Westinghouse Air Brake Technologies Corp 10-Q for FY2026 Q3
Westinghouse Air Brake Technologies Corp (WAB)
10-Q
2026-10-21
For: 2026-09-30
View Original
Added on
October 21, 2026
About this 10-Q
Westinghouse Air Brake Technologies Corp filed this 10-Q on October 21, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Wabtec reported third-quarter net sales increased 8.1% to $3.12 billion compared with the prior-year period, while multi-year backlog reached a record $31.4 billion at September 30, 2026; Dellner Couplers closed February 10, 2026, for approximately $1.053 billion. AI summary
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $3.12B
- up 8.1% from $2.89B a year earlier
- Net income
- $409M
- up 31.9% from net income of $310M a year earlier
- Diluted EPS
- $2.42
- up 33.7% from $1.81 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________________
FORM 10-Q
____________________________________
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
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
____________________________________
(Exact name of registrant as specified in its charter)
____________________________________
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
| (Address of principal executive offices) | (Zip code) | ||||||||||
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
____________________________________
Securities registered pursuant to Section 12(b) of the Act:
Class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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 ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||
| Emerging growth company | Smaller reporting company | ||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of October 16, 2026, there were 167,802,384 shares of common stock, par value $.01 per share, of the registrant outstanding.
WESTINGHOUSE AIR BRAKE
TECHNOLOGIES CORPORATION
September 30, 2026
FORM 10-Q
TABLE OF CONTENTS
| Page | ||||||||
PART I—FINANCIAL INFORMATION | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
| PART II—OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 4. | ||||||||
| Item 5. | ||||||||
Item 6. | ||||||||
2
PART I—FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
| Unaudited | |||||||||||
| In millions, except par value | September 30, 2026 | December 31, 2025 | |||||||||
| Assets | |||||||||||
| Assets | |||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | |||||||||
| Accounts receivable | |||||||||||
| Unbilled accounts receivable | |||||||||||
| Inventories, net | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Other noncurrent assets | |||||||||||
| Total noncurrent assets | |||||||||||
| Total Assets | $ | $ | |||||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Liabilities | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Customer deposits | |||||||||||
| Accrued compensation | |||||||||||
| Accrued warranty | |||||||||||
| Current portion of long-term debt | |||||||||||
| Other accrued liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Deferred income taxes | |||||||||||
| Other long-term liabilities | |||||||||||
| Total Liabilities | |||||||||||
| Commitments and contingencies (Note 14) | |||||||||||
| Equity | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
Treasury stock, at cost, | ( | ( | |||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total Westinghouse Air Brake Technologies Corporation shareholders’ equity | |||||||||||
| Noncontrolling interest | |||||||||||
| Total Equity | |||||||||||
| Total Liabilities and Equity | $ | $ | |||||||||
The accompanying notes are an integral part of these statements.
3
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| Unaudited | Unaudited | ||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| In millions, except per share data | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| Sales of goods | $ | $ | $ | $ | |||||||||||||||||||
| Sales of services | |||||||||||||||||||||||
| Total net sales | |||||||||||||||||||||||
| Cost of sales: | |||||||||||||||||||||||
| Cost of goods | ( | ( | ( | ( | |||||||||||||||||||
| Cost of services | ( | ( | ( | ( | |||||||||||||||||||
| Total cost of sales | ( | ( | ( | ( | |||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling, general and administrative expenses | ( | ( | ( | ( | |||||||||||||||||||
| Engineering expenses | ( | ( | ( | ( | |||||||||||||||||||
| Amortization expense | ( | ( | ( | ( | |||||||||||||||||||
| Total operating expenses | ( | ( | ( | ( | |||||||||||||||||||
| Income from operations | |||||||||||||||||||||||
| Other income and expenses: | |||||||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Other income (expense), net | ( | ||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense | ( | ( | ( | ( | |||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interest | ( | ( | ( | ( | |||||||||||||||||||
| Net income attributable to Wabtec shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Earnings Per Common Share | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Net income attributable to Wabtec shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | |||||||||||||||||||||||
| Net income attributable to Wabtec shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these statements.
4
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Unaudited | Unaudited | ||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| In millions | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income attributable to Wabtec shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Foreign currency translation gain (loss) | ( | ( | |||||||||||||||||||||
| Unrealized gain on derivative contracts | |||||||||||||||||||||||
| Change in unrealized gain (loss) on pension and post-retirement benefit plans | ( | ||||||||||||||||||||||
| Other comprehensive income (loss) before tax | ( | ( | |||||||||||||||||||||
| Income tax expense related to components of other comprehensive income | ( | ( | ( | ( | |||||||||||||||||||
| Other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||||||||
| Comprehensive income attributable to Wabtec shareholders | $ | $ | $ | $ | |||||||||||||||||||
The accompanying notes are an integral part of these statements.
5
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Unaudited | |||||||||||
| Nine Months Ended September 30, | |||||||||||
| In millions | 2026 | 2025 | |||||||||
| Operating Activities | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Stock-based compensation expense | |||||||||||
| Net gain on mark-to-market derivatives | ( | ( | |||||||||
| Below market intangible amortization | ( | ( | |||||||||
| Changes in operating assets and liabilities, net of acquisitions and dispositions: | |||||||||||
| Accounts receivable and unbilled accounts receivable | ( | ( | |||||||||
| Inventories | ( | ( | |||||||||
| Accounts payable | |||||||||||
| Accrued income taxes | |||||||||||
| Current and noncurrent customer deposits | ( | ||||||||||
| Other accrued liabilities | ( | ( | |||||||||
| Other operating activities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Investing Activities | |||||||||||
| Acquisitions of businesses, net of cash acquired | ( | ( | |||||||||
| Purchase of property, plant and equipment | ( | ( | |||||||||
| Other investing activities | |||||||||||
| Net cash used for investing activities | ( | ( | |||||||||
| Financing Activities | |||||||||||
| Proceeds from debt, net of issuance costs | |||||||||||
| Payments of debt | ( | ( | |||||||||
| Repurchase of stock | ( | ( | |||||||||
| Cash dividends | ( | ( | |||||||||
| Payment of income tax withholding on share-based compensation | ( | ( | |||||||||
| Distribution to/redemption of noncontrolling interest | ( | ( | |||||||||
| Other financing activities | ( | ( | |||||||||
| Net cash (used for) provided by financing activities | ( | ||||||||||
| Effect of changes in currency exchange rates | ( | ||||||||||
| Decrease in cash | ( | ( | |||||||||
| Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
The accompanying notes are an integral part of these statements.
6
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
| In millions | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Treasury Stock Shares | Treasury Stock Amount | Retained Earnings | Accumulated Other Comprehensive Loss | Non-controlling Interest | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | ( | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($ | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock repurchase | — | — | — | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | ( | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($ | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock repurchase | — | — | — | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to/redemption of noncontrolling interest | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | ( | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($ | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock repurchase | — | — | — | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2026 | $ | $ | ( | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these statements.
7
| In millions | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Treasury Stock Shares | Treasury Stock Amount | Retained Earnings | Accumulated Other Comprehensive Loss | Non-controlling Interest | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | ( | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($ | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax | — | — | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock repurchase | — | — | — | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock retirement | ( | ( | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | ( | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($ | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax | — | — | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock repurchase | — | — | — | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | ( | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($ | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | ( | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these statements.
8
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2026 (UNAUDITED)
1. BUSINESS
2. ACCOUNTING POLICIES
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.
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, 2025. The December 31, 2025 information included herein has been derived from the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
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.
9
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.
Revolving Receivables Program The Company utilizes its Revolving Receivables Program to request borrowings from a financial institution against certain collateralized receivables for up to $450 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.
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 September 30, 2026 and December 31, 2025, the bankruptcy-remote subsidiary held receivables of $727 million and $623 million, respectively, which are included in the Company's Condensed Consolidated Balance Sheets. The receivables held by the bankruptcy-remote subsidiary collateralize the outstanding borrowings. There were outstanding borrowings of $427 million at September 30, 2026 and no outstanding borrowings at December 31, 2025. The transfers are recorded at the fair value of the proceeds received and obligations assumed less derecognized receivables, if applicable. Our maximum exposure to losses related to these receivables transferred to the program is limited to the amount outstanding.
Restricted Cash At September 30, 2026 and December 31, 2025, the Company classified cash of $11 million and $25 million, respectively, as restricted, primarily for cash held in escrow related to acquisitions.
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 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 if
10
the qualitative test indicates that it is more likely than not that the fair value of a reporting unit is less than the carrying amount and 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.
Accumulated Other Comprehensive Loss Comprehensive income (loss) comprises both Net income and Other comprehensive income (loss) resulting from the change in equity from transactions and other events and circumstances from non-owner sources.
The changes in Accumulated other comprehensive loss by component, including any tax impacts, for the three months ended September 30, 2026 and 2025 are as follows:
| Foreign currency translation | Derivative contracts | Pension and postretirement benefit plans | Total | ||||||||||||||||||||||||||||||||
| In millions | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||
| Balance at June 30 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Other comprehensive income (loss), net | ( | ( | |||||||||||||||||||||||||||||||||
| Balance at September 30 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
The changes in Accumulated other comprehensive loss by component, including any tax impacts, for the nine months ended September 30, 2026 and 2025 are as follows:
| Foreign currency translation | Derivative contracts | Pension and postretirement benefit plans | Total | ||||||||||||||||||||||||||||||||
| In millions | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||
| Balance at beginning of year | $ | ( | $ | ( | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Other comprehensive (loss) income before reclassifications | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Amounts reclassified from Accumulated other comprehensive loss | ( | ( | |||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income, net of tax | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Balance at end of period | $ | ( | $ | ( | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
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 (expense), net" with the tax impact recognized in "Income tax expense" on the Condensed Consolidated Statements of Income.
11
3. ACQUISITIONS
On February 10, 2026, Wabtec acquired Dellner Couplers, a global leader in highly engineered safety-critical train connection systems and services for passenger rail rolling stock, for approximately $1.053 billion. The acquisition brings highly attractive and complementary technologies to Wabtec and strengthens its portfolio of mission-critical passenger rail systems. Dellner Couplers reports within the Transit Segment. The acquisition was funded with a combination of cash on hand and borrowings under other sources of available liquidity.
The following table summarizes the preliminary fair value of the Dellner Couplers assets acquired and liabilities assumed:
| In millions | |||||
| Assets acquired | |||||
| Cash and cash equivalents | $ | ||||
| Accounts receivable | |||||
| Inventory | |||||
| Other current assets | |||||
| Property, plant and equipment | |||||
| Goodwill | |||||
| Other intangible assets | |||||
| Other noncurrent assets | |||||
| Total assets acquired | |||||
| Liabilities assumed | |||||
| Current liabilities | |||||
| Noncurrent liabilities | |||||
| Total liabilities assumed | |||||
| Net assets acquired | $ | ||||
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On December 1, 2025, Wabtec acquired Frauscher Sensor Technology Group GmbH ("Frauscher"), a global market leader in train detection, wayside object control solutions and axle counting systems, for approximately $792 million. The acquisition strengthens the Company’s product portfolio by adding highly attractive and complementary railway signaling technologies. Frauscher reports within the Digital Intelligence product line of the Freight Segment. The acquisition was funded with a combination of cash on hand, proceeds from the 2025 Term Credit Agreement and borrowings under other sources of available liquidity.
The following table summarizes the preliminary fair value of the Frauscher assets acquired and liabilities assumed:
| In millions | |||||
| Assets acquired | |||||
| Cash and cash equivalents | $ | ||||
| Accounts receivable | |||||
| Inventory | |||||
| Other current assets | |||||
| Property, plant and equipment | |||||
| Goodwill | |||||
| Other intangible assets | |||||
| Other noncurrent assets | |||||
| Total assets acquired | |||||
| Liabilities assumed | |||||
| Current liabilities | |||||
| Noncurrent liabilities | |||||
| Total liabilities assumed | |||||
| Net assets acquired | $ | ||||
13
On July 1, 2025, Wabtec acquired 100 % ownership in Evident’s Inspection Technologies division ("Inspection Technologies") for approximately $1.797 billion. Inspection Technologies, formerly part of the Scientific Solutions Division of Olympus Corporation, is a global leader in Non-Destructive Testing, Remote Visual Inspection and Analytical Instruments solutions for mission critical assets. Inspection Technologies’ leading industry presence and innovative product portfolio is expected to significantly expand Wabtec's capabilities, adding advanced automated inspection capabilities, driving technology in a space where data acquisition, analytics and automation are critical. Inspection Technologies reports within the Digital Intelligence product line of the Freight Segment. The acquisition was funded with a combination of cash on hand, proceeds from the 2035 Notes and borrowings under other sources of available liquidity.
