XML 30 R15.htm IDEA: XBRL DOCUMENT
v3.20.4

INTANGIBLES | 12 Months Ended
--- | ---
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract] |
INTANGIBLES | INTANGIBLES Goodwill and indefinite lived intangible assets are reviewed annually during the fourth quarter for impairment. For 2020, the Company opted to proceed directly to the quantitative impairment test for all reporting units with goodwill. The discounted cash flow approach and the market approach were used to estimate the fair value of each reporting unit using a weighting of 75% and 25%, respectively. The discounted cash flow model requires several assumptions including future sales growth, EBIT (earnings before interest and taxes) margins, capital expenditures, a discount rate and a terminal revenue growth rate (the revenue growth rate for the period beyond the years forecasted by the reporting units) for each reporting unit. The market approach requires several assumptions including EBITDA (earnings before interest, taxes, depreciation and amortization) multiples for comparable companies that operate in the same markets as the Company’s reporting units. For 2020, the discounted cash flow approach was given more weight compared to the market approach due to a relatively reduced amount of publicly available data from companies with comparable operations to those of Wabtec; however, both valuation approaches resulted in a conclusion that the estimated fair value of all three of the Company's reporting units was in excess of their respective carrying value, which resulted in a conclusion that no impairment existed. Additionally, the Company proceeded directly to the quantitative impairment test for some trade names with indefinite lives. The fair value of all material trade names subject to the quantitative impairment test exceeded its respective carrying value, resulting in a conclusion that no material impairment existed. For trade names not subject to the quantitative testing, the Company opted to perform a qualitative trade name impairment assessment and determined from the qualitative assessment that it was not more likely than not that the estimated fair values of the trade names were less than their carrying values; therefore, no further analysis was required. In assessing the qualitative factors to determine whether it is more likely than not that the fair value of a trade name is less than its carrying amount, the Company assessed relevant events and circumstances that may impact the fair value and the carrying amount of the trade name. The identification of relevant events and circumstances and how these may impact a trade name’s fair value or carrying amount involve significant judgments and assumptions. The judgment and assumptions include the identification of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, Wabtec specific events, share price trends and making the assessment on whether each relevant factor will impact the impairment test positively or negatively and the magnitude of any such impact. The change in the carrying amount of goodwill by segment for the year ended December 31, 2020 is as follows:
|  | Freight |  | Transit |  |
In millions |  | Segment |  | Segment |  | Total
Balance at December 31, 2019 |  | $ | 6,876.6 |  |  | $ | 1,484.0 |  |  | $ | 8,360.6 |
Additions |  | 2.1 |  |  | — |  |  | 2.1 |
Disposals |  | (5.6) |  |  | — |  |  | (5.6) |
Foreign currency impact |  | (0.9) |  |  | 129.0 |  |  | 128.1 |
Balance at December 31, 2020 |  | $ | 6,872.2 |  |  | $ | 1,613.0 |  |  | $ | 8,485.2 |
As of December 31, 2020 and 2019, the Company’s trade names had a net carrying amount of $650.7 million and $623.1 million, respectively, and the Company believes these intangibles have indefinite lives, with the exception of the right to use the GE Transportation trade name, to which the Company has assigned a useful life of 5 years. Intangible assets of the Company, other than goodwill and trade names, consist of the following:
|  | December 31,
In millions |  | 2020 |  | 2019
Intellectual property, patents, and other intangibles, net of accumulated amortization of $222.8 and $123.8 |  | $ | 1,007.6 |  |  | $ | 1,108.9 |
Backlog, net of accumulated amortization of $205.9 and $92.0 |  | 1,224.7 |  |  | 1,342.1 |
Customer relationships, net of accumulated amortization of $276.3 and $212.9 |  | 986.2 |  |  | 1,029.9 |
Total |  | $ | 3,218.5 |  |  | $ | 3,480.9 |
The remaining weighted average useful lives of backlog, intellectual property, customer relationships, and other intangibles were 13 years, 12 years, 17 years, and 8 years, respectively. The backlog intangible primarily consists of in-place long-term service agreements acquired by the Company in conjunction with the acquisition of GE Transportation. Amortization expense for intangible assets was $282.4 million, $238.4 million, and $39.8 million for the years ended December 31, 2020, 2019, and 2018, respectively. Estimated amortization expense for the five succeeding years is as follows (in millions):
2021 |  | $ | 278.1 |
2022 |  | 277.6 |
2023 |  | 277.2 |
2024 |  | 267.6 |
2025 |  | 265.0 |

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration