Good day, and welcome to the Wabtec First Quarter 2014 Results Conference Call. All participants will be in listen-only mode. (Operator Instructions). After today’s presentation, there will be an opportunity to ask questions. (Operator Instructions). Please note this event is being recorded. I would now like to turn the conference over to Mr. Tim Wesley, Vice President of Investor Relations. Please go ahead.

Thank you, Andrew. Good morning, everybody. Welcome to our first quarter earnings call. Let me introduce the Wabtec people who are here with me, Al Neupaver, our Chairman and CEO; Ray Betler, our President and Chief Operating Officer; Pat Dugan our CFO; and our Corporate Controller, John Mastalerz. And we’ll make our prepared remarks first and then we will be happy to take your questions. And we will certainly make some forward-looking statements during the call. So we ask that you to please review today’s press release for the appropriate disclaimers. Al?

Thanks Tim. Good morning. We had an excellent operating performance in the first quarter with record sales of $695 million and record earnings of $0.83 per diluted share. Our operating margin continued to expand nicely and was at 17.5%. Our backlog increased during the quarter and now stands at a record $1.72 billion. The business is performing well; thanks to our diversified business model, our strategic growth initiatives and the power of our Wabtec Performance System. We’re very optimistic and excited about the long-term opportunities in our freight and transit rail markets. These markets are large, they are global, and they are growing, and we are positioned well to participate in them. Today we affirmed our 2014 guidance. We expect full year earnings per diluted share to be about $3.45 based on sales growth of about 15% for the year. This guidance as it did in February, includes the acquisition of Fandstan Electric Group which we now expect will close during the second quarter. Our guidance also assumes the following: Continued modest growth in the global economy; the U.S. and European transit markets remain stable with the emerging markets driving growth; U.S. freight rail traffic grows modestly with OEM locomotive and freight car builds also growing. So far this year, rail traffic is up almost 2%.We assume no major changes in foreign exchange rates and that our tax rate will be about 31.5% for the year. As always, we will be disciplined when it comes to controlling cost, we will be focused on generating cash to invest in growth opportunities and ready to respond if market conditions change. Ray, can you talk a little bit about our current market situation?

Thank you, Al. One of the reasons we are optimistic about Wabtec’s future is that we are involved in very compelling markets. These markets as you know are mainly freight and passenger transit. They are large, they are global, and they’re growing. According to the UNIFE study, worldwide addressable rail supply markets exceed $100 billion, with an annual growth rate of about 3%. Western Europe, Asia-Pacific and NAFTA represent about 75% of that overall market. Rolling stock is the largest segment and outsourced services is the fastest growing segment and we play in both of these areas. All the markets are focused on improving safety, productivity and efficiency and that’s where Wabtec plays an important role. The markets are also compelling because inefficient transportation system and a robust infrastructure are essential to effective global economic growth in both developed and also emerging countries. Finally, secular trends are also driving investment. Areas like environmental, responsibility, urbanization and energy evolution. On the freight side, in NAFTA, traffic is up almost 2% so far this year led by a 4.3% increase in intermodal. That’s despite all the weather issues that our customers have to deal within the first few months of this year. OEM rolling stock deliveries this year are still expected to be higher in [2000] than they were in 2013. We expect them to be around 60,000 freight cars this year and around 1,100 locomotives. This compares to 53,000 freight cars and 1,000 locomotives delivered last year. Globally freight traffic is also growing, although China’s lower growth rate has had some ripple effect in the mining countries like Australia, Brazil and South Africa. As you know, we are focused on increasing our global footprint and also our product offerings where we see opportunities in markets that are larger than our traditional…

