Summary of Key Points from the Conference Call Industry Overview - **Industry**: U.S. Machinery and Electricals - **Focus**: Impact of recent policy changes by the Trump Administration on various sub-sectors including electricals, construction, agriculture, and trucks [1][11] Core Insights and Arguments 1. Policy Impact on Renewables - The Trump Administration's policies are de-prioritizing renewables, negatively impacting companies like Quanta (PWR) which derives 30% of sales from this sector [2][49] - The OBBBA cuts tax credits for renewables, shortening the eligibility timeframe from 2032 to 2027, leading to a projected slowdown in construction activity post-2025 [16][54] - Construction costs are rising due to stricter domestic content requirements and tariffs, which could drive renewables to ex-growth from 2025-2030 [2][18] 2. Construction Sector Stimulus - The reinstatement of 100% bonus depreciation for qualified property under the OBBBA is expected to stimulate construction activity, unlocking nearly $90 billion in additional non-residential construction spending, a 7% increase compared to 2024 levels [3][67] - This change is anticipated to benefit construction OEMs such as OSK, URI, ETN, CAT, TRMB, HUBB, DE, and J [3][12] 3. Agriculture Equipment Demand - Changes in biofuels policy, including a 75% increase in biomass-based diesel production mandated by the EPA, could lead to a 10% increase in agricultural equipment demand [4][84] - The extension of clean fuel tax credits from 2027 to 2029 and increased subsidies for biofuels are expected to positively impact companies like Deere, AGCO, and CNH [4][101] 4. Truck OEM Competitive Landscape - The Section 232 investigation into commercial vehicle manufacturing is likely to favor U.S.-based manufacturers like PACCAR (PCAR) by reversing the current tariff structure that disadvantages U.S. manufacturers [5][104] - Current tariffs create a cost disadvantage for U.S. truck manufacturers, as they face higher costs due to imported components [107][110] Additional Important Insights - The overall economic reorientation towards investment rather than consumption is expected to benefit the machinery and electrical sectors [13] - The anticipated slowdown in renewable energy construction does not imply a complete decline, as electricity demand continues to grow at a CAGR of 1.5-2% [28][40] - Historical context indicates that previous cuts to renewable tax credits led to significant underperformance in the sector, suggesting potential risks ahead [46] - The bonus depreciation changes are expected to lead to mid-single-digit earnings growth for companies like Oshkosh, Eaton, and United Rentals [79][82] Company Ratings and Price Targets - **Outperform Ratings**: Trimble (TP $99), Jacobs (TP $163), PACCAR (TP $118), Eaton (TP $410), Hubbell (TP $511) [7][8] - **Market-Perform Ratings**: AGCO (TP $118), Caterpillar (TP $447), Deere (TP $548), Cummins (TP $385), United Rentals (TP $885), Titan America (TP $15), Oshkosh (TP $132), Quanta (TP $410) [7][8] This summary encapsulates the key points discussed in the conference call, highlighting the implications of policy changes on various sectors and companies within the U.S. Machinery and Electricals industry.

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Cummins Inc. due to a class action lawsuit alleging breaches of fiduciary duties by the company's board of directors during the specified class period [1][2]. Group 1: Legal Investigation - The investigation is focused on whether Cummins' board of directors has breached their fiduciary duties to the company [1]. - A class action complaint was filed against Cummins on March 15, 2024, covering a class period from April 30, 2019, to December 21, 2023 [1]. Group 2: Allegations in the Lawsuit - The lawsuit claims that Cummins made materially false and misleading statements regarding its compliance with environmental regulations [2]. - It is alleged that Cummins continued to produce engines with unlawful emission defeating devices from 2019 to 2023, contradicting their assurances made post-April 2019 [2]. - The company is accused of understating its legal and regulatory risks while overstating its commitment to environmental protection [2].

Core Insights - Cummins Inc. reported Q2 2025 earnings of $6.43 per share, exceeding the Zacks Consensus Estimate of $4.99 and increasing from $5.26 in Q2 2024, driven by strong sales in Distribution and Power Systems segments [1][9] - Total revenues for Cummins reached $8.64 billion, surpassing the Zacks Consensus Estimate of $8.47 billion but declining from $8.8 billion in the same quarter last year [1][9] Segment Performance - Engine segment sales decreased by 8% year over year to $2.90 billion, missing the estimate of $2.91 billion, with EBITDA falling to $400 million from $445 million in the prior year [2] - Distribution segment sales rose by 7% year over year to $3 billion, exceeding the projection of $2.83 billion, with EBITDA increasing to $445 million from $314 million in the previous year [3] - Components segment sales totaled $2.7 billion, down 9% from the prior year and missing the estimate of $2.74 billion, with EBITDA at $397 million, slightly lower than the previous year's $406 million [4] - Power Systems segment sales surged by 19% year over year to $1.9 billion, beating the estimate of $1.64 billion, with EBITDA rising to $430 million from $301 million [5] - Accelera segment sales were $105 million, down 5% year over year and below the estimate of $112.5 million, with a pretax loss of $100 million [6] Financial Position - As of June 30, 2025, Cummins had cash and cash equivalents of $2.32 billion, up from $1.67 billion at the end of 2024, while long-term debt increased to $6.81 billion from $4.78 billion [7]

