AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 30/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · A substantial installed base where end‑users often prefer OE suppliers for safety/performance parts, plus customer‑specific engineered contracts with enforceable payment rights and a large RPO, supports embedded aftermarket access and repeat engagement.
durability · 2/4 · Multi‑year backlog and acquired customer relationships/technology underpin persistence, but strong price competition and credible in‑house service alternatives constrain long‑term defensibility.
customer dependency · 2/4 · Safety‑critical components and long‑term engineered work suggest reliance on OE parts and integration; yet many railroads maintain in‑house service capability, limiting dependency asymmetry.
erosion resilience · 2/4 · Backlog growth mitigates near‑term risk, but services declined in 1H26 before rebounding, and price competition remains strong. Resilience is mixed across product lines.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · The company implemented price escalations and surcharges and cites cost recovery via escalation clauses, indicating actioned pricing. However, the 10‑K highlights strong price competition with cost‑conscious customers, clouding net realized pricing.
retention · 2/4 · OEM‑preferred replacements and an expansive installed base support recurring aftermarket demand, but services weakness in H1’26 and in‑house alternatives show retention is not uniform.
margin resilience · 3/4 · Gross and operating margins expanded in 2026 despite tariff headwinds, supported by volume/mix, productivity and partial recovery mechanisms, indicating resilient profitability.
contractual freedom · 2/4 · Contracts incorporate line‑item pricing and variable consideration including escalation clauses, but also include damages and performance provisions, implying some flexibility yet not unilateral pricing control.
Predictability100
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 3.68
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 1.93
- observedAnnualPeriods
- 5.00
Financial strength—
Missing required inputs: netDebtEbitGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 61.48
- interestCoverageGrade
- 63.35
- currentRatioGrade
- 28.45
- Debt / FCF (x)
- 3.70
- Interest coverage (x)
- 7.97
- Current ratio (x)
- 1.11
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -2.19
- 3-year average SBC / revenue (%)
- 0.61
- cashConversionGrade
- 100.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Operating cash flow rose meaningfully, but significant acquisition outlays and ongoing repurchases required debt financing. Absent disclosed post‑deal returns, discipline appears mixed.
incentive alignment · 3/4 · Incentives reference EBIT margin, EPS, cash conversion, ROIC and RTSR, alongside stock ownership guidelines and a clawback policy, supporting alignment with shareholder value.
execution · 3/4 · Sales and margins expanded with a growing multi‑year backlog, evidencing operational execution amid tariff pressures and mixed end‑markets.
governance · 2/4 · Board and key committees are independent with active risk oversight and executive sessions, signaling functional governance; exceptional governance is not established.
Evidence
Our substantial installed base of products with end-users, such as the railroads and the passenger transit authorities, is a significant competitive advantage for providing products and services to the aftermarket because these customers often look to purchase safety- and performance-related replacement parts and technology upgrades from the original equipment components supplier.
2024 10-K competitive strengths: installed base and OE-preference supporting aftermarket · Filed 12/02/2025
Aftermarket sales are typically done at higher margins and are less cyclical than OEM sales because a certain level of aftermarket maintenance and service work must be performed, even during an industry slowdown.
2024 10-K competitive strengths: aftermarket recurring, higher-margin, less cyclical · Filed 12/02/2025
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.
3Q26 10-Q revenue recognition: highly engineered products, enforceable right to payment · Filed 21/10/2026
As of September 30, 2026, the Company's remaining performance obligations were approximately $31.4 billion.
3Q26 10-Q remaining performance obligations · Filed 21/10/2026
Within North America, New York Air Brake Company, a subsidiary of the German air brake producer Knorr-Bremse AG (“Knorr”) and Amsted Rail Company, Inc., a subsidiary of Amsted Industries Corporation, are our principal overall OEM competitors.
2025 10-K (filed 2026): principal OEM competitors (Knorr/Amsted) · Filed 13/02/2026
Our primary competition for locomotives is Progress Rail, owned by a subsidiary of Caterpillar.
2025 10-K (filed 2026): primary locomotive competitor (Progress Rail) · Filed 13/02/2026
Our primary competition for freight and passenger transit service and repair is mostly from the railroads’ and passenger transit authorities’ in-house operations and Knorr.
2025 10-K (filed 2026): services competition from in‑house operations and Knorr · Filed 13/02/2026
Price competition is strong because we have a relatively small number of customers and they are very cost-conscious.
2025 10-K competition: strong price competition and few cost‑conscious customers · Filed 12/02/2025
We have a long history of advancing technologies to meet customer needs and have been recognized for the development and production of locomotives, equipment, including PTC equipment, and systems for the freight rail and passenger transit industries.
2024 10-K: recognized for development/production (incl. PTC) · Filed 12/02/2025
GLOBAL IMPACT
PRODUCTS THAT SPAN MORE THAN 100 COUNTRIES
$11.17B
2025 Revenues
~31K
Global Employees
50+
Countries with
Wabtec operations
FORTUNE 500 COMPANY
~24.6K
Global locomotives in our installed base
7K+
Over 7,000 Patents
DRIVERS OF PORTFOLIO GROWTH
Accelerate innovation of scalable technologies
2026 Proxy: installed base and patents (issuer disclosure) · Filed 31/03/2026
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.
