Slide 1: Third Quarter 2024 Earnings Teleconference
Third Quarter 2024 Earnings Teleconference November 5th, 2024
Slide 2: Contents
CONTENTS Q3 2024 Summary 2024 Guidance Q3 2024 Supplemental Information Appendix 2
Slide 3: Disclosure Regarding Forward-Looking Statements
Disclosure Regarding Forward-Looking Statements Information provided in this presentation that is not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our forecasts, guidance, preliminary resul
Slide 4: Q3 2024 Summary
Q3 2024 Summary
Slide 5: Q3 2024 Summary
Q3 2024 Summary • Third quarter revenues of $8.5 billion • GAAP1 Net Income of $809 million and Diluted EPS of $5.86 • EBITDA of $1,389 million or 16.4 percent of sales 1 Generally Accepted Accounting Principles 5
Slide 6: Selected Financial Data - Quarter
Cummins Inc. Selected Financial Data - Quarter $ MILLIONS Q3 2024 Q3 2023 Sales 8,456 8,431 Gross Margin (% of Sales)1 25.7% 24.6% SAR (% of Sales)2 13.8% 14.1% EBITDA3 1,389 1,256 EBITDA (% of Sales)3 16.4% 14.9% Net Income attributable to Cummins Inc.4 809 676 Net Income (% of Sales)4 9.6% 8.0% Di
Slide 7: Q3 2024 Net Sales and EBITDA by Segment
Q3 2024 Net Sales and EBITDA by Segment Components Engine Distribution Power Accelera Intersegment Total $ MILLIONS Systems Eliminations Three months ended September 30, 2024 Net Sales 2,724 2,913 2,952 1,687 110 (1,930) 8,456 Sales growth vs 2023 (16)% (1)% 16% 17% 7% 6% —% EBITDA 351 427 370 328 (
Slide 8: 2024 Guidance
2024 Guidance
Slide 9: Guidance for 2024 Consolidated Results
Guidance for 2024 Consolidated Results ITEM FULL YEAR GUIDANCE2 Consolidated Revenue Down 3% to Flat Earnings from JVs Down 5% to 15% 3 EBITDA Margin Approx. 15.5% Depreciation & Amortization $1,030 to $1,080 M 1 Effective Tax Rate 23.5% Capital Expenditures $1.2 to $1.3 B Global Pension Funding $70
Slide 10: Guidance for 2024 Segment Results
Guidance for 2024 Segment Results ITEM COMPONENTS2 ENGINE DISTRIBUTION POWER SYSTEMS ACCELERA 3 Consolidated Down 12% to 15% Down 2% to Up 1% Up 8% to 11% Up 8% to 11% $400M to $450M Revenue Growth 2024 EBITDA Margins 13.3% to 13.8% 13.7% to 14.2% 11.5% to 12.0% 18.3% to 18.8% ($430M) to ($400M) (%
Slide 11: Key On-Highway Engine Markets - 2024
Key On-Highway Engine Markets - 2024 2024 Market Size KEY MARKET Forecast Vs. 2023 Heavy Duty Truck - North America 255K - 275K units Down 7% to 12% Class 8, Group 2 - Production No change to prior guidance Medium Duty Truck - North America 150K - 160K units Flat to Up 5% Class 6-7, and Class 8 Grou
Slide 12: Cummins Inc. 2024 Guidance
Cummins Inc. 1,2,3,4 2024 Guidance Sales down 3% to Flat EBITDA Approx. 15.5% 4 1 2022 EBITDA excludes $111 million of net cost related to the indefinite suspension of operations in Russia, $81 million of cost related to the separation of Atmus, and includes $115 million of cost related to the acqui
Slide 13: Q3 2024 Supplemental Information
Q3 2024 Supplemental Information
Slide 14: Components Segment Selected Financial Data
Components Segment Selected Financial Data • Sales decreased 16% primarily due to $ MILLIONS Q3 2024 Q3 2023 CHANGE the separation of Atmus and lower demand in heavy-duty truck. Sales 2,724 3,236 (16)% • The decrease in EBITDA margin is driven primarily by the dilutive impact EBITDA1 351 461 (24)% o
Slide 15: Engine Segment Selected Financial Data
Engine Segment Selected Financial Data • Sales decrease of 1% due to $ MILLIONS Q3 2024 Q3 2023 CHANGE softening demand in the North American heavy-duty truck Sales 2,913 2,931 (1)% market partially offset by strength in global medium-duty truck markets. EBITDA 427 395 8% • EBITDA margin increase dr
