historical performance analysis analysts:. 3-year compound average growth rates
TRANSCRIPT
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Historical Performance Analysis
Analysts:
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3-Year Compound Average Growth Rates
Total Revenue 8.0% Free Cash Flow 17.9%EBIT 26.2% Total Invested Capital 13.3%
NOPAT 28.2% Total Assets 11.1%Earnings Per Share 35.2% Economic Value-Added 81.2%
Dividends Per Share 30.2% Market Value-Added 98.5%
ANNUALIZED 3-YEAR CAGR
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Margins and Yields
2007 2008 2009 2010 2011
7.1% 7.4% 5.2% 9.5% 11.8%5.8% 6.6% 10.2% 7.3% 11.2%7.7% 12.8% 3.3% 5.0% 8.3%0.9% 2.0% 1.1% 0.8% 1.1%
Margins and Yields
Operating MarginFree Cash Flow MarginEarnings YieldDividend Yield
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Per Share Metrics
2007 2008 2009 2010 2011
3.72 3.87 2.17 5.29 9.580.43 0.60 0.70 0.88 1.333.16 3.76 1.98 4.51 8.011.91 2.21 (0.32) 1.97 3.65
Per Share Metrics
Earnings
NOPATFree Cash Flow
Dividends
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Cumulative Stock Returns Trailing 24 Months
-40%
-30%
-20%
-10%
0%
10%
20%
30%CMI CAT DE
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Cumulative Stock Returns vs. the Market
-30%
-20%
-10%
0%
10%
20%
30%CMI ^SPX
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Total Revenue and Net Income
$0$2,000$4,000$6,000$8,000
$10,000$12,000$14,000$16,000$18,000$20,000
2006 2007 2008 2009 2010 2011
Total Revenue Net Income
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Revenue Per Share
$0 $10 $20 $30 $40 $50 $60 $70 $80 $90
$100
2007 2008 2009 2010 2011
Revenue Per Share CMI CAT
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Operating Profit
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2006 2007 2008 2009 2010 2011
EBITDA EBIT
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EBITDA Per Share
$0.00 $2.00 $4.00 $6.00 $8.00
$10.00 $12.00 $14.00 $16.00
2007 2008 2009 2010 2011
EBITDA Per Share CMI CAT
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Earnings and Dividends Per Share
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
2006 2007 2008 2009 2010 2011
Earnings Per Share Dividends Per Share
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Earnings Per Share
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
2007 2008 2009 2010 2011
Earnings Per Share CMI CAT
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Dividends Per Share
$0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00
2007 2008 2009 2010 2011
Dividends Per Share CMI CAT
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Gross and Operating Margin
0%
5%
10%
15%
20%
25%
30%
2006 2007 2008 2009 2010 2011
Gross Profit Margin Operating Profit Margin
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Gross Profit Margin
0%
5%
10%
15%
20%
25%
30%
2007 2008 2009 2010 2011
Gross Profit Margin CMI CAT
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Operating Profit Margin
0.0%2.0%4.0%6.0%8.0%
10.0%12.0%14.0%
2007 2008 2009 2010 2011
Operating Profit Margin CMI CAT
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Net and Free Cash Flow Margin
0%
2%
4%
6%
8%
10%
12%
2006 2007 2008 2009 2010 2011
Net Profit Margin Free Cash Flow Margin
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Net Profit Margin
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2007 2008 2009 2010 2011
Net Profit Margin CMI CAT
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Price/Earnings and Price/Free Cash Flow
05
101520253035
2006 2007 2008 2009 2010 2011
Price/Earnings Price/Free Cash Flow
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Price/Earnings
0.05.0
10.015.020.025.030.035.040.045.050.0
2007 2008 2009 2010 2011
Price to Earnings CMI CAT
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Earnings and Dividend Yield
0%2%4%6%8%
10%12%14%
2006 2007 2008 2009 2010 2011
Earnings Yield Dividend Yield
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Dividend Yield
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2007 2008 2009 2010 2011
Dividend Yield CMI CAT
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Current and Quick Ratio
0.00.20.40.60.81.01.21.41.6
1.61.71.71.81.81.91.92.02.02.12.1
2006 2007 2008 2009 2010 2011
Current Ratio Quick Ratio
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Days Sales Outstanding and Inventory Turnover
0123456789
01020304050607080
2006 2007 2008 2009 2010 2011
Days Sales Outstanding Inventory Turnover
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Total Debt to Assets, Long-Term Debt to Equity
0%
5%
10%
15%
20%
25%
2006 2007 2008 2009 2010 2011
Total Debt to Assets Long-Term Debt to Equity
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Total Debt to Assets
0%
2%
4%
6%
8%
10%
12%