The following table summarizes the fair value of the Inspection Technologies assets acquired and liabilities assumed:
| In millions | |||||
| Assets acquired | |||||
| Cash and cash equivalents | $ | ||||
| Accounts receivable | |||||
| Inventory | |||||
| Other current assets | |||||
| Property, plant and equipment | |||||
| Goodwill | |||||
| Customer relationships | |||||
| Trade names | |||||
| Acquired technology | |||||
| Other noncurrent assets | |||||
| Total assets acquired | |||||
| Liabilities assumed | |||||
| Current liabilities | |||||
| Noncurrent liabilities | |||||
| Total liabilities assumed | |||||
| Net assets acquired | $ | ||||
As of September 30, 2026, the measurement period remains open for the Dellner Couplers and Frauscher acquisitions, and the Company has not finalized the respective purchase accounting. The fair values of the assets acquired and liabilities assumed were determined using the income, cost and market approaches. Discounted cash flow models were used to estimate the fair values of acquired intangible assets. The fair value measurements were primarily based on significant inputs that are not observable in the market and are considered Level 3 in the fair value hierarchy.
Intangible assets acquired for each of these acquisitions include customer relationships and acquired technology that are subject to amortization, and trade names that were assigned an indefinite life and are not subject to amortization. Additionally, the Dellner Couplers acquired intangible assets include backlog which is subject to amortization. Contingent liabilities assumed as part of each transaction were not material. These estimates are preliminary in nature and subject to adjustments, which could be material as the Company has not completed its valuation of acquired assets and liabilities. Certain information necessary to complete the valuations of assets acquired and liabilities assumed and final income tax computations is not yet available. Any necessary adjustments will be finalized within one year from the date of each respective acquisition, once the Company has received the necessary information.
Goodwill was calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of the net assets acquired, and represents the assembled workforce and the future economic benefits, including synergies, that are expected to be achieved as a result of the acquisition. The purchased goodwill is not expected to be deductible for tax purposes for Dellner Couplers or Frauscher, and approximately half of the purchased goodwill is expected to be deductible for tax purposes for Inspection Technologies. The pro forma impact on Wabtec’s sales and results of operations, including the pro forma effect of events that are directly attributable to these acquisitions, was not significant.
Also during 2025, the Freight Segment completed two additional acquisitions which were individually and collectively immaterial.
Transaction costs related to the completed acquisitions for the nine months ended September 30, 2026 were approximately $14 million and for the three and nine months ended September 30, 2025 were approximately $9 million and $44 million, respectively, and are included in Selling, general, and administrative expenses.
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4. INVENTORIES
The components of inventory, net of reserves, were:
| In millions | September 30, 2026 | December 31, 2025 | |||||||||
| Raw materials | $ | $ | |||||||||
| Work-in-progress | |||||||||||
| Finished goods | |||||||||||
| Total inventories | $ | $ | |||||||||
5. GOODWILL AND INTANGIBLE ASSETS
The change in the carrying amount of goodwill by segment is as follows:
| In millions | Freight Segment | Transit Segment | Total | ||||||||||||||
Balance at December 31, 2025 | $ | $ | $ | ||||||||||||||
| Additions/adjustments | |||||||||||||||||
| Foreign currency impact | ( | ( | ( | ||||||||||||||
Balance at September 30, 2026 | $ | $ | $ | ||||||||||||||
As of September 30, 2026 and December 31, 2025, the Company’s trade names had a net carrying amount of $897 million and $851 million, respectively. The Company believes these intangibles have indefinite lives.
Intangible assets of the Company, other than goodwill and trade names, consist of the following:
| September 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| In millions | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||||
| Backlog | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Customer relationships | ( | ( | ||||||||||||||||||||||||||||||||||||
| Acquired technology | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
At September 30, 2026, the weighted average remaining useful lives of backlog, customer relationships and acquired technology were 7 years, 16 years and 6 years, respectively. The backlog intangible asset primarily consists of in-place long-term agreements acquired by the Company in conjunction with past acquisitions. Amortization expense for intangible assets was $89 million and $267 million for the three and nine months ended September 30, 2026, respectively, and $77 million and $219 million for the three and nine months ended September 30, 2025, respectively.
Amortization expense for the five succeeding years is estimated to be as follows:
| In millions | |||||
| Remainder of 2026 | $ | ||||
| 2027 | $ | ||||
| 2028 | $ | ||||
| 2029 | $ | ||||
| 2030 | $ | ||||
15
6. CONTRACT ASSETS AND CONTRACT LIABILITIES
Contract assets include unbilled amounts resulting from sales under long-term contracts where revenue is recognized over time and revenue exceeds the amount that can be billed to the customer based on the terms of the contract. The current portion of the contract assets are classified as current assets under the caption “Unbilled accounts receivable” while the noncurrent contract assets are classified as other assets under the caption "Other noncurrent assets" on the Condensed Consolidated Balance Sheets. Noncurrent contract assets were $168 million at September 30, 2026 and $121 million at December 31, 2025. The Company has elected to use the practical expedient and does not consider unbilled amounts anticipated to be paid within one year as significant financing components.
Contract liabilities include customer deposits that are made prior to the incurrence of costs related to a newly agreed upon contract and advanced customer payments that are in excess of revenue recognized. The current portion of contract liabilities are classified as current liabilities under the caption “Customer deposits” while the noncurrent contract liabilities are classified as noncurrent liabilities under the caption "Other long-term liabilities" on the Condensed Consolidated Balance Sheets. Noncurrent contract liabilities were $332 million at September 30, 2026 and $259 million at December 31, 2025. These contract liabilities are not considered a significant financing component because they are used to meet working capital demands that can be higher in the early stages of a contract or revenue associated with the contract liabilities is expected to be recognized within one year. Contract liabilities also include provisions for estimated losses from uncompleted contracts. Provisions for loss contracts were $50 million and $82 million at September 30, 2026 and December 31, 2025, respectively. These provisions for estimated losses are classified as current liabilities and included within the caption “Other accrued liabilities” on the Condensed Consolidated Balance Sheets.
The change in the carrying amount of contract assets and contract liabilities for the nine months ended September 30, 2026 and 2025 is as follows:
| Contract Assets | |||||||||||
| In millions | 2026 | 2025 | |||||||||
| Balance at beginning of year | $ | $ | |||||||||
| Recognized in current year | |||||||||||
| Reclassified to accounts receivable | ( | ( | |||||||||
| Acquisitions/adjustments | |||||||||||
| Foreign currency impact | ( | ||||||||||
Balance at September 30 | $ | $ | |||||||||
| Contract Liabilities | |||||||||||
| In millions | 2026 | 2025 | |||||||||
| Balance at beginning of year | $ | $ | |||||||||
| Recognized in current year | |||||||||||
| Amounts in beginning balance reclassified to revenue | ( | ( | |||||||||
| Current year amounts reclassified to revenue | ( | ( | |||||||||
| Acquisitions | |||||||||||
| Foreign currency impact | ( | ||||||||||
| Balance at September 30 | $ | $ | |||||||||
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7. LEASES
The Company leases certain property, buildings and equipment. For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of lease payments. Many of the Company's leases include rental escalation clauses, renewal options, and/or termination options that are factored into our determination of lease payments when appropriate. The right-of-use assets are classified as noncurrent and included within the caption "Other noncurrent assets" on the Condensed Consolidated Balance Sheets. The current portion of lease liabilities are classified under the caption "Other accrued liabilities," while the noncurrent portion of lease liabilities are classified under the caption "Other long-term liabilities" on the Condensed Consolidated Balance Sheets. The Company does not separate lease and non-lease components. As most of the Company's leases do not provide a readily stated discount rate, the Company must estimate the rate to discount lease payments using its incremental borrowing rate.
Operating lease expense was $21 million and $62 million for the three and nine months ended September 30, 2026, respectively, and $19 million and $52 million for the three and nine months ended September 30, 2025, respectively. New operating leases of $46 million and $56 million were added during the three and nine months ended September 30, 2026, respectively, and $82 million and $117 million for the three and nine months ended September 30, 2025, respectively. Wabtec does not have material financing leases, short-term or variable leases or sublease income.
Scheduled payments of lease liabilities are as follows:
| In millions | Operating Leases | ||||
| Remaining 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total lease payments | |||||
| Less: Present value discount | ( | ||||
| Present value of lease liabilities | $ | ||||
The following table summarizes the remaining lease term and discount rate assumptions used to develop the present value of operating lease liabilities:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Weighted-average remaining lease term (years) | |||||||||||
| Weighted-average discount rate | % | % | |||||||||
17
8. LONG-TERM DEBT
Long-term debt consisted of the following:
| Effective Interest Rate | Face Value | September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||
| In millions | Book Value | Fair Value1 | Book Value | Fair Value1 | |||||||||||||||||||||||||||||||
| 2025 Credit Agreement: | |||||||||||||||||||||||||||||||||||
| Revolving Credit Facility | % | N/A | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Term Loan Facility, due 2030 | % | $ | |||||||||||||||||||||||||||||||||
| 2025 Term Credit Agreement: | |||||||||||||||||||||||||||||||||||
| Term Loan, due 2026 | % | $ | |||||||||||||||||||||||||||||||||
| Senior Notes: | |||||||||||||||||||||||||||||||||||
| % | $ | ||||||||||||||||||||||||||||||||||
| % | € | ||||||||||||||||||||||||||||||||||
| % | $ | ||||||||||||||||||||||||||||||||||
| % | $ | ||||||||||||||||||||||||||||||||||
| % | $ | ||||||||||||||||||||||||||||||||||
| % | $ | ||||||||||||||||||||||||||||||||||
Revolving Receivables Program | % | N/A | |||||||||||||||||||||||||||||||||
| Other Borrowings | |||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||
| Less: current portion | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Long-term portion | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
1. See Note 13 for information on the fair value measurement of the Company's long-term debt.
Variances between Face Value and Book Value are the result of unamortized discounts and debt issuance fees as well as foreign exchange on the Euro Notes and euro denominated borrowings under the Revolving Credit Facility.
The Company has debt issuance costs related to certain financing transactions which are also amortized through interest expense. As of September 30, 2026 and December 31, 2025, the Company had total combined unamortized discount and debt issuance costs of $21 million and $26 million, respectively. Amortization of discounts and debt issuance fees are included in the calculation of Effective Interest Rate.
Credit Agreements
On November 28, 2025, the Company entered into a new stand-alone credit agreement (the "2025 Term Credit Agreement") for a term loan of $500 million. Borrowings under the 2025 Term Credit Agreement bear interest at a plus an interest rate spread up to 1.50 % based on the lower of the pricing corresponding to (i) the Company's Leverage Ratio or (ii) the Company's public credit rating. The frequency of interest payments varies based upon the Interest Election Request. The term loan issued under this agreement will mature on November 27, 2026. The obligations of the Company under this agreement are unsecured and have been guaranteed by certain of the Company's subsidiaries. The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type. The borrowing rate for the agreement is a variable rate assessed periodically in accordance with the terms of the agreement. At September 30, 2026, the interest rate was 4.9 %.
On April 23, 2025, the Company entered into a new unsecured credit agreement (the "2025 Credit Agreement"), which amended, restated, and refinanced certain prior credit agreements. The 2025 Credit Agreement provides for borrowings consisting of (i) a multi-currency revolving credit facility for a U.S. dollar equivalent of up to $2.0 billion (the “Revolving Credit Facility”) and (ii) a delayed draw term loan facility of $725 million (the “Term Loan Facility”), all pursuant to the terms and conditions of the 2025 Credit Agreement. The Term Loan Facility was utilized to refinance outstanding borrowings with the remaining amount utilized as part of funding for the Inspection Technologies acquisition. The 2025 Credit Agreement includes an incremental facility that allows the Company to request, at prevailing market rates, an aggregate amount not to exceed $1.0 billion, (a) increases to the borrowing commitments under the Revolving Credit Facility and/or (b) new incremental term loan commitments. The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type.
