Westinghouse Air Brake Technologies : Financial Results & Company Highlights Presentation - Q1 2023

FIRST QUARTER 2023

Wabtec Financial Results and Company Highlights

Forward looking statements & non-GAAP financial information

This communication contains "forward-looking" statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995 including statements regarding the impact of acquisitions by Wabtec, statements regarding Wabtec's expectations about future sales and earnings and statements about the impact of evolving global conditions on Wabtec's business. All statements, other than historical facts, including statements regarding synergies and other expected benefits from acquisitions; statements regarding Wabtec's plans, objectives, expectations and intentions; and statements regarding macro-economic conditions and evolving production and demand conditions; and any assumptions underlying any of the foregoing, are forward-looking statements. Forward looking statements include statements regarding: Wabtec's plans, objectives and intention; Wabtec's expectations about future sales, earnings and cash conversion; Wabtec's projected expenses and cost savings associated with its Integration 2.0 initiative; Wabtec's 5-year outlook (established in March 2022); Wabtec's expectations for evolving global industry, market and macro-economic conditions and their impact on Wabtec's business; synergies and other expected benefits from Wabtec's acquisitions; Wabtec's expectations for production and demand conditions; and any assumptions underlying any of the foregoing. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words "may," "will," "should," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "overestimate," "underestimate," "believe," "could," "project," "predict," "continue," "target" or other similar words or expressions. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) changes in general economic and/or industry specific conditions, including the impacts of tax and tariff programs, inflation, supply chain disruptions, foreign currency exchange, and industry consolidation; (2) changes in the financial condition or operating strategies of Wabtec's customers; (3) unexpected costs, charges or expenses resulting from acquisitions and potential failure to realize synergies and other anticipated benefits of acquisitions, including as a result of integrating acquired targets into Wabtec; (4) inability to retain and hire key personnel; (5) evolving legal, regulatory and tax regimes; (6) changes in the expected timing of projects; (7) a decrease in freight or passenger rail traffic; (8) an increase in manufacturing costs; (9) actions by third parties, including government agencies; (10) the severity and duration of the evolving COVID-19 pandemic and the resulting impact on the global economy and, in particular, our customers, suppliers and end-markets, (11) potential disruptions, instability, and volatility in global markets from the imposition of economic sanctions on Russia resulting from the invasion of Ukraine; (12) cybersecurity and data protection risks and (13) other risk factors as detailed from time to time in Wabtec's reports filed with the SEC, including Wabtec's annual report on Form 10-K, periodic quarterly reports on Form 10-Q, current reports on Form 8-K and other documents filed with the SEC. The foregoing list of important factors is not exclusive. Any forward-looking statements speak only as of the date of this communication. Wabtec does not undertake any obligation to update any forward-looking statements, whether as a result of new information or development, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

This presentation as well as Wabtec's earnings release and financial guidance mention certain non-GAAP financial performance measures, including adjusted gross profit, adjusted operating expenses, adjusted income from operations, adjusted interest and other expense, adjusted operating margin, adjusted income tax expense, adjusted effective tax rate, adjusted earnings per diluted share, EBITDA and adjusted EBITDA, net debt and operating cash flow conversion rate. Wabtec defines EBITDA as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is further adjusted for restructuring. Wabtec defines operating cash flow conversion as net cash provided by operating activities divided by net income plus depreciation and amortization including deferred debt cost amortization. While Wabtec believes these are useful supplemental measures for investors, they are not presented in accordance with GAAP. Investors should not consider non-GAAP measures in isolation or as a substitute for net income, cash flows from operations, or any other items calculated in accordance with GAAP. In addition, the non-GAAP financial measures included in this presentation have inherent material limitations as performance measures because they add back certain expenses incurred by the company to GAAP financial measures, resulting in those expenses not being taken into account in the applicable non-GAAP financial measure. Because not all companies use identical calculations, Wabtec's presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. Included in this presentation are reconciliation tables that provide details about how adjusted results relate to GAAP results. Wabtec is not presenting a quantitative reconciliation of its forecasted GAAP earnings per diluted share to forecasted adjusted earnings per diluted share as it is unable to predict with reasonable certainty and without unreasonable effort the impact and timing of restructuring-related expenses and the outcome of certain regulatory, legal and tax matters; the financial impact of these items is uncertain and is dependent on various factors, including the timing, and could be material to Wabtec's Consolidated Statement of Earnings.

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W A B T E C

Today's participants

RAFAEL SANTANA	JOHN OLIN	KRISTINE KUBACKI
President and Chief	Executive Vice President	Vice President,
Executive Officer	and Chief Financial Officer	Investor Relations
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W A B T E C

1Q 2023 overview

	S A L E S	$2.19B	Up 13.9% YoY
OPERATING MARGIN	12.6%	16.4%
		GAAP	Adjusted(2)
EARNINGS PER SHARE	$0.93	$1.28
		GAAP	Adjusted(2)
	CASH FLOW FROM	($25M )
	OPERATIONS (1)
MULTI - YEAR BACKLOG	$22.33B

1Q 2023 HIGHLIGHTS

Increased sales were driven by strong Freight segment growth … excluding impacts of FX, sales were up 16.8% YoY

Operating margin benefited from higher sales growth and lower SG&A as a percentage of sales

GAAP EPS up 16.3% … Adjusted EPS up 13.3% YoY from higher Freight sales

Operating cash flow was impacted by seasonally low cash generation quarter and higher working capital

Backlog provides improved multi-year visibility … 12-month backlog up 4.4% to a new high of $6.9 billion

STRONG UNDERLYING MOMENTUM DESPITE MACRO VOLATILITY

4 (1) Year-over-year 1st quarter cash flow impact from securitization of accounts receivable was unfavorable $10 million

1. Adjusted numbers represent non-GAAP financial measures. See Appendix for additional details and reconciliations

W A B T E C

2023 Market Expectations

F R E I G H T
NA Carloads	-/↔
Locomotive and	↔/-
Railcars Unparkings
International Freight	+
Volumes

	20.2%
			NORTH AMERICAN
			FREIGHT CARLOADS
5.1%
						0.2%
		(0.1%)					(0.8%)
					(3.3%)
			(4.9%)	(3.7%)			(3.6%)
1Q21	2Q21	3Q21	4Q21	1Q22	2Q22	3Q22	4Q22	1Q23

Source: Association of American Railroads

NA Railcar Deliveries	+
Mining Commodities	↔/-
T R A N S I T
Infrastructure	+
Investment
Global Ridership	+/↔

A V G N O R T H A M E R I C A N P A R K E D L O C O M O T I V E S

2019 2020 2021 2022 2023

Source: Wabtec

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2023 FREIGHT VOLUMES

		3.8%
	2.7%
(0.4%)
				(2.7%)
			(5.5%)
Brazil	China	India	South Africa	Kazakhstan

Sources: China, Kazakhstan, India Ministry of Railways, Brazil: ANTT, South Africa