		(545,890	)		(337,761	)		33,678			(850,321	)
Gross profit		(348	)		300,152			95,848			(52,844	)		342,808
Operating expenses		(32,772	)		(77,863	)		(37,198	)		—			(147,833	)
Operating (loss) profit		(33,120	)		222,289			58,650			(52,844	)		194,975
Interest (expense) income, net		(10,832	)		2,184			1,415			—			(7,233	)
Other income (expense), net		8,121			(6,094	)		(1,918	)		—			109
Equity earnings		201,639			36,960			—			(238,599	)		—
Income (loss) from operations before income tax		165,808			255,339			58,147			(291,443	)		187,851
Income tax expense		(41,835	)		(6,811	)		(15,232	)		—			(63,878	)
Net income (loss) attributable to Wabtec shareholders	$	123,973		$	248,528		$	42,915		$	(291,443	)	$	123,973
Comprehensive income (loss) attributable to Wabtec shareholders	$	124,190		$	248,528		$	37,297		$	(291,443	)	$	118,572

(1) Includes elimination of gross profit realized with certain intercompany transactions between Guarantor and Non-Guarantor subsidiaries.

Condensed Statement of Cash Flows for the Six Months Ended June 30, 2013:

In thousands	Parent			Guarantors			Non-Guarantors			Elimination			Consolidated
Net cash (used for) provided by operating activities	$	(96,588	)	$	288,443		$	165,117		$	(311,876	)	$	45,096
Net cash used for investing activities		(3,178	)		(8,008	)		(112,661	)		—			(123,847	)
Net cash provided by (used for) financing activities		81,415			(280,676	)		(31,544	)		311,876			81,071
Effect of changes in currency exchange rates		—			—			(3,581	)		—			(3,581	)
(Decrease) increase in cash		(18,351	)		(241	)		17,331			—			(1,261	)
Cash, beginning of year		22,335			5,473			187,958			—			215,766
Cash, end of period	$	3,984		$	5,232		$	205,289		$	—		$	214,505

Condensed Statement of Cash Flows for the Six Months Ended June 30, 2012:

In thousands	Parent			Guarantors			Non-Guarantors			Elimination			Consolidated
Net cash provided by (used for) operating activities	$	30,954		$	251,959		$	39,066		$	(291,443	)	$	30,536
Net cash used for investing activities		(91,723	)		(9,220	)		(3,795	)		—			(104,738	)
Net cash provided by (used for) financing activities		24,383			(248,328	)		(42,850	)		291,443			24,648
Effect of changes in currency exchange rates		—			—			(1,956	)		—			(1,956	)
Decrease in cash		(36,386	)		(5,589	)		(9,535	)		—			(51,510	)
Cash, beginning of year		75,621			14,024			195,970			—			285,615
Cash, end of period	$	39,235		$	8,435		$	186,435		$	—		$	234,105