Borrowings under the 2025 Credit Agreement mature on April 23, 2030. Amounts borrowed and repaid under the Term Loan Facility may not be reborrowed. The applicable interest rate for borrowings under the 2025 Credit Agreement includes a (per the Interest Election terms of the agreement) plus an interest rate spread up to 1.75 % based on the lower of the pricing corresponding to (i) the Company’s financial leverage or (ii) the Company’s public credit rating. At September 30,
18
2026, the interest rate on the Term Loan Facility and the Revolving Credit Facility were both 5.1 2.0 billion of unsecured short-term notes. The program is supported by the Company's existing Revolving Credit Facility and does not increase the Company's overall borrowing capacity.
Under the 2025 Term Credit Agreement and the 2025 Credit Agreement, the Company has agreed to maintain an Interest Coverage Ratio of at least 3.0 to 1.0, and a Leverage Ratio not to exceed 3.5 to 1.0. The Interest Coverage Ratio is calculated using an earnings metric as defined in the agreement compared to Interest Expense for the four quarters then ended. The Leverage Ratio is defined as net debt (total debt, net of up to $500 million of unrestricted cash) as of the last day of such fiscal quarter to the defined earnings metric for the four quarters then ended. Additionally, the Company may effect an increase in the maximum Leverage Ratio in contemplation of a Material Acquisition. All terms are as defined in the 2025 Credit Agreement.
The following table presents availability under the 2025 Credit Agreement at September 30, 2026:
| In millions | Revolving Credit Facility | Term Loan Facility | Total | |||||||||||||||||
| Maximum Availability | $ | $ | $ | |||||||||||||||||
| Outstanding Borrowings | ( | ( | ( | |||||||||||||||||
| Letters of Credit Under Credit Agreement | ||||||||||||||||||||
| Current Availability | $ | $ | $ | |||||||||||||||||
The Company was in compliance with all financial covenants in the 2025 Credit Agreement and the 2025 Term Credit Agreement as of September 30, 2026.
Senior Notes
The Company or its subsidiaries may issue senior notes from time to time. These notes are comprised of our 3.45 % Senior Notes due 2026 (the "2026 Notes"), 1.25 % Senior Notes (EUR) due 2027 (the "Euro Notes"), 4.70 % Senior Notes due 2028 (the "2028 Notes"), 4.90 % Senior Notes due 2030 (the "2030 Notes"), 5.611 % Senior Notes due 2034 (the "2034 Notes"), and 5.50 % Senior Notes due 2035 (the "2035 Notes"). The 2026 Notes, 2028 Notes, 2030 Notes, 2034 Notes, and 2035 Notes are the “US Notes”, and collectively with the Euro Notes, the “Senior Notes.” Interest on the US Notes is payable semi-annually and interest on the Euro Notes is paid annually. Each series of the Senior Notes may be redeemed at any time in whole or from time to time in part in accordance with the provisions of the indenture, under which such series of notes was issued. Each of the Senior Notes may be redeemed at a redemption price of 100 % of the principal amount plus a specified make-whole premium and accrued interest. The US Notes and the Company's guarantee of the Euro Notes are senior unsecured obligations of the Company and rank pari passu with all existing and future senior debt, and are senior to all existing and future subordinated indebtedness of the Company.
On May 29, 2025, the Company issued (i) $500 million of 4.90 % Senior Notes due 2030 and (ii) $750 million of 5.50 % Senior Notes due 2035. The 2030 Notes and 2035 Notes were issued at approximately 100 12 4.90 % and 5.50 %, respectively, per year, payable semi-annually on May 29 and November 29 of each year, commencing November 29, 2025. The 2030 Notes will mature on May 29, 2030, and the 2035 Notes will mature on May 29, 2035.
Proceeds from the 2030 Notes and cash on hand were utilized to repay the outstanding amount of notes due in 2025 at maturity. Proceeds from the 2035 Notes were utilized as part of funding for the Inspection Technologies acquisition, which closed July 1, 2025.
The indentures under which the Senior Notes were issued contain covenants and restrictions which limit, subject to certain exceptions, certain sale and leaseback transactions with respect to principal properties, the incurrence of secured debt without equally and ratably securing the Senior Notes, and certain merger and consolidation transactions. The covenants do not require the Company to maintain any financial ratios or specified levels of net worth or liquidity. The US Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis by each of the Company's subsidiaries that is a guarantor under the 2025 Credit Agreement. The Euro Notes were issued by Wabtec Transportation Netherlands B.V. and are fully and unconditionally guaranteed by the Parent Company.
19
9. STOCK-BASED COMPENSATION
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, as amended and restated (the “2011 Plan”) and the 2000 Stock Incentive Plan, as amended (the “2000 Plan”). The 2011 Plan has a term through May 15, 2030, and as of September 30, 2026, the number of shares available for future grants under the 2011 Plan was approximately 3.3 million shares. The Company also maintains a 1995 Non-Employee Directors’ Fee and Stock Option Plan as amended and restated (the "Directors Plan”).
Stock-based compensation expense was $30 million and $92 million for the three and nine months ended September 30, 2026, respectively, and $24 million and $68 million for the three and nine months ended September 30, 2025, respectively. At September 30, 2026, unamortized compensation expense related to stock options, non-vested restricted shares and incentive stock units expected to vest was approximately $132 million.
Stock Options Stock options can be granted to eligible employees and directors at an exercise price equal to fair market value, which is the average of the high and low Wabtec stock price on the date of grant. Options become exercisable over a three-year vesting period and expire 10 years from the date of grant. There were no 81,038 shares issuable pursuant to exercisable stock options.
Restricted Stock, Restricted Stock Units and Incentive Stock Units As provided for under the 2011 Plan and 2000 Plan, eligible employees are granted restricted stock and restricted stock units that generally vest over three years from the date of grant. Under the Directors Plan, restricted stock awards vest one year from the date of grant. The restricted stock units are liability-classified equity awards as they can be settled in cash.
Annually, the Company issues incentive stock units to eligible employees that vest upon attainment of certain cumulative three-year performance goals, including a Relative Total Stockholder Return ("RTSR") modifier. The RTSR modifier can increase or decrease the payment by up to 20 three-year performance, which is then used to estimate the total shares expected to vest over the three-year vesting cycle and corresponding expense based on the grant date fair value of the award. When determining the estimated three-year performance, the Company utilizes a combination of historical actual results, budgeted results and forecasts. Upon the initial grant of a performance cycle, the Company estimates the three-year performance at 100 %. 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. As of September 30, 2026, the Company estimates that it will achieve 200 %, 200 % and 182 % for the incentive stock awards expected to vest, inclusive of the RTSR modifier, based on the estimated performance for the three-year
During the first quarter of 2026, the Company also issued an additional incentive stock unit grant for certain eligible employees. The grant has a one-year performance goal for 2026 and a three-year vesting period. Eligible employees vest from 0 % to 100 % of the initial incentive stock units granted based upon attainment of the 2026 performance goal. As of September 30, 2026, the Company estimates that it will achieve 100 % of the one-year performance goal.
Quarterly, the Company reviews and updates performance estimates based on actual performance results and current projections. If the estimates of the number of these incentive 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. The incentive stock units included in the table below represent the number of incentive stock units that are expected to vest based on the Company’s estimate for meeting those established performance targets.
Compensation expense for the non-vested restricted stock and incentive stock units is based on the closing price of the Company's common stock on the date of grant and recognized over the applicable vesting period. Expense for incentive stock units is updated as necessary based on the Company's performance.
20
The following table summarizes the restricted stock, restricted stock unit and incentive stock unit activity and related information for the nine months ended September 30, 2026:
| Restricted Stock and Units | Incentive Stock Units | Weighted Average Grant Date Fair Value | |||||||||||||||
| Outstanding at December 31, 2025 | $ | ||||||||||||||||
| Granted | $ | ||||||||||||||||
| Vested | ( | ( | $ | ||||||||||||||
| Adjustment for incentive stock awards expected to vest | $ | ||||||||||||||||
| Canceled | ( | ( | $ | ||||||||||||||
| Outstanding at September 30, 2026 | $ | ||||||||||||||||
10. INCOME TAXES
The following table presents the overall effective tax rate for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Overall Effective Tax Rate | % | ||||||||||||||||||||||
The year-over-year decrease in the effective rate for the three months ended September 30, 2026 was primarily driven by the jurisdictional mix of earnings. The year-over-year decrease in the effective tax rate for the nine months ended September 30, 2026 was primarily driven by prior period audit settlements, higher discrete equity compensation tax deductions and the jurisdictional mix of earnings.
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11. EARNINGS PER SHARE
The Company’s non-vested restricted stock contains rights to receive non-forfeitable 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 excludes the income attributable to the non-vested restricted stock from the numerator, which results in approximately 0.2 0.3 The computation of basic and diluted earnings per share for Net income attributable to Wabtec shareholders is as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| In millions, except per share data | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Numerator | |||||||||||||||||||||||
| Net income attributable to Wabtec shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Less: Net income allocated to non-vested restricted stock | ( | ( | ( | ||||||||||||||||||||
| Numerator for basic and diluted earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
| Denominator | |||||||||||||||||||||||
| Weighted average shares outstanding - basic | |||||||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||
| Assumed conversion of dilutive stock-based compensation plans excluding non-vested restricted stock | |||||||||||||||||||||||
| Assumed conversion of dilutive non-vested restricted stock | |||||||||||||||||||||||
| Weighted average shares outstanding - diluted | |||||||||||||||||||||||
| Earnings per common share attributable to Wabtec shareholders | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
12. WARRANTIES
The following table reconciles the changes in the Company’s product warranty reserve for the nine months ended September 30, 2026 and 2025:
| In millions | 2026 | 2025 | |||||||||
| Balance at beginning of year | $ | $ | |||||||||
| Warranty expense | |||||||||||
| Warranty claim payments | ( | ( | |||||||||
| Acquisitions | |||||||||||
| Foreign currency impact | ( | ||||||||||
Balance at September 30 | $ | $ | |||||||||
13. FAIR VALUE MEASUREMENT AND DERIVATIVE 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.
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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 Company’s cash, cash equivalents and restricted cash 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, cash equivalents and restricted cash approximated the carrying value at September 30, 2026 and December 31, 2025. The Senior Notes are considered Level 2 based on the fair value valuation hierarchy.
Hedging Activities In the normal course of business, the Company is exposed to market risk related to interest rates, commodity prices and foreign currency exchange rate fluctuations, which may adversely affect our operating results and financial position. At times, we limit these risks through the use of derivatives such as cross-currency swaps, foreign currency forward contracts, interest rate swaps, commodity swaps and options. These hedging 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. In accordance with our policy, derivatives are only used for hedging purposes. We do not use derivatives for trading or speculative purposes.
The Company uses forward contracts to hedge forecasted foreign currency denominated sales of finished goods and future settlement of foreign currency denominated assets and liabilities. The Company may use interest rate hedge contracts on certain investing and borrowing transactions to manage its net exposure to interest rate changes and to manage its overall cost of borrowing. During 2026, the Company entered into new interest rate hedge contracts to manage interest rate risk for a portion of future expected debt transactions. The Company may also use commodity forward swaps to manage its exposure to commodity price changes and to reduce its overall cost of manufacturing.
The Company has also established balance sheet risk management and net investment hedging programs to protect its balance sheet against foreign currency exchange rate volatility. We conduct our business worldwide in U.S. dollars and the functional currencies of our foreign subsidiaries, including euro, Indian rupee, British pound sterling, Australian dollars, Canadian dollars, Brazilian real, Kazakhstani tenge, and several other foreign currencies. Changes in these foreign currency exchange rates could have a material adverse impact on our financial results that are reported in U.S. dollars. We are also exposed to foreign currency exchange rate risk related to our foreign subsidiaries, including intercompany loans denominated in non-functional currencies. We hedge these exposures using foreign currency swap contracts and cross-currency swaps to offset the potential income statement effects on intercompany loans denominated in non-functional currencies. These programs reduce but do not eliminate foreign currency exchange rate risk entirely. Net gains and losses related to the Company's hedging activities, except as described below, were not material for the three and nine months ended September 30, 2026 and 2025.
During 2025, in connection with the acquisitions of Frauscher and Dellner Couplers, the Company entered into foreign exchange contracts for a notional value of €1,290 million to mitigate foreign currency exposure of the purchase prices. As part of the acquisition of Frauscher in the fourth quarter of 2025, the Company utilized foreign exchange forward contracts with a notional value of €690 million. As part of the acquisition of Dellner Couplers in the first quarter of 2026, the Company utilized foreign exchange forward contracts with a notional value of €600 million. The contracts are not designated as accounting hedges under Topic 815 of ASC, and as such, the gains and losses are recorded as a component of Other income (expense), net. For the nine months ended September 30, 2026, these contracts resulted in a net gain of $2 million. For the three and nine months ended September 30, 2025, these contracts resulted in a net loss of $(2 ) million and a net gain of $30 million, respectively.
