Albert J. Neupaver

Thanks, Tim, good morning. We had a strong operating performance in the first quarter, with record sales of $583 million and record earnings per diluted share of $1.22. The company really hit on all cylinders during the quarter, which led us to preannounce the results and increase our guidance for the year.

As we'll discuss, our performance was driven by strong growth in our Freight Group. Our overall business is performing very well thanks to our diversified business model, our strategic growth initiatives and the power of our Wabtec Performance System, which I'll talk a little bit about today.

We are in compelling growth markets around the world, and we remain excited about our future opportunities. As I mentioned, a couple of weeks ago we increased our guidance for the year, and today we affirm that. Based on our first quarter results and current outlook, we expect our full year earnings per diluted share to be about $4.80, with sales growth now expected to be about 15% for the year. This EPS guidance is about 35% higher than our GAAP EPS last year, and 12% higher than the guidance we announced earlier in the year.

Our guidance has some assumptions. Our assumptions are: the global economy grows modestly, the freight rail traffic improves with the economy, our transit markets remain stable and no major changes in foreign exchange rates. As always, we will be disciplined when it comes to controlling costs, focused on generating cash to invest in growth opportunities and ready to respond decisively to any changes in market conditions.

Let me talk a little bit about the freight rail market. In North America rail traffic is mixed so far this year. Through mid-April, car loadings were down 1.8%. But if you exclude coal, car loadings were actually up 2.9%. Intermodal, meanwhile, was up 3.6%. Of the 20 traffic categories that are tracked, 13 are up so far this year, with particular strength in autos, metals and petroleum products. The OEM market drivers are positive in 2012. Forecasters are now expecting that about 55,000 new freight cars will be delivered in 2012. That compares to about 48,000 in 2011. Nearly 17,000 cars were delivered in the first quarter. The backlog remained at about 60,000 cars, and it appears that new car orders have stabilized.

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