8/22/2016

Distributed Generation
Microgrids & Energy Storage

Forward-Looking Statements
Forward-looking Statements
Certain statements in this financial review relate to future events and expectations and are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as believe, estimate, will be, will, would, expect, anticipate, plan, project, intend,
could, should or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are
forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do
not guarantee future performance, and we do not undertake to update our forward-looking statements.
Caterpillars actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including,
but not limited to: (i) global and regional economic conditions and economic conditions in the industries we serve; (ii) government monetary or fiscal policies
and infrastructure spending; (iii) commodity price changes, component price increases, fluctuations in demand for our products or significant shortages of
component products; (iv) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and
suppliers; (v) political and economic risks, commercial instability and events beyond our control in the countries in which we operate; (vi) failure to maintain
our credit ratings and potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive position and
access to capital markets; (vii) our Financial Products segments risks associated with the financial services industry; (viii) changes in interest rates or
market liquidity conditions; (ix) an increase in delinquencies, repossessions or net losses of Cat Financials customers; (x) new regulations or changes in
financial services regulations; (xi) a failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures or divestitures;
(xii) international trade policies and their impact on demand for our products and our competitive position; (xiii) our ability to develop, produce and market
quality products that meet our customers needs; (xiv) the impact oft he highly competitive environment in which we operate on our sales and pricing; (xv)
failure to realize all of the anticipated benefits from initiatives to increase our productivity, efficiency and cash flow and to reduce costs; (xvi) additional
restructuring costs or a failure to realize anticipated savings or benefits from past or future cost reduction actions; (xvii) inventory management decisions
and sourcing practices of our dealers and our OEM customers; (xviii) compliance with environmental laws and regulations; (xix) alleged or actual violations
of trade or anti-corruption laws and regulations; (xx) additional tax expense or exposure; (xxi) currency fluctuations; (xxii) our or Cat Financials compliance
with financial covenants; (xxiii) increased pension plan funding obligations; (xxiv) union disputes or other employee relations issues; (xxv) significant legal
proceedings, claims, lawsuits or government investigations; (xxvi) changes in accounting standards; (xxvii) failure or breach of IT security; (xxviii) adverse
effects ofunexpected events including natural disasters; and (xxix) other factors described in more detail under Item 1A. Risk Factors in our Form 10-K
filed with the SEC on February 16, 2016 for the year ended December 31, 2015.

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Agenda
Caterpillar and Electric Power
Why Enter the Microgrid - Energy Storage - Renewable Space?
Portfolio of System Products
Caterpillar - Tucson Proving Grounds (TPG) Microgrid

Global Snapshot

$47B Global Revenue 2015

59% Sales & Revenues Outside of the United States

100K Employees Globally

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Energy & Transportation A Global Snapshot

More than

$18 billion 450,000

2015 Global Sales
Railroad Caterpillar
Transit
& generator sets
A legacy of Solutions Provider installed
90 yearsof engines in worldwide
the field Over 20 million
E&T customers engines built
Producing an engine
are GLOBAL and MOBILE every 15 seconds

Why Microgrids and Energy Storage?

SolarPVandEnergyStorageprices
havedroppeddramatically,making
themattractiveeconomicalternatives
todieselandgaspowergeneration

SolarPVandEnergyStorageareonan
exponentialgrowthcurve

Somegovernmentsaredrivingsolarandwind over
naturalgasduetozerocarbonfootprint

Sources:Navigant,Caterpillar

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Energy Storage Market Overview

Telecom and Rural Electrification Growth (Community Energy Storage)

What is often the most economical, sustainable solution and

has the biggest impact?

Hybrid MiniGrids.
80%inRuralAreas

22%
Estimatedincreaseof inoffgrid

towersby2020(and13% inpoorgrid)

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Research Cell Efficiency: Fastest Innovation Rate

30%
FEBRUARY 2016

25%
SINGLE CRYSTAL SILICON (Non-Concentrator) 22.1%
MULTICRYSTALLINE SILICON
20%
CdTe
15%

10%

5% Each point is a certified

result as published in
NRELs Record Cell
'95 '96 '97 '98 '99 '01 '02 '04 '11 '12 '13 '14 '15 '16 Efficiency Records

Energy Density Advantage: Thin Film

A+B+C+D = UP
TO 11%
BETTER ENERGY DENSITY

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Why Energy Storage?