Core Viewpoint - Cummins Inc. held its Q2 2025 earnings call, discussing financial results and future expectations, with key executives participating in the call [1][4]. Group 1: Company Overview - Cummins Inc. is represented by Jennifer Rumsey as CEO and Chairman, and Mark Smith as CFO during the earnings call [4]. - The call is part of a regular update to investors regarding the company's performance in the second quarter of 2025 [2][4]. Group 2: Financial Performance - The earnings call is focused on discussing the financial results for Q2 2025, although specific financial metrics and outcomes are not detailed in the provided text [4]. Group 3: Forward-Looking Statements - The company indicates that some information shared during the call will include forward-looking statements, which may differ from actual future results [5].

Financial Performance - Cummins reported net sales of $8.643 billion for Q2 2025, a decrease of 2% compared to $8.796 billion in Q2 2024[116]. - Net income attributable to Cummins Inc. for Q2 2025 was $890 million, or $6.43 per diluted share, compared to $726 million, or $5.26 per diluted share in Q2 2024[116]. - For the first half of 2025, net income attributable to Cummins Inc. was $1.7 billion, or $12.38 per diluted share, down from $2.7 billion, or $19.42 per diluted share in the same period of 2024[117]. - Worldwide revenues decreased by 2 percent for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to weaker demand in on-highway truck markets and the divestiture of Atmus[119]. - Net income attributable to Cummins Inc. for the six months ended June 30, 2025, was $1,714 million, a decrease of $1,005 million or 37 percent compared to the same period in 2024[134]. Sales and Market Trends - U.S. and Canada net sales decreased by 6% in Q2 2025, primarily due to lower demand in heavy-duty and medium-duty markets[118]. - International sales increased by 5% in Q2 2025, driven by higher demand in Europe and China, despite lower sales in Asia Pacific[118]. - The Engine segment sales decreased by 8 percent, while the Power Systems segment sales increased by 19 percent due to higher demand in power generation markets[135]. - Heavy-duty truck sales in Q2 2025 decreased by $208 million (18%) due to weaker demand, with shipments down 26% in North America[162]. - Total unit shipments for the Engine segment in Q2 2025 decreased by 27,300 units (16%) to 147,000 units compared to Q2 2024[159]. Cost and Expenses - Cash generated from operations for the six months ended June 30, 2025, was $782 million, compared to a cash usage of $575 million in the same period of 2024[123]. - Selling, general and administrative expenses decreased by $49 million and $117 million for the three and six months ended June 30, 2025, respectively, mainly due to lower compensation expenses[141]. - Research, development and engineering expenses decreased by $22 million and $47 million for the three and six months ended June 30, 2025, respectively, attributed to lower compensation expenses[142]. - Interest expense decreased to $87 million and $164 million for the three and six months ended June 30, 2025, respectively, due to lower weighted-average interest rates[148]. Dividends and Shareholder Returns - The Board of Directors authorized a quarterly dividend increase of approximately 10 percent from $1.82 per share to $2.00 per share in July 2025[125]. - Dividends paid during the six months ended June 30, 2025, amounted to $502 million, with a 10% increase in the quarterly dividend authorized in July 2025[196]. Debt and Financing - The debt to capital ratio at June 30, 2025, was 38.7 percent, up from 38.4 percent at December 31, 2024, due to higher debt balances[124]. - The company entered into a new 5-year credit agreement allowing borrowing of up to $2.0 billion, and a new 3-year credit agreement for the same amount[127][128]. - Total debt as of June 30, 2025, was $8,111 million, with total debt as a percentage of total capital at 38.7%[180]. Operational Highlights - Strong growth in power generation markets, particularly in data center and commercial sectors, contributed to the increase in net income[116]. - Cummins continues to focus on electrification and alternative power technologies, with efforts in the Accelera segment aimed at commercializing these innovations[110]. - The company is navigating a challenging market environment, including geopolitical risks and fluctuating demand across various sectors[111]. - The uncertain tariff environment has created significant market volatility, potentially impacting future demand for capital goods and supply chain costs[178]. - The company is proactively taking steps in its supply chain to mitigate impacts from tariff-related volatility[178]. Cash Flow and Investments - Net cash provided by operating activities increased by $1.4 billion for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to lower working capital requirements of $1.2 billion[182]. - Net cash used in investing activities decreased by $191 million for the six months ended June 30, 2025, primarily due to the absence of cash associated with the Atmus divestiture[183]. - Capital expenditures for the six months ended June 30, 2025, were $393 million, with an estimated $1.4 billion to $1.5 billion planned for 2025, over 65% of which is expected to be invested in North America[197]. Pension and Retirement Plans - The investment gain on U.S. pension trusts was 4.6 percent, while the U.K. pension trusts experienced a loss of 0.8 percent in the first six months of 2025[132]. - The global pension plans were 115% funded at December 31, 2024, with U.S. defined benefit plans at 117% funded[199]. - The company has a maximum remaining required contribution of $551 million to the Amplify Cell Technologies LLC joint venture, expected to be made by the end of 2028[201].

