Basis of Presentation The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America and the rules and regulations of the Securities and Exchange Commission and include the accounts of Wabtec and its subsidiaries in which Wabtec has a controlling interest. 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. Certain prior year amounts have been reclassified, where necessary, to conform to the current year presentation.

Results for these interim periods are not necessarily indicative of results to be expected for the full year, particularly in light of ongoing volatility in the macroeconomic environment caused by supply chain disruptions, labor availability, broad-based inflation, tariffs and trade negotiations, and the impacts from regional conflicts. These factors continue to impact our sales channels, supply chain, manufacturing operations, workforce, and other key aspects of our operations. We are unable to reasonably predict the full impact of these factors due to the high degree of uncertainty regarding their duration and severity, their potential impact on global economic activity, and the impact that current and new sanctions and tariffs may have on our business, global supply chain operations and our customers, suppliers, and end-markets.

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, 2024. The December 31, 2024 information included herein has been derived from the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Use of Estimates The preparation of financial statements in conformity with GAAP 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.

Revenue Recognition A majority of the Company’s revenues are derived from performance obligations that are satisfied at a point in time when control passes to the customer. The remaining revenues are earned over time. Generally, for performance obligations satisfied at a point in time control passes at the time of shipment in accordance with agreed upon delivery terms.

The Company also has long-term customer agreements involving the design and production of highly engineered products that require revenue to be recognized over time because these products have no alternative use without significant economic loss, and the agreements contain an enforceable right to payment including a reasonable profit margin from the customer in the event of contract termination. Additionally, the Company has customer agreements involving the creation or enhancement of an asset that the customer controls which also require revenue to be recognized over time. Generally, the Company uses an input method for determining the amount of revenue, cost and gross margin to recognize over time for these customer agreements. The input methods used for these agreements include costs of material and labor, both of which give an accurate representation of the progress made toward complete satisfaction of a particular performance obligation. The Company may also use the output method which recognizes revenue based on direct measurements of the value transferred to the customer. Contract revenues and cost estimates are reviewed and revised periodically throughout the year and adjustments are reflected in the accounting period as such amounts are determined.

Due to the nature of work required to be performed on the Company’s long-term projects, the estimation of total revenue and cost at completion is subject to many variables and requires significant judgment. Contract estimates related to long-term projects are based on various assumptions to project the outcome of future events that could span several years. These assumptions include cost of materials; labor availability and productivity; complexity of the work to be performed; and the performance of suppliers, customers and subcontractors that may be associated with the contract. We have a disciplined process where Management reviews the progress of long term-projects periodically throughout the year. As part of this process, Management reviews information including key contract matters, progress towards completion, identified risks and opportunities and any other information that could impact the Company’s estimates of revenue and costs. After completing this analysis, any adjustments to net sales, cost of goods sold, and the related impact to operating income are recognized as necessary in the period they become known.

Generally, the Company’s revenue contains a single performance obligation for each distinct good or service; however, a single contract may have multiple performance obligations comprising multiple promises to customers. When there are multiple performance obligations, revenue is allocated based on the relative stand-alone selling price. Pricing is defined in our contracts on a line item basis and includes an estimate of variable consideration when required by the terms of the individual customer contract. Types of variable consideration the Company typically has include volume discounts, prompt payment discounts, price escalation clauses, liquidating damages, and performance bonuses. Sales returns and allowances are also estimated and recognized in the same period the related revenue is recognized, based upon the Company’s experience and future expectations.

Remaining performance obligations represent the allocated transaction price of unsatisfied or partially unsatisfied performance obligations. As of June 30, 2025, the Company's remaining performance obligations were approximately $21.8 billion. The Company expects to recognize revenue of approximately 38% of the remaining performance obligations over the next 12 months, with the remainder recognized thereafter.

Revolving Receivables Program Effective January 1, 2025, the Company utilizes its Revolving Receivables Program to request borrowings from a financial institution against certain collateralized receivables for up to $350 million. The Company and certain of its subsidiaries (the "Originators") contribute receivables to our bankruptcy-remote subsidiary, which can then be collateralized on a recurring basis. As customers pay their balances, we transfer additional receivables into the program. Borrowings and repayments under the Revolving Receivables Program are classified as Financing activities on our Condensed Consolidated Statement of Cash Flows, with any outstanding collateralized balance at period end classified as debt on our Condensed Consolidated Balance Sheets. Prior to January 1, 2025, the Company utilized its Revolving Receivables Program to sell up to $350 million of certain receivables from the Originators. Receivables were sold to a financial institution on a recurring basis in exchange for cash equal to the gross receivables sold. Proceeds and remittances of receivables sold under the program prior to January 1, 2025, are classified as Operating activities on our Condensed Consolidated Statement of Cash Flows.

The bankruptcy remote subsidiary is a separate legal entity with its own creditors, and its assets are not available to pay creditors of the Company or any other affiliates of the Company. The receivables transferred to the program are fully guaranteed by our bankruptcy-remote subsidiary, which holds additional receivables that are pledged as collateral under this facility. The Company has agreed to guarantee the performance of the Originators' respective obligations under the revolving agreement. Neither the Company (except for the bankruptcy-remote consolidated subsidiary referenced above) nor the Originators guarantees the collectability of the receivables under the revolving agreements.