Thanks a lot Ray. As we go forward at Wabtec, we really want to continue to focus on growth and cash generation. Our priorities for allocating free cash remain the same. First priority is to fund internal growth programs that includes capital expenditures; second priority would be acquisitions; and then thirdly, return money to shareholders through a combination of dividends and stock buybacks. We had a very small window for buying stock in the first quarter and did repurchase 27,500 shares for about $2 million. So, we have about a $198 million left on our approved $200 million buyback authorization. We expect to be active during the year. We remain focused on increasing free cash flow by managing cost, driving down working capital, and controlling capital expenditures. Our growth strategies also remain the same, global and market expansion; aftermarket expansion; new products and technologies; acquisitions. Let’s talk a bit about the progress that we’ve made on these strategies. In the global and market expansion area, our sales outside of the U.S. during the first quarter were $314 million, that’s 4% higher than last year’s quarter and about 45% of total sales versus if you look back five years ago that number would be about a third. We continue to expand our capabilities and market presence in various markets around the world. In particular, we have taken advantage of opportunities in Europe, China and South Africa. The aftermarket expansion strategy: Overall aftermarket sales were $414 million in the quarter. That’s a 16% growth over year ago quarter and it represents 60% of our total sales. This growth is due in part to acquisitions and internal growth initiatives. We are very focused on expanding our service offerings globally. As for new products, we continue to have tremendous focus on this area with…

Thanks Al, good morning everybody and thanks for joining us on the call. Just some highlights from our financial results for Q1. Our sales for the first quarter were a record $695 million which is 13% higher than last year. Of this increase about three quarters was from organic growth. Our freight segment sales increased 23%. That increase was due to acquisitions and organic growth from increases in the area of electronics and freight car components. Transit segment sales increased 3%. For 2014, we expect to see revenues increase in both of our operating segments with freight probably growing at a faster rate. Our operating income for the quarter was a record $122 million which is about 17.5% of sales. The first quarter operating margin in 2013, a year ago was 16.8% and we finished the full year at 17%. So we continue to have slight improvement. Our interest expense for the quarter was $4.5 million which is a bit higher than a year ago and that’s due to some increased borrowings related to acquisitions that we completed in 2013. Our effective tax rate was 31.7% and it was 30% last year. You have to remember that last year in first quarter 2013, we had a one-time tax benefit due to changes in legislation and especially the extension of the R&D tax credit which is a first quarter discrete item. We expect to see the annual rate for 2014 to be about 31.5%. We could have some variability due to timing of any discrete tax items throughout the quarters in 2014. In terms of working capital our trade and unbilled receivables were $637 million. Inventories were $420 million and payables were $345 million, the unbilled receivables are related to the long term contracts where we need to hit certain project…

Thanks Pat. In summary, we had an excellent performance in the first quarter with record sales and earnings and a record backlog. As we look forward to 2014, we are anticipating another record year and affirm our EPS guidance of about $3.45 on revenue growth of about 15%. We are pleased with our strategic progress and excited about the long-term growth opportunities we see. As countries around the world continue to invest in freight, rail and passenger transit infrastructure. We continue to benefit from our diverse business model and the Wabtec Performance System, which provides the tools we need to generate cash and reduce cost. We have an experienced management team that is poised to take advantage of our growth opportunities and ready to respond to any changes in market conditions. With that, we'd be more than happy to answer your questions.

We will now begin the question-and-answer session. (Operator Instructions). The first question comes from Scott Group of Wolfe Research. Please go ahead.

Hey, thanks. Good morning, guys.

Good morning, Scott.

So, first just in terms of the delay in closing the Fandstan acquisition, maybe if you just have any color on what’s going on there? And how does that impact the guidance? I know no change to the guidance, but Fandstan closing a little bit later. Does that imply some, the rest of the business maybe doing a little bit better than your thought, I just want to understand that?

