Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 24, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | WAB | |
Entity Registrant Name | WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORP | |
Entity Central Index Key | 943,452 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 96,614,946 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 411,381 | $ 233,401 |
Restricted cash | 1,724,000 | 0 |
Accounts receivable | 851,244 | 800,619 |
Unbilled accounts receivable | 389,277 | 366,168 |
Inventories | 866,205 | 742,634 |
Other current assets | 111,441 | 122,291 |
Total current assets | 4,353,548 | 2,265,113 |
Property, plant and equipment | 1,026,184 | 1,026,046 |
Accumulated depreciation | (468,761) | (452,074) |
Property, plant and equipment, net | 557,423 | 573,972 |
Other Assets | ||
Goodwill | 2,412,554 | 2,460,103 |
Other intangibles, net | 1,157,424 | 1,204,432 |
Other noncurrent assets | 72,277 | 76,360 |
Total other assets | 3,642,255 | 3,740,895 |
Total Assets | 8,553,226 | 6,579,980 |
Current Liabilities | ||
Accounts payable | 557,449 | 552,525 |
Customer deposits | 374,104 | 369,716 |
Accrued compensation | 165,190 | 164,210 |
Accrued warranty | 136,449 | 137,542 |
Current portion of long-term debt | 47,038 | 47,225 |
Other accrued liabilities | 250,063 | 302,112 |
Total current liabilities | 1,530,293 | 1,573,330 |
Long-term debt | 3,818,061 | 1,823,303 |
Reserve for postretirement and pension benefits | 95,310 | 103,734 |
Deferred income taxes | 153,549 | 175,902 |
Accrued warranty | 18,104 | 15,521 |
Other long-term liabilities | 27,557 | 59,658 |
Total liabilities | 5,642,874 | 3,751,448 |
Commitments and contingent liabilities (Note 16) | ||
Equity | ||
Preferred stock, 1,000,000 shares authorized, no shares issued | 0 | 0 |
Common stock, $0.01 par value; 200,000,000 shares authorized: 132,349,534 shares issued and 96,606,946 and 96,034,352 outstanding at September 30, 2018 and December 31, 2017, respectively | 1,323 | 1,323 |
Additional paid-in capital | 916,768 | 906,616 |
Treasury stock, at cost, 35,742,588 and 36,315,182 shares, at September 30, 2018 and December 31, 2017, respectively | (816,327) | (827,379) |
Retained earnings | 2,999,139 | 2,773,300 |
Accumulated other comprehensive loss | (205,733) | (44,992) |
Total Westinghouse Air Brake Technologies Corporation shareholders' equity | 2,895,170 | 2,808,868 |
Non-controlling interest | 15,182 | 19,664 |
Total equity | 2,910,352 | 2,828,532 |
Total Liabilities and Equity | $ 8,553,226 | $ 6,579,980 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 132,349,534 | 132,349,534 |
Common stock, shares outstanding (in shares) | 96,606,946 | 96,034,352 |
Treasury stock, shares (in shares) | 35,742,588 | 36,315,182 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,077,814 | $ 957,931 | $ 3,245,671 | $ 2,806,218 |
Cost of sales | (775,802) | (704,728) | (2,308,811) | (2,009,345) |
Gross profit | 302,012 | 253,203 | 936,860 | 796,873 |
Selling, general and administrative expenses | (146,839) | (118,183) | (465,197) | (368,788) |
Engineering expenses | (20,132) | (24,709) | (61,569) | (71,511) |
Amortization expense | (9,862) | (8,645) | (30,113) | (27,039) |
Total operating expenses | (176,833) | (151,537) | (556,879) | (467,338) |
Income from operations | 125,179 | 101,666 | 379,981 | 329,535 |
Other income and expenses | ||||
Interest expense, net | (23,713) | (20,038) | (75,917) | (57,460) |
Other income (expense), net | 1,201 | (443) | 5,958 | 5,304 |
Income from operations before income taxes | 102,667 | 81,185 | 310,022 | 277,379 |
Income tax expense | (16,598) | (12,746) | (53,225) | (64,776) |
Net income | 86,069 | 68,439 | 256,797 | 212,603 |
Less: Net loss (gain) attributable to noncontrolling interest | 1,670 | (1,040) | 3,724 | 710 |
Net income attributable to Wabtec shareholders | $ 87,739 | $ 67,399 | $ 260,521 | $ 213,313 |
Basic | ||||
Net income attributable to Wabtec shareholders (in dollars per share) | $ 0.91 | $ 0.70 | $ 2.71 | $ 2.23 |
Diluted | ||||
Net income attributable to Wabtec shareholders (in dollars per share) | $ 0.91 | $ 0.70 | $ 2.70 | $ 2.22 |
Weighted average shares outstanding | ||||
Basic (in shares) | 96,208 | 95,709 | 95,935 | 95,163 |
Diluted (in shares) | 96,637 | 96,316 | 96,436 | 95,808 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income attributable to Wabtec shareholders | $ 87,739 | $ 67,399 | $ 260,521 | $ 213,313 |
Foreign currency translation (loss) gain | (44,253) | 82,905 | (159,064) | 277,984 |
Unrealized (loss) gain on derivative contracts | (82) | 15,021 | (5,583) | 18,400 |
Unrealized gain (loss) on pension benefit plans and post-retirement benefit plans | (6,872) | 27 | 3,363 | (3,017) |
Other comprehensive (loss) income before tax | (51,207) | 97,953 | (161,284) | 293,367 |
Income tax expense related to components of other comprehensive income | 1,675 | (5,333) | 543 | (5,692) |
Other comprehensive (loss) income, net of tax | (49,532) | 92,620 | (160,741) | 287,675 |
Comprehensive income attributable to Wabtec shareholders | $ 38,207 | $ 160,019 | $ 99,780 | $ 500,988 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Activities | ||
Net income | $ 256,797 | $ 212,603 |
Adjustments to reconcile net income to cash provided by operations: | ||
Depreciation and amortization | 82,974 | 76,970 |
Stock-based compensation expense | 20,484 | 14,539 |
Loss on disposal of property, plant and equipment | 4,057 | 1,633 |
Changes in operating assets and liabilities, net of acquisitions | ||
Accounts receivable and unbilled accounts receivable | (100,212) | (60,246) |
Inventories | (125,523) | (53,365) |
Accounts payable | 4,194 | (121,389) |
Accrued income taxes | (43,770) | (35,942) |
Accrued liabilities and customer deposits | 16,369 | 81,270 |
Other assets and liabilities | (77,332) | (89,562) |
Net cash provided by operating activities | 38,038 | 26,511 |
Investing Activities | ||
Purchase of property, plant and equipment | (64,232) | (60,263) |
Proceeds from disposal of property, plant and equipment | 9,139 | 1,066 |
Acquisitions of businesses, net of cash acquired | (49,067) | (846,675) |
Net cash used for investing activities | (104,160) | (905,872) |
Financing Activities | ||
Proceeds from debt | 3,490,185 | 883,473 |
Payments of debt | (1,466,626) | (918,919) |
Proceeds from exercise of stock options and other benefit plans | 13,138 | 2,888 |
Payment of income tax withholding on share-based compensation | (6,705) | (6,798) |
Cash dividends ($0.36 and $0.20 per share for the nine months ended September 30, 2018 and 2017, respectively) | (34,682) | (30,693) |
Net cash provided by (used for) financing activities | 1,995,310 | (70,049) |
Effect of changes in currency exchange rates | (27,208) | 34,258 |
Increase (decrease) in cash | 1,901,980 | (915,152) |
Cash, cash equivalents, and restricted cash, beginning of period | 233,401 | 1,143,232 |
Cash, cash equivalents, and restricted cash, end of period | $ 2,135,381 | $ 228,080 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - $ / shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Cash Flows [Abstract] | ||
Cash dividends, per share (in dollars per share) | $ 0.36 | $ 0.2 |
Business
Business | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | BUSINESS Westinghouse Air Brake Technologies Corporation (“Wabtec” or the "Company") is one of the world’s largest providers of value-added, technology-based equipment, systems and services for the global passenger transit and freight rail industries. Our highly engineered products enhance safety, improve productivity and reduce maintenance costs for customers, can be found on most locomotives, freight cars, passenger transit cars and buses around the world, and many of our core products and services are essential in the safe and efficient operation of freight rail and passenger transit vehicles. Wabtec is a global company with operations in 31 countries and our products can be found in more than 100 countries throughout the world. In the first nine months of 2018 , approximately 66% of the Company’s revenues came from customers outside the United States. |
Accounting Policies
Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Accounting Policies | ACCOUNTING POLICIES Basis of Presentation The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America and the rules and regulations of the Securities and Exchange Commission and include the accounts of Wabtec and its subsidiaries in which Wabtec has a controlling interest. These condensed consolidated interim financial statements do not include all of the information and footnotes required for complete financial statements. In management’s opinion, these financial statements reflect all adjustments of a normal, recurring nature necessary for a fair presentation of the results for the interim periods presented. Results for these interim periods are not necessarily indicative of results to be expected for the full year. The Company operates on a four-four-five week accounting quarter, and the quarters end on or about March 31, June 30, September 30, and December 31. The notes included herein should be read in conjunction with the audited consolidated financial statements included in Wabtec’s Annual Report on Form 10-K for the year ended December 31, 2017 . The December 31, 2017 information has been derived from the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . Revenue Recognition On January 1, 2018, the Company adopted ASC 606 “Revenue from Contracts with Customers”. This new guidance provides a five-step analysis of transactions to determine when and how revenue is recognized and requires entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. Approximately 75% of the Company’s revenues are derived from performance obligations that are satisfied at a point in time when control passes to the customer which is generally at the time of shipment in accordance with agreed upon delivery terms. The remaining revenues are earned over time. This approach is consistent with our revenue recognition approach in prior years. The Company also has long-term customer agreements involving the design and production of highly engineered products that require revenue to be recognized over time because these products have no alternative use without significant economic loss and the agreements contain an enforceable right to payment including a reasonable profit margin from the customer in the event of contract termination. Additionally, the Company has customer agreements involving the creation or enhancement of an asset that the customer controls which also require revenue to be recognized over time. This approach is consistent with our revenue recognition approach in prior years. Generally, the Company uses an input method for determining the amount of revenue, cost and gross margin to recognize over time for these customer agreements. The input methods used for these agreements include costs of material and labor, both of which give an accurate representation of the progress made toward complete satisfaction of a particular performance obligation. Contract revenues and cost estimates are reviewed and revised quarterly at a minimum and adjustments are reflected in the accounting period as such amounts are determined. Contract assets include unbilled amounts resulting from sales under long-term contracts where revenue is recognized over time and revenue exceeds the amount that can be billed to the customer based on the terms of the contract. Contract assets are classified as current assets under the caption “Unbilled Accounts Receivable” on the consolidated balance sheet. The Company has elected to use the practical expedient and not consider unbilled amounts anticipated to be paid within one year as significant financing components. Contract liabilities include customer deposits that are made prior to the incurrence of costs related to a newly agreed upon contract and advanced customer payments that are in excess of revenue recognized. These contract liabilities are classified as current liabilities under the caption “Customer Deposits” on the consolidated balance sheet. These contract liabilities are not considered a significant financing component because they are used to meet working capital demands that can be higher in the early stages of a contract and revenue associated with the contract liabilities is expected to be recognized within one year. Contract liabilities also include provisions for estimated losses from uncompleted contracts. Provisions for loss contracts were $66.5 million and $94.0 million at September 30, 2018 and December 31, 2017 , respectively. These provisions for estimated losses are classified as current liabilities and included within the caption “Other accrued liabilities” on the consolidated balance sheet. Due to the nature of work required to be performed on the Company’s long-term projects, the estimation of total revenue and cost at completion is subject to many variables and requires significant judgment. Contract estimates related to long-term projects are based on various assumptions to project the outcome of future events that could span several years. These assumptions include cost of materials; labor availability and productivity; complexity of the work to be performed; and the performance of suppliers, customers and subcontractors that may be associated with the contract. We have a disciplined quarterly estimate-at-completion process where management reviews the progress of long term-projects. As part of this process, management reviews information including key contract matters, progress towards completion, identified risks and opportunities and any other information that could impact the Company’s estimates of revenue and costs. After completing this analysis, any quarterly adjustments to net sales, cost of goods sold, and the related impact to operating income are recognized as necessary in the period they become known. Generally, the Company’s revenue contains a single performance obligation for each distinct good. Pricing is defined in our contracts on a line item basis and includes an estimate of variable consideration when required by the terms of the individual customer contract. Types of variable consideration that the Company typically has include volume discounts, prompt payment discounts, liquidating damages, and performance bonuses. Sales returns and allowances are also estimated and recognized in the same period the related revenue is recognized, based upon the Company’s experience. Pre-Production Costs Certain pre-production costs relating to long-term production and supply contracts have been deferred and will be recognized over the life of the contracts. Deferred pre-production costs were $20.3 million and $20.2 million at September 30, 2018 and December 31, 2017 , respectively. Reclassifications Certain prior year amounts have been reclassified, where necessary, to conform to the current year presentation. Refer to Recently Adopted Accounting Pronouncements below. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. Financial Derivatives and Hedging Activities As part of its risk management strategy, the Company utilizes derivative financial instruments to mitigate the impact of changes in foreign currencies and interest rates. For further information regarding financial derivatives and hedging activities, refer to Footnotes 14 and 15. Foreign Currency Translation Assets and liabilities of foreign subsidiaries, except for the Company’s Mexican operations whose functional currency is the U.S. Dollar, are translated at the rate of exchange in effect on the balance sheet date while income and expenses are translated at the average rates of exchange prevailing during the period. Foreign currency gains and losses resulting from transactions and the translation of financial statements are recorded in the Company’s consolidated financial statements based upon the provisions of ASC 830 “Foreign Currency Matters.” The effects of currency exchange rate changes on intercompany transactions and balances of a long-term investment nature are accumulated and carried as a component of accumulated other comprehensive loss. The effects of currency exchange rate changes on intercompany transactions that are denominated in a currency other than an entity’s functional currency are charged or credited to earnings. Noncontrolling Interests In accordance with ASC 810 "Consolidation", the Company has classified noncontrolling interests as equity on the condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017 . Net income attributable to noncontrolling interests was a loss of $1.7 million and income of $1.0 million , for the three months ended September 30, 2018 and 2017 , respectively. Net income attributable to noncontrolling interests was a loss of $3.7 million and $0.7 million , for the nine months ended September 30, 2018 and 2017 , respectively. Other comprehensive income attributable to noncontrolling interests for the three and nine months ended September 30, 2018 and 2017 was not material. Recently Issued Accounting Pronouncements In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". The amendments in this update address certain stranded income tax effects in accumulated other comprehensive income ("AOCI") resulting from the Tax Cuts and Jobs Act (the "Tax Act"). Current guidance requires the effect of a change in tax laws or rates on deferred tax balances to be reported in income from continuing operations in the accounting period that includes the period of enactment, even if the related income tax effects were originally charged or credited directly to AOCI. The amount of the reclassification would include the effect of the change in the U.S. federal corporate income tax rate on the gross deferred tax amounts and related valuation allowances, if any, at the date of the enactment of the Tax Act related to items in AOCI. The updated guidance is effective for reporting periods beginning after December 15, 2018 and is to be applied retrospectively to each period in which the effect of the Tax Act related to items remaining in AOCI are recognized or at the beginning of the period of adoption. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". The amendments in this update eliminate the requirement to perform Step 2 of the goodwill impairment test. Instead, an entity should perform a goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value up to the carrying amount of the goodwill. This ASU is effective for public companies in the fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The impact of adopting this guidance could result in a change in the overall conclusion as to whether or not a reporting unit's goodwill is impaired and the amount of an impairment charge recognized in the event a reporting units' carrying value exceeds its fair value. All of the Company's reporting units had fair values that were substantially greater than the carrying value as of the Company's last quantitative goodwill impairment test, which was performed as of October 1, 2017. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 814)" which requires lessees to recognize a right of use asset and lease liability on the balance sheet for all leases with terms longer than 12 months. For leases with terms less than 12 months, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize a right of use asset and lease liability. The guidance requires enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases that will be effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company expects to adopt the requirements of the new standard effective January 1, 2019. The FASB recently proposed a transition alternative, which would allow for the application of the guidance at beginning of the period in which it is adopted, rather than requiring the adjustment of prior comparative periods. The Company plans to adopt this transition alternative. The Company plans to elect the practical expedient which does not require the capitalization of leases with terms of 12 months or less, and does not plan to elect the practical expedient which allows hindsight to be used to determine the term of a lease. The Company has evaluated its lease portfolio and is assessing the impact to the consolidated financial statements. The Company is in the process of implementing processes and information technology tools to assist in its ongoing lease data collection and analysis and evaluating its accounting policies and internal controls that would be impacted by the new guidance, to ensure readiness for adoption in the first quarter of 2019. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contract with Customers.” This ASU supersedes most of the previous revenue recognition requirements in U.S. GAAP and requires entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity’s nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This ASU became effective for public companies during interim and annual reporting periods beginning after December 15, 2017. The Company adopted this accounting standard update using the modified retrospective method. The impact of adopting the new standard was not material to the consolidated statement of income or the consolidated balance sheet. In March 2017, the FASB issued ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost". The amendments in this update require the service cost component of net benefit costs to be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit costs are required to be presented in the income statement separately from the service cost component and outside income from operations. This update also allows only the service cost component to be eligible for capitalization when applicable. This ASU became effective for public companies during interim and annual reporting periods beginning after December 15, 2017. In accordance with this update, the Company began recognizing the interest expense component of net periodic benefit cost in interest expense in the income statement and the expected return on plan assets, net amortization/deferrals, and curtailments in other income (expense), net in the income statement. This update has been applied retrospectively for presentation of the service cost component and other components of net benefit costs in accordance with this ASU and the impact of adoption resulted in increases of $0.3 million , $2.2 million and $2.5 million to selling, general, and administrative expense, interest expense, net and other income, net, respectively, in the income statement for the three months ended September 30, 2017 . The impact of adoption resulted in increases of $1.0 million , $6.5 million and $7.5 million to selling, general, and administrative expense, interest expense, net and other income, net, respectively, in the income statement for the nine months ended September 30, 2017 . Also, the capitalization of the service cost component of net benefit cost has been adopted prospectively in accordance with this ASU. In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash". The amendments in this update require a statement of cash flows to explain the change during the period in total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU became effective for public companies during interim and annual reporting periods beginning after December 15, 2017. This update has been applied retrospectively and as a result restricted cash related to the acquisition of Faiveley Transport is included in the change in cash for the nine months ended September 30, 2017 . Other Comprehensive Income (Loss) Comprehensive income comprises both net income and the change in equity from transactions and other events and circumstances from nonowner sources. The changes in accumulated other comprehensive income (loss) by component, net of tax, for the nine months ended September 30, 2018 are as follows: In thousands Foreign currency translation Derivative contracts Pension and post retirement benefit plans Total Balance at December 31, 2017 $ 5,063 $ 4,015 $ (54,070 ) $ (44,992 ) Other comprehensive income (loss) before reclassifications (159,064 ) (8,544 ) 995 (166,613 ) Amounts reclassified from accumulated other comprehensive income — 4,314 1,558 5,872 Net current period other comprehensive (loss) income (159,064 ) (4,230 ) 2,553 (160,741 ) Balance at September 30, 2018 $ (154,001 ) $ (215 ) $ (51,517 ) $ (205,733 ) Reclassifications out of accumulated other comprehensive income (loss) for the three months ended September 30, 2018 are as follows: In thousands Amount reclassified from accumulated other comprehensive income Affected line item in the Condensed Consolidated Statements of Income Amortization of defined pension and post retirement items Amortization of initial net obligation and prior service cost $ (375 ) Other income (expense), net Amortization of net loss 1,093 Other income (expense), net 718 Other income (expense), net (198 ) Income tax expense $ 520 Net income Derivative contracts Realized gain on derivative contracts $ 4,915 Interest expense, net (1,180 ) Income tax expense $ 3,735 Net income Reclassifications out of accumulated other comprehensive income (loss) for the nine months ended September 30, 2018 are as follows: In thousands Amount reclassified from accumulated other comprehensive income Affected line item in the Condensed Consolidated Statements of Income Amortization of defined pension and post retirement items Amortization of initial net obligation and prior service cost $ (1,126 ) Other income (expense), net Amortization of net loss 3,278 Other income (expense), net 2,152 Other income (expense), net (594 ) Income tax expense $ 1,558 Net income Derivative contracts Realized gain on derivative contracts $ 5,770 Interest expense, net (1,456 ) Income tax expense $ 4,314 Net income The changes in accumulated other comprehensive loss by component, net of tax, for the nine months ended September 30, 2017 are as follows: Foreign Derivative Pension and Total Balance at December 31, 2016 $ (321,033 ) $ (2,957 ) $ (55,615 ) $ (379,605 ) Other comprehensive income (loss) before reclassifications 277,984 11,424 (4,715 ) 284,693 Amounts reclassified from accumulated other comprehensive income — 1,206 1,776 2,982 Net current period other comprehensive income (loss) 277,984 12,630 (2,939 ) 287,675 Balance at September 30, 2017 $ (43,049 ) $ 9,673 $ (58,554 ) $ (91,930 ) Reclassifications out of accumulated other comprehensive loss for the three months ended September 30, 2017 are as follows: In thousands Amount reclassified from Affected line item in the Amortization of defined pension and post retirement items Amortization of initial net obligation and prior service cost $ (422 ) Other income (expense), net Amortization of net loss 1,240 Other income (expense), net 818 Other income (expense), net (226 ) Income tax expense $ 592 Net income Derivative contracts Realized gain on derivative contracts $ 497 Interest expense, net (131 ) Income tax expense $ 366 Net income Reclassifications out of accumulated other comprehensive loss for the nine months ended September 30, 2017 are as follows: In thousands Amount reclassified from Affected line item in the Amortization of defined pension and post retirement items Amortization of initial net obligation and prior service cost $ (1,266 ) Other income (expense), net Amortization of net loss 3,720 Other income (expense), net 2,454 Other income (expense), net (678 ) Income tax expense $ 1,776 Net income Derivative contracts Realized gain on derivative contracts $ 1,653 Interest expense, net (447 ) Income tax expense $ 1,206 Net income |
Proposed Merger With GE Transpo