Financial Data and Key Metrics Changes - Revenues for the second quarter were $8.6 billion, a decrease of 2% compared to 2024 [9] - EBITDA was $1.6 billion or 18.4% of sales, compared to $1.3 billion or 15.3% a year ago, indicating an increase in profitability [18] - Gross margin improved by 150 basis points year over year, reaching 26.4% of sales [19] Business Line Data and Key Metrics Changes - Engine segment revenues were $2.9 billion, down 8% from a year ago, with EBITDA at 13.8% [22] - Components revenue decreased by 9% to $2.7 billion, but EBITDA improved to 14.7% [22] - Distribution segment revenues increased by 7% to $3 billion, with record EBITDA of $445 million, improving to 14.6% of sales [23] - Power Systems segment revenues rose by 19% to $1.9 billion, with record EBITDA of $433 million, increasing to 22.8% of sales [24] Market Data and Key Metrics Changes - North America revenues decreased by 6% compared to 2024, with heavy-duty truck industry production down 27% [10] - International revenues increased by 5%, with China revenues at $1.8 billion, up 9% due to strong domestic demand [11] - In China, industry demand for medium and heavy-duty trucks increased by 13%, with unit sales up 31% [12] Company Strategy and Development Direction - The company is focused on its Destination Zero strategy, introducing new products in the Power Systems segment to meet growing power demands [8] - A 10% increase in quarterly dividends was announced, marking the sixteenth consecutive year of dividend increases [8] - The company aims to maintain operational efficiency and invest in capacity expansion to support future growth [32] Management's Comments on Operating Environment and Future Outlook - Management anticipates a continued decline in North America heavy and medium-duty truck volumes by 25% to 30% in the third quarter [14] - The company is navigating uncertainties related to tariffs and trade policies, which are impacting freight activity and costs [15] - Despite challenges, management remains confident in the strength of the power generation market and the company's diversified global business [17] Other Important Information - The company returned $251 million to shareholders in dividends, consistent with its long-term plan to return approximately 50% of operating cash flow [9] - Joint venture income increased to $118 million, driven by higher volumes in China [20] - Operating cash flow was an inflow of $785 million, compared to an outflow of $851 million a year ago [21] Q&A Session Summary Question: Comments on Power Systems margins sustainability - Management expressed satisfaction with Power Systems performance, indicating ongoing operational improvements and strong demand [30][31] Question: Backlog and pricing flexibility in Power Systems - The company confirmed a backlog extending out two years and ongoing negotiations for tariff recovery with customers [35] Question: Data center market growth and sales expectations - Management reaffirmed expectations for $2 billion in sales from data centers by 2026, maintaining a strong market position [39][41] Question: Distribution margins and component side performance - Management noted that distribution margins benefited from strong parts demand and pricing, while component margins improved despite sales declines [44][46] Question: North America truck market cycle outlook - Management highlighted uncertainty in the truck market due to low orders and regulatory factors, making future predictions challenging [50][52] Question: Capital allocation and share buybacks - The company plans to maintain a long-term benchmark of returning at least 50% of operating cash flow to shareholders, with a focus on effective capital allocation [87][88] Question: Tariff impacts and recovery timeline - Management indicated that tariffs negatively impacted profitability in the second quarter, but they expect to approach price-cost neutrality by the fourth quarter [95][97]

