Meeting Tier 4 Emissions




Ric Kleine
Vice President
Industrial Business
Engine Segment

                                                                                                          ...
Engine Segment

    Stronger Industrial Engine Sales Mix
              By Industrial Application                          ...
Tougher Global Emission Standards
                           Off-
                         highway
                       ...
Tier 4 Regulations Approaching
                 Near Zero Emissions

                                 9.2                 ...
A Proven Technology Route
                                                                                                ...
System Integration Advantage

    All core technologies for Tier 4 are available
    from within Cummins own resources
   ...
Integration with OEM Chassis

    Equipment factors             Operational factors
    Many different types          Vibr...
Designed for the Customer

               High Uptime
               Low Operating Costs
               Low Maintenance
  ...
Thank You for Your Interest in




              For Additional Information Contact:
           Dean Cantrell, Director – ...
Appendix
Cummins Inc.
                                      2007 Revenue by Segment
         Macro growth trends                   ...
Cummins Inc.
                               2007 Revenue by Marketing Territory
      International revenue               ...
Cummins – Historical Performance
                                       Sales                                             ...
Engine Segment
                                      2007 Revenue by Product
         Emission regulations
         create...
Engine Segment
                             2007 Revenue by Market Application
         Gaining market share in           ...
Engines – Historical Performance
                          Sales                                                  Segment ...
Power Generation Segment
                                  2007 Revenue by Product
        Capitalize on industry
        ...
Power Generation – Historical Performance

                              Sales                                            ...
Components Segment
                                    2007 Revenue by Product
        New products launched              ...
Components – Historical Performance

                           Sales                                                 Segm...
Distribution Segment
                                      2007 Revenue by Product
        Continue acquisitions,         ...
Distribution – Historical Performance
                             Sales                                             Segme...
Joint Venture Sales Unconsolidated

                                           Engines                                    ...
Joint Venture Sales Unconsolidated
                          Power Generation                                             ...
Non-GAAP
Reconciliations
Non-GAAP Reconciliation – EBIT

                                                                                 Years End...
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CONEXPO%20Investor%20Presentation%202008

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CONEXPO%20Investor%20Presentation%202008