Proposed Merger With GE Transportation | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Proposed Merger With GE Transportation | PROPOSED MERGER WITH GE TRANSPORTATION On May 20, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with General Electric Company (“GE”), Transportation Systems Holdings Inc. (“SpinCo”), which is a newly formed wholly owned subsidiary of GE, and Wabtec US Rail Holdings, Inc. (“Merger Sub”), which is a newly formed wholly owned subsidiary of the Company. In addition, on May 20, 2018, GE, SpinCo, the Company and Wabtec US Rail Holdings, Inc. (“Direct Sale Purchaser”), entered into the Separation, Distribution and Sale Agreement (the “Separation Agreement”). Together, the Merger Agreement and the Separation Agreement provide for the combination of the Company and GE’s realigned transportation business (“GE Transportation”) through a modified Reverse Morris Trust transaction structure. The transactions contemplated by the Merger Agreement and the Separation Agreement (the “Transactions”) have been approved by the Boards of Directors of both the Company and GE. In connection with the separation of GE Transportation from the remaining business of GE, GE will conduct an internal reorganization in which the assets and liabilities of GE Transportation will be segregated from the assets and liabilities of GE’s remaining business to prepare for the Transactions. Following this internal reorganization, certain assets of GE Transportation will be sold to Direct Sale Purchaser for a cash payment of $2.9 billion (the "Direct Sale"), and Direct Sale Purchaser will assume certain liabilities of GE Transportation in connection with this purchase. Thereafter, GE will transfer the remaining business and operations of GE Transportation (the “SpinCo Business”) to SpinCo and its subsidiaries (to the extent not already held by SpinCo and its subsidiaries) (the “SpinCo Transfer”), and SpinCo will issue to GE additional shares of SpinCo common stock. Following this issuance of additional SpinCo common stock to GE, GE will hold all of the outstanding SpinCo common stock. Following the Direct Sale and the SpinCo Transfer and based on market conditions, GE will distribute certain of the shares of SpinCo’s common stock to GE’s stockholders by way of a spin-off or a split-off transaction (the “Distribution”), as determined in GE’s discretion. In a spin-off, all GE stockholders would receive a pro rata number of shares of SpinCo common stock. In a split-off, GE would offer its stockholders the option to exchange all or a portion of their shares of GE common stock for shares of SpinCo common stock in an exchange offer, resulting in a reduction in GE’s outstanding shares. If the exchange offer is undertaken and consummated but the exchange offer is not fully subscribed because less than all shares of SpinCo common stock available for distribution by GE are exchanged, the remaining shares of SpinCo common stock available for distribution by GE would be distributed on a pro rata basis to GE stockholders whose shares of GE common stock remain outstanding after the consummation of the exchange offer. Immediately after the Distribution and on the closing date of the merger, Merger Sub will merge with and into SpinCo, whereby the separate corporate existence of Merger Sub will cease and SpinCo will continue as the surviving company and a wholly owned subsidiary of the Company. In the Merger, subject to adjustment in accordance with the Merger Agreement, each share of SpinCo common stock will be converted into the right to receive a number of shares of the Company’s common stock based on the exchange ratio set forth in the Merger Agreement. Upon consummation of the Merger and calculated based on Wabtec's outstanding common stock immediately prior to the Merger on a fully-diluted, as-converted and as-exercised basis, 50.1% of the outstanding shares of the Company’s common stock would be held collectively by GE and pre-Merger holders of GE common stock (with approximately 9.9% of the outstanding shares of the Company’s common stock expected to be held by GE) and 49.9% of the outstanding shares of the Company’s common stock would be held by pre-Merger stockholders of the Company. Pursuant to certain agreements to be entered into in connection with the Transactions, GE will be obligated to sell a number of its shares of the Company’s common stock within two years of the date of the Distribution and, subject to limited exceptions, to sell all of its shares of the Company’s common stock within three years of the closing date of the Merger. Subject to adjustment under certain circumstances as set forth in the Merger Agreement, the Company will issue the requisite shares of the Company’s common stock in the Merger. Based upon the reported closing sale price of $95.43 per share for the Company’s common stock on the NYSE on October 12, 2018, the total value of the shares of the Company’s common stock to be issued by the Company in the merger would be approximately $9,398 million and the cash to be received by GE in the transactions, including in respect of the Direct Sale, would be approximately $3,370 million . The actual value of the Company’s common stock to be issued in the Merger will depend on the market price of shares of the Company’s common stock at the time of the Merger. On September 14, 2018, Wabtec completed a public offering and sale of (i) $500 million aggregate principal amount of floating rate senior notes, (ii) $750 million aggregate principal amount of 2024 Senior Notes and (iii) $1.25 billion aggregate principal amount of 2028 Senior Notes. The Company intends to use the net proceeds from the offering and sale of these notes combined with the proceeds from a $400 million delayed draw term loan that was entered into on June 8, 2018 to finance the Direct Sale. Wabtec used a portion of the proceeds from the September 14, 2018 notes to pay debt associated with its revolving credit facility. The remaining proceeds are classified as Restricted Cash on the consolidated balance sheet, as the Company intends to use these cash amounts to finance the Direct Sale. Refer to Footnote 8 for further information regarding debt. After the Merger, the Company will own and operate the SpinCo Business and the assets acquired in the Direct Sale. It is anticipated that SpinCo, which will be the Company’s wholly owned subsidiary, will hold the SpinCo Business and Direct Sale Purchaser, which will also be the Company’s wholly owned subsidiary, will hold the assets purchased and the liabilities assumed in connection with the Direct Sale. Together, SpinCo and Direct Sale Purchaser will own and operate post-Transaction GE Transportation. The Company will also continue its current businesses. All shares of the Company’s common stock, including those issued in the Merger, will be listed on the NYSE under the Company’s current trading symbol “WAB.” On the date of the Distribution, GE or its subsidiaries and SpinCo or the subsidiaries of GE that GE will contribute to SpinCo pursuant to the Separation Agreement will enter into additional agreements relating to, among other things, intellectual property, employee matters, tax matters, research and development, co-location services and transition services. The value of the total consideration to be delivered by the Company in the Transactions would be approximately $12.8 billion based on the Company’s reported closing stock price on the NYSE on October 12, 2018; however, the final purchase price will depend on the market price of shares of the Company’s common stock at the time of the Merger. The transaction is expected to close by early 2019, subject to customary closing conditions, including certain approvals by the Company’s shareholders and regulatory approvals. ACQUISITIONS Faiveley Transport On November 30, 2016, the Company acquired majority ownership of Faiveley Transport S.A. (“Faiveley Transport”) under the terms of a Share Purchase Agreement (“Share Purchase Agreement”). Faiveley Transport is a leading global provider of value-added, integrated systems and services for the railway industry with annual sales of about $1.2 billion and more than 5,700 employees in 24 countries. Faiveley Transport supplies railway manufacturers, operators and maintenance providers with a range of value-added, technology-based systems and services in Energy & Comfort (air conditioning, power collectors and converters, and passenger information), Access & Mobility (passenger access systems and platform doors), and Brakes and Safety (braking systems and couplers). The transaction was structured as a step acquisition as follows: • On November 30, 2016, the Company acquired majority ownership of Faiveley Transport, after completing the purchase of the Faiveley family’s ownership interest under the terms of the Share Purchase Agreement, which directed the Company to pay €100 per share of Faiveley Transport, payable between 25% and 45% in cash at the election of those shareholders and the remainder payable in Wabtec stock. The Faiveley family’s ownership interest acquired by the Company represented approximately 51% of outstanding share capital and approximately 49% of the outstanding voting shares of Faiveley Transport. Upon completion of the share purchase under the Share Purchase Agreement, Wabtec commenced a tender offer for the remaining publicly traded Faiveley Transport shares. The public shareholders had the option to elect to receive €100 per share in cash or 1.1538 shares of Wabtec common stock per share of Faiveley Transport. The common stock portion of the consideration was subject to a cap on issuance of Wabtec common shares that was equivalent to the rates of cash and stock elected by the 51% owners. • On February 3, 2017, the initial cash tender offer was closed, which resulted in the Company acquiring approximately 27% of additional outstanding share capital and voting rights of Faiveley Transport for approximately $411.8 million in cash and $25.2 million in Wabtec stock. After the initial cash tender offer, the Company owned approximately 78% of outstanding share capital and 76% of voting rights. • On March 6, 2017, the final cash tender offer was closed, which resulted in the Company acquiring approximately 21% of additional outstanding share capital and 22% of additional outstanding voting rights of Faiveley Transport for approximately $303.2 million in cash and $0.3 million in Wabtec stock. After the final cash tender offer, the Company owned approximately 99% of the share capital and 98% of the voting rights of Faiveley Transport. • On March 21, 2017, a mandatory squeeze-out procedure was finalized, which resulted in the Company acquiring the Faiveley Transport shares not tendered in the offers for approximately $17.5 million in cash. This resulted in the Company owning 100% of the share capital and voting rights of Faiveley Transport. As of November 30, 2016, the date the Company acquired 51% of the share capital and 49% of the voting interest in Faiveley Transport, Faiveley Transport was consolidated under the variable interest entity model as the Company concluded that it was the primary beneficiary of Faiveley Transport as it then possessed the power to direct the activities of Faiveley Transport that most significantly impact its economic performance and it then possessed the obligation and right to absorb losses and benefits from Faiveley Transport. The purchase price paid for 100% ownership of Faiveley Transport was $1,507.0 million . The $744.7 million included as deposits in escrow on the consolidated balance sheet at December 31, 2016 was cash designated for use as consideration for the tender offers. The fair values of the assets acquired and liabilities assumed were determined using the income, cost and market approaches. The fair value measurements were primarily based on significant inputs that are not observable in the market and are considered Level 3. The December 31, 2016 consolidated balance sheet includes the assets and liabilities of Faiveley Transport, which have been measured at fair value. The fair value of the noncontrolling interest was preliminarily determined using the market price of Faiveley Transport’s publicly traded common stock multiplied by the number of publicly traded common shares outstanding at the acquisition date and is considered Level 1. The acquisition of the noncontrolling interest during the three months ended March 31, 2017 resulted in a $8.9 million increase to additional paid-in capital on the consolidated balance sheet which represents the difference in consideration paid to acquire the noncontrolling interest and the carrying value of noncontrolling interest at acquisition. The following table summarizes the final fair values of the Faiveley Transport assets acquired and liabilities assumed: In thousands Assets acquired Cash and cash equivalents $ 178,318 Accounts receivable 439,631 Inventories 205,649 Other current assets 70,930 Property, plant, and equipment 148,746 Goodwill 1,262,350 Trade names 346,328 Customer relationships 233,529 Patents 1,201 Other noncurrent assets 184,564 Total assets acquired 3,071,246 Liabilities assumed Current liabilities 819,493 Debt 409,899 Other noncurrent liabilities 335,039 Total liabilities assumed 1,564,431 Net assets acquired $ 1,506,815 During the twelve months ended December 31, 2017, the estimated fair values for customer relationships and current liabilities were adjusted by $21.8 million and $65.3 million , respectively, for changes to initial estimates based on information that existed at the date of acquisition. Additionally, the estimated fair values for accounts receivable and current liabilities were adjusted by $2.8 million and $36.2 million , respectively, to correct errors in the preliminary estimated fair values of the Faiveley Transport assets acquired and liabilities assumed. Other noncurrent assets were adjusted by $30.0 million to record the deferred tax impact of these adjustments. As a result of these adjustments and other immaterial adjustments related to changes to initial estimates based on information that existed at the date of acquisition, goodwill increased by $74.1 million . Accounts receivable and current liabilities were adjusted by $64.3 million to correct an error in the preliminary estimated fair values of Faiveley Transport assets and liabilities assumed related to a factoring arrangement with recourse. Included in current liabilities is $25.9 million of accrued compensation for acquired share-based stock plans that are obligated to be settled in cash. Contingent liabilities assumed as part of the transaction were not material. These contingent liabilities are related to environmental, legal and tax matters. Contingent liabilities are recorded at fair value in purchase accounting, aside from those pertaining to uncertainty in income taxes which are an exception to the fair value basis of accounting. Goodwill was calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of the net assets acquired, and represents the future economic benefits, including synergies and assembled workforce, the Company expects to achieve as a result of the acquisition. Purchased goodwill is not deductible for tax purposes. The goodwill allocated to the Freight segment is $72.0 million and the goodwill allocated to the Transit segment is $1,190.4 million . Other Acquisitions The Company has made the following acquisitions operating as a business unit or component of a business unit in the Freight Segment: • On December 4, 2017 , the Company acquired Melett Limited ("Melett"), a leader in the design, manufacture, and supply of high-quality turbochargers and replacement parts to the turbocharger aftermarket, for a purchase price of approximately $71.9 million , net of cash acquired, resulting in preliminary goodwill of $25.7 million , none of which will be deductible for tax purposes. • On April 5, 2017 , the Company acquired Thermal Transfer Corporation ("TTC"), a leading provider of heat transfer solutions for industrial applications, for a purchase price of approximately $32.5 million , net of cash acquired, resulting in goodwill of $14.1 million , all of which will be deductible for tax purposes. • On March 13, 2017 , the Company acquired Aero Transportation Products ("ATP"), a manufacturer of engineered covering systems for hopper freight cars, for a purchase price of approximately $65.3 million , net of cash acquired, resulting in goodwill of $29.0 million , all of which will be deductible for tax purposes. The Company has made the following acquisitions operating as a business unit or component of a business unit in the Transit Segment: • On March 22, 2018 , the Company acquired Annax GmbH ("Annax"), a leading supplier of public address and passenger information systems for transit vehicles, for a purchase price of approximately $28.7 million , net of cash acquired, resulting in preliminary goodwill of $14.3 million , none of which will be deductible for tax purposes. • On October 2, 2017 , the Company acquired AM General Contract ("AM General"), a manufacturer of safety systems, mainly for transit rail cars, for a purchase price of approximately $10.4 million , net of cash acquired, resulting in preliminary goodwill of $12.9 million , none of which will be deductible for tax purposes. The acquisitions listed above include escrow deposits of $30.2 million , which act as security for indemnity and other claims in accordance with the purchase and related escrow agreements. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition for Annax, Melett and AM General. For the ATP and TTC acquisitions, the following table summarizes the final fair value of the assets acquired and liabilities assumed at the date of acquisition. Annax Melett AM General TTC ATP In thousands March 22, December 4, October 2, April 5, March 13, Current assets $ 34,036 $ 35,258 $ 6,610 $ 3,744 $ 11,666 Property, plant & equipment 674 5,917 4,140 5,413 5,354 Goodwill 14,301 25,732 12,944 14,095 29,034 Other intangible assets 23,998 30,479 12,097 12,300 25,000 Total assets acquired 73,009 97,386 35,791 35,552 71,054 Total liabilities assumed (44,345 ) (25,493 ) (25,375 ) (3,041 ) (5,800 ) Net assets acquired $ 28,664 $ 71,893 $ 10,416 $ 32,511 $ 65,254 Of the allocation of $103.9 million of total acquired other intangible assets, $31.9 million was assigned to trade names and $67.6 million was assigned to customer relationships. The trade names were determined to have indefinite useful lives, while the customer relationships’ average useful lives are 20 years . The Company also made smaller acquisitions not listed above which are, individually and collectively, immaterial. The following unaudited pro forma consolidated financial information presents income statement results as if the acquisitions listed above had occurred on January 1, 2017: In thousands Three Months Ended Three Months Ended Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Net sales $ 1,077,814 $ 986,323 $ 3,259,096 $ 2,899,691 Gross profit 302,012 262,362 938,796 825,685 Net income attributable to Wabtec shareholders 87,739 70,530 261,025 223,383 Diluted earnings per share As Reported $ 0.91 $ 0.70 $ 2.70 $ 2.22 Pro forma $ 0.91 $ 0.73 $ 2.70 $ 2.32 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | PROPOSED MERGER WITH GE TRANSPORTATION On May 20, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with General Electric Company (“GE”), Transportation Systems Holdings Inc. (“SpinCo”), which is a newly formed wholly owned subsidiary of GE, and Wabtec US Rail Holdings, Inc. (“Merger Sub”), which is a newly formed wholly owned subsidiary of the Company. In addition, on May 20, 2018, GE, SpinCo, the Company and Wabtec US Rail Holdings, Inc. (“Direct Sale Purchaser”), entered into the Separation, Distribution and Sale Agreement (the “Separation Agreement”). Together, the Merger Agreement and the Separation Agreement provide for the combination of the Company and GE’s realigned transportation business (“GE Transportation”) through a modified Reverse Morris Trust transaction structure. The transactions contemplated by the Merger Agreement and the Separation Agreement (the “Transactions”) have been approved by the Boards of Directors of both the Company and GE. In connection with the separation of GE Transportation from the remaining business of GE, GE will conduct an internal reorganization in which the assets and liabilities of GE Transportation will be segregated from the assets and liabilities of GE’s remaining business to prepare for the Transactions. Following this internal reorganization, certain assets of GE Transportation will be sold to Direct Sale Purchaser for a cash payment of $2.9 billion (the "Direct Sale"), and Direct Sale Purchaser will assume certain liabilities of GE Transportation in connection with this purchase. Thereafter, GE will transfer the remaining business and operations of GE Transportation (the “SpinCo Business”) to SpinCo and its subsidiaries (to the extent not already held by SpinCo and its subsidiaries) (the “SpinCo Transfer”), and SpinCo will issue to GE additional shares of SpinCo common stock. Following this issuance of additional SpinCo common stock to GE, GE will hold all of the outstanding SpinCo common stock. Following the Direct Sale and the SpinCo Transfer and based on market conditions, GE will distribute certain of the shares of SpinCo’s common stock to GE’s stockholders by way of a spin-off or a split-off transaction (the “Distribution”), as determined in GE’s discretion. In a spin-off, all GE stockholders would receive a pro rata number of shares of SpinCo common stock. In a split-off, GE would offer its stockholders the option to exchange all or a portion of their shares of GE common stock for shares of SpinCo common stock in an exchange offer, resulting in a reduction in GE’s outstanding shares. If the exchange offer is undertaken and consummated but the exchange offer is not fully subscribed because less than all shares of SpinCo common stock available for distribution by GE are exchanged, the remaining shares of SpinCo common stock available for distribution by GE would be distributed on a pro rata basis to GE stockholders whose shares of GE common stock remain outstanding after the consummation of the exchange offer. Immediately after the Distribution and on the closing date of the merger, Merger Sub will merge with and into SpinCo, whereby the separate corporate existence of Merger Sub will cease and SpinCo will continue as the surviving company and a wholly owned subsidiary of the Company. In the Merger, subject to adjustment in accordance with the Merger Agreement, each share of SpinCo common stock will be converted into the right to receive a number of shares of the Company’s common stock based on the exchange ratio set forth in the Merger Agreement. Upon consummation of the Merger and calculated based on Wabtec's outstanding common stock immediately prior to the Merger on a fully-diluted, as-converted and as-exercised basis, 50.1% of the outstanding shares of the Company’s common stock would be held collectively by GE and pre-Merger holders of GE common stock (with approximately 9.9% of the outstanding shares of the Company’s common stock expected to be held by GE) and 49.9% of the outstanding shares of the Company’s common stock would be held by pre-Merger stockholders of the Company. Pursuant to certain agreements to be entered into in connection with the Transactions, GE will be obligated to sell a number of its shares of the Company’s common stock within two years of the date of the Distribution and, subject to limited exceptions, to sell all of its shares of the Company’s common stock within three years of the closing date of the Merger. Subject to adjustment under certain circumstances as set forth in the Merger Agreement, the Company will issue the requisite shares of the Company’s common stock in the Merger. Based upon the reported closing sale price of $95.43 per share for the Company’s common stock on the NYSE on October 12, 2018, the total value of the shares of the Company’s common stock to be issued by the Company in the merger would be approximately $9,398 million and the cash to be received by GE in the transactions, including in respect of the Direct Sale, would be approximately $3,370 million . The actual value of the Company’s common stock to be issued in the Merger will depend on the market price of shares of the Company’s common stock at the time of the Merger. On September 14, 2018, Wabtec completed a public offering and sale of (i) $500 million aggregate principal amount of floating rate senior notes, (ii) $750 million aggregate principal amount of 2024 Senior Notes and (iii) $1.25 billion aggregate principal amount of 2028 Senior Notes. The Company intends to use the net proceeds from the offering and sale of these notes combined with the proceeds from a $400 million delayed draw term loan that was entered into on June 8, 2018 to finance the Direct Sale. Wabtec used a portion of the proceeds from the September 14, 2018 notes to pay debt associated with its revolving credit facility. The remaining proceeds are classified as Restricted Cash on the consolidated balance sheet, as the Company intends to use these cash amounts to finance the Direct Sale. Refer to Footnote 8 for further information regarding debt. After the Merger, the Company will own and operate the SpinCo Business and the assets acquired in the Direct Sale. It is anticipated that SpinCo, which will be the Company’s wholly owned subsidiary, will hold the SpinCo Business and Direct Sale Purchaser, which will also be the Company’s wholly owned subsidiary, will hold the assets purchased and the liabilities assumed in connection with the Direct Sale. Together, SpinCo and Direct Sale Purchaser will own and operate post-Transaction GE Transportation. The Company will also continue its current businesses. All shares of the Company’s common stock, including those issued in the Merger, will be listed on the NYSE under the Company’s current trading symbol “WAB.” On the date of the Distribution, GE or its subsidiaries and SpinCo or the subsidiaries of GE that GE will contribute to SpinCo pursuant to the Separation Agreement will enter into additional agreements relating to, among other things, intellectual property, employee matters, tax matters, research and development, co-location services and transition services. The value of the total consideration to be delivered by the Company in the Transactions would be approximately $12.8 billion based on the Company’s reported closing stock price on the NYSE on October 12, 2018; however, the final purchase price will depend on the market price of shares of the Company’s common stock at the time of the Merger. The transaction is expected to close by early 2019, subject to customary closing conditions, including certain approvals by the Company’s shareholders and regulatory approvals. ACQUISITIONS Faiveley Transport On November 30, 2016, the Company acquired majority ownership of Faiveley Transport S.A. (“Faiveley Transport”) under the terms of a Share Purchase Agreement (“Share Purchase Agreement”). Faiveley Transport is a leading global provider of value-added, integrated systems and services for the railway industry with annual sales of about $1.2 billion and more than 5,700 employees in 24 countries. Faiveley Transport supplies railway manufacturers, operators and maintenance providers with a range of value-added, technology-based systems and services in Energy & Comfort (air conditioning, power collectors and converters, and passenger information), Access & Mobility (passenger access systems and platform doors), and Brakes and Safety (braking systems and couplers). The transaction was structured as a step acquisition as follows: • On November 30, 2016, the Company acquired majority ownership of Faiveley Transport, after completing the purchase of the Faiveley family’s ownership interest under the terms of the Share Purchase Agreement, which directed the Company to pay €100 per share of Faiveley Transport, payable between 25% and 45% in cash at the election of those shareholders and the remainder payable in Wabtec stock. The Faiveley family’s ownership interest acquired by the Company represented approximately 51% of outstanding share capital and approximately 49% of the outstanding voting shares of Faiveley Transport. Upon completion of the share purchase under the Share Purchase Agreement, Wabtec commenced a tender offer for the remaining publicly traded Faiveley Transport shares. The public shareholders had the option to elect to receive €100 per share in cash or 1.1538 shares of Wabtec common stock per share of Faiveley Transport. The common stock portion of the consideration was subject to a cap on issuance of Wabtec common shares that was equivalent to the rates of cash and stock elected by the 51% owners. • On February 3, 2017, the initial cash tender offer was closed, which resulted in the Company acquiring approximately 27% of additional outstanding share capital and voting rights of Faiveley Transport for approximately $411.8 million in cash and $25.2 million in Wabtec stock. After the initial cash tender offer, the Company owned approximately 78% of outstanding share capital and 76% of voting rights. • On March 6, 2017, the final cash tender offer was closed, which resulted in the Company acquiring approximately 21% of additional outstanding share capital and 22% of additional outstanding voting rights of Faiveley Transport for approximately $303.2 million in cash and $0.3 million in Wabtec stock. After the final cash tender offer, the Company owned approximately 99% of the share capital and 98% of the voting rights of Faiveley Transport. • On March 21, 2017, a mandatory squeeze-out procedure was finalized, which resulted in the Company acquiring the Faiveley Transport shares not tendered in the offers for approximately $17.5 million in cash. This resulted in the Company owning 100% of the share capital and voting rights of Faiveley Transport. As of November 30, 2016, the date the Company acquired 51% of the share capital and 49% of the voting interest in Faiveley Transport, Faiveley Transport was consolidated under the variable interest entity model as the Company concluded that it was the primary beneficiary of Faiveley Transport