SEC Filing | Wabtec Corporation

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SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K(A) CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): November 1, 2001 WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION (Exact Name of Registrant as Specified in its Charter) DELAWARE (State or Other Jurisdiction of Incorporation) 1-13782 25-1615902 (Commission File Number) (IRS Employer Identification No.) 1001 AIR BRAKE AVENUE, WILMERDING, PENNSYLVANIA, 15148 (Address of Principal Executive Offices) (412)-825-1000 (Registrant's Telephone Number Including Area Code)

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On November 1, 2001, Westinghouse Air Brake Technologies Corporation ("Wabtec") completed the disposition of certain locomotive after market assets to General Electric Company, acting through its GE Transportation Systems business ("GETS"), for approximately $240 million in cash. The transaction was consummated pursuant to an Asset Purchase Agreement, entered into on July 24, 2001. The assets consisted principally of locomotive after market products and services for which Wabtec is not the original equipment manufacturer. The purchase price of $240 million in cash was arrived at by negotiation among the parties. In connection with the sale of assets to General Electric, the Company has provided certain representations and warranties customary to such a transaction, and an indemnification for breach thereof. The Company does not expect to incur any material expenses in the future in regards to this indemnity. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Not Applicable (b) Pro Forma Condensed Consolidated Financial Information

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION (Unaudited) The following Pro Forma Condensed Consolidated Financial Statements are based on the historical financial statements of Westinghouse Air Brake Technologies Corporation ("Wabtec" or the "Company"), adjusted to give effect to the disposition of certain locomotive aftermarket assets by the Company. The Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2000 and the nine months ended September 30, 2001 assume that the disposition had occurred on January 1, 2000 and January 1, 2001, respectively. The unaudited Pro Forma Condensed Consolidated Balance Sheet as of December 31, 2000 gives effect to the disposition as if it had occurred on December 31, 2000. The unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2001 gives effect to the disposition as if it had occurred on September 30, 2001. The pro forma financial information reflects certain assumptions described above and in the Notes to Pro Forma Condensed Consolidated Financial Statements below. The pro forma financial information does not purport to present what the Company's results of operations would actually have been if the disposition of certain locomotive aftermarket assets had occurred on the assumed date, as specified above, or to project the Company's financial condition or results of operations for any future period.

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2000 (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) (Unaudited) Historical Disposition Historical Sold Pro Forma Pro Forma Company Businesses Adjustments As Adjusted ----------- ----------- ----------- ----------- Net sales $ 1,027,976 $ 187,264 $ 10,939 (7) $ 851,651 Cost of sales 750,176 149,544 10,939 (7) 611,571 ----------- --------- --------- --------- Gross profit 277,800 37,720 -- 240,080 Operating expenses 188,320 17,305 -- 171,015 ----------- --------- --------- --------- Income from operations 89,480 20,415 -- 69,065 OTHER INCOME AND EXPENSES: Interest expense 45,505 2,286 (13,428)(8) 29,791 Other income, net (3,620) (518) -- (3,102) ----------- --------- --------- --------- Income before income taxes 47,595 18,647 13,428 42,376 INCOME TAXES 22,202 6,713 4,834 (9) 20,323 ----------- --------- --------- --------- NET INCOME $ 25,393 $ 11,934 $ 8,594 $ 22,053 =========== ========= ========= ========= INCOME PER DILUTED SHARE $ 0.59 $ 0.51 =========== ========= WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 43,382 43,382 =========== ========= The accompanying notes are an integral part of this statement.

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) (Unaudited) Historical Disposition Historical Sold Pro Forma Pro Forma Company Businesses Adjustments As Adjusted ----------- ----------- ----------- ----------- Net sales $ 736,745 $ 125,752 $ 9,105 (7) $ 620,098 Cost of sales 546,756 100,469 9,105 (7) 455,392 --------- --------- --------- --------- Gross profit 189,989 25,283 -- 164,706 Operating expenses 125,297 13,111 -- 112,186 --------- --------- --------- --------- Income from operations 64,692 12,172 -- 52,520 OTHER INCOME AND EXPENSES: Interest expense 28,537 1,193 (8,952)(8) 18,392 Other expense, net 1,184 725 -- 459 --------- --------- --------- --------- Income before income taxes 34,971 10,254 8,952 33,669 INCOME TAXES 10,256 3,589 3,133 (10) 9,800 --------- --------- --------- --------- NET INCOME $ 24,715 $ 6,665 $ 5,819 $ 23,869 ========= ========= ========= ========= INCOME PER DILUTED SHARE $ 0.57 $ 0.55 ========= ========= WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 43,205 43,205 ========= ========= The accompanying notes are an integral part of this statement.