Okay. First question was related to Fandstan in closing of the business. So, as we have explained, Fandstan is a very global business with businesses in over 100 different countries and some complex business models. And we are going through some anticipated regulatory steps that we need to take in order to be able to close. So, we are confident that we will be able to work through those and close in the second quarter at this point. Any change to that, obviously we would keep everyone informed. If, the second question is related to did we actually see the rest of our business perform a little better than expectations? Since we had anticipated, we would have closed the Fandstan business in the first quarter. The anticipation was that we would not close it until late in the first quarter. However there was impact that we have build into the guidance related to revenues. And your assumption and your statement is partially correct. There is some strength that we saw in the first quarter that was not anticipated or build into our guidance. I think that we had stronger sales related to freight car products and a lot of that had to do with the severe winter that we had. We also saw the advantage that we had from our electronic product line and some of the growth was through the acquisitions that we had last year and the results were a little better in those acquisitions. We typically don’t see some of the growth in acquisition right out of the [shoe]. So, in total we saw a little more strength than would have been reflected in our guidance. And hopefully that will be sustained going forward.

Okay, great. And just a second question; most of the rails have raised CapEx guidance particularly for locomotives for the year and I think you guys are sticking with your guidance in terms of locomotive deliveries, maybe what’s the disconnect there? And can you give some color, I don’t know if you’ve talked in the past about your content opportunity on locomotives and if that changes at all when the new Tier 4 locomotives kick in I guess next year?

Okay. Our guidance on the locomotives if you would have gone back to the fourth quarter last year as we saw we expect that actually locomotive business may have been flat to down. And I think that we reported in February and again this year that we actually think of it’s going to be up a bit at about 1,100 to about 10% increase. We continue to see strength in that area whether those could be delivered or not in 2014 still needs to be seen. So yes, I think we’re pretty consistent with what’s happened in the marketplace on locomotives. Your second part of the question was related to the content. The content on a locomotive varies greatly. I think if we were to have every product that we possibly make on a locomotive, we could be upwards of around $200,000 per locomotive and that creates a good opportunity for us. As far as Tier 4 that doesn’t create anymore products for us, but it does require redesign of many of our products to be Tier 4 compliant, one of which is as you’re aware, we make heat exchangers and that heat exchanger now has to have different thermal management conditions in order to help meet that Tier 4 requirement by the customers. Also some of the emission control equipment we have also needs to be designed to help meet the Tier 4. So, it does create an opportunity, but it doesn’t really broaden our offering package.

Okay. Thanks for time guys. I’ll get back in queue.

Okay. Thanks a lot.

The next question comes from Allison Poliniak of Wells Fargo. Please go ahead.

Hi guys, good morning.

Good morning Allison.

Good morning Allison.

Al, on your new product [come] in a topic you mentioned electronic braking and yesterday the NPSB [listening] some hearings and the concept of electronic braking was a big discussion. Just want to get your sense with all those crude-by-rail safety and sort of the appetite out there; I know it’s probably very early stages. But do you think this could be a real opportunity as you move forward, I know there has been some challenges historically?

Yes. I think that there is a lot of challenges for the utilization of electronic control pneumatic braking by the freight railroads. And primarily it comes into the fact that you need a unit train and a unit train is one that would travel from point A to point B and back and forth and not be changing the cars, because every railcar has to be equipped with ECP in order for it to be effective. And as you know most trains could have tank car, a hopper and a flatcar or whatever or even an auto rack all mixed in one train and that makes for it to be very difficult. I think that crude-by-rail creates a potential opportunity that they may be able to use this concept to help electronic control pneumatic braking. It allows for shorter stopping distances, it allows for electronic control of each of the cars. So there are some advantages, obviously you could get some of those benefits used in other technology such as distributive power and I think that a lot of railroads get some of the benefit from doing that. So, I think there is a lot that still has to be overcome. We continued to have good success in the international markets primarily in the mining area where unit trains is the standard, Australia, Brazil, South Africa. So, I think that there is other complication in the U.S. as well and that’s related to, if you lease the car, you own it, who pays for it, who gets the benefit. All those things really need to be worked through. We see it as an opportunity not an immediate one, but long-term. This technology is good technology that adds value, it helps in the safety efficiency and the productivity of the railroads and it will be adopted overtime is our opinion.

Great. And then Ray, you commented on transit obviously federal funding, I think your view makes sense that almost likely to just go on sort of a stable funding pattern for a little while until we can get Congress to move. But how should we be thinking about that in terms of orders? It's sort of that was -- is that what transit assuming at this point and can we just keep going forward from here or could we see an acceleration once it sort of clarifies?