as it then possessed the power to direct the activities of Faiveley Transport that most significantly impact its economic performance and it then possessed the obligation and right to absorb losses and benefits from Faiveley Transport. The purchase price paid for 100% ownership of Faiveley Transport was $1,507.0 million . The $744.7 million included as deposits in escrow on the consolidated balance sheet at December 31, 2016 was cash designated for use as consideration for the tender offers. The fair values of the assets acquired and liabilities assumed were determined using the income, cost and market approaches. The fair value measurements were primarily based on significant inputs that are not observable in the market and are considered Level 3. The December 31, 2016 consolidated balance sheet includes the assets and liabilities of Faiveley Transport, which have been measured at fair value. The fair value of the noncontrolling interest was preliminarily determined using the market price of Faiveley Transport’s publicly traded common stock multiplied by the number of publicly traded common shares outstanding at the acquisition date and is considered Level 1. The acquisition of the noncontrolling interest during the three months ended March 31, 2017 resulted in a $8.9 million increase to additional paid-in capital on the consolidated balance sheet which represents the difference in consideration paid to acquire the noncontrolling interest and the carrying value of noncontrolling interest at acquisition. The following table summarizes the final fair values of the Faiveley Transport assets acquired and liabilities assumed: In thousands Assets acquired Cash and cash equivalents $ 178,318 Accounts receivable 439,631 Inventories 205,649 Other current assets 70,930 Property, plant, and equipment 148,746 Goodwill 1,262,350 Trade names 346,328 Customer relationships 233,529 Patents 1,201 Other noncurrent assets 184,564 Total assets acquired 3,071,246 Liabilities assumed Current liabilities 819,493 Debt 409,899 Other noncurrent liabilities 335,039 Total liabilities assumed 1,564,431 Net assets acquired $ 1,506,815 During the twelve months ended December 31, 2017, the estimated fair values for customer relationships and current liabilities were adjusted by $21.8 million and $65.3 million , respectively, for changes to initial estimates based on information that existed at the date of acquisition. Additionally, the estimated fair values for accounts receivable and current liabilities were adjusted by $2.8 million and $36.2 million , respectively, to correct errors in the preliminary estimated fair values of the Faiveley Transport assets acquired and liabilities assumed. Other noncurrent assets were adjusted by $30.0 million to record the deferred tax impact of these adjustments. As a result of these adjustments and other immaterial adjustments related to changes to initial estimates based on information that existed at the date of acquisition, goodwill increased by $74.1 million . Accounts receivable and current liabilities were adjusted by $64.3 million to correct an error in the preliminary estimated fair values of Faiveley Transport assets and liabilities assumed related to a factoring arrangement with recourse. Included in current liabilities is $25.9 million of accrued compensation for acquired share-based stock plans that are obligated to be settled in cash. Contingent liabilities assumed as part of the transaction were not material. These contingent liabilities are related to environmental, legal and tax matters. Contingent liabilities are recorded at fair value in purchase accounting, aside from those pertaining to uncertainty in income taxes which are an exception to the fair value basis of accounting. Goodwill was calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of the net assets acquired, and represents the future economic benefits, including synergies and assembled workforce, the Company expects to achieve as a result of the acquisition. Purchased goodwill is not deductible for tax purposes. The goodwill allocated to the Freight segment is $72.0 million and the goodwill allocated to the Transit segment is $1,190.4 million . Other Acquisitions The Company has made the following acquisitions operating as a business unit or component of a business unit in the Freight Segment: • On December 4, 2017 , the Company acquired Melett Limited ("Melett"), a leader in the design, manufacture, and supply of high-quality turbochargers and replacement parts to the turbocharger aftermarket, for a purchase price of approximately $71.9 million , net of cash acquired, resulting in preliminary goodwill of $25.7 million , none of which will be deductible for tax purposes. • On April 5, 2017 , the Company acquired Thermal Transfer Corporation ("TTC"), a leading provider of heat transfer solutions for industrial applications, for a purchase price of approximately $32.5 million , net of cash acquired, resulting in goodwill of $14.1 million , all of which will be deductible for tax purposes. • On March 13, 2017 , the Company acquired Aero Transportation Products ("ATP"), a manufacturer of engineered covering systems for hopper freight cars, for a purchase price of approximately $65.3 million , net of cash acquired, resulting in goodwill of $29.0 million , all of which will be deductible for tax purposes. The Company has made the following acquisitions operating as a business unit or component of a business unit in the Transit Segment: • On March 22, 2018 , the Company acquired Annax GmbH ("Annax"), a leading supplier of public address and passenger information systems for transit vehicles, for a purchase price of approximately $28.7 million , net of cash acquired, resulting in preliminary goodwill of $14.3 million , none of which will be deductible for tax purposes. • On October 2, 2017 , the Company acquired AM General Contract ("AM General"), a manufacturer of safety systems, mainly for transit rail cars, for a purchase price of approximately $10.4 million , net of cash acquired, resulting in preliminary goodwill of $12.9 million , none of which will be deductible for tax purposes. The acquisitions listed above include escrow deposits of $30.2 million , which act as security for indemnity and other claims in accordance with the purchase and related escrow agreements. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition for Annax, Melett and AM General. For the ATP and TTC acquisitions, the following table summarizes the final fair value of the assets acquired and liabilities assumed at the date of acquisition. Annax Melett AM General TTC ATP In thousands March 22, December 4, October 2, April 5, March 13, Current assets $ 34,036 $ 35,258 $ 6,610 $ 3,744 $ 11,666 Property, plant & equipment 674 5,917 4,140 5,413 5,354 Goodwill 14,301 25,732 12,944 14,095 29,034 Other intangible assets 23,998 30,479 12,097 12,300 25,000 Total assets acquired 73,009 97,386 35,791 35,552 71,054 Total liabilities assumed (44,345 ) (25,493 ) (25,375 ) (3,041 ) (5,800 ) Net assets acquired $ 28,664 $ 71,893 $ 10,416 $ 32,511 $ 65,254 Of the allocation of $103.9 million of total acquired other intangible assets, $31.9 million was assigned to trade names and $67.6 million was assigned to customer relationships. The trade names were determined to have indefinite useful lives, while the customer relationships’ average useful lives are 20 years . The Company also made smaller acquisitions not listed above which are, individually and collectively, immaterial. The following unaudited pro forma consolidated financial information presents income statement results as if the acquisitions listed above had occurred on January 1, 2017: In thousands Three Months Ended Three Months Ended Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Net sales $ 1,077,814 $ 986,323 $ 3,259,096 $ 2,899,691 Gross profit 302,012 262,362 938,796 825,685 Net income attributable to Wabtec shareholders 87,739 70,530 261,025 223,383 Diluted earnings per share As Reported $ 0.91 $ 0.70 $ 2.70 $ 2.22 Pro forma $ 0.91 $ 0.73 $ 2.70 $ 2.32 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES The components of inventory, net of reserves, were: In thousands September 30, December 31, Raw materials $ 465,925 $ 378,481 Work-in-progress 173,624 167,390 Finished goods 226,656 196,763 Total inventories $ 866,205 $ 742,634 |
Intangibles
Intangibles | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangibles | INTANGIBLES The change in the carrying amount of goodwill by segment for the nine months ended September 30, 2018 is as follows: In thousands Freight Segment Transit Segment Total Balance at December 31, 2017 $ 718,958 $ 1,741,145 $ 2,460,103 Additions 5,252 13,707 18,959 Foreign currency impact (7,710 ) (58,798 ) (66,508 ) Balance at September 30, 2018 $ 716,500 $ 1,696,054 $ 2,412,554 As of September 30, 2018 , and December 31, 2017 , the Company’s trade names had a net carrying amount of $599.5 million and $603.4 million , respectively, and the Company believes these intangibles have indefinite lives. Intangible assets of the Company, other than goodwill and trade names, consist of the following: In thousands September 30, December 31, Patents, non-compete and other intangibles, net of accumulated amortization of $42,928 and $43,021 $ 15,192 $ 17,554 Customer relationships, net of accumulated amortization of $151,007 and $126,824 542,780 583,459 Total $ 557,972 $ 601,013 The weighted average remaining useful life of patents, customer relationships and other intangibles are 10 years , 16 years and 14 years , respectively. Amortization expense for intangible assets was $9.9 million and $30.1 million for the three and nine months ended September 30, 2018 , and $8.6 million and $27.0 million for the three and nine months ended September 30, 2017 , respectively. Amortization expense for the five succeeding years is estimated to be as follows: Remainder of 2018 $ 10,460 2019 38,335 2020 36,099 2021 35,608 2022 35,320 |
Contract Assets and Contract Li
Contract Assets and Contract Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Contract Assets and Contract Liabilities | CONTRACT ASSETS AND CONTRACT LIABILITIES Contract assets include unbilled amounts resulting from sales under long-term contracts where revenue is recognized over time and revenue exceeds the amount that can be billed to the customer based on the terms of the contract. Contract liabilities include customer deposits that are made prior to the incurrence of costs related to a newly agreed upon contract, advanced customer payments that are in excess of revenue recognized, and provisions for estimated losses from uncompleted contracts. The change in the carrying amount of contract assets and contract liabilities for the nine months ended September 30, 2018 is as follows: In thousands Contract Assets Balance at beginning of year $ 366,168 Recognized in current year 328,438 Reclassified to accounts receivable (296,459 ) Foreign currency impact (8,870 ) Balance at September 30, 2018 $ 389,277 In thousands Contract Liabilities Balance at beginning of year $ 463,704 Recognized in current year 151,706 Amounts in beginning balance reclassified to revenue (142,718 ) Current year amounts reclassified to revenue (17,931 ) Foreign currency impact (14,185 ) Balance at September 30, 2018 $ 440,576 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | LONG-TERM DEBT Long-term debt consisted of the following: In thousands September 30, December 31, Floating Senior Notes, due 2021, net of unamortized debt $ 496,495 $ — 4.150% Senior Notes, due 2024, net of unamortized debt 742,616 — 4.700% Senior Notes, due 2028, net of unamortized debt 1,239,417 — 3.45% Senior Notes, due 2026, net of unamortized debt 748,225 747,655 4.375% Senior Notes, due 2023, net of unamortized 248,759 248,567 Revolving Credit Facility, net of unamortized 346,588 853,124 Schuldschein Loan 11,601 11,998 Other Borrowings 29,721 6,860 Capital Leases 1,677 2,324 Total 3,865,099 1,870,528 Less - current portion 47,038 47,225 Long-term portion $ 3,818,061 $ 1,823,303 On September 14, 2018 the Company issued $2.5 billion of senior notes with three different maturities. • Floating Rate Senior Notes due 2021 - The Company issued $500.0 million of Floating Rate Senior Notes due 2021 (the "Floating Rate Notes“). The Floating Rate Notes, which are non-callable for one year , were issued at 100% of face value. Interest on the Floating Rate Notes accrues at a floating rate per annum equal to three-month Libor plus 105 basis points. The interest rate for the Floating Rate Notes for the initial interest period will be the three-month Libor plus 105 basis points determined on September 12, 2018 and is payable quarterly on December 15, March 15, June 15, and September 15 of each year. The Company incurred $3.5 million of deferred financing costs related to the issuance of the Floating Rate Notes. • 4.150% Senior Notes due 2024 - The Company issued $750.0 million of 4.150% Senior Notes due 2024 (the "2024 Notes"). The 2024 Notes were issued at 99.805% of face value. Interest on the 2024 Notes accrues at a rate of 4.150% per annum and is payable semi-annually on March 15 and September 15 of each year. The Company incurred $7.4 million of deferred financing costs related to the issuance of the 2024 Notes. • 4.700% Senior Notes Due 2028 - The Company issued $1,250.0 million of 4.700% Senior Notes due 2028 (the "2028 Notes" and together with the Floating Rate Notes and 2024 Notes, the "Senior Notes"). The 2028 Notes were issued at 99.889% of face value. Interest on the 2028 Notes accrues at a rate of 4.700% per annum and is payable semi-annually on March 15 and September 15 of each year. The Company incurred $10.6 million of deferred financing costs related to the issuance of the 2028 Notes. The net proceeds from the issuance and sale of the Senior Notes will be used to finance the cash portion of the GE Transportation acquisition. The principal balances are due in full at maturity. The Senior Notes are senior unsecured obligations of the Company and rank pari passu with all existing and future senior debt and senior to all existing and future subordinated indebtedness of the Company. The indenture under which the Senior Notes were issued contains covenants and restrictions which limit among other things, the following: the incurrence of indebtedness, payment of dividends and certain distributions, sales of assets, change in control, mergers and consolidations and the incurrence of liens. The Company will be required to redeem the Senior Notes, in whole, on August 20, 2019 at a special mandatory redemption price equal to 101% of the aggregate principal amount of the Senior Notes, plus accrued and unpaid interest from the last date on which interest was paid if: • the closing of the Transactions has not occurred by 5:00 p.m., New York City time, on August 20, 2019; or • the Merger Agreement and the Separation Agreement are terminated at any time prior to August 20, 2019. Additionally, the interest rate payable on each series of Senior Notes will be subject to adjustments from time to time if either Moody's, S&P, or Fitch ceases to rate the Senior Notes of the applicable series or fails to make a rating of the Senior Notes of such series publicly available. Upon a downgrade in rating by either agency, the interest rates of corresponding Senior Notes would increase between 0.25% and 1.00% to current stated rate. The Company is in compliance with the restrictions and covenants in the indenture under which the Senior Notes were issued and expects that these restrictions and covenants will not be any type of limiting factor in executing our operating activities. 3.45% Senior Notes due November 2026 On November 3, 2016, the Company issued $750.0 million of 3.45% Senior Notes due 2026 (the "2016 Notes"). The 2016 Notes were issued at 99.965% of face value. Interest on the 2016 Notes accrues at a rate of 3.45% per annum and is payable semi-annually on May 15 and November 15 of each year. The proceeds were used to finance the cash portion of the Faiveley Transport acquisition, refinance Faiveley Transport's indebtedness, and for general corporate purposes. The principal balance is due in full at maturity. The Company incurred $2.7 million of deferred financing costs related to the issuance of the 2016 Notes. The 2016 Notes are senior unsecured obligations of the Company and rank pari passu with all existing and future senior debt and senior to all existing and future subordinated indebtedness of the Company. The indenture under which the 2016 Notes were issued contains covenants and restrictions which limit among other things, the following: the incurrence of indebtedness, payment of dividends and certain distributions, sale of assets, change in control, mergers and consolidations and the incurrence of liens. The Company is in compliance with the restrictions and covenants in the indenture under which the 2016 Notes were issued and expects that these restrictions and covenants will not be any type of limiting factor in executing our operating activities. 4.375% Senior Notes due August 2023 In August 2013 , the Company issued $250.0 million of 4.375% Senior Notes due 2023 (the “2013 Notes”). The 2013 Notes were issued at 99.879% of face value. Interest on the 2013 Notes accrues at a rate of 4.375% per annum and is payable semi-annually on February 15 and August 15 of each year. The proceeds were used to repay debt outstanding under the Company’s existing credit agreement, and for general corporate purposes. The principal balance is due in full at maturity. The Company incurred $2.6 million of deferred financing costs related to the issuance of the 2013 Notes. The 2013 Notes are senior unsecured obligations of the Company and rank pari passu with all existing and future senior debt and senior to all existing and future subordinated indebtedness of the Company. The indenture under which the 2013 Notes were issued contains covenants and restrictions which limit among other things, the following: the incurrence of indebtedness, payment of dividends and certain distributions, sale of assets, change in control, mergers and consolidations and the incurrence of liens. The Company is in compliance with the restrictions and covenants in the indenture under which the 2013 Notes were issued and expects that these restrictions and covenants will not be any type of limiting factor in executing our operating activities. 2018 Refinancing Credit Agreement On June 8, 2018, the Company entered into a credit agreement (the “2018 Refinancing Credit Agreement”), which replaced the Company’s then-existing “2016 Refinancing Credit Agreement.” As part of the 2018 Refinancing Credit Agreement, the Company entered into (i) a $1.2 billion revolving credit facility (the “Revolving Credit Facility”), which replaced the Company’s revolving credit facility under the 2016 Refinancing Credit Agreement, and includes a letter of credit sub-facility of up to $450.0 million and a swing line sub-facility of $75.0 million , (ii) a $350.0 million term loan (the “Refinancing Term Loan”), which refinanced the term loan under the 2016 Refinancing Credit Agreement, and (iii) a new $400.0 million delayed draw term loan (the “Delayed Draw Term Loan”). The 2018 Refinancing Credit Agreement also provided for a bridge loan facility (the “Bridge Loan Facility”) in an amount not to exceed $2.5 billion , such facility to become effective at the Company’s request. Commitments in respect of the Bridge Loan Facility were terminated upon the issuance and sale of the Senior Notes on September 14, 2018. In addition, the 2018 Refinancing Credit Agreement contains an uncommitted accordion feature allowing the Company to request, in an aggregate amount not to exceed $600.0 million , increases to the borrowing commitments under the Revolving Credit Facility or a new incremental term loan commitment. At September 30, 2018, the Company had available bank borrowing capacity, net of $29.7 million of letters of credit, of approximately $1,170.3 million subject to certain financial covenant restrictions. The Revolving Credit Facility matures on June 8, 2023 and is unsecured. The Refinancing Term Loan matures on June 8, 2021 and is unsecured. The Delayed Draw Term Loan matures on the third anniversary of the date on which it is borrowed and is unsecured. The applicable interest rate for borrowings under the 2018 Refinancing Credit Agreement includes interest rate spreads based on the lower of the pricing corresponding to (i) the Company’s ratio of total debt (less unrestricted cash up to $300.0 million ) to EBITDA (“Leverage Ratio”) or (ii) the Company’s public rating, in each case that range between 1.000% and 1.875% for LIBOR/CDOR-based borrowings and 0.0% and 0.875% for Alternate Base Rate based borrowings. The obligations of the Company under the 2018 Refinancing Credit Agreement have been guaranteed by certain of the Company’s subsidiaries. The 2018 Refinancing Credit Agreement contains customary representations and warranties by the Company and its subsidiaries, including customary use of materiality, material adverse effect, and knowledge qualifiers. The Company and its subsidiaries are also subject to (i) customary affirmative covenants that impose certain reporting obligations on the Company and its subsidiaries and (ii) customary negative covenants, including limitations on: indebtedness; liens; restricted payments; fundamental changes; business activities; transactions with affiliates; restrictive agreements; changes in fiscal year; and use of proceeds. In addition, the Company is required to maintain (i) an Interest Coverage ratio at least 3.00 to 1.00 over each period of four consecutive fiscal quarters ending on the last day of a fiscal quarter and (ii) a Leverage Ratio, calculated as of the last day of a fiscal quarter for a period of four consecutive fiscal quarters, of 3.25 to 1.00 or less; provided that, in the event the Company completes the Direct Sale and the Merger or any other material acquisition in which the cash consideration paid exceeds $500.0 million , the maximum Leverage Ratio permitted will be 3.75 to 1.00 at the end of the fiscal quarter in which such acquisition is consummated and each of the three fiscal quarters immediately following such fiscal quarter and 3.50 to 1.00 at the end of each of the fourth and fifth full fiscal quarters after the consummation of such acquisition. The Company is in compliance with the restrictions and covenants of the 2018 Refinancing Credit Agreement and does not expect that these measurements will limit the Company in executing its operating activities. At September 30, 2018 , the weighted average interest rate on the Company’s variable rate debt was 3.49% . On June 5, 2014 , the Company entered into a forward starting interest rate swap agreement with a notional value of $150.0 million . The effective date of the interest rate swap agreement was November 7, 2016 , and the termination date is December 19, 2018 . The impact of the interest rate swap agreement converts a portion of the Company’s outstanding debt from a variable rate to a fixed-rate borrowing. During the term of the interest rate swap agreement the interest rate on the notional value will be fixed at 2.56% plus the Alternate Rate margin. As for this agreement, the Company is exposed to credit risk in the event of nonperformance by the counterparties. However, since only the cash interest payments are exchanged, exposure is significantly less than the notional amount. The counterparties are large financial institutions with excellent credit ratings and history of performance. The Company currently believes the risk of nonperformance is negligible. 2016 Refinancing Credit Agreement On June 22, 2016 , the Company amended and restated its then existing revolving credit facility with a consortium of commercial banks. The “2016 Refinancing Credit Agreement” provided the Company with a $1.2 billion , five years revolving credit facility and a $400.0 million delayed draw term loan (the “Term Loan”). The Company incurred approximately $3.3 million of deferred financing costs related to the 2016 Refinancing Credit Agreement. The 2016 Refinancing Credit Agreement borrowings bore variable interest rates indexed as described below. The Term Loan was initially drawn on November 25, 2016 . The Company incurred a 10 basis point commitment fee from June 22, 2016 until the initial draw. Under the 2016 Refinancing Credit Agreement, the Company could elect a Base Rate of interest for U.S. Dollar denominated loans or, for certain currencies, an interest rate based on the London Interbank Offered Rate (“LIBOR”) of interest, or other rates appropriate for such currencies (in any case, “the Alternate Rate”). The Base Rate adjusted on a daily basis and was the greater of the Federal Funds Effective Rate plus 0.5% per annum, the PNC, N.A. prime rate or the Daily LIBOR Rate plus 100 basis points, plus a margin that ranges from 0 to 75 basis points. The Alternate Rate was based on the quoted rates specific to the applicable currency, plus a margin that ranges from 75 to 175 basis points. Both the Base Rate and Alternate Rate margins were dependent on the Company’s consolidated total indebtedness to EBITDA ratios. The initial Base Rate margin was 0 basis points and the Alternate Rate margin was 175 basis points. Schuldschein Loan, Due 2024 In conjunction with the acquisition of Faiveley Transport, Wabtec acquired $137.2 million of a Schuldschein private placement loan which was originally issued by Faiveley Transport on March 5, 2014 in Germany, in which approximately 20 international investors participated. This loan is denominated in euros. Subsequent to the acquisition of Faiveley Transport, the Company repaid $125.8 million of the outstanding Schuldshein loan. The remaining balance of $11.6 million as of September 30, 2018 matures on March 5, 2024 and bears a fixed rate of 4.00% . The Schuldschein loan is senior unsecured and ranks pari passu with all existing and future senior debt and senior to all existing and future subordinated indebtedness of the Company. The Schuldshein loan agreement contains covenants and undertakings which limit, among other things, the following: factoring of receivables, the incurrence of indebtedness, sale of assets, change of control, mergers and consolidations and incurrence of liens. At September 30, 2018 , the Company is in compliance with the undertakings and covenants contained in the loan agreement. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS Defined Benefit Pension Plans The Company sponsors defined benefit pension plans that cover certain U.S., Canadian, German and United Kingdom employees and which provide benefits of stated amounts for each year of service of the employee. The Company uses a December 31 measurement date for the plans. The following tables provide information regarding the Company’s defined benefit pension plans summarized by U.S. and international components. U.S. International Three Months Ended September 30, Three Months Ended September 30, In thousands, except percentages 2018 2017 2018 2017 Net periodic benefit cost Service cost $ 87 $ 86 $ 691 $ 614 Interest cost 333 356 1,834 1,677 Expected return on plan assets (445 ) (433 ) (3,466 ) (2,910 ) Net amortization/deferrals 243 248 554 685 Net periodic benefit cost (credit) $ 218 $ 257 $ (387 ) $ 66 U.S. International Nine Months Ended Nine Months Ended In thousands, except percentages 2018 2017 2018 2017 Net periodic benefit cost Service cost $ 261 $ 258 $ 2,073 $ 1,842 Interest cost 999 1,068 5,502 5,031 Expected return on plan assets (1,335 ) (1,299 ) (10,398 ) (8,730 ) Net amortization/deferrals 729 744 1,662 2,055 Net periodic benefit cost (credit) $ 654 $ 771 $ (1,161 ) $ 198 Assumptions Discount Rate 3.56 % 3.95 % 2.40 % 2.51 % Expected long-term rate of return 5.15 % 4.95 % 5.10 % 4.93 % Rate of compensation increase 3.00 % 3.00 % 2.60 % 2.54 % The Company’s funding methods are based on governmental requirements and differ from those methods used to recognize pension expense. The Company expects to contribute $7.3 million to the international plans during 2018 . The company does not expect to contribute to the U.S. plans during 2018. Post Retirement Benefit Plans In addition to providing pension benefits, the Company has provided certain unfunded postretirement health care and life insurance benefits for a portion of North American employees. The Company is not obligated to pay health care and life insurance benefits to individuals who had retired prior to 1990. The Company uses a December 31 measurement date for all post retirement plans. The following tables provide information regarding the Company’s postretirement benefit plans summarized by U.S. and international components. U.S. International Three Months Ended September 30, Three Months Ended September 30, In thousands, except percentages 2018 2017 2018 2017 Net periodic benefit cost Service cost $ 1 $ 1 $ 8 $ 7 Interest cost 81 88 26 24 Net amortization/deferrals (76 ) (73 ) (4 ) (7 ) Net periodic benefit cost $ 6 $ 16 $ 30 $ 24 U.S. International Nine Months Ended Nine Months Ended In thousands, except percentages 2018 2017 2018 2017 Net periodic benefit cost Service cost $ 3 $ 3 $ 24 $ 21 Interest cost 243 264 78 72 Net amortization/deferrals (228 ) (219 ) (12 ) (21 ) Net periodic benefit cost $ 18 $ 48 $ 90 $ 72 Assumptions Discount Rate 3.43 % 3.76 % 3.21 % 3.46 % |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION As of September 30, 2018 , the Company maintains employee stock-based compensation plans for stock options, restricted stock, and incentive stock units as governed by the 2011 Stock Incentive Compensation Plan, as amended and restated (the “2011 Plan”) and the 2000 Stock Incentive Plan, as amended (the “2000 Plan”). The 2011 Plan has a term through May 10, 2027 and provides a maximum of 3,800,000 shares for grants or awards, plus any shares which remain available under the 2000 Plan. The amendment and restatement of the 2011 Plan was approved by stockholders of Wabtec on May 10, 2017. The Company also maintains a 1995 Non-Employee Directors’ Fee and Stock Option Plan as amended and restated (“the Directors Plan”). Stock-based compensation expense was $6.4 million and $2.6 million for the three months ended September 30, 2018 and 2017 , respectively. Included in stock-based compensation expense for the three months ended September 30, 2018 is $0.4 million of expense related to stock options, $2.3 million related to restricted stock, $2.3 million related to restricted stock units, $1.2 million related to incentive stock units and $0.2 million related to units issued for Directors' fees. Stock-based compensation expense was $20.5 million and $14.5 million for the nine months ended September 30, 2018 and 2017 , respectively. Included in stock-based compensation expense for the nine months ended September 30, 2018 is $1.2 million of expense related to stock options, $5.0 million related to restricted stock, $7.0 million related to restricted stock units, $6.4 million related to incentive stock units and $0.9 million related to units issued for Directors’ fees. At September 30, 2018 , unamortized compensation expense related to stock options, non-vested restricted shares and incentive stock units expected to vest totaled $35.4 million . Stock Options Stock options are granted to eligible employees and directors at the fair market value, which is the average of the high and low Wabtec stock price on the date of grant. Under the 2011 Plan and the 2000 Plan, options become exercisable over a four -year vesting period and expire 10 years from the date of grant. The following table summarizes the Company’s stock option activity and related information for the 2011 Plan, the 2000 Plan and the Directors Plan for the nine months ended September 30, 2018 : Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic value (in thousands) Outstanding at December 31, 2017 983,512 $ 40.62 4.0 $ 40,137 Granted 82,580 77.54 2,258 Exercised (574,303 ) 23.88 46,520 Canceled (16,471 ) 64.46 666 Outstanding at September 30, 2018 475,318 56.50 5.9 22,997 Exercisable at September 30, 2018 291,169 49.75 5.0 16,051 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Nine Months Ended 2018 2017 Dividend yield 0.31 % 0.23 % Risk-free interest rate 2.78 % 2.17 % Stock price volatility 23.9 % 23.4 % Expected life (years) 5.0 5.0 The dividend yield is based on the Company’s dividend rate and the current market price of the underlying common stock at the date of grant. Expected life in years is determined from historical stock option exercise data. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free interest rate is based on the U.S. Treasury bond rates for the expected life of the option. Restricted Stock, Restricted Units and Incentive Stock Beginning in 2006, the Company adopted a restricted stock program. As provided for under the 2011 Plan and 2000 Plan, eligible employees are granted restricted stock that generally vests over four years from the date of grant. Under the Directors Plan, restricted stock units vest one year from the date of grant. In addition, the Company has issued incentive stock units to eligible employees that vest upon attainment of certain cumulative three -year performance goals. Based on the Company’s performance for each three -year period then ended, the incentive stock units can vest, with underlying shares of common stock being awarded in an amount ranging from 0% to 200% of the amount of initial incentive stock units granted. The incentive stock units included in the table below represent the number of incentive stock units that are expected to vest based on the Company’s estimate for meeting those established performance targets. As of September 30, 2018 , the Company estimates that it will achieve 71% , 81% and 91% of the goals for the incentive stock awards expected to vest based on performance for the three -year periods ending December 31, 2018 , 2019 , and 2020 , respectively, and has recorded incentive compensation expense accordingly. If our estimate of the number of these incentive stock units expected to vest changes in a future accounting period, cumulative compensation expense could increase or decrease and will be recognized in the current period for the elapsed portion of the vesting period and would change future expense for the remaining vesting period. Compensation expense for the non-vested restricted stock and incentive stock units is based on the average of the high and low Wabtec stock price on the date of grant and recognized over the applicable vesting period. The following table summarizes the restricted stock activity and related information for the 2011 Plan, the 2000 Plan and the Directors Plan, and incentive stock units activity for the 2011 Plan and the 2000 Plan with related information for the nine months ended September 30, 2018 : Restricted Stock and Units Incentive Stock Units Weighted Average Grant Date Fair Value Outstanding at December 31, 2017 399,000 327,333 $ 78.76 Granted 223,990 175,100 73.76 Vested (143,327 ) (93,312 ) 81.42 Adjustment for incentive stock awards expected to vest — (3,934 ) 73.40 Canceled (28,643 ) (25,775 ) 78.80 Outstanding at September 30, 2018 451,020 379,412 75.62 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company is responsible for filing consolidated U.S., foreign and combined, unitary or separate state income tax returns. The Company is responsible for paying the taxes relating to such returns, including any subsequent adjustments resulting from the redetermination of such tax liabilities by the applicable taxing authorities. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries that is payable over eight years (the "Transition Tax"), a reduction of the U.S. federal corporate tax rate from 35% to 21%, repeals the Domestic Manufacturing Deduction, a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries, new provisions designed to tax global intangible low-taxed income ("GILTI"), tax certain deductible base erosion payments called base erosion and anti-abuse tax (“BEAT”), and new interest expense limitation provisions. In relation to the initial analysis of the impact of the all tax law changes at December 31, 2017, the Company recorded a net tax expense of $4.3 million . This included a provisional expense for the U.S tax reform bill of $55.0 million , as well as a net benefit for the revaluation of deferred tax assets and liabilities of $50.7 million . In the current quarter, the Company has revised its accounting for the income tax effects of the Tax Act. The Company has adjusted the provisional amounts previously recorded in accordance with SEC Staff Accounting Bulletin No. 118. As such, the Company has included the following tax provisions in its financial statements as of September 30, 2018: Revaluation of deferred tax assets and liabilities: The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017. In addition, the Tax Act makes certain changes to the depreciation rules and implements new limits on the deductibility of certain executive compensation. The Company evaluated these changes and recorded a provisional benefit to net deferred taxes of $24.6 million at December 31, 2017. As a result of the completion of its 2017 U.S. corporate tax return in the three months ended September 30, 2018, the Company has adjusted its US deferred tax balances which has resulted in a current period benefit of $3.2 million . The Company has revised its calculation of the impact of these changes on its deferred tax balances. As of September 30, 2018, the Company has reviewed its analysis of the impact of the Tax Act on the deductibility of certain executive compensation. As a result, no further adjustments were made as of September 30, 2018. Transition Tax on unrepatriated foreign earnings: The Transition Tax on unrepatriated foreign earnings is a tax on previously untaxed accumulated and current earnings and profits ("E&P") of the Company's foreign subsidiaries. To determine the amount of the Transition Tax, the Company must determine, among other factors, the amount of post-1986 E&P of its foreign subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings. The Company was able to make a reasonable estimate of the Transition Tax and recorded a provisional Transition Tax expense of $51.8 million at December 31, 2017. As of September 30, 2018, the Company has revised its calculation of the Transition Tax which resulted in a benefit of $3.3 million and $13.4 million for the three and nine months ended September 30, 2018. The Company's accounting for the following impacted areas of the Tax Act is incomplete. However, the Company was able to make reasonable estimates of certain effects and, therefore, has recorded provisional amounts as follows: Global intangible low taxed income: The Tax Act created a new requirement that certain income (i.e., GILTI) earned by foreign subsidiaries must be included currently in the gross income of the U.S. shareholder. Under U.S. GAAP, the Company is permitted to make an accounting policy election to either treat taxes due on future inclusions in U.S. taxable income related to GILTI as a current-period expense when incurred or to factor such amounts into the Company's measurement of its deferred taxes. The Company has made the election to treat taxes due on future inclusions related to GILTI as current period expense. The Company was able to make reasonable estimates to calculate a provision that is included in the current period expense. The Company will continue to evaluate and update this provision and the application of ASC 740. The overall effective income tax rate was 16.2% and 17.2% for the three and nine months ended September 30, 2018 , respectively, and 15.7% and 23.4% for the three and nine months ended September 30, 2017, respectively. The increase in the effective tax for the three months ended September 30, 2018 is due to a deferred tax net benefit recorded in the prior three month period ended September 30, 2017. The decrease in the effective tax for the nine months ended September 30, 2018 is due to the tax benefits related to the Tax Act as discussed above, a higher earnings mix in lower tax jurisdictions and the release of uncertain tax positions due to the expiration of statutes. During the current three month period ending September 30, 2018, certain statutes have expired related to uncertain tax positions that were previously recorded resulting in a $2.4 million reduction to the liability for uncertain tax positions, $1.1 million of which favorably affected the Company’s effective tax rate. As of September 30, 2018, the liability for income taxes associated with uncertain tax positions was $4.5 million , of which $3.3 million , if recognized, would favorably affect the Company’s effective tax rate. As of December 31, 2017, the liability for income taxes associated with uncertain tax positions was $6.9 million , of which $4.4 million , if recognized, would favorably affect the Company’s effective tax rate. The Company includes interest and penalties related to uncertain tax positions in income tax expense. During the current three month period ending September 30, 2018, certain statutes have expired related to uncertain tax positions that were previously recorded. The net reduction in accrued interest expense related to these positions totaled $0.3 million which favorably affected the Company’s effective tax rate. As of September 30, 2018 , the total accrued interest and penalties are $0.6 million and $0.1 million , respectively. As of December 31, 2017, the total accrued interest and penalties were $0.7 million and $0.1 million , respectively. At this time, the Company believes it is reasonably possible that unrecognized tax benefits of approximately $4.5 million may change within the next 12 months due to the expiration of statutory review periods and current examinations. With limited exceptions, the Company is no longer subject to examination by various U.S. and foreign taxing authorities for years before 2014. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The computation of basic and diluted earnings per share for net income attributable to Wabtec shareholders is as follows: Three Months Ended In thousands, except per share data 2018 2017 Numerator Numerator for basic and diluted earnings per common share - net income attributable to Wabtec shareholders $ 87,739 $ 67,399 Less: dividends declared - common shares and non-vested restricted stock (11,586 ) (11,518 ) Undistributed earnings 76,153 55,881 Percentage allocated to common shareholders (1) 99.7 % 99.7 % 75,925 55,713 Add: dividends declared - common shares 11,552 11,485 Numerator for basic and diluted earnings per common share $ 87,477 $ 67,198 Denominator Denominator for basic earnings per common share - weighted average shares 96,208 95,709 Effect of dilutive securities: Assumed conversion of dilutive stock-based compensation plans 429 607 Denominator for diluted earnings per common share - adjusted weighted average shares and assumed conversion 96,637 96,316 Net income attributable to Wabtec shareholders per common share Basic $ 0.91 $ 0.70 Diluted $ 0.91 $ 0.70 (1) Basic weighted-average common shares outstanding 96,208 95,709 Basic weighted-average common shares outstanding and non-vested restricted stock expected to vest 96,495 95,983 Percentage allocated to common shareholders 99.7 % 99.7 % Nine Months Ended September 30, In thousands, except per share data 2018 2017 Numerator Numerator for basic and diluted earnings per common share - net income attributable to Wabtec shareholders $ 260,521 $ 213,313 Less: dividends declared - common shares and non-vested restricted stock (34,682 ) (30,693 ) Undistributed earnings 225,839 182,620 Percentage allocated to common shareholders (1) 99.7 % 99.4 % 225,161 181,524 Add: dividends declared - common shares 34,579 30,508 Numerator for basic and diluted earnings per common share $ 259,740 $ 212,032 Denominator Denominator for basic earnings per common share - weighted average shares 95,935 95,163 Effect of dilutive securities: Assumed conversion of dilutive stock-based compensation plans 501 645 Denominator for diluted earnings per common share - adjusted weighted average shares and assumed conversion 96,436 95,808 Net income attributable to Wabtec shareholders per common share Basic $ 2.71 $ 2.23 Diluted $ 2.70 $ 2.22 (1) Basic weighted-average common shares outstanding 95,935 95,163 Basic weighted-average common shares outstanding and non-vested restricted stock expected to vest 96,221 95,740 Percentage allocated to common shareholders 99.7 % 99.4 % The Company’s non-vested restricted stock contains rights to receive nonforfeitable dividends, and thus are participating securities requiring the two-class method of computing earnings per share. The calculation of earnings per share for common stock shown above excludes the income attributable to the non-vested restricted stock from the numerator and excludes the dilutive impact of those shares from the denominator. |
Warranties
Warranties | 9 Months Ended |
Sep. 30, 2018 | |
Product Warranties Disclosures [Abstract] | |
Warranties | WARRANTIES The following table reconciles the changes in the Company’s product warranty reserve as follows: In thousands 2018 2017 Balance at beginning of year $ 153,063 $ 138,992 Warranty expense 45,691 33,108 Acquisitions 3,081 3,412 Warranty claim payments (42,993 ) (33,492 ) Foreign currency impact/other (4,289 ) 6,744 Balance at September 30 $ 154,553 $ 148,764 |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING Foreign Currency Hedging The Company uses forward contracts to mitigate its foreign currency exchange rate exposure due to forecasted sales of finished goods and future settlement of foreign currency denominated assets and liabilities. Derivatives used to hedge forecasted transactions and specific cash flows associated with foreign currency denominated financial assets and liabilities that meet the criteria for hedge accounting are designated as cash flow hedges. The effective portion of gain and losses is deferred as a component of accumulated other comprehensive income and is recognized in earnings at the time the hedged item affects earnings, in the same line item as the underlying hedged item. The contracts are scheduled to mature within two years. For the three and nine months ended September 30, 2018 and September 30, 2017 , the amounts reclassified into income were not material. Other Activities The Company enters into certain derivative contracts in accordance with its risk management strategy that do not meet the criteria for hedge accounting but which have the impact of largely mitigating foreign currency exposure. These foreign exchange contracts are accounted for on a full mark to market basis through earnings, with gains and losses recorded as a component of other expense, net. The net unrealized gain related to these contracts was $4.7 million for the three months ended September 30, 2018 . These contracts are scheduled to mature within one year. The following table summarizes the gross notional amounts and fair values of the designated and non-designated hedges discussed in the above sections as of September 30, 2018 . In millions Designated Non-Designated Total Gross notional amount $ 787.0 $ 796.0 $ 1,583.0 Fair Value: Other current assets $ — $ 4.7 $ 4.7 Other current liabilities (6.0 ) — (6.0 ) Total $ (6.0 ) $ 4.7 $ (1.3 ) The following table summarizes the gross notional amounts and fair values of the designated and non-designated hedges discussed in the above sections as of December 31, 2017 . In millions Designated Non-Designated Total Gross notional amount $ 805.1 $ 379.7 $ 1,184.8 Fair Value: Other current assets $ 3.5 $ 2.1 $ 5.6 Other current liabilities — — — Total $ 3.5 $ 2.1 $ 5.6 Interest Rate Hedging The Company uses interest rate swaps to manage interest rate exposures. The Company is exposed to interest rate volatility with regard to existing floating rate debt. Primary exposure includes the London Interbank Offered Rates (LIBOR). Derivatives used to hedge risk associated with changes in the fair value of certain variable-rate debt are primarily designated as fair value hedges. Consequently, changes in the fair value of these derivatives, along with changes in the fair value of debt obligations are recognized in current period earnings. Refer to footnote 15 for further information on interest rate swaps. As of September 30, 2018 , the Company has recorded a current liability of $0.1 million and an accumulated other comprehensive loss of $0.1 million , net of tax, related to these agreements . |
Fair Value Measurement and Fair
Fair Value Measurement and Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement and Fair Value of Financial Instruments | FAIR VALUE MEASUREMENT AND FAIR VALUE OF FINANCIAL INSTRUMENTS ASC 820 “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value and explains the related disclosure requirements. ASC 820 indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model. Valuation Hierarchy ASC 820 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The following table provides the liabilities carried at fair value measured on a recurring basis as of September 30, 2018 , which are included in other current liabilities on the Condensed Consolidated Balance sheet: Fair Value Measurements at September 30, 2018 Using In thousands Total Carrying Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Interest rate swap agreements $ 87 $ — $ 87 $ — Total $ 87 $ — $ 87 $ — The following table provides the liabilities carried at fair value measured on a recurring basis as of December 31, 2017 , which is included in other current liabilities on the Condensed Consolidated Balance sheet: Fair Value Measurements at December 31, 2017 Using In thousands Total Carrying Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Interest rate swap agreements $ 1,163 $ — $ 1,163 $ — Total $ 1,163 $ — $ 1,163 $ — To reduce the impact of interest rate changes on a portion of its variable-rate debt, the Company entered into interest rate swaps which effectively converted a portion of the debt from variable to fixed-rate borrowings during the term of the swap contracts. For certain derivative contracts whose fair values are based upon trades in liquid markets, such as interest rate swaps, valuation model inputs can generally be verified and valuation techniques do not involve significant management judgment. The fair values of such financial instruments are generally classified within Level 2 of the fair value hierarchy. As a result of our global operating activities the Company is exposed to market risks from changes in foreign currency exchange rates, which may adversely affect our operating results and financial position. When deemed appropriate, the Company minimizes these risks through entering into foreign currency forward contracts. The foreign currency forward contracts are valued using broker quotations, or market transactions in either the listed or over-the counter markets. As such, these derivative instruments are classified within Level 2. The Company’s cash and cash equivalents are highly liquid investments purchased with an original maturity of three months or less and are considered Level 1 on the fair value valuation hierarchy. The fair value of cash and cash equivalents approximated the carrying value at September 30, 2018 and December 31, 2017 . The Company’s defined benefit pension plan assets consist primarily of equity security funds, debt security funds and temporary cash and cash equivalent investments. Generally, all plan assets are considered Level 2 based on the fair value valuation hierarchy. These investments are comprised of a number of investment funds that invest in a diverse portfolio of assets including equity securities, corporate and governmental bonds, and money markets. Trusts are valued at the net asset value (“NAV”) as determined by their custodian. NAV represent the accumulation of the unadjusted quoted close prices on the reporting date for the underlying investments divided by the total shares outstanding at the reporting dates. The 2013 and 2016 Notes are considered Level 2 based on the fair value valuation hierarchy. The estimated fair values and related carrying values of the Company’s financial instruments are as follows: September 30, 2018 December 31, 2017 In thousands Carrying Value Fair Value Carrying Fair Interest rate swap agreement $ 87 $ 87 $ 1,163 $ 1,163 4.375% Senior Notes 248,759 254,408 248,567 262,033 3.45% Senior Notes 748,225 687,698 747,655 741,113 Floating Rate Notes 2021 496,495 501,065 — — 4.15% Senior Notes 742,616 745,350 — — 4.7% Senior Notes 1,239,417 1,232,300 — — The fair value of the Company’s interest rate swap agreements and the 2013 and 2016 Notes were based on dealer quotes and represent the estimated amount the Company would pay to the counterparty to terminate the agreement. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Claims have been filed against the Company and certain of its affiliates in various jurisdictions across the United States by persons alleging bodily injury as a result of exposure to asbestos-containing products. Further information and detail on these claims is described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 , in Note 19 therein, filed on February 26, 2018. During the first nine months of 2018 , there were no material changes to the information described in the Form 10-K. From time to time, the Company is involved in litigation related to claims arising out of the Company's operations in the ordinary course of business, including claims based on product liability, contracts, intellectual property, or other causes of action. Further information and detail on any potentially material litigation is as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 , in Note 19 therein, filed on February 26, 2018. Except as described below, there have been no material changes to the information described in the Form 10-K. On April 21, 2016, Siemens Industry, Inc. filed a lawsuit against the Company in federal district court in Delaware alleging that the Company has infringed seven patents owned by Siemens, all of which relate to Positive Train Control technology. On November 2, 2016, Siemens amended its complaint to add six additional patents they also claim are infringed by the Company’s Positive Train Control Products. The Company has filed Answers, and asserted counterclaims, in response to Siemens’ complaints. Additionally, after filings by the Company, the US Patent & Trademark Office has granted Inter-Parties Review proceedings on ten (10) of the patents asserted by Siemens to contest their validity; the hearings began in April 2018 and will continue through November 2018. As of October 24, 2018, the USPTO has issued a decision in only one of the IPR hearings, finding the Siemens patent claims at issue in that hearing to be invalid. Despite the pendency of the remaining IPR proceedings, a trial is scheduled for January 19, 2019 on Siemens’ infringement claims. Wabtec’s counterclaims alleging that Siemens has violated three (3) of Wabtec’s patents have been severed from the initial case and are now a separate case pending in federal district court in Delaware. On August 1, 2018, Wabtec’s motion for a preliminary injunction against Siemens was denied after a hearing. On July 19, 2018, Siemens moved to amend its pleadings in this case to add new counterclaims alleging violations of federal antitrust and state trade practices laws; Siemens’ motion to amend was granted on October 3, 2018. Wabtec will file responsive pleadings and/or motions. Xorail, Inc., a wholly owned subsidiary of the Company (“Xorail”), has received notices from Denver Transit Constructors (“Denver Transit”) alleging breach of contract related to the operating of constant warning wireless crossings, and late delivery of the Train Management & Dispatch System (“TMDS”) for the Denver Eagle P3 Project, which is owned by the Denver Regional Transit District ("RTD"). No damages have been asserted for the alleged late delivery of the TMDS, and no formal claim has been filed. Xorail is in the final stages of successfully implementing a recovery plan concerning the TMDS issues. With regard to the wireless crossing issue, as of September 8, 2017, Denver Transit alleged that total damages were $36.8 million through July 31, 2017 and are continuing to accumulate. The majority of the damages stems from a delay in approval of the wireless crossing system by the Federal Railway Administration ("FRA") and the Public Utility Commission ("PUC"), resulting in the use of flaggers at all of the crossings pending approval of the wireless crossing system and certification of the crossings. Denver Transit has alleged that the delay is due to Xorail's failure to achieve constant warning times for the crossings in accordance with the approval requirements imposed by the FRA and PUC. Xorail has denied Denver Transit's assertions, asserting that its system satisfied the contractual requirements. No formal claim has been filed against Xorail by Denver Transit. Xorail has worked with Denver Transit to modify its system to meet the FRA's and PUC's previously undefined approval requirements. On September 28, 2017, the FRA granted a five year approval of the modified wireless crossing system as currently implemented. On March 28, 2018, the PUC granted its approval of the modified wireless crossing system as currently implemented, consistent with the approval previously granted by the FRA. In August 2018, Denver Transit completed the process of certifying the crossings and eliminating the use of flaggers. On September 21, 2018, DTC filed a complaint against RTD in Colorado state court for breach of contract related to non-payments and the costs for the flaggers, asserting a change-in-law arising from the FRA/PUC’s new certification requirements. The complaint generally supports Xorail’s position and does not name or implicate Xorail. On April 3, 2018, the United States Department of Justice entered into a proposed consent decree resolving allegations that the Company and Knorr-Bremse AG had maintained unlawful agreements not to compete for each other’s employees. The allegations also related to Faiveley Transport before it was acquired by the Company in November 2016. The proposed consent decree is pending review and approval by the U.S. District Court for the District of Columbia. No monetary fines or penalties have been imposed on the Company. The Company elected to settle this matter with the Department of Justice to avoid the cost and distraction of litigation. As of July 16, 2018, putative class action lawsuits have been filed in several different federal district courts naming the Company and Knorr as defendants in connection with the allegations contained in the proposed consent decree. The lawsuits seek unspecified damages on behalf of employees of the Company (including Faiveley Transport) and Knorr allegedly caused by the defendants’ actions. A federal Multi-District Litigation (MDL) Panel decided that cases will be consolidated and heard in the Western District of Pennsylvania. As of October 15, 2018, a total of at least 30 plaintiffs have filed class action claims relating to the alleged conspiracy. The litigation is in its very early stages and the Company does not believe that it has diminished competition for talent in the marketplace and intends to contest these claims vigorously. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 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 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 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 |