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2000 (DOLLARS IN THOUSANDS) (Unaudited) Historical Purchase Disposition Historical Sold Agreement Disposition Pro Forma Pro Forma Company Businesses Adjustments Adjusted Adjustments As Adjusted ---------- ---------- ----------- ----------- ----------- ----------- ASSETS CURRENT ASSETS: Cash $ 6,071 $ 180 $ (180)(1) $ -- $ -- $ 6,071 Accounts receivable 194,379 41,949 -- 41,949 -- 152,430 Inventories 202,828 64,123 (252)(2,3) 63,871 -- 138,957 Other current assets 44,277 984 -- 984 -- 43,293 --------- --------- --------- --------- --------- --------- Total current assets 447,555 107,236 (432) 106,804 -- 340,751 Property, plant and equipment, net 214,645 34,579 (2,026)(4) 32,553 -- 182,092 OTHER ASSETS: Intangibles 265,394 16,425 -- 16,425 -- 248,969 Other noncurrent assets 56,453 30,139 -- 30,139 -- 26,314 --------- --------- --------- --------- --------- --------- Total other assets 321,847 46,564 -- 46,564 -- 275,283 TOTAL ASSETS $ 984,047 $ 188,379 $ (2,458) $ 185,921 $ -- $ 798,126 ========= ========= ========= ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable 86,316 13,991 -- 13,991 -- 72,325 Other current liabilities 104,340 15,272 -- 15,272 -- 89,068 --------- --------- --------- --------- --------- --------- Total current liabilities 190,656 29,263 -- 29,263 -- 161,393 Long-term debt 539,446 -- -- -- (200,000)(6) 339,446 Other long-term liabilities 57,574 9,800 -- 9,800 -- 47,774 --------- --------- --------- --------- --------- --------- Total liabilities 787,676 39,063 -- 39,063 (200,000) 548,613 --------- --------- --------- --------- --------- --------- Shareholders' equity 196,371 149,316 (2,458) 146,858 200,000 249,513 --------- --------- --------- --------- --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 984,047 $ 188,379 $ (2,458) $ 185,921 $ -- $ 798,126 ========= ========= ========= ========= ========= ========= The accompanying notes are an integral part of this statement.

WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2001 (DOLLARS IN THOUSANDS) (Unaudited) Historical Purchase Disposition Historical Sold Agreement Disposition Pro Forma Pro Forma Company Businesses Adjustments Adjusted Adjustments As Adjusted ---------- ---------- ----------- ----------- ----------- ----------- ASSETS CURRENT ASSETS: Cash $ 61 $ 82 $ (82)(1) $ -- $ -- $ 61 Accounts receivable 162,229 32,137 -- 32,137 -- 130,092 Inventories 186,617 60,936 799 (2,3) 61,735 -- 124,882 Other current assets 40,620 635 -- 635 -- 39,985 --------- --------- -------- --------- --------- --------- Total current assets 389,527 93,790 717 94,507 -- 295,020 Property, plant and equipment, net 202,102 29,715 (1,597)(4) 28,118 -- 173,984 OTHER ASSETS: Intangibles 263,609 15,554 -- 15,554 -- 248,055 Other noncurrent assets 41,966 19,687 -- 19,687 -- 22,279 --------- --------- -------- --------- --------- --------- Total other assets 305,575 35,241 -- 35,241 -- 270,334 TOTAL ASSETS $ 897,204 $ 158,746 $ (880) $ 157,866 $ -- $ 739,338 ========= ========= ======== ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable 77,048 14,744 -- 14,744 -- 62,304 Other current liabilities 99,789 10,150 (228)(5) 9,922 -- 89,867 --------- --------- -------- --------- --------- --------- Total current liabilities 176,837 24,894 (228) 24,666 -- 152,171 Long-term debt 454,237 -- -- -- (200,000)(6) 254,237 Other long-term liabilities 51,244 8,676 -- 8,676 -- 42,568 --------- --------- -------- --------- --------- --------- Total liabilities 682,318 33,570 (228) 33,342 (200,000) 448,976 Shareholders' equity 214,886 125,176 (652) 124,524 200,000 290,362 --------- --------- -------- --------- --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 897,204 $ 158,746 $ (880) $ 157,866 $ -- $ 739,338 ========= ========= ======== ========= ========= ========= The accompanying notes are an integral part of this statement.

NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The pro forma adjustments to the condensed consolidated balance sheet are as follows: 1. To eliminate cash which was retained by Wabtec. 2. To include a contract in Australia assumed by the buyer. 3. To adjust for certain inventory which was retained by Wabtec. 4. To adjust for certain facilities and fixed assets which were retained by Wabtec. 5. To adjust for certain accruals which were retained by Wabtec. 6. To reflect the use of cash proceeds, after tax, to reduce long-term debt. The pro forma adjustments to the condensed consolidated statements of operations are as follows: 7. To reflect the fact that intercompany sales to the disposed businesses would have been external sales. 8. To reflect reduced interest expense from the use of cash proceeds, after tax, to pay down debt. 9. To record income tax effect of the pro forma adjustments at the Company's effective tax rate of 36%. 10. To record income tax effect of the pro forma adjustments at the Company's effective tax rate of 35%.

SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION (Registrant) By /s/ Gregory T.H. Davies ----------------------------- Gregory T.H. Davies Date: December 28, 2001 President and Chief Executive Officer