Slide 16: Engine Segment - Sales by Market
Engine Segment - Sales by Market • On-highway revenues $ MILLIONS Q3 2024 Q3 2023 CHANGE decreased 1% due to softening demand in the North American Heavy-Duty Truck 1,021 1,116 (9)% heavy-duty truck market partially Medium-Duty Truck & 1,073 931 15% offset by strength in the global Bus medium-duty t
Slide 17: Distribution Segment Selected Financial Data
Distribution Segment Selected Financial Data • Sales increased 16% driven by $ MILLIONS Q3 2024 Q3 2023 CHANGE increased demand for power generation products, particularly for Sales 2,952 2,535 16% data center applications, and pricing actions. EBITDA 370 306 21% • EBITDA margin increased primarily
Slide 18: Power Systems Segment Selected Financial Data
Power Systems Segment Selected Financial Data • Sales increased 17% due to $ MILLIONS Q3 2024 Q3 2023 CHANGE increased global demand in power generation, particularly for data center applications, and mining markets. Sales 1,687 1,444 17% • EBITDA margin increased primarily as EBITDA 328 234 40% a r
Slide 19: Accelera Segment Selected Financial Data
Accelera Segment Selected Financial Data • Sales increased due to increased electrolyzer installations. $ MILLIONS Q3 2024 Q3 2023 CHANGE • EBITDA losses are driven by costs Sales 110 103 7% associated with the development of electric powertrains, fuel cells and electrolyzers, as well as products to
Slide 20: Joint Venture Income - Quarter
Joint Venture Income - Quarter $ MILLIONS Q3 2024 Q3 2023 Components 12 26 Engine 53 62 Distribution 25 22 Power Systems 20 11 Accelera (11) (3) Total JV Income 99 118 20
Slide 21: Cash Flow - Quarter
Cash Flow - Quarter $ MILLIONS Q3 2024 Q3 2023 Operating Cash Flow 640 1,529 Capital Expenditures 259 280 Working Capital Measure 7,315 7,306 Working Capital Measure 21.6% 21.7% (% of Net Sales) Total Debt to Capital % 40.1% 39.0% Net Debt to Capital % 28.2% 23.0% 21
Slide 22: Appendix
Appendix
Slide 23: Cummins Inc.
Cummins Inc. • Strong product portfolio and Q3 2024 LTM Revenue by Segment global partners • Macro growth trends play to Cummins' strengths • Disciplined investment for growth • Demonstrated technology leadership Q3 2024 LTM Results Sales: $34.2 billion EBITDA1: $5.3 billion EBITDA%1: 15.4% 1 Exclud
Slide 24: Cummins Inc. - Revenue by Marketing Territory
Cummins Inc. • Capitalizing on global Q3 2024 LTM Revenue by Marketing Territory emissions regulations • Strong geographic diversification and leadership across multiple end-markets • Global distribution network with presence in approximately 190 countries and territories 24
Slide 25: Cummins - Joint Venture Sales Unconsolidated
Cummins - Joint Venture Sales Unconsolidated Q3 2024 LTM Revenue * Rest of world 25
Slide 26: Components Segment - Overview
Components Segment - Overview • Leading supplier of axles, brakes, Q3 2024 LTM Revenue by Business and aftertreatment products for commercial vehicle applications • Largest worldwide supplier of turbochargers from 3.8L to 25L for commercial applications Q3 2024 LTM Results Sales: $12.2 billion EBITD
Slide 27: Components Segment - Sales Mix
Components Segment - Sales Mix Q3 2024 LTM Revenue $12.2 billion 27
Slide 28: Components Segment - Historical Performance
Components Segment - Historical Performance 4 1,2,3,4 2024 Guidance4 Sales Down 12% to 15% EBITDA 13.3% to 13.8% 1 2022 EBITDA excludes $4 million of net cost related of the indefinite suspension of operations in Russia and $28 million of cost related to the separation of Atmus, and includes $70 mil