Guarantor Subsidiaries Financia
Guarantor Subsidiaries Financial Information | 9 Months Ended |
Sep. 30, 2018 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Guarantor Subsidiaries Financial Information | GUARANTOR SUBSIDIARIES FINANCIAL INFORMATION The obligations of the Company under the 2018 Refinancing Credit Agreement have been guaranteed by certain of the Company’s subsidiaries. Each guarantor is 100% owned by the Company. In accordance with positions established by the Securities and Exchange Commission, the following shows separate financial information with respect to the parent, the guarantor subsidiaries and the non-guarantor subsidiaries. The principal elimination entries eliminate investment in subsidiaries and certain intercompany balances and transactions. Balance Sheet for September 30, 2018 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Cash, cash equivalents, and restricted cash $ 1,760,805 $ 73 $ 374,503 $ — $ 2,135,381 Receivables, net 117,117 70,128 1,053,276 — 1,240,521 Inventories 147,208 63,186 655,811 — 866,205 Current assets - other (14,278 ) 936 124,783 — 111,441 Total current assets 2,010,852 134,323 2,208,373 — 4,353,548 Property, plant and equipment, net 49,355 24,847 483,221 — 557,423 Goodwill 25,275 283,241 2,104,038 — 2,412,554 Investment in subsidiaries 6,686,158 2,745,446 — (9,431,604 ) — Other intangibles, net 29,585 79,169 1,048,670 — 1,157,424 Other long-term assets 20,595 (33,748 ) 85,430 — 72,277 Total assets $ 8,821,820 $ 3,233,278 $ 5,929,732 $ (9,431,604 ) $ 8,553,226 Current liabilities $ 198,264 $ 89,160 $ 1,242,869 $ — $ 1,530,293 Inter-company 1,909,286 (1,402,141 ) (507,145 ) — — Long-term debt 3,804,601 — 13,460 — 3,818,061 Long-term liabilities - other 14,499 11,601 268,420 — 294,520 Total liabilities 5,926,650 (1,301,380 ) 1,017,604 — 5,642,874 Shareholders' equity 2,895,170 4,534,658 4,896,946 (9,431,604 ) 2,895,170 Non-controlling interest — — 15,182 — 15,182 Total shareholders' equity $ 2,895,170 $ 4,534,658 $ 4,912,128 $ (9,431,604 ) $ 2,910,352 Total Liabilities and Shareholders' Equity $ 8,821,820 $ 3,233,278 $ 5,929,732 $ (9,431,604 ) $ 8,553,226 Balance Sheet for December 31, 2017 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Cash and cash equivalents $ 933 $ 625 $ 231,843 $ — $ 233,401 Receivables, net 77,046 59,166 1,030,575 — 1,166,787 Inventories 120,937 46,626 575,071 — 742,634 Current assets - other 1,142 563 120,586 — 122,291 Total current assets 200,058 106,980 1,958,075 — 2,265,113 Property, plant and equipment, net 52,532 26,492 494,948 — 573,972 Goodwill 25,274 283,242 2,151,587 — 2,460,103 Investment in subsidiaries 6,517,205 2,440,665 — (8,957,870 ) — Other intangibles, net 30,575 81,037 1,092,820 — 1,204,432 Other long-term assets 17,414 (23,892 ) 82,838 — 76,360 Total assets $ 6,843,058 $ 2,914,524 $ 5,780,268 $ (8,957,870 ) $ 6,579,980 Current liabilities $ 196,827 $ 77,284 $ 1,299,219 $ — $ 1,573,330 Inter-company 2,121,546 (1,307,410 ) (814,136 ) — — Long-term debt 1,661,771 14 161,518 — 1,823,303 Long-term liabilities - other 54,046 20,594 280,175 — 354,815 Total liabilities 4,034,190 (1,209,518 ) 926,776 — 3,751,448 Shareholders' equity 2,808,868 4,124,042 4,833,828 (8,957,870 ) 2,808,868 Non-controlling interest — — 19,664 — 19,664 Total shareholders' equity $ 2,808,868 $ 4,124,042 $ 4,853,492 $ (8,957,870 ) $ 2,828,532 Total Liabilities and Shareholders' Equity $ 6,843,058 $ 2,914,524 $ 5,780,268 $ (8,957,870 ) $ 6,579,980 Income Statement for the Three Months Ended September 30, 2018 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Net Sales $ 169,445 $ 118,516 $ 850,250 $ (60,397 ) $ 1,077,814 Cost of sales (122,946 ) (75,021 ) (612,073 ) 34,238 (775,802 ) Gross profit 46,499 43,495 238,177 (26,159 ) 302,012 Total operating expenses (37,090 ) (14,746 ) (124,997 ) — (176,833 ) (Loss) income from operations 9,409 28,749 113,180 (26,159 ) 125,179 Interest (expense) income, net (23,012 ) 3,212 (3,913 ) — (23,713 ) Other income (expense), net (1,479 ) 1 2,679 — 1,201 Equity earnings (loss) 97,128 91,758 — (188,886 ) — Pretax income (loss) 82,046 123,720 111,946 (215,045 ) 102,667 Income tax expense 5,693 (2 ) (22,289 ) — (16,598 ) Net income 87,739 123,718 89,657 (215,045 ) 86,069 Less: Net loss attributable to noncontrolling interest — — 1,670 — 1,670 Net income (loss) attributable to Wabtec shareholders $ 87,739 $ 123,718 $ 91,327 $ (215,045 ) $ 87,739 Comprehensive income (loss) attributable to Wabtec shareholders $ 87,867 $ 123,718 $ 41,667 $ (215,045 ) $ 38,207 Income Statement for the Three Months Ended September 30, 2017 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Net Sales $ 134,905 $ 89,881 $ 761,566 $ (28,421 ) $ 957,931 Cost of sales (111,774 ) (53,692 ) (554,819 ) 15,557 (704,728 ) Gross profit 23,131 36,189 206,747 (12,864 ) 253,203 Total operating expenses (22,886 ) (12,714 ) (115,937 ) — (151,537 ) Income (loss) from operations 245 23,475 90,810 (12,864 ) 101,666 Interest (expense) income, net (20,295 ) 2,811 (2,554 ) — (20,038 ) Other income (expense), net 1,520 — (1,963 ) — (443 ) Equity earnings (loss) 80,874 64,820 — (145,694 ) — Pretax income (loss) 62,344 91,106 86,293 (158,558 ) 81,185 Income tax expense 5,056 — (17,802 ) — (12,746 ) Net income (loss) 67,400 91,106 68,491 (158,558 ) 68,439 Less: Net income attributable to noncontrolling interest — — (1,040 ) — (1,040 ) Net income (loss) attributable to Wabtec shareholders $ 67,400 $ 91,106 $ 67,451 $ (158,558 ) $ 67,399 Comprehensive income (loss) attributable to Wabtec shareholders $ 66,815 $ 91,106 $ 160,656 $ (158,558 ) $ 160,019 Income Statement for the Nine Months Ended September 30, 2018 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Net Sales $ 499,172 $ 374,599 $ 2,550,843 $ (178,943 ) $ 3,245,671 Cost of sales (364,523 ) (236,699 ) (1,812,660 ) 105,071 (2,308,811 ) Gross profit (loss) 134,649 137,900 738,183 (73,872 ) 936,860 Total operating expenses (122,497 ) (40,687 ) (393,695 ) — (556,879 ) Income (loss) from operations 12,152 97,213 344,488 (73,872 ) 379,981 Interest (expense) income, net (75,140 ) 9,291 (10,068 ) — (75,917 ) Other income (expense), net 7,733 (678 ) (1,097 ) — 5,958 Equity earnings (loss) 330,978 304,227 — (635,205 ) — Pretax income (loss) 275,723 410,053 333,323 (709,077 ) 310,022 Income tax expense (15,202 ) (2 ) (38,021 ) — (53,225 ) Net income (loss) 260,521 410,051 295,302 (709,077 ) 256,797 Less: Net income attributable to noncontrolling interest — — 3,724 — 3,724 Net income (loss) attributable to Wabtec shareholders $ 260,521 $ 410,051 $ 299,026 $ (709,077 ) $ 260,521 Comprehensive income (loss) attributable to Wabtec shareholders $ 261,156 $ 410,051 $ 137,650 $ (709,077 ) $ 99,780 Income Statement for the Nine Months Ended September 30, 2017 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Net Sales $ 417,156 $ 288,312 $ 2,186,541 $ (85,791 ) $ 2,806,218 Cost of sales (311,037 ) (177,593 ) (1,580,101 ) 59,386 (2,009,345 ) Gross profit (loss) 106,119 110,719 606,440 (26,405 ) 796,873 Total operating expenses (80,478 ) (37,783 ) (349,077 ) — (467,338 ) Income (loss) from operations 25,641 72,936 257,363 (26,405 ) 329,535 Interest (expense) income, net (55,783 ) 8,041 (9,718 ) — (57,460 ) Other income (expense), net 6,863 (229 ) (1,330 ) — 5,304 Equity earnings (loss) 246,103 182,066 — (428,169 ) — Pretax income (loss) 222,824 262,814 246,315 (454,574 ) 277,379 Income tax expense (9,511 ) — (55,265 ) — (64,776 ) Net income (loss) 213,313 262,814 191,050 (454,574 ) 212,603 Less: Net income attributable to noncontrolling interest — — 710 — 710 Net income (loss) attributable to Wabtec shareholders $ 213,313 $ 262,814 $ 191,760 $ (454,574 ) $ 213,313 Comprehensive income (loss) attributable to Wabtec shareholders $ 214,483 $ 262,814 $ 478,265 $ (454,574 ) $ 500,988 Condensed Statement of Cash Flows for the Nine Months Ended September 30, 2018 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Net cash (used for) provided by operating activities $ (111,120 ) $ 95,503 $ 127,527 $ (73,872 ) $ 38,038 Net cash used for investing activities (12,498 ) (1,303 ) (90,359 ) — (104,160 ) Net cash provided by (used for) financing activities 1,883,490 (94,752 ) 132,700 73,872 1,995,310 Effect of changes in currency exchange rates — — (27,208 ) — (27,208 ) Increase (Decrease) in cash 1,759,872 (552 ) 142,660 — 1,901,980 Cash and cash equivalents, beginning of period 933 625 231,843 — 233,401 Cash, cash equivalents, and restricted cash, end of period $ 1,760,805 $ 73 $ 374,503 $ — $ 2,135,381 Condensed Statement of Cash Flows for the Nine Months Ended September 30, 2017 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Net cash (used for) operating activities $ (38,959 ) $ 101,597 $ (9,722 ) $ (26,405 ) $ 26,511 Net cash (used for) provided by investing activities (12,591 ) (2,358 ) (890,923 ) — (905,872 ) Net cash provided by (used for) financing activities 52,077 (99,615 ) (48,916 ) 26,405 (70,049 ) Effect of changes in currency exchange rates — — 34,258 — 34,258 Increase (Decrease) in cash 527 (376 ) (915,303 ) — (915,152 ) Cash, cash equivalents and restricted cash, beginning of period 2,522 1,226 1,139,484 — 1,143,232 Cash and cash equivalents, end of period $ 3,049 $ 850 $ 224,181 $ — $ 228,080 |
Other Income (Expense), Net
Other Income (Expense), Net | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), Net | OTHER INCOME (EXPENSE), NET The components of other income (expense) are as follows: Three Months Ended Nine Months Ended In thousands 2018 2017 2018 2017 Foreign currency (loss) $ (3,525 ) $ (4,113 ) $ (6,834 ) $ (5,202 ) Equity income 632 520 2,855 1,587 Expected return on pension assets/amortization 2,829 2,490 8,879 7,470 Other miscellaneous income 1,265 660 1,058 1,449 Total other income (expense), net $ 1,201 $ (443 ) $ 5,958 $ 5,304 |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America and the rules and regulations of the Securities and Exchange Commission and include the accounts of Wabtec and its subsidiaries in which Wabtec has a controlling interest. These condensed consolidated interim financial statements do not include all of the information and footnotes required for complete financial statements. In management’s opinion, these financial statements reflect all adjustments of a normal, recurring nature necessary for a fair presentation of the results for the interim periods presented. Results for these interim periods are not necessarily indicative of results to be expected for the full year. The Company operates on a four-four-five week accounting quarter, and the quarters end on or about March 31, June 30, September 30, and December 31. The notes included herein should be read in conjunction with the audited consolidated financial statements included in Wabtec’s Annual Report on Form 10-K for the year ended December 31, 2017 . The December 31, 2017 information has been derived from the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . |
Revenue Recognition | On January 1, 2018, the Company adopted ASC 606 “Revenue from Contracts with Customers”. This new guidance provides a five-step analysis of transactions to determine when and how revenue is recognized and requires entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. Approximately 75% of the Company’s revenues are derived from performance obligations that are satisfied at a point in time when control passes to the customer which is generally at the time of shipment in accordance with agreed upon delivery terms. The remaining revenues are earned over time. This approach is consistent with our revenue recognition approach in prior years. The Company also has long-term customer agreements involving the design and production of highly engineered products that require revenue to be recognized over time because these products have no alternative use without significant economic loss and the agreements contain an enforceable right to payment including a reasonable profit margin from the customer in the event of contract termination. Additionally, the Company has customer agreements involving the creation or enhancement of an asset that the customer controls which also require revenue to be recognized over time. This approach is consistent with our revenue recognition approach in prior years. Generally, the Company uses an input method for determining the amount of revenue, cost and gross margin to recognize over time for these customer agreements. The input methods used for these agreements include costs of material and labor, both of which give an accurate representation of the progress made toward complete satisfaction of a particular performance obligation. Contract revenues and cost estimates are reviewed and revised quarterly at a minimum and adjustments are reflected in the accounting period as such amounts are determined. Contract assets include unbilled amounts resulting from sales under long-term contracts where revenue is recognized over time and revenue exceeds the amount that can be billed to the customer based on the terms of the contract. Contract assets are classified as current assets under the caption “Unbilled Accounts Receivable” on the consolidated balance sheet. The Company has elected to use the practical expedient and not consider unbilled amounts anticipated to be paid within one year as significant financing components. Contract liabilities include customer deposits that are made prior to the incurrence of costs related to a newly agreed upon contract and advanced customer payments that are in excess of revenue recognized. These contract liabilities are classified as current liabilities under the caption “Customer Deposits” on the consolidated balance sheet. These contract liabilities are not considered a significant financing component because they are used to meet working capital demands that can be higher in the early stages of a contract and revenue associated with the contract liabilities is expected to be recognized within one year. Contract liabilities also include provisions for estimated losses from uncompleted contracts. Provisions for loss contracts were $66.5 million and $94.0 million at September 30, 2018 and December 31, 2017 , respectively. These provisions for estimated losses are classified as current liabilities and included within the caption “Other accrued liabilities” on the consolidated balance sheet. Due to the nature of work required to be performed on the Company’s long-term projects, the estimation of total revenue and cost at completion is subject to many variables and requires significant judgment. Contract estimates related to long-term projects are based on various assumptions to project the outcome of future events that could span several years. These assumptions include cost of materials; labor availability and productivity; complexity of the work to be performed; and the performance of suppliers, customers and subcontractors that may be associated with the contract. We have a disciplined quarterly estimate-at-completion process where management reviews the progress of long term-projects. As part of this process, management reviews information including key contract matters, progress towards completion, identified risks and opportunities and any other information that could impact the Company’s estimates of revenue and costs. After completing this analysis, any quarterly adjustments to net sales, cost of goods sold, and the related impact to operating income are recognized as necessary in the period they become known. Generally, the Company’s revenue contains a single performance obligation for each distinct good. Pricing is defined in our contracts on a line item basis and includes an estimate of variable consideration when required by the terms of the individual customer contract. Types of variable consideration that the Company typically has include volume discounts, prompt payment discounts, liquidating damages, and performance bonuses. Sales returns and allowances are also estimated and recognized in the same period the related revenue is recognized, based upon the Company’s experience. Pre-Production Costs Certain pre-production costs relating to long-term production and supply contracts have been deferred and will be recognized over the life of the contracts. |
Reclassifications | Certain prior year amounts have been reclassified, where necessary, to conform to the current year presentation. Refer to Recently Adopted Accounting Pronouncements below. |
Use of Estimates | The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. |
Financial Derivatives and Hedging Activities | As part of its risk management strategy, the Company utilizes derivative financial instruments to mitigate the impact of changes in foreign currencies and interest rates. For further information regarding financial derivatives and hedging activities, refer to Footnotes 14 and 15. |
Foreign Currency Translation | Assets and liabilities of foreign subsidiaries, except for the Company’s Mexican operations whose functional currency is the U.S. Dollar, are translated at the rate of exchange in effect on the balance sheet date while income and expenses are translated at the average rates of exchange prevailing during the period. Foreign currency gains and losses resulting from transactions and the translation of financial statements are recorded in the Company’s consolidated financial statements based upon the provisions of ASC 830 “Foreign Currency Matters.” The effects of currency exchange rate changes on intercompany transactions and balances of a long-term investment nature are accumulated and carried as a component of accumulated other comprehensive loss. The effects of currency exchange rate changes on intercompany transactions that are denominated in a currency other than an entity’s functional currency are charged or credited to earnings. |
Noncontrolling Interests | In accordance with ASC 810 "Consolidation", the Company has classified noncontrolling interests as equity on the condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017 . |
Recently Issued Accounting Pronouncements | In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". The amendments in this update address certain stranded income tax effects in accumulated other comprehensive income ("AOCI") resulting from the Tax Cuts and Jobs Act (the "Tax Act"). Current guidance requires the effect of a change in tax laws or rates on deferred tax balances to be reported in income from continuing operations in the accounting period that includes the period of enactment, even if the related income tax effects were originally charged or credited directly to AOCI. The amount of the reclassification would include the effect of the change in the U.S. federal corporate income tax rate on the gross deferred tax amounts and related valuation allowances, if any, at the date of the enactment of the Tax Act related to items in AOCI. The updated guidance is effective for reporting periods beginning after December 15, 2018 and is to be applied retrospectively to each period in which the effect of the Tax Act related to items remaining in AOCI are recognized or at the beginning of the period of adoption. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". The amendments in this update eliminate the requirement to perform Step 2 of the goodwill impairment test. Instead, an entity should perform a goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value up to the carrying amount of the goodwill. This ASU is effective for public companies in the fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The impact of adopting this guidance could result in a change in the overall conclusion as to whether or not a reporting unit's goodwill is impaired and the amount of an impairment charge recognized in the event a reporting units' carrying value exceeds its fair value. All of the Company's reporting units had fair values that were substantially greater than the carrying value as of the Company's last quantitative goodwill impairment test, which was performed as of October 1, 2017. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 814)" which requires lessees to recognize a right of use asset and lease liability on the balance sheet for all leases with terms longer than 12 months. For leases with terms less than 12 months, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize a right of use asset and lease liability. The guidance requires enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases that will be effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company expects to adopt the requirements of the new standard effective January 1, 2019. The FASB recently proposed a transition alternative, which would allow for the application of the guidance at beginning of the period in which it is adopted, rather than requiring the adjustment of prior comparative periods. The Company plans to adopt this transition alternative. The Company plans to elect the practical expedient which does not require the capitalization of leases with terms of 12 months or less, and does not plan to elect the practical expedient which allows hindsight to be used to determine the term of a lease. The Company has evaluated its lease portfolio and is assessing the impact to the consolidated financial statements. The Company is in the process of implementing processes and information technology tools to assist in its ongoing lease data collection and analysis and evaluating its accounting policies and internal controls that would be impacted by the new guidance, to ensure readiness for adoption in the first quarter of 2019. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contract with Customers.” This ASU supersedes most of the previous revenue recognition requirements in U.S. GAAP and requires entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity’s nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This ASU became effective for public companies during interim and annual reporting periods beginning after December 15, 2017. The Company adopted this accounting standard update using the modified retrospective method. The impact of adopting the new standard was not material to the consolidated statement of income or the consolidated balance sheet. In March 2017, the FASB issued ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost". The amendments in this update require the service cost component of net benefit costs to be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit costs are required to be presented in the income statement separately from the service cost component and outside income from operations. This update also allows only the service cost component to be eligible for capitalization when applicable. This ASU became effective for public companies during interim and annual reporting periods beginning after December 15, 2017. In accordance with this update, the Company began recognizing the interest expense component of net periodic benefit cost in interest expense in the income statement and the expected return on plan assets, net amortization/deferrals, and curtailments in other income (expense), net in the income statement. This update has been applied retrospectively for presentation of the service cost component and other components of net benefit costs in accordance with this ASU and the impact of adoption resulted in increases of $0.3 million , $2.2 million and $2.5 million to selling, general, and administrative expense, interest expense, net and other income, net, respectively, in the income statement for the three months ended September 30, 2017 . The impact of adoption resulted in increases of $1.0 million , $6.5 million and $7.5 million to selling, general, and administrative expense, interest expense, net and other income, net, respectively, in the income statement for the nine months ended September 30, 2017 . Also, the capitalization of the service cost component of net benefit cost has been adopted prospectively in accordance with this ASU. In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash". The amendments in this update require a statement of cash flows to explain the change during the period in total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU became effective for public companies during interim and annual reporting periods beginning after December 15, 2017. This update has been applied retrospectively and as a result restricted cash related to the acquisition of Faiveley Transport is included in the change in cash for the nine months ended September 30, 2017 . |
Other Comprehensive Income (Loss) | Comprehensive income comprises both net income and the change in equity from transactions and other events and circumstances from nonowner sources. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Changes in Accumulated Other Comprehensive Loss by Component, Net of Tax | The changes in accumulated other comprehensive income (loss) by component, net of tax, for the nine months ended September 30, 2018 are as follows: In thousands Foreign currency translation Derivative contracts Pension and post retirement benefit plans Total Balance at December 31, 2017 $ 5,063 $ 4,015 $ (54,070 ) $ (44,992 ) Other comprehensive income (loss) before reclassifications (159,064 ) (8,544 ) 995 (166,613 ) Amounts reclassified from accumulated other comprehensive income — 4,314 1,558 5,872 Net current period other comprehensive (loss) income (159,064 ) (4,230 ) 2,553 (160,741 ) Balance at September 30, 2018 $ (154,001 ) $ (215 ) $ (51,517 ) $ (205,733 ) The changes in accumulated other comprehensive loss by component, net of tax, for the nine months ended September 30, 2017 are as follows: Foreign Derivative Pension and Total Balance at December 31, 2016 $ (321,033 ) $ (2,957 ) $ (55,615 ) $ (379,605 ) Other comprehensive income (loss) before reclassifications 277,984 11,424 (4,715 ) 284,693 Amounts reclassified from accumulated other comprehensive income — 1,206 1,776 2,982 Net current period other comprehensive income (loss) 277,984 12,630 (2,939 ) 287,675 Balance at September 30, 2017 $ (43,049 ) $ 9,673 $ (58,554 ) $ (91,930 ) |