At September 30, 2026, the Company had a total gross notional amount of designated and non-designated derivatives of $729 million and $434 million, respectively. At December 31, 2025, the Company had a total gross notional amount of designated and non-designated derivatives of $467 million and $1.355 billion, respectively. The related assets and liabilities at both September 30, 2026 and December 31, 2025 were not significant.
14. COMMITMENTS AND CONTINGENCIES
The Company is subject to a variety of environmental laws and regulations governing discharges to air and water, the handling, storage and disposal of hazardous or solid waste materials and the remediation of contamination associated with releases of hazardous substances. The Company believes its operations currently comply in all material respects with all of the various environmental laws and regulations applicable to our business; however, there can be no assurance that environmental requirements will not change in the future or that we will not incur significant costs to comply with such requirements.
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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. The vast majority of the claims are submitted to insurance carriers for defense and indemnity, or to non-affiliated companies that retain the liabilities for the asbestos-containing products at issue. We cannot, however, assure that all of these claims will be fully covered by insurance, or that the indemnitors or insurers will remain financially viable. Our ultimate legal and financial liability with respect to these claims, as is the case with other pending litigation, cannot be estimated. A limited number of claims are not covered by insurance, nor are they subject to indemnity from non-affiliated parties. Management believes that the costs of the Company’s asbestos-related cases will not be material to the Company’s overall financial position, results of operations and cash flows.
During the third quarter of 2023, a competitor of the Company, Progress Rail (“Progress”), which is a Caterpillar Inc. company, sued the Company in the U.S. District Court for the District of Delaware asserting antitrust, breach of contract, unfair competition law, defamation and false advertising claims. In February 2026, the Company and Progress Rail agreed to settle all of Progress Rail’s claims without admission of liability by the Company, and the settlement did not have any impact on the Company’s operating results or cash flows.
From time to time the Company is involved in litigation relating to claims arising out of its operations in the ordinary course of business. As of the date hereof, the Company is involved in no litigation that the Company believes will have a material adverse effect on its financial condition, results of operations or liquidity.
15. SEGMENT INFORMATION
The Company 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 Company's business segments are:
Freight Segment builds, rebuilds, upgrades, and overhauls locomotives, services locomotives and freight cars, and provides a range of component and digital solutions for customers in the freight and transit rail, mining, and marine industries. It also manufactures and services components for new and existing freight cars and locomotives, supplies railway electronics, positive train control equipment, signal design and engineering services, maintenance of way, and provides heat exchange and cooling systems for locomotives and power generation equipment. Customers include large, publicly traded railroads, leasing companies, manufacturers of original equipment such as locomotives and freight cars, and utilities, and also serves companies in the mining, marine, and industrial markets and applications. We refer to sales of both goods, such as spare parts and equipment upgrades, and related services, such as monitoring, maintenance and repairs, as sales in our Services product line.
Transit Segment primarily manufactures and services components and train connection systems for new and existing passenger transit vehicles, typically regional trains, high speed trains, subway cars, light-rail vehicles and buses. It also refurbishes subway cars and provides heating, ventilation, and air conditioning equipment and doors for buses and subway cars. Customers include public transit authorities and municipalities, leasing companies and manufacturers of passenger transit vehicles and buses, and companies in the electrical generation, distribution, and charging industries.
Wabtec’s chief operating decision maker ("CODM") is the Company’s Chairman and Chief Executive Officer, Rafael Santana. Mr. Santana utilizes Income (loss) from operations as the primary reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources. For both of the Company’s segments, the CODM uses segment Income (loss) from operations to make operational and personnel related decisions across the business. The CODM considers actual, budgeted and forecasted Income (loss) from operations on a monthly basis for evaluating the performance of each segment and making decisions about allocating capital and other resources to each segment. Additionally, Gross margin is used by the CODM as a secondary measure of segment profit or loss in assessing segment performance and deciding how to allocate resources. For both of the Company’s segments, the CODM uses segment Gross margin to make commercial and operational related decisions across the business.
Intersegment sales are accounted for at prices that are generally established by reference to similar transactions with unaffiliated customers. Corporate activities include general corporate expenses, elimination of certain intersegment transactions, interest income and expense and other unallocated charges. Segment assets for the Freight and Transit Segment include assets directly utilized for segment operations, as well as the related goodwill and intangible assets. Corporate segment assets include cash, cash equivalents, and restricted cash, equity method investment assets, certain tax assets, receivables held by our bankruptcy-remote facility, pension assets, corporate headquarters' assets and other asset balances that are managed outside of operating segments.
Cost of sales for both segments represents costs directly related to manufacturing products and providing services. Primary costs include raw materials, direct labor, overhead, shipping and handling, warehousing, and the depreciation of manufacturing, warehousing and distribution facilities. Selling, general and administrative expenses for both segments represent costs incurred in managing the business, including salary, benefits, professional fees and operating costs associated with each
24
segment’s non-manufacturing activities. The amounts of depreciation and amortization disclosed by reportable segment are included within their respective segment expense captions, such as Cost of sales, Selling, general & administrative expenses and Amortization expense.
Segment financial information for the three months ended September 30, 2026 is as follows:
| In millions | Freight Segment | Transit Segment | Corporate Activities and Elimination | Total | |||||||||||||||||||
| Sales to external customers | $ | $ | $ | $ | |||||||||||||||||||
| Cost of sales | ( | ( | ( | ||||||||||||||||||||
| Gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Gross margin | % | % | |||||||||||||||||||||
| Selling, general & administrative expenses | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Engineering expenses | ( | ( | ( | ||||||||||||||||||||
| Amortization expense | ( | ( | ( | ||||||||||||||||||||
| Income (loss) from operations | ( | ||||||||||||||||||||||
| Interest expense and other, net | ( | ( | |||||||||||||||||||||
| Income (loss) before income taxes | $ | $ | $ | ( | $ | ||||||||||||||||||
| Intersegment sales/(elimination) | $ | $ | $ | ( | $ | — | |||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
| Capital expenditures | $ | $ | $ | $ | |||||||||||||||||||
| Segment assets | $ | $ | $ | $ | |||||||||||||||||||
Segment financial information for the three months ended September 30, 2025 is as follows:
| In millions | Freight Segment | Transit Segment | Corporate Activities and Elimination | Total | |||||||||||||||||||
| Sales to external customers | $ | $ | $ | $ | |||||||||||||||||||
| Cost of sales | ( | ( | ( | ||||||||||||||||||||
| Gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Gross margin | % | % | |||||||||||||||||||||
| Selling, general & administrative expenses | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Engineering expenses | ( | ( | ( | ||||||||||||||||||||
| Amortization expense | ( | ( | ( | ||||||||||||||||||||
| Income (loss) from operations | ( | ||||||||||||||||||||||
| Interest expense and other, net | ( | ( | |||||||||||||||||||||
| Income (loss) before income taxes | $ | $ | $ | ( | $ | ||||||||||||||||||
| Intersegment sales/(elimination) | $ | $ | $ | ( | $ | — | |||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
| Capital expenditures | $ | $ | $ | $ | |||||||||||||||||||
| Segment assets | $ | $ | $ | $ | |||||||||||||||||||
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Segment financial information for the nine months ended September 30, 2026 is as follows:
| In millions | Freight Segment | Transit Segment | Corporate Activities and Elimination | Total | |||||||||||||||||||
| Sales to external customers | $ | $ | $ | $ | |||||||||||||||||||
| Cost of sales | ( | ( | ( | ||||||||||||||||||||
| Gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Gross margin | % | % | |||||||||||||||||||||
| Selling, general & administrative expenses | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Engineering expenses | ( | ( | ( | ||||||||||||||||||||
| Amortization expense | ( | ( | ( | ||||||||||||||||||||
| Income (loss) from operations | ( | ||||||||||||||||||||||
| Interest expense and other, net | ( | ( | |||||||||||||||||||||
| Income (loss) before income taxes | $ | $ | $ | ( | $ | ||||||||||||||||||
| Intersegment sales/(elimination) | $ | $ | $ | ( | $ | — | |||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
| Capital expenditures | $ | $ | $ | $ | |||||||||||||||||||
Segment financial information for the nine months ended September 30, 2025 is as follows:
| In millions | Freight Segment | Transit Segment | Corporate Activities and Elimination | Total | |||||||||||||||||||
| Sales to external customers | $ | $ | $ | $ | |||||||||||||||||||
| Cost of sales | ( | ( | ( | ||||||||||||||||||||
| Gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Gross margin | % | % | |||||||||||||||||||||
| Selling, general & administrative expenses | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Engineering expenses | ( | ( | ( | ||||||||||||||||||||
| Amortization expense | ( | ( | ( | ||||||||||||||||||||
| Income (loss) from operations | ( | ||||||||||||||||||||||
| Interest expense and other, net | ( | ( | |||||||||||||||||||||
| Income (loss) before income taxes | $ | $ | $ | ( | $ | ||||||||||||||||||
| Intersegment sales/(elimination) | $ | $ | $ | ( | $ | — | |||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
| Capital expenditures | $ | $ | $ | $ | |||||||||||||||||||
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Sales to external customers by product line are as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| In millions | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Freight Segment: | ||||||||||||||||||||||||||
| Services | $ | $ | $ | $ | ||||||||||||||||||||||
| Equipment | ||||||||||||||||||||||||||
| Components | ||||||||||||||||||||||||||
| Digital Intelligence | ||||||||||||||||||||||||||
| Total Freight Segment | $ | $ | $ | $ | ||||||||||||||||||||||
| Transit Segment: | ||||||||||||||||||||||||||
| Original Equipment Manufacturer | $ | $ | $ | $ | ||||||||||||||||||||||
| Aftermarket | ||||||||||||||||||||||||||
| Total Transit Segment | $ | $ | $ | $ | ||||||||||||||||||||||
16. OTHER INCOME (EXPENSE), NET
The components of Other income (expense), net are as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| In millions | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Foreign currency gain (loss) | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| (Loss) gain on mark-to-market derivatives | ( | |||||||||||||||||||||||||
| Equity (loss) income | ( | |||||||||||||||||||||||||
| Expected return on pension assets/amortization | ||||||||||||||||||||||||||
| Other miscellaneous expense, net | ( | ( | ||||||||||||||||||||||||
| Total Other income (expense), net | $ | $ | ( | $ | $ | |||||||||||||||||||||
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17. RESTRUCTURING
Wabtec is focused on driving operational efficiency and improving profitability while reducing manufacturing complexity. As a result, there are key strategic initiatives aimed at achieving these focus areas.
Integration 3.0
Integration 3.0 is a multi-year strategic initiative to further consolidate our footprint, reduce complexity and streamline manufacturing, engineering, administrative, and commercial activities. The Company anticipates that it will incur one-time restructuring charges related to Integration 3.0 of approximately $80 million to $100 million. Net charges to date of $45 million were primarily for employee-related costs.
A summary of restructuring charges related to the Integration 3.0 initiative is as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| In millions | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Freight Segment: | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
| Total Freight Segment | $ | $ | $ | $ | |||||||||||||||||||
| Transit Segment: | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
| Total Transit Segment | $ | $ | $ | $ | |||||||||||||||||||
| Corporate: | |||||||||||||||||||||||
| Selling, general and administrative expenses | $ | $ | $ | $ | |||||||||||||||||||
| Total Integration 3.0 restructuring charges, net | $ | $ | $ | $ | |||||||||||||||||||
Portfolio Optimization
Wabtec is focused on exiting various low-margin product offerings through Portfolio Optimization to improve profitability while reducing manufacturing complexity. There were no material cash payments during the three and nine months ended September 30, 2026 and 2025. Wabtec recorded net charges of approximately $3 million and $2 million during the three and nine months ended September 30, 2026, respectively, and $3 million during the nine months ended September 30, 2025, primarily for asset write-downs related to Portfolio Optimization. Total one-time restructuring charges related to Portfolio Optimization to date are approximately $103 million.
Integration 2.0
Integration 2.0 is a multi-year strategic initiative to review and consolidate our operating footprint, reduce headcount, streamline the end-to-end manufacturing process, restructure the North America distribution channels, expand operations in low-cost countries, and simplify the business through systems enablement. The Company anticipates that it will incur one-time restructuring charges related to Integration 2.0 of up to approximately $170 million, of which approximately $148 million has been incurred to date. There were no material charges or cash payments during the three and nine months ended September 30, 2026 and 2025.