So, I think Allison that we have a very strong backlog in transit to transit project sort of three to five years in nature. So, I think a stable trending toward increasing or slightly increasing funding stream is very good for us. We have a pretty good share on the orders that we win. And we have lot of ongoing projects. So, those projects are going to sustain our ability to grow our market. If you look at it on an international basis, we have a strong foundation in North America. And our goal is to increase our market share in Europe and other places in the world. So, if the funding stream remains the same, it's a good thing for us. If it increases, obviously it's better. But we're in a very good position and the opportunities really are international in the transit market for us.

Okay, perfect. Thanks guys.

Thanks, Allison.

The next question comes from Matt Brooklier of Longbow Research. Please go ahead.

Hey, thanks. Good morning.

Good morning, Matt.

So, just kind of a higher level question for you, there has been obviously more talk of potential PTC delay here. You guys reaffirmed your guidance. I guess the question is what gives you convection that you are able to potentially hit this guidance with incremental potential complications or delays on the PTC side. I mean what kind of differentiates, what you are doing in the market versus other, who are involved?

Yes. When you think about the delay on positive train control, what the delay is, is the full implementation of PTC on all the designated routes and designated locomotives. That delay does not indicate this and truly we see it, there is any delay effort to try to get to that, still that same deadline and lot of work continues. And we’re part of all that work trying to develop and interoperable system with PTC. So any delay, I don’t think they are going to stop spend money because I think that what they are trying to say is hey, we cannot meet the deadline but we are still going to work toward trying to, and we are going to get it done as soon as possible. I think that’s more of the message than we are going to stop and wait and continue. I think the work will continue.

Okay. And are you able to provide some color on what total PTC sales in first quarter and how that broke out between the freight and the transit divisions?

Yes. Our first quarter sales were about 72 million in PTC related products, about half of that was freight, about a quarter of it was international and about a quarter of it was transit. And that’s pretty much, if you look at the total spend up to this day in that area, that’s about where the percentages are at.

Okay, that’s helpful. And just last question, you mentioned seeing some benefit from weather on the maintenance side, is there any carry forward into second quarter and then if there was any negative weather impact maybe you could talk to that?

Yes. Obviously the weather impact, the negative part of it would have been just the railroads probably didn’t get the loads carried that they would have normally had. They did not have the weather impact. So there might have been more activity but the severe weather is very tough on the equipment which I think we saw some added sales related to that. As we look forward, during the quarter the deliveries I think were actually down fourth quarter of ‘13 to first quarter, almost 2,000 cars. We would expect with the backlog gone up to 82,000 which is I think the second highest in recent years, I think 2006 it might have peaked out at 88,000 or something like that. And so, I would think that deliveries should actually increase going forward into the second, third, fourth quarter based on that backlog. That would be a plus that we would obviously see.

Okay, good color. I appreciate the time.

Thank you.

The next question comes from Thom Albrecht of BB&T. Please go ahead. Thom Albrecht - BB&T: Hey guys, couple of questions here. So, just in your guidance, it looks like you’re calling for probably 8% -- 7% to 8% organic growth. I want to see if you’re comfortable with that because as I went through your 10-K your organic growth last year was less than 1%.

Yes. Right now that’s about we’d expect to get half of our growth this year from internal growth and about half from acquisitions. Your math is pretty good, Thom. Thom Albrecht - BB&T: Okay. So, on this weather issue, I am just trying to picture it a little bit more specifically than couple of other questions. I actually picture that weather probably created, maybe not in the beginning but the second half for the quarter, some repair opportunities in freight but maybe was more of a hindrance to transit and that that might lead to more repair work in the second quarter. Is that possible, or am I just over thinking it?

