UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One):
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ---
ACT OF 1934
For the fiscal year ended December 31, 2002
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ---
ACT OF 1934
For the transition period from __________ to ___________
Commission file number 1-13782
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
Westinghouse Air Brake Technologies Corporation Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address of
the principal executive office.
Westinghouse Air Brake Technologies Corporation
1001 Air Brake Avenue
Wilmerding, PA 15148
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION SAVINGS PLAN
Form 11-K Annual Report Pursuant To Section 15(D) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 2002
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION SAVINGS PLAN
ANNUAL REPORT ON FORM 11-K
DECEMBER 31, 2002 AND 2001
TABLE OF CONTENTS
PAGE
----
Report of Independent Auditors 1
Statements of Net Assets Available for Benefits,
December 31, 2002 and 2001 2
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 2002 and
2001 3
Notes to Financial Statements 4
REPORT OF INDEPENDENT AUDITORS
To the Westinghouse Air Brake Technologies Corporation Savings Plan and
Participants:
We have audited the accompanying statements of net assets available for benefits
of the Westinghouse Air Brake Technologies Corporation Savings Plan as of
December 31, 2002 and 2001 and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2002 and 2001, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
/s/ Ernst & Young LLP
June 6, 2003
1
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
2002 2001
------------ ------------
Investments in Master Trust, at market value $ 93,207,285 $ 97,729,052
Employee contributions receivable 378,461 295,520
Employer contributions receivable 2,708,635 3,154,745
Participant loans 2,379,878 2,516,764
------------ ------------
Net assets available for benefits $ 98,674,259 $103,696,081
============ ============
The accompanying notes are an integral part of these financial statements.
2
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Years ended December 31,
2002 2001
------------- -------------
Net assets available for benefits, beginning of year $ 103,696,081 $ 105,124,834
------------- -------------
Increases:
Employee contributions 5,769,728 6,490,809
Employer contributions 4,222,729 7,530,872
Transfer in from other plans and employee rollovers 11,200,268 1,929,891
Investment income:
Interest and dividends 2,202,490 2,657,140
------------- -------------
Total increases 23,395,215 18,608,712
------------- -------------
Decreases:
Benefit payments 14,195,674 6,933,916
Net depreciation in fair value of investments 14,207,091 13,086,158
Administrative expenses 14,272 17,391
------------- -------------
Total decreases 28,417,037 20,037,465
------------- -------------
Net decrease (5,021,822) (1,428,753)
------------- -------------
Net assets available for benefits, end of year $ 98,674,259 $ 103,696,081
============= =============
The accompanying notes are an integral part of these financial statements.
3
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
1. DESCRIPTION OF PLAN:
The following brief description of the Plan is provided for general information
purposes only. Participants should refer to the plan document and Summary Plan
Description for more complete information.
General
The Westinghouse Air Brake Technologies Corporation Savings Plan (the Plan),
effective March 9, 1990, amended and restated effective January 1, 1997, is a
contributory plan intended to comply with the provisions of Sections 401(a),
401(k), and 401(m) of the Internal Revenue Code (IRC). All salaried
nonbargaining employees of Westinghouse Air Brake Technologies Corporation and
its subsidiaries (the Company) are eligible to participate upon their hire date.
Collective bargaining employees in Wilmerding and Greensburg are eligible to
participate in the Plan, but are not eligible for employer matching
contributions.
Contributions
Participants may contribute, through payroll deductions, employee elective
contributions from 1% to 20% of their compensation, limited to $11,000 in 2002.
In addition, participants may contribute employee after-tax contributions from
1% to 20% of their compensation in 2002. Employee contributions were limited to
contributions up to 16% of their compensation in 2001.
Participant total annual contributions may not exceed the contribution limits
under Section 415(c) of the IRC. In addition, the combination of an employee's
elective contribution and after-tax contribution could not exceed 20% and 16% of
his/her compensation in 2002 and 2001, respectively.
The Company makes an annual contribution of 3% of a nonbargaining participant's
eligible compensation, as long as the Company employs the participant at
December 31. In addition, the Company makes a matching contribution of up to 3%
of the nonbargaining participant's contributions.
Withdrawals
Participants may make the following types of withdrawals:
In-Service Withdrawals--A participant may withdraw any amount of the vested
portion of his/her employer matching account, employer after-tax account, and
rollover accounts once in any six-month period. Once a participant has
reached age 59-1/2, he/she can withdraw any portion of his/her employee
elective account.
Hardship Withdrawals--In the case of hardship, as defined in the plan
document, the participant can receive 100% of his/her employee elective
account. Hardship withdrawals are limited to once every plan year. Employee
contributions cannot be made to the Plan for a period of six months
following the hardship withdrawal.
Loans
Participants may receive loans from the Plan. At no time shall the loans of the
participant exceed the lesser of 50% of the value of the participant's vested
balance of his/her accounts, reduced by any outstanding loan balance or $50,000.
The loans bear interest based on prevailing commercial rates as determined
quarterly by the plan administrator. The interest rates on participant loans
range from 5.25% to 10.5%.
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Vesting
Employee contributions are at all times 100% vested and nonforfeitable. Plan
participants become 100% vested in employer contributions after three years of
service as described in the Summary Plan Description.
