2015 CMI Analyst Day

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CMI Analyst Day

November 10, 2015

CMI Analyst Day

Mark Smith

Vice President - Investor Relations

November 10, 2015

Disclosure regardingforward-looking statements

Information provided in this presentation that is not purely historical are forward-looking stateme

of the Private Securities Litigation Reform Act of 1995, including statements regarding our forechopes, beliefs and intentions on strategies regarding the future. Our actual future results could

those projected in such forward-looking statements because of a number of factors, including, b

adoption and implementation of global emission standards; the price and availability of energy;

infrastructure development; increasing global competition among our customers; general econo

financing conditions; governmental action; changes in our customers’ business strategies; com

expense volatility; labor relations; the consummation and integration of the planned acquisitions

distributors; and other risks detailed from time to time in our Securities and Exchange Commis

in the Risk Factors section of our 2014 Annual Report on Form 10-K. Shareholders, potential inreaders are urged to consider these factors carefully in evaluating the forward-looking statemen

not to place undue reliance on such forward-looking statements. Any or all of these factors coul

operations, financial condition or liquidity for future periods to differ materially from those expres

any forward looking statements. The forward-looking statements made herein are made only as

presentation and we undertake no obligation to publicly update any forward-looking statements

new information, future events or otherwise. More detailed information about factors that may a

may be found in our filings with the Securities and Exchange Commission, which are available

or at http://www.cummins.com in the Investor Relations section of our website.

Agenda

9:00 Welcome

9:05 Tom Linebarger, Chairman and CEO

9:50 Rich Freeland, President and COO

10:15 Break

10:30 Pat Ward, Vice President and CFO10:50 Tom Linebarger, Chairman and CEO

11:00 Q&A

12:00 Lunch

CMI Analyst Day

Tom Linebarger

Chairman and Chief Executive Officer

November 10, 2015

Agenda

Strategy to deliver profitable growth

Relentless focus on performance improveme

Disciplined investment to drive strong returns

Strong total shareholder return

Total Shareholder Return CMI Peers S&P 500 DJIA

Jan. 2005 to Oct. 2015 459% 129% 72% 65%

Peers Include: BorgWarner, Caterpillar, Daimler, Danaher, Deere, Donaldson, Eaton, Emerson, Honeywell, Illinois Tool Works, Ingersoll Rand, Paccar, Parker Hannifin, Textron, W.W. Grainger, Volvo

1 Compound Annual Growth Rate

2 EBIT is a non-GAAP measure which is defined as earnings before interest expense, income tax expense and noncontrolling interests in income3 The return on equity calculation is a non-GAAP measure- equity excludes non-controlling interests, defined benefit postretirement plans and sp

Driven by strong performance

CMI Peer Average

Revenue CAGR

CMI Peer Average

EBIT Margin %Improvement 22%

From 2004 to 2014

Driven by a clear strategy and good deci

Geographic expansion through partnerships

Investment in the right technologies

Leading products in major markets

Global distribution

Used a mix of organic growth,partnerships, and acquisitions

Acquisition Organic Joint Venture

1973Holset

EmissionSolutions

1982ISB

1986Onan

1994Tata JV

NelsonIndustries

2006Foton

SCR+EGRDevelopment

SCR Dose

19951st KomatsuJV Engine

WuxiTurbo JV

1997Dongfeng

2008ISF

Distrib

1978KV38/50

Business conditions have changed

Industry growth in the past four years has beexpectations

Conditions in our core markets have changed

– Growth in emerging markets has slowed

– Lower investment in infrastructure and weaker com

– Slower pace of growth in emissions – opportunity lemerging markets

Cyclical weaknesses are likely to persist

Cummins will outperform

Manage effectively through periods of weak d

– Adjust cost structure quickly, in the right areas

– Execute and operate well

– Use the downturn to improve our business

Capture profitable growth from new products

Leverage and extend strong existing partners

Add to existing growth platforms

Positioned well to add growth platforms

We have strong, defensible capabilities to levera

We have demonstrated success building profitabthrough organic investments, partnerships and a