Financial Performance - Cummins Inc reported Q2 2025 revenue of $8643 million, a decrease of 2% compared to Q2 2024[9, 13] - The company's EBITDA for Q2 2025 was $1587 million, representing 184% of sales[9, 13] - Net income for Q2 2025 reached $890 million, with a diluted EPS of $643[9] Segment Performance - Engine segment revenue decreased by 8% to $2899 million due to lower On-Highway demand in North America[13, 22] - Components segment sales declined by 9% to $2705 million, also driven by lower On-Highway demand in North America[13, 25] - Distribution segment experienced a 7% increase in sales, reaching $3041 million, fueled by higher demand for power generation products in North America[13, 28] - Power Systems segment saw a significant 19% revenue increase to $1889 million, primarily due to increased power generation demand[13, 31] - Accelera segment reported sales of $105 million, a decrease of 5%, with an EBITDA loss of $100 million[13, 34] Additional Information - Operating cash flow for Q2 2025 was $785 million[39]

Financial Performance - Cummins reported quarterly earnings of $6.43 per share, exceeding the Zacks Consensus Estimate of $4.99 per share, and up from $5.26 per share a year ago, representing an earnings surprise of +28.86% [1] - The company posted revenues of $8.64 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.99%, although this is a decrease from year-ago revenues of $8.8 billion [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $4.85 on revenues of $8.23 billion, and for the current fiscal year, it is $20.66 on revenues of $33.23 billion [7] - The estimate revisions trend for Cummins was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - Cummins operates within the Zacks Automotive - Internal Combustion Engines industry, which is currently in the top 41% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

EXHIBIT 99 August 5, 2025 Cummins Reports Second Quarter 2025 Results COLUMBUS, IND. - Cummins Inc. (NYSE: CMI) today reported results for the second quarter of 2025. "We delivered strong second quarter results, driven by record profitability in our Power Systems and Distribution segments," said Jennifer Rumsey, Chair and CEO. "Our employees' resilience and commitment continue to power our success in a dynamic environment. We see a contrast across our markets with robust demand for power generation equipmen ...

Industry Overview - The Auto-Tires-Trucks sector is currently in the second-quarter earnings season, with companies like Tesla, Ford, General Motors, Aptiv, and O'Reilly Automotive reporting quarterly numbers that exceeded earnings estimates [1] - The auto sector's earnings for Q2 2025 are projected to decline by 27.7% year-over-year, with revenues expected to decrease by 6% [2] Market Performance - U.S. vehicle sales showed modest year-over-year growth in Q2, driven by strong demand for gasoline-powered and hybrid vehicles, with a seasonally adjusted annual rate of 15.3 million units in June [4] - Retail vehicle inventory reached 2.16 million units in June, marking a 22.9% increase from June 2024, while average transaction prices rose to $46,233, up $1,400 from the previous year [4] Impact of Tariffs - Higher tariffs on imports initially increased demand among price-sensitive buyers, but as prices stabilized, this momentum began to wane [5] - Elevated operating costs, particularly in R&D for advanced technologies, are likely to have negatively impacted earnings [5] Potential Winners - Companies identified as well-positioned to exceed earnings estimates include Cummins Inc. (CMI), Rivian Automotive, Inc. (RIVN), Lucid Group, Inc. (LCID), and American Axle & Manufacturing Holdings, Inc. (AXL) [3] Company Highlights Cummins Inc. (CMI) - Cummins is the largest engine manufacturer globally, with a strong product lineup and a focus on electrification and clean energy technologies [8][9] - The company has an Earnings ESP of +2.79% and a Zacks Rank of 3, with Q2 earnings and revenues estimated at $4.99 per share and $8.47 billion, respectively [10][11] Rivian Automotive, Inc. (RIVN) - Rivian is targeting budget-conscious consumers with its upcoming R2 and R3 models, with the R2 expected to launch in H1 2026 at a starting price of around $45,000 [12] - The company has an Earnings ESP of +8.53% and a Zacks Rank of 3, with Q2 revenue estimated at $1.26 billion [14] Lucid Group, Inc. (LCID) - Lucid's vehicles are now compatible with Tesla's Supercharger network, enhancing convenience for owners and potentially boosting sales [15] - The company has an Earnings ESP of +3.08% and a Zacks Rank of 3, with Q2 revenue estimated at $253.4 million, reflecting year-over-year growth of 26.4% [17] American Axle & Manufacturing Holdings, Inc. (AXL) - American Axle is advancing in the electric drive space and has a strong electrification portfolio, with key launches driving growth [18] - The company has an Earnings ESP of +17.59% and a Zacks Rank of 3, with Q2 earnings and revenues estimated at 13 cents and $1.51 billion, respectively [20]