Every Promise. Delivered. Mid-America Truck Show March 27, 2008 - PowerPoint PPT Presentation

Every Promise. Delivered. Mid-America Truck Show March 27, 2008

Welcome and Introductions � David Geraghty – Commercial Vehicle Engine Business � Dan Davis – Emission Solutions – Global OEM Business � Shawn Wasson – Auxiliary Power Unit Business, Power Generation 2

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% 2007 Segment Data Light-duty Sales: $8.2 billion Automotive EBIT: $589 million & RV 16% EBIT Margin: 7.2% 3

Cummins Delivers the Right Technology – On Time, Every Time – � We developed the best solutions in the market for the EPA07 emissions regulations � We were ready to go when the new rules demanded – Again! � Customers prefer Cummins’ power 4

North American Heavy-Duty Truck Shipments Engine Market Share*, January 2008 50 1998-2006 2007-2008 CMI 45 Annual Share Jan ‘08 40 44.0% 35 Cummins 30 Percent Share DDC Cat 25 Mack Volvo 20 MBE 15 10 5 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Total Total Total Total Total Total Total Total Total 07 07 07 07 07 07 07 07 07 07 07 07 08 5 * Wards NA Heavy Duty (Class 8 Group 2) Market Share

Market Share 10 20 30 40 50 60 70 0 2000 2000 – 2005 2001 2002 2003 Class 7 MDT Engine Market Share* 2004 2005 Jan-06 Feb-06 Cummins Mar-06 Apr-06 May-06 January 2008 2006 Jun-06 Jul-06 Caterpillar Aug-06 Sep-06 Oct-06 Nov-06 Hino Dec-06 *Ward’s Class 7 NAFTA truck shipments Jan-07 Feb-07 Mar-07 MBE Apr-07 May-07 2007 Jun-07 ITEC Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 6

Designing For Medium-Duty Customers � Reliability � Total cost of ownership � Low maintenance � Power density Overall Best Value � Sociability � Safe operation � Weight/space � Minimal driver training � Ease of operation � Information systems � Emissions compliance 7

Designing Engines For The Heavy-Duty Market � High uptime � Low fuel consumption � Operational efficiency � High residual value Lowest Cost of Ownership � High performance � Safe operation � Ease of operation � Driver satisfaction � Information systems � Sociability � Emissions compliance 8

Complementing Proprietary Offerings We won’t compete with our OEMs – we help them sell more trucks 9

The Right Technology Integrated Technology to Meet EPA 2010 Mid- Mid -Range Range Range Heavy Heavy- -Duty Duty Duty Mid Mid Range Heavy Heavy Duty Engines Engines Engines Engines Engines Engines Engines Engines Customer Customer Customer Customer � Diverse applications � Uptime Needs Needs � Power range Needs Needs � Operational efficiency � Best value � Low cost of ownership Evolution of 2007 technology Evolution of 2007 technology Proven SCR aftertreatment No NOx aftertreatment HD XPI fuel system 10

11 Cummins Emission Solutions

Components Segment 2007 Revenue by Product � New products launched Specialty Filtration � Industry leading 6% Air Intake Systems technology 9% Turbocharger � Capacity expansion 29% � Grow with CMI and non- Acoustic Exhaust CMI engine volumes 10% � Leverage global distribution to grow aftermarket Engine Fuel Filtration Systems 17% 14% 2007 Segment Data Sales: $2.9 billion Catalytic Exhaust EBIT: $153 million 15% EBIT Margin: 5.2% 12

What We Do For Customers Cost Effectively Solve Their Emissions Challenges with World-Class Aftertreatment Technology And Service 13

System Integration is Critical Environment Controls I ntegration Vehicle, engine and aftertreatment . . . a single system designed to optimize performance, reliability, cost and emissions 14

Why Are Customers Responding? � The task is daunting � Functionality in ALL applications � Reliability � Durability � Serviceability � Integration with controls, engines and vehicles � Noise � Safety 15

CES Capabilities � Design � Controls – hardware and software � Components – dosing systems � Reliability � Sourcing scale 16

Success For EPA2007 – Euro IV – 10 engine platforms – More than 100 vehicle manufacturers – Capacity for 200,000+ units for medium-duty/heavy-duty in North America – Capacity for 150,000+ units in Europe – China, Brazil expansion 17

Leadership Position in Medium-duty / Heavy-duty Truck Aftertreatment EPA 2007 Market Share Euro 4 Market Share 4% 5% 10% CES CES 16% 45% 27% 10% 12% 8% 19% 7% 22% 15% 18

Investing For The Future – On-highway • 2010 • Euro V / Euro VI • Euro IV in Brazil, India, China – Off-highway • Tier 4 – North America, Western Europe, Japan 19

Cummins Pow er Generation Auxiliary Pow er Units 20

Pow er Generation Segment 2007 Revenue by Product � Capitalize on industry Alternators growth Commercial 20% 58% � Leverage existing market leadership Rental � Establish leadership in 2% all major markets � Expand into new and Consumer 11% adjacent markets Power Electronics 4% 2007 Segment Data Energy Sales: $3.1 billion Solutions 5% EBIT: $334 million EBIT Margin: 10.9% 21

22 Expand Into New and Adjacent Markets

ComfortGuard APU System � Integrated system which eliminates the need to idle the main vehicle engine � Reduces fuel consumption up to 80%, compared to idling the main engine � Payback period of 1-2 years � Utilize proven small kw diesel platform used in all Consumer markets � Successfully launched in 2007 – Considered among the market leaders by end of first year – Secured first fit availability with Volvo Trucks N.A. 23

Cummins Poised for Grow th, Even in Dow n Market � APU Business connected to APU Market Size 35 North America Truck Market � Cummins channel more 30 Units (Thousands) capable today 25 � First fit sales with Volvo 20 � CARB approval for Integrated 15 DPF solution, first approved 10 system � ComfortGuard is one part of 5 a portfolio of Cummins 0 solutions to address idling 2003 2006 2008E 24

Cummins Delivers the Right Technology – On Time, Every Time – � We have developed the best solutions in the market for the EPA ’07 and ‘10 emissions regulations � Customers recognize Cummins for our technology leadership and dependability � We are investing in the next generation of profitable growth opportunities in global on- highway markets 25

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 26

Appendix

Cummins Inc. 2007 Revenue by Segment � Macro growth trends Components play to Cummins’ Segment 19% strengths Engine � Disciplined Segment 52% Distribution investment for Segment 10% growth � Demonstrated technology leadership Power Gen Segment 19% 2007 Data Sales: $13.0 billion EBIT: $1,227 million EBIT Margin: 9.4% 28

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% 29

Cummins – Historical Performance Sales EBIT $13,048 $14,000 $1,400 $1,179 $1,227 $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 30

Engine Segment 2007 Revenue by Product � Emission regulations Parts and create opportunities Midrange Service 21% (3-9L) 40% � Emerging markets � Strategic OEM partnerships � New engine platforms � Aftermarket revenue High creates stable earnings Horsepower (19-91L) 17% 2007 Segment Data Heavy-Duty Sales: $8.2 billion (10-15L) 22% EBIT: $589 million EBIT Margin: 7.2% 31

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% 2007 Segment Data Light-duty Sales: $8.2 billion Automotive EBIT: $589 million & RV 16% EBIT Margin: 7.2% 32

Engines – Historical Performance Sales Segment EBIT $9,000 $800 $733 $8,182 $8,000 $7,511 $700 $6,657 $7,000 $589 $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 33