We have a capable management team and the s

evaluate and execute investments

We have a strong balance sheet to make investmreturn projects

Fuel Systems

Technologies

Controls andSystems

Filtration

Global Construction

NA Truck HD

India Truck MD+HD

NA Truck MD

China Truck MD+HD

Global Mining

Scale Advantagein Manufacturingand Supply Chain

GlobalDistribution a

EmissionSolutions

* 2015 Es

TechnologyLeadership

0 200,000 400,000 600,000 800,000 1,000,000 1,2

Cat-Perkins

Volvo Group

Ford Motors

Isuzu Motors

Weichai

Volkswagen Group

Daimler

Yuchai

Toyota / Hino

Cummins

2.8-17L Diesel EnginesSource: Power Systems Research, 2014 Production Year; Cummins volumes include JV Volumes

Cummins owned and Cummins joint ventureIndependent

GlobalDistribution

Opportunities for partnerships and acquis

Build on our strength in emissions control and fuel

Increase our participation in attractive markets

Capitalize on our global distribution network

Build on our strengthin emissions control and fuel efficien

Strategic focus on components that most the power train and equipment performan

– Fuel efficiency

– Controls and system integration

– Adapting technology from developed marketsfor developing markets

Capitalize on our global distribution n2

Fully realize sales and cost synergies from network of newly acquired distributors

Product line extensions to other industrial aaftermarket components

Data-enabled services to offer customers a

Increase our participation in attractive3

Establish global leadership position in lightcommercial vehicles

Enable development of the natural gas veh

Move up the power range and strengthen mposition in high-horsepower markets

– Focus on businesses with high recurringaftermarket revenues

Acquisitions and partnerships will bepursued with discipline

Investment criteria – Drive significant sales and / or cost synergies

– Build upon clear strategy for sustainable growth a

– Leverage existing capabilities

Discipline

– Develop multiple strategic options

– Proactively analyze potential targets for sources o

– Focus on return on investment

Allocation of capital going forward

Disciplined investment in high return busineoutperform markets and competitors

Strategic use of balance sheet for high returacquisitions and partnerships

Active portfolio management

Continue to return cash to shareholders

CMI Analyst Day

Rich Freeland

President and Chief Operating Officer November 10, 2015

– Technology Leadership

– Scale Advantage in Manufacturing and Supply C

– Global Distribution

– Partnerships and Customers

Four strong capabilities

Cummins Inc.Global leader

Long track record of performance improve

Europe+ Middle East

Latin America+ Mexico

8% Asia Pacific

China 3%India

2% Africa

60%US/Canada

Q3’15 LTM Revenue: $19.4 B

Cummins Inc.Q3'15 LTM revenue by marketing territory

$11,362

$13,048$14,342

$10,800

$13,226

$18,048$17,334 $17,301

$19,221 $

$2,500

$5,000

$7,500

$10,000

$12,500

$15,000

$17,500

$20,000

$22,500

$25,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

3 Year Revenue $Millions

Cummins Inc.Track record of performance improvement

EBIT excludes restructuring charges of $37M in 2008 and $99M in 2009. 2011 EBIT excludes $121 in gains from divestures. 2012 EBITexcludes $52M in restructuring charges. 2014 EBIT excludes $32M in one-time charges within the Power Generation segment.

Gl b l k t

Global marketsOn different cycles

NA Construction

International

Data Centers

NA Pickup

NA MDTruck

NA HDTruck

Commercial Marine Oil & Gas

Global MiningChina Construction

Brazil TruckChina

India Co

E i S t

Engine SegmentHistorical performance

$7,511$8,182

$8,810

$6,405

$7,888

$11,307$10,733

$10,013$10,96

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

EBIT excludes restructuring charges of $15M in 2008, $47M in 2009 and $20M in 2012.

Revenue $Millions 3 Y

Global leader

Global leaderScale advantage

Source: Power Systems Research, 2014 Production Year; Cummins volumes include JV Volumes

0 200,000 400,000 600,000 800,000 1,000,000

Cat-Perkins

Volvo Group

Ford MotorsIsuzu Motors

Weichai

Volkswagen Group

Daimler

Yuchai

Toyota / Hino

Cummins

Engine business

Key partnerships working well

– Expanding existing relationships

– Developing new partners

New products launched and gaining tractio – Gaining share in China truck

– Growing position in off-highway markets

New global products gaining traction

Indus10/12L

On- and Off-Highway

2.8/3.8L

On- and Off-Highway

Distribution Segment

Distribution SegmentHistorical performance

$1,385 $1,540

$2,164$1,784

$2,324

$3,044$3,277

$3,749

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

Revenue $Millions

EBIT excludes restructuring charges of $2M in 2008, $5M in 2009 and $14M in 2012.

Gl b l di t ib ti ll iti d

Global distribution well positioned

Cummins owned and Cummins joint venture

Independent

A i iti f N th A i di t ib t

Acquisition of North American distributorsMeeting targets

Sales +$1.0 billion +$1.1 billion

EBIT +$120 million +$135 millio

EPS +$0.50 +$0.63Cumulative impact from 2013 - 2015

Target from2013 Analyst Day Current e

North American distributors

North American distributorsCapturing synergies

Cost synergies – Consolidate back office operations and reduce

– Leverage our strength in purchasing across the

Sales synergies – System-wide focus on key end markets

– Opportunity to sell more products through our n

Components Segment

Components SegmentHistorical performance

EBIT excludes restructuring charges of $14M in 2008, $35M in 2009 $6M in 2012.

$2,281

$2,932$3,152

$2,355

$3,046

$4,063 $4,012$4,342

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

2006 2007 2008 2009 2010 2011 2012 2013 20

Revenue $Millions

Components business

Leading technologies for emissions, fuel econo

performance

Proven capability to adapt advanced technologydeveloping markets

Key technologies to meet future emissions regu – Criteria emissions in emerging markets

– Fuel economy regulations in developed markets

Continuing opportunity from criteria

Continuing opportunity from criteriaemission regulations

Global On-Highway Engines

EPA 13/Euro VI:

Pie charts represents proportion of CMI and Joint Venture engines

at different emissions standards – 2014 production

EPA 13/Euro VI:~40%

BelowTier 4:

Global Off-Hig

Gl b l i i t it

Global emission opportunity

315 700 1,600

Euro III NSIV/Euro IV

China LDChina MD/HDIndia MD/HD

BrazilMD/HD

124 285

NAFTAMD

NAFTHD

Criteria emissions F

Euro V EPA 2014/

2015 Estimated truck market sizes (in thousands)

Power Generation Segment

Power Generation SegmentHistorical performance

$2,416

$3,060

$3,500

$2,417

$2,919

$3,498$3,268

$3,031 $2

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

2006 2007 2008 2009 2010 2011 2012 2013 20

Revenue $Millions

10.4%9.5%

EBIT excludes restructuring charges of $3M in 2008, $12M in 2009 and $12M in 2012. EBIT in 2014 excludes one-time charges of $32M

Power Generation

Power GenerationImportant earnings contributor across the comp

ComponentsEngine

Genset

Power GenerationSegment

P G ti t d ti

Power Generation cost reduction

Actions taken in 2013 and 2014

– Exited alternator operations in Europe

– Simplified organization structure

– Delivered savings

Further and deeper actions underway

– Reduce manufacturing capacity

– Make structural and operational improvements

Relentless focus on cost reduction

Operational improvements

– Value engineering and material costs

– Supply chain

– Quality

Restructuring – Targeted capacity reductions

– Professional workforce actions

CMI Analyst Day

Pat WardVice President and

Chief Financial Officer November 10, 2015

Creating shareholder value

DisciplinedInvestment

Performance

Improvement

Strong Cash Returnsto Shareholders

Organic growth Acquisitions and Partners

20% Incremental margins

Increase Operating Cash F

Return 50% ofOperating Cash Flow

gthrough return on capital

Disciplined investment

phas delivered strong returns

For year ending 2014 5-Year average 10-Year av

ROANA 29% 28%

ROE 23% 22%

ROIC 22% 20%

ROANA, return on average net assets, is a non-GAAP measure which is defined as earnings before interest and tax (EBIT) divided by average

ROE, return on equity, is a non-GAAP measure- equity excludes non-controlling interests, defined benefit postretirement plans and special item

ROIC, return on invested capital, is defined as net operating profit after tax divided by average total capital.

