Sustainable Performance in
Global On-Highway Markets

Mid America Truck Show
March 22, 2007
Disclosure Regarding Forward-Looking Statements
& non-GAAP Financial Measures

This presentation contains certain forward-...
Welcome and Introductions

 David Geraghty – Commercial Vehicle Engine
 Business
 Dan Davis – Emission Solutions – Global ...
Diversified Global Power Leader
          Four Complementary Businesses




Engines        Power       Components   Distri...
Creating Greater Shareholder Value

                    550                               l
                              ...
Cummins is a Long-Term Player in
Global On-Highway Markets

  We have fundamentally changed our
  business model
  Custome...
Aggressively Pursuing Cost Leadership


                                                                     Engine Segmen...
Virtual Integration with OEM Partners




                                        8
Growing Share with OEM Partners




                                  9
Delivering Great End-Customer Value




                                      10
System Integration is Critical

                    Controls Integration




   Vehicle, engine and aftertreatment . . .
 ...
Investing in Global Light Duty Diesel




                <6000 lb GVW           6000 – 8500 lb GVW            >8500 lb GV...
Investing in Emerging On-highway
Markets




                                   13
Investing in Our Distribution Channel




Company-owned

Joint Venture

Independent


                                    ...
Cummins Emission Solutions




                             15
Components Segment
                                         2006 Revenue by Product
         Strategic advantage in       ...
Unique Technology Integration

 Fuel Systems
 Electronic Controls
 Air Handling Systems
 Filtration and Aftertreatment
 Co...
Why Cummins Emission Solutions exists
                          0.11
                                                   US...
The Right Technology Matters

Active Particulate Filter       NOx Adsorber
                              Periodic Fuel Inj...
Three Product Segments in
Aftertreatment Market

 Packaging (canning)
 Components (e.g. dosing systems,
 controls)
 System...
Cummins Emission Solutions Technology Creates On-
       Highway MD/HD Truck Market Leadership Position


      EPA 2007 M...
Evolving global emission standards
creates growth opportunities
              Global Market Size for On-highway
          ...
Cummins Power Generation
  Auxiliary Power Units




                           23
Power Generation Segment
                                    2006 Revenue by Product
         Turnaround complete
        ...
Consumer Products Adjacencies


   RV                                                         Truck
  OEMs                ...
ComfortGuard APU System

Integrated system which
eliminates the need to idle the
main vehicle engine
Reduces fuel consumpt...
Positioned for Growth in APU Market

                          APU Market Size     Strong and respected brand
            ...
Cummins is a Long-Term Player in
Global On-Highway Markets

  We have fundamentally changed our
  business model
  Custome...
29
Appendix
Cummins Inc.
                                     2006 Revenue by Segment
         2006 – Outstanding                  Com...
Cummins Inc.
                    2006 Revenue by Marketing Territory
 International revenue                         Africa...
Cummins – Historical Performance
                                  Sales                                                  ...
Engine Segment
                                         2006 Revenue by Product
         Emission regulations
            ...
Engine Segment
                                    2006 Revenue by Market Application
         Heavy-duty Truck           ...
Engines – Historical Performance
                    Sales                                                Segment EBIT
   ...
Power Generation Segment
                                    2006 Revenue by Product
         Turnaround complete
        ...
Power Generation – Historical Performance

                          Sales                                               S...
Components Segment
                                         2006 Revenue by Product
         Strategic advantage in       ...
Components – Historical Performance

