Segment Information

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

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 September 30, 2014 is as follows:
					Corporate
	Freight		Transit		Activities and
In thousands	Segment		Segment		Elimination			Total
Sales to external customers	$	453,329	$	343,942	$	-		$	797,271
Intersegment sales/(elimination)		9,781		1,822		(11,603	)		-
Total sales	$	463,110	$	345,764	$	(11,603	)	$	797,271
Income (loss) from operations	$	102,182	$	40,734	$	(6,939	)	$	135,977
Interest expense and other, net		-		-		(4,748	)		(4,748	)
Income (loss) from operations before income taxes	$	102,182	$	40,734	$	(11,687	)	$	131,229
Segment financial information for the three months ended September 30, 2013 is as follows:
					Corporate
	Freight		Transit		Activities and
In thousands	Segment		Segment		Elimination			Total
Sales to external customers	$	340,533	$	290,865	$	-		$	631,398
Intersegment sales/(elimination)		5,410		2,642		(8,052	)	$	-
Total sales	$	345,943	$	293,507	$	(8,052	)	$	631,398
Income (loss) from operations	$	77,299	$	36,335	$	(3,763	)	$	109,871
Interest expense and other, net		-		-		(5,487	)		(5,487	)
Income (loss) from operations before income taxes	$	77,299	$	36,335	$	(9,250	)	$	104,384
Segment financial information for the nine months ended September 30, 2014 is as follows:
					Corporate
	Freight		Transit		Activities and
In thousands	Segment		Segment		Elimination			Total
Sales to external customers	$	1,250,337	$	973,251	$	-		$	2,223,588
Intersegment sales/(elimination)		27,074		6,096		(33,170	)		-
Total sales	$	1,277,411	$	979,347	$	(33,170	)	$	2,223,588
Income (loss) from operations	$	294,396	$	112,009	$	(16,259	)	$	390,146
Interest expense and other, net		-		-		(13,497	)		(13,497	)
Income (loss) from operations before income taxes	$	294,396	$	112,009	$	(29,756	)	$	376,649
Segment financial information for the nine months ended September 30, 2013 is as follows:
					Corporate
	Freight		Transit		Activities and
In thousands	Segment		Segment		Elimination			Total
Sales to external customers	$	1,009,069	$	875,841	$	-		$	1,884,910
Intersegment sales/(elimination)		20,384		5,407		(25,791	)	$	-
Total sales	$	1,029,453	$	881,248	$	(25,791	)	$	1,884,910
Income (loss) from operations	$	225,734	$	110,809	$	(10,451	)	$	326,092
Interest expense and other, net		-		-		(12,547	)		(12,547	)
Income (loss) from operations before income taxes	$	225,734	$	110,809	$	(22,998	)	$	313,545

Sales by product are as follows:
	Three Months Ended
	September 30,
In thousands	2014		2013
Specialty Products & Electronics	$	390,038	$	263,595
Brake Products		170,826		137,189
Remanufacturing, Overhaul & Build		142,620		161,857
Other Transit Products		51,607		50,270
Other		42,180		18,487
Total sales	$	797,271	$	631,398
Sales by product are as follows:
	Nine Months Ended
	September 30,
In thousands	2014		2013
Specialty Products & Electronics	$	980,897	$	764,222
Brake Products		487,095		417,921
Remanufacturing, Overhaul & Build		474,444		489,391
Other Transit Products		155,144		153,698
Other		126,008		59,678
Total sales	$	2,223,588	$	1,884,910