Relentless focus on performance improv

2001-2005 2006-2010 2011-2015

Average EBIT%

~ Includes an estimate for 2015.

EBIT excludes restructuring charges of $37M in 2008 and $99M in 2009. 2011 EBIT excludes $121 in gains from divestures. 2012 EBIT exclude

charges. 2014 EBIT excludes $32M in one-time charges within the Power Generation segment.

$18.53

2001-2005 2006-2010 2011-2015

Diluted EPS

Diluted Earnings Per Share amounts are adjusted for 2-1 stock splits in 2007 and 2008.

2001-2005 2006-2010 2011-2015

Operating Cash Flow

20% CAGR 2001 - 2015

Increasing cash returned to shareholders

~ OCF = Operating Cash Flow

25% of OCF

40% of OCF

$1,000

$1,200

$1,400

$1,600

2005 2006 2007 2008 2009 2010 2011 2012 2013

$Millions

Increasing cash returned to shareholders

0.300.330.430.600.700.88

2.002.50

2005 2006 2007 2008 2009 2010 20

Dividend Per Sha

Share Repurchase

• Reduced diluted shares

by 12% since 2005

Dividend

• Increased > 1,100%

• Top 5% in growth in

204 203200

197 198 197194

190 187183

190195

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Diluted Shares Outstanding (M)

* Includes an estimate for 2015

Diluted shares outstanding are adjusted for 2-1 stock splits in 2007 and 2008.

Strong long-term shareholder returns

Total Shareholder Return CMI Peers S&P 500 DJIA

Jan. 2005 to Oct. 2015 459% 129% 72% 65%

Peers Include: BorgWarner, Caterpillar, Daimler, Danaher, Deere, Donaldson, Eaton, Emerson, Honeywell, Illinois Tool Works, IngersollRand, Navistar, Paccar, Parker Hannifin, Textron, W.W. Grainger, Volvo

Improvement since 2013,b t t i t d

but not in expected range

EBIT %

2013 2015

Sales $B

What has changed from 2013

Growth in emerging markets has slowed

Lower investment in infrastructure

Weaker commodity prices

Declining demand in high-horsepower mark

Strong US dollar a headwind to revenues an

Current environment

Low growth

Committed to improving operational perform

Structural cost reduction

Maintain key investments for profitable grow

Capital allocation plans to increase return

Cap ta a ocat o p a s to c ease etu

Strong

Balance

Organic

Growth

Repurc

Capital

Structure

Acquisitions &

Partnerships

Strong

Balance

Organic

Growth

Repurc

Capital

Structure

Acquisitions &

Partnerships

Strong

Balance

Organic

Growth

Repurc

Capital

Structure

Acquisitions &

Partnerships

Strong

Balance

Organic

Growth

Repurc

Capital

Structure

Acquisitions &

Partnerships

Focused on creating shareholder value

20% incremental EBIT margins across cycle

Disciplined investment focused on strong re

– Organic investments

– Acquisitions and Partnerships

Return 50% of Operating Cash Flow to shar

CMI Analyst Day

Tom Linebarger

Chairman and Chief Executive Officer

November 10, 2015

Summary

We remain committed to profitable growth and strong capital to drive shareholder return

We will manage our business well even in tough timesoutperform the market

– Execute restructuring and drive operational improvemen

– Capture profitable growth from new products – Realize synergies from distributor acquisitions

– Expand existing partnerships

Summary

We will continue to seek adjacent growth through a cof organic growth, partnerships and acquisitions

We will leverage our strong capabilities to create val

We will likely shift more towards acquisitions and pa

We will be disciplined in all of our investments to drivreturn on capital

We will continue to return cash to shareholders throudividends and share repurchases

2015 CMI Analyst Day

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