WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPWAB
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORP Goodwill & Intangibles Disclosure
GOODWILL AND INTANGIBLE ASSETS
Goodwill is reviewed annually during the fourth quarter for impairment. The Company has identified three reporting units for purposes of testing goodwill for impairment. Two reporting units exist within the Freight segment (the "Freight" and "Components" reporting units), and the Transit segment is also a reporting unit. In 2025, management elected to first assess qualitative factors to determine whether a quantitative goodwill impairment test is necessary for the Freight and Transit reporting units. During the assessment, management evaluated all relevant events and facts that may impact the fair value or carrying value of the reporting units' goodwill and concluded that it was not more likely than not that the estimated fair values were less than the carrying values; therefore, no further analysis was required. For the Components reporting unit, management elected to proceed directly to the quantitative impairment test. The discounted cash flow method and the market approach were used to estimate the fair value of the Components reporting unit using a weighting of 75% and 25%, respectively. The discounted cash flow model requires several assumptions including future sales growth, EBIT (earnings before interest and taxes) margins, capital expenditures, a discount rate and a terminal revenue growth rate (the revenue growth rate for the period beyond the years forecasted by the reporting units) for the Components reporting unit. The market approach requires several assumptions including EBITDA (earnings before interest, taxes, depreciation and amortization) multiples for comparable companies that operate in the same markets as the Company’s reporting units. For 2025, the discounted cash flow method was given more weight compared to the market approach due to variables between the operations of the guideline companies used in the analysis and Wabtec's operations, such as different reporting unit sizes, growth and business characteristics. Each valuation resulted in a conclusion that the estimated fair value of the Components reporting unit was in excess of its carrying value, and no impairment existed.
The change in the carrying amount of goodwill by segment is as follows:
| In millions | Freight Segment | Transit Segment | Total | |||||||||||||||||
| Balance at December 31, 2023 | $ | 7,294 | $ | 1,486 | $ | 8,780 | ||||||||||||||
| Additions | 31 | 54 | 85 | |||||||||||||||||
| Disposals | (5) | (1) | (6) | |||||||||||||||||
| Foreign currency impact | (72) | (77) | (149) | |||||||||||||||||
| Balance at December 31, 2024 | $ | 7,248 | $ | 1,462 | $ | 8,710 | ||||||||||||||
| Additions | 1,320 | — | 1,320 | |||||||||||||||||
| Disposals | (3) | — | (3) | |||||||||||||||||
| Foreign currency impact | 2 | 187 | 189 | |||||||||||||||||
| Balance at December 31, 2025 | $ | 8,567 | $ | 1,649 | $ | 10,216 | ||||||||||||||
The Company’s indefinite lived intangible assets are also reviewed annually during the fourth quarter for impairment. During 2025 and 2024, the Company proceeded directly to the quantitative impairment test for certain trade names with indefinite lives. For 2025 and 2024, certain trade names that were associated with the Company’s current restructuring actions were tested and considered impaired. As such, for the year ended December 31, 2025 and 2024, approximately $3 million and approximately $6 million of expense was recorded, respectively, primarily related to the Company's Portfolio Optimization. For the remaining trade names subject to the quantitative impairment test in both 2025 and 2024, the fair value exceeded each respective carrying value, resulting in a conclusion that no additional impairment existed. For other trade names, management assessed qualitative factors and concluded that it was not more likely than not that the estimated fair values of the trade names were less than their carrying values; therefore, no further analysis was required. The assessment of qualitative factors used in determining whether it is more likely than not that the fair value of a trade name is less than its carrying amount involves significant judgments and assumptions. The judgment and assumptions include the identification of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, Wabtec specific events, share price trends and assessing whether each relevant factor will impact the impairment test positively or negatively and the magnitude of any such impact.
As of December 31, 2025 and 2024, the Company’s trade names had a net carrying amount of $851 million and $595 million, respectively, and the Company believes these intangibles have indefinite lives, with the exception of the right to use the GE Transportation trade name, to which the Company had an original useful life of 5 years and became fully amortized in the first quarter of 2024.
Intangible assets of the Company, other than goodwill and trade names, that are considered definitive lived consist of the following:
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| In millions | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||||
| Backlog | $ | 1,311 | $ | (613) | $ | 698 | $ | 1,415 | $ | (629) | $ | 786 | ||||||||||||||||||||||||||
| Customer relationships | 2,000 | (550) | 1,450 | 1,329 | (480) | 849 | ||||||||||||||||||||||||||||||||
| Acquired technology | 1,570 | (731) | 839 | 1,318 | (614) | 704 | ||||||||||||||||||||||||||||||||
| Total | $ | 4,881 | $ | (1,894) | $ | 2,987 | $ | 4,062 | $ | (1,723) | $ | 2,339 | ||||||||||||||||||||||||||
The remaining weighted average useful lives of backlog, customer relationships and acquired technology were 8 years, 16 years and 8 years, respectively. The backlog intangible asset primarily consists of in-place long-term service agreements acquired by the Company in conjunction with the acquisition of GE Transportation. Amortization expense for intangible assets was $300 million, $303 million, and $321 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Amortization expense for the five succeeding years is estimated to be as follows:
| In millions | ||||||||
| 2026 | $ | 323 | ||||||
| 2027 | $ | 318 | ||||||
| 2028 | $ | 316 | ||||||
| 2029 | $ | 315 | ||||||
| 2030 | $ | 315 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 12, 2025 | |
| 2023 | Feb 14, 2024 | |
| 2022 | Feb 15, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 26, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 19, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.