Solar Wind

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Energy Storage - Types

Mechanical
Pumped hydro
Compressed air
Flywheel
Electro-chemical
Lithium-Ion chemistries
Lead acid
Metal-air

Cat Energy Storage Solutions

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 8/22/2016

Why Did Caterpillar Choose Fluidic Energy

Proven Product & Value Proposition in $25B Market Attractive ROIC & Capital Lite Expansion Capability
- Commercially Successful, 1200+ sites, w/ repeat - Capital Lite (cost to scale is 1/20th of norm)
Customers - Bringing Jobs to the markets we serve
Head start with Broad IP Protection Experienced Leadership + Team
- 1st New Battery Technology Commercialized in +15 - Track records of success, 200 Employees
Years Rapidly Growing Commercial Momentum
- 5 years ahead of next closest new battery technology - Significant Revenue pipeline building
company - Strong Global Presence in Telecom Energy Support
- 90 Patents plus substantial trade secrets Applications
Energy as a Service (EaaS) Business Model Proven - PowerCo Down select, Managed Service Contract
- Enabled by Electronics & Software Intelligence - Rapidly Expanding Presence in Micro-Grid and Nano-
Solid Financials/Outlook Grid
- Rapidly Reducing Costs - 60+ Village ESDM Micro-grids Rural Electrification
- EBITDA positive within sight - 500 Island Micro-grid MOU in Indonesia
- 100 Village Micro-grid MOU signed in Madagascar

Uniquely Positioned For Strong Growth

Recent A record number of nominations were received: 6,900 distinct companies from 60 countries. The
Recognition The Global Cleantech 100 represents the most innovative and promising ideas 100-member expert panel was drawn equally from leading financial investors and representatives
January 25, 2016 in cleantech the companies that are best positioned to solve tomorrows clean of multi-national corporations and industrials active in technology and innovation scouting across
technology challenges the companies with the highest potential to make the Asia, Europe, and North America.
most significant market impact.

Fluidics Zinc Air Energy Storage

Technology Provides Differentiation
EXTENDED RUNTIME ELIMINATES THEFT CLEAN & NO COOLING REQUIRED
872 hour discharges No commercial value No lead/toxic material,
enable system to be of materials used and operates in
used for demand cell shut-down upon temperatures up to
response, peak shaving removal has proven 50C
and critical backup to eliminate theft
power

SCALABLE PREDICTABLE PERFORMANCE REMOTE MONITORING

Modular and scalable Unaffected by higher Integrated electronics
from 12kWh to temps, depth of and remote
1Mwh, allows for discharge, state of monitoring & control
optimal sizing at all charge, or number of increase reliability
times cycles and reduce
maintenance cost

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Bi-Directional Inverter
Providesintelligent
charginganddischarging
ofenergystorage
solution
Leveragestechnology
developedforthe
electricdrivemachines

Cat Energy Storage Solutions

Utilizes BDP250, Li-ion, and/or Ultra-capacitors

Storage for grid stability, smoothing, time shifting of
renewable energy sources.
Includes fire suppression equipment
Options for Environmental Control

Packaged
Solutions

Inverters

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Microgrid Master Controller - MMC

Mastercontrollerfor
microgridsystems
Scaledplatformforsmall
tolargeinstallations
Integratesallenergy
sources
Optimizesproductionof
energy

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Microgrid Master Controller Features

Feature Description

MonitoringandControlUser Includessystemvisualization anduserinterfaceformanualorautomatic

Interface control ofthedistributedenergyresources.
AssetOptimization Based onanumberofdifferentparameters,suchas minimizingfuelcost,
optimizingengineoperation, ormaximizingsystemreliability.
DistributedResourceDispatch Photovoltaic(PV)system,energystoragesystem (ESS)andgeneratorsets
arecontrolledfromthe MMC.
GridImport/ExportPowercontrol Regulatestheamountofrealand reactivepowercontributedtothe
microgrid fromtheavailableutilityservicebasedona programmableset
point.
BlackStart Configuredtocoordinatethe availablegenerationtoenergizethemicrogrid
fromadeenergized(black)state.Sequencingloadstoensurevoltageand
frequency arekeptwithinacceptableranges.

