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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, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number: 033-90866
____________________________________
WESTINGHOUSE AIR BRAKE TECHNOLOGIES
CORP
ORATION
(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, 2021, there were 189,034,202 shares of common stock, par value $.01 per share, of the registrant outstanding.




WESTINGHOUSE AIR BRAKE
TECHNOLOGIES CORPORATION
June 30, 2021
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, 2021December 31, 2020
Assets
Current Assets
Cash and cash equivalents $453.5 $598.7 
Accounts receivable 1,020.9 969.3 
Unbilled accounts receivable431.7 443.2 
Inventories 1,661.2 1,642.1 
Other current assets 240.9 226.5 
Total current assets 3,808.2 3,879.8 
Property, plant and equipment, net 1,544.3 1,601.6 
Goodwill 8,653.2 8,485.2 
Other intangible assets, net 3,876.0 3,869.2 
Other noncurrent assets 630.7 618.7 
Total noncurrent assets 14,704.2 14,574.7 
Total Assets $18,512.4 $18,454.5 
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable $994.7 $909.4 
Customer deposits 597.5 642.7 
Accrued compensation 243.2 242.3 
Accrued warranty 245.2 240.1 
Current portion of long-term debt0.6 447.2 
Other accrued liabilities 763.5 744.6 
Total current liabilities 2,844.7 3,226.3 
Long-term debt 4,079.6 3,792.2 
Accrued postretirement and pension benefits108.1 113.5 
Deferred income taxes 194.1 168.4 
Contingent consideration219.2 218.1 
Other long term liabilities 738.9 783.3 
Total Liabilities 8,184.6 8,301.8 
Commitments and contingencies (Note 15)
Equity
Common stock, $.01 par value; 500.0 shares authorized: 226.9 and 226.9 shares issued and 189.0 and 188.9 outstanding at June 30, 2021 and December 31, 2020, respectively
2.0 2.0 
Additional paid-in capital 7,896.7 7,880.6 
Treasury stock, at cost, 37.9 and 38.0 shares, at June 30, 2021 and December 31, 2020, respectively
(1,008.6)(1,010.1)
Retained earnings 3,780.1 3,588.9 
Accumulated other comprehensive loss (375.8)(339.1)
Total Westinghouse Air Brake Technologies Corporation shareholders’ equity 10,294.4 10,122.3 
Noncontrolling interest33.4 30.4 
Total Equity 10,327.8 10,152.7 
Total Liabilities and Equity $18,512.4 $18,454.5 
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 data2021202020212020
Net sales:
Sales of goods$1,588.0 $1,406.1 $3,073.1 $2,996.9 
Sales of services424.3 331.3 769.4 670.4 
Total net sales2,012.3 1,737.4 3,842.5 3,667.3 
Cost of sales:
Cost of goods(1,185.0)(1,061.3)(2,292.7)(2,217.2)
Cost of services(247.2)(189.4)(435.5)(384.7)
Total cost of sales(1,432.2)(1,250.7)(2,728.2)(2,601.9)
Gross profit580.1 486.7 1,114.3 1,065.4 
Operating expenses:
Selling, general and administrative expenses(262.1)(216.8)(497.5)(460.2)
Engineering expenses(42.0)(38.2)(79.7)(87.2)
Amortization expense(72.7)(72.3)(142.2)(141.3)
Total operating expenses(376.8)(327.3)(719.4)(688.7)
Income from operations203.3 159.4 394.9 376.7 
Other income and expenses:
Interest expense, net(44.9)(51.4)(92.5)(104.7)
Other income (expense), net10.3 6.3 24.5 (8.5)
Income before income taxes 168.7 114.3 326.9 263.5 
Income tax expense(43.5)(28.5)(87.0)(66.5)
Net income125.2 85.8 239.9 197.0 
Less: Net (income) loss attributable to noncontrolling interest(0.4)1.0 (2.7)1.4 
Net income attributable to Wabtec shareholders$124.8 $86.8 $237.2 $198.4 
Earnings Per Common Share
Basic
Net income attributable to Wabtec shareholders$0.66 $0.46 $1.25 $1.04 
Diluted
Net income attributable to Wabtec shareholders$0.66 $0.46 $1.25 $1.04 
Weighted average shares outstanding
Basic188.6 189.8 188.5 190.3 
Diluted188.9 190.2 188.9 190.8 
 
