Cummins_SIRAN teleconference

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Cummins_SIRAN teleconference

  1. 1. SIRAN Teleconference September 5, 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. Agenda Well positioned for sustained earnings growth – Dean Cantrell, Director Investor Relations Creating cleaner and healthier environment – Tina Vujovich, Vice President, Marketing & Environmental Policy Living our Core Values at Cummins – Marya Rose, Vice President, General Counsel & Corporate Secretary 3
  4. 4. Our Vision/Mission VISION Making people’s lives better by unleashing the Power of Cummins. MISSION • Motivating people to act like owners working together. • Exceeding customers expectations by always being the first to market with the best products. • Partnering with our customers to make sure they succeed. • Demanding that everything we do leads to a cleaner, healthier, safer environment. • Creating wealth for all stakeholders. 4
  5. 5. Diversified Global Power Leader Four Complementary Businesses Engines Power Components Distribution Generation 5
  6. 6. Creating Greater Shareholder Value Doubled our revenue in 5 years Highest period of net earnings as a percent of sales in over 40 years Generated $4.6 billion in EBITDA since 2003 Improved debt to capital from 60% in 2003 to 17% today Actively repurchased 3.5 million shares in 2 years Exceeded both ROANA and ROE targets for over three years 6
  7. 7. Focused on Sustained Earnings Growth Our customers recognize Cummins for our technology leadership Cummins’ global presence is unmatched by others Cummins is well positioned for long-term growth 7
  8. 8. Global Adoption Emission Standards Off- highway 2011-14 Europe 2009 US / China Canada 2010 2010 Australia 2008 Mexico Brazil India 2008 2009 2010 8
  9. 9. Dieselization of North America 3500 <6000 lb GVW 6000 – 8500 lb GVW >8500 lb GVW Car Light Truck (includes PU trucks, SUVs and Vans) Light Vehicles (<14,000 GVW) 9.9 M 2.9 M 6.6 M 0.85 M 100% gasoline 100% Gasoline 67% Diesel, 33 % Gas 9
  10. 10. Profitable Growth – Engines Light Duty Diesel in 1.4 U.S. and China 1.2 Engine Production (Millions) 1.0 13- and 11-liter 0.8 Engines in China 0.6 0.4 Market Share Gains 0.2 Midrange Engine 0.0 2006 Organic New 2010 Capacity Growth Platforms In 2010, 25% of our engine volume will come from new engine platforms. 10
  11. 11. Profitable Growth – Components Evolving Global Emission Standards Strategic advantage in Accelerates Market Growth for emissions compliance Diesel Catalytic Exhaust $6 Significant future $5 growth in revenue and Global Market Size ($B) earnings $4 Multiple new product $3 introductions $2 Winning non- We have 30% of the market today Cummins business $1 $0 2006 2010 11
  12. 12. Profitable Growth – Distribution 2011 2006 2001 $3.2B $5.4B $8.9B Joint Venture Company Owned Independent Revenues through our distribution channel are growing 10% CAGR. In 2011, nearly 90% of revenue will flow through fully or partially owned distributors. 12
  13. 13. Profitable Growth – Power Generation Pursuing market 35% Global Generator Set Consumption (Total Output) Approximate $7 Billion Annual Global Market leadership in 30% Top 8 regions commercial 92% of total 25% generators Market Leader (# 1 or # 2) 20% Leader in some segments Expanding into Not a market leader 15% adjacent consumer 10% markets 5% 0% North Western China Middle India Southeast Latin Africa All Others America Europe East Asia America 13
  14. 14. Agenda Well positioned for sustained earnings growth – Dean Cantrell, Director Investor Relations Creating cleaner and healthier environment – Tina Vujovich, Vice President, Marketing & Environmental Policy Living our Core Values at Cummins – Marya Rose, Vice President, General Counsel & Corporate Secretary 14
  15. 15. Cummins’ Climate Change Initiative Cummins pledged to reduce global GHG intensity emissions by 25% from 2005 to 2010 Cummins joined the EPA’s Climate Leaders Program with aggressive target For Cummins, reducing GHG emissions is fundamentally about improving energy efficiency. 15
  16. 16. Facilities GHG Improvement Complete scope worldwide – Direct and indirect energy consumption – Facilities and processes Assessing energy efficiency and opportunities at all major facilities Tracking and reporting 16
  17. 17. Product GHG Improvement Customers worldwide demand energy efficiency from our products Cummins clean diesels today deliver 30% lower net CO2 emissions than conventional gasoline engines Additional product strategies will reduce fuel consumption of our products to even more competitive levels 17
  18. 18. GHG Initiative to Sustainability Cummins’ commitment to sustainability is good business Providing products that help customers succeed is best way for us to compete successfully We are engaging our most powerful resource – our employees We are making progress toward goals 18
  19. 19. Agenda Well positioned for sustained earnings growth – Dean Cantrell, Director Investor Relations Creating cleaner and healthier environment – Tina Vujovich, Vice President, Marketing & Environmental Policy Living our Core Values at Cummins – Marya Rose, Vice President, General Counsel & Corporate Secretary 19
  20. 20. Our Core Values Corporate Responsibility Diversity Integrity Global Involvement Innovation Delivering Superior Results 20
  21. 21. Corporate Social Responsibility Cummins Foundation – Historically served North America, with affiliated foundations in India and Mexico – Increased global focus – China, Brazil, Europe, Australia – Emphasis on: health, education, economic development, assisting people living at margins of society 21
  22. 22. Corporate Social Responsibility Corporate Charitable Donations in 2006 – $4 million in Foundation grants – $4 million in direct corporate contributions Employee Involvement – Community Involvement Teams – Every Employee/Every Community 22
  23. 23. Corporate Social Responsibility Top company for Asian Americans 23
  24. 24. Cummins Export Policy – Basic Tenets Cummins will: Remain committed to compliance Know which countries are subject to sanctions Know our customers and business partners Know our products 24
  25. 25. Cummins Export Policy - Overview Cummins scrupulously follows U.S. export laws. Cummins has strengthened export policies and controls in past year. Cummins has given export controls training to thousands of employees in the past year. 25
  26. 26. Cummins Export Policy - Overview Cummins has openly communicated export policies and practices to investment community 26
  27. 27. Cummins Export Policy – Sudan Cummins responded decisively to concerns raised regarding JV sales to Sudan. Cummins’ export policy bans all direct sales of its products to Sudan. Training has raised awareness and resulted in potential sales to Sudan being halted. Cummins has actively engaged its joint venture partners in China on this issue. 27
  28. 28. Cummins Labor Relations - Overview Cummins provides fair pay and consistent benefits to all employees. – Competitive wages – Quality, affordable health care – Secure pension benefits – Safe working conditions Cummins teams with employees to create an inclusive workplace – in both union and non- union locations. 28
  29. 29. Cummins Labor Relations – Overview Cummins has been consistently recognized as an ‘employer of choice.’ Cummins has more than 5,000 unionized workers in the U.S. and works with unions around the world. Allegations in recent Teamsters report are inaccurate and unfounded. 29
  30. 30. Questions Contact information: Investor_relations@cummins.com (812) 377-3121

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