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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 June 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number: 033-90866
____________________________________
WESTINGHOUSE AIR BRAKE TECHNOLOGIESCORPORATION
(Exact name of registrant as specified in its charter)
____________________________________
Delaware25-1615902
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer
Identification No.)
30 Isabella Street Pittsburgh, Pennsylvania
15212
(Address of principal executive offices)(Zip code)
412-825-1000
(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
Common Stock, $.01 par value per share
WAB
New York Stock Exchange
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.
Large accelerated filerAccelerated filerNon-accelerated filer
Emerging growth companySmaller 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 July 23, 2020, there were 190,299,552 shares of common stock, par value $.01 per share, of the registrant outstanding.




WESTINGHOUSE AIR BRAKE
TECHNOLOGIES CORPORATION
June 30, 2020
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 6.

2


PART I—FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
In millions, except par valueJune 30,
2020
December 31,
2019
Assets
Current Assets
Cash and cash equivalents $587.9  $604.2  
Accounts receivable 964.4  1,149.9  
Unbilled accounts receivables445.9  514.0  
Inventories 1,799.5  1,773.1  
Other current assets 172.0  150.9  
Total current assets 3,969.7  4,192.1  
Property, plant and equipment 2,240.5  2,216.0  
Accumulated depreciation (628.1) (560.2) 
Property, plant and equipment, net 1,612.4  1,655.8  
Other Assets
Goodwill 8,309.9  8,360.6  
Other intangibles, net 3,935.4  4,104.0  
Other noncurrent assets 638.0  631.7  
Total other assets 12,883.3  13,096.3  
Total Assets $18,465.4  $18,944.2  
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable $1,006.0  $1,157.5  
Customer deposits 619.5  604.2  
Accrued compensation 231.1  343.8  
Accrued warranty 216.8  226.5  
Current portion of long-term debt697.1  95.7  
Other accrued liabilities 712.7  830.3  
Total current liabilities 3,483.2  3,258.0  
Long-term debt 3,768.7  4,333.6  
Accrued postretirement and pension benefits106.6  113.0  
Deferred income taxes 155.6  145.3  
Contingent consideration297.6  291.8  
Other long term liabilities 773.1  808.9  
Total Liabilities 8,584.8  8,950.6  
Commitments and contingencies (Note 15)
Equity
Convertible preferred stock, $.01 par value; 1.0 shares authorized, no shares issued and outstanding, at June 30, 2020 and December 31, 2019
    
Common stock, $.01 par value; 500.0 shares authorized: 226.9 and 226.9 shares issued and 190.3 and 191.7 outstanding at June 30, 2020 and December 31, 2019, respectively
2.0  2.0  
Additional paid-in capital 7,871.7  7,877.2  
Treasury stock, at cost, 36.6 and 35.2 shares, at June 30, 2020 and December 31, 2019, respectively
(909.3) (807.1) 
Retained earnings 3,419.0  3,267.0  
Accumulated other comprehensive loss (537.8) (382.6) 
Total Westinghouse Air Brake Technologies Corporation shareholders’ equity 9,845.6  9,956.5  
Noncontrolling interest35.0  37.1  
Total Equity 9,880.6  9,993.6  
Total Liabilities and Equity $18,465.4  $18,944.2  
The accompanying notes are an integral part of these statements.
3


WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
UnauditedUnaudited
Three Months Ended
June 30,
Six Months Ended
June 30,
In millions, except per share data2020201920202019
Net sales:
Sales of goods$1,406.1  $1,892.5  $2,996.9  $3,327.0  
Sales of services331.3  343.8  670.4  502.9  
Total net sales1,737.4  2,236.3  3,667.3  3,829.9  
Cost of sales:
Cost of goods(1,061.3) (1,377.7) (2,217.2) (2,451.3) 
Cost of services(189.4) (243.9) (384.7) (374.9) 
Total cost of sales(1,250.7) (1,621.6) (2,601.9) (2,826.2) 
Gross profit486.7  614.7  1,065.4  1,003.7  
Operating expenses:
Selling, general and administrative expenses(216.8) (290.9) (460.2) (550.7) 
Engineering expenses(38.2) (57.2) (87.2) (91.7) 
Amortization expense(72.3) (66.0) (141.3) (93.4) 
Total operating expenses(327.3) (414.1) (688.7) (735.8) 
Income from operations159.4  200.6  376.7  267.9  
Other income and expenses:
Interest expense, net(51.4) (58.5) (104.7) (103.0) 
Other income (expense), net6.3  2.1  (8.5) (6.1) 
Income from operations before income taxes 114.3  144.2  263.5  158.8  
Income tax expense(28.5) (41.5) (66.5) (60.0) 
Net income85.8  102.7  197.0  98.8  
Less: Net loss attributable to noncontrolling interest1.0  1.4  1.4  0.9  
Net income attributable to Wabtec shareholders86.8  104.1  198.4  99.7  
Earnings Per Common Share
Basic
Net income attributable to Wabtec shareholders$0.46  $0.58  $1.04  $0.66  
Diluted
Net income attributable to Wabtec shareholders$0.46  $0.54  $1.04  $0.61  
Weighted average shares outstanding
Basic189.8  177.3  190.3  149.6  
Diluted190.2  191.5  190.8  162.2  
 