Yes, I think you’re over analyzing it a little bit, Thom. I don’t think it’s going to carry over into transit. And I think most of the weather type things are behind us now. The only thing that you see in transit sometimes is delayed spending based on budgets or money available. But we don’t know of anything that happened that way. Last year, during 2013 hurricane Sandy had a major impact on the transit lines, and there was a lot of aftermarket that happened from that and we saw that. But I don’t anticipate any little pop in transit or freight into the second quarter related to that weather. I think the biggest thing will be that hopefully traffic will continue to improve as we’ve seen in last few weeks and that we would also expect that OEM delivery, the freight cars going up into the second quarter. Thom Albrecht - BB&T: And then the other question is in recent years, usually the first quarter EBITDA margin is the low point for the year, but you had a very impressive 17.5% margin, do you think that could be the low point for this year as well?

We’re probably not going to comment on that, but I can, I would like to congratulate Ray Betler and the entire team of really operating that peak performance which I think that we always stride for, we are working for incremental improvement. I think it was a lot of questions in the last call related to the any improved margins and I think that we said with confidence we’re going to continue to try to do that and that’s our goal and we’ll continue to do that going forward.

Thom, I want to thank you very much for a certain expectations from it. Thom Albrecht - BB&T: Nothing like (inaudible). And I’ll get out, get back in queue in a moment, but I think Pat said the organic growth was about 75% in the first quarter, so that means your organic growth was just under 10%; is that a correct figure?

Yes, our organic growth was exactly three quarters of the total. That’s right. Thom Albrecht - BB&T: Okay. All right. Thank you very much.

Thank you, Thom.

Thanks Thom.

The next question comes from Justin Long of Stephens. Please go ahead.

Thanks. Good morning and congrats on the quarter.

Thank you.

I saw that the 1,000 unit locomotive order in South Africa you’ve been talking about was placed, it looks like with four builders. So I was wondering if you could talk about the bidding process for components associated with those locomotive. What’s the potential opportunity and timing around winning some of this business? And then also just longer term, could you remind us of the additional locomotive and freight cars that are currently being discussed as potential orders in South Africa?

Okay. In South Africa, you are correct. There was 4 builders were selected, they split up the electric locomotives and the diesel locomotives. Right now, the locomotive builders are going through the bidding process. I can tell you, in the last month, we’ve made trips to South Africa, we’ve made trips to China and we visited with the other people here in the North America. That bidding process is going on right now. We hope to have some success in our bids, we won’t know for a little bit of time and whenever we do know, we’ll announce it. But, we’re trying to get some content from all the builders. Related to the transit vehicles, I think it’s 3,600, Ray?

Yes.

They have laid out a contract to Austin. Again we’re aggressively talking to Austin about our participation in that project. We’re not in a position where we could announce anything at this point. But again, we’ll keep you informed. There are nice opportunities. We were pretty impressed with our South African operation and our General Manager in that area is doing a fine job and creating, a lot of requirements are going to be that you have to have localization of the manufactory in order to participates, so our visit was timely and important.

Great, that’s a helpful update. It sounds like there is a lot of activity. And I guess as a follow up one thing, I wanted to touch on with PTC and kind of follow up on an earlier question and your guidance. How much of your backlog today is PTC related, I am just trying to get a sense for how much visibility you have to that 10% to 15% increase in PTC revenue, you’ve guided for this year. Is that already in the backlog today or do you need to win additional contracts to hit that target?

There is about $150 million in the backlog with PTC and its spread out over a long period of time. Typically we do not get a large backlog on the onboard computer, the only way we get some backlog is signing some of these transit contracts, but when we look at the freight railroads, where we are doing contract we are (inaudible) work as well as the onboard computer those usually coming in on the purchase order on the short delivery and we are able to support that.

Okay, great. That’s helpful color. I will leave it at that. I appreciate the time today.

Thank you.

The next question comes from Steve Barger of KeyBanc. Please go ahead.

Hi, good morning.

Good morning, Steve.

A couple of Fandstan questions. You talked about having an installed base or they have an installed base in 100 countries, what’s the dollar basis of the installed base if you know? And does that base track the revenue mix of 60% transit and 40% industrial?