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 millions2021202020212020
Net income attributable to Wabtec shareholders$124.8 $86.8 $237.2 $198.4 
Foreign currency translation gain (loss)33.8 29.2 (27.9)(152.2)
Unrealized gain (loss) on derivative contracts0.5 (9.1)(7.4)(1.0)
Unrealized (loss) gain on pension benefit plans and post-retirement benefit plans(1.1)0.7 (4.4)(2.9)
Other comprehensive income (loss) before tax33.2 20.8 (39.7)(156.1)
Income tax benefit related to components of other comprehensive income (loss) 2.0 3.0 0.9 
Other comprehensive income (loss), net of tax33.2 22.8 (36.7)(155.2)
Comprehensive income attributable to Wabtec shareholders$158.0 $109.6 $200.5 $43.2 
 
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 millions20212020
Operating Activities
Net income$239.9 $197.0 
Adjustments to reconcile net income to cash provided by (used for) operating activities:
Depreciation and amortization246.3 233.7 
Stock-based compensation expense24.2 5.7 
Below market intangible amortization(19.9)(55.4)
Changes in operating assets and liabilities, net of acquisitions
Accounts receivable and unbilled accounts receivable(28.8)246.1 
Inventories7.8 (30.3)
Accounts payable82.4 (148.5)
Accrued income taxes18.6 5.1 
Accrued liabilities and customer deposits(38.0)(99.3)
Other assets and liabilities(17.1)(125.5)
Net cash provided by operating activities515.4 228.6 
Investing Activities
Purchase of property, plant and equipment(55.5)(67.6)
Proceeds from disposal of assets and businesses8.2 9.7 
Acquisitions of businesses, net of cash acquired(405.1)(40.3)
Net cash used for investing activities(452.4)(98.2)
Financing Activities
Proceeds from debt3,008.4 2,093.0 
Payments of debt(3,170.0)(2,059.3)
Repurchase of stock(1.2)(105.3)
Cash dividends(45.9)(46.4)
Other financing activities(3.8)(5.5)
Net cash used for financing activities(212.5)(123.5)
Effect of changes in currency exchange rates4.3 (23.2)
Decrease in cash(145.2)(16.3)
Cash and cash equivalents, beginning of period598.7 604.2 
Cash and cash equivalents, end of period$453.5 $587.9 
 
The accompanying notes are an integral part of these statements.
 

6


WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
In millions, except per share dataCommon Stock SharesCommon Stock AmountAdditional Paid-in CapitalTreasury Stock SharesTreasury Stock AmountRetained EarningsAccumulated Other Comprehensive LossNon-controlling InterestTotal
Balance, December 31, 2020226.9 $2.0 $7,880.6 (38.0)$(1,010.1)$3,588.9 $(339.1)$30.4 $10,152.7 
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— — (5.4)— 0.2 — — — (5.2)
Stock based compensation— — 8.7 — — — — — 8.7 
Net income— — — — — 112.4 — 2.3 114.7 
Other comprehensive loss, net of tax— — — — — — (69.9)— (69.9)
Stock repurchase— — — — (1.2)— — — (1.2)
Other— — — — — — — 0.3 0.3 
Balance, March 31, 2021226.9 $2.0 $7,883.9 (38.0)$(1,011.1)$3,678.3 $(409.0)$33.0 $10,177.1 
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— — (1.1)0.1 2.5 — — — 1.4 
Stock based compensation— — 13.9 — — — — — 13.9 
Net income — — — — — 124.8  0.4 125.2 
Other comprehensive income, net of tax— — — — — — 33.2 — 33.2 
Stock repurchase— — — — — — — —  
Other— — — — — — — —  
Balance, June 30, 2021226.9 $2.0 $7,896.7 (37.9)$(1,008.6)$3,780.1 $(375.8)$33.4 $10,327.8 
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— — (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— —  — — — — 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 

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, 2021 (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 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 2021, approximately 59% of the Company’s revenues came from customers outside the United States.