3Q26 10-Q: implemented price escalations and surcharges; mitigation actions · Filed 21/10/2026
See Appendix for additional details and reconciliations V O L U M E Higher Freight & Transit sales, including acquisitions M I X / P R I C I N G Favorable product mix, cost recovery through contract escalation, partial tariff recovery, & favorable acquisition mix R AW M AT E R I A L S Increased net tariffs and unfavorable raw material costs C U R R E N C Y Foreign exchange decreased gross profit $1.7M (operating income decreased $0.7M) M A N U F A C T U R I N G / O T H E R Integration 3.0 ongoing savings and increased productivity S G & A / E N G I N E E R I N G Increase mainly driven by acquisitions 3Q OPERATING INCOME KEY DRIVERS
3Q26 investor presentation: cost recovery via contract escalation; partial tariff recovery · Filed 21/10/2026
Equipment sales were up 35.0% driven by higher locomotive deliveries, while Services sales were down 4.2% due to lower modernization deliveries, as expected.
2Q26 press release: Freight Services sales down 4.2% YoY · Filed 22/07/2026
Equipment sales were up 52.5% driven by higher locomotive deliveries, while Services sales were down 17.3% due to lower modernization deliveries as expected.
1Q26 press release: Freight Services sales down 17.3% YoY · Filed 22/04/2026
Services sales were up 6.7% driven by core services demand and higher modernization deliveries, while Equipment sales were up 0.3% due to increased mining sales, which were partially offset by lower locomotive deliveries.
3Q26 press release: Freight Services sales up 6.7% YoY · Filed 21/10/2026
Wabtec Corporation Consolidated Financial Results
3Q26 press release: gross and operating margins improved YoY · Filed 21/10/2026
Wabtec Corporation Consolidated Financial Results
2Q26 press release: margins improved YoY · Filed 22/07/2026
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.
2025 10-K: pricing defined in contracts; line‑item basis; variable consideration · Filed 13/02/2026
Types of variable consideration the Company typically has include volume discounts, prompt payment discounts, price escalation clauses, liquidating damages, and performance bonuses.
2025 10-K: variable consideration includes price escalation clauses · Filed 13/02/2026
The backlog intangible asset primarily consists of in-place long-term agreements acquired by the Company in conjunction with past acquisitions.
3Q26 10-Q: backlog intangible asset from in‑place long‑term agreements · Filed 21/10/2026
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.
3Q26 10-Q: acquired customer relationships and technology; trade names · Filed 21/10/2026
(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.
3Q26 10-Q: cash provided by operating activities increased to $1,095m · Filed 21/10/2026
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.
3Q26 10-Q: cash used for investing activities (acquisitions) $1,243m · Filed 21/10/2026
•During the quarter, the Company repurchased $305 million of Wabtec shares and paid $52 million in dividends.
3Q26 press release: share repurchases and dividends during the quarter · Filed 21/10/2026
Use the Company’s stock price and other value-creating financial metrics such as earnings before interest and taxes (EBIT) margin, earnings per share (EPS), cash conversion, cash from operating activities, return on invested capital (ROIC) and relative total stockholder return (RTSR) in our executive incentive programs.
2026 Proxy: incentive metrics include EBIT margin, EPS, cash conversion, ROIC, RTSR · Filed 31/03/2026
Other Compensation Policies and Practices
Stock Ownership Guidelines
Wabtec has established stock ownership guidelines to encourage our key employees to own and retain shares of stock.
2026 Proxy: stock ownership guidelines for executives · Filed 31/03/2026
The Clawback Policy requires the Company to reasonably promptly recoup certain incentive-based compensation (without regard to taxes paid) that was erroneously awarded or paid to executive officers during the applicable three-year recovery period upon the Board, a Committee of the Board, or the officers of the Company concluding that the Company is required to prepare an accounting restatement of the Company’s financials as a result of material noncompliance by the Company under applicable securities laws.
2026 Proxy: clawback policy for incentive compensation · Filed 31/03/2026
Backlog
Wabtec Corporation Consolidated Backlog Comparison
Backlog $ in millions
September 30,
2026
2025
Change
12-Month Backlog
$8,992
$8,267
8.8
%
Total Backlog
$31,435
$25,577
22.9
%
•The Company’s multi-year backlog continues to provide strong visibility.
3Q26 press release: 12‑month and multi‑year backlog growth · Filed 21/10/2026
6
/
2026 Proxy Statement
Table of Contents
Proxy Statement Summary
Corporate Governance Highlights
Board Oversight
Board Independence
Stockholder Rights
•Active strategy and risk oversight by full Board and committees including: business and market risks, human capital management, cybersecurity, M&A and strategic transactions
2026 Proxy: board oversight, risk oversight responsibilities · Filed 31/03/2026
•Audit Committee, Compensation and Talent Management Committee, Governance Committee and Risk and Public Policy Committee comprised solely of independent directors
2026 Proxy: committees comprised solely of independent directors · Filed 31/03/2026