At June 30, 2025 and December 31, 2024, the bankruptcy-remote subsidiary held receivables of $762 million and $693 million, respectively, which are included in the Company's Condensed Consolidated Balance Sheets. The receivables held by the bankruptcy-remote subsidiary collateralize the outstanding receivables sold and outstanding borrowings. There were no outstanding borrowings at June 30, 2025 or outstanding receivables sold at December 31, 2024. The transfers are recorded at the fair value of the proceeds received and obligations assumed less derecognized receivables. Our maximum exposure to losses related to these receivables transferred to the program is limited to the amount outstanding.

The following table sets forth a summary of receivables used as collateral for requested borrowings and the resulting impact of net cash proceeds included in cash from financing activities. There were no receivables sold under the program during the six months ended June 30, 2025.


In millions	Six Months Ended June 30, 2025
Gross receivables collateralized/cash borrowings received	$	350
Customer collections remitted to financial institution	(350)
Net cash proceeds received	$	—

The following table sets forth a summary of receivables sold and the resulting impact of net cash proceeds included in cash from operating activities during the six months ended June 30, 2024:


In millions	Six Months Ended June 30, 2024
Gross receivables sold/cash proceeds received	$	812
Customer collections remitted to financial institution	(832)
Net cash proceeds remitted	$	(20)

Depreciation Expense Depreciation of property, plant and equipment related to the manufacturing of products or services provided is included in Cost of goods or Cost of services. Depreciation of other property, plant and equipment that is not attributable to the manufacturing of products or services provided is included in Selling, general and administrative expenses or Engineering expenses to the extent the property, plant, and equipment is used for research and development purposes.

Goodwill and Intangible Assets Goodwill and other intangible assets with indefinite lives are not amortized. Other intangibles (with definite lives) are amortized on a straight-line basis over their estimated economic lives. Amortizable intangible assets are reviewed for impairment when indicators of impairment are present. The Company tests goodwill and indefinite-lived intangible assets for impairment at the reporting unit level and at least annually. The Company performs its annual impairment test during the fourth quarter after the annual forecasting process is completed, and also tests for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company will perform either a qualitative or quantitative test for goodwill, performing a quantitative test for each identified reporting unit at least every three years. Periodically, Management of the Company assesses whether or not an indicator of impairment is present that would necessitate an impairment analysis be performed. No impairment indicators were identified during the current quarter.

Accounting Standards Recently Issued In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this update require entities to disclose disaggregated information about certain costs and expenses in commonly presented income statement expense captions. The amendments will require increased interim and annual footnote disclosures either prospectively or retrospectively for reporting periods presented in interim and annual company filings. The amendments in this update do not affect the recognition, measurement, or financial statement presentation of income statement expenses and will be effective for Wabtec's annual reporting periods beginning January 1, 2027 and interim reporting periods beginning January 1, 2028. The Company is assessing the extent of the impact of the amendments on its future filings.

Accounting Standards Recently Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update require entities to disclose on an annual basis specific categories within the income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The amendments in this update also require enhanced disaggregation of disclosures about income taxes paid and income tax expense, among other changes. The amendments in this update do not affect the recognition, measurement, or financial statement presentation of income taxes and are effective for Wabtec's annual reporting periods beginning January 1, 2025. The amendments require increased annual disclosures on current and comparable reporting periods presented in annual company filings. The resulting new annual disclosure requirements will be reflected in our 2025 report on Form 10-K.

The changes in Accumulated other comprehensive loss by component, including any tax impacts, for the three months ended June 30, 2025 and 2024 are as follows:


	Foreign currency translation				Derivative contracts				Pension and postretirement benefit plans				Total
In millions	2025		2024		2025		2024		2025		2024		2025		2024
Balance at March 31	$	(702)	$	(629)	$	15	$	17	$	(46)	$	(55)	$	(733)	$	(667)
Other comprehensive income (loss) before reclassifications	166		(49)		8		—		(2)		(1)		172		(50)
Amounts reclassified from Accumulated other comprehensive loss	—		—		(1)		—		1		(3)		—		(3)
Other comprehensive income (loss), net of tax	166		(49)		7		—		(1)		(4)		172		(53)
Balance at June 30	$	(536)	$	(678)	$	22	$	17	$	(47)	$	(59)	$	(561)	$	(720)


	Foreign currency translation				Derivative contracts				Pension and postretirement benefit plans				Total
In millions	2025		2024		2025		2024		2025		2024		2025		2024
Balance at beginning of year	$	(818)	$	(541)	$	17	$	7	$	(45)	$	(56)	$	(846)	$	(590)
Other comprehensive income (loss) before reclassifications	282		(137)		6		10		(3)		—		285		(127)
Amounts reclassified from Accumulated other comprehensive loss	—		—		(1)		—		1		(3)		—		(3)
Other comprehensive income (loss), net of tax	282		(137)		5		10		(2)		(3)		285		(130)
Balance at end of period	$	(536)	$	(678)	$	22	$	17	$	(47)	$	(59)	$	(561)	$	(720)

Amounts included under Derivative contracts related to interest rate hedges reclassified from Accumulated other comprehensive loss are recognized in "Interest expense, net" with the tax impact recognized in "Income tax expense" on the Condensed Consolidated Statements of Income. All other amounts reclassified from Accumulated other comprehensive loss are recognized in "Other income, net" with the tax impact recognized in "Income tax expense" on the Condensed Consolidated Statements of Income.

Treasury Stock During the first quarter of 2025, we retired 55 million shares of treasury stock. The retirement of treasury stock is recognized as a deduction from common stock for the shares' par value and any excess over par as a deduction from retained earnings.