                     Sales                                               Segment EBIT...
Distribution Segment
                                         2006 Revenue by Product
         Broadening product         ...
Distribution – Historical Performance
                          Sales                                       Segment EBIT
 ...
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  1. 1. Sustainable Performance in Global On-Highway Markets Mid America Truck Show March 22, 2007
  2. 2. Disclosure Regarding Forward-Looking Statements & non-GAAP Financial Measures This presentation contains certain forward-looking information. Any forward-looking statement involves risk and uncertainty. The Company’s future results may be affected by changes in general economic conditions and by the actions of customers and competitors. Actual outcomes may differ materially from what is expressed in any forward-looking statement. A more complete disclosure about forward- looking statements begins on page 61 of our 2006 Form 10-K, and it applies to this presentation. This presentation contains certain non-GAAP financial measures such as earnings before interest and taxes (EBIT). Please refer to our website (www.cummins.com) for the reconciliation of EBIT to GAAP financial measures. 2
  3. 3. Welcome and Introductions David Geraghty – Commercial Vehicle Engine Business Dan Davis – Emission Solutions – Global OEM Business Rich Eikill – Consumer Business, Power Generation Shawn Wasson – Auxiliary Power Unit Business, Power Generation 3
  4. 4. Diversified Global Power Leader Four Complementary Businesses Engines Power Components Distribution Generation 4
  5. 5. Creating Greater Shareholder Value 550 l nu a r n n ge A Retu 500 vera older A 450 ears 46% hareh y al S r last 4 400 Stock Price Index Tot Ove 350 300 250 200 150 100 50 03 04 05 06 3 2 4 5 6 3 3 4 4 5 5 6 6 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 n- n- n- n- ep ep ep ep ar ar ar ar ec ec ec ec ec Ju Ju Ju Ju M M M M S D D S D S D S D CMI S&P 500 Peer Avg. 5
  6. 6. Cummins is a Long-Term Player in Global On-Highway Markets We have fundamentally changed our business model Customers recognize Cummins for our technology leadership and dependability We are investing in the next generation of profitable growth opportunities in global automotive markets 6
  7. 7. Aggressively Pursuing Cost Leadership Engine Segment Six Sigma $8,000 $800 $7,511 $6,657 $7,000 $700 Technical productivity Segment Net Sales ($M) Segment EBIT ($M) $6,000 $600 $5,424 $5,000 $500 Global sourcing $3,582 $4,000 $400 $3,435 $3,000 $300 Lean manufacturing $2,000 $200 $1,000 $100 $0 $0 2002 2003 2004 2005 2006 Segment Net Sales Segment EBIT 7
  8. 8. Virtual Integration with OEM Partners 8
  9. 9. Growing Share with OEM Partners 9
  10. 10. Delivering Great End-Customer Value 10
  11. 11. System Integration is Critical Controls Integration Vehicle, engine and aftertreatment . . . a single system designed to optimize performance, reliability, cost and emissions 11
  12. 12. Investing in Global Light Duty Diesel <6000 lb GVW 6000 – 8500 lb GVW >8500 lb GVW Light Truck (includes PU trucks, SUVs and Vans) North America 2.9 M 6.6 M 0.85 M 0% Diesel 67% Diesel Worldwide 11.7 M 0.85 M 10% Diesel 67% Diesel 12
  13. 13. Investing in Emerging On-highway Markets 13
  14. 14. Investing in Our Distribution Channel Company-owned Joint Venture Independent 14
  15. 15. Cummins Emission Solutions 15
  16. 16. Components Segment 2006 Revenue by Product Strategic advantage in Specialty Filtration emissions compliance 6% Air Intake Systems Significant future growth Turbocharger 11% in revenue and earnings 27% Multiple new product introductions Acoustic Exhaust Winning non-CMI 12% business Fuel Systems 17% Engine Filtration 2006 Segment Data Catalytic 21% Sales: $2.3 billion Exhaust EBIT: $107 million 6% EBIT Margin: 4.7% (Target: 7-9%) 16
  17. 17. Unique Technology Integration Fuel Systems Electronic Controls Air Handling Systems Filtration and Aftertreatment Combustion Technologies 17
  18. 18. Why Cummins Emission Solutions exists 0.11 US02 Tier III US98 Particulates [g/bhp-hr] 0.10 Limits of 0.09 In-Cylinder 0.08 NOx 0.07 0.06 0.05 Limits of In-Cylinder PM 0.04 0.03 US07/ US10/ 0.02 EURO-V EURO-IV Tier 4 0.01 0.00 2 0 1 3 4 5 NOx [g/bhp-hr] 18
  19. 19. The Right Technology Matters Active Particulate Filter NOx Adsorber Periodic Fuel Injection NOx Adsorber Catalyst NOx Control Using Urea SCR Soot Urea (NH3) Ash Ash Soot 19
  20. 20. Three Product Segments in Aftertreatment Market Packaging (canning) Components (e.g. dosing systems, controls) System Integration – Single point of contact for an OEM – Responsible for the entire aftertreatment system (catalyst, dosing units, controls, packaging) 20
  21. 21. Cummins Emission Solutions Technology Creates On- Highway MD/HD Truck Market Leadership Position EPA 2007 Market Share Euro 4 Market Share D 5% 3 Others CES CES 19% A 35% 27% 12% D 10% B 22% C A 10% 19% C B 27% 15% 21
  22. 22. Evolving global emission standards creates growth opportunities Global Market Size for On-highway Commercial Vehicle Diesel Catalytic Exhaust ($B) $0 $1 $2 $3 $4 $5 $6 2006 2010 22
  23. 23. Cummins Power Generation Auxiliary Power Units 23