  1. 1. Meeting Tier 4 Emissions Ric Kleine Vice President Industrial Business
  2. 2. Engine Segment Where We’ve Been Who We Are Historical Performance Joint Venture Sales Geographic Market Application Consolidated Sales ($B) Unconsolidated ($B) Stationary India 7% South Pacific 2% Power 11% Heavy-duty $8.2 $1.9 R G truck 24% R SE/NE Asia 5% CA Mining/Rail $7.5 AG Govt/O&G C % East Asia 5% 23 $6.7 US/Canada % Marine 15% $1.5 25 55% $1.3 Latin $5.4 $1.2 America & Mexico 12% $3.6 $0.8 Medium-duty Construction Truck & bus 16% & Ag 18% EMEA Light-duty 14% Automotive & RV 16% 2007 Sales: $8.2B 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Where We’re Headed How We’re Getting There Future Performance Joint Venture Sales Consolidated Sales ($B) Unconsolidated ($B) Emission regulations $3.7 $13.3 GR Emerging markets CA R G 3% CA 1 Strategic OEM partnerships % 20 $7.5 New engine platforms $1.5 Steady aftermarket revenue growth 2006 2011 2006 2011 2
  3. 3. Engine Segment Stronger Industrial Engine Sales Mix By Industrial Application By Geography $3,000 $3,000 $2,676 $2,676 $2,500 $2,500 $2,063 $2,063 $2,000 $2,000 $1,791 $1,791 $M $M $1,380 $1,380 $1,500 $1,500 $1,000 $1,000 $500 $500 $0 $0 2004 2005 2006 2007 2004 2005 2006 2007 CON/AG HHP markets US ROW 3
  4. 4. Tougher Global Emission Standards Off- highway 2011-14 Europe 2009 China US / 2010 Canada 2010 Australia 2008 India Mexico Brazil 2010 2008 2009 4
  5. 5. Tier 4 Regulations Approaching Near Zero Emissions 9.2 Tier 1 / Stage 1 (1996) NOx g/kW-hr 6.4 Tier 2 / Stage II (2001) 4.0 Tier 3 / Stage IIIA (2005) 2.0 45% lower Tier 4 Interim / Stage IIIB (2011) 0.4 90% lower Tier 4 Final / Stage IV (2014) 0 0.54 0.02 0.2 PM g/kW-hr 90% lower 174-751 hp Power Category 5
  6. 6. A Proven Technology Route Tier 2 0.20 Engine - out Particulate [g/kW-hr] Tier 3 In-Cylinder Cooled EGR, VG Turbo 0..16 Combustion & Combustion Optimization Optimization 0.12 0.08 Incremental Particulate Architecture Filter 0.04 Tier 4 Final Tier 4 Interim 0.00 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 Engine - out NOx [g/kW-hr] 174-751 hp Technology Route 6
  7. 7. System Integration Advantage All core technologies for Tier 4 are available from within Cummins own resources Better integrated & performance optimized VG Turbo Integrated control HPCR system from ECM Direct Flow Air Intake Particulate Filter Crankcase Filtration 7
  8. 8. Integration with OEM Chassis Equipment factors Operational factors Many different types Vibration & shock loads + Wide variations in duty Dust & dirt cycles & load factors Angularity Space restrictions No ram air cooling 8
  9. 9. Designed for the Customer High Uptime Low Operating Costs Low Maintenance Initial Machine Cost Lowest Cost of Ownership Packaging / Cooling Higher Performance Safe Operation Clean Engine Sociability 9
  10. 10. Thank You for Your Interest in For Additional Information Contact: Dean Cantrell, Director – Investor Relations (812) 377-3121 Dean.A.Cantrell@Cummins.com www.Cummins.com 10
  11. 11. Appendix
  12. 12. Cummins Inc. 2007 Revenue by Segment Macro growth trends Components Segment 19% play to Cummins’ strengths Engine Segment 52% Disciplined Distribution investment for Segment 10% growth Demonstrated technology leadership Power Gen Segment 19% FYE 2007 Data Sales: $13.0 billion EBIT: $1,227 million EBIT Margin: 9.4% 12
  13. 13. Cummins Inc. 2007 Revenue by Marketing Territory International revenue Africa/Middle East Canada 5% is 54% of consolidated 3% revenue in 2007 Mexico/Latin Most international America 9% areas growing at double digit rate Demonstrates our United States Asia/Australia 46% 19% geographic diversity Europe/CIS 18% 13
  14. 14. Cummins – Historical Performance Sales EBIT $13,048 $14,000 $1,400 $1,227 $1,179 $12,000 $1,200 $11,362 $9,918 $10,000 $1,000 $907 $8,438 $ Millons $ Millons $8,000 $800 $6,296 $543 $6,000 $600 $4,000 $400 $181 $2,000 $200 $0 $0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 14
  15. 15. Engine Segment 2007 Revenue by Product Emission regulations create opportunities Midrange Parts and Emerging markets (3-9L) 40% Service 21% Strategic OEM partnerships New engine platforms Aftermarket revenue creates stable earnings High Horsepower (19-91L) 17% FYE 2007 Data Heavy-Duty Sales: $8.2 billion (10-15L) 22% EBIT: $589 million EBIT Margin: 7.2% 15
  16. 16. Engine Segment 2007 Revenue by Market Application Gaining market share in Stationary on-highway markets Power 11% Heavy-duty Industrial markets truck 24% Mining/Rail supported by non- Govt/O&G residential construction Marine 15% and commodity markets Expanding capacity to meet growing demand Construction Medium-duty & Ag 18% Truck & bus 16% FYE 2007 Data Light-duty Sales: $8.2 billion Automotive EBIT: $589 million & RV 16% EBIT Margin: 7.2% 16
