Westinghouse Air Brake Technologies Corporation

Good morning and welcome to Web Tech's fourth quarter 2021 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. 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, Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to Wabtec's fourth quarter 2021 earnings call. With us today are President and CEO Rafael Santana, CFO John Olin, and Senior Vice President of Finance, John Mestelers. Today's slide presentation, along with our earnings release and financial disclosures, were posted on our website earlier today and can be accessed on the Investor Relations tab on wabtechcorp.com. Some statements we're making 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 presentation. We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and reconciliation tables carefully as you consider these metrics. With that, I'll turn the call over to Rafael.

Thanks, Christine, and good morning, everyone. Let's move to slide four, and I'll start with an update on our business, my perspectives on the quarter, and our long-term value framework. John will then cover the financials. Overall, we achieved significant progress against our strategy, and delivered a strong fourth quarter as noted by the expansion of adjusted margins by 2.1 percentage points and adjusted earnings per share increase of over 20%. Total cash flow from operations was strong at $314 million. This takes year-to-date cash from operations to over a billion dollars, up 37% versus last year, which was a record for the company. This is a solid illustration that the team continues to drive strong operational performance and quality earnings. Cash conversion for the quarter was set 99%. Finally, we ended the year with over $22 billion of multi-year backlog, which was up $578 million in 2021. Overall, our team delivered really strong execution to finish out the year despite significant supply chain disruption and rising costs. On the back of this strong performance and our confidence about the future, I am pleased to announce that our board of directors approved a 25% increase in the quarterly dividend and reauthorized the $750 million share buyback program. Shifting our focus to slide five, Let's talk about our end market conditions in more details. Internationally, freight activity continued to grow in the fourth quarter across our major markets, and our order pipeline remains strong. We expect long-term revenue growth in the majority of our end markets. Freight trends in North America were down year over year in the fourth quarter. This was not driven by lack of demands, but largely by ongoing global supply chain disruptions. Locomotive parkings continue to decline despite weaker freight traffic in the quarter. Throughout the year, the advancements we have made in reliability, efficiency, and safety continue to drive measurable outcomes across our customers' operations. Last year, our fleet of locomotives traveled more than 1.5 billion miles in some of the world's harshest conditions. Looking ahead, we expect demand for reliability, productivity, and fuel efficiency to continue to increase, placing our services business and modernization portfolio in a position of strength. When it comes to the North American railcar build, demand for railcar is increasing. Railcars in storage are below pre-COVID levels, with about 19% of the North American fleet car in storage. As a result, industry orders for new rail cars are continuing to improve. The industry delivered just over 29,000 rail cars in 21, and the outlook for 2022 is for over 40,000 cars. Transitioning to the transit sector, ridership trends continue to be uneven in various markets. However, infrastructure spending for green initiatives continue to be a bright spot especially as governments globally invest in rail for clean, safe, and efficient transportation. Overall, the long-term market drivers for passenger transport remain strong. Next, let's turn to slide six to discuss some recent wins that are providing good momentum and visibility as we enter into 2022. Let's start with the shift to battery electric. In recent weeks, Union Pacific, announced an agreement to buy flex-drive locomotives. This comes on the heels of other strategic commitments from international customers in Canada and in Australia, all of which will leverage this next-generation technology to increase productivity, reduce fuel, and slash emissions across their operations. And in transit, WATEC was named a founding member of Europe's rail joint undertaking, which is investing nearly 1.2 billion euros to fund green rail projects. These are government-led projects focused on automation, digitization, and network optimization, areas where we can help drive innovation and technology adoption across the rail sector. I'd also highlight during the quarter, in freight services, we won a significant international long-term service contract, as well as orders for international locomotive modernizations. Overall, the modernization backlog remains strong. Throughout the fourth quarter, we delivered a record number of mods, marking a significant milestone for the team. We also want strategic digital contracts in North America to upgrade PTC hardware, along with an order for smart HPT at a class one to help our customers improve asset utilization, driving fuel efficiency and reducing emissions. Looking forward, our backlog gives us the confidence that we will drive long-term profitable growth and lead the industry in advancing its position in sustainable rail even farther. I'll turn the call here over to John to review the quarter, segment performance, and our overall financial position. John? Thanks, Rafael, and good morning, everyone.