Westinghouse Air Brake Technologies Corporation

Good morning and welcome to the Webtek Corporation third quarter 2023 earnings conference 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 from the question queue, 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 Wabtec's third quarter 2023 earnings call. With us today are President and CEO Rafael Santana, CFO John Olin, and Senior Vice President of Finance John Mastelers. Today's slide presentation, along with our earnings release and financial disclosures, were posted to our website earlier today and can be accessed on our 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 related to our forward-looking statements, please see our 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 move to slide four. I'll start with an update on our business, my perspectives on the quarter, the progress against our long-term value creation framework, and then John will cover the financials. We delivered another strong quarter, evidenced by robust sales growth, margin expansion, and increased earnings and cash flow. We achieved these despite increased volatility and uncertainty in the economy. Sales were $2.5 billion, which was up 22.5% for the prior year. Revenue was driven by strong performance from both the freight and transit segments. Total cash flow from operations was $425 million. Cash generation was driven by higher earnings and improved inventory management. Overall, our financial position remains strong. We continue to execute against our capital allocation framework to maximize shareholder value by investing for future growth and returning cash to shareholders. The 12-month backlog was over $7 billion, up 13%, signifying continued momentum and visibility across the business into 2024. Total multi-year backlog was $21.5 billion. Overall, the WAPTEC team delivered a strong quarter behind solid execution. Looking ahead, I'm encouraged by both the underlying momentum across the business and the team's unrelenting focus on delivering for our customers. And even against a more uncertain and volatile macro environment, we believe WAPTEC is well positioned to drive profitable growth ahead. Shifting our focus to slide five, let's talk about our 2023 and market expectations in more detail. While key metrics across our trade business remain mixed, we continue to be encouraged by our business momentum, activity in international markets, and our robust pipeline of opportunities across geographies. North America car loads continue to be down in the quarter, which resulted in locomotive parkings up slightly from last quarter's levels. Yet, we continue to see significant opportunities across the globe in demand for new locomotives, modernizations, and digital solutions, as our customers investment solutions that continue to drive reliability, productivity, safety, and fuel efficiency. Looking at the North American railcar builds, demand for railcars continues to show growth. The industry outlook for 2023 is for about 45,000 cars to be delivered. Internationally, activity is strong across core markets such as Latin America, Australia, South Africa, and Kazakhstan. Significant investments to expand and upgrade infrastructure are supporting a substantial international orders pipeline. In mining, commodity prices are supporting activity to refresh and upgrade the truck fleet. Finally, moving to the transit sector, the megatrends of urbanization and decarbonization remain in place, driving the need for clean, safe, and efficient transportation solutions around the globe. Next, let's turn to slide six to discuss a few recent business highlights. During the quarter, we signed a strategic MOU with KTZ, the national railway company in Kazakhstan, for over $2 billion. This agreement will support significant freight growth through the state-of-the-art equipment and technologies, driving productivity, and lowering operating costs. This framework includes locomotives to be delivered in 2024, a long-term supply agreement, and a collaboration on a number of digital technologies, all of which we expect to drive strong orders and sales growth in 2024. Speaking of our business in Kazakhstan, the team just achieved a significant milestone by delivering its 500th locomotive. Looking at our mining business, the team signed orders totaling over $150 million, which is up double digits versus last year. And early in the fourth quarter, our team in Latin America won an order for 22 additional locomotives to be delivered in 2024. In North America, We want an order in New York City Transit to supply components for an additional 640 subway cars. Also, late last quarter, we closed the L&M acquisition that expanded our heat transfer portfolio in mining. This is off to a great start. The integration is on track. Third quarter revenue is ahead of plan, taking advantage of a strong mining market globally. I'd also highlight Norco. which we acquired back in 2021. Our maintenance-of-way business continues to be ahead of plan and is experiencing double-digit growth in 2023. All of this demonstrates the continued momentum across the business, the team's relentless focus on driving for our customers, and the strong pipeline of opportunities we're executing on. WAPTEC's well-positioned to capture profitable growth with innovative and scalable technologies that addresses our customers' most pressing needs. Turning to slide seven, I'd like to discuss in more detail our international markets. While North America provides us a solid foundation to refresh and renew the install base, we also have a significant opportunity for growth across international fleets by leveraging our broad portfolio and superior technologies. We have been successful in expanding our international install base over time, which has grown at roughly 4.5% annually for the last six years. Looking ahead, the pipeline of opportunities in our international markets continues to strengthen, and as a result, we expect continued expansion in our install base. Increasing freight volumes from mining, agriculture, and intermodal continue to drive the need for increased investment in clean, efficient, and safe modes of transportation. We expect growth in 2024 from key regions like Latin America, CIS, Australia, and South Africa, driven by our regional footprint and local partnerships. Our technologies are delivering more fuel-efficient, reliable solutions which will reduce operational costs for our customers around the world. With that, I'll turn the call over to John to review the quarter, segment results, and our overall financial performance. John?