10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________________________

FORM 10-Q

____________________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 033-90866

____________________________________

WESTINGHOUSE AIR BRAKE TECHNOLOGIES
CORPORATION

(Exact name of registrant as specified in its charter)

____________________________________

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)

412-825-1000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

____________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at July 25, 2016
Common Stock, $.01 par value per share	90,120,526shares

WESTINGHOUSE AIR BRAKE

TECHNOLOGIES CORPORATION

June 30, 2016

FORM 10-Q

TABLE OF CONTENTS

		Page
	PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements - (Unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015	3
	Condensed Consolidated Statements of Income for the three and six months ended June 30, 2016 and 2015	4
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2016 and 2015	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2015	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	35
Item 4.	Controls and Procedures	35
	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 4.	Mine Safety Disclosures	36
Item 6.	Exhibits	36
	Signatures	37

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PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	Unaudited
In thousands, except shares and par value	June 30, 2016			December 31, 2015
Assets
Current Assets
Cash and cash equivalents	$	302,935		$	226,191
Accounts receivable	440,900			494,975
Unbilled accounts receivable	145,451			103,814
Inventories	493,442			478,574
Deposit in escrow	206,212			202,942
Deferred income taxes	75,705			71,658
Other current assets	35,713			33,524
Total current assets	1,700,358			1,611,678
Property, plant and equipment	730,050			717,295
Accumulated depreciation	(381,400		)	(364,102		)
Property, plant and equipment, net	348,650			353,193
Other Assets
Goodwill	860,027			858,532
Other intangibles, net	430,331			440,534
Other noncurrent assets	39,830			32,909
Total other assets	1,330,188			1,331,975
Total Assets	$	3,379,196		$	3,296,846
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	305,160		$	319,525
Customer deposits	110,968			106,127
Accrued compensation	62,062			69,892
Accrued warranty	77,566			72,678
Current portion of long-term debt	115			433
Other accrued liabilities	108,681			96,121
Total current liabilities	664,552			664,776
Long-term debt	744,139			691,805
Accrued postretirement and pension benefits	56,487			55,765
Deferred income taxes	145,572			139,852
Accrued warranty	18,780			19,386
Other long-term liabilities	23,827			23,923
Total liabilities	1,653,357			1,595,507
Shareholders’ Equity
Preferred stock, 1,000,000 shares authorized, no shares issued	—			—
Common stock, $0.01 par value; 200,000,000 shares authorized:
132,349,534 shares issued and 90,119,492 and 91,836,106 outstanding
at June 30, 2016 and December 31, 2015, respectively	1,323			1,323
Additional paid-in capital	466,553			469,326
Treasury stock, at cost, 42,230,042 and 40,513,428 shares,
at June 30, 2016 and December 31, 2015, respectively	(905,877		)	(775,124		)
Retained earnings	2,450,884			2,280,801
Accumulated other comprehensive loss	(290,346		)	(276,719		)
Total Westinghouse Air Brake Technologies Corporation shareholders' equity	1,722,537			1,699,607
Non-controlling interest (minority interest)	3,302			1,732
Total shareholders’ equity	1,725,839			1,701,339
Total Liabilities and Shareholders’ Equity	$	3,379,196		$	3,296,846

The accompanying notes are an integral part of these statements.

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WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	Unaudited						Unaudited
	Three Months Ended June 30,						Six Months Ended June 30,
In thousands, except per share data	2016			2015			2016			2015
Net sales	$	723,601		$	847,028		$	1,495,632		$	1,665,622
Cost of sales	(486,212		)	(579,264		)	(1,003,063		)	(1,142,503		)
Gross profit	237,389			267,764			492,569			523,119
Selling, general and administrative expenses	(80,610		)	(88,992		)	(170,361		)	(173,763		)
Engineering expenses	(18,029		)	(17,750		)	(35,982		)	(34,613		)
Amortization expense	(5,466		)	(5,162		)	(10,761		)	(10,463		)
Total operating expenses	(104,105		)	(111,904		)	(217,104		)	(218,839		)
Income from operations	133,284			155,860			275,465			304,280
Other income and expenses
Interest expense, net	(4,969		)	(4,041		)	(9,840		)	(8,347		)
Other expense, net	(1,229		)	(1,887		)	(1,075		)	(4,753		)
Income from operations before income taxes	127,086			149,932			264,550			291,180
Income tax expense	(36,601		)	(48,428		)	(79,902		)	(93,512		)
Net income attributable to Wabtec shareholders	$	90,485		$	101,504		$	184,648		$	197,668
Earnings Per Common Share
Basic
Net income attributable to Wabtec shareholders	$	1.00		$	1.05		$	2.03		$	2.05
Diluted
Net income attributable to Wabtec shareholders	$	1.00		$	1.04		$	2.02		$	2.03
Weighted average shares outstanding
Basic	89,846			96,338			90,832			96,066
Diluted	90,559			97,435			91,628			97,112

The accompanying notes are an integral part of these statements.

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WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Unaudited						Unaudited
	Three Months Ended June 30,						Six Months Ended June 30,
In thousands, except per share data	2016			2015			2016			2015
Net income attributable to Wabtec shareholders	$	90,485		$	101,504		$	184,648		$	197,668
Foreign currency translation (loss) gain	(42,330		)	36,082			(10,119		)	(51,849		)
Unrealized (loss) gain on derivative contracts	(716		)	949			(2,909		)	(756		)
Pension benefit plans and post-retirement benefit plans	2,149			(822		)	(1,634		)	3,000
Other comprehensive (loss) income before tax	(40,897		)	36,209			(14,662		)	(49,605		)
Income tax (expense) benefit related to components of
other comprehensive (loss) income	(352		)	(320		)	1,035			(605		)
Other comprehensive (loss) income, net of tax	(41,249		)	35,889			(13,627		)	(50,210		)
Comprehensive income attributable to Wabtec shareholders	$	49,236		$	137,393		$	171,021		$	147,458

The accompanying notes are an integral part of these statements.

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WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Unaudited
	Six Months Ended June 30,
In thousands, except per share data	2016			2015
Operating Activities
Net income attributable to Wabtec shareholders	$	184,648		$	197,668
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization	33,093			31,612
Stock-based compensation expense	9,673			14,989
Loss on disposal of property, plant and equipment	378			420
Excess income tax benefits from exercise of stock options	—			(1,388		)
Changes in operating assets and liabilities, net of acquisitions
Accounts receivable and unbilled accounts receivable	(2,171		)	(35,788		)
Inventories	(10,893		)	(25,536		)
Accounts payable	(13,757		)	(25,015		)
Accrued income taxes	2,913			19,185
Accrued liabilities and customer deposits	3,505			(27,089		)
Other assets and liabilities	6,587			(38,132		)
Net cash provided by operating activities	213,976			110,926
Investing Activities
Purchase of property, plant and equipment	(19,104		)	(20,860		)
Proceeds from disposal of property, plant and equipment	165			178
Acquisitions of businesses, net of cash acquired	(21,263		)	(100,108		)
Net cash used for investing activities	(40,202		)	(120,790		)
Financing Activities
Proceeds from debt	230,000			174,300
Payments of debt	(175,499		)	(294,589		)
Purchase of treasury stock	(133,738		)	—
Proceeds from exercise of stock options and other benefit plans	651			1,409
Excess income tax benefits from exercise of stock options	—			1,388
Payment of income tax withholding on share-based compensation	(9,006		)	(14,565		)
Cash dividends ($0.16 and $0.12 per share for the six months
ended June 30, 2016 and 2015, respectively)	(14,565		)	(11,580		)
Net cash used for financing activities	(102,157		)	(143,637		)
Effect of changes in currency exchange rates	5,127			(7,504		)
Increase (Decrease) in cash	76,744			(161,005		)
Cash, beginning of period	226,191			425,849
Cash, end of period	$	302,935		$	264,844

The accompanying notes are an integral part of these statements.

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WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2016 (UNAUDITED)

1. BUSINESS

Westinghouse Air Brake Technologies Corporation (“Wabtec”) is one of the world’s largest providers of value-added, technology-based products and services for the global rail industry. Our products are found on virtually all U.S. locomotives, freight cars and passenger transit vehicles, as well as in more than 100 countries throughout the world. Our products enhance safety, improve productivity and reduce maintenance costs for customers, and many of 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 20 countries. In the first six months of 2016, about 50% of the Company’s revenues came from customers outside the U.S.

2. PROPOSED TRANSACTION WITH FAIVELEY TRANSPORT S.A.

On July 27, 2015, the Company announced plans to acquire Faiveley Transport S.A. ("Faiveley Transport"), a leading global provider of value-added, integrated systems and services for the railway industry with annual sales of about $1.2 billion and more than 5,700 employees in 24 countries.  Faiveley Transport supplies railway manufacturers, operators and maintenance providers with a range of valued-added, technology-based systems and services in Energy & Comfort (air conditioning, power collectors and converters, and passenger information), Access & Mobility (passenger access systems and platform doors), and Brakes & Safety (braking systems and couplers).

The transaction has been structured in three steps:

• Wabtec made an irrevocable offer to the owners of approximately 51% of Faiveley Transport’s shares for a purchase price of €100 per share, payable 25% in cash and 75% in Wabtec preferred stock.  The preferred stock will have a 1% annual dividend or, if greater, the annual dividend assuming full conversion into common shares, and must be converted after three years into Wabtec common shares at an implied ratio of one Faiveley Transport common share for 1.125 Wabtec common shares. Shareholders owning approximately 51% of Faiveley Transport have entered into exclusive discussions with Wabtec.

• Upon completion of required labor group consultations, on October 6, 2015, the 51% shareholders entered into a definitive share purchase agreement and Faiveley Transport entered into an acquisition agreement with Wabtec.

• Upon completing the share purchase, Wabtec will commence a tender offer for the remaining publicly traded Faiveley Transport shares. The public shareholders will have the option to elect to receive €100 per share in cash or Wabtec preferred stock. The preferred stock portion of the consideration is subject to a cap of 75% of Faiveley Transport’s common shares.  Wabtec intends to delist Faiveley Transport from Euronext after the tender offer if minority interests represent less than 5%.

The total purchase price offered is about $1.8 billion, including assumed debt.  Wabtec plans to fund the cash portion of the transaction with cash on hand, existing credit facilities and potentially other debt financing.  Prior to December 31, 2015, Wabtec set aside €186.9 million as an escrow deposit for the Faiveley Transport purchase. The combination of Wabtec and Faiveley Transport would create one of the world’s largest public rail equipment companies, with revenues of about $4.5 billion and a presence in all key freight rail and passenger transit geographies worldwide. 

Closing of the transaction is subject to various conditions, including completion of regulatory requirements. These steps are currently on-going and the timing of completion is unknown.

3. ACCOUNTING POLICIES

Basis of Presentation The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles and the rules and regulations of the Securities and Exchange Commission and include the accounts of Wabtec and its majority owned subsidiaries. These condensed consolidated interim financial statements do not include all of the information and footnotes required for complete financial statements. In management’s opinion, these financial statements reflect all adjustments of a normal, recurring nature necessary for a fair presentation of the results for the interim periods presented. Results for these interim periods are not necessarily indicative of results to be expected for the full year.

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The Company operates on a four-four-five week accounting quarter, and the quarters end on or about March 31, June 30, September 30, and December 31.

The notes included herein should be read in conjunction with the audited consolidated financial statements included in Wabtec’s Annual Report on Form 10-K for the year ended December 31, 2015. The December 31, 2015 information has been derived from the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Revenue Recognition Revenue is recognized in accordance with Accounting Standards Codification (“ASC”) 605 “Revenue Recognition.” Revenue is recognized when products have been shipped to the respective customers, title has passed and the price for the product has been determined.

In general, the Company recognizes revenues on long-term contracts based on the percentage of completion method of accounting. The units-of-delivery method or other input-based or output-based measures, as appropriate, are used to measure the progress toward completion of individual contracts. Contract revenues and cost estimates are reviewed and revised at a minimum quarterly and adjustments are reflected in the accounting period as such amounts are determined. Provisions are made currently for estimated losses on uncompleted contracts. Unbilled accounts receivables were $145.5 million and $103.8 million, customer deposits were $111.0 million and $106.1 million, and provisions for loss contracts were $16.7 million and $11.8 million at June 30, 2016 and December 31, 2015, respectively.

Certain pre-production costs relating to long-term production and supply contracts have been deferred and will be recognized over the life of the contracts. Deferred pre-production costs were $28.8 million and $30.3 million at June 30, 2016 and December 31, 2015, respectively.

Reclassifications Certain prior year amounts have been reclassified, where necessary, to conform to the current year presentation.

Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates.

Financial Derivatives and Hedging Activities As part of its risk management strategy, the Company utilizes derivative financial instruments to manage its exposure due to changes in foreign currencies and interest rates. For further information regarding financial derivatives and hedging activities, refer to Footnotes 13 and 14.

Foreign Currency Translation Assets and liabilities of foreign subsidiaries, except for the Company’s Mexican operations whose functional currency is the U.S. Dollar, are translated at the rate of exchange in effect on the balance sheet date while income and expenses are translated at the average rates of exchange prevailing during the period. Foreign currency gains and losses resulting from transactions and the translation of financial statements are recorded in the Company’s consolidated financial statements based upon the provisions of ASC 830 “Foreign Currency Matters.” The effects of currency exchange rate changes on intercompany transactions and balances of a long-term investment nature are accumulated and carried as a component of accumulated other comprehensive loss. The effects of currency exchange rate changes on intercompany transactions that are denominated in a currency other than an entity’s functional currency are charged or credited to earnings.

Non-controlling Interests In accordance with ASC 810 "Consolidation", the Company has classified non-controlling interests as equity on our condensed consolidated balance sheets as of June 30, 2016 and December 31, 2015. Net income attributable to non-controlling interests for the three and six months ended June 30, 2016 and 2015 was not material.

Recent Accounting Pronouncements In April 2015, the FASB issued Accounting Standards Update No. 2015-3, “Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-3”) which changes the presentation of debt issuance costs in financial statements to present such costs as a direct deduction from the related debt liability rather than as an asset.  ASU 2015-3 became effective for public companies during interim and annual reporting periods beginning after December 15, 2015.  The Company retrospectively adopted this ASU on January 1, 2016. The adoption of this ASU did not have a material impact to our consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-9, “Revenue from Contract with Customers.”  The ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an

8

amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer.  The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity’s nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.  The Board voted to propose that the standard would take effect for reporting periods beginning after December 15, 2017 and that early adoption would be allowed as of the original effective date. The Company is currently evaluating the impact the pronouncement will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (ASU 2016-09”). The ASU simplifies several aspects for the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The ASU is effective for public companies in the fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

Other Comprehensive Income Comprehensive income is defined as net income and all other non-owner changes in shareholders’ equity.

The changes in accumulated other comprehensive loss by component, net of tax, for the six months ended June 30, 2016 are as follows:

In thousands	Foreign currency translation			Derivative contracts			Pension and post retirement benefit plans			Total
Balance at December 31, 2015	$	(227,349	)	$	(2,987	)	$	(46,383	)	$	(276,719	)
Other comprehensive (loss) before reclassifications	(10,119		)	(2,758		)	(2,293		)	(15,170		)
Amounts reclassified from accumulated other
comprehensive income	—			647			896			1,543
Net current period other comprehensive (loss)	(10,119		)	(2,111		)	(1,397		)	(13,627		)
Balance at June 30, 2016	$	(237,468	)	$	(5,098	)	$	(47,780	)	$	(290,346	)

Reclassifications out of accumulated other comprehensive loss for the three months ended June 30, 2016 are as follows:

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	$	(422	)	Cost of sales
Amortization of net loss	971			Cost of sales
	549			Income from Operations
	(157		)	Income tax expense
	$	392		Net income
Derivative contracts
Realized loss on derivative contracts	$	453		Interest expense, net
	(130		)	Income tax expense
	$	323		Net income

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Reclassifications out of accumulated other comprehensive loss for the six months ended June 30, 2016 are as follows:

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	$	(807	)	Cost of sales
Amortization of net loss	2,091			Cost of sales
	1,284			Income from Operations
	(388		)	Income tax expense
	$	896		Net income
Derivative contracts
Realized loss on derivative contracts	$	927		Interest expense, net
	(280		)	Income tax expense
	$	647		Net income

4. ACQUISITIONS

The Company has made the following acquisitions operating as a business unit or component of a business unit in the Freight Segment:

• On May 5, 2016, the Company acquired Unitrac Railroad Materials ("Unitrac"), a leading designer and manufacturer of railroad products and track work services for a purchase price of approximately $14.4 million, net of cash acquired, resulting in preliminary goodwill of $1.0 million, none of which will be deductible for tax purposes.

• On October 30, 2015, the Company acquired Relay Monitoring Systems PTY Ltd. ("RMS"), an Australian based manufacturer of electrical protection and control products for a purchase price of approximately $18.7 million, net of cash acquired, resulting in preliminary goodwill of $8.8 million, none of which will be deductible for tax purposes. 

• On October 8, 2015, the Company acquired Track IQ, an Australian based manufacturer of wayside censor systems for the global rail industry for a purchase price of approximately $9.3 million, net of cash acquired, resulting in preliminary goodwill of $6.6 million, all of which will be deductible for tax purposes.

• On February 4, 2015, the Company acquired Railroad Controls L.P. ("RCL"), a provider of railway signal construction services, for a purchase price of approximately $78.0 million, net of cash acquired, resulting in goodwill of $14.8 million, all of which will be deductible for tax purposes.

The Company has made the following acquisitions operating as a business unit or component of a business unit in the Transit Segment:

• On June 17, 2015, the Company acquired Metalocaucho (“MTC”), a manufacturer of transit products, primarily rubber components for suspension and vibration control systems, for a purchase price of approximately $23.4 million, net of cash acquired, resulting in goodwill of $13.2 million, none of which will be deductible for tax purposes.

The acquisitions listed above include escrow deposits of $37.6 million, which act as security for indemnity and other claims in accordance with the purchase and related escrow agreements.

For the Unitrac, RMS, and Track IQ acquisitions, the following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition. For the MTC and RCL acquisitions, the following table summarizes the final fair value of the assets acquired and liabilities assumed at the date of acquisition.

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	Unitrac			RMS			Track IQ			MTC			RCL
In thousands	May 5, 2016			October 30, 2015			October 8, 2015			June 17, 2015			February 4, 2015
Current assets	$	12,526		$	3,605		$	660		$	10,348		$	16,421
Property, plant & equipment	1,768			1,378			187			1,450			12,136
Goodwill	998			8,847			6,649			13,198			14,787
Other intangible assets	1,230			8,621			3,246			7,650			40,403
Other assets	—			—			—			114			—
Total assets acquired	16,522			22,451			10,742			32,760			83,747
Total liabilities assumed	(2,144		)	(3,741		)	(1,430		)	(9,400		)	(5,736		)
Net assets acquired	$	14,378		$	18,710		$	9,312		$	23,360		$	78,011

Of the $61.1 million of total acquired other intangible assets, $53.8 million was assigned to customer relationships, $5.6 million was assigned to trade names, $0.3 million was assigned to non-compete agreements and $1.4 million was assigned to customer backlog. The trade names were determined to have an indefinite useful life, while the customer relationships’ average useful life is 20 years, and the non-compete useful life is five years.

The following unaudited pro forma consolidated financial information presents income statement results as if the acquisitions listed above had occurred on January 1, 2015:

In thousands	Three Months Ended June 30, 2016		Three Months Ended June 30, 2015		Six Months Ended June 30, 2016		Six Months Ended June 30, 2015
Net sales	$	725,602	$	825,466	$	1,505,193	$	1,710,009
Gross profit	237,604		274,251		493,605		537,425
Net income attributable to Wabtec shareholders	90,608		101,534		184,978		200,540
Diluted earnings per share
As Reported	$	1.00	$	1.04	$	2.02	$	2.03
Pro forma	$	1.00	$	1.04	$	2.02	$	2.06

5. INVENTORIES

The components of inventory, net of reserves, were:

In thousands	June 30, 2016		December 31, 2015
Raw materials	$	197,026	$	180,128
Work-in-progress	169,968		171,217
Finished goods	126,448		127,229
Total inventories	$	493,442	$	478,574

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6. INTANGIBLES

The change in the carrying amount of goodwill by segment for the six months ended June 30, 2016 is as follows:

In thousands	Freight Segment			Transit Segment		Total
Balance at December 31, 2015	$	531,965		$	326,567	$	858,532
Adjustment to preliminary purchase allocation	1,379			1,025		2,404
Acquisitions	2,711			—		2,711
Foreign currency impact	(6,115		)	2,495		(3,620		)
Balance at June 30, 2016	$	529,940		$	330,087	$	860,027

As of June 30, 2016 and December 31, 2015, the Company’s trademarks had a net carrying amount of $167.8 million and $167.4 million, respectively, and the Company believes these intangibles have indefinite lives.

Intangible assets of the Company, other than goodwill and trademarks, consist of the following:

In thousands	June 30, 2016		December 31, 2015
Patents, non-compete and other intangibles, net of accumulated
amortization of $41,411 and $40,936	$	9,434	$	11,403
Customer relationships, net of accumulated amortization
of $78,240 and $70,493	253,126		261,751
Total	$	262,560	$	273,154

The weighted average remaining useful life of patents, customer relationships and other intangibles were 10 years, 16 years and 13 years, respectively. Amortization expense for intangible assets was $5.5 million and $10.8 million for three and six months ended June 30, 2016, and $5.2 million and $10.5 million for the three and six months ended June 30, 2015.

Amortization expense for the five succeeding years is estimated to be as follows (in thousands):

Remainder of 2016	$	10,320
2017	19,351
2018	18,660
2019	17,981
2020	16,803

7. LONG-TERM DEBT

Long-term debt consisted of the following:

In thousands	June 30, 2016		December 31, 2015
4.375% Senior Notes, due 2023, net of unamortized discount and debt issuance costs of $1,818 and $1,947	$	248,182	$	248,053
Revolving Credit Facility, net of unamortized debt issuance costs of $4,181 and $1,542	495,819		443,458
Capital Leases	253		727
Total	744,254		692,238
Less - current portion	115		433
Long-term portion	$	744,139	$	691,805

2016 Refinancing Credit Agreement

On June 22, 2016, the Company amended its existing revolving credit facility with a consortium of commercial banks. This “2016 Refinancing Credit Agreement” provides the Company with a $1.2 billion, 5 year revolving credit facility and a

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$400.0 million delayed draw term loan “Term Loan”. The Company incurred approximately $2.9 million of deferred financing cost related to the 2016 Refinancing Credit Agreement. The facility expires on June 22, 2021. The 2016 Refinancing Credit Agreement borrowings bear variable interest rates indexed as described below. At June 30, 2016, the Company had available bank borrowing capacity, net of $24.3 million of letters of credit, of approximately $675.7 million, subject to certain financial covenant restrictions.

The Term Loan is available for advance on or after June 22, 2016 until December 31, 2016. The Company will incur a 10 basis point commitment fee from June 22, 2016 until the initial draw or cancellation of the Term Loan.

Under the 2016 Refinancing Credit Agreement, the Company may elect a Base Rate of interest for U.S. Dollar denominated loans or, for certain currencies,  an interest rate based on the London Interbank Offered Rate (“LIBOR”) of interest, or other rates appropriate for such currencies  (in any case, “the Alternate Rate”). The Base Rate adjusts on a daily basis and is the greater of the Federal Funds Effective Rate plus 0.5% per annum, the PNC, N.A. prime rate or the Daily LIBOR Rate plus 100 basis points, plus a margin that ranges from 0 to 75 basis points. The Alternate Rate is based on the quoted rates specific to the applicable currency, plus a margin that ranges from 75 to 175 basis points. Both the Base Rate and Alternate Rate margins are dependent on the Company’s consolidated total indebtedness to cash flow ratios. The initial Base Rate margin is 0 basis points and the Alternate Rate margin is 100 basis points.