Transfer In from Other Plans
In 2002, assets allocated to plan participants who were previously part of the
Wabtec Corporation Employee Stock Ownership Plan were transferred into the
Westinghouse Air Brake Technologies Corporation Savings Plan. In 2001, salaried
participants who were previously part of the Motive Power Industries,
Incorporated Savings Plan, the Technical Service & Marketing Profit Sharing
401(k) and the Comet Industries, Incorporated 401(k) Savings Plan were
transferred into the Westinghouse Air Brake Technologies Corporation Savings
Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting
The accounts of the Plan are maintained on the accrual basis of accounting.
Expenses incurred by the plan administrator, investment manager and trustee for
their services and costs in administering the Plan are paid directly by the
Company.
Investments
Investments are valued at their market values based on published quotes.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires the plan administrator to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ from these
estimates.
Reclassifications
Certain amounts in the financial statements for prior years have been
reclassified to conform to statement presentation for the current year. These
reclassifications have no effect on net assets available for benefits.
3. INVESTMENTS
Principles of Presentation
The net assets of the Plan are held in a Master Trust (Trust). The Trust
consists of the following plans at December 31, 2002:
- - Westinghouse Air Brake Technologies Corporation Savings Plan
- - Westinghouse Air Brake Technologies Corporation Supplemental Plan
The Statements of net assets available for benefits present the assets held in
the Trust for the benefit of the Plan's participants. Each of the plans shares
pro rata in the commonly held investment of the Trust. Investment income and
realized and unrealized appreciation (depreciation) in the fair value of
investments are allocated to the Plan based upon the relationship of net assets
of the Plan at the beginning of the reportable period to total net assets of the
Trust. Cash and accrued income are allocated to the Plan based on the
relationship of the Plan's investments to total investments. The Plan's net
assets represent 96% of the net assets of the Master Trust.
At December 31, 2002 and 2001 investments in the Master Trust are as follows:
5
December 31
2002 2001
------------ ------------
Market value as determined by quoted market price:
Corporate common stock $ 12,006,698 $ 3,318,104
Mutual funds 83,241,984 95,238,902
Participant loans 2,379,878 2,516,764
------------ ------------
Total investments in Master Trust $ 97,628,560 $101,073,770
============ ============
For the years ended December 31, 2002 and 2001, investment income for the Master
Trust is as follows:
Years ended December 31
2002 2001
------------ ------------
Net appreciation (depreciation) in fair value of investments:
Corporate common stock $ 1,139,109 $ 217,504
Mutual funds (15,724,925) (13,192,906)
------------ ------------
(14,585,816) (12,975,402)
Interest & dividends 2,249,717 2,674,114
------------ ------------
Total investment loss $(12,336,099) $(10,301,288)
============ ============
Investment Options
The trustee of the investments is Fidelity Management Trust Company (Fidelity)
per the Trust Agreement dated June 21, 1990. Fidelity maintains the investments
and provides record-keeping functions for the Plan. Each participant's account,
at the discretion of the participant, may be invested in a variety of funds.
4. PLAN TERMINATION:
In the event the Plan is terminated, the Company will direct either (a) that the
investment manager and trustee continue to hold the participants' accounts in
accordance with the Plan, or (b) that the investment manager and trustee
immediately distribute to each participant all amounts in the participant's
account in a single lump-sum payment.
5. TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated March 27, 2002, stating that the Plan is qualified under Section 410 (a)
of the Internal Revenue Code (the Code) and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The plan administrator
has indicated that it will take the necessary steps, if any, to maintain the
Plan's qualified status.
6. SUBSEQUENT EVENT
Effective January 1, 2003, Service Center hourly employees, who were
participants in the Westinghouse Air Brake Technologies Corporation Savings Plan
for Hourly Employees (the Hourly Plan), were transferred into the Plan. Assets
of $496,490, representing these participants' accounts, were transferred into
the Plan from the Hourly Plan.
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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/ Scott E. Wahlstrom
-------------------------
Scott E. Wahlstrom
Vice President, Human Resources and
Plan Administrator of the Westinghouse Air
Brake Technologies Corporation Savings Plan
June 29, 2003
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CERTIFICATION
Pursuant to 18 U.S.C. ss. 1350, the undersigned officers of the
Westinghouse Air Brake Technologies Corporation Savings Plan (the "Plan"),
hereby certify, to the best of their knowledge, that the Plan's Annual Report
on Form 11-K for the year ended December 31, 2002 (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 Plan.
By: /s/ GREGORY T. H. DAVIES
-----------------------------------------
Gregory T. H. Davies
President & Chief Executive Officer
Date: June 29, 2003
By: /s/ SCOTT E. WAHLSTROM
-----------------------------------------
Scott E. Wahlstrom
Vice President, Human Resources and
Plan Administrator of the Westinghouse
Air Brake Technologies Corporation
Savings Plan
Date: June 29, 2003
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-33998) pertaining to the Westinghouse Air Brake Technologies
Corporation Savings Plan of our report dated June 6, 2003, with respect to the
financial statements of the Westinghouse Air Brake Technologies Corporation
Savings Plan included in this Annual Report (Form 11-K) for the year ended
December 31, 2002.
/s/ Ernst & Young LLP
June 6, 2003
