AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 19/10/2026
Moat63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · A large installed base, original-supplier preference and existing long-term service agreements establish a meaningful aftermarket position. Actual Transit aftermarket growth corroborates the mechanism, although its strength varies by business.
durability · 2/4 · Service agreements and new multi-year orders support persistence. Cancellation rights and credible competing service providers limit confidence in long-duration protection; no exceptional durability is demonstrated.
customer dependency · 3/4 · Safety-related replacement demand, customer-specific engineering and long-term services demonstrate substantial embedded relationships. Dependency is inferred from these disclosures rather than measured switching costs; customers retain alternative suppliers and in-house capabilities.
erosion resilience · 2/4 · Transit aftermarket growth and additional orders support continued relevance. Freight Services declines, strong historical price competition and encountered counterfeits demonstrate limits to resilience without establishing broad competitive deterioration.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · The issuer reports implementing price escalations and surcharges, providing evidence of actual pricing actions. Historical strong price competition and continuing tariff costs constrain the assessment. Net realized pricing and the recovery achieved are not quantified.
retention · 2/4 · Original-supplier preference, existing service agreements, Transit aftermarket growth and multi-year orders support repeat demand indirectly. Declining Freight organic Services sales and customer in-house alternatives make the evidence mixed; no retention rate is inferred.
margin resilience · 3/4 · Reported 2026 gross profit and operating income increased, and gross-margin improvement continued despite tariff inflation. Disclosed drivers include productivity, restructuring and acquisition accretion, following similar operational improvements in 2025. This supports operating resilience, while leaving pricing's contribution unresolved.
contractual freedom · 2/4 · Contract escalation clauses and implemented surcharges provide some ability to adjust terms. Prices remain specified by contract, alongside discounts, damages and performance conditions; unilateral repricing or comprehensive inflation protection is not established.
Predictability100
Five consecutive 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
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, or reported pretax profit plus reported interest expense when operating income is unavailable. 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 or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; 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. Nonpositive invested capital has no defined return and remains unavailable. 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 · First-half operating cash generation rose to $640 million, but $1.062 billion of acquisition spending and $108 million of capital expenditure coincided with $457 million of repurchases, $106 million of dividends and $1.049 billion of net debt inflows. Higher acquisition-related interest expense and unproven acquisition returns make discipline mixed.
incentive alignment · 3/4 · Disclosed 2025 compensation links performance units to three-year ROIC and operating cash flow with a relative shareholder-return modifier. Actual grants and vesting corroborate an operating equity program, supported by ownership and anti-hedging policies. Comprehensive holdings and target difficulty are missing, limiting claims of exceptional alignment.
execution · 3/4 · Reported profit and cash generation improved alongside Transit organic growth and higher backlog. Productivity and restructuring benefits provide operating corroboration beyond management process claims. Execution is assessed partly from aggregate results, which include acquisitions and coexist with Freight Services weakness.
governance · 2/4 · Independent committees, shareholder rights, meeting attendance and actual audit-service pre-approval support functioning oversight. Classified director terms and the subsequently disclosed combined Chairman/CEO role temper the assessment. Policies alone do not establish exceptional oversight effectiveness.
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.
Business / Competitive Strengths / original-supplier aftermarket preference · Filed 13/02/2026
Wabtec has an installed base of nearly 24,600 locomotives, as well as a diverse offering of Transit locomotives and cars both internationally and domestically.
Business / installed locomotive base · Filed 13/02/2026
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.