Slide 29: Components Segment - Joint Venture Sales Unconsolidated
Components Segment - Joint Venture Sales Unconsolidated Q3 2024 LTM Revenue 29
Slide 30: Engine Segment - Overview
Engine Segment - Overview • Diesel and natural gas engines from Q3 2024 LTM Revenue by Product 2.8L to 15L and 48 hp to 715 hp • Long-term engine supply agreements with key customers to stabilize pricing and to jointly engineer better integrated vehicles to market • Leading market share in multiple
Slide 31: Engine Segment - Sales Mix
Engine Segment - Sales Mix Q3 2024 LTM Revenue $11.8 billion 31
Slide 32: Engine Segment - Historical Performance
Engine Segment - Historical Performance 1, 2, 3 2024 Guidance Sales Down 2% to Up 1% EBITDA 13.7% to 14.2% 1 2022 EBITDA excludes $33 million of cost related of the indefinite suspension of operations in Russia 2 2023 EBITDA excludes $12 million of cost related to employee voluntary retirement and s
Slide 33: Engine Segment - Joint Venture Sales Unconsolidated
Engine Segment - Joint Venture Sales Unconsolidated Q3 2024 LTM Revenue 33
Slide 34: Distribution Segment - Overview
Distribution Segment - Overview • Provide aftermarket support and Q3 2024 LTM Revenue by Product increase solution-based revenue • Increasing network capabilities in emerging markets to capture profitable growth Q3 2024 LTM Results Sales: $11.0 billion EBITDA1: $1.2 billion EBITDA%1: 11.3% 34
Slide 35: Distribution Segment - Sales Mix
Distribution Segment - Sales Mix • Key enabler for Cummins growth • Benefiting from increased population of products in the field Q3 2024 LTM Revenue $11.0 billion 35
Slide 36: Distribution Segment - Historical Performance
Distribution Segment - Historical Performance 1 2024 Guidance Sales Up 8% to 11% EBITDA 11.5% to 12.0% 1 2022 excludes $55 million of net cost related to the indefinite suspension of operations in Russia 36
Slide 37: Distribution Segment - Joint Venture Sales Unconsolidated
Distribution Segment - Joint Venture Sales Unconsolidated Q3 2024 LTM Revenue 1 1 2024 includes higher JV unconsolidated sales as a result of JV ownership restructuring; however, no material change to overall JV income * Rest of World 37
Slide 38: Power Systems Segment - Overview
Power Systems Segment - Overview • Global provider of power generation Q3 2024 LTM Revenue by Product systems, components and services from 2kW to 3.5 Megawatts (MW) • Leading supplier of alternators from 7.5kVA to 11,200kVA • Leading market share in multiple geographies Q3 2024 LTM Results Sales: $
Slide 39: Power Systems Segment - Sales Mix
Power Systems Segment - Sales Mix Q3 2024 LTM Revenue $6.1 billion 39
Slide 40: Power Systems Segment - Historical Performance
Power Systems Segment - Historical Performance 1 2024 Guidance Sales Up 8% to 11% EBITDA 18.3% to 18.8% 1 2022 excludes $19 million of net cost related to the indefinite suspension of operations in Russia 40
Slide 41: Power Systems Segment - Joint Venture Sales Unconsolidated
Power Systems Segment - Joint Venture Sales Unconsolidated Q3 2024 LTM Revenue 41
Slide 42: Emerging Market Sales - India
Emerging Market Sales - India1 • Present in India for over 60 years • Market leadership • Strong OEM relationships • Expanding our markets in a variety of technologies 1 Consolidated & JV sales with eliminations 42
Slide 43: Emerging Market Sales - China