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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, 2025, filed with the Securities and Exchange Commission on February 13, 2026.
OVERVIEW
Wabtec is a global provider of value-added, technology-based locomotives, equipment, systems, and services for the freight rail and passenger transit industries, as well as the mining, marine and industrial markets and applications. Our highly engineered rail and transit products, which are designed to enhance safety, improve productivity and reduce maintenance costs for customers, can be found on most locomotives, freight cars, passenger transit cars and buses around the world. 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 over 50 countries and our products can be found in more than 100 countries worldwide. In the first nine months of 2026, approximately half of the Company’s net sales were generated from customers outside the United States.
Business Update
During the first quarter of 2025, Wabtec announced a definitive agreement to acquire Dellner Couplers, a global leader in highly engineered safety-critical train connection systems and services for passenger rail rolling stock. The acquisition subsequently closed on February 10, 2026 for approximately $1.053 billion and is included within our Transit Segment.
Total multi-year backlog increased $4.0 billion during the first nine months of 2026 to a record $31.4 billion at September 30, 2026. Significant Freight orders during the first nine months of 2026 included international orders spanning new locomotives, components, digital solutions, and multi-year services, including a multi-year service agreement supporting the Simandou mining project. Other significant Freight orders included a multi-year, multi-billion-dollar mining contract for drive systems and aftermarket parts, new locomotive and modernization orders in North America across multiple Class 1 customers, an international Positive Train Control (PTC) order, and a mining drive systems order in the Asia-Pacific region. We also began executing the first EVO modernization build to support the commercial rollout to the installed base. In Transit during the first nine months of 2026, we were awarded several significant orders across multiple key customers in brakes, couplers, and platform doors.
Wabtec is focused on driving operational efficiency and improving profitability while reducing manufacturing complexity. As a result, there are restructuring initiatives, including Integration 3.0, Portfolio Optimization and Integration 2.0, aimed at achieving these focus areas. During the first nine months of 2026 and 2025, Wabtec incurred $10 million and $21 million, respectively, of restructuring costs primarily for employee-related costs on programs under these initiatives. In addition, Transaction costs incurred during the nine months ended September 30, 2026 and 2025 related to recent acquisitions were approximately $14 million and $44 million, respectively.
Future macroeconomic volatility, changes to tariffs and trade policies, impacts from regional conflicts and war, supply chain disruptions, and labor availability, amongst other things, could cause a negative impact on revenue and cost increases resulting in an adverse effect on the Company’s operating results. Additionally, broad-based inflation, metals, energy and other commodity costs, transportation and logistics costs, labor costs, and foreign currency exchange rate fluctuations all continue to impact our results. The Company utilizes various mitigating actions intended to lessen the impact of macroeconomic volatility, including the impact of current tariffs. These actions include implementing price escalations and surcharges, driving operational efficiencies through various cost mitigation efforts and discretionary spend management, strategically sourcing materials, reviewing and modifying distribution logistics, and accelerating integration synergies through our strategic initiatives. The Company has experienced increased tariff costs which have unfavorably impacted our operating results and cash from operations for the nine months ended September 30, 2026. Although a nominal amount of these costs has been recovered through tariff refunds and the Company continues to pursue additional refund claims, the net impact of tariffs and timing of refunds on the Company's results of operations and cash flows remains subject to uncertainty.
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RESULTS OF OPERATIONS
Consolidated Results
THIRD QUARTER 2026 COMPARED TO THIRD QUARTER 2025
The following table shows our Condensed Consolidated Statements of Operations for the periods indicated.
| Three Months Ended September 30, | |||||||||||
| In millions | 2026 | 2025 | |||||||||
| Net sales: | |||||||||||
| Sales of goods | $ | 2,627 | $ | 2,425 | |||||||
| Sales of services | 493 | 461 | |||||||||
| Total Net sales | 3,120 | 2,886 | |||||||||
| Cost of sales: | |||||||||||
| Cost of goods | (1,664) | (1,617) | |||||||||
| Cost of services | (292) | (267) | |||||||||
| Total Cost of sales | (1,956) | (1,884) | |||||||||
| Gross profit | 1,164 | 1,002 | |||||||||
| Operating expenses: | |||||||||||
| Selling, general and administrative expenses | (383) | (375) | |||||||||
| Engineering expenses | (67) | (59) | |||||||||
| Amortization expense | (89) | (77) | |||||||||
| Total Operating expenses | (539) | (511) | |||||||||
| Income from operations | 625 | 491 | |||||||||
| Other income and expenses: | |||||||||||
| Interest expense, net | (80) | (65) | |||||||||
| Other income (expense), net | 12 | (1) | |||||||||
| Income before income taxes | 557 | 425 | |||||||||
| Income tax expense | (146) | (112) | |||||||||
| Net income | 411 | 313 | |||||||||
| Less: Net income attributable to noncontrolling interest | (2) | (3) | |||||||||
| Net income attributable to Wabtec shareholders | $ | 409 | $ | 310 | |||||||
The following table shows the major components of the change in Net sales in the three months ended September 30, 2026 from the three months ended September 30, 2025:
| In millions | Freight Segment | Transit Segment | Total | ||||||||||||||
| Third Quarter 2025 Net sales | $ | 2,093 | $ | 793 | $ | 2,886 | |||||||||||
| Acquisitions | 49 | 65 | 114 | ||||||||||||||
| Portfolio Optimization (Divestitures/Exits) | (11) | (1) | (12) | ||||||||||||||
| Foreign Exchange | 4 | (9) | (5) | ||||||||||||||
| Organic | 102 | 35 | 137 | ||||||||||||||
| Third Quarter 2026 Net sales | $ | 2,237 | $ | 883 | $ | 3,120 | |||||||||||
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Net sales
Net sales for the three months ended September 30, 2026 increased by $234 million, or 8.1%, to $3.12 billion compared to the same period in 2025. Organic sales increased $137 million, or 4.7%, which was attributable to both the Freight and Transit Segments. Freight sales increased primarily due to higher deliveries of locomotive modernizations, higher core services sales, strong industrial and maintenance of way demand, higher sales of asset inspection products and higher mining sales, partially offset by lower locomotive deliveries. Transit sales increased from higher demand for Aftermarket and Original Equipment Manufacturing products and services driven by increased investments in sustainable infrastructure, fleet expansion and renewals and increased passenger ridership levels. Acquisitions increased Net sales by $114 million, or 4.0%, and unfavorable changes in foreign exchange decreased Net sales by $5 million, or 0.2%.
Cost of sales
Cost of sales for the three months ended September 30, 2026 increased by $72 million, or 3.8%, to $1.96 billion compared to the same period in 2025. The increase is primarily due to the increase in Net sales. Cost of sales as a percentage of Net sales was 62.7% and 65.3% for the three months ended September 30, 2026 and 2025, respectively. The improvement in gross margin is attributable to productivity and efficiency, favorable mix within both the Freight and Transit segments, savings from integration and other restructuring initiatives and accretion from recent acquisitions, partially offset by higher commodity costs and net tariffs. Cost of sales for the three months ended September 30, 2025 included $24 million of costs related to purchase price accounting for the step-up of inventory to fair value related to acquisitions. Cost of sales for the three months ended September 30, 2026 and 2025 both included $2 million of costs related to restructuring initiatives.
Operating expenses
Total operating expenses increased $28 million, or 5.5%, for the three months ended September 30, 2026 compared to the same period in 2025. Selling, general and administrative expenses ("SG&A") increased $8 million for the three months ended September 30, 2026 compared to the same period in 2025. The increase is primarily due to incremental expense from acquisitions, partially offset by lower transaction costs and the impacts of integration and other restructuring initiatives. Transaction costs associated with acquisitions included in SG&A were $9 million for the three months ended September 30, 2025. SG&A for the three months ended September 30, 2025 included $4 million of costs related to restructuring initiatives. Engineering expenses increased $8 million and Amortization expense increased $12 million, both due to incremental expense from acquisitions.
Interest expense, net
Interest expense, net, increased $15 million to $80 million for the three months ended September 30, 2026 compared to the same period in 2025, due to higher average overall debt balances in the current period, primarily related to acquisitions.
Other income (expense), net
Other income (expense), net increased $13 million for the three months ended September 30, 2026 compared to the same period in 2025, primarily due to foreign exchange gains in the current period.
Income taxes
The effective income tax rate of 26.3% for the three months ended September 30, 2026 was mostly flat compared to 26.4% for the three months ended September 30, 2025.
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Freight Segment
The following table shows our Condensed Consolidated Statements of Operations for our Freight Segment for the periods indicated:
| Three Months Ended September 30, | |||||||||||||||||||||||
| In millions | 2026 | 2025 | Change | % Change | |||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| Sales of goods | $ | 1,746 | $ | 1,634 | $ | 112 | 6.9 | % | |||||||||||||||
| Sales of services | 491 | 459 | 32 | 7.0 | % | ||||||||||||||||||
| Total Net sales | 2,237 | 2,093 | 144 | 6.9 | % | ||||||||||||||||||
| Cost of sales: | |||||||||||||||||||||||
| Cost of goods | (1,085) | (1,077) | 8 | 0.7 | % | ||||||||||||||||||
| Cost of services | (291) | (266) | 25 | 9.4 | % | ||||||||||||||||||
| Total Cost of sales | (1,376) | (1,343) | 33 | 2.5 | % | ||||||||||||||||||
| Cost of sales (% of Net sales) | 61.5 | % | 64.2 | % | (2.7) | ||||||||||||||||||
| Gross profit | 861 | 750 | 111 | 14.8 | % | ||||||||||||||||||
| Operating expenses | (346) | (336) | 10 | 3.0 | % | ||||||||||||||||||
| Income from operations | $ | 515 | $ | 414 | $ | 101 | 24.4 | % | |||||||||||||||
| Income from operations (% of Net sales) | 23.0 | % | 19.8 | % | 3.2 | ||||||||||||||||||
The following table shows the major components of the change in Net sales for the Freight Segment in the third quarter of 2026 from the third quarter of 2025:
| In millions | |||||
| Third Quarter 2025 Net sales | $ | 2,093 | |||
| Acquisitions | 49 | ||||
| Portfolio Optimization (Divestitures/Exits) | (11) | ||||
| Foreign Exchange | 4 | ||||
| Organic changes in Net sales by Product Line: | |||||
| Equipment | 3 | ||||
| Services | 50 | ||||
| Digital Intelligence | 19 | ||||
| Components | 30 | ||||
| Third Quarter 2026 Net sales | $ | 2,237 | |||
Net sales
Freight Segment organic sales increased by $102 million, or 4.9%, driven primarily by Services sales from higher deliveries of locomotive modernizations and higher core services sales, Components sales from strong industrial, maintenance of way, and international demand, partially offset by lower North America railcar build, and Digital sales from higher demand for asset inspection products. Equipment sales also increased slightly from higher mining sales, mostly offset by lower locomotive deliveries. Acquisitions increased sales by $49 million, or 2.3%, primarily from Frauscher, and favorable changes in foreign exchange increased sales by $4 million, or 0.2%.
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Cost of sales
Freight Segment Cost of sales increased $33 million, primarily due to higher sales volume, and Cost of sales as a percentage of Net sales decreased 2.7 percentage points. The improvement in gross margin is attributable to productivity and efficiency, favorable mix within the Freight Segment and accretion from recent acquisitions, partially offset by higher commodity costs and net tariffs which include nominal tariff recoveries. Cost of sales for the three months ended September 30, 2025 included $24 million of costs related to purchase price accounting for the step-up of inventory to fair value related to acquisitions.
Operating expenses
Freight Segment Operating expenses increased by $10 million, and Operating expenses as a percentage of Net sales decreased 0.5 percentage points. Freight Segment SG&A expenses decreased $3 million for the three months ended September 30, 2026. The decrease is primarily due to lower employee compensation and benefit costs, partially offset by incremental expense from acquisitions. Freight Segment Engineering expenses increased $10 million and Amortization expense increased $3 million both due to incremental expense from acquisitions.
