What is included in this filing?

The filing amends Exhibit 99 to include the audited financial statements of the Westinghouse Air Brake Company Employee Stock Ownership Plan for the years ended December 31, 1997 and 1996, along with Schedule I (assets held for investment purposes) and Schedule II (reportable transactions).

How much of the company does the ESOP own?

The filing states that the ESOP owns approximately 28% of the company's common stock outstanding as of December 31, 1997, and approximately 25% as of December 31, 1996.

How is the ESOP financed?

The plan bought 9,336,000 shares of company common stock at $15 per share using a $140,040,000 term loan from the company entered into in 1995. The unallocated shares serve as collateral. The loan bears interest at 8.5%, and its term was reduced from 50 years to 43 years after Vapor Group employees were added to the plan in 1996. Scheduled principal repayments are $470,316 in 1998, with $136.3 million due after 2002.

What drove the change in the plan's net assets during 1997?

Net assets rose by $121.4 million during 1997, from a deficit of $(21.7) million to $99.7 million. The main drivers were net appreciation in fair value of investments of $121.2 million and employer contributions of $11.9 million. Interest expense of $11.9 million on the loan partly offset these gains.

Are there any pending benefit distributions?

As of December 31, 1997, the plan had $1,203,759 of pending distributions to participants who elected to withdraw. These are recorded as a liability on the plan's Form 5500 but not in the financial statements under generally accepted accounting principles. The Form 5500 shows net assets of $98,519,503.

WAB 10-K FY1997 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K/A filed June 29, 1998. Cited figures are marked; the original filing is the authoritative source.

This Form 10-K/A for the fiscal year ended December 31, 1997 amends Exhibit 99 of Westinghouse Air Brake Company (now Westinghouse Air Brake Technologies Corporation) to set forth the financial statements of its Employee Stock Ownership Plan (ESOP).

The filing contains no operating results, balance sheet, or business discussion for the company itself. It presents the plan's audited statements, with Arthur Andersen LLP's opinion dated June 5, 1998, along with Schedules I and II. The ESOP's net assets available for benefits were $99.7 million^a at December 31, 1997, up from a deficit of $(21.7) million at December 31, 1996.

The plan's largest asset is its investment in company common stock, valued at $238.8 million^b at market value on 9,318,341 shares. That is up from $117.8 million at the end of 1996. The plan owed $139.1 million on a loan payable to the employer, which was used to buy the shares at $15 per share under a $140.04 million term loan bearing 8.5% interest.

The plan held approximately 28% of the company's common stock at year-end 1997, compared with 25% at year-end 1996. Employer contributions were $11.9 million^c in 1997.

For investors, the main points are the plan's large stake in the company and the sharp rise in the stock's market value, which produced net appreciation of $121.2 million^d in 1997. The filing reports no reportable transactions in 1997 in Schedule II.

02—Key points

Key Highlights

Filing purpose: Form 10-K/A amending Exhibit 99, which sets out the Westinghouse Air Brake Company Employee Stock Ownership Plan financial statements for fiscal 1997.
ESOP net assets available for benefits were $99.7 million at December 31, 1997, versus a deficit of $(21.7) million at December 31, 1996.
The plan's investment in company common stock was $238.8 million at market value on 9,318,341 shares at year-end 1997, compared with $117.8 million at year-end 1996.
Net appreciation in fair value of investments was $121.2 million in 1997, and employer contributions were $11.9 million.
The plan owed $139.1 million on a loan payable to the employer, taken out in 1995 for $140.04 million at 8.5% interest, with a term reduced to 43 years.
The ESOP owned approximately 28% of the company's common stock at December 31, 1997, up from 25% at December 31, 1996.
Arthur Andersen LLP issued an unqualified opinion dated June 5, 1998, and Schedule II reports no reportable transactions for 1997.

03—Questions

Frequently Asked Questions

What is included in this filing?
The filing amends Exhibit 99 to include the audited financial statements of the Westinghouse Air Brake Company Employee Stock Ownership Plan for the years ended December 31, 1997 and 1996, along with Schedule I (assets held for investment purposes) and Schedule II (reportable transactions).
How much of the company does the ESOP own?
The filing states that the ESOP owns approximately 28% of the company's common stock outstanding as of December 31, 1997, and approximately 25% as of December 31, 1996.
How is the ESOP financed?
The plan bought 9,336,000 shares of company common stock at $15 per share using a $140,040,000 term loan from the company entered into in 1995. The unallocated shares serve as collateral. The loan bears interest at 8.5%, and its term was reduced from 50 years to 43 years after Vapor Group employees were added to the plan in 1996. Scheduled principal repayments are $470,316 in 1998, with $136.3 million due after 2002.
What drove the change in the plan's net assets during 1997?
Net assets rose by $121.4 million during 1997, from a deficit of $(21.7) million to $99.7 million. The main drivers were net appreciation in fair value of investments of $121.2 million and employer contributions of $11.9 million. Interest expense of $11.9 million on the loan partly offset these gains.
Are there any pending benefit distributions?
As of December 31, 1997, the plan had $1,203,759 of pending distributions to participants who elected to withdraw. These are recorded as a liability on the plan's Form 5500 but not in the financial statements under generally accepted accounting principles. The Form 5500 shows net assets of $98,519,503.

04—Continue

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