I don’t have the dollar value of the installed base, and I tell you why, Fandstan was a company that started in the UK. And their when we did meet with their CEO it was amazing that their strategy was very similar to ours, he named the same -- and I know a lot of companies have the same strategies, but he named the same but he also did a lot of the growth related to acquisitions of companies around the world. So I would imagine that installed base is excellent, but keep in mind it’s only a 30% aftermarket business. So we think there is some opportunity there to grow that. Some of the products they installed though even installment though they are for 30, 40 years and that’s they make a conductor rail, a third rail product that actually make the rail with -- it’s a [clouded] material with aluminum that the electricity is transmitted on and that product doesn’t really have an aftermarket. So there is some products that create an opportunity for us and there is others that probably you are just not going to get in aftermarket with.

I got it. And that actually sagged into the next question, in terms of the useful life on transit or industrial, is more of the aftermarket focused on the industrial side and typically for the aftermarket that you are serving, are these types of products where customers can push out or defer CapEx or do they have a more predictable replacement cycle?

On Fandstan if you look at the pantograph, the pantograph is the -- how do I explain it, it’s on top of the -- if you ever look at a street car or a transit car on top of it you see this thing that kind of [scissors] up some up and down on springs and that has a good aftermarket and I knew that a carbon shoes up there that need to touch the wire that’s hot. Also on the third rail shoe gear that wears as well because they sale the actual component that goes between the vehicle and the third rail. And some of the other industrial products which are large induction lines they import, they have C ports where they make these big wheels in festoons, some of those have some aftermarket, not a lot less than normal. So it’s actually more on the transit has the aftermarket in my opinion than the industrial. I don’t Ray you may have a comment on that.

Yes, I agree 100% what your assessment are. And I think that high maintenance where products are just what I will explain the pantograph is by far to top of list in terms of opportunities.

Got it. Historically speaking can you give us the growth rate for Fandstan?

It probably won’t -- intrinsic I would think it’s probably in the 3% to 5% range, but if you look at it historically they’ve had acquisitions over the year, so it’s grown rapidly.

So you think that 3% to 5% is the organic plus or minus?

That’s what our assumption is, yes.

And I know it’s going to be not contribute much on the EBITDA line this year, but as you look out and you just look at this family of products where do you think the Fandstan transit and industrial margins can go, if you want to (inaudible)?

Yes, normally what I’ll tell you is they’re going to improve, you could be assure that our goals and objectives will show that we’re going to try to improve those margins. We really don’t have a goal in mind other than continuous improvement. We think there is, as I stated we think there is a lot of opportunity especially as we apply our lean manufacturing techniques to Wabtec performance system. We think that there is a lot of sourcing opportunities, I apologize I think I’m getting an echo for some reason. Yes, I would think that probably is an opportunity, but I’d rather not give you an exact number.

Okay. And since been late in the call, actually one more and then get back in line. You’ve been expanding your international footprint to gain access of these global markets, which certainly has been a successful strategy. But are there still opportunities domestically from a share standpoint, mid-weather it’s on content on a railcar or locomotive or are you kind of getting there and yield more grow with the market?

Well, I think there are certain products and certain businesses that will grow with the market, but there are also opportunities to broaden our product lines, which would allow us to increase our share. We still do not offer the full range of products in transit or freight.

Is there, just to follow-on, is there more opportunity on transit or freight to broaden the product lines?

Transit’s a small market in the U.S. so you could get incremental improvement, but it’s not going to end up that much in the bottom-line. Freight’s a much larger market, so I would think that the growth would be more in freight and faster than in the transit.

Got it. Thanks.

Next question comes from Art Hatfield of Raymond James. Please go ahead.

Good morning. Hey thanks for taking my question, I’ll try to be quick. If you already hit on this, I apologize, Al. But you had mentioned a regulatory kind of hang-up on Fandstan, where is that add? Is it here or the UK?

Really it's a global regulatory issue that I think will be resolved in the second quarter.