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Transit Segment
The following table shows our Condensed Consolidated Statements of Operations for our Transit Segment for the periods indicated:
| Three Months Ended September 30, | |||||||||||||||||||||||
| In millions | 2026 | 2025 | Change | % Change | |||||||||||||||||||
| Net sales | $ | 883 | $ | 793 | $ | 90 | 11.3 | % | |||||||||||||||
| Cost of sales | (580) | (541) | 39 | 7.2 | % | ||||||||||||||||||
| Cost of sales (% of Net sales) | 65.5 | % | 68.3 | % | (2.8) | ||||||||||||||||||
| Gross profit | 303 | 252 | 51 | 20.2 | % | ||||||||||||||||||
| Operating expenses | (158) | (137) | 21 | 15.3 | % | ||||||||||||||||||
| Income from operations | $ | 145 | $ | 115 | $ | 30 | 26.1 | % | |||||||||||||||
| Income from operations (% of Net sales) | 16.4 | % | 14.5 | % | 1.9 | ||||||||||||||||||
The following table shows the major components of the change in Net sales for the Transit Segment in the third quarter of 2026 from the third quarter of 2025:
| In millions | |||||
| Third Quarter 2025 Net sales | $ | 793 | |||
| Acquisitions | 65 | ||||
| Portfolio Optimization (Divestitures/Exits) | (1) | ||||
| Foreign Exchange | (9) | ||||
| Organic changes in Net sales by Product Line: | |||||
| Aftermarket | 24 | ||||
| Original Equipment Manufacturing | 11 | ||||
| Third Quarter 2026 Net sales | $ | 883 | |||
Net sales
Transit Segment organic sales increased by $35 million, or 4.4%, driven by strong Aftermarket and Original Equipment Manufacturing sales primarily as a result of increased pricing related to contract escalations and increased demand for products and services due to fleet expansion and renewals, increased passenger ridership levels and increased investments in sustainable infrastructure. Sales from the Dellner Couplers acquisition increased sales by $65 million, or 8.2%, and unfavorable changes in foreign exchange rates decreased sales by $9 million, or 1.1%.
Cost of sales
Transit Segment Cost of sales increased by $39 million, primarily due to higher sales volume and acquisitions, and Cost of sales as a percentage of Net sales decreased by 2.8 percentage points. The increase in gross margin was attributable to increased productivity, favorable pricing and mix within the Transit Segment and savings from integration and other restructuring initiatives.
Operating expenses
Transit Segment Operating expenses increased by $21 million and as a percentage of Net sales increased by 0.9 percentage points. Transit Segment SG&A expenses increased $14 million, Engineering expenses decreased $2 million and Amortization expense increased $9 million for the three months ended September 30, 2026, primarily due to incremental expense from acquisitions, partially offset by savings from integration and other restructuring initiatives. Transit SG&A expenses for the three months ended September 30, 2025 included $2 million of costs related to restructuring initiatives.
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FIRST NINE MONTHS OF 2026 COMPARED TO FIRST NINE MONTHS OF 2025
The following table shows our Condensed Consolidated Statements of Operations for the periods indicated.
| Nine Months Ended September 30, | |||||||||||
| In millions | 2026 | 2025 | |||||||||
| Net sales: | |||||||||||
| Sales of goods | $ | 7,828 | $ | 6,808 | |||||||
| Sales of services | 1,421 | 1,394 | |||||||||
| Total Net sales | 9,249 | 8,202 | |||||||||
| Cost of sales: | |||||||||||
| Cost of goods | (4,990) | (4,548) | |||||||||
| Cost of services | (873) | (814) | |||||||||
| Total Cost of sales | (5,863) | (5,362) | |||||||||
| Gross profit | 3,386 | 2,840 | |||||||||
| Operating expenses: | |||||||||||
| Selling, general and administrative expenses | (1,184) | (1,029) | |||||||||
| Engineering expenses | (193) | (155) | |||||||||
| Amortization expense | (267) | (219) | |||||||||
| Total Operating expenses | (1,644) | (1,403) | |||||||||
| Income from operations | 1,742 | 1,437 | |||||||||
| Other income and expenses: | |||||||||||
| Interest expense, net | (231) | (157) | |||||||||
| Other income, net | 33 | 21 | |||||||||
| Income before income taxes | 1,544 | 1,301 | |||||||||
| Income tax expense | (374) | (322) | |||||||||
| Net income | 1,170 | 979 | |||||||||
| Less: Net income attributable to noncontrolling interest | (4) | (11) | |||||||||
| Net income attributable to Wabtec shareholders | $ | 1,166 | $ | 968 | |||||||
The following table shows the major components of the change in Net sales in the nine months ended September 30, 2026 from the nine months ended September 30, 2025:
| In millions | Freight Segment | Transit Segment | Total | ||||||||||||||
| First Nine Months of 2025 Net sales | $ | 5,913 | $ | 2,289 | $ | 8,202 | |||||||||||
| Acquisitions | 396 | 175 | 571 | ||||||||||||||
| Portfolio Optimization (Divestitures/Exits) | (32) | (5) | (37) | ||||||||||||||
| Foreign Exchange | 38 | 49 | 87 | ||||||||||||||
| Organic | 280 | 146 | 426 | ||||||||||||||
| First Nine Months of 2026 Net sales | $ | 6,595 | $ | 2,654 | $ | 9,249 | |||||||||||
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Net sales
Net sales for the nine months ended September 30, 2026 increased by $1,047 million, or 12.8%, to $9.25 billion compared to the same period in 2025. Organic sales increased $426 million, or 5.2%, which was attributable to both the Freight and Transit Segments. Freight sales increased primarily due to higher North American and international locomotive deliveries and higher mining sales, partially offset by lower deliveries of locomotive modernizations and engine overhauls. Transit sales increased from higher demand for Aftermarket and Original Equipment Manufacturing products and services driven by increased investments in sustainable infrastructure, fleet expansion and renewals and increased passenger ridership levels. Acquisitions increased Net sales by $571 million, or 7.0%, and favorable changes in foreign exchange rates increased Net sales by $87 million, or 1.1%.
Cost of sales
Cost of sales for the nine months ended September 30, 2026 increased by $501 million, or 9.3%, to $5.86 billion compared to the same period in 2025. The increase is primarily due to the increase in Net sales. Cost of sales as a percentage of Net sales was 63.4% and 65.4% for the nine months ended September 30, 2026 and 2025, respectively. The improvement in gross margin is attributable to productivity and efficiency, savings from integration and other restructuring initiatives, and accretion from recent acquisitions, partially offset by increases in net tariffs and commodity costs and unfavorable mix within the Freight Segment. Cost of sales for the nine months ended September 30, 2026 and 2025 included $28 million and $24 million, respectively, of costs related to purchase price accounting for the step-up of inventory to fair value related to acquisitions. Cost of sales for the nine months ended September 30, 2026 and 2025 included $5 million and $8 million, respectively, of costs related to restructuring initiatives.
Operating expenses
Total operating expenses increased $241 million, or 17.2%, for the nine months ended September 30, 2026 compared to the same period in 2025. SG&A expenses increased $155 million for the nine months ended September 30, 2026 compared to the same period in 2025. The increase is primarily due to incremental expense from acquisitions and higher employee compensation and benefit costs, partially offset by the impacts of integration and other restructuring initiatives. Transaction costs associated with acquisitions included in SG&A were $14 million and $44 million for the nine months ended September 30, 2026 and 2025, respectively. SG&A for the nine months ended September 30, 2026 and 2025 included $1 million and $12 million, respectively, of costs related to restructuring initiatives. Engineering expenses increased $38 million and Amortization expense increased $48 million both due to incremental expense from acquisitions.
Interest expense, net
Interest expense, net, increased $74 million to $231 million for the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to higher average overall debt balances in the current period, primarily related to acquisitions.
Other income, net
Other income, net, increased $12 million to $33 million for the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to foreign exchange gains in the current period, compared to foreign exchange losses in the prior period. This was partially offset by a $30 million net gain on mark-to-market derivatives in the prior period associated with the acquisitions of Dellner Couplers and Frauscher.
Income taxes
The effective income tax rate was 24.2% and 24.8% for the nine months ended September 30, 2026 and 2025, respectively. The year-over-year decrease in the effective rate was primarily driven by prior period audit settlements, higher discrete equity compensation tax deductions and the jurisdictional mix of earnings.
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Freight Segment
The following table shows our Condensed Consolidated Statements of Operations for our Freight Segment for the periods indicated:
| Nine Months Ended September 30, | |||||||||||||||||||||||
| In millions | 2026 | 2025 | Change | % Change | |||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| Sales of goods | $ | 5,178 | $ | 4,524 | $ | 654 | 14.5 | % | |||||||||||||||
| Sales of services | 1,417 | 1,389 | 28 | 2.0 | % | ||||||||||||||||||
| Total Net sales | 6,595 | 5,913 | 682 | 11.5 | % | ||||||||||||||||||
| Cost of sales: | |||||||||||||||||||||||
| Cost of goods | (3,222) | (2,970) | 252 | 8.5 | % | ||||||||||||||||||
| Cost of services | (870) | (811) | 59 | 7.3 | % | ||||||||||||||||||
| Total Cost of sales | (4,092) | (3,781) | 311 | 8.2 | % | ||||||||||||||||||
| Cost of sales (% of Net sales) | 62.1 | % | 63.9 | % | (1.8) | ||||||||||||||||||
| Gross profit | 2,503 | 2,132 | 371 | 17.4 | % | ||||||||||||||||||
| Operating expenses | (1,034) | (883) | 151 | 17.1 | % | ||||||||||||||||||
| Income from operations | $ | 1,469 | $ | 1,249 | $ | 220 | 17.6 | % | |||||||||||||||
| Income from operations (% of Net sales) | 22.3 | % | 21.1 | % | 1.2 | ||||||||||||||||||
The following table shows the major components of the change in Net sales for the Freight Segment in the first nine months of 2026 from the first nine months of 2025:
| In millions | |||||
| First Nine Months of 2025 Net sales | $ | 5,913 | |||
| Acquisitions | 396 | ||||
| Portfolio Optimization (Divestitures/Exits) | (32) | ||||
| Foreign Exchange | 38 | ||||
| Organic changes in Net sales by Product Line: | |||||
| Equipment | 437 | ||||
| Services | (142) | ||||
| Components | 12 | ||||
| Digital Intelligence | (27) | ||||
| First Nine Months of 2026 Net sales | $ | 6,595 | |||
Net sales
Freight Segment organic sales increased by $280 million, or 4.7%, driven primarily by Equipment sales from higher North American and international locomotive deliveries and higher mining sales and Components sales from strong industrial demand, partially offset by lower North America railcar build. This was partially offset by decreased Services sales from lower deliveries of locomotive modernizations and engine overhauls and decreased Digital Intelligence sales driven by the exit of a low-margin project. Acquisitions increased sales by $396 million, or 6.7%, primarily from Inspection Technologies and Frauscher, and favorable changes in foreign exchange increased sales by $38 million, or 0.6%.
Cost of sales
Freight Segment Cost of sales increased by $311 million, primarily due to higher sales volume, and Cost of sales as a percentage of Net sales decreased 1.8 percentage points. The improvement in gross margin is attributable to productivity and efficiency and accretion from recent acquisitions, partially offset by higher commodity and net tariff costs, unfavorable mix within the Freight Segment and the exit of a low-margin Digital project. Cost of sales for the nine months ended September 30, 2026 and 2025 included $20 million and $24 million, respectively, of costs related to purchase price accounting for the step-up
37
of inventory to fair value related to acquisitions. Cost of sales for the nine months ended September 30, 2026 and 2025 included $2 million and $5 million, respectively, of costs related to restructuring initiatives.
Operating expenses
Freight Segment Operating expenses increased by $151 million, and Operating expenses as a percentage of Net sales increased 0.8 percentage points. Freight Segment SG&A expenses increased $90 million, Engineering expenses increased $34 million and Amortization expense increased $27 million for the nine months ended September 30, 2026, primarily due to incremental expense from acquisitions.