Reclassifications Out of Accumulated Other Comprehensive Loss | Reclassifications out of accumulated other comprehensive income (loss) for the three months ended September 30, 2018 are as follows: In thousands Amount reclassified from accumulated other comprehensive income Affected line item in the Condensed Consolidated Statements of Income Amortization of defined pension and post retirement items Amortization of initial net obligation and prior service cost $ (375 ) Other income (expense), net Amortization of net loss 1,093 Other income (expense), net 718 Other income (expense), net (198 ) Income tax expense $ 520 Net income Derivative contracts Realized gain on derivative contracts $ 4,915 Interest expense, net (1,180 ) Income tax expense $ 3,735 Net income Reclassifications out of accumulated other comprehensive income (loss) for the nine months ended September 30, 2018 are as follows: In thousands Amount reclassified from accumulated other comprehensive income Affected line item in the Condensed Consolidated Statements of Income Amortization of defined pension and post retirement items Amortization of initial net obligation and prior service cost $ (1,126 ) Other income (expense), net Amortization of net loss 3,278 Other income (expense), net 2,152 Other income (expense), net (594 ) Income tax expense $ 1,558 Net income Derivative contracts Realized gain on derivative contracts $ 5,770 Interest expense, net (1,456 ) Income tax expense $ 4,314 Net income Reclassifications out of accumulated other comprehensive loss for the three months ended September 30, 2017 are as follows: In thousands Amount reclassified from Affected line item in the Amortization of defined pension and post retirement items Amortization of initial net obligation and prior service cost $ (422 ) Other income (expense), net Amortization of net loss 1,240 Other income (expense), net 818 Other income (expense), net (226 ) Income tax expense $ 592 Net income Derivative contracts Realized gain on derivative contracts $ 497 Interest expense, net (131 ) Income tax expense $ 366 Net income Reclassifications out of accumulated other comprehensive loss for the nine months ended September 30, 2017 are as follows: In thousands Amount reclassified from Affected line item in the Amortization of defined pension and post retirement items Amortization of initial net obligation and prior service cost $ (1,266 ) Other income (expense), net Amortization of net loss 3,720 Other income (expense), net 2,454 Other income (expense), net (678 ) Income tax expense $ 1,776 Net income Derivative contracts Realized gain on derivative contracts $ 1,653 Interest expense, net (447 ) Income tax expense $ 1,206 Net income |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Summary of Preliminary Estimated Fair Values of the Assets Acquired and Liabilities Assumed at the Date of the Acquisition | The following table summarizes the final fair values of the Faiveley Transport assets acquired and liabilities assumed: In thousands Assets acquired Cash and cash equivalents $ 178,318 Accounts receivable 439,631 Inventories 205,649 Other current assets 70,930 Property, plant, and equipment 148,746 Goodwill 1,262,350 Trade names 346,328 Customer relationships 233,529 Patents 1,201 Other noncurrent assets 184,564 Total assets acquired 3,071,246 Liabilities assumed Current liabilities 819,493 Debt 409,899 Other noncurrent liabilities 335,039 Total liabilities assumed 1,564,431 Net assets acquired $ 1,506,815 The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition for Annax, Melett and AM General. For the ATP and TTC acquisitions, the following table summarizes the final fair value of the assets acquired and liabilities assumed at the date of acquisition. Annax Melett AM General TTC ATP In thousands March 22, December 4, October 2, April 5, March 13, Current assets $ 34,036 $ 35,258 $ 6,610 $ 3,744 $ 11,666 Property, plant & equipment 674 5,917 4,140 5,413 5,354 Goodwill 14,301 25,732 12,944 14,095 29,034 Other intangible assets 23,998 30,479 12,097 12,300 25,000 Total assets acquired 73,009 97,386 35,791 35,552 71,054 Total liabilities assumed (44,345 ) (25,493 ) (25,375 ) (3,041 ) (5,800 ) Net assets acquired $ 28,664 $ 71,893 $ 10,416 $ 32,511 $ 65,254 |
Pro Forma Financial Information | The following unaudited pro forma consolidated financial information presents income statement results as if the acquisitions listed above had occurred on January 1, 2017: In thousands Three Months Ended Three Months Ended Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Net sales $ 1,077,814 $ 986,323 $ 3,259,096 $ 2,899,691 Gross profit 302,012 262,362 938,796 825,685 Net income attributable to Wabtec shareholders 87,739 70,530 261,025 223,383 Diluted earnings per share As Reported $ 0.91 $ 0.70 $ 2.70 $ 2.22 Pro forma $ 0.91 $ 0.73 $ 2.70 $ 2.32 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Components of Inventory, Net of Reserves | The components of inventory, net of reserves, were: In thousands September 30, December 31, Raw materials $ 465,925 $ 378,481 Work-in-progress 173,624 167,390 Finished goods 226,656 196,763 Total inventories $ 866,205 $ 742,634 |
Intangibles (Tables)
Intangibles (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Change in the Carrying Amount of Goodwill by Segment | The change in the carrying amount of goodwill by segment for the nine months ended September 30, 2018 is as follows: In thousands Freight Segment Transit Segment Total Balance at December 31, 2017 $ 718,958 $ 1,741,145 $ 2,460,103 Additions 5,252 13,707 18,959 Foreign currency impact (7,710 ) (58,798 ) (66,508 ) Balance at September 30, 2018 $ 716,500 $ 1,696,054 $ 2,412,554 |
Intangible Assets of the Company, Other Than Goodwill and Trade Names | Intangible assets of the Company, other than goodwill and trade names, consist of the following: In thousands September 30, December 31, Patents, non-compete and other intangibles, net of accumulated amortization of $42,928 and $43,021 $ 15,192 $ 17,554 Customer relationships, net of accumulated amortization of $151,007 and $126,824 542,780 583,459 Total $ 557,972 $ 601,013 |
Amortization Expense | Amortization expense for the five succeeding years is estimated to be as follows: Remainder of 2018 $ 10,460 2019 38,335 2020 36,099 2021 35,608 2022 35,320 |
Contract Assets and Contract _2
Contract Assets and Contract Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Change in Carrying Amount of Contract Assets and Contract Liabilities | The change in the carrying amount of contract assets and contract liabilities for the nine months ended September 30, 2018 is as follows: In thousands Contract Assets Balance at beginning of year $ 366,168 Recognized in current year 328,438 Reclassified to accounts receivable (296,459 ) Foreign currency impact (8,870 ) Balance at September 30, 2018 $ 389,277 In thousands Contract Liabilities Balance at beginning of year $ 463,704 Recognized in current year 151,706 Amounts in beginning balance reclassified to revenue (142,718 ) Current year amounts reclassified to revenue (17,931 ) Foreign currency impact (14,185 ) Balance at September 30, 2018 $ 440,576 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following: In thousands September 30, December 31, Floating Senior Notes, due 2021, net of unamortized debt $ 496,495 $ — 4.150% Senior Notes, due 2024, net of unamortized debt 742,616 — 4.700% Senior Notes, due 2028, net of unamortized debt 1,239,417 — 3.45% Senior Notes, due 2026, net of unamortized debt 748,225 747,655 4.375% Senior Notes, due 2023, net of unamortized 248,759 248,567 Revolving Credit Facility, net of unamortized 346,588 853,124 Schuldschein Loan 11,601 11,998 Other Borrowings 29,721 6,860 Capital Leases 1,677 2,324 Total 3,865,099 1,870,528 Less - current portion 47,038 47,225 Long-term portion $ 3,818,061 $ 1,823,303 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Components of Net Periodic Benefit Cost | The following tables provide information regarding the Company’s defined benefit pension plans summarized by U.S. and international components. U.S. International Three Months Ended September 30, Three Months Ended September 30, In thousands, except percentages 2018 2017 2018 2017 Net periodic benefit cost Service cost $ 87 $ 86 $ 691 $ 614 Interest cost 333 356 1,834 1,677 Expected return on plan assets (445 ) (433 ) (3,466 ) (2,910 ) Net amortization/deferrals 243 248 554 685 Net periodic benefit cost (credit) $ 218 $ 257 $ (387 ) $ 66 U.S. International Nine Months Ended Nine Months Ended In thousands, except percentages 2018 2017 2018 2017 Net periodic benefit cost Service cost $ 261 $ 258 $ 2,073 $ 1,842 Interest cost 999 1,068 5,502 5,031 Expected return on plan assets (1,335 ) (1,299 ) (10,398 ) (8,730 ) Net amortization/deferrals 729 744 1,662 2,055 Net periodic benefit cost (credit) $ 654 $ 771 $ (1,161 ) $ 198 Assumptions Discount Rate 3.56 % 3.95 % 2.40 % 2.51 % Expected long-term rate of return 5.15 % 4.95 % 5.10 % 4.93 % Rate of compensation increase 3.00 % 3.00 % 2.60 % 2.54 % |
Other Postretirement Benefit Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Components of Net Periodic Benefit Cost | The following tables provide information regarding the Company’s postretirement benefit plans summarized by U.S. and international components. U.S. International Three Months Ended September 30, Three Months Ended September 30, In thousands, except percentages 2018 2017 2018 2017 Net periodic benefit cost Service cost $ 1 $ 1 $ 8 $ 7 Interest cost 81 88 26 24 Net amortization/deferrals (76 ) (73 ) (4 ) (7 ) Net periodic benefit cost $ 6 $ 16 $ 30 $ 24 U.S. International Nine Months Ended Nine Months Ended In thousands, except percentages 2018 2017 2018 2017 Net periodic benefit cost Service cost $ 3 $ 3 $ 24 $ 21 Interest cost 243 264 78 72 Net amortization/deferrals (228 ) (219 ) (12 ) (21 ) Net periodic benefit cost $ 18 $ 48 $ 90 $ 72 Assumptions Discount Rate 3.43 % 3.76 % 3.21 % 3.46 % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option Activity | The following table summarizes the Company’s stock option activity and related information for the 2011 Plan, the 2000 Plan and the Directors Plan for the nine months ended September 30, 2018 : Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic value (in thousands) Outstanding at December 31, 2017 983,512 $ 40.62 4.0 $ 40,137 Granted 82,580 77.54 2,258 Exercised (574,303 ) 23.88 46,520 Canceled (16,471 ) 64.46 666 Outstanding at September 30, 2018 475,318 56.50 5.9 22,997 Exercisable at September 30, 2018 291,169 49.75 5.0 16,051 |
Share-Based Fair Value of Each Option Grant Weighted-Average Assumptions | The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Nine Months Ended 2018 2017 Dividend yield 0.31 % 0.23 % Risk-free interest rate 2.78 % 2.17 % Stock price volatility 23.9 % 23.4 % Expected life (years) 5.0 5.0 |
Restricted Stock Activity and Incentive Stock Awards Activity | The following table summarizes the restricted stock activity and related information for the 2011 Plan, the 2000 Plan and the Directors Plan, and incentive stock units activity for the 2011 Plan and the 2000 Plan with related information for the nine months ended September 30, 2018 : Restricted Stock and Units Incentive Stock Units Weighted Average Grant Date Fair Value Outstanding at December 31, 2017 399,000 327,333 $ 78.76 Granted 223,990 175,100 73.76 Vested (143,327 ) (93,312 ) 81.42 Adjustment for incentive stock awards expected to vest — (3,934 ) 73.40 Canceled (28,643 ) (25,775 ) 78.80 Outstanding at September 30, 2018 451,020 379,412 75.62 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The computation of basic and diluted earnings per share for net income attributable to Wabtec shareholders is as follows: Three Months Ended In thousands, except per share data 2018 2017 Numerator Numerator for basic and diluted earnings per common share - net income attributable to Wabtec shareholders $ 87,739 $ 67,399 Less: dividends declared - common shares and non-vested restricted stock (11,586 ) (11,518 ) Undistributed earnings 76,153 55,881 Percentage allocated to common shareholders (1) 99.7 % 99.7 % 75,925 55,713 Add: dividends declared - common shares 11,552 11,485 Numerator for basic and diluted earnings per common share $ 87,477 $ 67,198 Denominator Denominator for basic earnings per common share - weighted average shares 96,208 95,709 Effect of dilutive securities: Assumed conversion of dilutive stock-based compensation plans 429 607 Denominator for diluted earnings per common share - adjusted weighted average shares and assumed conversion 96,637 96,316 Net income attributable to Wabtec shareholders per common share Basic $ 0.91 $ 0.70 Diluted $ 0.91 $ 0.70 (1) Basic weighted-average common shares outstanding 96,208 95,709 Basic weighted-average common shares outstanding and non-vested restricted stock expected to vest 96,495 95,983 Percentage allocated to common shareholders 99.7 % 99.7 % Nine Months Ended September 30, In thousands, except per share data 2018 2017 Numerator Numerator for basic and diluted earnings per common share - net income attributable to Wabtec shareholders $ 260,521 $ 213,313 Less: dividends declared - common shares and non-vested restricted stock (34,682 ) (30,693 ) Undistributed earnings 225,839 182,620 Percentage allocated to common shareholders (1) 99.7 % 99.4 % 225,161 181,524 Add: dividends declared - common shares 34,579 30,508 Numerator for basic and diluted earnings per common share $ 259,740 $ 212,032 Denominator Denominator for basic earnings per common share - weighted average shares 95,935 95,163 Effect of dilutive securities: Assumed conversion of dilutive stock-based compensation plans 501 645 Denominator for diluted earnings per common share - adjusted weighted average shares and assumed conversion 96,436 95,808 Net income attributable to Wabtec shareholders per common share Basic $ 2.71 $ 2.23 Diluted $ 2.70 $ 2.22 (1) Basic weighted-average common shares outstanding 95,935 95,163 Basic weighted-average common shares outstanding and non-vested restricted stock expected to vest 96,221 95,740 Percentage allocated to common shareholders 99.7 % 99.4 % |
Warranties (Tables)
Warranties (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Product Warranties Disclosures [Abstract] | |
Changes in Product Warranty Reserve | The following table reconciles the changes in the Company’s product warranty reserve as follows: In thousands 2018 2017 Balance at beginning of year $ 153,063 $ 138,992 Warranty expense 45,691 33,108 Acquisitions 3,081 3,412 Warranty claim payments (42,993 ) (33,492 ) Foreign currency impact/other (4,289 ) 6,744 Balance at September 30 $ 154,553 $ 148,764 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Notional Amounts and Fair Value | The following table summarizes the gross notional amounts and fair values of the designated and non-designated hedges discussed in the above sections as of September 30, 2018 . In millions Designated Non-Designated Total Gross notional amount $ 787.0 $ 796.0 $ 1,583.0 Fair Value: Other current assets $ — $ 4.7 $ 4.7 Other current liabilities (6.0 ) — (6.0 ) Total $ (6.0 ) $ 4.7 $ (1.3 ) The following table summarizes the gross notional amounts and fair values of the designated and non-designated hedges discussed in the above sections as of December 31, 2017 . In millions Designated Non-Designated Total Gross notional amount $ 805.1 $ 379.7 $ 1,184.8 Fair Value: Other current assets $ 3.5 $ 2.1 $ 5.6 Other current liabilities — — — Total $ 3.5 $ 2.1 $ 5.6 |
Fair Value Measurement and Fa_2
Fair Value Measurement and Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Liabilities Carried at Fair Value Measured on Recurring Basis | The following table provides the liabilities carried at fair value measured on a recurring basis as of September 30, 2018 , which are included in other current liabilities on the Condensed Consolidated Balance sheet: Fair Value Measurements at September 30, 2018 Using In thousands Total Carrying Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Interest rate swap agreements $ 87 $ — $ 87 $ — Total $ 87 $ — $ 87 $ — The following table provides the liabilities carried at fair value measured on a recurring basis as of December 31, 2017 , which is included in other current liabilities on the Condensed Consolidated Balance sheet: Fair Value Measurements at December 31, 2017 Using In thousands Total Carrying Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Interest rate swap agreements $ 1,163 $ — $ 1,163 $ — Total $ 1,163 $ — $ 1,163 $ — |
Estimated Fair Values and Related Carrying Values of Financial Instruments | The estimated fair values and related carrying values of the Company’s financial instruments are as follows: September 30, 2018 December 31, 2017 In thousands Carrying Value Fair Value Carrying Fair Interest rate swap agreement $ 87 $ 87 $ 1,163 $ 1,163 4.375% Senior Notes 248,759 254,408 248,567 262,033 3.45% Senior Notes 748,225 687,698 747,655 741,113 Floating Rate Notes 2021 496,495 501,065 — — 4.15% Senior Notes 742,616 745,350 — — 4.7% Senior Notes 1,239,417 1,232,300 — — |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Financial Information | 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 | Sales by product line are as follows: Three Months Ended 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 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 |
Guarantor Subsidiaries Financ_2
Guarantor Subsidiaries Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Balance Sheet | Balance Sheet for September 30, 2018 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Cash, cash equivalents, and restricted cash $ 1,760,805 $ 73 $ 374,503 $ — $ 2,135,381 Receivables, net 117,117 70,128 1,053,276 — 1,240,521 Inventories 147,208 63,186 655,811 — 866,205 Current assets - other (14,278 ) 936 124,783 — 111,441 Total current assets 2,010,852 134,323 2,208,373 — 4,353,548 Property, plant and equipment, net 49,355 24,847 483,221 — 557,423 Goodwill 25,275 283,241 2,104,038 — 2,412,554 Investment in subsidiaries 6,686,158 2,745,446 — (9,431,604 ) — Other intangibles, net 29,585 79,169 1,048,670 — 1,157,424 Other long-term assets 20,595 (33,748 ) 85,430 — 72,277 Total assets $ 8,821,820 $ 3,233,278 $ 5,929,732 $ (9,431,604 ) $ 8,553,226 Current liabilities $ 198,264 $ 89,160 $ 1,242,869 $ — $ 1,530,293 Inter-company 1,909,286 (1,402,141 ) (507,145 ) — — Long-term debt 3,804,601 — 13,460 — 3,818,061 Long-term liabilities - other 14,499 11,601 268,420 — 294,520 Total liabilities 5,926,650 (1,301,380 ) 1,017,604 — 5,642,874 Shareholders' equity 2,895,170 4,534,658 4,896,946 (9,431,604 ) 2,895,170 Non-controlling interest — — 15,182 — 15,182 Total shareholders' equity $ 2,895,170 $ 4,534,658 $ 4,912,128 $ (9,431,604 ) $ 2,910,352 Total Liabilities and Shareholders' Equity $ 8,821,820 $ 3,233,278 $ 5,929,732 $ (9,431,604 ) $ 8,553,226 Balance Sheet for December 31, 2017 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Cash and cash equivalents $ 933 $ 625 $ 231,843 $ — $ 233,401 Receivables, net 77,046 59,166 1,030,575 — 1,166,787 Inventories 120,937 46,626 575,071 — 742,634 Current assets - other 1,142 563 120,586 — 122,291 Total current assets 200,058 106,980 1,958,075 — 2,265,113 Property, plant and equipment, net 52,532 26,492 494,948 — 573,972 Goodwill 25,274 283,242 2,151,587 — 2,460,103 Investment in subsidiaries 6,517,205 2,440,665 — (8,957,870 ) — Other intangibles, net 30,575 81,037 1,092,820 — 1,204,432 Other long-term assets 17,414 (23,892 ) 82,838 — 76,360 Total assets $ 6,843,058 $ 2,914,524 $ 5,780,268 $ (8,957,870 ) $ 6,579,980 Current liabilities $ 196,827 $ 77,284 $ 1,299,219 $ — $ 1,573,330 Inter-company 2,121,546 (1,307,410 ) (814,136 ) — — Long-term debt 1,661,771 14 161,518 — 1,823,303 Long-term liabilities - other 54,046 20,594 280,175 — 354,815 Total liabilities 4,034,190 (1,209,518 ) 926,776 — 3,751,448 Shareholders' equity 2,808,868 4,124,042 4,833,828 (8,957,870 ) 2,808,868 Non-controlling interest — — 19,664 — 19,664 Total shareholders' equity $ 2,808,868 $ 4,124,042 $ 4,853,492 $ (8,957,870 ) $ 2,828,532 Total Liabilities and Shareholders' Equity $ 6,843,058 $ 2,914,524 $ 5,780,268 $ (8,957,870 ) $ 6,579,980 |
Condensed Income Statement | Income Statement for the Three Months Ended September 30, 2018 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Net Sales $ 169,445 $ 118,516 $ 850,250 $ (60,397 ) $ 1,077,814 Cost of sales (122,946 ) (75,021 ) (612,073 ) 34,238 (775,802 ) Gross profit 46,499 43,495 238,177 (26,159 ) 302,012 Total operating expenses (37,090 ) (14,746 ) (124,997 ) — (176,833 ) (Loss) income from operations 9,409 28,749 113,180 (26,159 ) 125,179 Interest (expense) income, net (23,012 ) 3,212 (3,913 ) — (23,713 ) Other income (expense), net (1,479 ) 1 2,679 — 1,201 Equity earnings (loss) 97,128 91,758 — (188,886 ) — Pretax income (loss) 82,046 123,720 111,946 (215,045 ) 102,667 Income tax expense 5,693 (2 ) (22,289 ) — (16,598 ) Net income 87,739 123,718 89,657 (215,045 ) 86,069 Less: Net loss attributable to noncontrolling interest — — 1,670 — 1,670 Net income (loss) attributable to Wabtec shareholders $ 87,739 $ 123,718 $ 91,327 $ (215,045 ) $ 87,739 Comprehensive income (loss) attributable to Wabtec shareholders $ 87,867 $ 123,718 $ 41,667 $ (215,045 ) $ 38,207 Income Statement for the Three Months Ended September 30, 2017 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Net Sales $ 134,905 $ 89,881 $ 761,566 $ (28,421 ) $ 957,931 Cost of sales (111,774 ) (53,692 ) (554,819 ) 15,557 (704,728 ) Gross profit 23,131 36,189 206,747 (12,864 ) 253,203 Total operating expenses (22,886 ) (12,714 ) (115,937 ) — (151,537 ) Income (loss) from operations 245 23,475 90,810 (12,864 ) 101,666 Interest (expense) income, net (20,295 ) 2,811 (2,554 ) — (20,038 ) Other income (expense), net 1,520 — (1,963 ) — (443 ) Equity earnings (loss) 80,874 64,820 — (145,694 ) — Pretax income (loss) 62,344 91,106 86,293 (158,558 ) 81,185 Income tax expense 5,056 — (17,802 ) — (12,746 ) Net income (loss) 67,400 91,106 68,491 (158,558 ) 68,439 Less: Net income attributable to noncontrolling interest — — (1,040 ) — (1,040 ) Net income (loss) attributable to Wabtec shareholders $ 67,400 $ 91,106 $ 67,451 $ (158,558 ) $ 67,399 Comprehensive income (loss) attributable to Wabtec shareholders $ 66,815 $ 91,106 $ 160,656 $ (158,558 ) $ 160,019 Income Statement for the Nine Months Ended September 30, 2018 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Net Sales $ 499,172 $ 374,599 $ 2,550,843 $ (178,943 ) $ 3,245,671 Cost of sales (364,523 ) (236,699 ) (1,812,660 ) 105,071 (2,308,811 ) Gross profit (loss) 134,649 137,900 738,183 (73,872 ) 936,860 Total operating expenses (122,497 ) (40,687 ) (393,695 ) — (556,879 ) Income (loss) from operations 12,152 97,213 344,488 (73,872 ) 379,981 Interest (expense) income, net (75,140 ) 9,291 (10,068 ) — (75,917 ) Other income (expense), net 7,733 (678 ) (1,097 ) — 5,958 Equity earnings (loss) 330,978 304,227 — (635,205 ) — Pretax income (loss) 275,723 410,053 333,323 (709,077 ) 310,022 Income tax expense (15,202 ) (2 ) (38,021 ) — (53,225 ) Net income (loss) 260,521 410,051 295,302 (709,077 ) 256,797 Less: Net income attributable to noncontrolling interest — — 3,724 — 3,724 Net income (loss) attributable to Wabtec shareholders $ 260,521 $ 410,051 $ 299,026 $ (709,077 ) $ 260,521 Comprehensive income (loss) attributable to Wabtec shareholders $ 261,156 $ 410,051 $ 137,650 $ (709,077 ) $ 99,780 Income Statement for the Nine Months Ended September 30, 2017 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Net Sales $ 417,156 $ 288,312 $ 2,186,541 $ (85,791 ) $ 2,806,218 Cost of sales (311,037 ) (177,593 ) (1,580,101 ) 59,386 (2,009,345 ) Gross profit (loss) 106,119 110,719 606,440 (26,405 ) 796,873 Total operating expenses (80,478 ) (37,783 ) (349,077 ) — (467,338 ) Income (loss) from operations 25,641 72,936 257,363 (26,405 ) 329,535 Interest (expense) income, net (55,783 ) 8,041 (9,718 ) — (57,460 ) Other income (expense), net 6,863 (229 ) (1,330 ) — 5,304 Equity earnings (loss) 246,103 182,066 — (428,169 ) — Pretax income (loss) 222,824 262,814 246,315 (454,574 ) 277,379 Income tax expense (9,511 ) — (55,265 ) — (64,776 ) Net income (loss) 213,313 262,814 191,050 (454,574 ) 212,603 Less: Net income attributable to noncontrolling interest — — 710 — 710 Net income (loss) attributable to Wabtec shareholders $ 213,313 $ 262,814 $ 191,760 $ (454,574 ) $ 213,313 Comprehensive income (loss) attributable to Wabtec shareholders $ 214,483 $ 262,814 $ 478,265 $ (454,574 ) $ 500,988 |
Condensed Cash Flow Statement | Condensed Statement of Cash Flows for the Nine Months Ended September 30, 2018 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Net cash (used for) provided by operating activities $ (111,120 ) $ 95,503 $ 127,527 $ (73,872 ) $ 38,038 Net cash used for investing activities (12,498 ) (1,303 ) (90,359 ) — (104,160 ) Net cash provided by (used for) financing activities 1,883,490 (94,752 ) 132,700 73,872 1,995,310 Effect of changes in currency exchange rates — — (27,208 ) — (27,208 ) Increase (Decrease) in cash 1,759,872 (552 ) 142,660 — 1,901,980 Cash and cash equivalents, beginning of period 933 625 231,843 — 233,401 Cash, cash equivalents, and restricted cash, end of period $ 1,760,805 $ 73 $ 374,503 $ — $ 2,135,381 Condensed Statement of Cash Flows for the Nine Months Ended September 30, 2017 : In thousands Parent Guarantors Non-Guarantors Elimination Consolidated Net cash (used for) operating activities $ (38,959 ) $ 101,597 $ (9,722 ) $ (26,405 ) $ 26,511 Net cash (used for) provided by investing activities (12,591 ) (2,358 ) (890,923 ) — (905,872 ) Net cash provided by (used for) financing activities 52,077 (99,615 ) (48,916 ) 26,405 (70,049 ) Effect of changes in currency exchange rates — — 34,258 — 34,258 Increase (Decrease) in cash 527 (376 ) (915,303 ) — (915,152 ) Cash, cash equivalents and restricted cash, beginning of period 2,522 1,226 1,139,484 — 1,143,232 Cash and cash equivalents, end of period $ 3,049 $ 850 $ 224,181 $ — $ 228,080 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Components of Other Income (Expense) | The components of other income (expense) are as follows: Three Months Ended Nine Months Ended In thousands 2018 2017 2018 2017 Foreign currency (loss) $ (3,525 ) $ (4,113 ) $ (6,834 ) $ (5,202 ) Equity income 632 520 2,855 1,587 Expected return on pension assets/amortization 2,829 2,490 8,879 7,470 Other miscellaneous income 1,265 660 1,058 1,449 Total other income (expense), net $ 1,201 $ (443 ) $ 5,958 $ 5,304 |
Business - Additional Informati
Business - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2018country | |
Product Information [Line Items] | |
Number of countries company operates | 31 |
Sales Revenue Outside United States | Customer Concentration Risk | |
Product Information [Line Items] | |
Percent of revenue from customers outside the U.S. (as a percent) | 66.00% |
Minimum | |
Product Information [Line Items] | |
Number of countries where product is found (more than) | 100 |
Accounting Policies - Additiona
Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Provisions for loss contracts | $ 66,500 | $ 66,500 | $ 94,000 | ||
Deferred pre-production costs | 20,300 | 20,300 | $ 20,200 | ||
Net income (loss) attributable to noncontrolling interest | (1,670) | $ 1,040 | (3,724) | $ (710) | |
Selling, general and administrative expenses | 146,839 | 118,183 | 465,197 | 368,788 | |
Interest expense, net | 23,713 | 20,038 | 75,917 | 57,460 | |
Other income (expense), net | $ 1,201 | (443) | $ 5,958 | 5,304 | |
Restatement Adjustment | Accounting Standards Update 2017-07 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Selling, general and administrative expenses | 300 | 1,000 | |||
Interest expense, net | 2,200 | 6,500 | |||
Other income (expense), net | $ 2,500 | $ 7,500 | |||
Transferred at Point in Time | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Revenue derived from performance obligations satisfied when control passes to customer (as a percent) | 75.00% |
Accounting Policies - Accumulat
Accounting Policies - Accumulated Other Comprehensive Loss by Component, Net of Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 2,808,868 | |||
Other comprehensive income (loss) before reclassifications | (166,613) | $ 284,693 | ||
Amounts reclassified from accumulated other comprehensive income | 5,872 | 2,982 | ||
Other comprehensive (loss) income, net of tax | $ (49,532) | $ 92,620 | (160,741) | 287,675 |
Ending balance | 2,895,170 | 2,895,170 | ||
Foreign currency translation | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 5,063 | (321,033) | ||
Other comprehensive income (loss) before reclassifications | (159,064) | 277,984 | ||
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | ||
Other comprehensive (loss) income, net of tax | (159,064) | 277,984 | ||
Ending balance | (154,001) | (43,049) | (154,001) | (43,049) |
Derivative contracts | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 4,015 | (2,957) | ||
Other comprehensive income (loss) before reclassifications | (8,544) | 11,424 | ||
Amounts reclassified from accumulated other comprehensive income | 4,314 | 1,206 | ||
Other comprehensive (loss) income, net of tax | (4,230) | 12,630 | ||
Ending balance | (215) | 9,673 | (215) | 9,673 |
Pension and post retirement benefit plans | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (54,070) | (55,615) | ||
Other comprehensive income (loss) before reclassifications | 995 | (4,715) | ||
Amounts reclassified from accumulated other comprehensive income | 1,558 | 1,776 | ||
Other comprehensive (loss) income, net of tax | 2,553 | (2,939) | ||
Ending balance | (51,517) | (58,554) | (51,517) | (58,554) |
AOCI Attributable to Parent | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (44,992) | (379,605) | ||
Ending balance | $ (205,733) | $ (91,930) | $ (205,733) | $ (91,930) |
Accounting Policies - Reclassif
Accounting Policies - Reclassifications Out of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||||
Other income (expense), net | $ 1,201 | $ (443) | $ 5,958 | $ 5,304 |