Notes / intangible assets / existing long-term service agreements · Filed 13/02/2026
33 Transit Segment The following table shows our Condensed Consolidated Statements of Operations for our Transit Segment for the periods indicated: Three Months Ended June 30, In millions 2026 2025 Change % Change Net sales $ 936 $ 787 $ 149 18.9 % Cost of sales (629) (546) 83 15.2 % Cost of sales (% of Net sales) 67.2 % 69.3 % (2.1) Gross profit 307 241 66 27.4 % Operating expenses (161) (132) 29 22.0 % Income from operations $ 146 $ 109 $ 37 33.9 % Income from operations (% of Net sales) 15.6 % 13.9 % 1.7 The following table shows the major components of the change in Net sales for the Transit Segment in the second quarter of 2026 from the second quarter of 2025: In millions Second Quarter 2025 Net sales $ 787 Acquisitions 69 Portfolio Optimization (Divestitures/Exits) (1) Foreign Exchange 10 Organic changes in Net sales by Product Line: Aftermarket 56 Original Equipment Manufacturing 15 Second Quarter 2026 Net sales $ 936 Net sales Transit Segment organic sales increased by $71 million, or 9.0%, driven by strong Aftermarket and Original Equipment Manufacturing sales primarily as a result of increased demand for products and services due to fleet expansion and renewals, increased passenger ridership levels and increased investments in sustainable infrastructure.
MD&A / second-quarter Transit results and organic aftermarket growth · Filed 22/07/2026
Total multi-year backlog increased $3.5 billion during the first six months of 2026 to a record $30.9 billion at June 30, 2026.
MD&A / first-half 2026 backlog growth · Filed 22/07/2026
Significant Freight orders included a multi-year, multi-billion-dollar mining contract for drive systems and aftermarket parts, a $1.0 billion Australian order spanning across new locomotives, components, digital solutions, and multi-year services, a $210 million U.S.
MD&A / significant multi-year Freight orders · Filed 22/07/2026
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.
Revenue recognition / customer-specific engineering and termination payment rights · Filed 22/07/2026
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.
Business / named North American OEM competitors · Filed 13/02/2026
Our primary competition for locomotives is Progress Rail, owned by a subsidiary of Caterpillar.
Business / named locomotive competitor · 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.
Business / service competition from customers and Knorr · Filed 13/02/2026
Depending on the product line and geography, we can also compete with our customers, such as CRRC Corporation Limited, a China-based manufacturer of rolling stock.
Business / competition from rolling-stock customers · Filed 13/02/2026
Price competition is strong because we have a relatively small number of customers and they are very cost-conscious.
Business / strong price competition and cost-conscious customers · Filed 12/02/2025
36 Freight Segment The following table shows our Condensed Consolidated Statements of Operations for our Freight Segment for the periods indicated: Six Months Ended June 30, In millions 2026 2025 Change % Change Net sales: Sales of goods $ 3,432 $ 2,890 $ 542 18.8 % Sales of services 926 930 (4) (0.4) % Total Net sales 4,358 3,820 538 14.1 % Cost of sales: Cost of goods (2,137) (1,893) 244 12.9 % Cost of services (579) (545) 34 6.2 % Total Cost of sales (2,716) (2,438) 278 11.4 % Cost of sales (% of Net sales) 62.3 % 63.8 % (1.5) Gross profit 1,642 1,382 260 18.8 % Operating expenses (688) (547) 141 25.8 % Income from operations $ 954 $ 835 $ 119 14.3 % Income from operations (% of Net sales) 21.9 % 21.9 % 0.0 The following table shows the major components of the change in Net sales for the Freight Segment in the first six months of 2026 from the first six months of 2025: In millions First Six Months of 2025 Net sales $ 3,820 Acquisitions 347 Portfolio Optimization (Divestitures/Exits) (21) Foreign Exchange 34 Organic changes in Net sales by Product Line: Equipment 434 Services (192) Components (18) Digital Intelligence (46) First Six Months of 2026 Net sales $ 4,358 Net sales Freight Segment organic sales increased by $178 million, or 4.7%, driven primarily by Equipment sales from higher North American and international locomotive deliveries and higher mining sales.
MD&A / first-half Freight organic sales bridge and Services decline · Filed 22/07/2026
The Company’s contracts are subject to standard industry cancellation provisions, including cancellations on short notice or upon completion of designated stages.
Business / backlog cancellation provisions · Filed 13/02/2026
Further, although we routinely conduct anti-counterfeiting activities in multiple jurisdictions, we have encountered counterfeit reproductions of our products or products that otherwise infringe on our intellectual property rights.
Risk Factors / encountered counterfeit products · Filed 13/02/2026
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.