2007 2008 2009 2010 2011
Total Debt to Assets CMI CAT
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Return on Assets, Equity and Capital
0%5%
10%15%20%25%30%35%
2006 2007 2008 2009 2010 2011
ROA ROE ROIC
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Return on Assets
0.0%2.0%4.0%6.0%8.0%
10.0%12.0%14.0%16.0%18.0%
2007 2008 2009 2010 2011
Return on Assets CMI CAT
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Return on Equity
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
2007 2008 2009 2010 2011
Return on Equity CMI CAT
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Net Profit Margin
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2007 2008 2009 2010 2011
Net Profit Margin CMI CAT
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Total Asset Turnover
0.00.20.40.60.81.01.21.41.61.8
2007 2008 2009 2010 2011
Total Asset Turnover CMI CAT
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NOPAT and Free Cash Flow
-$200$0
$200$400$600$800
$1,000$1,200$1,400$1,600$1,800
2007 2008 2009 2010 2011
Net Oper. Profit After Tax Free Cash Flow
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Net Fixed Assets and Total Invested Capital
$0$1,000$2,000$3,000$4,000$5,000$6,000$7,000
2006 2007 2008 2009 2010 2011
Net Fixed Assets Total Invested Capital
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Total Capital Per Share
$0 $5
$10 $15 $20 $25 $30 $35 $40
2007 2008 2009 2010 2011
Total Capital Per Share CMI CAT
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Return on Invested Capital
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
2007 2008 2009 2010 2011
Return on Invested Capital CMI CAT
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Free Cash Flow Per Share
($4.00)($3.00)($2.00)($1.00)$0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00
2007 2008 2009 2010 2011
Free Cash Flow Per Share CMI CAT
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EVA and MVA
02,0004,0006,0008,00010,00012,00014,00016,00018,000
-400
-200
0
200
400
600
800
2006 2007 2008 2009 2010 2011
Economic Value-Added Market Valued-Added
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Economic Value-Added Per Share
($3.00)($2.00)($1.00)$0.00 $1.00 $2.00 $3.00 $4.00
2007 2008 2009 2010 2011
Economic Value-Added Per Share CMI CAT
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Market Value-Added Per Share
$0 $10 $20 $30 $40 $50 $60 $70 $80 $90
$100
2007 2008 2009 2010 2011
Market Value-Added Per Share CMI CAT
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Weighted Average Cost of Capital
Cost of Capital 2011 Weight % Cost Wgt CostEquity Capita l i zation 22,303 97.0% 16.2% 15.7%
Total Debt 686 3.0% 4.5% 0.1%Preferred Stock 0 0.0% 0.0% 0.0%Value of Al l Securities 22,989 100.0%Effective Tax Rate 27.1% Long-Term Growth Rate:Risk-Free Rate 2.27% 0.0%Beta 1.99 Alternative Beta:Market Risk Premium 7.0%CAPM Cost of Equi ty 16.2%
Weighted Average Cost of Capital: 15.8%
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Value Creation
Value Creation 2006 2007 2008 2009 2010 2011Economic Value-Added 152 49 107 -307 109 635
Market Valued-Added 3,398 9,599 2,149 5,481 17,091 16,811PV of Future FCFs 3,300 3,443 3,558 4,184 4,458 4,458Value of Non-Oper. Assets 935 697 503 1,120 1,362 1,761Tota l Intrins ic Fi rm Value 4,235 4,140 4,061 5,304 5,820 6,219Intrins ic Va lue of Equity 3,551 3,572 3,423 4,660 5,081 5,533Per Share Intrinsic Value $17.48 $17.87 $17.42 $23.57 $25.77 $28.58Year-End Stock Price $36.84 $48.20 $30.16 $66.06 $105.89 $116.05Over (Under) Va luation/Sh $19.35 $30.33 $12.74 $42.49 $80.12 $87.47% Over (Under) Va lued 52.5% 62.9% 42.3% 64.3% 75.7% 75.4%
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Stock Price vs. Intrinsic Value
$0$20$40$60$80
$100$120$140
2006 2007 2008 2009 2010 2011
Year-End Stock Price Per Share Intrinsic Value
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Over (Under) Valuation
0%10%20%30%40%50%60%70%80%
$0 $10 $20 $30 $40 $50 $60 $70 $80 $90
$100
2006 2007 2008 2009 2010 2011
Over (Under) Valuation/Sh % Over (Under) Valued
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Historical Performance Diffusion Index
Revenues, Profits and Dividends 20.0% Liquidity and Debt 10.0%Tota l Revenue Current RatioEBITDA Quick RatioEPS Days Sa les OutstandingDPS Inventory Turnover
Gross, Operating and Net Margins 15.0% Tota l Debt/AssetsGross Profi t Margin Long-Term Debt/EquityOperating Profi t Margin NOPAT, Total Invested Capital, FCF 15.0%Net Profi t Margin NOPATFree Cash Flow Margin Tota l Invested Capita l
Relative Valuation 15.0% Free Cash FlowPrice/Earnings Value Creation 15.0%Price/Free Cash Flow Economic Va lue-AddedEarnings Yield Market Va lue-AddedDividend Yield Intrins ic Va lue
Profitability 10.0%ROA Score (max = 100%) 0.0%ROEROIC
Historical Performance Diffusion Index