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. Results for these interim periods are not necessarily indicative of results to be expected for the full year particularly in light of the ongoing COVID-19 pandemic that is continuing to impact our sales channels, supply chain, manufacturing operations, workforce, and other key aspects of our operations and the high degree of uncertainty regarding the pandemic's duration and severity, availability and effectiveness of vaccines, impact of variants of the disease, actions to control it, and the potential impact on global economic activity, global supply chain operations and our customers, suppliers, and end-markets.
The Company operates on a four-four-five week accounting quarter, and the quarters end on or about March 31, June 30, September 30 and December 31.
The notes included herein should be read in conjunction with the audited consolidated financial statements included in Wabtec’s Annual Report on Form 10-K for the year ended December 31, 2020. The December 31, 2020 information has been derived from the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
Use of Estimates The preparation of financial statements in conformity with GAAP in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates.
Revenue Recognition A majority of the Company’s revenues are derived from performance obligations that are satisfied at a point in time when control passes to the customer. The remaining revenues are earned over time. Generally, for performance obligations satisfied at a point in time control passes at the time of shipment in accordance with agreed upon delivery terms.
The Company also has long-term customer agreements involving the design and production of highly engineered products that require revenue to be recognized over time because these products have no alternative use without significant economic loss and the agreements contain an enforceable right to payment including a reasonable profit margin from the customer in the event of contract termination. Additionally, the Company has customer agreements involving the creation or enhancement of an asset that the customer controls which also require revenue to be recognized over time. Generally, the Company uses an input method for determining the amount of revenue, cost and gross margin to recognize over time for these customer agreements. The input methods used for these agreements include costs of material and labor, both of which give an accurate representation of the progress made toward complete satisfaction of a particular performance obligation. Contract revenues and cost estimates are reviewed and revised periodically through the year and adjustments are reflected in the accounting period as such amounts are determined.
Due to the nature of work required to be performed on the Company’s long-term projects, the estimation of total revenue and cost at completion is subject to many variables and requires significant judgment. Contract estimates related to long-term projects are based on various assumptions to project the outcome of future events that could span several years. These assumptions include cost of materials; labor availability and productivity; complexity of the work to be performed; and the
8


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, 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.
Remaining performance obligations represent the transaction price of firm customer orders subject to standard industry cancellation provisions and substantial scope-of-work adjustments. As of June 30, 2021, the Company's remaining performance obligations were $20.8 billion. The Company expects to recognize revenue of approximately 25% of the remaining performance obligations over the next 12 months, with the remainder recognized thereafter.
SEC regulations require that revenue categories that exceed 10% of total revenue are presented separately on the company's Statement of income. As such, the Company has displayed sales of goods and sales of services, and the related cost, in line with those regulations. Additionally, those regulations also require that goods are to include all sales of tangible products, and services must include all other sales. In Note 16 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.
Revolving Receivables Program In May 2020, the Company entered into a revolving agreement to transfer up to $150 million of certain receivables of certain subsidiaries of the Company (the "Originators") through our bankruptcy-remote subsidiary to a financial institution on a recurring basis in exchange for cash equal to the gross receivables transferred. 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. During the first quarter of 2021, the Company amended its revolving agreement to increase the amount of certain receivables that can be transferred from $150 million to $200 million. As customers pay their balances, we transfer additional receivables into the program, resulting in our gross receivables sold exceeding net cash flow impacts (e.g., collect and reinvest). The sold receivables are fully guaranteed by our bankruptcy-remote subsidiary which held additional receivables of $332.7 million at June 30, 2021 that are pledged as collateral under this agreement. The transfers are recorded at the fair value of the proceeds received and obligations assumed less derecognized receivables. No obligation was recorded at June 30, 2021 as the estimated expected credit losses on receivables sold is insignificant. Our maximum exposure to loss related to these receivables transferred is limited to the amount outstanding. The Company has agreed to guarantee the performance of the Originators respective obligations under the revolving agreement. None of the Company (except for the bankruptcy-remote consolidated subsidiary referenced above) nor the Originators guarantees the collectability of the receivables under the revolving agreements.
The following table sets forth a summary of receivables sold:
In millionsSix Months Ended
June 30, 2021
Six Months Ended
June 30, 2020
Gross receivables sold/cash proceeds received$568.8 $293.9 
Collections reinvested under revolving agreement 486.8 193.9 
Net cash proceeds received$82.0 $100.0 
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 expense depending on how the property, plant and equipment is used.
Goodwill and Intangible Assets Goodwill and other intangible assets with indefinite lives are not amortized. Other intangibles (with definite lives) are amortized on a straight-line basis over their estimated economic lives. Amortizable intangible assets are reviewed for impairment when indicators of impairment are present. The Company tests goodwill and indefinite-lived intangible assets for impairment at the reporting unit level and at least annually. The Company performs its annual impairment test during the fourth quarter after the annual forecasting process is completed, and also tests for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Periodically, management of
9