MD&A / implemented price escalations, surcharges and other mitigation actions · Filed 22/07/2026
The Company has experienced increased tariff costs which unfavorably impacted our operating results and cash from operations for the six months ended June 30, 2026.
MD&A / realized tariff effects on results and operating cash flow · 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.
Revenue recognition / contractually specified line-item pricing · Filed 22/07/2026
Types of variable consideration the Company typically has include volume discounts, prompt payment discounts, price escalation clauses, liquidating damages, and performance bonuses.
Revenue recognition / escalation clauses, discounts, damages and bonuses · Filed 22/07/2026
3 WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME Unaudited Unaudited Three Months Ended June 30, Six Months Ended June 30, In millions, except per share data 2026 2025 2026 2025 Net sales: Sales of goods $ 2,670 $ 2,226 $ 5,201 $ 4,383 Sales of services 509 480 928 933 Total net sales 3,179 2,706 6,129 5,316 Cost of sales: Cost of goods (1,710) (1,481) (3,326) (2,931) Cost of services (308) (287) (581) (547) Total cost of sales (2,018) (1,768) (3,907) (3,478) Gross profit 1,161 938 2,222 1,838 Operating expenses: Selling, general and administrative expenses (400) (347) (801) (654) Engineering expenses (70) (50) (126) (96) Amortization expense (91) (69) (178) (142) Total operating expenses (561) (466) (1,105) (892) Income from operations 600 472 1,117 946 Other income and expenses: Interest expense, net (80) (46) (151) (92) Other (expense) income, net (2) 24 21 22 Income before income taxes 518 450 987 876 Income tax expense (122) (111) (228) (210) Net income 396 339 759 666 Less: Net income attributable to noncontrolling interest (1) (3) (2) (8) Net income attributable to Wabtec shareholders $ 395 $ 336 $ 757 $ 658 Earnings Per Common Share Basic Net income attributable to Wabtec shareholders $ 2.33 $ 1.96 $ 4.45 $ 3.84 Diluted Net income attributable to Wabtec shareholders $ 2.33 $ 1.96 $ 4.44 $ 3.84 Weighted average shares outstanding Basic 169.1 170.6 169.5 170.6 Diluted 169.6 171.2 170.1 171.2 The accompanying notes are an integral part of these statements.
Unaudited consolidated income statements / 2026 and comparative 2025 results · Filed 22/07/2026
The improvement in gross margin is attributable to productivity and efficiency, savings from restructuring initiatives, and accretion from recent acquisitions, partially offset by inflation driven by tariffs and unfavorable mix within the Freight Segment.
MD&A / gross-margin improvement attribution and tariff pressure · Filed 22/07/2026
The improvement in gross margin is attributable to strong productivity and cost management, savings from restructuring initiatives, and the exit of low margin business offerings through Portfolio Optimization.
MD&A / 2025 gross-margin improvement attribution · Filed 13/02/2026
Operating activities In the first six months of 2026, cash provided by operating activities was $640 million compared to $400 million in the first six months of 2025.
Liquidity / first-half operating cash generation · Filed 22/07/2026
During the first six months of 2026, Wabtec used $1,062 million for acquisitions, primarily for Dellner Couplers and $108 million for additions to property, plant and equipment for investments in our facilities and manufacturing processes.
Liquidity / actual acquisition and capital spending · Filed 22/07/2026
Financing activities In the first six months of 2026, cash provided by financing activities was $408 million, which included $1,049 million of inflows from net changes in debt, partially offset by $457 million of stock repurchases, $106 million of dividend payments, and $54 million of payments for income tax withholding on share-based compensation.
Liquidity / debt inflows, repurchases and distributions · Filed 22/07/2026
Interest expense, net Interest expense, net, increased $34 million to $80 million for the three months ended June 30, 2026 compared to the same period in 2025, due to higher average overall debt balances in the current period, primarily related to acquisitions.
