1. A Look at Natural Gas FAPT– 2/21/14 craig.h.weerts@cummins.com 1

2. Agenda  Florida HB579  A look at some basics  How do I educate myself?  Economic Considerations  Operational Considerations  Questions 8/14/2015 Cummins Confidential2

3. Takes Effect January 1, 2014 thru December 31, 2018  (1) Tax Free Holiday (Auto Fuel Only) –LNG –CNG –Propane  Beginning January 1, 2019 –Nat Gas Taxed $.21 (dge) –Diesel Taxed $.31 (g)  (2) $6 million per calendar year in rebate funds available to offset vehicle premium –Maximum $250,000 per applicant –Maximum $25,000 per vehicle –Maximum 50% of incremental cost –Purchase in prior year HB 579 (Nat Gas Development)

4. Might Be A Deal – But Is It? Some Basic Facts  Natural Gas is primarily Methane  Methane – CH 4 is the most basic hydrocarbon  The higher the ratio of hydrogen to carbon, the lower the “carbon footprint”  Natural Gas has a net 25% reduction in “Greenhouse Gas” wellhead to wheel  CNG, LNG, and RNG are essentially the same thing  Natural Gas is lighter than air and goes up  Gasoline, diesel, and LPG are heavier than air  LNG starts heavier but becomes lighter 8/14/2015 Cummins Confidential4

5. More Facts  Energy Density Index varies by fuel –Diesel - 100 –Gasoline - 90 –LPG - 67 –LNG - 58 –DME - 53 –CNG - 28 8/14/2015 Cummins Confidential5

6. And More  Natural Gas is a commodity sold by million BTUs  There are 7.213 DGE in one MBTU  This year price has ranged from about $3.30 to about $4.50, a range of about 36%  Impact on DGE is $0.46 to $0.62 for gas only  Balance of price is processing, distribution, and taxes  Transportation is a minor portion of demand for Natural Gas 8/14/2015 Cummins Confidential6

7. How Do I Learn?  NGVAmerica – (www.ngvc.org)www.ngvc.org  Cummins Westport – (www.cumminswestport.com)www.cumminswestport.com  Work with an expert (Paid consultant)  Your schoolbus OEM  Your Cummins Distributor 8/14/2015 Cummins Confidential7

8. CWI Natural Gas Academy ( www.cumminswestport.com/natural-gas-academy-videos)  Video 1 – What is Natural Gas –Discussion of CNG, LNG, and RNG –Features, benefits, and shortcomings of each  Video 2 – Natural Gas Engines –Discuss difference with gas or diesel engines –Look at spark ignited, compression ignited, and dual fuel  Video 3 – Natural Gas Fuel Systems –What is different versus gas or diesel –What is different CNG versus LNG –Importance of fuel choice and tank sizing 8/14/2015 Cummins Confidential8

9. CWI NGA Continued  Video 4 – How to Fuel a Vehicle –Discuss what is involved in fueling with CNG and LNG –Discuss safety and training  Video 5 – Natural Gas Engine Maintenance –Discuss differences and similarity with diesels –Spark Plugs, Different Oil, Daily Requirement  Video 6 – Upgrading your facility for Natural Gas –NFPA 30A –Local fire marshall  Videos 7 & 8 – Walk around of ISL-G and ISX 12G 8/14/2015 Cummins Confidential9

10. Background Done, Time To Evaluate  Economic Considerations –Price of Diesel Versus Natural Gas CNG or LNG available now Gas line available for CNG station Partnership available to share cost/facility Sufficient volume to attract investor or own –Added maintenance cost Training of staff Facility modifications Confusion factor 8/14/2015 Cummins Confidential10

11. Continued  Economic –Schoolbus premium Fuel tank size Right size engine available Residual Value –Incentives State of Florida Federal Other states –Value of “Green Image” 8/14/2015 Cummins Confidential11

12.  Operational Considerations –Routes Length of route Fuel availability/distance to fuel –Performance Requirements “Right bus avaiable “Right Engine” Available –Facility modifications –Technician and Driver training 8/14/2015 Cummins Confidential12

13. Natural Gas Playbook 13 February 21, 2014

14. Natural Gas Playbook Elements Customer NG Business Case OEM Specifications OEM Dealer Fuel Fuel Provider CWI Divisional Sales CWI Distributor Facility Readiness Service Training Vehicle Integration Review Driver Training Cummins Westport Confidential14 5 Step Playbook Step 1 Assess Step 2 Specify Step 3 Prepare Step 4 Implement Step 5 Operate

15. CWI Playbook Process Cummins Westport Confidential15 Conduct fuel quality test Implement Conduct pilot truck test Develop rollout plan Confirm fuel economy & range Conduct driver training Truck delivery & PDI Conduct fuelling training Test problem resolution processes Infant care support Kick off event 4 Operate & Maintain Conduct daily maintenance & inspections Monitor fuelling procedures Monitor fuel consumption Conduct scheduled maintenance & inspections Conduct scheduled fuel quality inspections Manage & resolve problems 5 Fleet profile Assess Routes & loads Current fuel profile NG fuel availability Fuel price expectations Environment & terrain Incentives Regulations & codes Service capability Facility requirements Previous experience Business case Risks & mitigation 1 OEM Specify Chassis Engine Transmission & gearing Fuel type & quality Fuelling procedure NG fuel system type, capacity & configuration Safety equipment Warranty package Delivery dates 2 Confirm fuel availability Prepare Confirm service & parts availability Obtain permits, licenses & approvals Complete facility modifications Operations & maintenance training Define driver training process Safety training Fire & emergency response plan Define problem resolution processes 3