the Company assesses whether or not an indicator of impairment is present that would necessitate an impairment analysis to be performed.
Accounting Standards Recently Adopted In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, “Income Taxes: Simplifying the Accounting for Income Taxes.” The amendments in this update simplify the accounting for certain income tax transactions by removing specific exceptions to the general principles in Accounting Standards Codification ("ASC") 740, "Income Taxes." This guidance is effective for fiscal years beginning after December 15, 2020 with early adoption permitted. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.
Other Comprehensive Income (Loss) Comprehensive income comprises both net income and the change in equity from transactions and other events and circumstances from non-owner sources.
The changes in Accumulated other comprehensive loss by component, net of tax, for the three months ended June 30, 2021 are as follows:
In millionsForeign currency translationDerivative contractsPension and post retirement benefit plansTotal
Balance at March 31, 2021$(321.9)$(3.5)$(83.6)$(409.0)
Other comprehensive income (loss) before reclassifications33.8 0.4 (1.8)32.4 
Amounts reclassified from Accumulated other comprehensive loss  0.8 0.8 
Other comprehensive income (loss), net33.8 0.4 (1.0)33.2 
Balance at June 30, 2021$(288.1)$(3.1)$(84.6)$(375.8)
The changes in Accumulated other comprehensive loss by component, net of tax, for the three months ended June 30, 2020 are as follows:
In millionsForeign currency translationDerivative contractsPension and post retirement benefit plansTotal
Balance at March 31, 2020$(490.0)$2.8 $(73.4)$(560.6)
Other comprehensive income (loss) before reclassifications29.2 (6.9)(0.3)22.0 
Amounts reclassified from Accumulated other comprehensive loss  0.8 0.8 
Other comprehensive income (loss), net29.2 (6.9)0.5 22.8 
Balance at June 30, 2020$(460.8)$(4.1)$(72.9)$(537.8)
The changes in Accumulated other comprehensive loss by component, net of tax, for the six months ended June 30, 2021 are as follows:
In millionsForeign currency translationDerivative contractsPension and post retirement benefit plansTotal
Balance at December 31, 2020$(260.2)$2.4 $(81.3)$(339.1)
Other comprehensive loss before reclassifications(27.9)(5.5)(4.8)(38.2)
Amounts reclassified from Accumulated other comprehensive loss  1.5 1.5 
Other comprehensive loss, net(27.9)(5.5)(3.3)(36.7)
Balance at June 30, 2021$(288.1)$(3.1)$(84.6)$(375.8)
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The changes in Accumulated other comprehensive loss by component, net of tax, for the six months ended June 30, 2020 are as follows:
In millionsForeign currency translationDerivative contractsPension and post retirement benefit plansTotal
Balance at December 31, 2019$(308.6)$(3.3)$(70.7)$(382.6)
Other comprehensive loss before reclassifications(152.2)(0.8)(3.7)(156.7)
Amounts reclassified from Accumulated other comprehensive loss  1.5 1.5 
Other comprehensive loss, net(152.2)(0.8)(2.2)(155.2)
Balance at June 30, 2020$(460.8)$(4.1)$(72.9)$(537.8)
Reclassifications out of and into Accumulated other comprehensive income (loss) are recognized in "Other income (expense), net" with the tax impact recognized in "Income tax expense."

3. ACQUISITIONS
Nordco
On March 31, 2021, the Company acquired Nordco, a leading North American supplier of new, rebuilt and used maintenance of way equipment. Nordco's products and services portfolio includes mobile railcar movers and ultrasonic rail flaw detection technologies. The purchase price paid for 100% ownership of Nordco was approximately $410 million.
The following table summarizes the preliminary fair value of the Nordco assets acquired and liabilities assumed:
In millions
Assets acquired
Cash and cash equivalents $5.1 
Accounts receivable 22.4 
Inventory 34.3 
Other current assets 1.7 
Property, plant and equipment 16.6 
Goodwill 214.2 
Other intangible assets167.6 
Other noncurrent assets 13.6 
Total assets acquired 475.5 
Liabilities assumed
Current liabilities 19.1 
Noncurrent liabilities 46.2 
Total liabilities assumed 65.3 
Net assets acquired $410.2 
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 intangibles. 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. These estimates are preliminary in nature and subject to adjustments, which could be material, as the Company has not completed its valuation of assets acquired and liabilities assumed. Any necessary adjustments will be finalized within one year from the date of acquisition; adjustments to date have not been significant. Substantially all of the accounts receivable acquired are expected to be collectible. Intangible assets acquired include customer relationships and intellectual property that are subject to amortization, and trade names that were assigned an indefinite life and are not subject to amortization. Contingent liabilities assumed as part of the transaction were not material.
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. The results of this business since the date of acquisition are reported within the Freight segment
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and the Services product line. The pro-forma impact on Wabtec’s sales and results of operations, including the pro forma effect of events that are directly attributable to the acquisition, was not significant.

