RESTRUCTURING

12 Months Ended

Dec. 31, 2023

Restructuring and Related Activities [Abstract]

During the first quarter of 2022, Wabtec announced a three-year strategic initiative (“Integration 2.0”) to review and consolidate our operating footprint, reduce headcount, streamline the end-to-end manufacturing process, restructure the North America distribution channels, expand operations in low-cost countries, and simplify the business through systems enablement. Through this initiative, Management will also evaluate additional capital investments to further simplify and streamline the business. The Company anticipates that it will incur one-time charges related to Integration 2.0 of approximately $135 million to $165 million.

A summary of restructuring charges related to the Integration 2.0 initiative is as follows:


	For the year ended December 31,
In millions	2023		2022
Freight Segment:
Cost of goods sold	$	4	$	13
Selling, general and administrative expenses	5		1
Total Freight Segment	$	9	$	14

Transit Segment:
Cost of goods sold	$	25	$	26
Selling, general and administrative expenses	13		6
Amortization expense	2		—
Total Transit Segment	$	40	$	32
Total Integration 2.0 restructuring charges	$	49	$	46

Total charges related to Integration 2.0 to date are approximately $118 million which includes amounts recorded in the fourth quarter 2021 for similar actions in Europe. Cash payments made during 2023 were approximately $39 million, primarily for employee related costs. Cash payments made during 2022 were not material.

In addition to Integration 2.0, Wabtec is focused on exiting various low margin product offerings through Portfolio Optimization to improve profitability while reducing manufacturing complexity. Wabtec expects to incur approximately $85 million in net exit charges related to Portfolio Optimization, which will be predominately non-cash asset write downs. Wabtec recorded charges of approximately $28 million in the fourth quarter of 2023 for asset write downs related to Portfolio Optimization.