SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K(A)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 1, 2001
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
1-13782 25-1615902
(Commission File Number) (IRS Employer Identification No.)
1001 AIR BRAKE AVENUE, WILMERDING, PENNSYLVANIA, 15148
(Address of Principal Executive Offices)
(412)-825-1000
(Registrant's Telephone Number Including Area Code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On November 1, 2001, Westinghouse Air Brake Technologies
Corporation ("Wabtec") completed the disposition of certain locomotive after
market assets to General Electric Company, acting through its GE Transportation
Systems business ("GETS"), for approximately $240 million in cash. The
transaction was consummated pursuant to an Asset Purchase Agreement, entered
into on July 24, 2001. The assets consisted principally of locomotive after
market products and services for which Wabtec is not the original equipment
manufacturer. The purchase price of $240 million in cash was arrived at by
negotiation among the parties. In connection with the sale of assets to General
Electric, the Company has provided certain representations and warranties
customary to such a transaction, and an indemnification for breach thereof. The
Company does not expect to incur any material expenses in the future in regards
to this indemnity.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not Applicable
(b) Pro Forma Condensed Consolidated Financial Information
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
The following Pro Forma Condensed Consolidated Financial Statements are based on
the historical financial statements of Westinghouse Air Brake Technologies
Corporation ("Wabtec" or the "Company"), adjusted to give effect to the
disposition of certain locomotive aftermarket assets by the Company. The Pro
Forma Condensed Consolidated Statement of Operations for the year ended December
31, 2000 and the nine months ended September 30, 2001 assume that the
disposition had occurred on January 1, 2000 and January 1, 2001, respectively.
The unaudited Pro Forma Condensed Consolidated Balance Sheet as of December 31,
2000 gives effect to the disposition as if it had occurred on December 31, 2000.
The unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30,
2001 gives effect to the disposition as if it had occurred on September 30,
2001.
The pro forma financial information reflects certain assumptions described above
and in the Notes to Pro Forma Condensed Consolidated Financial Statements below.
The pro forma financial information does not purport to present what the
Company's results of operations would actually have been if the disposition of
certain locomotive aftermarket assets had occurred on the assumed date, as
specified above, or to project the Company's financial condition or results of
operations for any future period.
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(Unaudited)
Historical Disposition
Historical Sold Pro Forma Pro Forma
Company Businesses Adjustments As Adjusted
----------- ----------- ----------- -----------
Net sales $ 1,027,976 $ 187,264 $ 10,939 (7) $ 851,651
Cost of sales 750,176 149,544 10,939 (7) 611,571
----------- --------- --------- ---------
Gross profit 277,800 37,720 -- 240,080
Operating expenses 188,320 17,305 -- 171,015
----------- --------- --------- ---------
Income from operations 89,480 20,415 -- 69,065
OTHER INCOME AND EXPENSES:
Interest expense 45,505 2,286 (13,428)(8) 29,791
Other income, net (3,620) (518) -- (3,102)
----------- --------- --------- ---------
Income before income taxes 47,595 18,647 13,428 42,376
INCOME TAXES 22,202 6,713 4,834 (9) 20,323
----------- --------- --------- ---------
NET INCOME $ 25,393 $ 11,934 $ 8,594 $ 22,053
=========== ========= ========= =========
INCOME PER DILUTED SHARE $ 0.59 $ 0.51
=========== =========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 43,382 43,382
=========== =========
The accompanying notes are an integral part of this statement.
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(Unaudited)
Historical Disposition
Historical Sold Pro Forma Pro Forma
Company Businesses Adjustments As Adjusted
----------- ----------- ----------- -----------
Net sales $ 736,745 $ 125,752 $ 9,105 (7) $ 620,098
Cost of sales 546,756 100,469 9,105 (7) 455,392
--------- --------- --------- ---------
Gross profit 189,989 25,283 -- 164,706
Operating expenses 125,297 13,111 -- 112,186
--------- --------- --------- ---------
Income from operations 64,692 12,172 -- 52,520
OTHER INCOME AND EXPENSES:
Interest expense 28,537 1,193 (8,952)(8) 18,392
Other expense, net 1,184 725 -- 459
--------- --------- --------- ---------
Income before income taxes 34,971 10,254 8,952 33,669
INCOME TAXES 10,256 3,589 3,133 (10) 9,800
--------- --------- --------- ---------
NET INCOME $ 24,715 $ 6,665 $ 5,819 $ 23,869
========= ========= ========= =========
INCOME PER DILUTED SHARE $ 0.57 $ 0.55
========= =========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 43,205 43,205
========= =========
The accompanying notes are an integral part of this statement.