At June 30, 2016, the weighted average interest rate on the Company’s variable rate debt was 1.45%.  On January 12, 2012, the Company entered into a forward starting interest rate swap agreement with a notional value of $150.0 million. The effective date of the interest rate swap agreement is July 31, 2013, and the termination date is November 7, 2016. The impact of the interest rate swap agreement converts a portion of the Company’s outstanding debt from a variable rate to a fixed-rate borrowing. During the term of the interest rate swap agreement the interest rate on the notional value will be fixed at 1.415% plus the Alternate Rate margin. On June 5, 2014, the Company entered into a forward starting interest rate swap agreement with a notional value of $150.0 million.  The effective date of the interest rate swap agreement is November 7, 2016, and the termination date is December 19, 2018.  The impact of the interest rate swap agreement converts a portion of the Company’s outstanding debt from a variable rate to a fixed-rate borrowing.  During the term of the interest rate swap agreement the interest rate on the notional value will be fixed at 2.56% plus the Alternate Rate margin.  As for these agreements, the Company is exposed to credit risk in the event of nonperformance by the counterparties.  However, since only the cash interest payments are exchanged, exposure is significantly less than the notional amount.  The counterparties are large financial institutions with an excellent credit rating and history of performance.  The Company currently believes the risk of nonperformance is negligible.

The 2016 Refinancing Credit Agreement limits the Company’s ability to declare or pay cash dividends and prohibits the Company from declaring or making other distributions, subject to certain exceptions. The 2016 Refinancing Credit Agreement contains various other covenants and restrictions including the following limitations: incurrence of additional indebtedness; mergers, consolidations, sales of assets and acquisitions; additional liens; sale and leasebacks; permissible investments, loans and advances; certain debt payments; and imposes a minimum interest expense coverage ratio of 3.0 and a maximum debt to cash flow ratio of 3.25. The Company is in compliance with the restrictions and covenants of the 2016 Refinancing Credit Agreement and does not expect that these measurements will limit the Company in executing our operating activities.

2013 Refinancing Credit Agreement

On December 19, 2013, the Company amended its then existing revolving credit facility with a consortium of commercial banks. This “2013 Refinancing Credit Agreement” provided the Company with a $800.0 million, five-year revolving credit facility. The Company incurred approximately $1.0 million of deferred financing cost related to the 2013 Refinancing Credit Agreement. The 2013 Refinancing Credit Agreement was replaced by the 2016 Refinancing Credit Agreement.

Under the 2013 Refinancing Credit Agreement, the Company could have elected a Base Rate of interest for U.S. Dollar denominated loans or, for certain currencies,  an interest rate based on the LIBOR of interest, or other rates appropriate for such currencies  (in any case, “the Alternate Rate”). The Base Rate adjusted on a daily basis and was the greater of the Federal Funds Effective Rate plus 0.5% per annum, the PNC, N.A. prime rate or the Daily LIBOR Rate plus 100 basis points, plus a margin that ranged from 0 to 75 basis points. The Alternate Rate was based on the quoted rates specific to the applicable currency, plus a margin that ranged from 75 to 175 basis points. Both the Base Rate and Alternate Rate margins were dependent on the Company’s consolidated total indebtedness to cash flow ratios.

4.375% Senior Notes Due August 2023

In August 2013, the Company issued $250.0 million of Senior Notes due in 2023 (the “2013 Notes”).  The 2013 Notes were issued at 99.879% of face value.  Interest on the 2013 Notes accrues at a rate of 4.375% per annum and is payable semi-annually on February 15 and August 15 of each year.  The proceeds were used to repay debt outstanding under the Company’s

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existing credit agreement, and for general corporate purposes.  The principal balance is due in full at maturity.  The Company incurred $2.6 million of deferred financing costs related to the issuance of the 2013 Notes.  

The 2013 Notes are senior unsecured obligations of the Company and rank pari passu with all existing and future senior debt and senior to all existing and future subordinated indebtedness of the Company. The indenture under which the 2013 Notes were issued contains covenants and restrictions which limit among other things, the following: the incurrence of indebtedness, payment of dividends and certain distributions, sale of assets, change in control, mergers and consolidations and the incurrence of liens.

The Company is in compliance with the restrictions and covenants in the indenture under which the 2013 Notes were issued and expects that these restrictions and covenants will not be any type of limiting factor in executing our operating activities.

8. EMPLOYEE BENEFIT PLANS

Defined Benefit Pension Plans

The Company sponsors defined benefit pension plans that cover certain U.S., Canadian, German and United Kingdom employees and which provide benefits of stated amounts for each year of service of the employee.

The Company uses a December 31 measurement date for the plans.

The following tables provide information regarding the Company’s defined benefit pension plans summarized by U.S. and international components.

	U.S.						International
	Three Months Ended June 30,						Three Months Ended June 30,
In thousands, except percentages	2016			2015			2016			2015
Net periodic benefit cost
Service cost	$	84		$	95		$	255		$	506
Interest cost	369			479			1,450			1,801
Expected return on plan assets	(519		)	(542		)	(2,881		)	(2,434		)
Net amortization/deferrals	229			266			435			655
Net periodic benefit cost	$	163		$	298		$	(741	)	$	528

Assumptions
Discount Rate	4.21	%	3.95	%	3.56	%	3.48	%
Expected long-term rate of return	5.70	%	5.70	%	5.81	%	5.79	%
Rate of compensation increase	3.00	%	3.00	%	3.10	%	3.10	%

	U.S.						International
	Six Months Ended June 30,						Six Months Ended June 30,
In thousands, except percentages	2016			2015			2016			2015
Net periodic benefit cost
Service cost	$	168		$	190		$	728		$	1,012
Interest cost	738			958			2,936			3,590
Expected return on plan assets	(1,038		)	(1,084		)	(5,286		)	(4,850		)
Net amortization/deferrals	458			532			1,055			1,307
Curtailment loss recognized	—			—			240			—
Net periodic benefit cost	$	326		$	596		$	(327	)	$	1,059

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Assumptions
Discount Rate	4.21	%	3.95	%	3.56	%	3.48	%
Expected long-term rate of return	5.70	%	5.70	%	5.81	%	5.79	%
Rate of compensation increase	3.00	%	3.00	%	3.10	%	3.10	%

The Company’s funding methods are based on governmental requirements and differ from those methods used to recognize pension expense. The Company expects to contribute $7.0 million to the international plans and does not expect to make a contribution to the U.S. plans during 2016.

Post Retirement Benefit Plans

In addition to providing pension benefits, the Company has provided certain unfunded postretirement health care and life insurance benefits for a portion of North American employees. The Company is not obligated to pay health care and life insurance benefits to individuals who had retired prior to 1990.

The Company uses a December 31 measurement date for all post retirement plans.

The following tables provide information regarding the Company’s postretirement benefit plans summarized by U.S. and international components.

	U.S.						International
	Three Months Ended June 30,						Three Months Ended June 30,
In thousands, except percentages	2016			2015			2016			2015
Net periodic benefit cost
Service cost	$	1		$	2		$	7		$	11
Interest cost	97			308			25			35
Net amortization/deferrals	(105		)	(234		)	(9		)	(10		)
Net periodic benefit (credit) cost	$	(7	)	$	76		$	23		$	36

Assumptions
Discount Rate	3.33	%	3.95	%	3.24	%	3.96	%

	U.S.						International
	Six Months Ended June 30,						Six Months Ended June 30,
In thousands, except percentages	June 30, 2016			June 30, 2015			June 30, 2016			June 30, 2015
Net periodic benefit cost
Service cost	$	2		$	4		$	14		$	22
Interest cost	194			616			50			70
Net amortization/deferrals	(210		)	(468		)	(18		)	(19		)
Net periodic benefit (credit) cost	$	(14	)	$	152		$	46		$	73

Assumptions
Discount Rate	3.33	%	3.95	%	3.24	%	3.96	%

At December 31, 2015, the Company changed the method it uses to estimate the service and interest cost components of net periodic benefit cost for pension and other postretirement benefit costs for all of its U.S. and International plans. Historically, the service and interest cost components were estimated using a single weighted-average discount rate derived from the yield curve used to measure the projected benefit obligation at the beginning of the period. The Company has elected to utilize an approach that discounts the individual expected cash flows underlying the service and interest cost using the applicable spot rates derived from the yield curve used in the determination of the benefit obligation to the relevant projected

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cash flows. The Company made this change to improve the correlation between projected benefit cash flows and the corresponding yield curve spot rates and to provide a more precise measurement of service and interest costs. The Company estimates the service and interest cost of the pension and OPEB plans will be reduced by approximately $1.6 million in 2016 as a result of this change. The Company has accounted for this change as a change in accounting estimate that is inseparable from a change in accounting principle and accordingly has accounted for it prospectively.

9. STOCK-BASED COMPENSATION

As of June 30, 2016, the Company maintains employee stock-based compensation plans for stock options, restricted stock, and incentive stock units as governed by the 2011 Stock Incentive Compensation Plan (the “2011 Plan”) and the 2000 Stock Incentive Plan, as amended (the “2000 Plan”). The 2011 Plan has a 10-year term through March 27, 2021 and provides a maximum of 3,800,000 shares for grants or awards. The 2011 Plan was approved by stockholders of Wabtec on May 11, 2011. The Company also maintains a Non-Employee Directors’ Fee and Stock Option Plan (“the Directors Plan”).

Stock-based compensation expense was $9.7 million and $15.0 million for the six months ended June 30, 2016 and 2015, respectively. Included in stock-based compensation expense for the six months ended June 30, 2016 is $0.9 million of expense related to stock options, $3.0 million related to non-vested restricted stock, $1.2 million related to restricted stock units, $4.1 million related to incentive stock units and $0.5 million related to units issued for Directors’ fees. At June 30, 2016, unamortized compensation expense related to those stock options, non-vested restricted shares units and incentive stock units expected to vest totaled $31.0 million and will be recognized over a weighted average period of 1.6 years.

Stock Options Stock options are granted to eligible employees and directors at the fair market value, which is the average of the high and low Wabtec stock price on the date of grant. Under the 2011 Plan and the 2000 Plan, options become exercisable over a four-year vesting period and expire 10 years from the date of grant.

The following table summarizes the Company’s stock option activity and related information for the 2011 Plan, the 2000 Plan and the Directors Plan for the six months ended June 30, 2016:

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic value (in thousands)
Outstanding at December 31, 2015	1,097,323		$	32.70	4.8	$	42,154
Granted	94,115		61.39			828
Exercised	(26,150	)	26.89			1,132
Canceled	(5,321	)	69.37			4
Outstanding at June 30, 2016	1,159,967		35.00		4.7	40,825
Exercisable at June 30, 2016	941,442		27.17		3.9	40,501

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

	Six Months Ended June 30,
	2016		2015
Dividend yield	0.26	%	0.14	%
Risk-free interest rate	1.47	%	1.82	%
Stock price volatility	26.9	%	27.3	%
Expected life (years)	5.0		5.0

The dividend yield is based on the Company’s dividend rate and the current market price of the underlying common stock at the date of grant. Expected life in years is determined from historical stock option exercise data. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free interest rate is based on the U.S. Treasury bond rates for the expected life of the option.

Restricted Stock, Restricted Units and Incentive Stock Beginning in 2006, the Company adopted a restricted stock program. As provided for under the 2011 and 2000 Plans, eligible employees are granted restricted stock that generally vests over four years from the date of grant. Under the Directors Plan, restricted stock units vest one year from the date of grant.

In addition, the Company has issued incentive stock units to eligible employees that vest upon attainment of certain cumulative three year performance goals. Based on the Company’s performance for each three-year period then ended, the incentive stock units can vest and be awarded ranging from 0% to 200% of the initial incentive stock units granted. The incentive stock units included in the table below represent the number of shares that are expected to vest based on the Company’s estimate for meeting those established performance targets. As of June 30, 2016, the Company estimates that it will achieve 119%, 92% and 100% for the incentive stock awards expected to vest based on performance for the three-year periods ending December 31, 2016, 2017, and 2018, respectively, and has recorded incentive compensation expense accordingly. If our estimate of the number of these stock units expected to vest changes in a future accounting period, cumulative compensation expense could increase or decrease and will be recognized in the current period for the elapsed portion of the vesting period and would change future expense for the remaining vesting period.

Compensation expense for the non-vested restricted stock and incentive stock units is based on the average of the high and low Wabtec stock price on the date of grant and recognized over the applicable vesting period.

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The following table summarizes the restricted stock activity and related information for the 2011 Plan, the 2000 Plan and the Directors Plan, and incentive stock units activity for the 2011 Plan and the 2000 Plan with related information for the six months ended June 30, 2016:

	Restricted Stock and Units		Incentive Stock Awards		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2015	356,885		541,638		$	65.89
Granted	142,891		167,850		62.20
Vested	(148,753	)	(236,591	)	52.12
Adjustment for incentive stock awards expected to vest	—		(27,784	)	73.28
Canceled	(7,519	)	(5,283	)	70.48
Outstanding at June 30, 2016	343,504		439,830		70.85

10. INCOME TAXES

The overall effective income tax rate was 28.8% and 30.2% for the three and six months ended June 30, 2016, respectively, and 32.3% and 32.1% for the three and six months ended June 30, 2015, respectively.  For the three and six months ended June 30, 2016, the decrease in the effective rate is primarily the result of a lower earnings mix in higher tax rate jurisdictions.

As of June 30, 2016 and December 31, 2015, the liability for income taxes associated with uncertain tax positions was $10.6 million, of which $4.3 million, if recognized, would favorably affect the Company’s effective tax rate.

The Company includes interest and penalties related to uncertain tax positions in income tax expense. As of June 30, 2016, the total accrued interest and penalties are $2.3 million and $0.2 million, respectively.  As of December 31, 2015, the total accrued interest and penalties were $2.0 million and $0.2 million, respectively.

At this time, the Company believes that it is reasonably possible that unrecognized tax benefits of approximately $2.1 million may change within the next 12 months due to the expiration of statutory review periods and current examinations.  With limited exception, the Company is no longer subject to examination by various U.S. and foreign taxing authorities for years before 2012.

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11. EARNINGS PER SHARE

The computation of basic and diluted earnings per share for net income attributable to Wabtec shareholders is as follows:

	Three Months Ended June 30,
In thousands, except per share data	2016			2015
Numerator
Numerator for basic and diluted earnings per common    share - net income attributable
to Wabtec shareholders	$	90,485		$	101,504
Less: dividends declared - common shares    and non-vested restricted stock	(7,209		)	(5,799		)
Undistributed earnings	83,276			95,705
Percentage allocated to common shareholders (1)	99.7		%	99.7		%
	83,026			95,418
Add: dividends declared - common shares	7,189			5,782
Numerator for basic and diluted earnings per    common share	$	90,215		$	101,200
Denominator
Denominator for basic earnings per common    share - weighted average shares	89,846			96,338
Effect of dilutive securities:
Assumed conversion of dilutive stock-based    compensation plans	713			1,097
Denominator for diluted earnings per common share -
adjusted weighted average shares and assumed conversion	90,559			97,435
Net income per common share attributable to    Wabtec shareholders
Basic	$	1.00		$	1.05
Diluted	$	1.00		$	1.04

(1) Basic weighted-average common shares outstanding	89,846		96,338
Basic weighted-average common shares outstanding and    non-vested restricted stock expected to vest	90,101		96,620
Percentage allocated to common shareholders	99.7	%	99.7	%

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	Six Months Ended June 30,
In thousands, except per share data	2016			2015
Numerator
Numerator for basic and diluted earnings per common    share - net income attributable
to Wabtec shareholders	$	184,648		$	197,668
Less: dividends declared - common shares    and non-vested restricted stock	(14,565		)	(11,580		)
Undistributed earnings	170,083			186,088
Percentage allocated to common shareholders (1)	99.7		%	99.6		%
	169,573			185,344
Add: dividends declared - common shares	14,520			11,539
Numerator for basic and diluted earnings per    common share	$	184,093		$	196,883
Denominator
Denominator for basic earnings per common    share - weighted average shares	90,832			96,066
Effect of dilutive securities:
Assumed conversion of dilutive stock-based    compensation plans	796			1,046
Denominator for diluted earnings per common share -
adjusted weighted average shares and assumed conversion	91,628			97,112
Net income per common share attributable to    Wabtec shareholders
Basic	$	2.03		$	2.05
Diluted	$	2.02		$	2.03

(1) Basic weighted-average common shares outstanding	90,832		96,066
Basic weighted-average common shares outstanding and    non-vested restricted stock expected to vest	91,111		96,406
Percentage allocated to common shareholders	99.7	%	99.6	%

The Company’s non-vested restricted stock contains rights to receive nonforfeitable dividends, and thus, are participating securities requiring the two-class method of computing earnings per share. The calculation of earnings per share for common stock shown above excludes the income attributable to the non-vested restricted stock from the numerator and excludes the dilutive impact of those shares from the denominator.

12. WARRANTIES

The following table reconciles the changes in the Company’s product warranty reserve as follows:

	Six Months Ended June 30,
In thousands	2016			2015
Balance at December 31, 2015 and 2014, respectively	$	92,064		$	87,849
Warranty expense	17,853			14,043
Acquisitions	7,547			6,001
Warranty claim payments	(20,422		)	(10,538		)
Foreign currency impact/other	(696		)	(702		)
Balance at June 30, 2016 and 2015, respectively	$	96,346		$	96,653

13. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING

Foreign Currency Hedging The Company uses forward contracts to mitigate its foreign currency exchange rate exposure due to forecasted sales of finished goods and future settlement of foreign currency denominated assets and liabilities. Derivatives used to hedge forecasted transactions and specific cash flows associated with foreign currency denominated financial assets and liabilities that meet the criteria for hedge accounting are designated as cash flow hedges. The effective portion of gain and losses is deferred as a component of accumulated other comprehensive income and is recognized in earnings at the time the hedged item affects earnings, in the same line item as the underlying hedged item. At June 30, 2016, the Company had outstanding foreign exchange contracts with a notional value of $10.8 million. The fair value of these hedges was a net liability of $0.7 million at June 30, 2016. The notional amount and fair value of foreign exchange contracts at December 31, 2015 was not material. The contracts are scheduled to mature within two years. For the period ended June 30, 2016, the amount reclassified into income was not material.

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Interest Rate Hedging The Company uses interest rate swaps to manage interest rate exposures. The Company is exposed to interest rate volatility with regard to existing floating rate debt. Primary exposure includes the London Interbank Offered Rates (LIBOR). Derivatives used to hedge risk associated with changes in the fair value of certain variable-rate debt are primarily designated as fair value hedges. Consequently, changes in the fair value of these derivatives, along with changes in the fair value of debt obligations are recognized in current period earnings. See long-term debt footnote fair value measurement footnote for further information on current interest rate swaps.

As of June 30, 2016, the Company has recorded a current liability of $6.6 million and a corresponding offset in accumulated other comprehensive loss of $4.0 million, net of tax, related to these agreements.

Other Activities The Company enters into certain derivative contracts in accordance with its risk management strategy that do not meet the criteria for hedge accounting but which have the impact of largely mitigating foreign currency exposure. At June 30, 2016, the Company maintained foreign currency contracts with a notional value of $21.1 million. These foreign exchange contracts are accounted for on a full mark to market basis through earnings, with gains and losses recorded as a component of other expense, net. The net unrealized loss related to these contracts was $1.3 million for the period ended June 30, 2016. The notional amount and fair value of foreign exchange contracts that did not meet the criteria for hedge accounting at December 31, 2015 was not material. These contracts are scheduled to mature within one year.

14. FAIR VALUE MEASUREMENT AND FAIR VALUE OF FINANCIAL INSTRUMENTS

ASC 820 “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value and explains the related disclosure requirements. ASC 820 indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model.

Valuation Hierarchy ASC 820 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following table provides the liabilities carried at fair value measured on a recurring basis as of June 30, 2016, which are included in other current liabilities on the Condensed Consolidated Balance sheet:

			Fair Value Measurements at June 30, 2016 Using
In thousands	Total Carrying Value at June 30, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Interest rate swap agreements	$	6,592	$	—	$	6,592	$	—
Total	$	6,592	$	—	$	6,592	$	—

The following table provides the liabilities carried at fair value measured on a recurring basis as of December 31, 2015, which is included in other current liabilities on the Condensed Consolidated Balance sheet:

			Fair Value Measurements at December 31, 2015 Using
In thousands	Total Carrying Value at December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Interest rate swap agreements	$	4,474	$	—	$	4,474	$	—
Total	$	4,474	$	—	$	4,474	$	—

To reduce the impact of interest rate changes on a portion of its variable-rate debt, the Company entered into interest rate swaps which effectively converted a portion of the debt from variable to fixed-rate borrowings during the term of the swap

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contracts. For certain derivative contracts whose fair values are based upon trades in liquid markets, such as interest rate swaps, valuation model inputs can generally be verified and valuation techniques do not involve significant management judgment. The fair values of such financial instruments are generally classified within Level 2 of the fair value hierarchy.

As a result of our global operating activities the Company is exposed to market risks from changes in foreign currency exchange rates, which may adversely affect our operating results and financial position. When deemed appropriate, the Company minimizes these risks through entering into foreign currency forward contracts. The foreign currency forward contracts are valued using broker quotations, or market transactions in either the listed or over-the counter markets. As such, these derivative instruments are classified within Level 2.

The Company’s cash and cash equivalents are highly liquid investments purchased with an original maturity of three months or less and are considered Level 1 on the fair value valuation hierarchy. The fair value of cash and cash equivalents approximated the carrying value at June 30, 2016 and December 31, 2015. The Company’s defined benefit pension plan assets consist primarily of equity security funds, debt security funds and temporary cash and cash equivalent investments. Generally, all plan assets are considered Level 2 based on the fair value valuation hierarchy. These investments are comprised of a number of investment funds that invest in a diverse portfolio of assets including equity securities, corporate and governmental bonds, and money markets.  Trusts are valued at the net asset value (“NAV”) as determined by their custodian.  NAV represent the accumulation of the unadjusted quoted close prices on the reporting date for the underlying investments divided by the total shares outstanding at the reporting dates.  The 2013 Notes are considered Level 2 based on the fair value valuation hierarchy.

The estimated fair values and related carrying values of the Company’s financial instruments are as follows:

	June 30, 2016				December 31, 2015
In thousands	Carry Value		Fair Value		Carry Value		Fair Value
Interest rate swap agreement	$	6,592	$	6,592	$	4,474	$	4,474
4.375% Senior Notes	248,182		267,613		248,053		254,075

The fair value of the Company’s interest rate swap agreements and the 2013 Notes were based on dealer quotes and represent the estimated amount the Company would pay to the counterparty to terminate the agreement.

15. COMMITMENTS AND CONTINGENCIES

Claims have been filed against the Company and certain of its affiliates in various jurisdictions across the United States by persons alleging bodily injury as a result of exposure to asbestos-containing products. Further information and detail on these claims is described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, in Note 19 therein, filed on February 19, 2016. During the first six months of 2016, there were no material changes to the information described in the Form 10-K.

The Company is also subject to litigation from time to time arising out of its operations in the ordinary course of business, including claims based on product liability, contracts, intellectual property, or other causes of action. Further information and detail on any potentially material litigation is as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, in Note 19 therein, filed on February 19, 2016. Except as described below, there have been no material changes to the information described in the Form 10-K.

On April 21, 2016, Siemens Industry, Inc. (Siemens) filed a lawsuit against the Company in federal district court in Delaware alleging that the Company has infringed seven (7) patents owned by Siemens, all of which are related to Positive Train Control technology. Wabtec filed its answer to the complaint on June 17, 2016. The case is in a very preliminary stage. Wabtec believes the claims are without merit and intends to vigorously defend itself.