MD&A / acquisition-related increase in interest expense · Filed 22/07/2026
2025 Compensation Highlights Elements of Target Compensation Base Salary Annual Cash Incentive Long-Term Equity Incentives Weighting (%) 5% 16% 18% 30% 77% 54% 2025 Performance Metrics •Individual contribution to the business •Knowledge and experience •Capabilities and qualifications •Earnings per share (75%) •Cash conversion (25%) •Personal performance modifier (EBIT Margin %) (80%-120%) •60% performance units (at target) and 40% time-vesting restricted stock For performance units: •3-year average annual return on invested capital (50%) •3-year average cash from operating activities (50%) •Subject to relative total stockholder return (RTSR) modifier (+/- 20%) 36 / 2026 Proxy Statement Table of Contents Compensation Discussion and Analysis Say-on-Pay Results The Compensation Committee reviewed the results of the 2025 stockholder advisory vote on executive officer compensation and incorporated the results as one of the many factors considered in connection with the discharge of its responsibilities.
Compensation Discussion and Analysis / 2025 incentive metrics and equity structure · Filed 31/03/2026
20 The following table summarizes the restricted stock, restricted stock unit and incentive stock unit activity and related information for the six months ended June 30, 2026: Restricted Stock and Units Incentive Stock Units Weighted Average Grant Date Fair Value Outstanding at December 31, 2025 592,576 872,053 $ 147.49 Granted 205,309 209,179 $ 254.37 Vested (272,126) (348,127) $ 121.17 Adjustment for incentive stock awards expected to vest — 138,513 $ 168.69 Canceled (6,437) — $ 181.69 Outstanding at June 30, 2026 519,322 871,618 $ 193.03 10.
Stock compensation / actual grants and vesting during first-half 2026 · Filed 22/07/2026
Going forward, the Lead Independent Director will preside over executive sessions, will serve as a liaison between the Independent Directors and the CEO and will perform additional obligations identified in the Corporate Governance Guidelines •Executive sessions of non-management directors at all regular Board meetings •Audit Committee, Compensation and Talent Management Committee, Governance Committee and Risk and Public Policy Committee comprised solely of independent directors •Board commitment to recruiting qualified, and experienced director candidates with a range of backgrounds and experience •Bylaws provide a stockholder right to call special meetings •Majority voting for uncontested director elections •Proxy access for large, long-term stockholders •Year-round stockholder engagement Executive Compensation Other Governance Practices •Robust stock ownership guidelines for officers and directors •Minimum vesting of 12 months for restricted stock •Policy against hedging or pledging of Wabtec shares by officers and directors •Limits on outside directorships •External Board evaluation •Annual self-assessment •Annual review and updates to Corporate Governance Guidelines •All directors attended the 2025 Annual Meeting and 75% or more of the Board and Committee meetings in 2025 •Policy against using preferred shares for anti-takeover purposes 2026 Proxy Statement / 7 Table of Contents Proposal 1 Election of Directors Wabtec’s Board of Directors currently has nine members.
Corporate Governance Highlights / independent committees, shareholder rights and policies · Filed 31/03/2026
Your vote is very important. Voting Items Purpose Board Recommendation Page Reference 1 Elect three directors for a term of three years expiring in 2029 aFOR 8 2 Approve an advisory (non-binding) resolution to approve the 2025 named executive officer compensation aFOR 34 3 Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the 2026 fiscal year aFOR 66 Misc.
Annual meeting voting items / three-year director terms · Filed 31/03/2026
OTHER INFORMATION On May 18, 2026, Rafael Santana, Wabtec's Chairman and Chief Executive Officer, entered into a stock trading plan (the "Plan") designed to comply with Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended.
Other Information / combined Chairman and Chief Executive Officer roles · Filed 22/07/2026
In February 2026, the Company and Progress Rail agreed to settle all of Progress Rail’s claims without admission of liability by the Company, and the settlement did not have any impact on the Company’s operating results or cash flows.
Contingencies / February 2026 Progress Rail settlement · Filed 22/07/2026
All services provided by Ernst & Young LLP for fiscal year 2025 were pre-approved by the Audit Committee.
Audit Matters / actual pre-approval of 2025 auditor services · Filed 31/03/2026
