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Baird 2015 Industrial Conference

Energy and Transportation –Jim UmplebyInvestor Relations – Rich MooreNovember 11, 2015

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Discussion

►Third-Quarter Results / Outlook –Rich Moore

►Energy & Transportation Review –Jim Umpleby

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Third-Quarter 2015 Financial Results

• Lower sales in all regions and for each segment

• Most significant decline in Energy & Transportation

• Price realization negative $60 million

• Lower sales volume was the primary reason for the decline inprofit

• Significant unexpected items in the third quarter of 2015

 Adjustment to incentive compensation expense as a result of lowering

the 2015 outlook reduced Q3 2015 operating costs by about $70million, or about $0.09 per share.

Currency translation losses on non US$ assets and liabilities andhedging losses combined were about $135 million, or about $0.17 pershare in the quarter. Included in the Other Income and Expense lineof the P&L, below Operating Profit.

Sales and Revenues Profit

3rd Quarter 3rd Quarter  

2014 2015 Change

Sales and Revenues $ 13.5 Billion $ 11.0 Billion $ (2.5)Billion

Profit Per Share $ 1.63 $ 0.62 $ (1.01)

Profit Per Share $ 1.72 $ 0.75 $ (0.97)

Excluding Restructuring Costs

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2015 Outlook

#

Outlook

Sales and Revenues Top end about $48 Billion

Profit Per Share About $3.70

Profit Per Share About $4.60Excluding Restructuring

Profit outlook reflects:

• Lower sales and revenues than expected in July.

•  About $0.17 per share of currency translation and hedging losses from the third quarter.

•  Additional cost reduction and lower incentive compensation.• Significantly higher restructuring costs.

# Outlook as of October 22, 2015; We are not updating our outlook today

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Preliminary Outlook for 2016 Sales & Revenues

#

Expect 2016 to be down about 5% from 2015

4th consecutive down year 

• Resource Industries expected to be down about 10% in 2016 … but from avery low base.

• Construction Industries flat to down 5% from 2015.

• Energy & Transportation down 5% to 10% ... mostly oil & gas, much of thata result of a higher backlog at the start of 2015.

# Outlook as of October 22, 2015; We are not updating our outlook today

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ENERGY &TRANSPORTATION

Energy & Transportation Sales

POWERGENERATION

INDUSTRIAL

TRANSPORTATION

OIL & GAS

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OIL & GAS

SOLUTIONS PROVIDER

• Reciprocating Engines

• Pumps & Transmissions

• Gas Turbines & Compressors

APPLICATIONS

• Offshore & Land Drilling

• Well Service• Production

• Gas Compression

ENERGY &TRANSPORTATION

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POWER GENERATION

SOLUTIONS PROVIDER

• Generator Sets (10kW – 22 MW)

• Reciprocating Engines

• Gas Turbines

DIESEL & GAS

• Data Centers

• Telecommunications• Hospitals

• Universities

ENERGY &TRANSPORTATION

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SOLUTIONS PROVIDER

• Marine Engines

• Marine Auxiliary Units

• Cat Propulsion Systems (Berg)

APPLICATIONS

• Cargo

• Cruise and Ferry

• High Performance

• Commercial Workboat

MARINE

ENERGY &TRANSPORTATION

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RAIL

SOLUTIONS PROVIDER

• Freight and Transit Locomotives

• Freight Car, Signal and Track Services

ENERGY &TRANSPORTATION

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Rail

ENERGY &

TRANSPORTATION

Oil & Gas Marine

IndustrialPower Generation

ENERGY &TRANSPORTATION

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