16. 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

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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 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, 2016 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	397,067	$	326,534	$	—		$	723,601
Intersegment sales/(elimination)	13,616		4,106		(17,722		)	—
Total sales	$	410,683	$	330,640	$	(17,722	)	$	723,601
Income (loss) from operations	$	92,317	$	52,146	$	(11,179	)	$	133,284
Interest expense and other, net	—		—		(6,198		)	(6,198		)
Income (loss) from operations before income taxes	$	92,317	$	52,146	$	(17,377	)	$	127,086

Segment financial information for the three months ended June 30, 2015 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	534,674	$	312,354	$	—		$	847,028
Intersegment sales/(elimination)	9,029		2,799		(11,828		)	—
Total sales	$	543,703	$	315,153	$	(11,828	)	$	847,028
Income (loss) from operations	$	125,232	$	37,514	$	(6,886	)	$	155,860
Interest expense and other, net	—		—		(5,928		)	(5,928		)
Income (loss) from operations before income taxes	$	125,232	$	37,514	$	(12,814	)	$	149,932

Segment financial information for the six months ended June 30, 2016 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	839,736	$	655,896	$	—		$	1,495,632
Intersegment sales/(elimination)	19,424		5,783		(25,207		)	—
Total sales	$	859,160	$	661,679	$	(25,207	)	$	1,495,632
Income (loss) from operations	$	198,991	$	97,156	$	(20,682	)	$	275,465
Interest expense and other, net	—		—		(10,915		)	(10,915		)
Income (loss) from operations before income taxes	$	198,991	$	97,156	$	(31,597	)	$	264,550

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Segment financial information for the six months ended June 30, 2015 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	1,046,561	$	619,061	$	—		$	1,665,622
Intersegment sales/(elimination)	17,957		5,383		(23,340		)	—
Total sales	$	1,064,518	$	624,444	$	(23,340	)	$	1,665,622
Income (loss) from operations	$	236,801	$	78,937	$	(11,458	)	$	304,280
Interest expense and other, net	—		—		(13,100		)	(13,100		)
Income (loss) from operations before income taxes	$	236,801	$	78,937	$	(24,558	)	$	291,180

Sales by product are as follows:

	Three Months Ended June 30,
In thousands	2016		2015
Specialty Products & Electronics	$	339,188	$	448,292
Remanufacturing, Overhaul & Build	156,981		151,859
Brake Products	141,979		159,034
Other Transit Products	49,643		50,864
Other	35,810		36,979
Total sales	$	723,601	$	847,028

	Six Months Ended June 30,
In thousands	2016		2015
Specialty Products & Electronics	$	717,457	$	873,829
Remanufacturing, Overhaul & Build	315,014		288,549
Brake Products	293,885		326,431
Other Transit Products	98,438		97,667
Other	70,838		79,146
Total sales	$	1,495,632	$	1,665,622

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17. OTHER INCOME (EXPENSE), NET

The components of other income (expense) are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
In thousands	2016			2015			2016			2015
Foreign currency loss	$	(1,530	)	$	(1,541	)	$	(1,368	)	$	(3,935	)
Other miscellaneous income (expense)	301			(346		)	293			(818		)
Total other expense, net	$	(1,229	)	$	(1,887	)	$	(1,075	)	$	(4,753	)

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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, 2015, filed with the Securities and Exchange Commission on February 19, 2016.

OVERVIEW

Wabtec is one of the world’s largest providers of value-added, technology-based products and services for the global rail industry. Our products are found on virtually all U.S. locomotives, freight cars and passenger transit vehicles, as well as in more than 100 countries throughout the world. Our products enhance safety, improve productivity and reduce maintenance costs for customers, and many of 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 20 countries. In the first six months of 2016, about 50% of the Company’s revenues came from customers outside the U.S.

Management Review and Future Outlook

Wabtec’s long-term financial goals are to generate cash flow from operations in excess of net income, maintain a strong credit profile while minimizing our overall cost of capital, increase margins through strict attention to cost controls and implementation of the Wabtec Performance System, and increase revenues through a focused growth strategy, including global and market expansion, new products and technologies, aftermarket products and services and acquisitions. In addition, management evaluates the Company’s current operational performance through measures such as quality and on-time delivery.

The Company monitors a variety of factors and statistics to gauge activity in key freight rail and passenger transit markets such as North and South America, Europe and Asia-Pacific. In these and other markets, the freight rail industry is largely driven by general economic conditions, which can cause fluctuations in rail traffic and the level of investment spending by railroads and governments to expand, upgrade, and modernize their networks. Based on those fluctuations, railroads and governments can increase or decrease purchases of new locomotives and freight cars, and spending on rail-related infrastructure. The passenger transit industry is driven mainly by the spending of government agencies and authorities as they maintain, expand and modernize their transit systems. In doing so, they will increase or decrease spending on new locomotives, transit/subway cars, buses and related infrastructure. Fare box revenues, the fees paid by riders to use public transit, also provide funding for maintaining and operating the systems. Many government entities at all levels are facing budget issues, which could have a negative effect on demand for the Company’s products and services.

In North America, the Association of American Railroads ("AAR") compiles freight rail industry statistics such as carloadings, generally referred to as “rail traffic,” and the Railway Supply Institute ("RSI") releases data on freight car orders, deliveries, and backlog. Through the first six months of 2016, rail traffic in North America was down about 7%. According to the RSI, at the end of the second quarter of 2016, the industry multi-year backlog of freight cars on order was about 89,000, slightly lower than at the end of the first quarter of 2016. In 2015, deliveries of new freight cars and locomotives were about 82,000 units and 1,200 units, respectively. In 2016, the Company expects the deliveries of new freight cars and locomotives to be approximately 60,000 units and 900 units, respectively. Future demand depends largely on the strength in the overall economy and in rail traffic volumes.

The American Public Transportation Association ("APTA") provides quarterly transit ridership statistics for the U.S. and Canada. For the first quarter of 2016 ridership was up slightly in the U.S. and down slightly in Canada. In the fourth quarter of 2015, the U.S. Congress passed a new, five-year transportation funding bill, which includes annual spending increases and some funding for Positive Train Control (“PTC”) projects. The Company expects deliveries of new subway cars to increase in 2016, while bus deliveries are expected to be about the same compared to 2015.

In 2008, the U.S. federal government enacted a rail safety bill that mandates the use of PTC technology, which includes on-board locomotive computer and related software, on a majority of the locomotives and track in the U.S. With our Electronic Train Management System^®, we are the leading supplier of this on-board train control equipment, and we are working with the U.S. Class I railroads, commuter rail authorities and other industry suppliers to implement this technology. In 2015, the U.S. Congress extended the deadline for PTC implementation until December 31, 2018, which has slowed the rate of industry spending on this technology. Wabtec’s Train Control and Signaling revenue, which includes PTC, was about $196 million for the six months ended June 30, 2016.

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Wabtec continues to expand its presence in freight rail and passenger transit markets outside the U.S., particularly in Europe, Asia-Pacific and South America. In Europe, the majority of the rail system serves the passenger transit market, which is larger than the transit market in the U.S. Our presence in the U.K., Germany and Italy has positioned the Company to take advantage of this market. Asia-Pacific is a growth market and our various joint ventures and direct exports to China have positioned the Company to take advantage of this growth. Important freight rail markets include Australia, Brazil, Russia and South Africa.

Current conditions in these international markets vary based on general economic factors and specific freight rail and passenger transit drivers, as mentioned above. In its most recent quarterly data, the Office of Rail Regulation in the U.K. reported an increase in passenger ridership of about 1% and a 27% decrease in freight moved, mainly due to reduced shipments of coal. In Germany, the government statistics bureau reported a slight increase for passenger rail and bus ridership in 2015. Russian Railways announced a decrease of almost 1% in passenger ridership in the first half of 2016 compared to the year-ago period, and it said freight tons loaded were 1.8% higher than the year-ago period.

In 2016 and beyond, general economic and market conditions in our key markets could have an impact on our sales and operations. To the extent that these factors cause instability of capital and debt markets, shortages of raw materials or component parts, longer sales cycles, deferral or delay of customer orders or an inability to market our products effectively, our business and results of operations could be materially adversely affected. In addition, we face risks associated with our four-point growth strategy including the level of investment that customers are willing to make in new technologies developed by the industry and the Company, and risks inherent in global expansion. When necessary, we will modify our financial and operating strategies to reflect changes in market conditions and risks.

PROPOSED TRANSACTION WITH FAIVELEY TRANSPORT S.A.

On July 27, 2015, the Company announced plans to acquire Faiveley Transport S.A. ("Faiveley Transport"), a leading global provider of value-added, integrated systems and services for the railway industry with annual sales of about $1.2 billion and more than 5,700 employees in 24 countries.  Faiveley Transport supplies railway manufacturers, operators and maintenance providers with a range of valued-added, technology-based systems and services in Energy & Comfort (air conditioning, power collectors and converters, and passenger information), Access & Mobility (passenger access systems and platform doors), and Brakes & Safety (braking systems and couplers).

The transaction has been structured in three steps:

• Wabtec made an irrevocable offer to the owners of approximately 51% of Faiveley Transport’s shares for a purchase price of €100 per share, payable 25% in cash and 75% in Wabtec preferred stock.  The preferred stock will have a 1% annual dividend or, if greater, the annual dividend assuming full conversion into common shares, and must be converted after three years into Wabtec common shares at an implied ratio of one Faiveley Transport common share for 1.125 Wabtec common shares. Shareholders owning 51% of Faiveley Transport have entered into exclusive discussions with Wabtec.

• Upon completion of required labor group consultations, on October 6, 2015, the 51% shareholders entered into a definitive share purchase agreement and Faiveley Transport entered into an acquisition agreement with Wabtec.

• Upon completing the share purchase, Wabtec will commence a tender offer for the remaining publicly traded Faiveley Transport shares. The public shareholders will have the option to elect to receive €100 per share in cash or Wabtec preferred stock. The preferred stock portion of the consideration is subject to a cap of 75% of Faiveley Transport’s common shares.  Wabtec intends to delist Faiveley Transport from Euronext after the tender offer if minority interests represent less than 5%.

The total purchase price offered is about $1.8 billion, including assumed debt.  Wabtec plans to fund the cash portion of the transaction with cash on hand, existing credit facilities and potentially other debt financing.  Prior to December 31, 2015, Wabtec set aside €186.9 million as an escrow deposit for the Faiveley Transport purchase. The combination of Wabtec and Faiveley Transport would create one of the world’s largest public rail equipment companies, with revenues of about $4.5 billion and a presence in all key freight rail and passenger transit geographies worldwide. 

Closing of the transaction is subject to various conditions, including completion of regulatory requirements. These steps are currently on-going and the timing of completion is unknown.

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RESULTS OF OPERATIONS

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

	Three Months Ended June 30,						Six Months Ended June 30,
In millions	2016			2015			2016			2015
Net sales	$	723,601		$	847,028		$	1,495,632		$	1,665,622
Cost of sales	(486,212		)	(579,264		)	(1,003,063		)	(1,142,503		)
Gross profit	237,389			267,764			492,569			523,119
Selling, general and administrative expenses	(80,610		)	(88,992		)	(170,361		)	(173,763		)
Engineering expenses	(18,029		)	(17,750		)	(35,982		)	(34,613		)
Amortization expense	(5,466		)	(5,162		)	(10,761		)	(10,463		)
Total operating expenses	(104,105		)	(111,904		)	(217,104		)	(218,839		)
Income from operations	133,284			155,860			275,465			304,280
Interest expense, net	(4,969		)	(4,041		)	(9,840		)	(8,347		)
Other expense, net	(1,229		)	(1,887		)	(1,075		)	(4,753		)
Income from operations before income taxes	127,086			149,932			264,550			291,180
Income tax expense	(36,601		)	(48,428		)	(79,902		)	(93,512		)
Net income attributable to Wabtec shareholders	$	90,485		$	101,504		$	184,648		$	197,668

SECOND QUARTER 2016 COMPARED TO SECOND QUARTER 2015

The following table summarizes our results of operations for the periods indicated:

	Three Months Ended June 30,
In thousands	2016		2015		Percent Change
Freight Segment	$	397,067	$	534,674	(25.7	)%
Transit Segment	326,534		312,354		4.5	%
Net sales	723,601		847,028		(14.6	)%
Income from operations	133,284		155,860		(14.5	)%
Net income attributable to Wabtec shareholders	$	90,485	$	101,504	(10.9	)%

The following table shows the major components of the change in sales in the second quarter of 2016 from the second quarter of 2015:

In thousands	Freight Segment			Transit Segment			Total
Second Quarter 2015 Net Sales	$	534,674		$	312,354		$	847,028
Acquisitions	10,521			6,246			16,767
Change in Sales by Product Line:
Remanufacturing, Overhaul & Build	(1,269		)	11,546			10,277
Other Transit Products	—			(1,287		)	(1,287		)
Other	(7,108		)	302			(6,806		)
Brake Products	(15,249		)	(1,519		)	(16,768		)
Specialty Products & Electronics	(120,974		)	4,549			(116,425		)
Foreign exchange	(3,528		)	(5,657		)	(9,185		)
Second Quarter 2016 Net Sales	$	397,067		$	326,534		$	723,601

Net sales for the three months ended June 30, 2016 decreased by $123.4 million or 14.6% to $723.6 million from $847.0 million. The decrease is primarily due to lower sales for Specialty Products and Electronics of $116.4 million and lower Brake Products sales of $16.8 million due to decreased demand for freight products as well as train control and signaling products and

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services. This decrease was partially offset by higher sales for Remanufacturing, Overhaul and Build of $10.3 million due to higher demand for aftermarket locomotive builds. Acquisitions increased sales $16.8 million and unfavorable foreign exchange decreased sales $9.2 million.

Freight Segment sales decreased by $137.6 million, or 25.7%, primarily due to a decrease of $121.0 million for Specialty Products and Electronics sales from lower demand for freight original equipment rail products as well as train control and signaling products and services and a decrease of $15.2 million for Brake Products sales from lower demand for original equipment brakes for freight customers. Acquisitions increased sales by $10.5 million and unfavorable foreign exchange decreased sales by $3.5 million.

Transit Segment sales increased by $14.2 million, or 4.5%, primarily due to higher sales for Remanufacturing, Overhaul and Build products due to higher demand for aftermarket locomotive builds. Acquisitions increased sales by $6.2 million and unfavorable foreign exchange decreased sales by $5.7 million.

Cost of Sales and Gross Profit. The following table shows the major components of cost of sales for the periods indicated:

	Three Months Ended June 30, 2016
In thousands	Freight		Percentage of Sales		Transit		Percentage of Sales		Total		Percentage of Sales
Material	$	149,908	37.8	%	$	130,808	40.1	%	$	280,716	38.8	%
Labor	43,700		11.0	%	43,643		13.4	%	87,343		12.1	%
Overhead	64,661		16.3	%	46,257		14.2	%	110,918		15.3	%
Other/Warranty	438		0.1	%	6,797		2.1	%	7,235		1.0	%
Total cost of sales	$	258,707	65.2	%	$	227,505	69.8	%	$	486,212	67.2	%

	Three Months Ended June 30, 2015
In thousands	Freight		Percentage of Sales		Transit		Percentage of Sales		Total		Percentage of Sales
Material	$	222,501	41.6	%	$	132,014	42.3	%	$	354,515	41.9	%
Labor	57,950		10.8	%	38,824		12.4	%	96,774		11.4	%
Overhead	74,782		14.0	%	44,308		14.2	%	119,090		14.1	%
Other/Warranty	1,557		0.3	%	7,328		2.3	%	8,885		1.0	%
Total cost of sales	$	356,790	66.7	%	$	222,474	71.2	%	$	579,264	68.4	%

Cost of Sales decreased by $93.1 million to $486.2 million in the second quarter of 2016 compared to $579.3 million in the same period of 2015. In the second quarter of 2016, cost of sales as a percentage of sales was 67.2% compared to 68.4% in the same period of 2015.  The decrease as a percentage of sales is due to contributions from cost reduction initiatives and improved margin performance from prior year acquisitions.

Freight Segment cost of sales decreased 1.5% as a percentage of sales to 65.2% in 2016 compared to 66.7% for the same period in 2015. The decrease is primarily related to product sales with lower material content, lower overall material costs due to on-going sourcing efforts, and decreases in various commodity prices.

Transit Segment cost of sales decreased 1.4% as a percentage of sales to approximately 69.8% in the second quarter of 2016 from 71.2% for the same period of 2015.  The decrease is primarily related to improved margin performance from prior years acquisitions and the benefits of ongoing cost reduction efforts. The change between material and labor costs is a direct result of higher remanufacturing, overhaul and build revenue which carries higher labor and lower material content as a percentage of sales.

Included in cost of sales is warranty expense. The provision for warranty expense is generally established for specific losses, along with historical estimates of customer claims as a percentage of sales, which can cause variability in warranty expense between quarters. Warranty expense was $7.0 million in the second quarter of 2016 compared to $7.7 million in the second quarter of 2015.

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Gross profit for the three months ended June 30, 2016 decreased $30.4 million to $237.4 million from $267.8 million in the previous year's quarter. The gross profit margin increased 120 basis points to 32.8% from 31.6% at June 30, 2015. The decrease is due lower sales volume, however, the improvement in the gross profit margin is due to ongoing cost reduction initiatives aimed at increasing our competitiveness in an increasing challenging global economy, as well as the reasons discussed above.

Operating expenses The following table shows our operating expenses for the periods indicated:

	Three Months Ended June 30,
In thousands	2016		Percentage of Sales		2015		Percentage of Sales
Selling, general and administrative expenses	$	80,610	11.1	%	$	88,992	10.5	%
Engineering expenses	18,029		2.5	%	17,750		2.1	%
Amortization expense	5,466		0.8	%	5,162		0.6	%
Total operating expenses	$	104,105	14.4	%	$	111,904	13.2	%

Total operating expenses were 14.4% and 13.2% of sales for the second quarters of 2016 and 2015, respectively.  Selling, general, and administrative expenses decreased $8.4 million, or 9.4%, primarily due to lower sales volume, reduced incentive compensation expense and benefits associated with the cost saving initiative undertaken in 2016. These reductions were partially offset by $5.8 million of costs related to the Faiveley transaction and $0.4 million of costs related to restructuring activity. Engineering expense increased by $0.3 million, or 1.6%, primarily related to acquisitions. Amortization expense increased $0.3 million due to amortization of intangibles associated with acquisitions.

The following table shows our segment operating expense for the periods indicated:

	Three Months Ended June 30,
In thousands	2016		2015		Percent Change
Freight Segment	$	44,464	$	52,482	(15.3	)%
Transit Segment	48,461		52,536		(7.8	)%
Corporate	11,180		6,886		62.4	%
Total operating expenses	104,105		111,904		(7.0	)%

Freight Segment operating expenses decreased $8.0 million, or 15.3%, in 2016 and increased 140 basis points to 11.2% of sales. The decrease is primarily attributable to reduced sales volumes and lower costs associated with cost saving initiatives undertaken in 2016 partially offset by $1.5 million of incremental operating expenses from acquisitions.

Transit Segment operating expenses decreased $4.1 million, or 7.8%, in 2016 and decreased 200 basis points to 14.8% of sales. The decrease is primarily attributable to lower costs associated with cost saving initiatives undertaken in 2016 partially offset by $0.6 million of incremental operating expenses from acquisitions.  

Corporate non-allocated operating expenses increased $4.3 million in 2016 primarily due to $5.8 million of costs related to the Faiveley transaction partially offset by lower costs from cost saving initiatives.

Income from operations Income from operations totaled $133.3 million or 18.4% of sales in the second quarter of 2016 compared to $155.9 million or 18.4% of sales in the same period of 2015. Income from operations decreased due to lower sales volume partially offset by lower operating expenses as discussed above.

Interest expense, net Interest expense, net, increased $0.9 million in 2016 primarily attributable to higher average debt balances relating to stock repurchases and the escrow deposit for the Faiveley acquisition.

Other income/(expense), net Other Expense, net, decreased $0.7 million to $1.2 million compared to $1.9 million in 2015 due to lower currency losses in the current year.

Income taxes The effective income tax rate was 28.8% and 32.3% for the second quarter of 2016 and 2015, respectively. The decrease in the effective rate is primarily the result of a lower earnings mix in higher tax rate jurisdictions.

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Net income Net income for the second quarter of 2016 was $90.5 million or $1.00 per diluted share compared to $101.5 million or $1.04 per diluted share in the prior year quarter. The decrease in net income is due to lower income from operations for the reasons noted above, partially offset by a lower effective tax rate discussed above and lower shares outstanding.

FIRST SIX MONTHS OF 2016 COMPARED TO FIRST SIX MONTHS OF 2015

The following table summarizes our results of operations for the periods indicated:

	Six months ended June 30,
In thousands	2016		2015		Percent Change
Freight Segment	$	839,736	$	1,046,561	(19.8	)%
Transit Segment	655,896		619,061		6.0	%
Net sales	1,495,632		1,665,622		(10.2	)%
Income from operations	275,465		304,280		(9.5	)%
Net income attributable to Wabtec shareholders	$	184,648	$	197,668	(6.6	)%

The following table shows the major components of the change in sales in the first half of 2016 from the first half of 2015:

In thousands	Freight Segment			Transit Segment			Total
First Six Months of 2015 Net Sales	$	1,046,561		$	619,061		$	1,665,622
Acquisitions	25,019			11,914			36,933
Change in Sales by Product Line:
Remanufacturing, Overhaul & Build	12,551			23,933			36,484
Other Transit Products	—			768			768
Other	(18,921		)	747			(18,174		)
Brake Products	(21,296		)	(7,558		)	(28,854		)
Specialty Products & Electronics	(195,066		)	22,840			(172,226		)
Foreign exchange	(9,112		)	(15,809		)	(24,921		)
First Six Months of 2016 Net Sales	$	839,736		$	655,896		$	1,495,632

Net sales for the six months ended June 30, 2016 decreased by $170.0 million or 10.2% to $1,495.6 million from $1,665.6 million. The decrease is primarily due to lower sales for Specialty Products and Electronics of $172.2 million and lower Brake Products sales of $28.9 million due to decreased demand for freight products as well as for train control and signaling products and services. This decrease was partially offset by higher sales for Remanufacturing, Overhaul and Build of $36.5 million due to higher demand for aftermarket locomotive builds. Acquisitions increased sales $36.9 million and unfavorable foreign exchange decreased sales $24.9 million.

Freight Segment sales decreased by $206.8 million, or 19.8%, primarily due to a decrease of $195.1 million for Specialty Products and Electronics sales from lower demand for freight original equipment rail products and train control and signaling products and a decrease of $21.3 million for Brake Products sales from lower demand for original equipment brakes and aftermarket services. The decrease was partially offset by a $12.6 million increase in Remanufacturing, Overhaul, and Build sales. Acquisitions increased sales by $25.0 million and unfavorable foreign exchange decreased sales by $9.1 million.

Transit Segment sales increased by $36.8 million, or 5.9%, primarily due to an increase for Remanufacturing, Overhaul, and Build sales of $23.9 million from higher demand for aftermarket locomotive builds, and a $22.8 million increase for Specialty Products and Electronics. Acquisitions increased sales by $11.9 million and unfavorable foreign exchange decreased sales by $15.8 million.

