Segment Information

6 Months Ended

Jun. 30, 2019

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 June 30, 2019 is as follows:



In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	1,493,949	$	742,335	$	—		$	2,236,284
Intersegment sales/(elimination)	13,709		7,383		(21,092		)	—
Total sales	$	1,507,658	$	749,718	$	(21,092	)	$	2,236,284
Income (loss) from operations	$	151,978	$	71,211	$	(22,552	)	$	200,637
Interest expense and other, net	—		—		(56,383		)	(56,383		)
Income (loss) from operations before income taxes	$	151,978	$	71,211	$	(78,935	)	$	144,254

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



In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	412,258	$	699,422	$	—		$	1,111,680
Intersegment sales/(elimination)	18,699		2,984		(21,683		)	—
Total sales	$	430,957	$	702,406	$	(21,683	)	$	1,111,680
Income (loss) from operations	$	84,347	$	57,975	$	(18,799	)	$	123,523
Interest expense and other, net	—		—		(29,749		)	(29,749		)
Income (loss) from operations before income taxes	$	84,347	$	57,975	$	(48,548	)	$	93,774

Segment financial information for the six months ended June 30, 2019 is as follows:



In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	2,370,383	$	1,459,518	$	—		$	3,829,901
Intersegment sales/(elimination)	30,413		13,505		(43,918		)	—
Total sales	$	2,400,796	$	1,473,023	$	(43,918	)	$	3,829,901
Income (loss) from operations	$	227,188	$	130,144	$	(89,388	)	$	267,944
Interest expense and other, net	—		—		(109,180		)	(109,180		)
Income (loss) from operations before income taxes	$	227,188	$	130,144	$	(198,568	)	$	158,764

Segment financial information for the six months ended June 30, 2018 is as follows:



In thousands	Freight Segment		Transit Segment		Corporate Activities and Elimination			Total
Sales to external customers	$	791,812	$	1,376,045	$	—		$	2,167,857
Intersegment sales/(elimination)	30,701		6,873		(37,574		)	—
Total sales	$	822,513	$	1,382,918	$	(37,574	)	$	2,167,857
Income (loss) from operations	$	153,969	$	126,059	$	(25,226	)	$	254,802
Interest expense and other, net	—		—		(47,447		)	(47,447		)
Income (loss) from operations before income taxes	$	153,969	$	126,059	$	(72,673	)	$	207,355

Sales by product line are as follows:



	Three Months Ended June 30,
In thousands	2019		2018
Remanufacturing, Overhaul & Build	$	1,171,147	$	127,202
Specialty Products & Electronics	443,333		434,399
Transit Products	310,839		282,130
Brake Products	254,260		217,574
Other	56,705		50,375
Total sales	$	2,236,284	$	1,111,680



	Six Months Ended June 30,
In thousands	2019		2018
Remanufacturing, Overhaul & Build	$	1,753,324	$	262,900
Specialty Products & Electronics	861,447		820,947
Transit Products	605,656		556,409
Brake Products	496,482		433,192
Other	112,992		94,409
Total sales	$	3,829,901	$	2,167,857