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
(Unaudited)
Historical Purchase Disposition
Historical Sold Agreement Disposition Pro Forma Pro Forma
Company Businesses Adjustments Adjusted Adjustments As Adjusted
---------- ---------- ----------- ----------- ----------- -----------
ASSETS
CURRENT ASSETS:
Cash $ 6,071 $ 180 $ (180)(1) $ -- $ -- $ 6,071
Accounts receivable 194,379 41,949 -- 41,949 -- 152,430
Inventories 202,828 64,123 (252)(2,3) 63,871 -- 138,957
Other current assets 44,277 984 -- 984 -- 43,293
--------- --------- --------- --------- --------- ---------
Total current assets 447,555 107,236 (432) 106,804 -- 340,751
Property, plant and equipment, net 214,645 34,579 (2,026)(4) 32,553 -- 182,092
OTHER ASSETS:
Intangibles 265,394 16,425 -- 16,425 -- 248,969
Other noncurrent assets 56,453 30,139 -- 30,139 -- 26,314
--------- --------- --------- --------- --------- ---------
Total other assets 321,847 46,564 -- 46,564 -- 275,283
TOTAL ASSETS $ 984,047 $ 188,379 $ (2,458) $ 185,921 $ -- $ 798,126
========= ========= ========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 86,316 13,991 -- 13,991 -- 72,325
Other current liabilities 104,340 15,272 -- 15,272 -- 89,068
--------- --------- --------- --------- --------- ---------
Total current liabilities 190,656 29,263 -- 29,263 -- 161,393
Long-term debt 539,446 -- -- -- (200,000)(6) 339,446
Other long-term liabilities 57,574 9,800 -- 9,800 -- 47,774
--------- --------- --------- --------- --------- ---------
Total liabilities 787,676 39,063 -- 39,063 (200,000) 548,613
--------- --------- --------- --------- --------- ---------
Shareholders' equity 196,371 149,316 (2,458) 146,858 200,000 249,513
--------- --------- --------- --------- --------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 984,047 $ 188,379 $ (2,458) $ 185,921 $ -- $ 798,126
========= ========= ========= ========= ========= =========
The accompanying notes are an integral part of this statement.
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2001
(DOLLARS IN THOUSANDS)
(Unaudited)
Historical Purchase Disposition
Historical Sold Agreement Disposition Pro Forma Pro Forma
Company Businesses Adjustments Adjusted Adjustments As Adjusted
---------- ---------- ----------- ----------- ----------- -----------
ASSETS
CURRENT ASSETS:
Cash $ 61 $ 82 $ (82)(1) $ -- $ -- $ 61
Accounts receivable 162,229 32,137 -- 32,137 -- 130,092
Inventories 186,617 60,936 799 (2,3) 61,735 -- 124,882
Other current assets 40,620 635 -- 635 -- 39,985
--------- --------- -------- --------- --------- ---------
Total current assets 389,527 93,790 717 94,507 -- 295,020
Property, plant and equipment, net 202,102 29,715 (1,597)(4) 28,118 -- 173,984
OTHER ASSETS:
Intangibles 263,609 15,554 -- 15,554 -- 248,055
Other noncurrent assets 41,966 19,687 -- 19,687 -- 22,279
--------- --------- -------- --------- --------- ---------
Total other assets 305,575 35,241 -- 35,241 -- 270,334
TOTAL ASSETS $ 897,204 $ 158,746 $ (880) $ 157,866 $ -- $ 739,338
========= ========= ======== ========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 77,048 14,744 -- 14,744 -- 62,304
Other current liabilities 99,789 10,150 (228)(5) 9,922 -- 89,867
--------- --------- -------- --------- --------- ---------
Total current liabilities 176,837 24,894 (228) 24,666 -- 152,171
Long-term debt 454,237 -- -- -- (200,000)(6) 254,237
Other long-term liabilities 51,244 8,676 -- 8,676 -- 42,568
--------- --------- -------- --------- --------- ---------
Total liabilities 682,318 33,570 (228) 33,342 (200,000) 448,976
Shareholders' equity 214,886 125,176 (652) 124,524 200,000 290,362
--------- --------- -------- --------- --------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 897,204 $ 158,746 $ (880) $ 157,866 $ -- $ 739,338
========= ========= ======== ========= ========= =========
The accompanying notes are an integral part of this statement.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The pro forma adjustments to the condensed consolidated balance sheet are as
follows:
1. To eliminate cash which was retained by Wabtec.
2. To include a contract in Australia assumed by the buyer.
3. To adjust for certain inventory which was retained by Wabtec.
4. To adjust for certain facilities and fixed assets which were retained
by Wabtec.
5. To adjust for certain accruals which were retained by Wabtec.
6. To reflect the use of cash proceeds, after tax, to reduce long-term
debt.
The pro forma adjustments to the condensed consolidated statements of operations
are as follows:
7. To reflect the fact that intercompany sales to the disposed businesses
would have been external sales.
8. To reflect reduced interest expense from the use of cash proceeds,
after tax, to pay down debt.
9. To record income tax effect of the pro forma adjustments at the
Company's effective tax rate of 36%.
10. To record income tax effect of the pro forma adjustments at the
Company's effective tax rate of 35%.
(c) Not Applicable
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WESTINGHOUSE AIR BRAKE
TECHNOLOGIES CORPORATION
(Registrant)
By /s/ Gregory T.H. Davies
-----------------------------
Gregory T.H. Davies
Date: December 28, 2001 President and Chief Executive Officer