30

Cost of Sales and Gross Profit. The following table shows the major components of cost of sales for the periods indicated:

	Six months ended June 30, 2016
In thousands	Freight		Percentage of Sales		Transit		Percentage of Sales		Total		Percentage of Sales
Material	$	319,340	38.0	%	$	273,932	41.8	%	$	593,272	39.7	%
Labor	91,137		10.9	%	81,236		12.4	%	172,373		11.5	%
Overhead	127,974		15.2	%	94,233		14.4	%	222,207		14.9	%
Other/Warranty	4,135		0.5	%	11,076		1.7	%	15,211		1.0	%
Total cost of sales	$	542,586	64.6	%	$	460,477	70.3	%	$	1,003,063	67.1	%

	Six months ended June 30, 2015
In thousands	Freight		Percentage of Sales		Transit		Percentage of Sales		Total		Percentage of Sales
Material	$	440,628	42.1	%	$	260,075	42.0	%	$	700,703	42.1	%
Labor	112,535		10.8	%	77,988		12.6	%	190,523		11.4	%
Overhead	142,131		13.6	%	88,980		14.4	%	231,111		13.9	%
Other/Warranty	9,513		0.9	%	10,653		1.7	%	20,166		1.2	%
Total cost of sales	$	704,807	67.4	%	$	437,696	70.7	%	$	1,142,503	68.6	%

Cost of Sales decreased by $139.4 million to $1,003.1 million in the first six months of 2016 compared to $1,142.5 million in the same period of 2015. In the first six months of 2016, cost of sales as a percentage of sales was 67.2% compared to 68.6% in the same period of 2015.  The decrease as a percentage of sales is due contributions from cost reduction initiatives and improved margin performance from prior year acquisitions.

Freight Segment cost of sales decreased 2.8% as a percentage of sales to 64.6% in 2016 compared to 67.4% for the same period in 2015. The decrease is primarily related to product sales with lower material content, lower overall material costs due to ongoing sourcing efforts, and decreases in various commodity prices.

Transit Segment cost of sales decreased 0.4% as a percentage of sales to approximately 70.3% in the first half of 2016 from 70.7% for the same period of 2015.  The decrease is primarily due to better margin performance from prior year acquisitions and ongoing sourcing savings.

Included in cost of sales is warranty expense. The provision for warranty expense is generally established for specific losses, along with historical estimates of customer claims as a percentage of sales, which can cause variability in warranty expense between quarters. Warranty expense was $17.9 million in the first six months of 2016 compared to $14.0 million in the first half of 2015.

Gross profit for the six months ended June 30, 2016 decreased $30.6 million to $492.6 million from $523.1 million in the first six months of 2015. The gross profit margin increased 150 basis points to 32.9% from 31.4% at June 30, 2015. The decrease is due lower sales volume, however, the improvement in the gross profit margin is due to ongoing cost reduction initiatives aimed at increasing our competitiveness in an increasing challenging global economy, as well as favorable performance discussed above.

31

Operating expenses The following table shows our operating expenses for the periods indicated:

	Six months ended June 30,
In thousands	2016		Percentage of Sales		2015		Percentage of Sales
Selling, general and administrative expenses	$	170,361	11.4	%	$	173,763	10.4	%
Engineering expenses	35,982		2.4	%	34,613		2.1	%
Amortization expense	10,761		0.7	%	10,463		0.6	%
Total operating expenses	$	217,104	14.5	%	$	218,839	13.1	%

Total operating expenses were 14.5% and 13.1% of sales for the first six months of 2016 and 2015, respectively.  Selling, general, and administrative expenses decreased $3.4 million, or 2.0%, primarily due to lower sales volume, reduced costs for incentive compensation, and benefits associated with the cost saving initiative undertaken in 2016. These reductions were partially offset by $9.4 million of costs related to the Faiveley acquisition and $1.9 million in costs related to restructuring activity. Engineering expense increased by $1.4 million, or 4.0%, primarily due to $0.8 million of expenses from acquisitions. The remainder of the increase can be attributed to the company concentrating resources on new product development. Amortization expense increased $0.3 million due to amortization of intangibles associated with acquisitions.

The following table shows our segment operating expense for the periods indicated:

	Six months ended June 30,
In thousands	2016		2015		Percent Change
Freight Segment	$	95,274	$	104,640	(9.0	)%
Transit Segment	101,146		102,740		(1.6	)%
Corporate	20,684		11,459		80.5	%
Total operating expenses	217,104		218,839		(0.8	)%

Freight Segment operating expenses decreased $9.4 million, or 9.0%, in 2016 and increased 130 basis points to 11.3% of sales. The decrease is primarily attributable to reduced sales volumes and lower costs associated with the cost saving initiative undertaken in 2016 partially offset by $2.9 million of incremental operating expenses from acquisitions.

Transit Segment operating expenses decreased $1.6 million, or 1.6%, in 2016 and decreased 120 basis points to 15.4% of sales. The decrease is primarily attributable to lower costs associated with cost saving initiatives undertaken in 2016 partially offset by $1.2 million of incremental operating expenses from acquisitions.  

Corporate non-allocated operating expenses increased $9.2 million in the first six months of 2016 primarily due to $10.7 million of costs related to the Faiveley acquisition partially offset by cost reductions associated with cost saving initiatives in 2016.

Income from operations Income from operations totaled $275.5 million or 18.4% of sales in the first half of 2016 compared to $304.3 million or 18.3% of sales in the same period of 2015. Income from operations decreased due to lower sales volume partially offset by lower operating expenses as discussed above.

Interest expense, net Interest expense, net, increased $1.5 million in 2016 due primarily to higher average debt balances resulting from stock repurchases and the escrow deposit for the Faiveley acquisition.

Other income/(expense), net Other Expense, net, decreased $3.7 million to $1.1 million primarily due to lower currency transaction losses in the current year.

Income taxes The effective income tax rate was 30.2% and 32.1% for the first six months of 2016 and 2015, respectively. The decrease in the effective rate is primarily the result of a lower earnings mix in higher tax rate jurisdictions.

32

Net income Net income for the first six months of 2016 was $184.6 million or $2.02 per diluted share compared to $197.7 million or $2.03 per diluted share in the prior year quarter. The decrease in net income is due to lower income from operations for the reasons noted above, partially offset by a lower effective tax rate discussed above and lower shares outstanding.

Liquidity and Capital Resources

Liquidity is provided primarily by operating cash flow and borrowings under the Company’s unsecured credit facility with a consortium of commercial banks. The following is a summary of selected cash flow information and other relevant data:

	Six Months Ended June 30,
In thousands	2016			2015
Cash provided by (used for):
Operating activities	$	213,976		$	110,926
Investing activities	(40,202		)	(120,790		)
Financing activities	(102,157		)	(143,637		)
Increase/(decrease) in cash	$	76,744		$	(161,005	)

Operating activities In the first six months of 2016 and 2015, cash provided by operations was $214.0 million and $110.9 million, respectively. In comparison to the first six months of 2015, cash provided by operations in 2016 increased due to favorable working capital performance. The major components of the higher cash inflows were as follows: a favorable change in accounts receivable of $33.6 million due to a decline in sales volume coupled with ongoing collection efforts, a favorable change in accrued liabilities and accounts payable of $30.6 million and $11.3 million, respectively, both due to payment timing, and a favorable change in inventory of $14.6 million due to successful efforts to control the amount of inventory on hand. These cash outflows were partially offset by lower operating results of $13.0 million.

Investing activities In the first six months of 2016 and 2015, cash used in investing activities was $40.2 million and $120.8 million, respectively. The major components of the cash outflow in 2016 were $21.3 million in net cash paid for acquisitions and $19.1 million in planned additions to property, plant and equipment for investments in our facilities and manufacturing processes. This compares to $100.1 million in net cash paid for acquisitions and $20.9 million in property, plant, and equipment for investments in the first six months of 2015. Refer to Note 4 of the “Notes to Condensed Consolidated Financial Statements” for additional information on acquisitions.

Financing activities In the first six months of 2016, cash used for financing activities was $102.2 million which included $230.0 million in proceeds from the revolving credit facility, $175.5 million in repayments of debt on the revolving credit facility, $14.6 million of dividend payments, $133.7 million for the repurchase of 1,950,000 shares of stock and $9.0 million related to the payment of income tax withholding on share based compensation. In the first six months of 2015, cash provided by financing activities was $143.6 million, which included $174.3 million in proceeds from the revolving credit facility, $294.6 million in repayments of debt on the revolving credit facility, $14.6 million related to payment of income tax withholding on share based compensation, and $11.6 million of dividend payments.

Company Stock Repurchase Plan

On February 8, 2016 the Board of Directors amended its stock repurchase authorization to $350 million of the Company’s outstanding shares. This new stock repurchase authorization supersedes the previous authorization of $350 million of which about $33.3 million remained. During the first six months of 2016, the Company repurchased 1,950,000, leaving $216.0 million under the authorization. There were no repurchases in the second quarter of 2016.

The Company intends to purchase shares on the open market or in negotiated or block trades. 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.

Contractual Obligations and Off-Balance Sheet Arrangements

As of June 30, 2016, the Company has recognized a total liability of $10.6 million for unrecognized tax benefits related to uncertain tax positions. At this time, the Company is unable to make a reasonably reliable estimate of the timing of cash

33

settlement for any of the unrecognized tax benefits due to the uncertainty of the timing and outcome of its audits and other factors.

Since December 31, 2015, there have been no other significant changes in the total amount of the Company’s contractual obligations or the timing of cash flows in accordance with those obligations, as reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

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

• 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, power generation equipment 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.

Operating factors

• 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, asbestos-related matters and pension liabilities or warranty, product liability or intellectual property claims;

• completion and integration of acquisitions; or

• the development and use of new technology.

34

Competitive factors

• the actions of competitors.

Political/governmental factors

• 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 PTC;

• uncertainty relating to the United Kingdom's continued membership in the European Union;

• federal and state income tax legislation; or

• the outcome of negotiations with partners, governments, suppliers, customers or others.

Statements in this 10-Q apply only as of the date on which such statements are made, and 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, 2015.

Critical Accounting Policies

A summary of critical accounting policies is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. In particular, judgment is used in areas such as accounts receivable and the allowance for doubtful accounts, inventories, goodwill and indefinite-lived intangibles, warranty reserves, pensions and postretirement benefits, income taxes and revenue recognition. There have been no significant changes in accounting policies since December 31, 2015.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

In the ordinary course of business, Wabtec is exposed to risks that increases in interest rates may adversely affect funding costs associated with its variable-rate debt. The Company’s variable rate debt represents 47% and 42% of total long-term debt at June 30, 2016 and December 31, 2015, respectively.  To reduce the impact of interest rate changes on a portion of this variable-rate debt, the Company entered into forward interest rate swap agreements which convert a portion of the debt from variable to fixed-rate borrowings during the term of the swap contract. Refer to Note 7 – Long Term Debt of “Notes to Condensed Consolidated Financial Statements” for additional information regarding interest rate risk.

Foreign Currency Exchange Risk

The Company is subject to certain risks associated with changes in foreign currency exchange rates to the extent our operations are conducted in currencies other than the U.S. dollar. For the first six months of 2016, approximately 50% of Wabtec’s net sales were to customers in the United States, 11% in the United Kingdom, 8% in Canada, 6% in Mexico, 3% in China, 3% in Germany, 2% in Australia, 2% in Brazil, and 15% in other international locations. To reduce the impact of changes in currency exchange rates, the Company has periodically entered into foreign currency forward contracts. Refer to “Financial Derivatives and Hedging Activities” in Note 3 of “Notes to Condensed Consolidated Financial Statements” for more information regarding foreign currency exchange risk.

Item 4. CONTROLS AND PROCEDURES

Wabtec’s principal executive officer and its principal financial officer have evaluated the effectiveness of Wabtec’s “disclosure controls and procedures,” (as defined in Exchange Act Rule 13a-15(e)) as of June 30, 2016. Based upon their evaluation, the principal executive officer and principal financial officer concluded that Wabtec’s disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by Wabtec in the reports filed or submitted by it under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that information required to be disclosed by Wabtec in such reports is accumulated and communicated to Wabtec’s Management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

There was no change in Wabtec’s “internal control over financial reporting” (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2016, that has materially affected, or is reasonably likely to materially affect, Wabtec’s internal control over financial reporting.

35

PART II—OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Except as described below, there have been no material changes regarding the Company’s commitments and contingencies as described in Note 19 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

On April 21, 2016, Siemens Industry, Inc. (Siemens) filed a lawsuit against the Company in federal district court in Delaware alleging that the Company has infringed seven (7) patents owned by Siemens, all of which are related to Positive Train Control technology. Wabtec filed its answer to the complaint on June 17, 2016. The case is in a very preliminary stage. Wabtec believes the claims are without merit and intends to vigorously defend itself.

Item 1A. RISK FACTORS

There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On February 9, 2016, the Board of Directors amended its stock repurchase authorization to $350.0 million of the Company’s outstanding shares. During the first six months of 2016, the Company repurchased 1,950,000 shares, leaving $216.0 million under the authorization. There were no repurchase in the second quarter of 2016.

The Company intends to purchase shares on the open market or in negotiated or block trades. 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

Not Applicable

Item 6. EXHIBITS

The following exhibits are being filed with this report:

31.1	Rule 13a-14(a) Certification of Chief Executive Officer.
31.2	Rule 13a-14(a) Certification of Chief Financial Officer.
32.1	Section 1350 Certification of Chief Executive Officer and Chief Financial Officer.
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.

36

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
By:	/s/ PATRICK D. DUGAN
	Patrick D. Dugan,
	Senior Vice President Finance and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
DATE:	July 28, 2016

37

EXHIBIT INDEX

31.1	Rule 13a-14(a) Certification of Chief Executive Officer.
31.2	Rule 13a-14(a) Certification of Chief Financial Officer.
32.1	Section 1350 Certification of Chief Executive Officer and Chief Financial Officer.
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.

38

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Raymond T. Betler, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Westinghouse Air Brake Technologies Corporation.

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

(d) Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 28, 2016

By:	/s/    RAYMOND T. BETLER
Name:	Raymond T. Betler
Title:	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Patrick D. Dugan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Westinghouse Air Brake Technologies Corporation.

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

(d) Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 28, 2016

By:	/S/    PATRICK D. DUGAN
Name:	Patrick D. Dugan
Title:	Senior Vice President Finance and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to 18 U.S.C. § 1350, the undersigned officers of Westinghouse Air Brake Technologies Corporation (the “Company”), hereby certify, to the best of their knowledge, that the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/    RAYMOND T. BETLER
	Raymond T. Betler President and Chief Executive Officer
Date:	July 28, 2016
By:	/s/    PATRICK D. DUGAN
	Patrick D. Dugan, Senior Vice President Finance and Chief Financial Officer
Date:	July 28, 2016

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 25, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Trading Symbol	WAB
Entity Registrant Name	WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORP
Entity Central Index Key	0000943452
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		90,120,526

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current Assets
Cash and cash equivalents	$ 302,935	$ 226,191
Accounts receivable	440,900	494,975
Unbilled accounts receivable	145,451	103,814
Inventories	493,442	478,574
Deposit in escrow	206,212	202,942
Deferred income taxes	75,705	71,658
Other current assets	35,713	33,524
Total current assets	1,700,358	1,611,678
Property, plant and equipment	730,050	717,295
Accumulated depreciation	(381,400)	(364,102)
Property, plant and equipment, net	348,650	353,193
Other Assets
Goodwill	860,027	858,532
Other intangibles, net	430,331	440,534
Other noncurrent assets	39,830	32,909
Total other assets	1,330,188	1,331,975
Total Assets	3,379,196	3,296,846
Current Liabilities
Accounts payable	305,160	319,525
Customer deposits	110,968	106,127
Accrued compensation	62,062	69,892
Accrued warranty	77,566	72,678
Current portion of long-term debt	115	433
Other accrued liabilities	108,681	96,121
Total current liabilities	664,552	664,776
Long-term debt	744,139	691,805
Accrued postretirement and pension benefits	56,487	55,765
Deferred income taxes	145,572	139,852
Accrued warranty	18,780	19,386
Other long-term liabilities	23,827	23,923
Total liabilities	1,653,357	1,595,507
Shareholders’ Equity
Preferred stock, 1,000,000 shares authorized, no shares issued	0	0
Common stock, $0.01 par value; 200,000,000 shares authorized: 132,349,534 shares issued and 90,119,492 and 91,836,106 outstanding at June 30, 2016 and December 31, 2015, respectively	1,323	1,323
Additional paid-in capital	466,553	469,326
Treasury stock, at cost, 42,230,042 and 40,513,428 shares, at June 30, 2016 and December 31, 2015, respectively	(905,877)	(775,124)
Retained earnings	2,450,884	2,280,801
Accumulated other comprehensive loss	(290,346)	(276,719)
Total Westinghouse Air Brake Technologies Corporation shareholders' equity	1,722,537	1,699,607
Non-controlling interest (minority interest)	3,302	1,732
Total shareholders’ equity	1,725,839	1,701,339
Total Liabilities and Shareholders’ Equity	$ 3,379,196	$ 3,296,846

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares issued (in shares)	132,349,534	132,349,534
Common stock, shares outstanding (in shares)	90,119,492	91,836,106
Treasury stock, shares (in shares)	42,230,042	40,513,428

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Net sales	$ 723,601	$ 847,028	$ 1,495,632	$ 1,665,622
Cost of sales	(486,212)	(579,264)	(1,003,063)	(1,142,503)
Gross profit	237,389	267,764	492,569	523,119
Selling, general and administrative expenses	(80,610)	(88,992)	(170,361)	(173,763)
Engineering expenses	(18,029)	(17,750)	(35,982)	(34,613)
Amortization expense	(5,466)	(5,162)	(10,761)	(10,463)
Total operating expenses	(104,105)	(111,904)	(217,104)	(218,839)
Income from operations	133,284	155,860	275,465	304,280
Other income and expenses
Interest expense, net	(4,969)	(4,041)	(9,840)	(8,347)
Other expense, net	(1,229)	(1,887)	(1,075)	(4,753)
Income from operations before income taxes	127,086	149,932	264,550	291,180
Income tax expense	(36,601)	(48,428)	(79,902)	(93,512)
Net income attributable to Wabtec shareholders	$ 90,485	$ 101,504	$ 184,648	$ 197,668
Basic
Net income attributable to Wabtec shareholders (in dollars per share)	$ 1.00	$ 1.05	$ 2.03	$ 2.05
Diluted
Net income attributable to Wabtec shareholders (in dollars per share)	$ 1.00	$ 1.04	$ 2.02	$ 2.03
Weighted average shares outstanding
Basic shares outstanding (in shares)	89,846	96,338	90,832	96,066
Diluted shares outstanding (in shares)	90,559	97,435	91,628	97,112

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income attributable to Wabtec shareholders	$ 90,485	$ 101,504	$ 184,648	$ 197,668
Foreign currency translation (loss) gain	(42,330)	36,082	(10,119)	(51,849)
Unrealized (loss) gain on derivative contracts	(716)	949	(2,909)	(756)
Pension benefit plans and post-retirement benefit plans	2,149	(822)	(1,634)	3,000
Other comprehensive (loss) income before tax	(40,897)	36,209	(14,662)	(49,605)
Income tax (expense) benefit related to components of other comprehensive (loss) income	(352)	(320)	1,035	(605)
Other comprehensive (loss) income, net of tax	(41,249)	35,889	(13,627)	(50,210)
Comprehensive income attributable to Wabtec shareholders	$ 49,236	$ 137,393	$ 171,021	$ 147,458

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Operating Activities
Net income attributable to Wabtec shareholders	$ 184,648	$ 197,668
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization	33,093	31,612
Stock-based compensation expense	9,673	14,989
Loss on disposal of property, plant and equipment	378	420
Excess income tax benefits from exercise of stock options	0	(1,388)
Changes in operating assets and liabilities, net of acquisitions
Accounts receivable and unbilled accounts receivable	(2,171)	(35,788)
Inventories	(10,893)	(25,536)
Accounts payable	(13,757)	(25,015)
Accrued income taxes	2,913	19,185
Accrued liabilities and customer deposits	3,505	(27,089)
Other assets and liabilities	6,587	(38,132)
Net cash provided by operating activities	213,976	110,926
Investing Activities
Purchase of property, plant and equipment	(19,104)	(20,860)
Proceeds from disposal of property, plant and equipment	165	178
Acquisitions of businesses, net of cash acquired	(21,263)	(100,108)
Net cash used for investing activities	(40,202)	(120,790)
Financing Activities
Proceeds from debt	230,000	174,300
Payments of debt	(175,499)	(294,589)
Purchase of treasury stock	(133,738)	0
Proceeds from exercise of stock options and other benefit plans	651	1,409
Excess income tax benefits from exercise of stock options	0	1,388
Payment of income tax withholding on share-based compensation	(9,006)	(14,565)
Cash dividends	(14,565)	(11,580)
Net cash used for financing activities	(102,157)	(143,637)
Effect of changes in currency exchange rates	5,127	(7,504)
Increase (Decrease) in cash	76,744	(161,005)
Cash, beginning of period	226,191	425,849
Cash, end of period	$ 302,935	$ 264,844

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - $ / shares	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Statement of Cash Flows [Abstract]
Cash dividends, per share (in dollars per share)	$ 0.16	$ 0.12

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Business

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business

BUSINESS

Westinghouse Air Brake Technologies Corporation (“Wabtec”) is one of the world’s largest providers of value-added, technology-based products and services for the global rail industry. Our products are found on virtually all U.S. locomotives, freight cars and passenger transit vehicles, as well as in more than 100 countries throughout the world. Our products enhance safety, improve productivity and reduce maintenance costs for customers, and many of 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 20 countries. In the first six months of 2016, about 50% of the Company’s revenues came from customers outside the U.S.

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Proposed Transaction with Faiveley Transport S.A.

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Proposed Transaction with Faiveley Transport S.A.

PROPOSED TRANSACTION WITH FAIVELEY TRANSPORT S.A.

On July 27, 2015, the Company announced plans to acquire Faiveley Transport S.A. ("Faiveley Transport"), a leading global provider of value-added, integrated systems and services for the railway industry with annual sales of about $1.2 billion and more than 5,700 employees in 24 countries.  Faiveley Transport supplies railway manufacturers, operators and maintenance providers with a range of valued-added, technology-based systems and services in Energy & Comfort (air conditioning, power collectors and converters, and passenger information), Access & Mobility (passenger access systems and platform doors), and Brakes & Safety (braking systems and couplers).

The transaction has been structured in three steps:

• Wabtec made an irrevocable offer to the owners of approximately 51% of Faiveley Transport’s shares for a purchase price of €100 per share, payable 25% in cash and 75% in Wabtec preferred stock.  The preferred stock will have a 1% annual dividend or, if greater, the annual dividend assuming full conversion into common shares, and must be converted after three years into Wabtec common shares at an implied ratio of one Faiveley Transport common share for 1.125 Wabtec common shares. Shareholders owning approximately 51% of Faiveley Transport have entered into exclusive discussions with Wabtec.

• Upon completion of required labor group consultations, on October 6, 2015, the 51% shareholders entered into a definitive share purchase agreement and Faiveley Transport entered into an acquisition agreement with Wabtec.

• Upon completing the share purchase, Wabtec will commence a tender offer for the remaining publicly traded Faiveley Transport shares. The public shareholders will have the option to elect to receive €100 per share in cash or Wabtec preferred stock. The preferred stock portion of the consideration is subject to a cap of 75% of Faiveley Transport’s common shares.  Wabtec intends to delist Faiveley Transport from Euronext after the tender offer if minority interests represent less than 5%.

The total purchase price offered is about $1.8 billion, including assumed debt.  Wabtec plans to fund the cash portion of the transaction with cash on hand, existing credit facilities and potentially other debt financing.  Prior to December 31, 2015, Wabtec set aside €186.9 million as an escrow deposit for the Faiveley Transport purchase. The combination of Wabtec and Faiveley Transport would create one of the world’s largest public rail equipment companies, with revenues of about $4.5 billion and a presence in all key freight rail and passenger transit geographies worldwide. 

Closing of the transaction is subject to various conditions, including completion of regulatory requirements. These steps are currently on-going and the timing of completion is unknown.