And is that just kind of your comfort level with where is that or is that based on kind of legal or regulatory requirement that they make a decision within a certain amount of time?

I think that there is probably no time limit on this decision, but we're confident that it will be resolved.

Just going back to Tom's question about margins for the rest of the year and I think my understanding on this is correct. But once you start to bring in Fandstan, Fandstan initially is going to have a margin drag. Is that not correct?

It will have a -- yes, it's lower than the transit on average, right.

Right. Okay. So that is just…

Plus we have the expense, the expenses of the integration, as well as the purchase price accounting. So, initially it has had larger drag than it will say once you -- what you have to do is the inventory value that is building the inventory has to flow out. And your backlog, you have to go through your backlog, you have to operate through that backlog. And any profit that’s in either one of those have to flow through the P&L is a negative hit. I learned that from these accountants that (inaudible) try to explain this.

Yes, unfortunately. Now you did a good job. So, when we think about Q1 potentially versus the rest of the year, we need to take that into account when we think about margin excluding all other issues that could come out, right?

That's a valid statement, but as you know our goal is to continue to improve margins.

I understand that. Thank you.

Thank you, Art.

Next question comes from Liam Burke of Janney Capital Markets. Please go ahead.

Yes, thank you. Good morning, Al.

Good morning, Liam.

Al, several quarters ago you talked about your Chicago service center and today in your prepared comments you said service is going to be a big part of your growth going forward. Do you see any need to expand that Chicago service area and is that going to affect any kind of capital expenditure?

Yes. We expanded that in 2013, right Ray?

Yes.

And it was not a major expenditure. As our offering continues to take hold then we do more in that area. We will have some capital going to be required in order to expand because of locations and everything in that particular market area.

Now do you plan on taking that outside of Chicago or is that just kind of where you just kind of continue?

Yes. Right now we have a repair facility in Houston; Chicago was a Greenfield site that we put in. We have one down in Houston, we have one in Salt Lake City, we have a repair in Boise and Chicago now. I think those are the locomotive repair centers we have. So, we do have quite a few now.

Okay. And Pat, you mentioned that a lot of the cash you have is residing overseas, does that change any of your -- how you are going to address your capital needs in the future?

No, I mean we contemplate that in our cash plan every year. Really our goal is to use that cash and reinvest in the business and do it in a way that’s the most efficient from a treasury and a tax standpoint.

Great, thank you.

The next question comes from Samuel Eisner of Goldman Sachs. Please go ahead.

Yes. Thanks very much. Good morning everyone.

Good morning, Sam.

Just going back to few of your comments on the share repurchase, it sound like though you are going to be active I think that’s the word that you use regarding share repurchases and this represents about 2.5% to 3% of turned cap. Just curious how you guys are thinking about using that outstanding, I guess $200 million? Should we expect you to do that by the end of the year or should that creep into ‘15 as well?

It could very easily creep into beyond, I think if you historically look at what we’ve done on share repurchases when we say active I think that you’re going to see more of the same. We’ll be opportunistic; we definitely want to minimize any creep that would happen with the share count. We just wanted to point out that the first quarter is not indicative of our normal strategy because we only had a window that was open for very short period of time, I think maybe a week. It was open and there was a lot of, that’s when the stock-based comp gets spin as well. So, we just want to point out that the first quarter is not indicative of our strategy.

Understood. And then Pat on the cash generation I think you said about $26 million in cash from ops just that seems to be down about $6 million year-on-year. So just curious what’s driving the lower cash generation for the company?

Well, our first quarter is always a challenge. We have a number of uses of cash I mean simply paying taxes and other items that normally build up throughout the year. So, we end up having sort of our weakest cash generation in the first quarter. And that gets better as the year goes on. Clearly the growth of the sales, the top-line has impacted our use of cash as we -- our working capital has gone up with receivables and inventories. So, we tend to see as the year goes on that the cash generation improves quarter-over-quarter. And really I don’t think that this is anything that’s anything problematic.