The accompanying notes are an integral part of these statements.
4


WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
UnauditedUnaudited
Three Months Ended
June 30,
Six Months Ended
June 30,
In millions2020201920202019
Net income attributable to Wabtec shareholders$86.8  $104.1  $198.4  $99.7  
Foreign currency translation gain (loss)29.2  18.8  (152.2) (27.7) 
Unrealized loss on derivative contracts(9.1)   (1.0) (4.1) 
Unrealized gain (loss) on pension benefit plans and post-retirement benefit plans0.7  1.3  (2.9) (2.3) 
Other comprehensive income (loss) before tax20.8  20.1  (156.1) (34.1) 
Income tax benefit (expense) related to components of other comprehensive income2.0  (0.3) 0.9  1.5  
Other comprehensive income (loss), net of tax22.8  19.8  (155.2) (32.6) 
Comprehensive income attributable to Wabtec shareholders$109.6  $123.9  $43.2  $67.1  
 
The accompanying notes are an integral part of these statements.

5


WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
Six Months Ended
June 30,
In millions, except per share data20202019
Operating Activities
Net income$197.0  $98.8  
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization233.7  165.1  
Stock-based compensation expense5.7  23.9  
Below market intangible amortization(55.4) (9.4) 
Changes in operating assets and liabilities, net of acquisitions
Accounts receivable and unbilled accounts receivable246.1  (35.7) 
Inventories(30.3) 147.4  
Accounts payable(148.5) (71.9) 
Accrued income taxes5.1  21.4  
Accrued liabilities and customer deposits(99.3) 24.2  
Other assets and liabilities(125.5) 80.0  
Net cash provided by operating activities228.6  443.8  
Investing Activities
Purchase of property, plant and equipment(67.6) (61.9) 
Proceeds from disposal of property, plant and equipment9.7  3.1  
Acquisitions of businesses, net of cash acquired(40.3) (2,981.6) 
Net cash used for investing activities(98.2) (3,040.4) 
Financing Activities
Proceeds from debt2,093.0  2,325.9  
Payments of debt(2,059.3) (1,552.1) 
Repurchase of stock(105.3)   
Cash dividends(46.4) (34.3) 
Payment of contingent consideration on acquisitions  (10.1) 
Other financing activities(5.5) (3.3) 
Net cash (used for) provided by financing activities(123.5) 726.1  
Effect of changes in currency exchange rates(23.2) (10.6) 
Decrease in cash(16.3) (1,881.1) 
Cash, cash equivalents, and restricted cash, beginning of period604.2  2,342.4  
Cash and cash equivalents, end of period$587.9  $461.3  
 
The accompanying notes are an integral part of these statements.
 