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Transit Segment
The following table shows our Condensed Consolidated Statements of Operations for our Transit Segment for the periods indicated:
| Nine Months Ended September 30, | |||||||||||||||||||||||
| In millions | 2026 | 2025 | Change | % Change | |||||||||||||||||||
| Net sales | $ | 2,654 | $ | 2,289 | $ | 365 | 15.9 | % | |||||||||||||||
| Cost of sales | (1,771) | (1,581) | 190 | 12.0 | % | ||||||||||||||||||
| Cost of sales (% of Net sales) | 66.7 | % | 69.1 | % | (2.4) | ||||||||||||||||||
| Gross profit | 883 | 708 | 175 | 24.7 | % | ||||||||||||||||||
| Operating expenses | (471) | (394) | 77 | 19.5 | % | ||||||||||||||||||
| Income from operations | $ | 412 | $ | 314 | $ | 98 | 31.2 | % | |||||||||||||||
| Income from operations (% of Net sales) | 15.5 | % | 13.7 | % | 1.8 | ||||||||||||||||||
The following table shows the major components of the change in Net sales for the Transit Segment in the first nine months of 2026 from the first nine months of 2025:
| In millions | |||||
| First Nine Months of 2025 Net sales | $ | 2,289 | |||
| Acquisitions | 175 | ||||
| Portfolio Optimization (Divestitures/Exits) | (5) | ||||
| Foreign Exchange | 49 | ||||
| Organic changes in Net sales by Product Line: | |||||
| Aftermarket | 103 | ||||
| Original Equipment Manufacturing | 43 | ||||
| First Nine Months of 2026 Net sales | $ | 2,654 | |||
Net sales
Transit Segment organic sales increased by $146 million, or 6.4%, driven by strong Aftermarket and Original Equipment Manufacturing sales primarily as a result of increased demand for products and services due to fleet expansion and renewals, increased passenger ridership levels and increased investments in sustainable infrastructure. Sales from the Dellner Couplers acquisition increased sales by $175 million, or 7.6%, and favorable changes in foreign exchange rates increased sales by $49 million, or 2.1%.
Cost of sales
Transit Segment Cost of sales increased by $190 million, primarily due to higher sales volume, and Cost of sales as a percentage of Net sales decreased by 2.4 percentage points. The increase in gross margin was attributable to increased productivity, favorable mix within the Transit Segment and savings from integration and other restructuring initiatives. Cost of sales for the nine months ended September 30, 2026 included $8 million of costs related to purchase price accounting for the step-up of inventory related to acquisitions to fair value on the date of acquisition. Cost of sales for the nine months ended September 30, 2026 and 2025 both included $3 million of costs related to restructuring initiatives.
Operating expenses
Transit Segment Operating expenses increased by $77 million and as a percentage of Net sales increased by 0.6 percentage points. Higher SG&A expenses to support higher sales volume, higher employee compensation and benefit costs, and incremental Operating expenses from acquisitions were partially offset by savings from integration and other restructuring initiatives. Transit SG&A expenses for the nine months ended September 30, 2026 and 2025 included $1 million and $10 million, respectively, of costs related to restructuring initiatives.
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Liquidity and Capital Resources
Liquidity is provided by operating cash flows, borrowings under our credit facilities, and proceeds from the Company’s Senior Notes. Additionally, the Company utilizes the Revolving Receivables Program and supply chain financing program described below, as well as other short-term financing agreements with certain banks, for added flexibility as part of our liquidity management strategy. Subsequent to September 30, 2026, the Company established a commercial paper program under which it may issue up to $2.0 billion of unsecured short-term notes. The program is supported by the Company's existing Revolving Credit Facility and provides an additional source of liquidity but does not increase the Company's overall borrowing capacity. The following is a summary of selected cash flow information and other relevant data:
| Nine Months Ended September 30, | |||||||||||
| In millions | 2026 | 2025 | |||||||||
| Cash provided by (used for): | |||||||||||
| Operating activities | $ | 1,095 | $ | 767 | |||||||
| Investing activities | $ | (1,243) | $ | (1,887) | |||||||
| Financing activities | $ | (147) | $ | 907 | |||||||
Operating activities In the first nine months of 2026, cash provided by operating activities was $1,095 million compared to $767 million in the first nine months of 2025. The increase was driven by higher net income and decreased working capital requirements.
Net income was $1,170 million, an increase of $191 million compared to the prior year period. Non‑cash adjustments, including depreciation and amortization of $424 million and stock‑based compensation of $75 million, further supported cash provided by operating activities and increased year over year, primarily due to incremental non‑cash expense from acquisitions and higher equity‑based compensation.
Cash provided by operating activities also benefited from changes in working capital. Higher Receivables decreased cash from operations by $342 million, compared to a decrease in cash from operations of $368 million in the prior year period, driven by the timing of collections from customers. Higher Inventories decreased cash from operations by $100 million, compared to a decrease in cash from operations of $228 million in the prior year period, driven by the impact of increased raw material costs and tariffs in the prior year period. Lower Customer deposits decreased cash from operations by $149 million, compared to a $1 million increase in cash from operations in the prior year, from changes in the timing of customer deposits.
Investing activities In the first nine months of 2026 and 2025, cash used for investing activities was $1,243 million and $1,887 million, respectively. During the first nine months of 2026, Wabtec used $1,062 million for acquisitions, primarily for Dellner Couplers and $182 million for additions to property, plant and equipment for investments in our facilities and manufacturing processes. During the first nine months of 2025, Wabtec used $1,755 million for acquisitions, primarily for Inspection Technologies, and $138 million for additions to property, plant, and equipment.
Financing activities In the first nine months of 2026, cash used for financing activities was $147 million, which included $855 million of inflows from net changes in debt, which was more than offset by $762 million of stock repurchases, $158 million of dividend payments, $55 million of payments for income tax withholding on share-based compensation, and $19 million of distributions to/redemption of noncontrolling interest. In the first nine months of 2025, cash provided by financing activities was $907 million, which included $1,235 million of inflows from net changes in debt, partially offset by $148 million of stock repurchases, $130 million of dividend payments, $39 million of payments for income tax withholding on share-based compensation, and $6 million of distributions to noncontrolling interest.
During 2026, the Company entered into $250 million of interest rate hedge contracts to manage its net exposure to interest rate changes and its overall cost of borrowing.
During the second quarter of 2025, the Company entered into the 2025 Credit Agreement, which amended, restated and refinanced certain prior credit agreements. The 2025 Credit Agreement increased the amount available under the Revolving Credit Facility to $2.0 billion and provided a Term Loan Facility of $725 million. The Term Loan Facility was utilized to refinance (i) $250 million of the outstanding delayed draw term loan borrowings and (ii) $225 million of the outstanding term loan borrowings, each under a prior credit agreement. During the third quarter of 2025, the remaining $250 million under the Term Loan Facility was drawn and utilized as part of funding for the Inspection Technologies acquisition.
Also during the second quarter of 2025, the Company issued $500 million of Senior Notes due in 2030 and $750 million of Senior Notes due in 2035. Proceeds from the 2030 Notes and cash on hand were utilized to repay the outstanding amount of the Company's 3.20% Senior Notes due 2025 at maturity. Proceeds from the 2035 Notes were utilized as part of funding for the Inspection Technologies acquisition.
40
As of September 30, 2026, the Company held approximately $489 million of cash, cash equivalents and restricted cash, which was primarily held outside of the United States, mainly in Europe, India, South Africa, and China. While repatriation of some cash held outside the United States may be restricted by local laws, most of the Company’s foreign cash could be repatriated to the United States net of any tax impacts. As of September 30, 2026, approximately $11 million of the Company's cash balance was classified as restricted, primarily for cash held in escrow related to acquisitions.
The Company's goal is to maintain an investment-grade credit profile, which supports access to diverse sources of liquidity and favorably impacts borrowing costs. Rating agencies that are engaged by the Company periodically update our credit ratings as events occur. As of September 30, 2026, the long-term credit ratings assigned to the Company were BBB with a stable outlook by Fitch Ratings, Baa2 with a stable outlook by Moody's Investors Service, and BBB with a stable outlook by S&P Global Ratings.
We or our affiliates may, from time to time, seek to retire or purchase outstanding debt through negotiated or open-market cash purchases, exchanges, or otherwise, and such transactions, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.
Revolving Receivables Program
The Company utilizes its Revolving Receivables Program to request borrowings from a financial institution against certain collateralized receivables for up to $450 million. The Company collateralizes certain receivables through our bankruptcy-remote subsidiary 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 included within Proceeds from debt and Payments of debt within the Financing activities section of the Condensed Consolidated Statement of Cash Flows.
During the nine months ended September 30, 2026, the Company borrowed and repaid $526 million and $99 million, respectively, against the collateralized receivables. During the nine months ended September 30, 2025, the Company borrowed and repaid $800 million and $600 million, respectively, against the collateralized receivables. Additional information with respect to the Revolving Receivables Program is included in Note 2 of "Notes to Condensed Consolidated Financial Statements" included in Part I, Item 1 of this report.
Supply Chain Financing Program
The Company has entered into supply chain financing arrangements with third-party financial institutions to provide our vendors with enhanced payment options while providing the Company with added working capital flexibility. The Company does not provide any guarantees under these arrangements, does not have an economic interest in our suppliers' voluntary participation, does not receive an economic benefit from the financial institutions, and no assets are pledged under the arrangements. The arrangements do not change the payable terms negotiated by the Company and our vendors and do not result in a change in the classification of amounts due as Accounts payable in the Condensed Consolidated Balance Sheets. Additional information with respect to the Supply Chain Financing Program is included in Note 2 of "Notes to Condensed Consolidated Financial Statements" included in Part I, Item 1 of this report.
Total Available Liquidity
The components of total available liquidity were as follows:
| In millions | September 30, 2026 | December 31, 2025 | |||||||||
| Cash and cash equivalents, excluding restricted cash | $ | 478 | $ | 764 | |||||||
| Revolving Credit Facility | 1,613 | 2,000 | |||||||||
Revolving Receivables Program | — | 443 | |||||||||
| Total Available Liquidity | $ | 2,091 | $ | 3,207 | |||||||
The Company believes that its existing cash balances, cash generated from operations, available borrowings under its credit facilities, and access to the capital markets will be sufficient to meet its working capital needs, planned capital expenditures, debt service requirements, dividends, share repurchases, and other known cash requirements for at least the next twelve months.
Guarantor Summarized Financial Information
Westinghouse Air Brake Technologies Corporation (the “Parent Company”) has issued 3.45% Senior Notes due 2026, 4.70% Senior Notes due 2028, 4.90% Senior Notes due 2030, 5.611% Senior Notes due 2034, and 5.50% Senior Notes due 2035 (collectively, the “US Notes”).
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The obligations under the US Notes issued by the Parent Company have been fully and unconditionally guaranteed by certain of the Parent Company's U.S. subsidiaries ("Guarantor Subsidiaries"), currently comprising GE Transportation, a Wabtec Company, RFPC Holding Corp., Transportation IP Holdings, LLC, Transportation Systems Services Operations Inc., Wabtec Components LLC, Wabtec Holding LLC, Wabtec Railway Electronics Holdings, LLC, Wabtec Transportation Systems, LLC and Wabtec US Rail, Inc. Each guarantor is 100% owned by the Parent Company. The Euro Notes are issued by Wabtec Transportation Netherlands B.V. ("Wabtec Netherlands") and are fully and unconditionally guaranteed by the Parent Company.
The following tables present summarized financial information of the Parent Company and the Guarantor Subsidiaries on a combined basis. The combined summarized financial information eliminates (i) all intercompany balances and transactions among the Parent Company and Guarantor Subsidiaries as well as (ii) all equity in earnings from and investments in any subsidiary that is not a Guarantor Subsidiary, which we refer to below as the non-guarantor subsidiaries.
The summarized financial information is provided in accordance with the reporting requirements of Rule 13-01 under SEC Regulation S-X for the Parent Company, as the issuer of the US Notes, and Guarantor Subsidiaries.
Summarized Statement of Income
| Unaudited | ||||||||
| Parent Company and Guarantor Subsidiaries | ||||||||
| In millions | Nine Months Ended September 30, 2026 | |||||||
| Net sales | $ | 4,954 | ||||||
| Gross profit | $ | 931 | ||||||
| Net loss attributable to Wabtec shareholders | $ | (253) | ||||||
Summarized Balance Sheet
| Unaudited | ||||||||||||||
| Parent Company and Guarantor Subsidiaries | ||||||||||||||
| In millions | September 30, 2026 | December 31, 2025 | ||||||||||||
| Current assets | $ | 1,083 | $ | 1,434 | ||||||||||
| Noncurrent assets | $ | 3,242 | $ | 3,311 | ||||||||||
| Current liabilities | $ | 3,090 | $ | 3,236 | ||||||||||
| Long-term debt | $ | 4,092 | $ | 3,701 | ||||||||||
| Other non-current liabilities | $ | 660 | $ | 605 | ||||||||||
The following is a description of the transactions between the combined Parent Company and Guarantor Subsidiaries with non-guarantor subsidiaries.
| Unaudited | ||||||||
| Parent Company and Guarantor Subsidiaries | ||||||||
| In millions | Nine Months Ended September 30, 2026 | |||||||
| Net sales to non-guarantor subsidiaries | $ | 749 | ||||||
| Purchases from non-guarantor subsidiaries | $ | 1,396 | ||||||
| Unaudited | ||||||||
| Parent Company and Guarantor Subsidiaries | ||||||||
| In millions | September 30, 2026 | |||||||
| Amount due to non-guarantor subsidiaries | $ | 6,173 | ||||||
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Summarized Financial Information—Euro Notes
The obligations under Wabtec Netherlands’ Euro Notes are fully and unconditionally guaranteed by the Parent Company. Wabtec Netherlands is a wholly owned, indirect subsidiary of the Parent Company. Wabtec Netherlands is a holding company and does not have any independent operations. Its assets consist of its investments in subsidiaries, which are separate and distinct legal entities that are not guarantors of the Euro Notes and have no obligations to pay amounts due under Wabtec Netherlands’ obligations.