  24. 24. Power Generation Segment 2006 Revenue by Product Turnaround complete Alternators Commercial Strengthening markets 19% 56% Expanding market share Rental Consumer growth 2% opportunities Growing project business Consumer capability 13% Power Electronics 6% 2006 Segment Data Energy Sales: $2.4 billion Solutions 4% EBIT: $220 million EBIT Margin: 9.1% (Target: 7-9%) 24
  25. 25. Consumer Products Adjacencies RV Truck OEMs OEMs Trailers Commercial Mobile Recreational Vehicles Aux. Power Unit Home Consumers Professionals Standby Portables 25
  26. 26. ComfortGuard APU System Integrated system which eliminates the need to idle the main vehicle engine Reduces fuel consumption up to 80% Payback period of 1-2 years for HD Trucks Utilize 5.5 kw Diesel platform used in all Consumer markets – Proven Design – Minimal Investment – Fast to Market 26
  27. 27. Positioned for Growth in APU Market APU Market Size Strong and respected brand 60 Industry leading support network 50 Units (Thousands) Respected relationships with 40 Owner Operators, large 30 fleets, and OEMs Leveraging Cummins Power 20 Generation experience in 10 mobile power applications 0 2003 2005 2007E 27
  28. 28. Cummins is a Long-Term Player in Global On-Highway Markets We have fundamentally changed our business model Customers recognize Cummins for our technology leadership and dependability We are investing in the next generation of profitable growth opportunities in global automotive markets 28
  29. 29. 29
  30. 30. Appendix
  31. 31. Cummins Inc. 2006 Revenue by Segment 2006 – Outstanding Components Segment 17% Year Record revenue and Engine Segment 55% EBIT for the company Distribution and each operating Segment 10% segment Record net income Record cash flow from operations for the year Power Gen Segment 18% 2006 Data Sales: $11.4 billion EBIT: $1,179 million EBIT Margin: 10.4% (Target: 7-10%) 31
  32. 32. Cummins Inc. 2006 Revenue by Marketing Territory International revenue Africa/Middle East Canada 5% is 50% of consolidated 7% revenue Mexico/Latin Pre-emission demand America 8% has accelerated US growth rate Most international United States 50% areas growing at Asia/Australia double digit rate 16% Europe/CIS 14% 32
  33. 33. Cummins – Historical Performance Sales EBIT $12,000 1400 $11,362 $1,179 $9,918 1200 $10,000 $8,438 1000 $907 $8,000 $ Millons $ Millons 800 $6,296 $5,853 $6,000 $543 600 $4,000 400 $181 $2,000 $139 200 $0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 33
  34. 34. Engine Segment 2006 Revenue by Product Emission regulations Parts and create opportunities Service 20% Midrange Aftermarket revenue (3-9L) 37% creates stable earnings Emerging markets Strategic OEM partnerships High Horsepower (19-91L) 14% 2006 Segment Data Heavy-Duty Sales: $7.5 billion (10-15L) 29% EBIT: $733 million EBIT Margin: 9.8% (Target: 7-10%) 34
  35. 35. Engine Segment 2006 Revenue by Market Application Heavy-duty Truck Stationary demand remains strong Power 10% Mining/Rail Heavy-duty Share gains in Medium- Govt/O&G truck 33% Marine 12% duty Truck & Bus Off-highway markets supported by non- residential construction Construction & Ag 15% and commodity markets Medium-duty Light-duty Truck & bus 13% 2006 Segment Data Automotive Sales: $7.5 billion & RV 17% EBIT: $733 million EBIT Margin: 9.8% (Target: 7-10%) 35
  36. 36. Engines – Historical Performance Sales Segment EBIT 8000 800 $7,511 $733 $6,657 7000 700 $582 6000 600 $5,424 5000 500 $M $M 4000 400 $3,435 $3,582 $328 3000 300 2000 200 1000 100 $62 $37 0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 36
  37. 37. Power Generation Segment 2006 Revenue by Product Turnaround complete Alternators Commercial Strengthening markets 19% 56% Expanding market share Rental Consumer growth 2% opportunities Growing project business Consumer capability 13% Power Electronics 6% 2006 Segment Data Energy Sales: $2.4 billion Solutions 4% EBIT: $220 million EBIT Margin: 9.1% (Target: 7-9%) 37
  38. 38. Power Generation – Historical Performance Sales Segment EBIT 3000 250 $220 $2,416 2500 200 $1,999 $145 2000 150 $1,842 $M $M 1500 100 $1,329 $1,226 $60 1000 50 500 0 ($19) ($25) 0 -50 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 38
  39. 39. Components Segment 2006 Revenue by Product Strategic advantage in Specialty Filtration emissions compliance 6% Air Intake Systems Significant future growth Turbocharger 11% in revenue and earnings 27% Multiple new product introductions Acoustic Exhaust Winning non-CMI 12% business Fuel Systems 17% Engine Filtration 2006 Segment Data Catalytic 21% Sales: $2.3 billion Exhaust EBIT: $107 million 6% EBIT Margin: 4.7% (Target: 7-9%) 39
  40. 40. Components – Historical Performance Sales Segment EBIT 120 2500 $2,281 $107 $2,000 100 $94 2000 $89 $86 $1,783 $84 80 1500 $1,292 $M $M 60 $951 1000 40 500 20 0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 40
  41. 41. Distribution Segment 2006 Revenue by Product Broadening product Service offering 18% Engines Expanding global 20% coverage Increasing equity ownership Excelling in customer support Parts, Filters, & Consumables Power 38% Generation 2006 Segment Data 24% Sales: $1.4 billion EBIT: $144 million EBIT Margin: 10.4% (Target: 8-10%) 41
  42. 42. Distribution – Historical Performance Sales Segment EBIT 1600 160 $144 $1,385 1400 140 $1,191 1200 120 $107 $973 1000 100 $79 $M $M 800 80 $669 $574 600 60 $51 $33 400 40 200 20 0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 42
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