6


WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
Common StockCommon StockAdditional Paid-inTreasury StockTreasury StockRetainedAccumulated OtherNon-controlling
In millions,SharesAmountCapitalSharesAmountEarningsComprehensive LossInterestTotal
Balance, December 31, 2019226.9  $2.0  $7,877.2  (35.3) $(807.1) $3,267.0  $(382.6) $37.1  $9,993.6  
Cash dividends ($0.12 dividend per share)
—  —  —  —  —  (23.0) —  —  (23.0) 
Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax—  —  (7.9) 0.2  2.2  —  —  —  (5.7) 
Stock based compensation—  —  10.0  —  —  —  —  —  10.0  
Net income (loss)—  —  —  —  —  111.6  —  (0.4) 111.2  
Other comprehensive loss, net of tax—  —  —  —  —  —  (178.0) —  (178.0) 
Stock repurchase—  —  —  (1.6) (105.3) —  —  —  (105.3) 
Other owner changes—  —  (4.3) —  —  —  —  (0.8) (5.1) 
Balance, March 31, 2020226.9  $2.0  $7,875.0  (36.7) $(910.2) $3,355.6  $(560.6) $35.9  $9,797.7  
Cash dividends ($0.12 dividend per share)
—  —  —  —  —  (23.4) —  —  (23.4) 
Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax—  —  (0.6) 0.1  0.9  —  —  —  0.3  
Stock based compensation—  —  (2.7) —  —  —  —  —  (2.7) 
Net income (loss)—  —  —  —  —  86.8  —  (1.0) 85.8  
Other comprehensive income, net of tax—  —  —  —  —  —  22.8  —  22.8  
Other owner changes—  —  —  —  —  —  —  0.1  0.1  
Balance, June 30, 2020226.9  $2.0  $7,871.7  (36.6) $(909.3) $3,419.0  $(537.8) $35.0  $9,880.6  
Balance, December 31, 2018132.3  $1.3  $914.6  (35.7) $(816.1) $3,022.0  $(256.6) $3.9  $2,869.1  
Cash dividends ($0.12 dividend per share)
—  —  —  —  —  (11.7) —  —  (11.7) 
Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax—  —  (14.4) 0.4  8.9  —  —  —  (5.5) 
Stock based compensation—  —  8.5  —  —  —  —  —  8.5  
Net (loss) income—  —  —  —  —  (4.5) —  0.5  (4.0) 
Other comprehensive loss, net of tax—  —  —  —  —  —  (52.4) —  (52.4) 
Acquisitions, net65.8  0.7  6,887.6  —  —  —  —  86.7  6,975.0  
Other owner changes—  —  —  —  —  —  —  1.4  1.4  
Balance, March 31, 2019198.1  $2.0  $7,796.3  $(35.3) $(807.2) $3,005.8  $(309.0) $92.5  $9,780.4  
Cash dividends ($0.12 dividend per share)
—  —  —  —  —  (22.6) —  —  (22.6) 
Proceeds from treasury stock issued from the exercise of stock options and other benefit plans, net of tax—  —  (4.6) 0.1  1.6  —  —  —  (3.0) 
Stock based compensation—  —  15.4  —  —  —  —  —  15.4  
Net income (loss)—  —  —  —  —  104.1  —  (1.4) 102.7  
Other comprehensive income, net of tax—  —  —  —  —  —  19.8  —  19.8  
Acquisitions, net—  —  —  —  —  —  —  (56.2) (56.2) 
Other owner changes25.3  —  —  —  —  —  —  (1.6) (1.6) 
Balance, June 30, 2019223.4  $2.0  $7,807.1  $(35.2) $(805.6) $3,087.3  $(289.2) $33.3  $9,834.9  

The accompanying notes are an integral part of these statements.
7


WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2020 (UNAUDITED)

1. BUSINESS
Westinghouse Air Brake Technologies Corporation (“Wabtec” or the "Company") is one of the world’s largest providers of locomotives, value-added, technology-based equipment, systems and services for the global freight rail and passenger transit industries. Our highly engineered products, which are intended 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 products enhance safety, improve productivity and reduce maintenance costs for customers, and many of our core products and services are essential in the safe and efficient operation of freight rail and passenger transit vehicles. Wabtec is a global company with operations in over 50 countries and our products can be found in more than 100 countries throughout the world. In the first six months of 2020, approximately 56% of the Company’s revenues came from customers outside the United States.
On March 11, 2020, the World Health Organization designated the outbreak of the novel strain of coronavirus, known as COVID-19, as a global pandemic. Governments and businesses around the world have taken unprecedented actions to mitigate the spread of COVID-19, including but not limited to, shelter-in-place orders, quarantines, significant restrictions on travel, as well as restrictions that prohibit many employees from going to work. Our top concern is, and remains, the health and well-being of our employees around the world. To date, COVID-19 has surfaced in nearly all regions around the world and has impacted our sales channels, supply chain, manufacturing operations, workforce, and other key aspects of our operations. The outbreak and preventive measures taken to help curb the spread, including temporary plant closures in China, India, Italy and other countries where outbreaks and stay-at-home orders were most prevalent, had an adverse impact on our operations and business results for t