ACQUISITIONS

The Company has made the following acquisitions operating as a business unit or component of a business unit in the Freight Segment:

• On May 5, 2016, the Company acquired Unitrac Railroad Materials ("Unitrac"), a leading designer and manufacturer of railroad products and track work services for a purchase price of approximately $14.4 million, net of cash acquired, resulting in preliminary goodwill of $1.0 million, none of which will be deductible for tax purposes.

• On October 30, 2015, the Company acquired Relay Monitoring Systems PTY Ltd. ("RMS"), an Australian based manufacturer of electrical protection and control products for a purchase price of approximately $18.7 million, net of cash acquired, resulting in preliminary goodwill of $8.8 million, none of which will be deductible for tax purposes. 

• On October 8, 2015, the Company acquired Track IQ, an Australian based manufacturer of wayside censor systems for the global rail industry for a purchase price of approximately $9.3 million, net of cash acquired, resulting in preliminary goodwill of $6.6 million, all of which will be deductible for tax purposes.

• On February 4, 2015, the Company acquired Railroad Controls L.P. ("RCL"), a provider of railway signal construction services, for a purchase price of approximately $78.0 million, net of cash acquired, resulting in goodwill of $14.8 million, all of which will be deductible for tax purposes.

The Company has made the following acquisitions operating as a business unit or component of a business unit in the Transit Segment:

• On June 17, 2015, the Company acquired Metalocaucho (“MTC”), a manufacturer of transit products, primarily rubber components for suspension and vibration control systems, for a purchase price of approximately $23.4 million, net of cash acquired, resulting in goodwill of $13.2 million, none of which will be deductible for tax purposes.

The acquisitions listed above include escrow deposits of $37.6 million, which act as security for indemnity and other claims in accordance with the purchase and related escrow agreements.

For the Unitrac, RMS, and Track IQ acquisitions, the following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition. For the MTC and RCL acquisitions, the following table summarizes the final fair value of the assets acquired and liabilities assumed at the date of acquisition.

	Unitrac			RMS			Track IQ			MTC			RCL
In thousands	May 5, 2016			October 30, 2015			October 8, 2015			June 17, 2015			February 4, 2015
Current assets	$	12,526		$	3,605		$	660		$	10,348		$	16,421
Property, plant & equipment	1,768			1,378			187			1,450			12,136
Goodwill	998			8,847			6,649			13,198			14,787
Other intangible assets	1,230			8,621			3,246			7,650			40,403
Other assets	—			—			—			114			—
Total assets acquired	16,522			22,451			10,742			32,760			83,747
Total liabilities assumed	(2,144		)	(3,741		)	(1,430		)	(9,400		)	(5,736		)
Net assets acquired	$	14,378		$	18,710		$	9,312		$	23,360		$	78,011

Of the $61.1 million of total acquired other intangible assets, $53.8 million was assigned to customer relationships, $5.6 million was assigned to trade names, $0.3 million was assigned to non-compete agreements and $1.4 million was assigned to customer backlog. The trade names were determined to have an indefinite useful life, while the customer relationships’ average useful life is 20 years, and the non-compete useful life is five years.

The following unaudited pro forma consolidated financial information presents income statement results as if the acquisitions listed above had occurred on January 1, 2015:

In thousands	Three Months Ended June 30, 2016		Three Months Ended June 30, 2015		Six Months Ended June 30, 2016		Six Months Ended June 30, 2015
Net sales	$	725,602	$	825,466	$	1,505,193	$	1,710,009
Gross profit	237,604		274,251		493,605		537,425
Net income attributable to Wabtec shareholders	90,608		101,534		184,978		200,540
Diluted earnings per share
As Reported	$	1.00	$	1.04	$	2.02	$	2.03
Pro forma	$	1.00	$	1.04	$	2.02	$	2.06

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Accounting Policies

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Accounting Policies

ACCOUNTING POLICIES

Basis of Presentation The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles and the rules and regulations of the Securities and Exchange Commission and include the accounts of Wabtec and its majority owned subsidiaries. These condensed consolidated interim financial statements do not include all of the information and footnotes required for complete financial statements. In management’s opinion, these financial statements reflect all adjustments of a normal, recurring nature necessary for a fair presentation of the results for the interim periods presented. Results for these interim periods are not necessarily indicative of results to be expected for the full year.

The Company operates on a four-four-five week accounting quarter, and the quarters end on or about March 31, June 30, September 30, and December 31.

The notes included herein should be read in conjunction with the audited consolidated financial statements included in Wabtec’s Annual Report on Form 10-K for the year ended December 31, 2015. The December 31, 2015 information has been derived from the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Revenue Recognition Revenue is recognized in accordance with Accounting Standards Codification (“ASC”) 605 “Revenue Recognition.” Revenue is recognized when products have been shipped to the respective customers, title has passed and the price for the product has been determined.

In general, the Company recognizes revenues on long-term contracts based on the percentage of completion method of accounting. The units-of-delivery method or other input-based or output-based measures, as appropriate, are used to measure the progress toward completion of individual contracts. Contract revenues and cost estimates are reviewed and revised at a minimum quarterly and adjustments are reflected in the accounting period as such amounts are determined. Provisions are made currently for estimated losses on uncompleted contracts. Unbilled accounts receivables were $145.5 million and $103.8 million, customer deposits were $111.0 million and $106.1 million, and provisions for loss contracts were $16.7 million and $11.8 million at June 30, 2016 and December 31, 2015, respectively.

Certain pre-production costs relating to long-term production and supply contracts have been deferred and will be recognized over the life of the contracts. Deferred pre-production costs were $28.8 million and $30.3 million at June 30, 2016 and December 31, 2015, respectively.

Reclassifications Certain prior year amounts have been reclassified, where necessary, to conform to the current year presentation.

Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates.

Financial Derivatives and Hedging Activities As part of its risk management strategy, the Company utilizes derivative financial instruments to manage its exposure due to changes in foreign currencies and interest rates. For further information regarding financial derivatives and hedging activities, refer to Footnotes 13 and 14.

Foreign Currency Translation Assets and liabilities of foreign subsidiaries, except for the Company’s Mexican operations whose functional currency is the U.S. Dollar, are translated at the rate of exchange in effect on the balance sheet date while income and expenses are translated at the average rates of exchange prevailing during the period. Foreign currency gains and losses resulting from transactions and the translation of financial statements are recorded in the Company’s consolidated financial statements based upon the provisions of ASC 830 “Foreign Currency Matters.” The effects of currency exchange rate changes on intercompany transactions and balances of a long-term investment nature are accumulated and carried as a component of accumulated other comprehensive loss. The effects of currency exchange rate changes on intercompany transactions that are denominated in a currency other than an entity’s functional currency are charged or credited to earnings.

Non-controlling Interests In accordance with ASC 810 "Consolidation", the Company has classified non-controlling interests as equity on our condensed consolidated balance sheets as of June 30, 2016 and December 31, 2015. Net income attributable to non-controlling interests for the three and six months ended June 30, 2016 and 2015 was not material.

Recent Accounting Pronouncements In April 2015, the FASB issued Accounting Standards Update No. 2015-3, “Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-3”) which changes the presentation of debt issuance costs in financial statements to present such costs as a direct deduction from the related debt liability rather than as an asset.  ASU 2015-3 became effective for public companies during interim and annual reporting periods beginning after December 15, 2015.  The Company retrospectively adopted this ASU on January 1, 2016. The adoption of this ASU did not have a material impact to our consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-9, “Revenue from Contract with Customers.”  The ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer.  The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity’s nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.  The Board voted to propose that the standard would take effect for reporting periods beginning after December 15, 2017 and that early adoption would be allowed as of the original effective date. The Company is currently evaluating the impact the pronouncement will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (ASU 2016-09”). The ASU simplifies several aspects for the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The ASU is effective for public companies in the fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

Other Comprehensive Income Comprehensive income is defined as net income and all other non-owner changes in shareholders’ equity.

The changes in accumulated other comprehensive loss by component, net of tax, for the six months ended June 30, 2016 are as follows:

In thousands	Foreign currency translation			Derivative contracts			Pension and post retirement benefit plans			Total
Balance at December 31, 2015	$	(227,349	)	$	(2,987	)	$	(46,383	)	$	(276,719	)
Other comprehensive (loss) before reclassifications	(10,119		)	(2,758		)	(2,293		)	(15,170		)
Amounts reclassified from accumulated other
comprehensive income	—			647			896			1,543
Net current period other comprehensive (loss)	(10,119		)	(2,111		)	(1,397		)	(13,627		)
Balance at June 30, 2016	$	(237,468	)	$	(5,098	)	$	(47,780	)	$	(290,346	)

Reclassifications out of accumulated other comprehensive loss for the three months ended June 30, 2016 are as follows:

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	$	(422	)	Cost of sales
Amortization of net loss	971			Cost of sales
	549			Income from Operations
	(157		)	Income tax expense
	$	392		Net income
Derivative contracts
Realized loss on derivative contracts	$	453		Interest expense, net
	(130		)	Income tax expense
	$	323		Net income

Reclassifications out of accumulated other comprehensive loss for the six months ended June 30, 2016 are as follows:

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	$	(807	)	Cost of sales
Amortization of net loss	2,091			Cost of sales
	1,284			Income from Operations
	(388		)	Income tax expense
	$	896		Net income
Derivative contracts
Realized loss on derivative contracts	$	927		Interest expense, net
	(280		)	Income tax expense
	$	647		Net income

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Acquisitions

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Acquisitions

PROPOSED TRANSACTION WITH FAIVELEY TRANSPORT S.A.

On July 27, 2015, the Company announced plans to acquire Faiveley Transport S.A. ("Faiveley Transport"), a leading global provider of value-added, integrated systems and services for the railway industry with annual sales of about $1.2 billion and more than 5,700 employees in 24 countries.  Faiveley Transport supplies railway manufacturers, operators and maintenance providers with a range of valued-added, technology-based systems and services in Energy & Comfort (air conditioning, power collectors and converters, and passenger information), Access & Mobility (passenger access systems and platform doors), and Brakes & Safety (braking systems and couplers).

The transaction has been structured in three steps:

• Wabtec made an irrevocable offer to the owners of approximately 51% of Faiveley Transport’s shares for a purchase price of €100 per share, payable 25% in cash and 75% in Wabtec preferred stock.  The preferred stock will have a 1% annual dividend or, if greater, the annual dividend assuming full conversion into common shares, and must be converted after three years into Wabtec common shares at an implied ratio of one Faiveley Transport common share for 1.125 Wabtec common shares. Shareholders owning approximately 51% of Faiveley Transport have entered into exclusive discussions with Wabtec.

• Upon completion of required labor group consultations, on October 6, 2015, the 51% shareholders entered into a definitive share purchase agreement and Faiveley Transport entered into an acquisition agreement with Wabtec.

• Upon completing the share purchase, Wabtec will commence a tender offer for the remaining publicly traded Faiveley Transport shares. The public shareholders will have the option to elect to receive €100 per share in cash or Wabtec preferred stock. The preferred stock portion of the consideration is subject to a cap of 75% of Faiveley Transport’s common shares.  Wabtec intends to delist Faiveley Transport from Euronext after the tender offer if minority interests represent less than 5%.

The total purchase price offered is about $1.8 billion, including assumed debt.  Wabtec plans to fund the cash portion of the transaction with cash on hand, existing credit facilities and potentially other debt financing.  Prior to December 31, 2015, Wabtec set aside €186.9 million as an escrow deposit for the Faiveley Transport purchase. The combination of Wabtec and Faiveley Transport would create one of the world’s largest public rail equipment companies, with revenues of about $4.5 billion and a presence in all key freight rail and passenger transit geographies worldwide. 

Closing of the transaction is subject to various conditions, including completion of regulatory requirements. These steps are currently on-going and the timing of completion is unknown.

ACQUISITIONS

The Company has made the following acquisitions operating as a business unit or component of a business unit in the Freight Segment:

• On May 5, 2016, the Company acquired Unitrac Railroad Materials ("Unitrac"), a leading designer and manufacturer of railroad products and track work services for a purchase price of approximately $14.4 million, net of cash acquired, resulting in preliminary goodwill of $1.0 million, none of which will be deductible for tax purposes.

• On October 30, 2015, the Company acquired Relay Monitoring Systems PTY Ltd. ("RMS"), an Australian based manufacturer of electrical protection and control products for a purchase price of approximately $18.7 million, net of cash acquired, resulting in preliminary goodwill of $8.8 million, none of which will be deductible for tax purposes. 

• On October 8, 2015, the Company acquired Track IQ, an Australian based manufacturer of wayside censor systems for the global rail industry for a purchase price of approximately $9.3 million, net of cash acquired, resulting in preliminary goodwill of $6.6 million, all of which will be deductible for tax purposes.

• On February 4, 2015, the Company acquired Railroad Controls L.P. ("RCL"), a provider of railway signal construction services, for a purchase price of approximately $78.0 million, net of cash acquired, resulting in goodwill of $14.8 million, all of which will be deductible for tax purposes.

The Company has made the following acquisitions operating as a business unit or component of a business unit in the Transit Segment:

• On June 17, 2015, the Company acquired Metalocaucho (“MTC”), a manufacturer of transit products, primarily rubber components for suspension and vibration control systems, for a purchase price of approximately $23.4 million, net of cash acquired, resulting in goodwill of $13.2 million, none of which will be deductible for tax purposes.

The acquisitions listed above include escrow deposits of $37.6 million, which act as security for indemnity and other claims in accordance with the purchase and related escrow agreements.

For the Unitrac, RMS, and Track IQ acquisitions, the following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition. For the MTC and RCL acquisitions, the following table summarizes the final fair value of the assets acquired and liabilities assumed at the date of acquisition.

	Unitrac			RMS			Track IQ			MTC			RCL
In thousands	May 5, 2016			October 30, 2015			October 8, 2015			June 17, 2015			February 4, 2015
Current assets	$	12,526		$	3,605		$	660		$	10,348		$	16,421
Property, plant & equipment	1,768			1,378			187			1,450			12,136
Goodwill	998			8,847			6,649			13,198			14,787
Other intangible assets	1,230			8,621			3,246			7,650			40,403
Other assets	—			—			—			114			—
Total assets acquired	16,522			22,451			10,742			32,760			83,747
Total liabilities assumed	(2,144		)	(3,741		)	(1,430		)	(9,400		)	(5,736		)
Net assets acquired	$	14,378		$	18,710		$	9,312		$	23,360		$	78,011

Of the $61.1 million of total acquired other intangible assets, $53.8 million was assigned to customer relationships, $5.6 million was assigned to trade names, $0.3 million was assigned to non-compete agreements and $1.4 million was assigned to customer backlog. The trade names were determined to have an indefinite useful life, while the customer relationships’ average useful life is 20 years, and the non-compete useful life is five years.

The following unaudited pro forma consolidated financial information presents income statement results as if the acquisitions listed above had occurred on January 1, 2015:

In thousands	Three Months Ended June 30, 2016		Three Months Ended June 30, 2015		Six Months Ended June 30, 2016		Six Months Ended June 30, 2015
Net sales	$	725,602	$	825,466	$	1,505,193	$	1,710,009
Gross profit	237,604		274,251		493,605		537,425
Net income attributable to Wabtec shareholders	90,608		101,534		184,978		200,540
Diluted earnings per share
As Reported	$	1.00	$	1.04	$	2.02	$	2.03
Pro forma	$	1.00	$	1.04	$	2.02	$	2.06

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Inventories

6 Months Ended

Jun. 30, 2016

Inventory Disclosure [Abstract]

Inventories

INVENTORIES

The components of inventory, net of reserves, were:

In thousands	June 30, 2016		December 31, 2015
Raw materials	$	197,026	$	180,128
Work-in-progress	169,968		171,217
Finished goods	126,448		127,229
Total inventories	$	493,442	$	478,574

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Intangibles

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Intangibles

INTANGIBLES

The change in the carrying amount of goodwill by segment for the six months ended June 30, 2016 is as follows:

In thousands	Freight Segment			Transit Segment		Total
Balance at December 31, 2015	$	531,965		$	326,567	$	858,532
Adjustment to preliminary purchase allocation	1,379			1,025		2,404
Acquisitions	2,711			—		2,711
Foreign currency impact	(6,115		)	2,495		(3,620		)
Balance at June 30, 2016	$	529,940		$	330,087	$	860,027

As of June 30, 2016 and December 31, 2015, the Company’s trademarks had a net carrying amount of $167.8 million and $167.4 million, respectively, and the Company believes these intangibles have indefinite lives.

Intangible assets of the Company, other than goodwill and trademarks, consist of the following:

In thousands	June 30, 2016		December 31, 2015
Patents, non-compete and other intangibles, net of accumulated
amortization of $41,411 and $40,936	$	9,434	$	11,403
Customer relationships, net of accumulated amortization
of $78,240 and $70,493	253,126		261,751
Total	$	262,560	$	273,154

The weighted average remaining useful life of patents, customer relationships and other intangibles were 10 years, 16 years and 13 years, respectively. Amortization expense for intangible assets was $5.5 million and $10.8 million for three and six months ended June 30, 2016, and $5.2 million and $10.5 million for the three and six months ended June 30, 2015.

Amortization expense for the five succeeding years is estimated to be as follows (in thousands):

Remainder of 2016	$	10,320
2017	19,351
2018	18,660
2019	17,981
2020	16,803

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Long-Term Debt

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Long-Term Debt

LONG-TERM DEBT

Long-term debt consisted of the following:

In thousands	June 30, 2016		December 31, 2015
4.375% Senior Notes, due 2023, net of unamortized discount and debt issuance costs of $1,818 and $1,947	$	248,182	$	248,053
Revolving Credit Facility, net of unamortized debt issuance costs of $4,181 and $1,542	495,819		443,458
Capital Leases	253		727
Total	744,254		692,238
Less - current portion	115		433
Long-term portion	$	744,139	$	691,805

2016 Refinancing Credit Agreement

On June 22, 2016, the Company amended its existing revolving credit facility with a consortium of commercial banks. This “2016 Refinancing Credit Agreement” provides the Company with a $1.2 billion, 5 year revolving credit facility and a $400.0 million delayed draw term loan “Term Loan”. The Company incurred approximately $2.9 million of deferred financing cost related to the 2016 Refinancing Credit Agreement. The facility expires on June 22, 2021. The 2016 Refinancing Credit Agreement borrowings bear variable interest rates indexed as described below. At June 30, 2016, the Company had available bank borrowing capacity, net of $24.3 million of letters of credit, of approximately $675.7 million, subject to certain financial covenant restrictions.

The Term Loan is available for advance on or after June 22, 2016 until December 31, 2016. The Company will incur a 10 basis point commitment fee from June 22, 2016 until the initial draw or cancellation of the Term Loan.

Under the 2016 Refinancing Credit Agreement, the Company may elect a Base Rate of interest for U.S. Dollar denominated loans or, for certain currencies,  an interest rate based on the London Interbank Offered Rate (“LIBOR”) of interest, or other rates appropriate for such currencies  (in any case, “the Alternate Rate”). The Base Rate adjusts on a daily basis and is the greater of the Federal Funds Effective Rate plus 0.5% per annum, the PNC, N.A. prime rate or the Daily LIBOR Rate plus 100 basis points, plus a margin that ranges from 0 to 75 basis points. The Alternate Rate is based on the quoted rates specific to the applicable currency, plus a margin that ranges from 75 to 175 basis points. Both the Base Rate and Alternate Rate margins are dependent on the Company’s consolidated total indebtedness to cash flow ratios. The initial Base Rate margin is 0 basis points and the Alternate Rate margin is 100 basis points.

At June 30, 2016, the weighted average interest rate on the Company’s variable rate debt was 1.45%.  On January 12, 2012, the Company entered into a forward starting interest rate swap agreement with a notional value of $150.0 million. The effective date of the interest rate swap agreement is July 31, 2013, and the termination date is November 7, 2016. The impact of the interest rate swap agreement converts a portion of the Company’s outstanding debt from a variable rate to a fixed-rate borrowing. During the term of the interest rate swap agreement the interest rate on the notional value will be fixed at 1.415% plus the Alternate Rate margin. On June 5, 2014, the Company entered into a forward starting interest rate swap agreement with a notional value of $150.0 million.  The effective date of the interest rate swap agreement is November 7, 2016, and the termination date is December 19, 2018.  The impact of the interest rate swap agreement converts a portion of the Company’s outstanding debt from a variable rate to a fixed-rate borrowing.  During the term of the interest rate swap agreement the interest rate on the notional value will be fixed at 2.56% plus the Alternate Rate margin.  As for these agreements, the Company is exposed to credit risk in the event of nonperformance by the counterparties.  However, since only the cash interest payments are exchanged, exposure is significantly less than the notional amount.  The counterparties are large financial institutions with an excellent credit rating and history of performance.  The Company currently believes the risk of nonperformance is negligible.

The 2016 Refinancing Credit Agreement limits the Company’s ability to declare or pay cash dividends and prohibits the Company from declaring or making other distributions, subject to certain exceptions. The 2016 Refinancing Credit Agreement contains various other covenants and restrictions including the following limitations: incurrence of additional indebtedness; mergers, consolidations, sales of assets and acquisitions; additional liens; sale and leasebacks; permissible investments, loans and advances; certain debt payments; and imposes a minimum interest expense coverage ratio of 3.0 and a maximum debt to cash flow ratio of 3.25. The Company is in compliance with the restrictions and covenants of the 2016 Refinancing Credit Agreement and does not expect that these measurements will limit the Company in executing our operating activities.

2013 Refinancing Credit Agreement

On December 19, 2013, the Company amended its then existing revolving credit facility with a consortium of commercial banks. This “2013 Refinancing Credit Agreement” provided the Company with a $800.0 million, five-year revolving credit facility. The Company incurred approximately $1.0 million of deferred financing cost related to the 2013 Refinancing Credit Agreement. The 2013 Refinancing Credit Agreement was replaced by the 2016 Refinancing Credit Agreement.

Under the 2013 Refinancing Credit Agreement, the Company could have elected a Base Rate of interest for U.S. Dollar denominated loans or, for certain currencies,  an interest rate based on the LIBOR of interest, or other rates appropriate for such currencies  (in any case, “the Alternate Rate”). The Base Rate adjusted on a daily basis and was the greater of the Federal Funds Effective Rate plus 0.5% per annum, the PNC, N.A. prime rate or the Daily LIBOR Rate plus 100 basis points, plus a margin that ranged from 0 to 75 basis points. The Alternate Rate was based on the quoted rates specific to the applicable currency, plus a margin that ranged from 75 to 175 basis points. Both the Base Rate and Alternate Rate margins were dependent on the Company’s consolidated total indebtedness to cash flow ratios.

4.375% Senior Notes Due August 2023

In August 2013, the Company issued $250.0 million of Senior Notes due in 2023 (the “2013 Notes”).  The 2013 Notes were issued at 99.879% of face value.  Interest on the 2013 Notes accrues at a rate of 4.375% per annum and is payable semi-annually on February 15 and August 15 of each year.  The proceeds were used to repay debt outstanding under the Company’s existing credit agreement, and for general corporate purposes.  The principal balance is due in full at maturity.  The Company incurred $2.6 million of deferred financing costs related to the issuance of the 2013 Notes.  

The 2013 Notes are senior unsecured obligations of the Company and rank pari passu with all existing and future senior debt and senior to all existing and future subordinated indebtedness of the Company. The indenture under which the 2013 Notes were issued contains covenants and restrictions which limit among other things, the following: the incurrence of indebtedness, payment of dividends and certain distributions, sale of assets, change in control, mergers and consolidations and the incurrence of liens.

The Company is in compliance with the restrictions and covenants in the indenture under which the 2013 Notes were issued and expects that these restrictions and covenants will not be any type of limiting factor in executing our operating activities.

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

EMPLOYEE BENEFIT PLANS

Defined Benefit Pension Plans

The Company sponsors defined benefit pension plans that cover certain U.S., Canadian, German and United Kingdom employees and which provide benefits of stated amounts for each year of service of the employee.

