Westinghouse Air Brake Technologies Corporation

Good morning and welcome to the Wabtec second quarter 2021 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Christine Kubacki, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to WABSEC's second quarter 2021 earnings call. With us today are President and CEO Rafael Santana, CFO Pat Dugan, Chief Technology Officer Eric Gebhardt, and Senior VP of Finance, John Mastelers. Today's slide presentation, along with our earnings release, financial disclosures, were posted on our website earlier today, and they can be accessed on our Investor Relations tab on wabtechcorp.com. Some 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 the disclosures in our earnings release and presentations. We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and reconciliation tables carefully as you consider these metrics. I will now turn the call over to Rafael.

Thanks, Christine, and good morning, everyone. Let's begin on slide four. We delivered a strong second quarter, as noted by our sales good old adjusted margin and adjusted earnings per share. each of which were up sequentially and year-over-year. Total sales for the quarter were $2 billion, driven by growing demand in freight services, components, and transit, but offset by weakness in the North America OEN market. Adjusted operating margin was 15.2 percent, driven by ongoing lean initiatives, cost actions, and the realization of synergies. Total cash flow from operations was $223 million. This takes the year-to-date cash from operations to $515 million versus $229 million a year ago. It's a solid illustration of how the team is driving good operational performance and focused working capital management. Cash conversion for the year is over 100%. Our year today, to book the bill, continues to be a positive story. We ended the first half of the year greater than one, and we have a strong order pipeline for international locomotives. Total backlog at the end of the quarter was $21.5 billion, providing strong visibility into 2021 and beyond. Finally, We ended second quarter with adjusted EPS of $1.06, up 22% year-over-year. In the area of synergies, we're on track to achieve our full run rate of $250 million this year, and we are feeling the benefits of our footprint consolidation and aggressive actions on structural costs. So overall, really strong execution by the team as we continue to deliver on our long-term strategy. I'm confident that with strong execution, focused cost measures, our team's drive on productivity, and continued improvements in our end markets, we will continue to deliver long-term profitable growth. Now let's turn into slide five to discuss a few of our recent business highlights starting with a strategic partnership we recently announced with CSX. CSX will be the first railroad to implement Wabtec's TRIP Optimizer zero to zero solution, which will allow them to start a train from zero miles per hour and stop it automatically using various controls. Zero to zero builds on TRIP Optimizer's proven performance and is an important building block to autonomous rail and a critical component of energy management, which Eric will cover shortly. We're also partnering with them to revitalize their yard fleets through an innovative Tier 4 switcher modernization program, where we overhaul switchers to the latest Wabtec Tier 4 platform. Additionally, We're working with them to modernize their locomotive fleet with our FDL advantage engine upgrade, which delivers another 5% reduction in fuel consumption. Some great examples of partnership and innovation at work. On the international front, commercial activity is increasing with multi-year orders in equipments, digital electronics, and transits, In the second quarter, we closed a significant order for positive train control with Rumo, and we're now implementing BTC in three countries outside the U.S. In addition, we won a key international locomotive deal in South America and a significant transit contract with Matra in North America. Finally, when it comes to innovation and going after opportunities that can enhance transportation our current portfolio, we announced a strategic partnership with General Motors, where we're exploring the use of battery and hydrogen fuel cell technologies to accelerate the rail industry's path to zero emission locomotives. This is an exciting space, one where strategic collaboration and investment will accelerate the path to more sustainable rail. Eric will share more on this in a moment. It's because of these breakthrough advancements and a commitment to innovation that Wabtec was named to Fast Company's Most Innovative Companies in 2021 in recognition of our commitment to solve some of the world's toughest challenges in the transportation sector. It's also because of our proven commitment to innovation that we were able to further strengthen our financial position the second quarter with a successful 500 million Euro green bond offering to fund investments that will continue to advance sustainable rail. Looking forward, we are confident Wabtec will drive long-term profitable growth and lead the industry in advancing its position in sustainable rail even further. With that, I'll turn the call over to Pat, who will review the quarter and segment performance and our overall financial position.