LoadManagement Activelycontrol thepoweredloadstoensurethesystemisnot overloaded

(loadshedsignalwillbetriggeredto removelowpriorityloads.Asloadfalls
belowa givensetpointasignalwillbetriggeredtoadd additionalloads.)

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Microgrid System
at
Tucson Proving
Grounds
(TPG)

Microgrid at Tucson Proving Grounds -- Project Drivers

No utility service at Tucson Proving Grounds
Grid extension is cost-prohibitive (8 miles to Green Valley)
Site average load is ~300kW. Peak load estimated at 500kW.
Traditional diesel prime power with 3 x C15 410ekW generator sets
Diesel fuel consumption ~250,000 gallons (~1 million Liters) per year
Generator set operation 11,000 hours per year

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Renewable Energy Project Potential

Excellent PV energy harvest at Tucson Proving Grounds
High annual sunlight // Hot climate
High performance of Cat Thin-Film PV

Excellent Fuel Consumption Reduction Potential

17 to 33% fuel consumption reduction nowmore potential in future

Cat Dealer - Empire

8+ years experience in the PV EPC business in Arizona
Installed original generator sets and switchgear
Performs genset maintenance

TPGOfficesandShopAreas
Tucson Proving Grounds
Satellite View

UndergroundPowerCable
Existing Powerhouse

C15 C15 C15

EnergyStorage:
SolarPanelArrays:CatBrandedThinFilm
LithiumIonBattery250kW
manufacturedbyFirstSolar
Ultracap 250kW
250kWFixedtilt
in20Enclosure
250kWSingleAxisTracker

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PV Fixed Array 250kW PV Tracking Array 250kW

TPG Microgrid
System Diagram
x10 x10

Energy Storage
Lithium Ion Battery
250kW / 10 min System Controller
MMC-M
Energy Storage
Ultra-capacitor
250kW / 30 sec

Site
Prime
3 x Cat C15
Power
410ekW Prime Loads

Cat
Switchgear

Typical Microgrid Operation: Daily Load & Generation Profiles

525

Solar
450 PV
Output
Site
375 Load

Power 300
(kW)
225 Diesel
Generator
150 Output
Generator
75 Shut-off
with MMC
0
0:00 6:00 12:00 18:00 24:00
Time of Day

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Selection of Optimum PV & Energy Storage Size

Gen Dieselgeneratorsonly24/7

FSC FuelSaveController

MMC CatMicrogrid MasterController

Gen

FSC

MMC

Configuration
250kWFixedPV
250kWTrackerPV
LiIon&UC20min
$2.85/Wtotalcostaftertax
credit
$0.50/L $0.75/L $1.00/L $1.25/L $1.50/L
$1.90/Gal $2.84/Gal $3.79/Gal $4.74/Gal $5.69/Gal

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Current Performance
With current configuration settings, PV is contributing on average 40% of the daily energy needs of the facility. The screen capture
below shows instantaneous power being provided solely by the PV to carry the facility loads. Monitoring of exhaust temperature has
allowed the minimum loading to be placed on the generator with no concerns of wet stacking of the exhaust.

Estimatedfuelsavings
Predicatedat33%onanannualbasis.
Basedoncurrentplantperformanceandadditionalintegrationof
MMCMwithGenset off,estimated39.5% annualfuelsavings.

2016 Caterpillar
All rights reserved.

CAT, CATERPILLAR, BUILT FOR IT, their respective logos, Caterpillar Yellow, the Power Edge trade dress as well as
corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission.

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