The Company uses a December 31 measurement date for the plans.

The following tables provide information regarding the Company’s defined benefit pension plans summarized by U.S. and international components.

	U.S.						International
	Three Months Ended June 30,						Three Months Ended June 30,
In thousands, except percentages	2016			2015			2016			2015
Net periodic benefit cost
Service cost	$	84		$	95		$	255		$	506
Interest cost	369			479			1,450			1,801
Expected return on plan assets	(519		)	(542		)	(2,881		)	(2,434		)
Net amortization/deferrals	229			266			435			655
Net periodic benefit cost	$	163		$	298		$	(741	)	$	528

Assumptions
Discount Rate	4.21	%	3.95	%	3.56	%	3.48	%
Expected long-term rate of return	5.70	%	5.70	%	5.81	%	5.79	%
Rate of compensation increase	3.00	%	3.00	%	3.10	%	3.10	%

	U.S.						International
	Six Months Ended June 30,						Six Months Ended June 30,
In thousands, except percentages	2016			2015			2016			2015
Net periodic benefit cost
Service cost	$	168		$	190		$	728		$	1,012
Interest cost	738			958			2,936			3,590
Expected return on plan assets	(1,038		)	(1,084		)	(5,286		)	(4,850		)
Net amortization/deferrals	458			532			1,055			1,307
Curtailment loss recognized	—			—			240			—
Net periodic benefit cost	$	326		$	596		$	(327	)	$	1,059

Assumptions
Discount Rate	4.21	%	3.95	%	3.56	%	3.48	%
Expected long-term rate of return	5.70	%	5.70	%	5.81	%	5.79	%
Rate of compensation increase	3.00	%	3.00	%	3.10	%	3.10	%

The Company’s funding methods are based on governmental requirements and differ from those methods used to recognize pension expense. The Company expects to contribute $7.0 million to the international plans and does not expect to make a contribution to the U.S. plans during 2016.

Post Retirement Benefit Plans

In addition to providing pension benefits, the Company has provided certain unfunded postretirement health care and life insurance benefits for a portion of North American employees. The Company is not obligated to pay health care and life insurance benefits to individuals who had retired prior to 1990.

The Company uses a December 31 measurement date for all post retirement plans.

The following tables provide information regarding the Company’s postretirement benefit plans summarized by U.S. and international components.

	U.S.						International
	Three Months Ended June 30,						Three Months Ended June 30,
In thousands, except percentages	2016			2015			2016			2015
Net periodic benefit cost
Service cost	$	1		$	2		$	7		$	11
Interest cost	97			308			25			35
Net amortization/deferrals	(105		)	(234		)	(9		)	(10		)
Net periodic benefit (credit) cost	$	(7	)	$	76		$	23		$	36

Assumptions
Discount Rate	3.33	%	3.95	%	3.24	%	3.96	%

	U.S.						International
	Six Months Ended June 30,						Six Months Ended June 30,
In thousands, except percentages	June 30, 2016			June 30, 2015			June 30, 2016			June 30, 2015
Net periodic benefit cost
Service cost	$	2		$	4		$	14		$	22
Interest cost	194			616			50			70
Net amortization/deferrals	(210		)	(468		)	(18		)	(19		)
Net periodic benefit (credit) cost	$	(14	)	$	152		$	46		$	73

Assumptions
Discount Rate	3.33	%	3.95	%	3.24	%	3.96	%

At December 31, 2015, the Company changed the method it uses to estimate the service and interest cost components of net periodic benefit cost for pension and other postretirement benefit costs for all of its U.S. and International plans. Historically, the service and interest cost components were estimated using a single weighted-average discount rate derived from the yield curve used to measure the projected benefit obligation at the beginning of the period. The Company has elected to utilize an approach that discounts the individual expected cash flows underlying the service and interest cost using the applicable spot rates derived from the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. The Company made this change to improve the correlation between projected benefit cash flows and the corresponding yield curve spot rates and to provide a more precise measurement of service and interest costs. The Company estimates the service and interest cost of the pension and OPEB plans will be reduced by approximately $1.6 million in 2016 as a result of this change. The Company has accounted for this change as a change in accounting estimate that is inseparable from a change in accounting principle and accordingly has accounted for it prospectively.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

As of June 30, 2016, the Company maintains employee stock-based compensation plans for stock options, restricted stock, and incentive stock units as governed by the 2011 Stock Incentive Compensation Plan (the “2011 Plan”) and the 2000 Stock Incentive Plan, as amended (the “2000 Plan”). The 2011 Plan has a 10-year term through March 27, 2021 and provides a maximum of 3,800,000 shares for grants or awards. The 2011 Plan was approved by stockholders of Wabtec on May 11, 2011. The Company also maintains a Non-Employee Directors’ Fee and Stock Option Plan (“the Directors Plan”).

Stock-based compensation expense was $9.7 million and $15.0 million for the six months ended June 30, 2016 and 2015, respectively. Included in stock-based compensation expense for the six months ended June 30, 2016 is $0.9 million of expense related to stock options, $3.0 million related to non-vested restricted stock, $1.2 million related to restricted stock units, $4.1 million related to incentive stock units and $0.5 million related to units issued for Directors’ fees. At June 30, 2016, unamortized compensation expense related to those stock options, non-vested restricted shares units and incentive stock units expected to vest totaled $31.0 million and will be recognized over a weighted average period of 1.6 years.

Stock Options Stock options are granted to eligible employees and directors at the fair market value, which is the average of the high and low Wabtec stock price on the date of grant. Under the 2011 Plan and the 2000 Plan, options become exercisable over a four-year vesting period and expire 10 years from the date of grant.

The following table summarizes the Company’s stock option activity and related information for the 2011 Plan, the 2000 Plan and the Directors Plan for the six months ended June 30, 2016:

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic value (in thousands)
Outstanding at December 31, 2015	1,097,323		$	32.70	4.8	$	42,154
Granted	94,115		61.39			828
Exercised	(26,150	)	26.89			1,132
Canceled	(5,321	)	69.37			4
Outstanding at June 30, 2016	1,159,967		35.00		4.7	40,825
Exercisable at June 30, 2016	941,442		27.17		3.9	40,501

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

	Six Months Ended June 30,
	2016		2015
Dividend yield	0.26	%	0.14	%
Risk-free interest rate	1.47	%	1.82	%
Stock price volatility	26.9	%	27.3	%
Expected life (years)	5.0		5.0

The dividend yield is based on the Company’s dividend rate and the current market price of the underlying common stock at the date of grant. Expected life in years is determined from historical stock option exercise data. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free interest rate is based on the U.S. Treasury bond rates for the expected life of the option.

Restricted Stock, Restricted Units and Incentive Stock Beginning in 2006, the Company adopted a restricted stock program. As provided for under the 2011 and 2000 Plans, eligible employees are granted restricted stock that generally vests over four years from the date of grant. Under the Directors Plan, restricted stock units vest one year from the date of grant.

In addition, the Company has issued incentive stock units to eligible employees that vest upon attainment of certain cumulative three year performance goals. Based on the Company’s performance for each three-year period then ended, the incentive stock units can vest and be awarded ranging from 0% to 200% of the initial incentive stock units granted. The incentive stock units included in the table below represent the number of shares that are expected to vest based on the Company’s estimate for meeting those established performance targets. As of June 30, 2016, the Company estimates that it will achieve 119%, 92% and 100% for the incentive stock awards expected to vest based on performance for the three-year periods ending December 31, 2016, 2017, and 2018, respectively, and has recorded incentive compensation expense accordingly. If our estimate of the number of these stock units expected to vest changes in a future accounting period, cumulative compensation expense could increase or decrease and will be recognized in the current period for the elapsed portion of the vesting period and would change future expense for the remaining vesting period.

Compensation expense for the non-vested restricted stock and incentive stock units is based on the average of the high and low Wabtec stock price on the date of grant and recognized over the applicable vesting period.

The following table summarizes the restricted stock activity and related information for the 2011 Plan, the 2000 Plan and the Directors Plan, and incentive stock units activity for the 2011 Plan and the 2000 Plan with related information for the six months ended June 30, 2016:

	Restricted Stock and Units		Incentive Stock Awards		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2015	356,885		541,638		$	65.89
Granted	142,891		167,850		62.20
Vested	(148,753	)	(236,591	)	52.12
Adjustment for incentive stock awards expected to vest	—		(27,784	)	73.28
Canceled	(7,519	)	(5,283	)	70.48
Outstanding at June 30, 2016	343,504		439,830		70.85

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Income Taxes

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The overall effective income tax rate was 28.8% and 30.2% for the three and six months ended June 30, 2016, respectively, and 32.3% and 32.1% for the three and six months ended June 30, 2015, respectively.  For the three and six months ended June 30, 2016, the decrease in the effective rate is primarily the result of a lower earnings mix in higher tax rate jurisdictions.

As of June 30, 2016 and December 31, 2015, the liability for income taxes associated with uncertain tax positions was $10.6 million, of which $4.3 million, if recognized, would favorably affect the Company’s effective tax rate.

The Company includes interest and penalties related to uncertain tax positions in income tax expense. As of June 30, 2016, the total accrued interest and penalties are $2.3 million and $0.2 million, respectively.  As of December 31, 2015, the total accrued interest and penalties were $2.0 million and $0.2 million, respectively.

At this time, the Company believes that it is reasonably possible that unrecognized tax benefits of approximately $2.1 million may change within the next 12 months due to the expiration of statutory review periods and current examinations.  With limited exception, the Company is no longer subject to examination by various U.S. and foreign taxing authorities for years before 2012.

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Earnings Per Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

The computation of basic and diluted earnings per share for net income attributable to Wabtec shareholders is as follows:

	Three Months Ended June 30,
In thousands, except per share data	2016			2015
Numerator
Numerator for basic and diluted earnings per common    share - net income attributable
to Wabtec shareholders	$	90,485		$	101,504
Less: dividends declared - common shares    and non-vested restricted stock	(7,209		)	(5,799		)
Undistributed earnings	83,276			95,705
Percentage allocated to common shareholders (1)	99.7		%	99.7		%
	83,026			95,418
Add: dividends declared - common shares	7,189			5,782
Numerator for basic and diluted earnings per    common share	$	90,215		$	101,200
Denominator
Denominator for basic earnings per common    share - weighted average shares	89,846			96,338
Effect of dilutive securities:
Assumed conversion of dilutive stock-based    compensation plans	713			1,097
Denominator for diluted earnings per common share -
adjusted weighted average shares and assumed conversion	90,559			97,435
Net income per common share attributable to    Wabtec shareholders
Basic	$	1.00		$	1.05
Diluted	$	1.00		$	1.04

(1) Basic weighted-average common shares outstanding	89,846		96,338
Basic weighted-average common shares outstanding and    non-vested restricted stock expected to vest	90,101		96,620
Percentage allocated to common shareholders	99.7	%	99.7	%

	Six Months Ended June 30,
In thousands, except per share data	2016			2015
Numerator
Numerator for basic and diluted earnings per common    share - net income attributable
to Wabtec shareholders	$	184,648		$	197,668
Less: dividends declared - common shares    and non-vested restricted stock	(14,565		)	(11,580		)
Undistributed earnings	170,083			186,088
Percentage allocated to common shareholders (1)	99.7		%	99.6		%
	169,573			185,344
Add: dividends declared - common shares	14,520			11,539
Numerator for basic and diluted earnings per    common share	$	184,093		$	196,883
Denominator
Denominator for basic earnings per common    share - weighted average shares	90,832			96,066
Effect of dilutive securities:
Assumed conversion of dilutive stock-based    compensation plans	796			1,046
Denominator for diluted earnings per common share -
adjusted weighted average shares and assumed conversion	91,628			97,112
Net income per common share attributable to    Wabtec shareholders
Basic	$	2.03		$	2.05
Diluted	$	2.02		$	2.03

(1) Basic weighted-average common shares outstanding	90,832		96,066
Basic weighted-average common shares outstanding and    non-vested restricted stock expected to vest	91,111		96,406
Percentage allocated to common shareholders	99.7	%	99.6	%

The Company’s non-vested restricted stock contains rights to receive nonforfeitable dividends, and thus, are participating securities requiring the two-class method of computing earnings per share. The calculation of earnings per share for common stock shown above excludes the income attributable to the non-vested restricted stock from the numerator and excludes the dilutive impact of those shares from the denominator.

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Warranties

6 Months Ended

Jun. 30, 2016

Product Warranties Disclosures [Abstract]

Warranties

WARRANTIES

The following table reconciles the changes in the Company’s product warranty reserve as follows:

	Six Months Ended June 30,
In thousands	2016			2015
Balance at December 31, 2015 and 2014, respectively	$	92,064		$	87,849
Warranty expense	17,853			14,043
Acquisitions	7,547			6,001
Warranty claim payments	(20,422		)	(10,538		)
Foreign currency impact/other	(696		)	(702		)
Balance at June 30, 2016 and 2015, respectively	$	96,346		$	96,653

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Derivative Financial Instruments and Hedging

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Hedging

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING

Foreign Currency Hedging The Company uses forward contracts to mitigate its foreign currency exchange rate exposure due to forecasted sales of finished goods and future settlement of foreign currency denominated assets and liabilities. Derivatives used to hedge forecasted transactions and specific cash flows associated with foreign currency denominated financial assets and liabilities that meet the criteria for hedge accounting are designated as cash flow hedges. The effective portion of gain and losses is deferred as a component of accumulated other comprehensive income and is recognized in earnings at the time the hedged item affects earnings, in the same line item as the underlying hedged item. At June 30, 2016, the Company had outstanding foreign exchange contracts with a notional value of $10.8 million. The fair value of these hedges was a net liability of $0.7 million at June 30, 2016. The notional amount and fair value of foreign exchange contracts at December 31, 2015 was not material. The contracts are scheduled to mature within two years. For the period ended June 30, 2016, the amount reclassified into income was not material.

Interest Rate Hedging The Company uses interest rate swaps to manage interest rate exposures. The Company is exposed to interest rate volatility with regard to existing floating rate debt. Primary exposure includes the London Interbank Offered Rates (LIBOR). Derivatives used to hedge risk associated with changes in the fair value of certain variable-rate debt are primarily designated as fair value hedges. Consequently, changes in the fair value of these derivatives, along with changes in the fair value of debt obligations are recognized in current period earnings. See long-term debt footnote fair value measurement footnote for further information on current interest rate swaps.

As of June 30, 2016, the Company has recorded a current liability of $6.6 million and a corresponding offset in accumulated other comprehensive loss of $4.0 million, net of tax, related to these agreements.

Other Activities The Company enters into certain derivative contracts in accordance with its risk management strategy that do not meet the criteria for hedge accounting but which have the impact of largely mitigating foreign currency exposure. At June 30, 2016, the Company maintained foreign currency contracts with a notional value of $21.1 million. These foreign exchange contracts are accounted for on a full mark to market basis through earnings, with gains and losses recorded as a component of other expense, net. The net unrealized loss related to these contracts was $1.3 million for the period ended June 30, 2016. The notional amount and fair value of foreign exchange contracts that did not meet the criteria for hedge accounting at December 31, 2015 was not material. These contracts are scheduled to mature within one year.

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Fair Value Measurement and Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurement and Fair Value of Financial Instruments

FAIR VALUE MEASUREMENT AND FAIR VALUE OF FINANCIAL INSTRUMENTS

ASC 820 “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value and explains the related disclosure requirements. ASC 820 indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model.

Valuation Hierarchy ASC 820 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following table provides the liabilities carried at fair value measured on a recurring basis as of June 30, 2016, which are included in other current liabilities on the Condensed Consolidated Balance sheet:

			Fair Value Measurements at June 30, 2016 Using
In thousands	Total Carrying Value at June 30, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Interest rate swap agreements	$	6,592	$	—	$	6,592	$	—
Total	$	6,592	$	—	$	6,592	$	—

The following table provides the liabilities carried at fair value measured on a recurring basis as of December 31, 2015, which is included in other current liabilities on the Condensed Consolidated Balance sheet:

			Fair Value Measurements at December 31, 2015 Using
In thousands	Total Carrying Value at December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Interest rate swap agreements	$	4,474	$	—	$	4,474	$	—
Total	$	4,474	$	—	$	4,474	$	—

To reduce the impact of interest rate changes on a portion of its variable-rate debt, the Company entered into interest rate swaps which effectively converted a portion of the debt from variable to fixed-rate borrowings during the term of the swap contracts. For certain derivative contracts whose fair values are based upon trades in liquid markets, such as interest rate swaps, valuation model inputs can generally be verified and valuation techniques do not involve significant management judgment. The fair values of such financial instruments are generally classified within Level 2 of the fair value hierarchy.

As a result of our global operating activities the Company is exposed to market risks from changes in foreign currency exchange rates, which may adversely affect our operating results and financial position. When deemed appropriate, the Company minimizes these risks through entering into foreign currency forward contracts. The foreign currency forward contracts are valued using broker quotations, or market transactions in either the listed or over-the counter markets. As such, these derivative instruments are classified within Level 2.

The Company’s cash and cash equivalents are highly liquid investments purchased with an original maturity of three months or less and are considered Level 1 on the fair value valuation hierarchy. The fair value of cash and cash equivalents approximated the carrying value at June 30, 2016 and December 31, 2015. The Company’s defined benefit pension plan assets consist primarily of equity security funds, debt security funds and temporary cash and cash equivalent investments. Generally, all plan assets are considered Level 2 based on the fair value valuation hierarchy. These investments are comprised of a number of investment funds that invest in a diverse portfolio of assets including equity securities, corporate and governmental bonds, and money markets.  Trusts are valued at the net asset value (“NAV”) as determined by their custodian.  NAV represent the accumulation of the unadjusted quoted close prices on the reporting date for the underlying investments divided by the total shares outstanding at the reporting dates.  The 2013 Notes are considered Level 2 based on the fair value valuation hierarchy.

The estimated fair values and related carrying values of the Company’s financial instruments are as follows:

	June 30, 2016				December 31, 2015
In thousands	Carry Value		Fair Value		Carry Value		Fair Value
Interest rate swap agreement	$	6,592	$	6,592	$	4,474	$	4,474
4.375% Senior Notes	248,182		267,613		248,053		254,075

The fair value of the Company’s interest rate swap agreements and the 2013 Notes were based on dealer quotes and represent the estimated amount the Company would pay to the counterparty to terminate the agreement.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Claims have been filed against the Company and certain of its affiliates in various jurisdictions across the United States by persons alleging bodily injury as a result of exposure to asbestos-containing products. Further information and detail on these claims is described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, in Note 19 therein, filed on February 19, 2016. During the first six months of 2016, there were no material changes to the information described in the Form 10-K.

The Company is also subject to litigation from time to time arising out of its operations in the ordinary course of business, including claims based on product liability, contracts, intellectual property, or other causes of action. Further information and detail on any potentially material litigation is as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, in Note 19 therein, filed on February 19, 2016. Except as described below, there have been no material changes to the information described in the Form 10-K.

On April 21, 2016, Siemens Industry, Inc. (Siemens) filed a lawsuit against the Company in federal district court in Delaware alleging that the Company has infringed seven (7) patents owned by Siemens, all of which are related to Positive Train Control technology. Wabtec filed its answer to the complaint on June 17, 2016. The case is in a very preliminary stage. Wabtec believes the claims are without merit and intends to vigorously defend itself.

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Segment Information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment Information

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 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, 2016 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	397,067	$	326,534	$	—		$	723,601
Intersegment sales/(elimination)	13,616		4,106		(17,722		)	—
Total sales	$	410,683	$	330,640	$	(17,722	)	$	723,601
Income (loss) from operations	$	92,317	$	52,146	$	(11,179	)	$	133,284
Interest expense and other, net	—		—		(6,198		)	(6,198		)
Income (loss) from operations before income taxes	$	92,317	$	52,146	$	(17,377	)	$	127,086

Segment financial information for the three months ended June 30, 2015 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	534,674	$	312,354	$	—		$	847,028
Intersegment sales/(elimination)	9,029		2,799		(11,828		)	—
Total sales	$	543,703	$	315,153	$	(11,828	)	$	847,028
Income (loss) from operations	$	125,232	$	37,514	$	(6,886	)	$	155,860
Interest expense and other, net	—		—		(5,928		)	(5,928		)
Income (loss) from operations before income taxes	$	125,232	$	37,514	$	(12,814	)	$	149,932

Segment financial information for the six months ended June 30, 2016 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	839,736	$	655,896	$	—		$	1,495,632
Intersegment sales/(elimination)	19,424		5,783		(25,207		)	—
Total sales	$	859,160	$	661,679	$	(25,207	)	$	1,495,632
Income (loss) from operations	$	198,991	$	97,156	$	(20,682	)	$	275,465
Interest expense and other, net	—		—		(10,915		)	(10,915		)
Income (loss) from operations before income taxes	$	198,991	$	97,156	$	(31,597	)	$	264,550

Segment financial information for the six months ended June 30, 2015 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	1,046,561	$	619,061	$	—		$	1,665,622
Intersegment sales/(elimination)	17,957		5,383		(23,340		)	—
Total sales	$	1,064,518	$	624,444	$	(23,340	)	$	1,665,622
Income (loss) from operations	$	236,801	$	78,937	$	(11,458	)	$	304,280
Interest expense and other, net	—		—		(13,100		)	(13,100		)
Income (loss) from operations before income taxes	$	236,801	$	78,937	$	(24,558	)	$	291,180

Sales by product are as follows:

	Three Months Ended June 30,
In thousands	2016		2015
Specialty Products & Electronics	$	339,188	$	448,292
Remanufacturing, Overhaul & Build	156,981		151,859
Brake Products	141,979		159,034
Other Transit Products	49,643		50,864
Other	35,810		36,979
Total sales	$	723,601	$	847,028

	Six Months Ended June 30,
In thousands	2016		2015
Specialty Products & Electronics	$	717,457	$	873,829
Remanufacturing, Overhaul & Build	315,014		288,549
Brake Products	293,885		326,431
Other Transit Products	98,438		97,667
Other	70,838		79,146
Total sales	$	1,495,632	$	1,665,622

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Other Income (Expense), Net

6 Months Ended

Jun. 30, 2016

Other Income and Expenses [Abstract]

Other Income (Expense), Net

OTHER INCOME (EXPENSE), NET

The components of other income (expense) are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
In thousands	2016			2015			2016			2015
Foreign currency loss	$	(1,530	)	$	(1,541	)	$	(1,368	)	$	(3,935	)
Other miscellaneous income (expense)	301			(346		)	293			(818		)
Total other expense, net	$	(1,229	)	$	(1,887	)	$	(1,075	)	$	(4,753	)

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Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Basis of Presentation

The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles and the rules and regulations of the Securities and Exchange Commission and include the accounts of Wabtec and its majority owned subsidiaries. These condensed consolidated interim financial statements do not include all of the information and footnotes required for complete financial statements. In management’s opinion, these financial statements reflect all adjustments of a normal, recurring nature necessary for a fair presentation of the results for the interim periods presented. Results for these interim periods are not necessarily indicative of results to be expected for the full year.

The Company operates on a four-four-five week accounting quarter, and the quarters end on or about March 31, June 30, September 30, and December 31.

The notes included herein should be read in conjunction with the audited consolidated financial statements included in Wabtec’s Annual Report on Form 10-K for the year ended December 31, 2015. The December 31, 2015 information has been derived from the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Revenue Recognition

Certain pre-production costs relating to long-term production and supply contracts have been deferred and will be recognized over the life of the contracts.

Revenue is recognized in accordance with Accounting Standards Codification (“ASC”) 605 “Revenue Recognition.” Revenue is recognized when products have been shipped to the respective customers, title has passed and the price for the product has been determined.