The following tables present summarized financial information of Wabtec Netherlands, as the Issuer of the Euro Notes, and the Parent Company, as the parent Guarantor, on a combined basis. The combined summarized financial information eliminates (i) all intercompany balances and transactions among Wabtec Netherlands and the Parent Company as well as (ii) all equity in earnings from and investments in any subsidiary of the Parent Company, other than Wabtec Netherlands, which we refer to below as the non-guarantor subsidiaries.
The summarized financial information is provided in accordance with the reporting requirements of Rule 13-01 under SEC Regulation S-X for Wabtec Netherlands, as the issuer of the Euro Notes, and Parent Company guarantor.
Summarized Statement of Income
| Unaudited | ||||||||
| Issuer and Parent Company (Guarantor) | ||||||||
| In millions | Nine Months Ended September 30, 2026 | |||||||
| Net sales | $ | 453 | ||||||
| Gross profit | $ | 143 | ||||||
| Net loss attributable to Wabtec shareholders | $ | (320) | ||||||
Summarized Balance Sheet
| Unaudited | ||||||||||||||
| Issuer and Parent Company (Guarantor) | ||||||||||||||
| In millions | September 30, 2026 | December 31, 2025 | ||||||||||||
| Current assets | $ | 164 | $ | 508 | ||||||||||
| Noncurrent assets | $ | 661 | $ | 656 | ||||||||||
| Current liabilities | $ | 1,884 | $ | 1,822 | ||||||||||
| Long-term debt | $ | 4,660 | $ | 4,286 | ||||||||||
| Other non-current liabilities | $ | 49 | $ | 42 | ||||||||||
The following is a description of the transactions between the combined Wabtec Netherlands, as the Issuer of the Euro Notes, and the Parent Company, as the parent Guarantor, with the subsidiaries of Westinghouse Air Brake Technologies Corp., other than Wabtec Netherlands, none of which are guarantors of the Euro Notes.
| Unaudited | ||||||||
| Issuer and Parent Company (Guarantor) | ||||||||
| In millions | Nine Months Ended September 30, 2026 | |||||||
| Net sales to non-guarantor subsidiaries | $ | 27 | ||||||
| Purchases from non-guarantor subsidiaries | $ | 95 | ||||||
| Unaudited | ||||||||
| Issuer and Parent Company (Guarantor) | ||||||||
| In millions | September 30, 2026 | |||||||
| Amount due to non-guarantor subsidiaries | $ | 10,228 | ||||||
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Company Stock Repurchase Plan
On February 6, 2026, the Board of Directors reauthorized the stock repurchase program and refreshed the amount available for stock repurchases to $1.2 billion of the Company’s outstanding shares. This new stock repurchase authorization supersedes the previous authorization of $1.0 billion, of which approximately $760 million remained at the reauthorization date. No time limit was set for the completion of the program, which conforms to the requirements under the agreements governing the Company's credit facilities and the indentures for the Senior Notes currently outstanding. The Company may repurchase shares in the future at any time, depending upon market conditions, our capital needs and other factors. Purchases of shares may be made by open market purchases or privately negotiated purchases and may be made pursuant to Rule 10b5-1 plan or otherwise. As of September 30, 2026, approximately $456 million was remaining under the stock repurchase plan.
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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
•changes in general economic and/or industry specific conditions, including the impacts of tax and tariff programs, inflation, supply chain disruptions, foreign currency exchange, and industry consolidation;
•the impacts of significant recent shifts in trade policies, including the imposition of tariffs, retaliatory tariff measures, and subsequent modifications or suspensions thereof, and market reactions to such policies and resulting trade disputes;
•prolonged unfavorable economic and industry conditions in the markets served by us, including North America, South America, Europe, Australia, Asia and Africa;
•decline in demand for freight cars, locomotives, passenger transit cars, buses and related products and services;
•reliance on major original equipment manufacturer customers;
•original equipment manufacturers’ program delays;
•decreased demand for services in the freight and passenger rail industry;
•decreased demand for our products and services;
•orders either being delayed, canceled, not returning to historical levels or being reduced, and/or economic conditions affecting the ability of our customers to pay timely for goods and services delivered;
•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;
•availability of credit or difficulty in obtaining debt or equity financing;
•changes in market consensus as to what attributes are required for projects to be considered "green" or "sustainable" or negative perceptions regarding determinations in such regard with respect to our Green Finance Framework or sustainability strategy; or
•changes in the sustainability topics that have the highest relative priority for Wabtec's external stakeholders;
Operating factors
•supply disruptions;
•technical difficulties;
•changes in operating conditions and costs;
•increases in raw material costs;
•challenges associated with the successful introduction of new products;
•product safety, quality and reliability;
•performance under material long-term contracts;
•labor availability constraints and labor relations challenges;
•the outcome of our existing or any future legal proceedings, including litigation involving our principal customers and any litigation with respect to environmental matters, asbestos-related matters, pension liabilities, warranties, product liabilities, competition and anti-trust matters or intellectual property claims;
•our ability to successfully complete and integrate acquisitions;
•risks associated with the development and use of new technology; or
•cybersecurity and data protection risks;
Competitive factors
•the actions of competitors; or
•adverse outcomes of negotiations with partners, suppliers, customers or others;
Political/governmental factors
•political instability in relevant areas of the world, including the impacts of war, conflicts, global military action, and acts of terrorism;
•future regulation/deregulation of our customers and/or the rail industry;
•decreases in levels of governmental funding on transit projects, including for some of our customers;
•political developments and laws and regulations, including those related to Positive Train Control;
•consequences of federal and state income tax legislation;
45
•sanctions imposed on countries and persons; or
•the outcome of negotiations with governments;
Natural hazards / health crises
•impacts of climate change, including evolving climate change policy;
•disruptive natural hazards, including earthquakes, fires, floods, tornadoes, hurricanes or other weather conditions;
•epidemics, pandemics, or similar public health crises;
•deterioration of general economic conditions as a result of natural hazards or health crises;
•shutdown of one or more of our operating facilities as a result of natural hazards and health crises; or
•supply chain and sourcing disruptions as a result of natural hazards, health crises or other external factors
Statements in this Quarterly Report on Form 10-Q apply only as of the date on which such statements are made, and except as required by law, 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, 2025.
Critical Accounting Estimates
A summary of critical accounting estimates is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. In particular, judgment is used in areas such as inventories, business combinations, goodwill and indefinite-lived intangible assets, warranty reserves, income taxes, and revenue recognition. There have been no significant changes in the related accounting policies since December 31, 2025.
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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See "Quantitative and Qualitative Disclosures About Market Risk" in Item 7A of Part II of our Annual Report on Form 10-K for the year ended December 31, 2025. Our exposure to market risk has not changed materially since December 31, 2025. Refer to Note 13 - Fair Value Measurement and Derivative Instruments of "Notes to Condensed Consolidated Financial Statements" included in Part I, Item 1 of this report for additional information regarding interest rate and 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 September 30, 2026. 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 accurately 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 September 30, 2026, that has materially affected, or is reasonably likely to materially affect, Wabtec’s internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Additional information with respect to legal proceedings is included in Note 14 of “Notes to Condensed Consolidated Financial Statements” included in Part I, Item 1 of this report.
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, 2025.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table summarizes the Company's stock repurchase activity for the three months ended September 30, 2026:
| Issuer Purchases of Common Stock | ||||||||||||||||||||||||||
| In millions, except shares and price per share | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs (1) | Maximum Dollar Value of Shares That May Yet Be Purchased Under the Programs (1) | ||||||||||||||||||||||
| July 2026 | 220,580 | $ | 265.18 | 220,580 | $ | 701 | ||||||||||||||||||||
| August 2026 | 219,205 | $ | 296.44 | 219,205 | $ | 636 | ||||||||||||||||||||
| September 2026 | 637,299 | $ | 283.56 | 637,299 | $ | 456 | ||||||||||||||||||||
| Total quarter ended September 30, 2026 | 1,077,084 | $ | 282.42 | 1,077,084 | $ | 456 | ||||||||||||||||||||
(1) On February 6, 2026, the Board of Directors reauthorized the stock repurchase program and refreshed the amount available for stock repurchases to $1.2 billion of the Company’s outstanding shares. This new stock repurchase authorization supersedes the previous authorization of $1.0 billion, of which approximately $760 million remained at the reauthorization date. No time limit was set for the completion of the program, which conforms to the requirements under the agreements governing the Company's credit facilities and the indentures for the Senior Notes currently outstanding. The Company may repurchase shares in the future at any time, depending upon market conditions, our capital needs and other factors. Purchases of shares may be made by open market purchases or privately negotiated purchases and may be made pursuant to Rule 10b5-1 plan or otherwise. As of September 30, 2026, approximately $456 million was remaining under the stock repurchase plan.
Item 4. MINE SAFETY DISCLOSURES
Not Applicable
Item 5. OTHER INFORMATION
None of Wabtec's Directors or Officers have adopted terminated
48
Item 6. EXHIBITS
The following exhibits are being filed with this report:
| 22.1 | |||||
| 31.1 | |||||
| 31.2 | |||||
| 32.1 | |||||
| 101.INS | XBRL Instance Document. | ||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | ||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
49
SIGNATURES
Pursuant to the requirements 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/ JOHN A. OLIN | ||||
| John A. Olin | |||||
| Executive Vice President and Chief Financial Officer | |||||
| (Duly Authorized Officer and Principal Financial Officer) | |||||
| DATE: | October 21, 2026 | ||||
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Exhibit 22.1
Guarantor Subsidiaries of Westinghouse Air Brake Technologies
The obligations under the Company's US Notes, the 2025 Credit Agreement and the 2025 Term Credit Agreement have been fully and unconditionally guaranteed by certain of the Company's U.S. subsidiaries. Each guarantor is 100% owned by the parent company. The Euro Notes are issued by Wabtec Netherlands and are fully and unconditionally guaranteed by the Company.
As of September 30, 2026:
The US Notes, the 2025 Credit Agreement, and the 2025 Term Credit Agreement
Issuer: Westinghouse Air Brake Technologies Corporation
Guarantors: GE Transportation, a Wabtec Company
RFPC Holding Corp.
Transportation IP Holdings, LLC
Transportation Systems Services Operations Inc.
Wabtec Components, LLC
Wabtec Holding, LLC
Wabtec Railway Electronics Holdings, LLC
Wabtec Transportation Systems, LLC
Wabtec US Rail, Inc.
The Euro Notes
Issuer: Wabtec Transportation Netherlands B.V.
Guarantor: Westinghouse Air Brake Technologies Corporation
Exhibit 31.1
CERTIFICATION
I, Rafael Santana, 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 officer 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: October 21, 2026
| By: | /s/ RAFAEL SANTANA | |||||||
| Name: | Rafael Santana | |||||||
| Title: | Chairman and Chief Executive Officer | |||||||
Exhibit 31.2
CERTIFICATION
I, John A. Olin, 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 officer 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: October 21, 2026
| By: | /S/ JOHN A. OLIN | |||||||
| Name: | John A. Olin | |||||||
| Title: | Executive Vice President and Chief Financial Officer | |||||||
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 September 30, 2026 (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/ RAFAEL SANTANA | |||||||
| Rafael Santana Chairman and Chief Executive Officer | ||||||||
| Date: | October 21, 2026 | |||||||
| By: | /s/ JOHN A. OLIN | |||||||
| John A. Olin Executive Vice President and Chief Financial Officer | ||||||||
| Date: | October 21, 2026 | |||||||