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SEGMENT INFORMATION | 3 Months Ended
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Mar. 31, 2026
Segment Reporting [Abstract] |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company 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 Company's business segments are: Freight Segment builds, rebuilds, upgrades, and overhauls locomotives, services locomotives and freight cars, and provides a range of component and digital solutions for customers in the freight and transit rail, mining, and marine industries. It also manufactures and services components for new and existing freight cars and locomotives, supplies railway electronics, positive train control equipment, signal design and engineering services, maintenance of way, and provides heat exchange and cooling systems for locomotives and power generation equipment. Customers include large, publicly traded railroads, leasing companies, manufacturers of original equipment such as locomotives and freight cars, and utilities, and also serves companies in the mining, marine, and industrial markets and applications. We refer to sales of both goods, such as spare parts and equipment upgrades, and related services, such as monitoring, maintenance and repairs, as sales in our Services product line. Transit Segment primarily manufactures and services components and train connection systems for new and existing passenger transit vehicles, typically regional trains, high speed trains, subway cars, light-rail vehicles and buses. It also refurbishes subway cars and provides heating, ventilation, and air conditioning equipment and doors for buses and subway cars. Customers include public transit authorities and municipalities, leasing companies and manufacturers of passenger transit vehicles and buses, and companies in the electrical generation, distribution, and charging industries. Wabtec’s chief operating decision maker ("CODM") is the Company’s Chief Executive Officer, Rafael Santana. Mr. Santana utilizes Income (loss) from operations as the primary reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources. For both of the Company’s segments, the CODM uses segment Income (loss) from operations to make operational and personnel related decisions across the business. The CODM considers actual, budgeted and forecasted Income (loss) from operations on a monthly basis for evaluating the performance of each segment and making decisions about allocating capital and other resources to each segment. Additionally, Gross margin is used by the CODM as a secondary measure of segment profit or loss in assessing segment performance and deciding how to allocate resources. For both of the Company’s segments, the CODM uses segment Gross margin to make commercial and operational related decisions across the business. 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 certain intersegment transactions, interest income and expense and other unallocated charges. Segment assets for the Freight and Transit Segment include assets directly utilized for segment operations, as well as the related goodwill and intangible assets. Corporate segment assets include cash, cash equivalents, and restricted cash, equity method investment assets, certain tax assets, receivables held by our bankruptcy-remote facility, pension assets, corporate headquarters' assets and other asset balances that are managed outside of operating segments. Cost of sales for both segments represents costs directly related to manufacturing products and providing services. Primary costs include raw materials, direct labor, overhead, shipping and handling, warehousing, and the depreciation of manufacturing, warehousing and distribution facilities. Selling, general and administrative expenses for both segments represent costs incurred in managing the business, including salary, benefits, professional fees and operating costs associated with each segment’s non-manufacturing activities. The amounts of depreciation and amortization disclosed by reportable segment are included within their respective segment expense captions, such as Cost of sales, Selling, general & administrative expenses and Amortization expense. Segment financial information for the three months ended March 31, 2026 is as follows:
In millions | Freight Segment |  | Transit Segment |  | Corporate Activities and Elimination |  | Total
Sales to external customers | $ | 2,115 |  |  | $ | 835 |  |  | $ | — |  |  | $ | 2,950 |
Cost of sales | (1,327) |  |  | (562) |  |  | — |  |  | (1,889) |
Gross profit | $ | 788 |  |  | $ | 273 |  |  | $ | — |  |  | $ | 1,061 |
Gross margin | 37.3 | % |  | 32.7 | % |  |  |  |
Selling, general & administrative expenses | $ | (219) |  |  | $ | (128) |  |  | $ | (54) |  |  | $ | (401) |
Engineering expenses | (43) |  |  | (13) |  |  | — |  |  | (56) |
Amortization expense | (76) |  |  | (11) |  |  | — |  |  | (87) |
Income (loss) from operations | 450 |  |  | 121 |  |  | (54) |  |  | 517 |
Interest expense and other, net | — |  |  | — |  |  | (48) |  |  | (48) |
Income (loss) before income taxes | $ | 450 |  |  | $ | 121 |  |  | $ | (102) |  |  | $ | 469 |
Intersegment sales/(elimination) | $ | 14 |  |  | $ | 10 |  |  | $ | (24) |  |  | $ | — |
Depreciation and amortization | $ | 112 |  |  | $ | 24 |  |  | $ | 3 |  |  | $ | 139 |
Capital expenditures | $ | 27 |  |  | $ | 18 |  |  | $ | 1 |  |  | $ | 46 |
Segment assets | $ | 16,002 |  |  | $ | 5,671 |  |  | $ | 1,523 |  |  | $ | 23,196 |
Segment financial information for the three months ended March 31, 2025 is as follows:
In millions | Freight Segment |  | Transit Segment |  | Corporate Activities and Elimination |  | Total
Sales to external customers | $ | 1,901 |  |  | $ | 709 |  |  | $ | — |  |  | $ | 2,610 |
Cost of sales | (1,216) |  |  | (494) |  |  | — |  |  | (1,710) |
Gross profit | $ | 685 |  |  | $ | 215 |  |  | $ | — |  |  | $ | 900 |
Gross margin | 36.0 | % |  | 30.3 | % |  |  |  |
Selling, general & administrative expenses | $ | (164) |  |  | $ | (107) |  |  | $ | (36) |  |  | $ | (307) |
Engineering expenses | (36) |  |  | (10) |  |  | — |  |  | (46) |
Amortization expense | (65) |  |  | (8) |  |  | — |  |  | (73) |
Income (loss) from operations | 420 |  |  | 90 |  |  | (36) |  |  | 474 |
Interest expense and other, net | — |  |  | — |  |  | (48) |  |  | (48) |
Income (loss) before income taxes | $ | 420 |  |  | $ | 90 |  |  | $ | (84) |  |  | $ | 426 |
Intersegment sales/(elimination) | $ | 11 |  |  | $ | 9 |  |  | $ | (20) |  |  | $ | — |
Depreciation and amortization | $ | 97 |  |  | $ | 20 |  |  | $ | 3 |  |  | $ | 120 |
Capital expenditures | $ | 31 |  |  | $ | 10 |  |  | $ | 3 |  |  | $ | 44 |
Segment assets | $ | 13,224 |  |  | $ | 4,145 |  |  | $ | 1,727 |  |  | $ | 19,096 |
Sales to external customers by product line are as follows:
|  | Three Months Ended March 31, |  |
In millions |  | 2026 |  | 2025 |  |  |  |
Freight Segment: |  |  |  |  |  |  |  |
Services |  | $ | 714 |  |  | $ | 863 |  |  |  |  |
Equipment |  | 726 |  |  | 476 |  |  |  |  |
Components |  | 357 |  |  | 381 |  |  |  |  |
Digital Intelligence |  | 318 |  |  | 181 |  |  |  |  |
Total Freight Segment |  | $ | 2,115 |  |  | $ | 1,901 |  |  |  |  |
Transit Segment: |  |  |  |  |  |  |  |
Original Equipment Manufacturer |  | $ | 381 |  |  | $ | 322 |  |  |  |  |
Aftermarket |  | 454 |  |  | 387 |  |  |  |  |
Total Transit Segment |  | $ | 835 |  |  | $ | 709 |  |  |  |  |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-21 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name 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