  17. 17. Engines – Historical Performance Sales Segment EBIT $9,000 $800 $733 $8,182 $8,000 $7,511 $700 $6,657 $589 $7,000 $582 $600 $6,000 $5,424 $500 $5,000 $M $M $400 $328 $4,000 $3,582 $300 $3,000 $200 $2,000 $100 $62 $1,000 $0 $0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 17
  18. 18. Power Generation Segment 2007 Revenue by Product Capitalize on industry Alternators growth Commercial 20% 58% Leverage existing market leadership Rental 2% Establish leadership in all major markets Expand into new and Consumer adjacent markets 11% Power Electronics 4% FYE 2007 Segment Data Energy Sales: $3.1 billion Solutions 5% EBIT: $334 million EBIT Margin: 10.9% 18
  19. 19. Power Generation – Historical Performance Sales Segment EBIT $3,500 $400 $3,060 $334 $350 $3,000 $300 $2,416 $2,500 $250 $220 $1,999 $2,000 $1,842 $200 $M $M $145 $150 $1,500 $1,329 $100 $60 $1,000 $50 $500 $0 ($19) $0 ($50) 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 19
  20. 20. Components Segment 2007 Revenue by Product New products launched Specialty Filtration Industry leading Air Intake 6% Systems technology 9% Turbocharger Capacity expansion 29% Acoustic Grow with CMI and non- Exhaust CMI engine volumes 10% Leverage global distribution to grow aftermarket Engine Fuel Filtration Systems 17% 14% FYE 2007 Segment Data Catalytic Sales: $2.9 billion Exhaust EBIT: $153 million 15% EBIT Margin: 5.2% 20
  21. 21. Components – Historical Performance Sales Segment EBIT $180 $3,500 $153 $160 $2,932 $3,000 $140 $2,500 $2,281 $120 $107 $2,000 $2,000 $100 $1,783 $89 $M $M $86 $84 $80 $1,500 $1,292 $60 $1,000 $40 $500 $20 $0 $0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 21
  22. 22. Distribution Segment 2007 Revenue by Product Continue acquisitions, Service 17% consolidations and Engines integrations 21% Leverage Cummins equipment growth World-class customer support Build capabilities – invest in growing regions Power Parts, Generation Filters, & FYE 2007 Segment Data 25% Consumables Sales: $1.5 billion 37% EBIT: $187 million EBIT Margin: 12.1% 22
  23. 23. Distribution – Historical Performance Sales Segment EBIT $1,800 $200 $187 $180 $1,540 $1,600 $1,385 $160 $1,400 $144 $1,191 $140 $1,200 $120 $973 $107 $1,000 $M $M $100 $800 $79 $669 $80 $600 $60 $51 $400 $40 $200 $20 $0 $0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 23
  24. 24. Joint Venture Sales Unconsolidated Engines Distribution $2,500 $4,000 $3,435 $3,500 $1,940 $2,000 $3,000 $2,497 $1,474 $2,500 $1,500 $ Millions $ Millions $1,316 $1,232 $1,285 $2,000 $1,715 $529 $1,000 $1,500 $1,204 $1,029 $1,000 $500 $500 $0 $0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 In 2003, sales from certain JVs (colored red above) were treated as unconsolidated; adoption of FIN 46R in 2004 required the 24 company to consolidate the results of certain JVs.
  25. 25. Joint Venture Sales Unconsolidated Power Generation Components $180 $200 $166 $162 $175 $180 $160 $160 $140 $130 $140 $120 $123 $105 $120 $110 $ Millions $ Millions $100 $94 $100 $80 $72 $72 $80 $60 $60 $40 $40 $20 $20 $0 $0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 25
  26. 26. Non-GAAP Reconciliations
  27. 27. Non-GAAP Reconciliation – EBIT Years Ended Millions 2003 2004 2005 2006 2007 EBIT $ 181 $ 543 $ 907 $ 1,179 $ 1,227 Less: Interest Expense $ 90 $ 111 $ 109 $ 96 $ 58 Earnings before income taxes $ 91 $ 432 $ 798 $ 1,083 $ 1,169 and minority interests We define EBIT as earnings before interest expense, provision for income taxes and minority interests in earnings of consolidated subsidiaries. We use EBIT to assess and measure the performance of our operating segments and also as a component in measuring our variable compensation programs. The table above reconciles EBIT, a non-GAAP financial measure, to our consolidated earnings before income taxes and minority interests, for each of the applicable periods. We believe EBIT is a useful measure of our operating performance for the periods presented as it illustrates our operating performance without regard to financing methods, capital structure or income taxes. This measure is not in accordance with, or an alternative for, accounting principles generally accepted in the United States of America (GAAP) and may not be consistent with measures used by other companies. It should be considered supplemental data. 27

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