SEGMENT INFORMATION

Wabtec has two reportable segments—the Freight Segment and the Transit Segment. The key factors used to identify these reportable segments are the organization and alignment of the Company’s internal operations, the nature of the products and services, and customer type. The business segments are:

Freight Segment primarily manufactures and services components for new and existing freight cars and locomotives, builds new switcher locomotives, rebuilds freight locomotives, supplies railway electronics, positive train control equipment, signal design and engineering services, and provides related heat exchange and cooling systems. Customers include large, publicly traded railroads, leasing companies, manufacturers of original equipment such as locomotives and freight cars, and utilities.

Transit Segment primarily manufactures and services components for new and existing passenger transit vehicles, typically regional trains, high speed trains, subway cars, light-rail vehicles and buses, builds new commuter locomotives, refurbishes subway cars, provides heating, ventilation, and air conditioning equipment, and doors for buses and subways. Customers include public transit authorities and municipalities, leasing companies, and manufacturers of subway cars and buses around the world.

The Company evaluates its business segments’ operating results based on income from operations. Intersegment sales are accounted for at prices that are generally established by reference to similar transactions with unaffiliated customers. Corporate activities include general corporate expenses, elimination of intersegment transactions, interest income and expense and other unallocated charges. Since certain administrative and other operating expenses have not been allocated to business segments, the results in the following tables are not necessarily a measure computed in accordance with generally accepted accounting principles and may not be comparable to other companies.

Segment financial information for the three months ended September 30, 2018 is as follows:



In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	391,577	$	686,237	$	—		$	1,077,814
Intersegment sales/(elimination)	13,510		4,738		(18,248		)	—
Total sales	$	405,087	$	690,975	$	(18,248	)	$	1,077,814
Income (loss) from operations	$	79,420	$	60,735	$	(14,976	)	$	125,179
Interest expense and other, net	—		—		(22,512		)	(22,512		)
Income (loss) from operations before income taxes	$	79,420	$	60,735	$	(37,488	)	$	102,667

Segment financial information for the three months ended September 30, 2017 is as follows:



In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	340,185	$	617,746	$	—		$	957,931
Intersegment sales/(elimination)	8,376		4,494		(12,870		)	—
Total sales	$	348,561	$	622,240	$	(12,870	)	$	957,931
Income (loss) from operations	$	61,424	$	47,358	$	(7,116	)	$	101,666
Interest expense and other, net	—		—		(20,481		)	(20,481		)
Income (loss) from operations before income taxes	$	61,424	$	47,358	$	(27,597	)	$	81,185

Segment financial information for the nine months ended September 30, 2018 is as follows:



In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	1,183,389	$	2,062,282	$	—		$	3,245,671
Intersegment sales/(elimination)	44,211		11,611		(55,822		)	—
Total sales	$	1,227,600	$	2,073,893	$	(55,822	)	$	3,245,671
Income (loss) from operations	$	233,390	$	186,794	$	(40,203	)	$	379,981
Interest expense and other, net	—		—		(69,959		)	(69,959		)
Income (loss) from operations before income taxes	$	233,390	$	186,794	$	(110,162	)	$	310,022

Segment financial information for the nine months ended September 30, 2017 is as follows:



In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	1,032,959	$	1,773,259	$	—		$	2,806,218
Intersegment sales/(elimination)	27,602		16,253		(43,855		)	—
Total sales	$	1,060,561	$	1,789,512	$	(43,855	)	$	2,806,218
Income (loss) from operations	$	195,811	$	155,383	$	(21,659	)	$	329,535
Interest expense and other, net	—		—		(52,156		)	(52,156		)
Income (loss) from operations before income taxes	$	195,811	$	155,383	$	(73,815	)	$	277,379

Sales by product line are as follows:



	Three Months Ended September 30,
In thousands	2018		2017
Specialty Products & Electronics	$	408,806	$	335,143
Transit Products	258,419		276,913
Brake Products	222,152		177,165
Remanufacturing, Overhaul & Build	134,726		132,018
Other	53,711		36,692
Total sales	$	1,077,814	$	957,931



	Nine Months Ended September 30,
In thousands	2018		2017
Specialty Products & Electronics	$	1,229,753	$	975,006
Transit Products	814,823		789,096
Brake Products	655,350		550,181
Remanufacturing, Overhaul & Build	397,626		387,634
Other	148,119		104,301
Total sales	$	3,245,671	$	2,806,218