In general, the Company recognizes revenues on long-term contracts based on the percentage of completion method of accounting. The units-of-delivery method or other input-based or output-based measures, as appropriate, are used to measure the progress toward completion of individual contracts. Contract revenues and cost estimates are reviewed and revised at a minimum quarterly and adjustments are reflected in the accounting period as such amounts are determined. Provisions are made currently for estimated losses on uncompleted contracts

Reclassifications

Certain prior year amounts have been reclassified, where necessary, to conform to the current year presentation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates.

Financial Derivatives and Hedging Activities

As part of its risk management strategy, the Company utilizes derivative financial instruments to manage its exposure due to changes in foreign currencies and interest rates. For further information regarding financial derivatives and hedging activities, refer to Footnotes 13 and 14.

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries, except for the Company’s Mexican operations whose functional currency is the U.S. Dollar, are translated at the rate of exchange in effect on the balance sheet date while income and expenses are translated at the average rates of exchange prevailing during the period. Foreign currency gains and losses resulting from transactions and the translation of financial statements are recorded in the Company’s consolidated financial statements based upon the provisions of ASC 830 “Foreign Currency Matters.” The effects of currency exchange rate changes on intercompany transactions and balances of a long-term investment nature are accumulated and carried as a component of accumulated other comprehensive loss. The effects of currency exchange rate changes on intercompany transactions that are denominated in a currency other than an entity’s functional currency are charged or credited to earnings.

Non-controlling Interests

In accordance with ASC 810 "Consolidation", the Company has classified non-controlling interests as equity on our condensed consolidated balance sheets as of June 30, 2016 and December 31, 2015.

Recent Accounting Pronouncements

In April 2015, the FASB issued Accounting Standards Update No. 2015-3, “Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-3”) which changes the presentation of debt issuance costs in financial statements to present such costs as a direct deduction from the related debt liability rather than as an asset.  ASU 2015-3 became effective for public companies during interim and annual reporting periods beginning after December 15, 2015.  The Company retrospectively adopted this ASU on January 1, 2016. The adoption of this ASU did not have a material impact to our consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-9, “Revenue from Contract with Customers.”  The ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer.  The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity’s nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.  The Board voted to propose that the standard would take effect for reporting periods beginning after December 15, 2017 and that early adoption would be allowed as of the original effective date. The Company is currently evaluating the impact the pronouncement will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (ASU 2016-09”). The ASU simplifies several aspects for the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The ASU is effective for public companies in the fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

Other Comprehensive Income

Comprehensive income is defined as net income and all other non-owner changes in shareholders’ equity.

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Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Changes in Accumulated Other Comprehensive Loss by Component, Net of Tax

The changes in accumulated other comprehensive loss by component, net of tax, for the six months ended June 30, 2016 are as follows:

In thousands	Foreign currency translation			Derivative contracts			Pension and post retirement benefit plans			Total
Balance at December 31, 2015	$	(227,349	)	$	(2,987	)	$	(46,383	)	$	(276,719	)
Other comprehensive (loss) before reclassifications	(10,119		)	(2,758		)	(2,293		)	(15,170		)
Amounts reclassified from accumulated other
comprehensive income	—			647			896			1,543
Net current period other comprehensive (loss)	(10,119		)	(2,111		)	(1,397		)	(13,627		)
Balance at June 30, 2016	$	(237,468	)	$	(5,098	)	$	(47,780	)	$	(290,346	)

Reclassifications Out of Accumulated Other Comprehensive Loss

Reclassifications out of accumulated other comprehensive loss for the three months ended June 30, 2016 are as follows:

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	$	(422	)	Cost of sales
Amortization of net loss	971			Cost of sales
	549			Income from Operations
	(157		)	Income tax expense
	$	392		Net income
Derivative contracts
Realized loss on derivative contracts	$	453		Interest expense, net
	(130		)	Income tax expense
	$	323		Net income

Reclassifications out of accumulated other comprehensive loss for the six months ended June 30, 2016 are as follows:

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	$	(807	)	Cost of sales
Amortization of net loss	2,091			Cost of sales
	1,284			Income from Operations
	(388		)	Income tax expense
	$	896		Net income
Derivative contracts
Realized loss on derivative contracts	$	927		Interest expense, net
	(280		)	Income tax expense
	$	647		Net income

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Summary of Preliminary Estimated Fair Values of the Assets Acquired and Liabilities Assumed at the Date of the Acquisition

For the Unitrac, RMS, and Track IQ acquisitions, the following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition. For the MTC and RCL acquisitions, the following table summarizes the final fair value of the assets acquired and liabilities assumed at the date of acquisition.

	Unitrac			RMS			Track IQ			MTC			RCL
In thousands	May 5, 2016			October 30, 2015			October 8, 2015			June 17, 2015			February 4, 2015
Current assets	$	12,526		$	3,605		$	660		$	10,348		$	16,421
Property, plant & equipment	1,768			1,378			187			1,450			12,136
Goodwill	998			8,847			6,649			13,198			14,787
Other intangible assets	1,230			8,621			3,246			7,650			40,403
Other assets	—			—			—			114			—
Total assets acquired	16,522			22,451			10,742			32,760			83,747
Total liabilities assumed	(2,144		)	(3,741		)	(1,430		)	(9,400		)	(5,736		)
Net assets acquired	$	14,378		$	18,710		$	9,312		$	23,360		$	78,011

Pro Forma Financial Information

The following unaudited pro forma consolidated financial information presents income statement results as if the acquisitions listed above had occurred on January 1, 2015:

In thousands	Three Months Ended June 30, 2016		Three Months Ended June 30, 2015		Six Months Ended June 30, 2016		Six Months Ended June 30, 2015
Net sales	$	725,602	$	825,466	$	1,505,193	$	1,710,009
Gross profit	237,604		274,251		493,605		537,425
Net income attributable to Wabtec shareholders	90,608		101,534		184,978		200,540
Diluted earnings per share
As Reported	$	1.00	$	1.04	$	2.02	$	2.03
Pro forma	$	1.00	$	1.04	$	2.02	$	2.06

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Inventories (Tables)

6 Months Ended

Jun. 30, 2016

Inventory Disclosure [Abstract]

Components of Inventory, Net of Reserves

The components of inventory, net of reserves, were:

In thousands	June 30, 2016		December 31, 2015
Raw materials	$	197,026	$	180,128
Work-in-progress	169,968		171,217
Finished goods	126,448		127,229
Total inventories	$	493,442	$	478,574

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Intangibles (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Change in the Carrying Amount of Goodwill by Segment

The change in the carrying amount of goodwill by segment for the six months ended June 30, 2016 is as follows:

In thousands	Freight Segment			Transit Segment		Total
Balance at December 31, 2015	$	531,965		$	326,567	$	858,532
Adjustment to preliminary purchase allocation	1,379			1,025		2,404
Acquisitions	2,711			—		2,711
Foreign currency impact	(6,115		)	2,495		(3,620		)
Balance at June 30, 2016	$	529,940		$	330,087	$	860,027

Intangible Assets of the Company, Other Than Goodwill and Trademarks

Intangible assets of the Company, other than goodwill and trademarks, consist of the following:

In thousands	June 30, 2016		December 31, 2015
Patents, non-compete and other intangibles, net of accumulated
amortization of $41,411 and $40,936	$	9,434	$	11,403
Customer relationships, net of accumulated amortization
of $78,240 and $70,493	253,126		261,751
Total	$	262,560	$	273,154

Amortization Expense

Amortization expense for the five succeeding years is estimated to be as follows (in thousands):

Remainder of 2016	$	10,320
2017	19,351
2018	18,660
2019	17,981
2020	16,803

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Schedule of Long-term Debt

Long-term debt consisted of the following:

In thousands	June 30, 2016		December 31, 2015
4.375% Senior Notes, due 2023, net of unamortized discount and debt issuance costs of $1,818 and $1,947	$	248,182	$	248,053
Revolving Credit Facility, net of unamortized debt issuance costs of $4,181 and $1,542	495,819		443,458
Capital Leases	253		727
Total	744,254		692,238
Less - current portion	115		433
Long-term portion	$	744,139	$	691,805

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Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2016

Defined Benefit Pension Plans

Components of Net Periodic Benefit Cost

The following tables provide information regarding the Company’s defined benefit pension plans summarized by U.S. and international components.

	U.S.						International
	Three Months Ended June 30,						Three Months Ended June 30,
In thousands, except percentages	2016			2015			2016			2015
Net periodic benefit cost
Service cost	$	84		$	95		$	255		$	506
Interest cost	369			479			1,450			1,801
Expected return on plan assets	(519		)	(542		)	(2,881		)	(2,434		)
Net amortization/deferrals	229			266			435			655
Net periodic benefit cost	$	163		$	298		$	(741	)	$	528

Assumptions
Discount Rate	4.21	%	3.95	%	3.56	%	3.48	%
Expected long-term rate of return	5.70	%	5.70	%	5.81	%	5.79	%
Rate of compensation increase	3.00	%	3.00	%	3.10	%	3.10	%

	U.S.						International
	Six Months Ended June 30,						Six Months Ended June 30,
In thousands, except percentages	2016			2015			2016			2015
Net periodic benefit cost
Service cost	$	168		$	190		$	728		$	1,012
Interest cost	738			958			2,936			3,590
Expected return on plan assets	(1,038		)	(1,084		)	(5,286		)	(4,850		)
Net amortization/deferrals	458			532			1,055			1,307
Curtailment loss recognized	—			—			240			—
Net periodic benefit cost	$	326		$	596		$	(327	)	$	1,059

Assumptions
Discount Rate	4.21	%	3.95	%	3.56	%	3.48	%
Expected long-term rate of return	5.70	%	5.70	%	5.81	%	5.79	%
Rate of compensation increase	3.00	%	3.00	%	3.10	%	3.10	%

Post Retirement Benefit Plans

Components of Net Periodic Benefit Cost

The following tables provide information regarding the Company’s postretirement benefit plans summarized by U.S. and international components.

	U.S.						International
	Three Months Ended June 30,						Three Months Ended June 30,
In thousands, except percentages	2016			2015			2016			2015
Net periodic benefit cost
Service cost	$	1		$	2		$	7		$	11
Interest cost	97			308			25			35
Net amortization/deferrals	(105		)	(234		)	(9		)	(10		)
Net periodic benefit (credit) cost	$	(7	)	$	76		$	23		$	36

Assumptions
Discount Rate	3.33	%	3.95	%	3.24	%	3.96	%

	U.S.						International
	Six Months Ended June 30,						Six Months Ended June 30,
In thousands, except percentages	June 30, 2016			June 30, 2015			June 30, 2016			June 30, 2015
Net periodic benefit cost
Service cost	$	2		$	4		$	14		$	22
Interest cost	194			616			50			70
Net amortization/deferrals	(210		)	(468		)	(18		)	(19		)
Net periodic benefit (credit) cost	$	(14	)	$	152		$	46		$	73

Assumptions
Discount Rate	3.33	%	3.95	%	3.24	%	3.96	%

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Option Activity

The following table summarizes the Company’s stock option activity and related information for the 2011 Plan, the 2000 Plan and the Directors Plan for the six months ended June 30, 2016:

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic value (in thousands)
Outstanding at December 31, 2015	1,097,323		$	32.70	4.8	$	42,154
Granted	94,115		61.39			828
Exercised	(26,150	)	26.89			1,132
Canceled	(5,321	)	69.37			4
Outstanding at June 30, 2016	1,159,967		35.00		4.7	40,825
Exercisable at June 30, 2016	941,442		27.17		3.9	40,501

Share-Based Fair Value of Each Option Grant Weighted-Average Assumptions

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

	Six Months Ended June 30,
	2016		2015
Dividend yield	0.26	%	0.14	%
Risk-free interest rate	1.47	%	1.82	%
Stock price volatility	26.9	%	27.3	%
Expected life (years)	5.0		5.0

Restricted Stock Activity and Incentive Stock Awards Activity

The following table summarizes the restricted stock activity and related information for the 2011 Plan, the 2000 Plan and the Directors Plan, and incentive stock units activity for the 2011 Plan and the 2000 Plan with related information for the six months ended June 30, 2016:

	Restricted Stock and Units		Incentive Stock Awards		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2015	356,885		541,638		$	65.89
Granted	142,891		167,850		62.20
Vested	(148,753	)	(236,591	)	52.12
Adjustment for incentive stock awards expected to vest	—		(27,784	)	73.28
Canceled	(7,519	)	(5,283	)	70.48
Outstanding at June 30, 2016	343,504		439,830		70.85

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Computation of Earnings Per Share

The computation of basic and diluted earnings per share for net income attributable to Wabtec shareholders is as follows:

	Three Months Ended June 30,
In thousands, except per share data	2016			2015
Numerator
Numerator for basic and diluted earnings per common    share - net income attributable
to Wabtec shareholders	$	90,485		$	101,504
Less: dividends declared - common shares    and non-vested restricted stock	(7,209		)	(5,799		)
Undistributed earnings	83,276			95,705
Percentage allocated to common shareholders (1)	99.7		%	99.7		%
	83,026			95,418
Add: dividends declared - common shares	7,189			5,782
Numerator for basic and diluted earnings per    common share	$	90,215		$	101,200
Denominator
Denominator for basic earnings per common    share - weighted average shares	89,846			96,338
Effect of dilutive securities:
Assumed conversion of dilutive stock-based    compensation plans	713			1,097
Denominator for diluted earnings per common share -
adjusted weighted average shares and assumed conversion	90,559			97,435
Net income per common share attributable to    Wabtec shareholders
Basic	$	1.00		$	1.05
Diluted	$	1.00		$	1.04

(1) Basic weighted-average common shares outstanding	89,846		96,338
Basic weighted-average common shares outstanding and    non-vested restricted stock expected to vest	90,101		96,620
Percentage allocated to common shareholders	99.7	%	99.7	%

	Six Months Ended June 30,
In thousands, except per share data	2016			2015
Numerator
Numerator for basic and diluted earnings per common    share - net income attributable
to Wabtec shareholders	$	184,648		$	197,668
Less: dividends declared - common shares    and non-vested restricted stock	(14,565		)	(11,580		)
Undistributed earnings	170,083			186,088
Percentage allocated to common shareholders (1)	99.7		%	99.6		%
	169,573			185,344
Add: dividends declared - common shares	14,520			11,539
Numerator for basic and diluted earnings per    common share	$	184,093		$	196,883
Denominator
Denominator for basic earnings per common    share - weighted average shares	90,832			96,066
Effect of dilutive securities:
Assumed conversion of dilutive stock-based    compensation plans	796			1,046
Denominator for diluted earnings per common share -
adjusted weighted average shares and assumed conversion	91,628			97,112
Net income per common share attributable to    Wabtec shareholders
Basic	$	2.03		$	2.05
Diluted	$	2.02		$	2.03

(1) Basic weighted-average common shares outstanding	90,832		96,066
Basic weighted-average common shares outstanding and    non-vested restricted stock expected to vest	91,111		96,406
Percentage allocated to common shareholders	99.7	%	99.6	%

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Warranties (Tables)

6 Months Ended

Jun. 30, 2016

Product Warranties Disclosures [Abstract]

Changes in Product Warranty Reserve

The following table reconciles the changes in the Company’s product warranty reserve as follows:

	Six Months Ended June 30,
In thousands	2016			2015
Balance at December 31, 2015 and 2014, respectively	$	92,064		$	87,849
Warranty expense	17,853			14,043
Acquisitions	7,547			6,001
Warranty claim payments	(20,422		)	(10,538		)
Foreign currency impact/other	(696		)	(702		)
Balance at June 30, 2016 and 2015, respectively	$	96,346		$	96,653

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Fair Value Measurement and Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Liabilities Carried at Fair Value Measured on Recurring Basis

The following table provides the liabilities carried at fair value measured on a recurring basis as of June 30, 2016, which are included in other current liabilities on the Condensed Consolidated Balance sheet:

			Fair Value Measurements at June 30, 2016 Using
In thousands	Total Carrying Value at June 30, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Interest rate swap agreements	$	6,592	$	—	$	6,592	$	—
Total	$	6,592	$	—	$	6,592	$	—

The following table provides the liabilities carried at fair value measured on a recurring basis as of December 31, 2015, which is included in other current liabilities on the Condensed Consolidated Balance sheet:

			Fair Value Measurements at December 31, 2015 Using
In thousands	Total Carrying Value at December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Interest rate swap agreements	$	4,474	$	—	$	4,474	$	—
Total	$	4,474	$	—	$	4,474	$	—

Estimated Fair Values and Related Carrying Values of Financial Instruments

The estimated fair values and related carrying values of the Company’s financial instruments are as follows:

	June 30, 2016				December 31, 2015
In thousands	Carry Value		Fair Value		Carry Value		Fair Value
Interest rate swap agreement	$	6,592	$	6,592	$	4,474	$	4,474
4.375% Senior Notes	248,182		267,613		248,053		254,075

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment Financial Information

Segment financial information for the three months ended June 30, 2016 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	397,067	$	326,534	$	—		$	723,601
Intersegment sales/(elimination)	13,616		4,106		(17,722		)	—
Total sales	$	410,683	$	330,640	$	(17,722	)	$	723,601
Income (loss) from operations	$	92,317	$	52,146	$	(11,179	)	$	133,284
Interest expense and other, net	—		—		(6,198		)	(6,198		)
Income (loss) from operations before income taxes	$	92,317	$	52,146	$	(17,377	)	$	127,086

Segment financial information for the three months ended June 30, 2015 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	534,674	$	312,354	$	—		$	847,028
Intersegment sales/(elimination)	9,029		2,799		(11,828		)	—
Total sales	$	543,703	$	315,153	$	(11,828	)	$	847,028
Income (loss) from operations	$	125,232	$	37,514	$	(6,886	)	$	155,860
Interest expense and other, net	—		—		(5,928		)	(5,928		)
Income (loss) from operations before income taxes	$	125,232	$	37,514	$	(12,814	)	$	149,932

Segment financial information for the six months ended June 30, 2016 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	839,736	$	655,896	$	—		$	1,495,632
Intersegment sales/(elimination)	19,424		5,783		(25,207		)	—
Total sales	$	859,160	$	661,679	$	(25,207	)	$	1,495,632
Income (loss) from operations	$	198,991	$	97,156	$	(20,682	)	$	275,465
Interest expense and other, net	—		—		(10,915		)	(10,915		)
Income (loss) from operations before income taxes	$	198,991	$	97,156	$	(31,597	)	$	264,550

Segment financial information for the six months ended June 30, 2015 is as follows:

In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	1,046,561	$	619,061	$	—		$	1,665,622
Intersegment sales/(elimination)	17,957		5,383		(23,340		)	—
Total sales	$	1,064,518	$	624,444	$	(23,340	)	$	1,665,622
Income (loss) from operations	$	236,801	$	78,937	$	(11,458	)	$	304,280
Interest expense and other, net	—		—		(13,100		)	(13,100		)
Income (loss) from operations before income taxes	$	236,801	$	78,937	$	(24,558	)	$	291,180

Sales by Product

Sales by product are as follows:

	Three Months Ended June 30,
In thousands	2016		2015
Specialty Products & Electronics	$	339,188	$	448,292
Remanufacturing, Overhaul & Build	156,981		151,859
Brake Products	141,979		159,034
Other Transit Products	49,643		50,864
Other	35,810		36,979
Total sales	$	723,601	$	847,028

	Six Months Ended June 30,
In thousands	2016		2015
Specialty Products & Electronics	$	717,457	$	873,829
Remanufacturing, Overhaul & Build	315,014		288,549
Brake Products	293,885		326,431
Other Transit Products	98,438		97,667
Other	70,838		79,146
Total sales	$	1,495,632	$	1,665,622

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Other Income (Expense), Net (Tables)

6 Months Ended

Jun. 30, 2016

Other Income and Expenses [Abstract]

Components of Other Income (Expense)

The components of other income (expense) are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
In thousands	2016			2015			2016			2015
Foreign currency loss	$	(1,530	)	$	(1,541	)	$	(1,368	)	$	(3,935	)
Other miscellaneous income (expense)	301			(346		)	293			(818		)
Total other expense, net	$	(1,229	)	$	(1,887	)	$	(1,075	)	$	(4,753	)

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Business - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2016 country
Product Information [Line Items]
Number of countries company operates	20
Sales Revenue Outside United States | Customer Concentration Risk
Product Information [Line Items]
Percent of revenue from customers outside the U.S.	50.00%
Minimum
Product Information [Line Items]
Number of countries where product is found (more than)	100

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Proposed Transaction with Faiveley Transport S.A. (Details) € / shares in Units, $ in Thousands, € in Millions	Jul. 27, 2015 USD ($) employee country	Jun. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 30, 2015 EUR (€)	Oct. 06, 2015	Jul. 27, 2015 € / shares shares
Business Acquisition [Line Items]
Convertible preferred stock, conversion period	3 years
Deposit in escrow		$ 206,212	$ 202,942
Business acquisition consolidated revenue after acquisition	$ 4,500,000
Faiveley Transport
Business Acquisition [Line Items]
Annual sales of Faiveley	$ 1,200,000
Number of employees (more than) | employee	5,700
Number of countries Faiveley operates in | country	24
Percentage of voting interests in Faiveley					51.00%	51.00%
Purchase price per share (in euros per share) | € / shares						€ 100
Percentage of business acquisition consideration payable in cash						25.00%
Percentage of business acquisition consideration payable in preferred stock						75.00%
Preferred stock annual dividend rate	1.00%
Number of common shares issued for conversion of one acquiree common share | shares						1.125
Minority interests percentage for delisting of acquiree company (less than)	5.00%
Business combination, consideration transferred	$ 1,800,000
Deposit in escrow | €				€ 186.9

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Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Summary Of Significant Accounting Policies [Line Items]
Unbilled accounts receivable	$ 145,451	$ 103,814
Customer deposits	110,968	106,127
Provisions for loss contracts	16,700	11,800
Deferred pre-production costs	$ 28,800	$ 30,300

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Accounting Policies - Accumulated Other Comprehensive Loss by Component, Net of Tax (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			$ 1,699,607
Other comprehensive (loss) income, net of tax	$ (41,249)	$ 35,889	(13,627)	$ (50,210)
Ending balance	1,722,537		1,722,537
Foreign currency translation
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			(227,349)
Other comprehensive (loss) before reclassifications			(10,119)
Amounts reclassified from accumulated other comprehensive income			0
Other comprehensive (loss) income, net of tax			(10,119)
Ending balance	(237,468)		(237,468)
Derivative contracts
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			(2,987)
Other comprehensive (loss) before reclassifications			(2,758)
Amounts reclassified from accumulated other comprehensive income			647
Other comprehensive (loss) income, net of tax			(2,111)
Ending balance	(5,098)		(5,098)
Pension and post retirement benefit plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			(46,383)
Other comprehensive (loss) before reclassifications			(2,293)
Amounts reclassified from accumulated other comprehensive income			896
Other comprehensive (loss) income, net of tax			(1,397)
Ending balance	(47,780)		(47,780)
AOCI Attributable to Parent
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			(276,719)
Other comprehensive (loss) before reclassifications			(15,170)
Amounts reclassified from accumulated other comprehensive income			1,543
Other comprehensive (loss) income, net of tax			(13,627)
Ending balance	$ (290,346)		$ (290,346)

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Accounting Policies - Reclassifications Out of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items]
Cost of sales	$ 486,212	$ 579,264	$ 1,003,063	$ 1,142,503
Income from Operations	127,086	149,932	264,550	291,180
Income tax expense	(36,601)	(48,428)	(79,902)	(93,512)
Interest expense, net	(4,969)	(4,041)	(9,840)	(8,347)
Net income attributable to Wabtec shareholders	90,485	$ 101,504	184,648	$ 197,668
Reclassification out of Accumulated Other Comprehensive Income | Pension and post retirement benefit plans
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items]
Income from Operations	549		1,284
Income tax expense	(157)		(388)
Net income attributable to Wabtec shareholders	392		896
Reclassification out of Accumulated Other Comprehensive Income | Amortization of initial net obligation and prior service cost
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items]
Cost of sales	(422)		(807)
Reclassification out of Accumulated Other Comprehensive Income | Amortization of net loss
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items]
Cost of sales	971		2,091
Reclassification out of Accumulated Other Comprehensive Income | Derivative contracts
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items]
Income tax expense	(130)		(280)
Interest expense, net	453		927
Net income attributable to Wabtec shareholders	$ 323		$ 647