Okay. So it just sounds about $6 million of working capital built. And then on PTC, I think last quarter there was a delay or push out in revenue or PTC revenue that was going to hit in the fourth quarter, has that all been captured in the number that you set today Al, or is there still more to come on that portion that was delayed?

No, I think it’s all captured in what we discussed. And I am struggling a little bit to remember exactly which delay, I don’t know of any, the large amount percentage…

Orders were pushed out.

Orders were pushed out, okay. Yes. No, I don’t think there is anything hang in there, okay?

Understood. Thanks.

Okay, thanks Sam.

The next question comes from Greg Halter of Great Lakes Review. Please go ahead.

Yes, thank you. Good morning guys.

Good morning Greg.

I wondered if you could comment on how the MRS roll out is going down in Brazil.

Right now our pilot program continues to operate, it’s utilizing the PTC system. We’re working through trying to solve any of the issues we have with the system; at the same time, we’re expanded into new areas, we’re doing it section-by-section. I think it’s going well. We stay very close to it. I don’t know if any major concerns that we have at this point other than trying to complete it as soon as we can. It’s a very large system that has a lot of tunnels, there is a lot of complexities with the signaling system that we’re working through.

All right. And Pat, wondered if you had figures for total assets and equity at the end of March?

I do. Our total assets are $2,917 million and are shareholders equity is $1,680 million.

All right, thank you. And within the freight segment, I wondered if you could comment on how the industrial piece of that did, if that was a headwind, tailwind or what?

Yes, it’s actually improving. What we are seeing is the industrial business is coming back. I think that the production of natural gas has gone up significantly, we see the results of that. So our industrial business is returning not completely at this point, but is showing signs of being healthy into the future.

All right. And couple of final ones, on both the freight and transit, wondered if you could break down the OEM versus the aftermarket in the quarter?

Okay. I can tell you that on freight OEM was 25%, aftermarket was 55%; on transit OEM was 35% and aftermarket was 65%; total was 40% OEM, 60% aftermarket for total business.

Great, thank you very much.

Thanks a lot.

The next question comes from Scott Blumenthal of Emerald Advisers. Please go ahead.

Good morning, gentlemen.

Good morning Scott.

Al, you mentioned the -- in Scott’s question, very first question long ago that you’re going to benefit and you’re maybe one of the few companies to benefit from the severe weather. You also mentioned that you felt that you saw benefit here during this quarter. Did that occur closer to the end of the quarter and maybe can you provide us with some insight as to how the cadence of the sales progressed through the quarter?

Yes, it was towards the end of the quarter, mostly in the third month, actually in March. I think they, probably just trying to keep everything running was probably the goal in January, February. And it’s not, don’t misunderstand, this was not a large increment that we saw from that but it was worth noting.

Okay. Thank you for that. And as Allison mentioned, crude and natural gas are obviously now big topics in the domestic rail business, maybe this is a better question for Ray. Can you maybe provide an update on the opportunities that this might represent for Wabtec, maybe locomotive engine types, natural gas tenders, new types of fueling system, those type of things?

I think Scott as far as opportunity for crude by rail, I think we’ve mentioned before that the type of trains and the type of haulage really doesn’t have a significant difference on us in terms of our opportunities; certainly if the volumes go up, that’s an opportunity. But in terms of technology, technology applications and product applications are pretty much the same. If there is any kind of migration or regulatory requirement to go [PTC] obviously that would be a big plus. There is product down, instead we are doing to always to try to capture incremental opportunities in those areas. Some of those are follow-ons from some of the incidence that have occurred in that market. But in general, I think the best opportunity we have comes through the increased volume.

And if the technology went from diesel fuel to natural gas, it really would not have a major impact on us.

Okay, fair enough. Thank you.

Hey Scott, thank you.

(Operator Instructions). This concludes our question-and-answer session. I would like to turn the conference back over to Albert Neupaver, Chairman and CEO for any closing remarks.

Thank you very much. And we will talk to you soon.