Westinghouse Air Brake Technologies Corporation

Good morning, everyone, and welcome to the Wabtex fourth quarter 2020 year-end results conference call. All participants will be in a listen-only mode. Should you need assistance, please know a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Christine Kabaki, Vice President of Investor Relations. Ma'am, please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to Wabtec's fourth quarter and full year 2020 earnings call. Joining me this morning are President and CEO Rafael Santana, CFO Pat Dugan, and Senior VP of Finance John Mafflerz. During our call today, we will be discussing the earnings release that we issued earlier this morning. Our slides from today, news release, and financial disclosures were posted on our website earlier today and can be accessed on the Investor Relations tab on wabtechcorp.com. Please note that some of the statements we're making today are forward-looking and based on our best view of the world and our business today. For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements. Please see those disclosures in our earnings release, presentation, and SEC filings. We will also be discussing non-GAAP financial metrics and encourage you to read our disclosures and reconciliation tables carefully as you consider these metrics. And now I will turn the call over to Rafael.

Thanks, Christine, and good morning, everyone, and thanks for joining today's call. Before we dive into the presentation, I'd like to begin by thanking our global team for their resilience and strong performance in 2020. In a year challenged by the pandemic, they worked tirelessly day in and day out to protect each other and to keep our operations delivering for our customers. They remained disciplined on cost management, executed in the face of many challenges, and helped to strengthen our financial position and ultimately delivered results for our shareholders. I'm proud of our team and the performance we've delivered, as you can see on slide three. Total sales for the year were $7.6 billion. This was driven largely by international freight market services and a recovery in transit, but offset by global disruption due to the pandemic. Adjusted operating margin was 15.1%, driven by cost actions and execution on our synergies. In 2020, we exceeded expectations by delivering a 200 base point margin improvement in transit, where our team continues to drive improved project execution, productivity, and cost actions. Total cash conversion was strong, with cash flow from operations of $784 million, which included roughly $220 million in one-time impacts related to transaction restructuring, and litigation expenses. Cash generation was driven in part by good working capital management. These allowed us to deliver on our financial priorities of investing in the business, paying down more than $300 million in debt, which includes the tax obligation to General Electric and returning roughly $300 million of capital to shareholders. Total multi-year backlog was over $21 billion and up sequentially over the prior quarter, providing us better visibility into 2021 and beyond. We ended the year with adjusted EPS of 379. Our teams continue to take action to manage what's in our control, protect the long-term growth of the company, and improve competitiveness while delivering shareholder value. In terms of synergies, we've delivered over $150 million in net synergies during 2020, and we're on track to deliver the full run rate of $250 million in synergies in 2021. To achieve these goals, we are taking further actions on structural costs. In 2020, we reduced headcount by 12%. We drove a 10% reduction across our operational footprint And we have started a lean reset across the company to remove waste, maximize competitiveness across our product lines, and advance our culture of continuous improvement. Since the GE transportation merger, total rooftops have been reduced by more than 30%, and total headcount by 16%. And today, we have exited more than 90% of the GE shared services ahead of schedule. Throughout the year, we also never lost sight of investing in growth. We extended our leadership position in autonomous operations, helping more than 70 customers successfully meet the deadline for positive train control. We also closed a strategic digital order for trip optimizer zero to zero. This is an advanced technology that allows a customer to start a train from zero miles per hour and stop the train automatically using various controls that are integrated with positive train control. In 2020, we also further strengthened our role as leaders in decarbonizing global rail transportation by developing new technologies that reduce emissions and drive fuel efficiency. We've built, shipped, and tested the world's first savvy haul battery electric locomotive. We're proud to share this locomotive is currently in revenue operating service with BNSF in California, and it will be a game changer in decarbonizing rail. In 2020, we extended battery technology to passengers as well by closing a significant deal with New York City Transit to drive down their overall carbon footprint. We have also reduced the weight, lifecycle cost, and braking distance of a transit train with solutions like Matroflax, for which we secured a key order in Singapore. And finally, we are improving air quality inside transit cars with the launch of Blue Filter and Advanced Air Filtration System. And as we highlighted last quarter, our order pipeline continues to strengthen. And we started to see that pipeline convert in the fourth quarter. Book to bill at the end of the quarter was 0.99 versus 0.89 in the third quarter. And we will continue to have positive momentum throughout 2021. Global freight volumes and equipment utilization have sequentially improved since the trough in the second quarter. and we are continuing to see uneven yet continued sequential recovery. This aligns with what you've heard from our customers as well. In the fourth quarter of 2020, we secured a strategic international locomotive order and throughout the year built on our strong install base, closing several long-term service agreements. We have also expanded our global technology footprint in key regions like the Americas, Russia CIS, and India. Demand for reliability and productivity will only accelerate as we continue to differentiate WAPTEC in the market. Quarter to date, we closed a significant multi-year order for modernizations and long-term service agreements, and we're well-positioned for mods growth, overhauls, and parts demand, especially as railroads recover. Based on these factors and orders, Watex is in a strong position to drive profitable growth and continue to perform for our shareholders, for our customers, and for our employees in the short and long term. With that, I'll turn the call over to Pat, who will review the quarter segment performance and our overall financial position. Pat?