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Acquisitions - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2016	May 05, 2016	Dec. 31, 2015	Oct. 30, 2015	Oct. 08, 2015	Jun. 17, 2015	Feb. 04, 2015
Business Acquisition [Line Items]
Goodwill	$ 860,027,000		$ 858,532,000
Escrow deposits	206,212,000		$ 202,942,000
Acquired indefinite-lived intangible assets	61,100,000
Trade Names
Business Acquisition [Line Items]
Acquired indefinite-lived intangible assets	5,600,000
Customer Relationships
Business Acquisition [Line Items]
Acquired indefinite-lived intangible assets	$ 53,800,000
Average useful life, years	20 years
Noncompete Agreements
Business Acquisition [Line Items]
Acquired indefinite-lived intangible assets	$ 300,000
Average useful life, years	5 years
Customer Backlog
Business Acquisition [Line Items]
Acquired indefinite-lived intangible assets	$ 1,400,000
Acquisitions other than Faiveley
Business Acquisition [Line Items]
Escrow deposits	$ 37,600,000
Unitrac
Business Acquisition [Line Items]
Purchase price, net of cash acquired		$ 14,378,000
Goodwill		998,000
Goodwill tax deduction		$ 0
RMS
Business Acquisition [Line Items]
Purchase price, net of cash acquired				$ 18,710,000
Goodwill				8,847,000
Goodwill tax deduction				$ 0
Track IQ
Business Acquisition [Line Items]
Purchase price, net of cash acquired					$ 9,312,000
Goodwill					$ 6,649,000
MTC
Business Acquisition [Line Items]
Purchase price, net of cash acquired						$ 23,360,000
Goodwill						13,198,000
Goodwill tax deduction						$ 0
RCL
Business Acquisition [Line Items]
Purchase price, net of cash acquired							$ 78,011,000
Goodwill							$ 14,787,000

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Acquisitions - Summary of Preliminary Estimated Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	May 05, 2016	Dec. 31, 2015	Oct. 30, 2015	Oct. 08, 2015	Jun. 17, 2015	Feb. 04, 2015
Business Acquisition [Line Items]
Goodwill	$ 860,027		$ 858,532
Unitrac
Business Acquisition [Line Items]
Current assets		$ 12,526
Property, plant & equipment		1,768
Goodwill		998
Other intangible assets		1,230
Other assets		0
Total assets acquired		16,522
Total liabilities assumed		(2,144)
Net assets acquired		$ 14,378
RMS
Business Acquisition [Line Items]
Current assets				$ 3,605
Property, plant & equipment				1,378
Goodwill				8,847
Other intangible assets				8,621
Other assets				0
Total assets acquired				22,451
Total liabilities assumed				(3,741)
Net assets acquired				$ 18,710
Track IQ
Business Acquisition [Line Items]
Current assets					$ 660
Property, plant & equipment					187
Goodwill					6,649
Other intangible assets					3,246
Other assets					0
Total assets acquired					10,742
Total liabilities assumed					(1,430)
Net assets acquired					$ 9,312
MTC
Business Acquisition [Line Items]
Current assets						$ 10,348
Property, plant & equipment						1,450
Goodwill						13,198
Other intangible assets						7,650
Other assets						114
Total assets acquired						32,760
Total liabilities assumed						(9,400)
Net assets acquired						$ 23,360
RCL
Business Acquisition [Line Items]
Current assets							$ 16,421
Property, plant & equipment							12,136
Goodwill							14,787
Other intangible assets							40,403
Other assets							0
Total assets acquired							83,747
Total liabilities assumed							(5,736)
Net assets acquired							$ 78,011

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Acquisitions - Pro Forma Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Business Combinations [Abstract]
Net sales	$ 725,602	$ 825,466	$ 1,505,193	$ 1,710,009
Gross profit	237,604	274,251	493,605	537,425
Net income attributable to Wabtec shareholders	$ 90,608	$ 101,534	$ 184,978	$ 200,540
Diluted earnings per share, as reported (in dollars per share)	$ 1.00	$ 1.04	$ 2.02	$ 2.03
Diluted earnings per share, pro forma (in dollars per share)	$ 1.00	$ 1.04	$ 2.02	$ 2.06

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Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 197,026	$ 180,128
Work-in-progress	169,968	171,217
Finished goods	126,448	127,229
Total inventories	$ 493,442	$ 478,574

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Intangibles - Change in the Carrying Amount of Goodwill by Segment (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 858,532
Adjustment to preliminary purchase allocation	2,404
Acquisitions	2,711
Foreign currency impact	(3,620)
Ending balance	860,027
Freight Segment
Goodwill [Roll Forward]
Beginning balance	531,965
Adjustment to preliminary purchase allocation	1,379
Acquisitions	2,711
Foreign currency impact	(6,115)
Ending balance	529,940
Transit Segment
Goodwill [Roll Forward]
Beginning balance	326,567
Adjustment to preliminary purchase allocation	1,025
Acquisitions	0
Foreign currency impact	2,495
Ending balance	$ 330,087

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Intangibles - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Intangible Assets Disclosure [Line Items]
Trademarks	$ 167,800		$ 167,800		$ 167,400
Intangible assets, amortization expense	$ 5,466	$ 5,162	$ 10,761	$ 10,463
Patents
Intangible Assets Disclosure [Line Items]
Intangible assets, weighted average useful life (years)			10 years
Customer Relationships
Intangible Assets Disclosure [Line Items]
Intangible assets, weighted average useful life (years)			16 years
Intellectual Property
Intangible Assets Disclosure [Line Items]
Intangible assets, weighted average useful life (years)			13 years

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Intangibles - Intangible Assets Other Than Goodwill and Trademarks (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Finite Lived Intangible Assets [Line Items]
Intangible assets, net of accumulated amortization	$ 262,560	$ 273,154
Patents And Other
Finite Lived Intangible Assets [Line Items]
Intangible assets, net of accumulated amortization	9,434	11,403
Intangible assets, accumulated amortization	41,411	40,936
Customer Relationships
Finite Lived Intangible Assets [Line Items]
Intangible assets, net of accumulated amortization	253,126	261,751
Intangible assets, accumulated amortization	$ 78,240	$ 70,493

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Intangibles - Amortization Expense (Detail) $ in Thousands	Jun. 30, 2016 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2016	$ 10,320
2017	19,351
2018	18,660
2019	17,981
2020	$ 16,803

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Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015	Aug. 31, 2013
Debt Instrument [Line Items]
Capital Leases	$ 253,000	$ 727,000
Total	744,254,000	692,238,000
Less - current portion	115,000	433,000
Long-term portion	744,139,000	691,805,000
Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt	495,819,000	443,458,000
Unamortized discount and debt issuance cost	4,181,000	1,542,000
4.375% Senior Notes, due 2023
Debt Instrument [Line Items]
Long-term debt	$ 248,182,000	$ 248,053,000	$ 250,000,000
Stated interest percentage	4.375%	4.375%	4.375%
Unamortized discount and debt issuance cost	$ 1,818,000	$ 1,947,000

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Long-Term Debt - Additional Information (Details) - USD ($)			6 Months Ended
	Jun. 22, 2016	Dec. 19, 2013	Jun. 30, 2016	Dec. 31, 2015	Jun. 05, 2014	Aug. 31, 2013	Jan. 12, 2012
Debt Instrument [Line Items]
Weighted average interest rate			1.45%
Forward Starting Interest Rate Swap Agreement
Debt Instrument [Line Items]
Interest rate swap agreements, notional amount					$ 150,000,000		$ 150,000,000.0
Interest rate on notional value					2.56%		1.415%
4.375% Senior Notes, due 2023
Debt Instrument [Line Items]
Deferred financing cost						$ 2,600,000
Long-term debt			$ 248,182,000	$ 248,053,000		$ 250,000,000
Senior notes coupon rate						99.879%
Stated interest percentage			4.375%	4.375%		4.375%
Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt			$ 495,819,000	$ 443,458,000
2016 Refinancing Credit Agreement
Debt Instrument [Line Items]
Deferred financing cost	$ 2,900,000
Minimum interest expense coverage ratio			3.0
Maximum debt to cash flow ratio			3.25
2016 Refinancing Credit Agreement | Federal Funds Effective Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			0.50%
2016 Refinancing Credit Agreement | LIBOR Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			1.00%
2016 Refinancing Credit Agreement | Base Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			0.00%
2016 Refinancing Credit Agreement | Base Rate | Minimum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			0.00%
2016 Refinancing Credit Agreement | Base Rate | Maximum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			0.75%
2016 Refinancing Credit Agreement | Alternative Rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			1.00%
2016 Refinancing Credit Agreement | Alternative Rate | Minimum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			0.75%
2016 Refinancing Credit Agreement | Alternative Rate | Maximum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			1.75%
2016 Refinancing Credit Agreement | Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility loan term, years	5 years
Line of credit facility, amount currently available			$ 675,700,000
2016 Refinancing Credit Agreement | Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Revolving credit facility, amount	$ 1,200,000,000
2016 Refinancing Credit Agreement | Term Loan
Debt Instrument [Line Items]
Ticking fee	0.10%
2016 Refinancing Credit Agreement | Term Loan | Line of Credit
Debt Instrument [Line Items]
Revolving credit facility, amount	$ 400,000,000
2016 Refinancing Credit Agreement | Letter of Credit
Debt Instrument [Line Items]
Line of credit amount outstanding			$ 24,300,000
2013 Refinancing Credit Agreement
Debt Instrument [Line Items]
Deferred financing cost		$ 1,000,000
Basis spread on effective rate			0.50%
Debt instrument, basis spread on variable rate			1.00%
2013 Refinancing Credit Agreement | Base Rate | Minimum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			0.00%
2013 Refinancing Credit Agreement | Base Rate | Maximum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			0.75%
2013 Refinancing Credit Agreement | Alternative Rate | Minimum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			0.75%
2013 Refinancing Credit Agreement | Alternative Rate | Maximum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			1.75%
2013 Refinancing Credit Agreement | Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility loan term, years		5 years
2013 Refinancing Credit Agreement | Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Revolving credit facility, amount		$ 800,000,000

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Employee Benefit Plans - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
U.S. Defined Benefit Pension Plans
Net periodic benefit cost
Service cost	$ 84	$ 95	$ 168	$ 190
Interest cost	369	479	738	958
Expected return on plan assets	(519)	(542)	(1,038)	(1,084)
Net amortization/deferrals	229	266	458	532
Curtailment loss recognized			0	0
Net periodic benefit cost	$ 163	$ 298	$ 326	$ 596
Assumptions
Discount Rate	4.21%	3.95%	4.21%	3.95%
Expected long-term rate of return	5.70%	5.70%	5.70%	5.70%
Rate of compensation increase	3.00%	3.00%	3.00%	3.00%
International Defined Benefit Pension Plans
Net periodic benefit cost
Service cost	$ 255	$ 506	$ 728	$ 1,012
Interest cost	1,450	1,801	2,936	3,590
Expected return on plan assets	(2,881)	(2,434)	(5,286)	(4,850)
Net amortization/deferrals	435	655	1,055	1,307
Curtailment loss recognized			240	0
Net periodic benefit cost	$ (741)	$ 528	$ (327)	$ 1,059
Assumptions
Discount Rate	3.56%	3.48%	3.56%	3.48%
Expected long-term rate of return	5.81%	5.79%	5.81%	5.79%
Rate of compensation increase	3.10%	3.10%	3.10%	3.10%
U.S. Post Retirement
Net periodic benefit cost
Service cost	$ 1	$ 2	$ 2	$ 4
Interest cost	97	308	194	616
Net amortization/deferrals	(105)	(234)	(210)	(468)
Net periodic benefit cost	$ (7)	$ 76	$ (14)	$ 152
Assumptions
Discount Rate	3.33%	3.95%	3.33%	3.95%
International Post Retirement
Net periodic benefit cost
Service cost	$ 7	$ 11	$ 14	$ 22
Interest cost	25	35	50	70
Net amortization/deferrals	(9)	(10)	(18)	(19)
Net periodic benefit cost	$ 23	$ 36	$ 46	$ 73
Assumptions
Discount Rate	3.24%	3.96%	3.24%	3.96%

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Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2016
Change in Assumptions for Pension Plans | Scenario Forecast
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]
Reduction in service and interest cost		$ 1,600
International Defined Benefit Pension Plans
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]
Contribution to the plan	$ 7,000
U.S. Defined Benefit Pension Plans
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]
Contribution to the plan	$ 0

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Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions	6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 9.7	$ 15.0
Unamortized compensation expense expected to be vested	$ 31.0
Recognized weighted average period, years	1 year 7 months 17 days
Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 0.9
Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	3.0
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	1.2
Performance Shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 4.1
Award vesting period	3 years
Performance Shares | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of incentive stock awards expected to be vested and awarded of stocks granted	0.00%
Performance Shares | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of incentive stock awards expected to be vested and awarded of stocks granted	200.00%
Performance Shares | Scenario Forecast
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of incentive stock awards expected to be vested and awarded of stocks granted			100.00%	92.00%	119.00%
2011 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Plan term	10 years
Number of shares available for grant	3,800,000
2011 Plan | Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Plan term	10 years
Award vesting period	4 years
2011 Plan | Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period	4 years
2011 Plan | Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period	4 years
Directors Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 0.5
Directors Plan | Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period	1 year
2000 Plan | Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Plan term	10 years
Award vesting period	4 years
2000 Plan | Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period	4 years
2000 Plan | Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period	4 years

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Stock-Based Compensation - Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Options Outstanding
Beginning balance (in shares)	1,097,323
Granted (in shares)	94,115
Exercised (in shares)	(26,150)
Canceled (in shares)	(5,321)
Ending balance (in shares)	1,159,967	1,097,323
Exercisable at period end (in shares)	941,442
Weighted-Average Exercise Price per Share
Beginning balance (in dollars per share)	$ 32.70
Granted (in dollars per share)	61.39
Exercised (in dollars per share)	26.89
Canceled (in dollars per share)	69.37
Ending balance (in dollars per share)	35.00	$ 32.70
Exercisable (in dollars per share)	$ 27.17
Weighted-Average Remaining Contractual Life
Outstanding, weighted average remaining contractual life	4 years 8 months 15 days	4 years 9 months 18 days
Exercisable weighted average remaining contractual life	3 years 1 month 299 days
Aggregate Intrinsic Value
Beginning balance	$ 42,154
Granted	828
Exercised	1,132
Canceled	4
Ending balance	40,825	$ 42,154
Exercisable	$ 40,501

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Stock-Based Compensation - Fair Value of Each Option Grant Weighted Average Assumptions (Detail)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Dividend yield	0.26%	0.14%
Risk-free interest rate	1.47%	1.82%
Stock price volatility	26.90%	27.30%
Expected life (years)	5 years	5 years

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Stock-Based Compensation - Restricted Stock Activity and Incentive Stock Awards Activity (Detail)	6 Months Ended
	Jun. 30, 2016 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Outstanding, beginning of period (in dollars per share) | $ / shares	$ 65.89
Granted (in dollars per share) | $ / shares	62.20
Vested (in dollars per share) | $ / shares	52.12
Adjustment for incentive stock awards expected to vest (in dollars per share) | $ / shares	73.28
Canceled (in dollars per share) | $ / shares	70.48
Outstanding, end of period (in dollars per share) | $ / shares	$ 70.85
Restricted Stock and Units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding, beginning of period (in shares)	356,885
Granted (in shares)	142,891
Vested (in shares)	(148,753)
Adjustment for incentive stock awards expected to vest (in shares)	0
Canceled (in shares)	(7,519)
Outstanding, end of period (in shares)	343,504
Incentive Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding, beginning of period (in shares)	541,638
Granted (in shares)	167,850
Vested (in shares)	(236,591)
Adjustment for incentive stock awards expected to vest (in shares)	(27,784)
Canceled (in shares)	(5,283)
Outstanding, end of period (in shares)	439,830

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Effective income tax rate	28.80%	32.30%	30.20%	32.10%
Liability for uncertain tax positions	$ 10.6		$ 10.6		$ 10.6
Unrecognized tax benefits if recognized that would affect effective tax rate	4.3		4.3		4.3
Accrued interest related to uncertain tax positions	2.3		2.3		2.0
Accrued penalties related to uncertain tax positions	0.2		0.2		$ 0.2
Unrecognized tax benefits subject to change within the next 12 months	$ 2.1		$ 2.1

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Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings Per Share [Abstract]
Net income attributable to Wabtec shareholders	$ 90,485	$ 101,504	$ 184,648	$ 197,668
Less: dividends declared - common shares and non-vested restricted stock	(7,209)	(5,799)	(14,565)	(11,580)
Undistributed earnings	$ 83,276	$ 95,705	$ 170,083	$ 186,088
Percentage allocated to common shareholders	99.70%	99.70%	99.70%	99.60%
Undistributed earnings allocated to common shareholders	$ 83,026	$ 95,418	$ 169,573	$ 185,344
Add: dividends declared - common shares	7,189	5,782	14,520	11,539
Numerator for basic and diluted earnings per common share	$ 90,215	$ 101,200	$ 184,093	$ 196,883
Basic weighted average common shares outstanding (in shares)	89,846	96,338	90,832	96,066
Assumed conversion of dilutive stock-based compensation plans (in shares)	713	1,097	796	1,046
Denominator for diluted earnings per common share - adjusted weighted average shares and assumed conversion (in shares)	90,559	97,435	91,628	97,112
Basic earnings per share (in dollars per share)	$ 1.00	$ 1.05	$ 2.03	$ 2.05
Diluted earnings per share, as reported (in dollars per share)	$ 1.00	$ 1.04	$ 2.02	$ 2.03
Basic weighted-average common shares outstanding and non-vested restricted stock expected to vest (in shares)	90,101	96,620	91,111	96,406

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Warranties - Changes in Product Warranty Reserve (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward]
Balance at beginning of period	$ 92,064	$ 87,849
Warranty expense	17,853	14,043
Acquisitions	7,547	6,001
Warranty claim payments	(20,422)	(10,538)
Foreign currency impact/other	(696)	(702)
Balance at end of period	$ 96,346	$ 96,653

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Derivative Financial Instruments and Hedging (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Interest rate swap agreements
Derivative [Line Items]
Interest rate swap agreement, current liability	$ 6,592	$ 4,474
Not Designated as Hedging Instrument | Foreign Currency Contracts
Derivative [Line Items]
Notional value	$ 21,100
Derivative term	1 year
Unrealized loss on derivative contracts	$ 1,300
Cash Flow Hedging | Designated as Hedging Instrument | Foreign Currency Contracts
Derivative [Line Items]
Notional value	10,800
Derivative liability, fair value	$ 700
Derivative term	2 years
Fair Value Hedging | Designated as Hedging Instrument | Interest rate swap agreements
Derivative [Line Items]
Interest rate swap agreement, current liability	$ 6,600
Accumulated other comprehensive loss	$ 4,000

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Fair Value Measurement and Fair Value of Financial Instruments - Liabilities Carried at Fair Value Measured on Recurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Interest rate swap agreement, current liability	$ 6,592	$ 4,474
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities at fair value	0	0
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities at fair value	6,592	4,474
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities at fair value	0	0
Interest rate swap agreements
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Interest rate swap agreement, current liability	6,592	4,474
Liabilities at fair value	6,592	4,474
Interest rate swap agreements | Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Interest rate swap agreement, current liability	6,592	4,474
Interest rate swap agreements | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities at fair value	0	0
Interest rate swap agreements | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities at fair value	6,592	4,474
Interest rate swap agreements | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities at fair value	$ 0	$ 0

XML

Fair Value Measurement and Fair Value of Financial Instruments - Estimated Fair Values and Related Carrying Values of Financial Instruments (Detail) - USD ($)	Jun. 30, 2016	Dec. 31, 2015	Aug. 31, 2013
4.375% Senior Notes
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Carry value	$ 248,182,000	$ 248,053,000	$ 250,000,000
Fair value	$ 267,613,000	$ 254,075,000
Stated interest percentage	4.375%	4.375%	4.375%
Interest rate swap agreements
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Carry value	$ 6,592,000	$ 4,474,000
Fair value	$ 6,592,000	$ 4,474,000

XML

Commitments and Contingencies - Additional Information (Details)	Apr. 21, 2016
Siemens Industry, Inc. | Pending Litigation
Loss Contingencies [Line Items]
Number of patents allegedly infringed	7

XML

Segment Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2016 segment
Segment Reporting [Abstract]
Number of reportable segments	2

XML

Segment Information - Segment Financial Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Total sales	$ 723,601	$ 847,028	$ 1,495,632	$ 1,665,622
Income (loss) from operations	133,284	155,860	275,465	304,280
Interest expense and other, net	(6,198)	(5,928)	(10,915)	(13,100)
Income from operations before income taxes	127,086	149,932	264,550	291,180
Freight Segment
Segment Reporting Information [Line Items]
Total sales	410,683	543,703	859,160	1,064,518
Income from operations before income taxes	92,317	125,232	198,991	236,801
Transit Segment
Segment Reporting Information [Line Items]
Total sales	330,640	315,153	661,679	624,444
Income from operations before income taxes	52,146	37,514	97,156	78,937
Operating Segments | Freight Segment
Segment Reporting Information [Line Items]
Total sales	397,067	534,674	839,736	1,046,561
Income (loss) from operations	92,317	125,232	198,991	236,801
Interest expense and other, net	0	0	0	0
Operating Segments | Transit Segment
Segment Reporting Information [Line Items]
Total sales	326,534	312,354	655,896	619,061
Income (loss) from operations	52,146	37,514	97,156	78,937
Interest expense and other, net	0	0	0	0
Intersegment sales/(elimination)
Segment Reporting Information [Line Items]
Total sales	(17,722)	(11,828)	(25,207)	(23,340)
Intersegment sales/(elimination) | Freight Segment
Segment Reporting Information [Line Items]
Total sales	13,616	9,029	19,424	17,957
Intersegment sales/(elimination) | Transit Segment
Segment Reporting Information [Line Items]
Total sales	4,106	2,799	5,783	5,383
Corporate Activities and Elimination
Segment Reporting Information [Line Items]
Total sales	(17,722)	(11,828)	(25,207)	(23,340)
Income (loss) from operations	(11,179)	(6,886)	(20,682)	(11,458)
Interest expense and other, net	(6,198)	(5,928)	(10,915)	(13,100)
Income from operations before income taxes	$ (17,377)	$ (12,814)	$ (31,597)	$ (24,558)

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Segment Information - Sales by Product (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Total sales	$ 723,601	$ 847,028	$ 1,495,632	$ 1,665,622
Specialty Products & Electronics
Segment Reporting Information [Line Items]
Total sales	339,188	448,292	717,457	873,829
Remanufacturing, Overhaul & Build
Segment Reporting Information [Line Items]
Total sales	156,981	151,859	315,014	288,549
Brake Products
Segment Reporting Information [Line Items]
Total sales	141,979	159,034	293,885	326,431
Other Transit Products
Segment Reporting Information [Line Items]
Total sales	49,643	50,864	98,438	97,667
Other
Segment Reporting Information [Line Items]
Total sales	$ 35,810	$ 36,979	$ 70,838	$ 79,146

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Other Income (Expense), Net - Components of Other Income Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Other Income and Expenses [Abstract]
Foreign currency loss	$ (1,530)	$ (1,541)	$ (1,368)	$ (3,935)
Other miscellaneous income (expense)	301	(346)	293	(818)
Total other expense, net	$ (1,229)	$ (1,887)	$ (1,075)	$ (4,753)