4. INVENTORIES
The components of inventory, net of reserves, were:
In millionsJune 30,
2021
December 31,
2020
Raw materials$710.9 $669.4 
Work-in-progress314.5 339.4 
Finished goods635.8 633.3 
Total inventories$1,661.2 $1,642.1 

5. GOODWILL AND INTANGIBLE ASSETS
The change in the carrying amount of goodwill by segment for the six months ended June 30, 2021 is as follows:
In millionsFreight SegmentTransit SegmentTotal
Balance at December 31, 2020$6,872.2 $1,613.0 $8,485.2 
Additions / opening balance sheet adjustments214.2  214.2 
Foreign currency impact2.8 (49.0)(46.2)
Balance at June 30, 2021$7,089.2 $1,564.0 $8,653.2 
As of June 30, 2021 and December 31, 2020, the Company’s trade names had a net carrying amount of $660.6 million and $650.7 million, respectively. The Company believes these intangibles have indefinite lives, with the exception of the right to use the GE Transportation trade name, to which the Company has assigned a useful life of 5 years.
Intangible assets of the Company, other than goodwill and trade names, consist of the following:
In millionsJune 30,
2021
December 31,
2020
Intellectual property, patents, and other intangibles, net of accumulated amortization of $274.9 and $223.7
$1,015.6 $1,007.6 
Backlog, net of accumulated amortization of $259.2 and $206.9
1,173.0 1,224.7 
Customer relationships, net of accumulated amortization of $306.4 and $276.3
1,026.8 986.2 
Total$3,215.4 $3,218.5 
The weighted average remaining useful life of backlog, intellectual property, customer relationships and other intangible assets were 12 years, 11 years, 16 years and 8 years, respectively. The backlog intangible asset primarily consists of in-place long-term service agreements acquired by the Company in conjunction with the acquisition of GE Transportation in 2019. Amortization expense for intangible assets was $72.7 million and $142.2 million for the three and six months ended June 30, 2021 and $72.3 million and $141.3 million for the three and six months ended June 30, 2020, respectively.
Amortization expense for the five succeeding years is estimated to be as follows:
In millions
Remainder of 2021$145.5 
2022290.3 
2023289.6 
2024280.1 
2025277.5 

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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 consolidated balance sheet. Noncurrent contract assets were $113.5 million at June 30, 2021 and $101.0 million at December 31, 2020, respectively. Included in noncurrent contract assets are certain costs that are specifically related to a contract, however, do not directly contribute to the transfer of control of the tangible product being created, such as non-recurring engineering costs. 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 consolidated balance sheet. Noncurrent contract liabilities were $66.1 million at June 30, 2021 and $79.6 million at December 31, 2020. 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 $122.5 million and $108.9 million at June 30, 2021 and December 31, 2020, respectively. These provisions for estimated losses are classified as current liabilities and included within the caption “Other accrued liabilities” on the consolidated balance sheets.
The change in the carrying amount of contract assets and contract liabilities for the six months ended June 30, 2021 and 2020 is as follows:
Contract Assets
In millions20212020
Balance at beginning of year$544.2 $623.4 
Acquisitions 4.1 
Recognized in current year369.5 451.8 
Reclassified to accounts receivable(364.0)(519.1)
Foreign currency impact(4.5)(6.2)
Balance at June 30
$545.2 $554.0 
Contract Liabilities
In millions20212020
Balance at beginning of year$831.2 $799.7 
Acquisitions1.7 6.8 
Recognized in current year339.3 424.7 
Amounts in beginning balance reclassified to revenue(316.7)(333.9)
Current year amounts reclassified to revenue(63.3)(107.5)
Foreign currency impact(6.1)(12.0)
Balance at June 30$786.1 $777.8 
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7. LEASES
The Company leases property and equipment under finance and operating leases. 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 Company does not separate lease and non-lease components contracts.
As most of the Company's leases do not provide a readily stated discount rate, the Company must estimate our incremental borrowing rate to discount lease payments. The Company has established discount rates by geographic region ranging from 1.0% to 12.3%.
The components of lease expense are as follows:
Three Months Ended June 30,Six Months Ended June 30,
In millions2021202020212020
Operating lease expense$14.3 $14.1 $28.5 $28.8 
Finance lease expense amortization of leased assets0.2 0.3 0.2 0.6 
Short-term and variable lease expense0.2  0.3 0.1 
Sublease income(0.1)(0.1)(0.2)(0.2)
Total$14.6 $14.3 $28.8 $29.3 
Scheduled payments of lease liabilities are as follows:
In millionsOperating LeasesFinance
Leases
Total
Remaining 2021$29.1 $0.4