Emerging Market Sales - China1 • Present in China for over 40 years • Broad product portfolio for On and Off Highway • Strong OEM partners • Long-term growth from new products and tightening emission standards 1 Consolidated & JV sales with eliminations 43
Slide 44: Non-GAAP Reconciliation - EBITDA
Non-GAAP Reconciliation - EBITDA Three Months Ended In Millions 30-Sep-24 30-Sep-23 Net income attributable to Cummins Inc. $ 809 $ 656 Net income attributable to noncontrolling interests 34 34 Consolidated net income 843 690 Income tax expense 200 188 Income before taxes 1,043 878 Interest expense
Slide 45: Non-GAAP Reconciliation - EBITDA (LTM)
Non-GAAP Reconciliation - EBITDA (LTM) Last Twelve Months Ended In Millions 30-Sep-24 30-Sep-23 Net income attributable to Cummins Inc. $ 2,097 $ 2,797 Net income attributable to noncontrolling interests 133 80 Consolidated net income 2,230 2,877 Income tax expense 781 757 Income before taxes 3,011
Slide 46: Non-GAAP Reconciliation - Working Capital
Non-GAAP Reconciliation - Working Capital Three Months Ended In Millions 30-Sep-24 30-Sep-23 Accounts and notes receivable, net $ 5,387 $ 5,662 Inventories 6,134 5,906 Accounts Payable - (principally trade) (4,206) (4,262) Working capital measure $ 7,315 $ 7,306 Annualized Working capital measure (%
Slide 47: Non-GAAP Reconciliation - Net Assets
Non-GAAP Reconciliation - Net Assets In Millions 30-Sep-24 30-Sep-23 Total Assets $ 32,052 $ 32,097 Less: Deferred debt costs 5 4 Less: Deferred tax assets 1,073 865 Less: Pension and other postretirement benefit adjustments excluded 324 930 from net assets Less: Liabilities deducted in arriving at
Slide 48: Non-GAAP Reconciliation - Invested Capital for ROIC Calculation
Non-GAAP Reconciliation - Invested Capital Used for Return on Invested Capital Calculation In Millions 30-Sep-24 30-Sep-23 Total Equity $ 11,341 $ 11,678 Less: Defined benefit postretirement plans (843) (431) Equity used for return on invested capital calculation 12,184 12,109 Loans payable 441 231
Slide 49: Non-GAAP Reconciliation - NOPAT for ROIC Calculation
Non-GAAP Reconciliation - Net Operating Profit After Taxes Used for Return on Invested Capital Calculation Last Twelve Months Ended In Millions 30-Sep-24 30-Sep-23 Net income attributable to Cummins Inc. $ 2,097 $ 2,797 Net income attributable to noncontrolling interests 133 80 Consolidated net inco
Slide 50: Non-GAAP Reconciliation - ROANA
Non-GAAP Reconciliation - ROANA Last 12 Months Ended In Millions 30-Sep-24 30-Sep-23 Unadjusted ROANA EBITDA $ 4,428 $ 5,000 Beginning - Total Net Assets 18,172 17,013 Ending - Total net Assets 18,059 18,172 Unadjusted ROANA 24 % 28 % Adjusted ROANA EBITDA excluding One-Time Items1 5,270 5,086 Begin
Slide 51: Non-GAAP Reconciliation - ROIC
Non-GAAP Reconciliation - ROIC Last 12 Months Ended In Millions 30-Sep-24 30-Sep-23 Unadjusted ROIC Net Operating Profit after Taxes $ 2,508 $ 3,171 Beginning - Unadjusted Invested capital used for ROIC calculation 19,573 17,791 Ending - Unadjusted Invested capital used for ROIC calculation 19,771 1
Slide 52: Net Debt to Capital Reconciliation
Net Debt to Capital Reconciliation In Millions 30-Sep-24 30-Sep-23 Total Debt (A) $ 7,587 $ 7,464 Total Equity (B) 11,341 11,678 Total Capital (C) = (A+B) 18,928 19,142 Total Cash, Cash Equivalents & Marketable Securities (D) 2,251 3,064 Net Debt (E) = (A-D) $ 5,336 $ 4,400 Total Debt to Capital % (
Slide 53: Thank you for your interest
Thank you for your interest For additional information: Chris Clulow – Vice President Investor Relations (812) 377-3121 | Investor.Relations@cummins.com www.cummins.com