Income tax expense | (16,598) | (12,746) | (53,225) | (64,776) |
Interest expense, net | (23,713) | (20,038) | (75,917) | (57,460) |
Net income | 87,739 | 67,399 | 260,521 | 213,313 |
Reclassification out of Accumulated Other Comprehensive Income | Pension and post retirement benefit plans | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||||
Other income (expense), net | 718 | 818 | 2,152 | 2,454 |
Income tax expense | (198) | (226) | (594) | (678) |
Net income | 520 | 592 | 1,558 | 1,776 |
Reclassification out of Accumulated Other Comprehensive Income | Amortization of initial net obligation and prior service cost | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||||
Other income (expense), net | (375) | (422) | (1,126) | (1,266) |
Reclassification out of Accumulated Other Comprehensive Income | Amortization of net loss | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||||
Other income (expense), net | 1,093 | 1,240 | 3,278 | 3,720 |
Reclassification out of Accumulated Other Comprehensive Income | Derivative contracts | ||||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items] | ||||
Income tax expense | (1,180) | (131) | (1,456) | (447) |
Interest expense, net | 4,915 | 497 | 5,770 | 1,653 |
Net income | $ 3,735 | $ 366 | $ 4,314 | $ 1,206 |
Proposed Merger With GE Trans_2
Proposed Merger With GE Transportation (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Oct. 12, 2018 | Sep. 14, 2018 | Jun. 08, 2018 | |
Business Acquisition [Line Items] | ||||
Debt issued | $ 2,500,000,000 | |||
Floating Rate Senior Notes | Senior Notes | ||||
Business Acquisition [Line Items] | ||||
Debt issued | 500,000,000 | |||
Senior Notes due 2024 | Senior Notes | ||||
Business Acquisition [Line Items] | ||||
Debt issued | 750,000,000 | |||
Senior Notes due 2028 | Senior Notes | ||||
Business Acquisition [Line Items] | ||||
Debt issued | $ 1,250,000,000 | |||
Delayed Draw Term Loan | Line of Credit | ||||
Business Acquisition [Line Items] | ||||
Delayed draw term loan | $ 400,000,000 | |||
Scenario Forecast | GE Transportation | ||||
Business Acquisition [Line Items] | ||||
Cash payment for acquisition | $ 2,900,000,000 | |||
Outstanding shares retained (as a percent) | 49.90% | |||
Equity issued in acquisition | $ 9,398,000,000 | |||
Business combination, consideration transferred | $ 12,800,000,000 | |||
Scenario Forecast | GE and Pre-Merger Holders | GE Transportation | ||||
Business Acquisition [Line Items] | ||||
Outstanding shares transferred (as a percent) | 50.10% | |||
Scenario Forecast | General Electric Company | GE Transportation | ||||
Business Acquisition [Line Items] | ||||
Outstanding shares transferred (as a percent) | 9.90% | |||
Cash to be received | $ 3,370,000,000 | |||
Subsequent Event | GE Transportation | ||||
Business Acquisition [Line Items] | ||||
Closing sale price (in dollars per share) | $ 95.43 | |||
Minimum | Scenario Forecast | General Electric Company | GE Transportation | ||||
Business Acquisition [Line Items] | ||||
Period for reverting shares | 2 years | |||
Maximum | Scenario Forecast | General Electric Company | GE Transportation | ||||
Business Acquisition [Line Items] | ||||
Period for reverting shares | 3 years |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) | Mar. 21, 2017USD ($) | Mar. 06, 2017USD ($) | Feb. 03, 2017USD ($) | Nov. 30, 2016USD ($)employeecountry | Mar. 31, 2017USD ($) | Mar. 21, 2017USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 22, 2018USD ($) | Dec. 04, 2017USD ($) | Oct. 02, 2017USD ($) | Apr. 05, 2017USD ($) | Mar. 13, 2017USD ($) | Dec. 31, 2016USD ($) | Nov. 30, 2016€ / shares |
Business Acquisition [Line Items] | |||||||||||||||
Additions | $ 18,959,000 | ||||||||||||||
Goodwill | 2,412,554,000 | $ 2,460,103,000 | |||||||||||||
Customer Relationships | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Acquired indefinite-lived intangible assets | $ 67,600,000 | ||||||||||||||
Intangible assets, weighted average useful life (years) | 20 years | ||||||||||||||
Trade Names | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Acquired indefinite-lived intangible assets | $ 31,900,000 | ||||||||||||||
Faiveley Transport | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Annual sales of Faiveley | $ 1,200,000,000 | ||||||||||||||
Number of employees (more than) | employee | 5,700 | ||||||||||||||
Number of countries Faiveley operates in | country | 24 | ||||||||||||||
Purchase price per share (in euros per share) | € / shares | € 100 | ||||||||||||||
Outstanding share capital acquired (as a percent) | 51.00% | ||||||||||||||
Percentage of voting interests in Faiveley (as a percent) | 100.00% | 22.00% | 27.00% | 100.00% | 49.00% | ||||||||||
Share conversion ratio | 1.1538 | ||||||||||||||
Additional share capital acquired (as a percent) | 21.00% | 27.00% | |||||||||||||
Cash payment for acquisition | $ 17,500,000 | $ 303,200,000 | $ 411,800,000 | ||||||||||||
Equity issued in acquisition | $ 300,000 | $ 25,200,000 | |||||||||||||
Cumulative share capital acquired (as a percent) | 100.00% | 99.00% | 78.00% | 100.00% | |||||||||||
Cumulative voting rights acquired (as a percent) | 100.00% | 98.00% | 76.00% | 100.00% | |||||||||||
Business combination, consideration transferred | $ 1,507,000,000 | ||||||||||||||
Escrow deposits | $ 744,700,000 | ||||||||||||||
Acquisition of noncontrolling interest | $ 8,900,000 | ||||||||||||||
Adjustment to current liabilities acquired | 65,300,000 | ||||||||||||||
Accounts receivable | $ 439,631,000 | 439,631,000 | |||||||||||||
Current liabilities | 819,493,000 | 819,493,000 | |||||||||||||
Adjustment to other noncurrent assets | 30,000,000 | ||||||||||||||
Additions | 74,100,000 | ||||||||||||||
Accrued share based compensation acquired in acquisition | 25,900,000 | ||||||||||||||
Goodwill | 1,262,350,000 | 1,262,350,000 | |||||||||||||
Faiveley Transport | Customer Relationships | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Adjustment to customer relationships acquired | 21,800,000 | ||||||||||||||
Faiveley Transport | Restatement Adjustment | Fair Value of Receivables | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Accounts receivable | 2,800,000 | ||||||||||||||
Faiveley Transport | Restatement Adjustment | Fair Value of Current Liabilities | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Current liabilities | 36,200,000 | ||||||||||||||
Faiveley Transport | Restatement Adjustment | Fair Value of Assets Acquired and Liabilities Assumed | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Accounts receivable | 64,300,000 | ||||||||||||||
Current liabilities | $ 64,300,000 | ||||||||||||||
Faiveley Transport | Minimum | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Percentage of business acquisition consideration payable in cash (as a percent) | 25.00% | ||||||||||||||
Faiveley Transport | Maximum | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Percentage of business acquisition consideration payable in cash (as a percent) | 45.00% | ||||||||||||||
Acquisitions other than Faiveley | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Escrow deposits | 30,200,000 | ||||||||||||||
Other intangible assets | 103,900,000 | ||||||||||||||
TTC | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Purchase price, net of cash acquired | $ 32,511,000 | ||||||||||||||
Goodwill | 14,095,000 | ||||||||||||||
Goodwill tax deduction | 14,100,000 | ||||||||||||||
Other intangible assets | $ 12,300,000 | ||||||||||||||
ATP | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Purchase price, net of cash acquired | $ 65,254,000 | ||||||||||||||
Goodwill | 29,034,000 | ||||||||||||||
Goodwill tax deduction | 29,000,000 | ||||||||||||||
Other intangible assets | $ 25,000,000 | ||||||||||||||
Melett | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Purchase price, net of cash acquired | $ 71,893,000 | ||||||||||||||
Goodwill | 25,732,000 | ||||||||||||||
Goodwill tax deduction | 0 | ||||||||||||||
Other intangible assets | $ 30,479,000 | ||||||||||||||
Annax | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Purchase price, net of cash acquired | $ 28,664,000 | ||||||||||||||
Goodwill | 14,301,000 | ||||||||||||||
Goodwill tax deduction | 0 | ||||||||||||||
Other intangible assets | $ 23,998,000 | ||||||||||||||
AM General | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Purchase price, net of cash acquired | $ 10,416,000 | ||||||||||||||
Goodwill | 12,944,000 | ||||||||||||||
Goodwill tax deduction | 0 | ||||||||||||||
Other intangible assets | $ 12,097,000 | ||||||||||||||
Freight Segment | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Additions | 5,252,000 | ||||||||||||||
Goodwill | 716,500,000 | 718,958,000 | |||||||||||||
Freight Segment | Faiveley Transport | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Goodwill | 72,000,000 | 72,000,000 | |||||||||||||
Transit Segment | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Additions | 13,707,000 | ||||||||||||||
Goodwill | $ 1,696,054,000 | $ 1,741,145,000 | |||||||||||||
Transit Segment | Faiveley Transport | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Goodwill | $ 1,190,400,000 | $ 1,190,400,000 |
Acquisitions - Summary of Preli
Acquisitions - Summary of Preliminary Estimated Fair Values of Faiveley Transport Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Mar. 21, 2017 |
Assets acquired | |||
Goodwill | $ 2,412,554 | $ 2,460,103 | |
Faiveley Transport | |||
Assets acquired | |||
Cash and cash equivalents | $ 178,318 | ||
Accounts receivable | 439,631 | ||
Inventories | 205,649 | ||
Other current assets | 70,930 | ||
Property, plant & equipment | 148,746 | ||
Goodwill | 1,262,350 | ||
Other assets | 184,564 | ||
Total assets acquired | 3,071,246 | ||
Liabilities assumed | |||
Current liabilities | 819,493 | ||
Debt | 409,899 | ||
Other noncurrent liabilities | 335,039 | ||
Total liabilities assumed | 1,564,431 | ||
Net assets acquired | 1,506,815 | ||
Faiveley Transport | Trade Names | |||
Assets acquired | |||
Intangible assets acquired | 346,328 | ||
Faiveley Transport | Customer Relationships | |||
Assets acquired | |||
Intangible assets acquired | 233,529 | ||
Faiveley Transport | Patents | |||
Assets acquired | |||
Intangible assets acquired | $ 1,201 |
Acquisitions - Summary of Pre_2
Acquisitions - Summary of Preliminary Estimated Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Mar. 22, 2018 | Dec. 31, 2017 | Dec. 04, 2017 | Oct. 02, 2017 | Apr. 05, 2017 | Mar. 13, 2017 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 2,412,554 | $ 2,460,103 | |||||
Annax | |||||||
Business Acquisition [Line Items] | |||||||
Current assets | $ 34,036 | ||||||
Property, plant & equipment | 674 | ||||||
Goodwill | 14,301 | ||||||
Other intangible assets | 23,998 | ||||||
Total assets acquired | 73,009 | ||||||
Total liabilities assumed | (44,345) | ||||||
Net assets acquired | $ 28,664 | ||||||
Melett | |||||||
Business Acquisition [Line Items] | |||||||
Current assets | $ 35,258 | ||||||
Property, plant & equipment | 5,917 | ||||||
Goodwill | 25,732 | ||||||
Other intangible assets | 30,479 | ||||||
Total assets acquired | 97,386 | ||||||
Total liabilities assumed | (25,493) | ||||||
Net assets acquired | $ 71,893 | ||||||
AM General | |||||||
Business Acquisition [Line Items] | |||||||
Current assets | $ 6,610 | ||||||
Property, plant & equipment | 4,140 | ||||||
Goodwill | 12,944 | ||||||
Other intangible assets | 12,097 | ||||||
Total assets acquired | 35,791 | ||||||
Total liabilities assumed | (25,375) | ||||||
Net assets acquired | $ 10,416 | ||||||
TTC | |||||||
Business Acquisition [Line Items] | |||||||
Current assets | $ 3,744 | ||||||
Property, plant & equipment | 5,413 | ||||||
Goodwill | 14,095 | ||||||
Other intangible assets | 12,300 | ||||||
Total assets acquired | 35,552 | ||||||
Total liabilities assumed | (3,041) | ||||||
Net assets acquired | $ 32,511 | ||||||
ATP | |||||||
Business Acquisition [Line Items] | |||||||
Current assets | $ 11,666 | ||||||
Property, plant & equipment | 5,354 | ||||||
Goodwill | 29,034 | ||||||
Other intangible assets | 25,000 | ||||||
Total assets acquired | 71,054 | ||||||
Total liabilities assumed | (5,800) | ||||||
Net assets acquired | $ 65,254 |
Acquisitions - Pro Forma Financ
Acquisitions - Pro Forma Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Business Combinations [Abstract] | ||||
Net sales | $ 1,077,814 | $ 986,323 | $ 3,259,096 | $ 2,899,691 |
Gross profit | 302,012 | 262,362 | 938,796 | 825,685 |
Net income attributable to Wabtec shareholders | $ 87,739 | $ 70,530 | $ 261,025 | $ 223,383 |
Diluted earnings per share | ||||
As Reported (in dollars per share) | $ 0.91 | $ 0.70 | $ 2.70 | $ 2.22 |
Pro forma (in dollars per share) | $ 0.91 | $ 0.73 | $ 2.70 | $ 2.32 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 465,925 | $ 378,481 |
Work-in-progress | 173,624 | 167,390 |
Finished goods | 226,656 | 196,763 |
Total inventories | $ 866,205 | $ 742,634 |
Intangibles - Change in the Car
Intangibles - Change in the Carrying Amount of Goodwill by Segment (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 2,460,103 |
Additions | 18,959 |
Foreign currency impact | (66,508) |
Ending balance | 2,412,554 |
Freight Segment | |
Goodwill [Roll Forward] | |
Beginning balance | 718,958 |
Additions | 5,252 |
Foreign currency impact | (7,710) |
Ending balance | 716,500 |
Transit Segment | |
Goodwill [Roll Forward] | |
Beginning balance | 1,741,145 |
Additions | 13,707 |
Foreign currency impact | (58,798) |
Ending balance | $ 1,696,054 |
Intangibles - Additional Inform
Intangibles - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Intangible Assets Disclosure [Line Items] | |||||
Trade names | $ 599,500 | $ 599,500 | $ 603,400 | ||
Intangible assets, amortization expense | $ 9,862 | $ 8,645 | $ 30,113 | $ 27,039 | |
Patents | |||||
Intangible Assets Disclosure [Line Items] | |||||
Intangible assets, weighted average useful life (years) | 10 years | ||||
Customer Relationships | |||||
Intangible Assets Disclosure [Line Items] | |||||
Intangible assets, weighted average useful life (years) | 16 years | ||||
Other Intangibles | |||||
Intangible Assets Disclosure [Line Items] | |||||
Intangible assets, weighted average useful life (years) | 14 years |
Intangibles - Intangible Assets
Intangibles - Intangible Assets Other Than Goodwill and Trade Names (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, net of accumulated amortization | $ 557,972 | $ 601,013 |
Patents And Other | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, net of accumulated amortization | 15,192 | 17,554 |
Intangible assets, accumulated amortization | 42,928 | 43,021 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, net of accumulated amortization | 542,780 | 583,459 |
Intangible assets, accumulated amortization | $ 151,007 | $ 126,824 |
Intangibles - Amortization Expe
Intangibles - Amortization Expense (Detail) $ in Thousands | Sep. 30, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2018 | $ 10,460 |
2,019 | 38,335 |
2,020 | 36,099 |
2,021 | 35,608 |
2,022 | $ 35,320 |
Contract Assets and Contract _3
Contract Assets and Contract Liabilities (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Contract Assets | |
Balance at beginning of year | $ 366,168 |
Recognized in current year | 328,438 |
Reclassified to accounts receivable | (296,459) |
Foreign currency impact | (8,870) |
Balance at end of period | 389,277 |
Contract Liabilities | |
Balance at beginning of year | 463,704 |
Recognized in current year | 151,706 |
Amounts in beginning balance reclassified to revenue | (142,718) |
Current year amounts reclassified to revenue | (17,931) |
Foreign currency impact | (14,185) |
Balance at end of period | $ 440,576 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 14, 2018 | Dec. 31, 2017 | Nov. 03, 2016 | Aug. 31, 2013 |
Debt Instrument [Line Items] | |||||
Capital Leases | $ 1,677 | $ 2,324 | |||
Total | 3,865,099 | 1,870,528 | |||
Less - current portion | 47,038 | 47,225 | |||
Long-term portion | 3,818,061 | 1,823,303 | |||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Unamortized discount and debt issuance cost | 3,412 | 2,451 | |||
Line of Credit | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | 346,588 | 853,124 | |||
Other Borrowings | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | 29,721 | 6,860 | |||
Floating Rate Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | 496,495 | 0 | |||
Floating Rate Senior Notes | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | 496,495 | 0 | |||
Unamortized discount and debt issuance cost | 3,505 | ||||
Senior Notes due 2024 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 742,616 | 0 | |||
Stated interest rate (as a percent) | 4.15% | ||||
Senior Notes due 2024 | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 742,616 | 0 | |||
Stated interest rate (as a percent) | 4.15% | ||||
Unamortized discount and debt issuance cost | 7,384 | ||||
Senior Notes due 2028 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 1,239,417 | 0 | |||
Stated interest rate (as a percent) | 4.70% | ||||
Senior Notes due 2028 | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 1,239,417 | 0 | |||
Stated interest rate (as a percent) | 4.70% | ||||
Unamortized discount and debt issuance cost | 10,583 | ||||
Senior Notes Due 2026 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 748,225 | 747,655 | |||
Stated interest rate (as a percent) | 3.45% | ||||
Senior Notes Due 2026 | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 748,225 | 747,655 | |||
Stated interest rate (as a percent) | 3.45% | ||||
Unamortized discount and debt issuance cost | 1,775 | 2,345 | |||
4.375% Senior Notes, due 2023 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 248,759 | 248,567 | |||
Stated interest rate (as a percent) | 4.375% | ||||
4.375% Senior Notes, due 2023 | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 248,759 | 248,567 | |||
Stated interest rate (as a percent) | 4.375% | ||||
Unamortized discount and debt issuance cost | 1,241 | 1,433 | |||
Schuldschein Loan | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 11,601 | $ 11,998 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | Aug. 20, 2019 | Sep. 14, 2018USD ($) | Nov. 03, 2016USD ($) | Jun. 22, 2016USD ($) | Aug. 31, 2013USD ($) | Nov. 25, 2016 | Sep. 30, 2018USD ($) | Jun. 08, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 21, 2017USD ($) | Jun. 05, 2014USD ($) | Mar. 05, 2014USD ($)investor |
Debt Instrument [Line Items] | ||||||||||||
Debt issued | $ 2,500,000,000 | |||||||||||
Weighted average interest rate (as a percent) | 3.49% | |||||||||||
Faiveley Transport | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Acquired loans | $ 1,564,431,000 | |||||||||||
Forward Starting Interest Rate Swap Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate swap agreements, notional amount | $ 150,000,000 | |||||||||||
Interest rate on notional value (as a percent) | 2.56% | |||||||||||
Floating Rate Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term debt | $ 496,495,000 | $ 0 | ||||||||||
Senior Notes due 2024 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Stated interest rate (as a percent) | 4.15% | |||||||||||
Long-term debt | $ 742,616,000 | 0 | ||||||||||
Senior Notes due 2028 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Stated interest rate (as a percent) | 4.70% | |||||||||||
Long-term debt | $ 1,239,417,000 | 0 | ||||||||||
2018 Refinancing Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Unrestricted cash | $ 300,000,000 | |||||||||||
EBITDA to interest expense ratio | 3 | |||||||||||
Leverage ratio | 3.25 | |||||||||||
Cash consideration transfer maximum | $ 500,000,000 | |||||||||||
Leverage ratio, three quarters following acquisition | 3.75 | |||||||||||
Leverage ratio quarter four and five following acquisition | 3.50 | |||||||||||
2018 Refinancing Agreement | LIBOR/CDOR | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 1.00% | |||||||||||
2018 Refinancing Agreement | LIBOR/CDOR | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 1.875% | |||||||||||
2018 Refinancing Agreement | Base Rate | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.00% | |||||||||||
2018 Refinancing Agreement | Base Rate | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.875% | |||||||||||
2018 Refinancing Agreement | Letter of Credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit amount outstanding | $ 29,700,000 | |||||||||||
Senior Notes Due 2026 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Stated interest rate (as a percent) | 3.45% | |||||||||||
Long-term debt | $ 748,225,000 | 747,655,000 | ||||||||||
4.375% Senior Notes, due 2023 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Stated interest rate (as a percent) | 4.375% | |||||||||||
Long-term debt | $ 248,759,000 | 248,567,000 | ||||||||||
2016 Refinancing Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Deferred financing cost | $ 3,300,000 | |||||||||||
2016 Refinancing Credit Agreement | Federal Funds Effective Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.50% | |||||||||||
2016 Refinancing Credit Agreement | LIBOR Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 1.00% | |||||||||||
2016 Refinancing Credit Agreement | Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.00% | |||||||||||
2016 Refinancing Credit Agreement | Base Rate | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.00% | |||||||||||
2016 Refinancing Credit Agreement | Base Rate | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.75% | |||||||||||
2016 Refinancing Credit Agreement | Alternative Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 1.75% | |||||||||||
2016 Refinancing Credit Agreement | Alternative Rate | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.75% | |||||||||||
2016 Refinancing Credit Agreement | Alternative Rate | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 1.75% | |||||||||||
2016 Refinancing Credit Agreement | Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Ticking fee | 0.10% | |||||||||||
Schuldschein Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term debt | $ 11,601,000 | 11,998,000 | ||||||||||
Schuldschein Loan | Faiveley Transport | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Stated interest rate (as a percent) | 4.00% | |||||||||||
Acquired loans | $ 137,200,000 | |||||||||||
Number of investors | investor | 20 | |||||||||||
Repayments of debt | $ 125,800,000 | |||||||||||
Long-term debt | $ 11,600,000 | |||||||||||
Senior Notes | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate adjustment (as a percent) | 0.25% | |||||||||||
Senior Notes | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate adjustment (as a percent) | 1.00% | |||||||||||
Senior Notes | Floating Rate Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issued | $ 500,000,000 | |||||||||||
Debt instrument term | 1 year | |||||||||||
Debt issuance price (as a percent) | 100.00% | |||||||||||
Deferred financing cost | $ 3,500,000 | |||||||||||
Long-term debt | $ 496,495,000 | 0 | ||||||||||
Senior Notes | Floating Rate Senior Notes | LIBOR Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 1.05% | |||||||||||
Senior Notes | Senior Notes due 2024 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issued | $ 750,000,000 | |||||||||||
Debt issuance price (as a percent) | 99.805% | |||||||||||
Stated interest rate (as a percent) | 4.15% | |||||||||||
Deferred financing cost | $ 7,400,000 | |||||||||||
Long-term debt | 742,616,000 | 0 | ||||||||||
Senior Notes | Senior Notes due 2028 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issued | $ 1,250,000,000 | |||||||||||
Debt issuance price (as a percent) | 99.889% | |||||||||||
Stated interest rate (as a percent) | 4.70% | |||||||||||
Deferred financing cost | $ 10,600,000 | |||||||||||
Long-term debt | 1,239,417,000 | 0 | ||||||||||
Senior Notes | Senior Notes Due 2026 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issued | $ 750,000,000 | |||||||||||
Debt issuance price (as a percent) | 99.965% | |||||||||||
Stated interest rate (as a percent) | 3.45% | |||||||||||
Deferred financing cost | $ 2,700,000 | |||||||||||
Long-term debt | 748,225,000 | 747,655,000 | ||||||||||
Senior Notes | 4.375% Senior Notes, due 2023 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issued | $ 250,000,000 | |||||||||||
Debt issuance price (as a percent) | 99.879% | |||||||||||
Stated interest rate (as a percent) | 4.375% | |||||||||||
Deferred financing cost | $ 2,600,000 | |||||||||||
Long-term debt | 248,759,000 | 248,567,000 | ||||||||||
Line of Credit | Revolving Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term debt | 346,588,000 | $ 853,124,000 | ||||||||||
Line of Credit | 2018 Refinancing Agreement | Revolving Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Revolving credit facility, amount | $ 1,200,000,000 | |||||||||||
Uncommitted accordion feature, maximum | 600,000,000 | |||||||||||
Line of credit facility, amount currently available | $ 1,170,300,000 | |||||||||||
Line of Credit | 2018 Refinancing Agreement | Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Revolving credit facility, amount | 350,000,000 | |||||||||||
Line of Credit | 2018 Refinancing Agreement | Delayed Draw Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Revolving credit facility, amount | 400,000,000 | |||||||||||
Line of Credit | 2018 Refinancing Agreement | Letter of Credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Revolving credit facility, amount | 450,000,000 | |||||||||||
Line of Credit | 2018 Refinancing Agreement | Swing Line Sub Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Revolving credit facility, amount | 75,000,000 | |||||||||||
Line of Credit | 2016 Refinancing Credit Agreement | Revolving Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Revolving credit facility, amount | $ 1,200,000,000 | |||||||||||
Credit facility loan term, years | 5 years | |||||||||||
Line of Credit | 2016 Refinancing Credit Agreement | Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Revolving credit facility, amount | $ 400,000,000 | |||||||||||
Bridge Loan | 2018 Refinancing Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Revolving credit facility, amount | $ 2,500,000,000 | |||||||||||
Scenario Forecast | Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issuance price (as a percent) | 101.00% |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Pension Plan | UNITED STATES | ||||
Net periodic benefit cost | ||||
Service cost | $ 87 | $ 86 | $ 261 | $ 258 |
Interest cost | 333 | 356 | 999 | 1,068 |
Expected return on plan assets | (445) | (433) | (1,335) | (1,299) |
Net amortization/deferrals | 243 | 248 | 729 | 744 |
Net periodic benefit cost (credit) | 218 | 257 | $ 654 | $ 771 |
Assumptions | ||||
Discount Rate | 3.56% | 3.95% | ||
Expected long-term rate of return | 5.15% | 4.95% | ||
Rate of compensation increase | 3.00% | 3.00% | ||
Pension Plan | Foreign Plan | ||||
Net periodic benefit cost | ||||
Service cost | 691 | 614 | $ 2,073 | $ 1,842 |
Interest cost | 1,834 | 1,677 | 5,502 | 5,031 |
Expected return on plan assets | (3,466) | (2,910) | (10,398) | (8,730) |
Net amortization/deferrals | 554 | 685 | 1,662 | 2,055 |
Net periodic benefit cost (credit) | (387) | 66 | $ (1,161) | $ 198 |
Assumptions | ||||
Discount Rate | 2.40% | 2.51% | ||
Expected long-term rate of return | 5.10% | 4.93% | ||
Rate of compensation increase | 2.60% | 2.54% | ||
Other Postretirement Benefit Plan | UNITED STATES | ||||
Net periodic benefit cost | ||||
Service cost | 1 | 1 | $ 3 | $ 3 |
Interest cost | 81 | 88 | 243 | 264 |
Net amortization/deferrals | (76) | (73) | (228) | (219) |
Net periodic benefit cost (credit) | 6 | 16 | $ 18 | $ 48 |
Assumptions | ||||
Discount Rate | 3.43% | 3.76% | ||
Other Postretirement Benefit Plan | Foreign Plan | ||||
Net periodic benefit cost | ||||
Service cost | 8 | 7 | $ 24 | $ 21 |
Interest cost | 26 | 24 | 78 | 72 |
Net amortization/deferrals | (4) | (7) | (12) | (21) |
Net periodic benefit cost (credit) | $ 30 | $ 24 | $ 90 | $ 72 |
Assumptions | ||||
Discount Rate | 3.21% | 3.46% |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) $ in Millions | Sep. 30, 2018USD ($) |
Pension Plan | Foreign Plan | |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Expected plan contributions | $ 7.3 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 6.4 | $ 2.6 | $ 20.5 | $ 14.5 | |||
Unamortized compensation expense expected to be vested | 35.4 | 35.4 | |||||
Stock Option | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock-based compensation expense | 0.4 | 1.2 | |||||
Restricted Stock | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock-based compensation expense | 2.3 | 5 | |||||
Restricted Stock Units (RSUs) | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock-based compensation expense | 2.3 | 7 | |||||
Performance Shares | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 1.2 | $ 6.4 | |||||
Award vesting period (in years) | 3 years | ||||||
Performance Shares | Minimum | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Percentage of incentive stock awards expected to be vested and awarded of stocks granted (as a percent) | 0.00% | ||||||
Performance Shares | Maximum | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Percentage of incentive stock awards expected to be vested and awarded of stocks granted (as a percent) | 200.00% | ||||||
Performance Shares | Scenario Forecast | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Percentage of incentive stock awards expected to be vested and awarded of stocks granted (as a percent) | 91.00% | 81.00% | 71.00% | ||||
2011 Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Number of shares available for grant (in shares) | 3,800,000 | 3,800,000 | |||||
2011 Plan | Stock Option | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Award vesting period (in years) | 4 years | ||||||
Plan term (in years) | 10 years | ||||||
2011 Plan | Restricted Stock | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Award vesting period (in years) | 4 years | ||||||
Directors Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 0.2 | $ 0.9 | |||||
Directors Plan | Restricted Stock | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Award vesting period (in years) | 1 year | ||||||
2000 Plan | Stock Option | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Award vesting period (in years) | 4 years | ||||||
Plan term (in years) | 10 years | ||||||
2000 Plan | Restricted Stock | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Award vesting period (in years) | 4 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Options Outstanding | ||
Beginning balance (in shares) | 983,512 | |
Granted (in shares) | 82,580 | |
Exercised (in shares) | (574,303) | |
Canceled (in shares) | (16,471) | |
Ending balance (in shares) | 475,318 | 983,512 |
Exercisable at period end (in shares) | 291,169 | |
Weighted-Average Exercise Price per Share | ||
Beginning balance (in dollars per share) | $ 40.62 | |
Granted (in dollars per share) | 77.54 | |
Exercised (in dollars per share) | 23.88 | |
Canceled (in dollars per share) | 64.46 | |
Ending balance (in dollars per share) | 56.50 | $ 40.62 |
Exercisable (in dollars per share) | $ 49.75 | |
Weighted-Average Remaining Contractual Life | ||
Outstanding, weighted average remaining contractual life (in years) | 5 years 1 month 299 days | 4 years |
Exercisable weighted average remaining contractual life (in years) | 5 years | |
Aggregate Intrinsic Value | ||
Beginning balance | $ 40,137 | |
Granted | 2,258 | |
Exercised | 46,520 | |
Canceled | 666 | |
Ending balance | 22,997 | $ 40,137 |
Exercisable | $ 16,051 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value of Each Option Grant Weighted Average Assumptions (Detail) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Dividend yield (as a percent) | 0.31% | 0.23% |
Risk-free interest rate (as a percent) | 2.78% | 2.17% |
Stock price volatility (as a percent) | 23.90% | 23.40% |
Expected life (years) | 5 years | 5 years |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity and Incentive Stock Awards Activity (Detail) - $ / shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Outstanding, beginning of period (in dollars per share) | $ 78.76 | |
Granted (in dollars per share) | 73.76 | |
Vested (in dollars per share) | 81.42 | |
Adjustment for incentive stock awards expected to vest (in dollars per share) | 73.40 | |
Canceled (in dollars per share) | 78.80 | |
Outstanding, end of period (in dollars per share) | $ 78.76 | $ 75.62 |
Restricted Stock and Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding, beginning of period (in shares) | 399,000 | |
Granted (in shares) | 223,990 | |
Vested (in shares) | (143,327) | |
Adjustment for incentive stock awards expected to vest (in shares) | 0 | |
Canceled (in shares) | (28,643) | |
Outstanding, end of period (in shares) | 451,020 | |
Incentive Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding, beginning of period (in shares) | 327,333 | |
Granted (in shares) | 175,100 | |
Vested (in shares) | (93,312) | |
Adjustment for incentive stock awards expected to vest (in shares) | (3,934) | |
Canceled (in shares) | (25,775) | |
Outstanding, end of period (in shares) | 379,412 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||||||
Initial analysis of tax law changes recorded net tax expense | $ 4.3 | |||||
Provisional expense for Transition Tax | 55 | |||||
Revaluation of deferred tax assets and liabilities | 50.7 | |||||
Provisional benefit to net deferred taxes | $ 3.2 | $ 24.6 | ||||
Provisional transition tax on unrepatriated foreign earnings | $ 3.3 | $ 13.4 | (51.8) | |||
Effective income tax rate (as a percent) | 16.20% | 15.70% | 17.20% | 23.40% | ||
Reduction in liability for certain tax provisions | $ 2.4 | |||||
Favorable tax impact | 1.1 | |||||
Liability for uncertain tax positions | 4.5 | $ 4.5 | 6.9 | |||
Unrecognized tax benefits if recognized that would affect effective tax rate | 3.3 | 3.3 | 4.4 | |||
Reduction in accrued interest expense | 0.3 | |||||
Accrued interest related to uncertain tax positions | 0.6 | 0.6 | 0.7 | |||
Accrued penalties related to uncertain tax positions | 0.1 | 0.1 | $ 0.1 | |||
Unrecognized tax benefits subject to change within the next 12 months | $ 4.5 | $ 4.5 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator | ||||
Net income attributable to Wabtec shareholders | $ 87,739 | $ 67,399 | $ 260,521 | $ 213,313 |
Less: dividends declared - common shares and non-vested restricted stock | (11,586) | (11,518) | (34,682) | (30,693) |
Undistributed earnings | $ 76,153 | $ 55,881 | $ 225,839 | $ 182,620 |
Percentage allocated to common shareholders (as a percent) | 99.70% | 99.70% | 99.70% | 99.40% |
Undistributed earnings allocated to common shareholders | $ 75,925 | $ 55,713 | $ 225,161 | $ 181,524 |
Add: dividends declared - common shares | 11,552 | 11,485 | 34,579 | 30,508 |
Numerator for basic and diluted earnings per common share | $ 87,477 | $ 67,198 | $ 259,740 | $ 212,032 |
Denominator | ||||
Basic weighted average common shares outstanding (in shares) | 96,208 | 95,709 | 95,935 | 95,163 |
Assumed conversion of dilutive stock-based compensation plans (in shares) | 429 | 607 | 501 | 645 |
Denominator for diluted earnings per common share - adjusted weighted average shares and assumed conversion (in shares) | 96,637 | 96,316 | 96,436 | 95,808 |
Net income attributable to Wabtec shareholders per common share | ||||
Basic (in dollars per share) | $ 0.91 | $ 0.70 | $ 2.71 | $ 2.23 |
Diluted (in dollars per share) | $ 0.91 | $ 0.70 | $ 2.70 | $ 2.22 |
Basic weighted-average common shares outstanding and non-vested restricted stock expected to vest (in shares) | 96,495 | 95,983 | 96,221 | 95,740 |
Warranties - Changes in Product
Warranties - Changes in Product Warranty Reserve (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Balance at beginning of year | $ 153,063 | $ 138,992 |
Warranty expense | 45,691 | 33,108 |
Acquisitions | 3,081 | 3,412 |
Warranty claim payments | (42,993) | (33,492) |
Foreign currency impact/other | (4,289) | 6,744 |
Balance at end of period | $ 154,553 | $ 148,764 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Derivative [Line Items] | |||||
Unrealized gain (loss) on derivative contracts | $ 4,700 | ||||
Interest rate swap agreements | |||||
Derivative [Line Items] | |||||
Interest rate swap agreement, current liability | 87 | $ 87 | $ 1,163 | ||
Non-Designated | Foreign Exchange Forward | |||||
Derivative [Line Items] | |||||
Derivative term (in years) | 1 year | ||||
Cash Flow Hedging | Designated | Foreign Currency Contracts | |||||
Derivative [Line Items] | |||||
Derivative term (in years) | 2 years | ||||
Derivative instruments amounts reclassified into income | 0 | $ 0 | $ 0 | $ 0 | |
Fair Value Hedging | Designated | Interest rate swap agreements | |||||
Derivative [Line Items] | |||||
Interest rate swap agreement, current liability | 100 | 100 | |||
Accumulated other comprehensive loss | $ 100 | $ 100 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedging - Summary of Notional Amounts and Fair Value (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Gross notional amount | $ 1,583,000,000 | $ 1,184,800,000 |
Total | (1,300,000) | 5,600,000 |
Other current assets | ||
Derivative [Line Items] | ||
Derivative asset fair value | 4,700,000 | 5,600,000 |
Other current liabilities | ||
Derivative [Line Items] | ||
Liabilities at fair value | (6,000,000) | 0 |
Designated | ||
Derivative [Line Items] | ||
Gross notional amount | 787,000,000 | 805,100,000 |
Total | (6,000,000) | 3,500,000 |
Designated | Other current assets | ||
Derivative [Line Items] | ||
Derivative asset fair value | 0 | 3,500,000 |
Designated | Other current liabilities | ||
Derivative [Line Items] | ||
Liabilities at fair value | (6,000,000) | 0 |
Non-Designated | ||
Derivative [Line Items] | ||
Gross notional amount | 796,000,000 | 379,700,000 |
Total | 4,700,000 | 2,100,000 |
Non-Designated | Other current assets | ||
Derivative [Line Items] | ||
Derivative asset fair value | 4,700,000 | 2,100,000 |
Non-Designated | Other current liabilities | ||
Derivative [Line Items] | ||
Liabilities at fair value | $ 0 | $ 0 |
Fair Value Measurement and Fa_3
Fair Value Measurement and Fair Value of Financial Instruments - Liabilities Carried at Fair Value Measured on Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Measurements, Recurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Interest rate swap agreement, current liability | $ 87 | $ 1,163 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities at fair value | 87 | 1,163 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities at fair value | 0 | 0 |
Interest rate swap agreements | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Interest rate swap agreement, current liability | 87 | 1,163 |
Liabilities at fair value | 87 | 1,163 |
Interest rate swap agreements | Fair Value, Measurements, Recurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Interest rate swap agreement, current liability | 87 | 1,163 |
Interest rate swap agreements | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities at fair value | 0 | 0 |
Interest rate swap agreements | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities at fair value | 87 | 1,163 |
Interest rate swap agreements | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities at fair value | $ 0 | $ 0 |
Fair Value Measurement and Fa_4
Fair Value Measurement and Fair Value of Financial Instruments - Estimated Fair Values and Related Carrying Values of Financial Instruments (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Interest rate swap agreements | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carry value | $ 87 | $ 1,163 |
Fair value | 87 | 1,163 |
4.375% Senior Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carry value | 248,759 | 248,567 |
Fair value | $ 254,408 | 262,033 |
Stated interest rate (as a percent) | 4.375% | |
3.45% Senior Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carry value | $ 748,225 | 747,655 |
Fair value | $ 687,698 | 741,113 |
Stated interest rate (as a percent) | 3.45% | |
Floating Rate Senior Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carry value | $ 496,495 | 0 |
Fair value | 501,065 | 0 |
Senior Notes due 2024 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carry value | 742,616 | 0 |
Fair value | $ 745,350 | 0 |
Stated interest rate (as a percent) | 4.15% | |
Senior Notes due 2028 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carry value | $ 1,239,417 | 0 |
Fair value | $ 1,232,300 | $ 0 |
Stated interest rate (as a percent) | 4.70% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | Oct. 15, 2018plaintiff | Sep. 08, 2017USD ($) | Nov. 02, 2016patent | Apr. 21, 2016patent | Sep. 30, 2018USD ($) |
Siemens Industry, Inc. | Pending Litigation | |||||
Loss Contingencies [Line Items] | |||||
Patents allegedly infringed | patent | 6 | 7 | |||
Subsidiaries | Denver Transit, Delivery of Train Management System | Threatened Litigation | |||||
Loss Contingencies [Line Items] | |||||
Damages alleged | $ 0 | ||||
Subsidiaries | Denver Transit, Installation of Constant Wireless Crossings | Threatened Litigation | |||||
Loss Contingencies [Line Items] | |||||
Damages alleged | $ 36,800,000 | ||||
Subsequent Event | Employee Competition Litigation | |||||
Loss Contingencies [Line Items] | |||||
Number of plaintiffs | plaintiff | 30 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2018segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Information - Segment F
Segment Information - Segment Financial Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total sales | $ 1,077,814 | $ 957,931 | $ 3,245,671 | $ 2,806,218 |
Income (loss) from operations | 125,179 | 101,666 | 379,981 | 329,535 |
Interest expense and other, net | (22,512) | (20,481) | (69,959) | (52,156) |
Income from operations before income taxes | 102,667 | 81,185 | 310,022 | 277,379 |
Freight Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 391,577 | 340,185 | 1,183,389 | 1,032,959 |
Income from operations before income taxes | 79,420 | 61,424 | 233,390 | 195,811 |
Transit Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 686,237 | 617,746 | 2,062,282 | 1,773,259 |
Income from operations before income taxes | 60,735 | 47,358 | 186,794 | 155,383 |
Operating Segments | Freight Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 405,087 | 348,561 | 1,227,600 | 1,060,561 |
Income (loss) from operations | 79,420 | 61,424 | 233,390 | 195,811 |
Interest expense and other, net | 0 | 0 | 0 | 0 |
Operating Segments | Transit Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 690,975 | 622,240 | 2,073,893 | 1,789,512 |
Income (loss) from operations | 60,735 | 47,358 | 186,794 | 155,383 |
Interest expense and other, net | 0 | 0 | 0 | 0 |
Intersegment sales/(elimination) | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | (18,248) | (12,870) | (55,822) | (43,855) |
Intersegment sales/(elimination) | Freight Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 13,510 | 8,376 | 44,211 | 27,602 |
Intersegment sales/(elimination) | Transit Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 4,738 | 4,494 | 11,611 | 16,253 |
Corporate Activities and Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Income (loss) from operations | (14,976) | (7,116) | (40,203) | (21,659) |
Interest expense and other, net | (22,512) | (20,481) | (69,959) | (52,156) |
Income from operations before income taxes | $ (37,488) | $ (27,597) | $ (110,162) | $ (73,815) |
Segment Information - Sales by
Segment Information - Sales by Product (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total sales | $ 1,077,814 | $ 957,931 | $ 3,245,671 | $ 2,806,218 |
Specialty Products & Electronics | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 408,806 | 335,143 | 1,229,753 | 975,006 |
Transit Products | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 258,419 | 276,913 | 814,823 | 789,096 |
Brake Products | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 222,152 | 177,165 | 655,350 | 550,181 |
Remanufacturing, Overhaul & Build | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 134,726 | 132,018 | 397,626 | 387,634 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | $ 53,711 | $ 36,692 | $ 148,119 | $ 104,301 |
Guarantor Subsidiaries Financ_3
Guarantor Subsidiaries Financial Information - Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Condensed Financial Statements, Captions [Line Items] | ||||
Cash, cash equivalents, and restricted cash | $ 2,135,381 | $ 233,401 | $ 228,080 | $ 1,143,232 |
Cash and cash equivalents | 411,381 | 233,401 | ||
Receivables, net | 1,240,521 | 1,166,787 | ||
Inventories | 866,205 | 742,634 | ||
Current assets - other | 111,441 | 122,291 | ||
Total current assets | 4,353,548 | 2,265,113 | ||
Property, plant and equipment, net | 557,423 | 573,972 | ||
Goodwill | 2,412,554 | 2,460,103 | ||
Investment in subsidiaries | 0 | 0 | ||
Other intangibles, net | 1,157,424 | 1,204,432 | ||
Other long-term assets | 72,277 | 76,360 | ||
Total Assets | 8,553,226 | 6,579,980 | ||
Current liabilities | 1,530,293 | 1,573,330 | ||
Inter-company | 0 | 0 | ||
Long-term debt | 3,818,061 | 1,823,303 | ||
Long-term liabilities - other | 294,520 | 354,815 | ||
Total liabilities | 5,642,874 | 3,751,448 | ||
Shareholders' equity | 2,895,170 | 2,808,868 | ||
Non-controlling interest | 15,182 | 19,664 | ||
Total equity | 2,910,352 | 2,828,532 | ||
Total Liabilities and Equity | 8,553,226 | 6,579,980 | ||
Elimination | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash, cash equivalents, and restricted cash | 0 | 0 | 0 | 0 |
Cash and cash equivalents | 0 | |||
Receivables, net | 0 | 0 | ||
Inventories | 0 | 0 | ||
Current assets - other | 0 | 0 | ||
Total current assets | 0 | 0 | ||
Property, plant and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Investment in subsidiaries | (9,431,604) | (8,957,870) | ||
Other intangibles, net | 0 | 0 | ||
Other long-term assets | 0 | 0 | ||
Total Assets | (9,431,604) | (8,957,870) | ||
Current liabilities | 0 | 0 | ||
Inter-company | 0 | 0 | ||
Long-term debt | 0 | 0 | ||
Long-term liabilities - other | 0 | 0 | ||
Total liabilities | 0 | 0 | ||
Shareholders' equity | (9,431,604) | (8,957,870) | ||
Non-controlling interest | 0 | 0 | ||
Total equity | (9,431,604) | (8,957,870) | ||
Total Liabilities and Equity | (9,431,604) | (8,957,870) | ||
Parent | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash, cash equivalents, and restricted cash | 1,760,805 | 933 | 3,049 | 2,522 |
Cash and cash equivalents | 933 | |||
Receivables, net | 117,117 | 77,046 | ||
Inventories | 147,208 | 120,937 | ||
Current assets - other | (14,278) | 1,142 | ||
Total current assets | 2,010,852 | 200,058 | ||
Property, plant and equipment, net | 49,355 | 52,532 | ||
Goodwill | 25,275 | 25,274 | ||
Investment in subsidiaries | 6,686,158 | 6,517,205 | ||
Other intangibles, net | 29,585 | 30,575 | ||
Other long-term assets | 20,595 | 17,414 | ||
Total Assets | 8,821,820 | 6,843,058 | ||
Current liabilities | 198,264 | 196,827 | ||
Inter-company | 1,909,286 | 2,121,546 | ||
Long-term debt | 3,804,601 | 1,661,771 | ||
Long-term liabilities - other | 14,499 | 54,046 | ||
Total liabilities | 5,926,650 | 4,034,190 | ||
Shareholders' equity | 2,895,170 | 2,808,868 | ||
Non-controlling interest | 0 | 0 | ||
Total equity | 2,895,170 | 2,808,868 | ||
Total Liabilities and Equity | 8,821,820 | 6,843,058 | ||
Guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash, cash equivalents, and restricted cash | 73 | 625 | 850 | 1,226 |
Cash and cash equivalents | 625 | |||
Receivables, net | 70,128 | 59,166 | ||
Inventories | 63,186 | 46,626 | ||
Current assets - other | 936 | 563 | ||
Total current assets | 134,323 | 106,980 | ||
Property, plant and equipment, net | 24,847 | 26,492 | ||
Goodwill | 283,241 | 283,242 | ||
Investment in subsidiaries | 2,745,446 | 2,440,665 | ||
Other intangibles, net | 79,169 | 81,037 | ||
Other long-term assets | (33,748) | (23,892) | ||
Total Assets | 3,233,278 | 2,914,524 | ||
Current liabilities | 89,160 | 77,284 | ||
Inter-company | (1,402,141) | (1,307,410) | ||
Long-term debt | 0 | 14 | ||
Long-term liabilities - other | 11,601 | 20,594 | ||
Total liabilities | (1,301,380) | (1,209,518) | ||
Shareholders' equity | 4,534,658 | 4,124,042 | ||
Non-controlling interest | 0 | 0 | ||
Total equity | 4,534,658 | 4,124,042 | ||
Total Liabilities and Equity | 3,233,278 | 2,914,524 | ||
Non-Guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash, cash equivalents, and restricted cash | 374,503 | 231,843 | $ 224,181 | $ 1,139,484 |
Cash and cash equivalents | 231,843 | |||
Receivables, net | 1,053,276 | 1,030,575 | ||
Inventories | 655,811 | 575,071 | ||
Current assets - other | 124,783 | 120,586 | ||
Total current assets | 2,208,373 | 1,958,075 | ||
Property, plant and equipment, net | 483,221 | 494,948 | ||
Goodwill | 2,104,038 | 2,151,587 | ||
Investment in subsidiaries | 0 | 0 | ||
Other intangibles, net | 1,048,670 | 1,092,820 | ||
Other long-term assets | 85,430 | 82,838 | ||
Total Assets | 5,929,732 | 5,780,268 | ||
Current liabilities | 1,242,869 | 1,299,219 | ||
Inter-company | (507,145) | (814,136) | ||
Long-term debt | 13,460 | 161,518 | ||
Long-term liabilities - other | 268,420 | 280,175 | ||
Total liabilities | 1,017,604 | 926,776 | ||
Shareholders' equity | 4,896,946 | 4,833,828 | ||
Non-controlling interest | 15,182 | 19,664 | ||
Total equity | 4,912,128 | 4,853,492 | ||
Total Liabilities and Equity | $ 5,929,732 | $ 5,780,268 |
Guarantor Subsidiaries Financ_4
Guarantor Subsidiaries Financial Information - Condensed Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | $ 1,077,814 | $ 957,931 | $ 3,245,671 | $ 2,806,218 |
Cost of sales | (775,802) | (704,728) | (2,308,811) | (2,009,345) |
Gross profit | 302,012 | 253,203 | 936,860 | 796,873 |
Total operating expenses | (176,833) | (151,537) | (556,879) | (467,338) |
Income from operations | 125,179 | 101,666 | 379,981 | 329,535 |
Interest (expense) income, net | (23,713) | (20,038) | (75,917) | (57,460) |
Other income (expense), net | 1,201 | (443) | 5,958 | 5,304 |
Equity earnings (loss) | 0 | 0 | 0 | 0 |
Income from operations before income taxes | 102,667 | 81,185 | 310,022 | 277,379 |
Income tax expense | (16,598) | (12,746) | (53,225) | (64,776) |
Net income | 86,069 | 68,439 | 256,797 | 212,603 |
Less: Net loss (gain) attributable to noncontrolling interest | 1,670 | (1,040) | 3,724 | 710 |
Net income attributable to Wabtec shareholders | 87,739 | 67,399 | 260,521 | 213,313 |
Comprehensive income attributable to Wabtec shareholders | 38,207 | 160,019 | 99,780 | 500,988 |
Elimination | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | (60,397) | (28,421) | (178,943) | (85,791) |
Cost of sales | 34,238 | 15,557 | 105,071 | 59,386 |
Gross profit | (26,159) | (12,864) | (73,872) | (26,405) |
Total operating expenses | 0 | 0 | 0 | 0 |
Income from operations | (26,159) | (12,864) | (73,872) | (26,405) |
Interest (expense) income, net | 0 | 0 | 0 | 0 |
Other income (expense), net | 0 | 0 | 0 | 0 |
Equity earnings (loss) | (188,886) | (145,694) | (635,205) | (428,169) |
Income from operations before income taxes | (215,045) | (158,558) | (709,077) | (454,574) |
Income tax expense | 0 | 0 | 0 | 0 |
Net income | (215,045) | (158,558) | (709,077) | (454,574) |
Less: Net loss (gain) attributable to noncontrolling interest | 0 | 0 | 0 | 0 |
Net income attributable to Wabtec shareholders | (215,045) | (158,558) | (709,077) | (454,574) |
Comprehensive income attributable to Wabtec shareholders | (215,045) | (158,558) | (709,077) | (454,574) |
Parent | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | 169,445 | 134,905 | 499,172 | 417,156 |
Cost of sales | (122,946) | (111,774) | (364,523) | (311,037) |
Gross profit | 46,499 | 23,131 | 134,649 | 106,119 |
Total operating expenses | (37,090) | (22,886) | (122,497) | (80,478) |
Income from operations | 9,409 | 245 | 12,152 | 25,641 |
Interest (expense) income, net | (23,012) | (20,295) | (75,140) | (55,783) |
Other income (expense), net | (1,479) | 1,520 | 7,733 | 6,863 |
Equity earnings (loss) | 97,128 | 80,874 | 330,978 | 246,103 |
Income from operations before income taxes | 82,046 | 62,344 | 275,723 | 222,824 |
Income tax expense | 5,693 | 5,056 | (15,202) | (9,511) |
Net income | 87,739 | 67,400 | 260,521 | 213,313 |
Less: Net loss (gain) attributable to noncontrolling interest | 0 | 0 | 0 | 0 |
Net income attributable to Wabtec shareholders | 87,739 | 67,400 | 260,521 | 213,313 |
Comprehensive income attributable to Wabtec shareholders | 87,867 | 66,815 | 261,156 | 214,483 |
Guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | 118,516 | 89,881 | 374,599 | 288,312 |
Cost of sales | (75,021) | (53,692) | (236,699) | (177,593) |
Gross profit | 43,495 | 36,189 | 137,900 | 110,719 |
Total operating expenses | (14,746) | (12,714) | (40,687) | (37,783) |
Income from operations | 28,749 | 23,475 | 97,213 | 72,936 |
Interest (expense) income, net | 3,212 | 2,811 | 9,291 | 8,041 |
Other income (expense), net | 1 | 0 | (678) | (229) |
Equity earnings (loss) | 91,758 | 64,820 | 304,227 | 182,066 |
Income from operations before income taxes | 123,720 | 91,106 | 410,053 | 262,814 |
Income tax expense | (2) | 0 | (2) | 0 |
Net income | 123,718 | 91,106 | 410,051 | 262,814 |
Less: Net loss (gain) attributable to noncontrolling interest | 0 | 0 | 0 | 0 |
Net income attributable to Wabtec shareholders | 123,718 | 91,106 | 410,051 | 262,814 |
Comprehensive income attributable to Wabtec shareholders | 123,718 | 91,106 | 410,051 | 262,814 |
Non-Guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net sales | 850,250 | 761,566 | 2,550,843 | 2,186,541 |
Cost of sales | (612,073) | (554,819) | (1,812,660) | (1,580,101) |
Gross profit | 238,177 | 206,747 | 738,183 | 606,440 |
Total operating expenses | (124,997) | (115,937) | (393,695) | (349,077) |
Income from operations | 113,180 | 90,810 | 344,488 | 257,363 |
Interest (expense) income, net | (3,913) | (2,554) | (10,068) | (9,718) |
Other income (expense), net | 2,679 | (1,963) | (1,097) | (1,330) |
Equity earnings (loss) | 0 | 0 | 0 | 0 |
Income from operations before income taxes | 111,946 | 86,293 | 333,323 | 246,315 |
Income tax expense | (22,289) | (17,802) | (38,021) | (55,265) |
Net income | 89,657 | 68,491 | 295,302 | 191,050 |
Less: Net loss (gain) attributable to noncontrolling interest | 1,670 | (1,040) | 3,724 | 710 |
Net income attributable to Wabtec shareholders | 91,327 | 67,451 | 299,026 | 191,760 |
Comprehensive income attributable to Wabtec shareholders | $ 41,667 | $ 160,656 | $ 137,650 | $ 478,265 |
Guarantor Subsidiaries Financ_5
Guarantor Subsidiaries Financial Information - Condensed Cash Flow Statement (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Financial Statements, Captions [Line Items] | ||
Net cash (used for) provided by operating activities | $ 38,038 | $ 26,511 |
Net cash used for investing activities | (104,160) | (905,872) |
Net cash provided by (used for) financing activities | 1,995,310 | (70,049) |
Effect of changes in currency exchange rates | (27,208) | 34,258 |
Increase (decrease) in cash | 1,901,980 | (915,152) |
Cash, cash equivalents, and restricted cash, beginning of period | 233,401 | 1,143,232 |
Cash, cash equivalents, and restricted cash, end of period | 2,135,381 | 228,080 |
Elimination | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash (used for) provided by operating activities | (73,872) | (26,405) |
Net cash used for investing activities | 0 | 0 |
Net cash provided by (used for) financing activities | 73,872 | 26,405 |
Effect of changes in currency exchange rates | 0 | 0 |
Increase (decrease) in cash | 0 | 0 |
Cash, cash equivalents, and restricted cash, beginning of period | 0 | 0 |
Cash, cash equivalents, and restricted cash, end of period | 0 | 0 |
Parent | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash (used for) provided by operating activities | (111,120) | (38,959) |
Net cash used for investing activities | (12,498) | (12,591) |
Net cash provided by (used for) financing activities | 1,883,490 | 52,077 |
Effect of changes in currency exchange rates | 0 | 0 |
Increase (decrease) in cash | 1,759,872 | 527 |
Cash, cash equivalents, and restricted cash, beginning of period | 933 | 2,522 |
Cash, cash equivalents, and restricted cash, end of period | 1,760,805 | 3,049 |
Guarantors | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash (used for) provided by operating activities | 95,503 | 101,597 |
Net cash used for investing activities | (1,303) | (2,358) |
Net cash provided by (used for) financing activities | (94,752) | (99,615) |
Effect of changes in currency exchange rates | 0 | 0 |
Increase (decrease) in cash | (552) | (376) |
Cash, cash equivalents, and restricted cash, beginning of period | 625 | 1,226 |
Cash, cash equivalents, and restricted cash, end of period | 73 | 850 |
Non-Guarantors | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash (used for) provided by operating activities | 127,527 | (9,722) |
Net cash used for investing activities | (90,359) | (890,923) |
Net cash provided by (used for) financing activities | 132,700 | (48,916) |
Effect of changes in currency exchange rates | (27,208) | 34,258 |
Increase (decrease) in cash | 142,660 | (915,303) |
Cash, cash equivalents, and restricted cash, beginning of period | 231,843 | 1,139,484 |
Cash, cash equivalents, and restricted cash, end of period | $ 374,503 | $ 224,181 |
Other Income (Expense), Net - C
Other Income (Expense), Net - Components of Other Income Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Income and Expenses [Abstract] | ||||
Foreign currency (loss) | $ (3,525) | $ (4,113) | $ (6,834) | $ (5,202) |
Equity income | 632 | 520 | 2,855 | 1,587 |
Expected return on pension assets/amortization | 2,829 | 2,490 | 8,879 | 7,470 |
Other miscellaneous income | 1,265 | 660 | 1,058 | 1,449 |
Total other income (expense), net | $ 1,201 | $ (443) | $ 5,958 | $ 5,304 |